Woelfle v Fembock

3841 of 2003 DIETER WOELFLE v INGRID FEMBOCK (The Estate of Gertrude Woelfle) JUDGMENT 1 MASTER: This is an application under the Family Provision Act 1982 (NSW) (the Act) in respect of the estate of the late Gertrude Woelfle who died on 21 January 2002. The deceased's husband had pre-deceased her and she was survived by her five children two of whom are the parties in the present application. The last will of the deceased 2 The deceased made her last will on 10 March 2000 under which she appointed her daughter the defendant as the executor and trustee. She gave legacies of $20,000.00 to her three sons and her daughter, Astrid and gave the residue of her estate to her daughter, the defendant. Assets in the estate 3 The deceased owned a property at 11B Yukon Place, Quakers Hill, Sydney, which was sold after the date of death. The net proceeds of the sale amounted to $236,649.00. The deceased also owned a 1994 Daihatsu Applause motor vehicle worth $5,500.00, 1,000 Telstra shares, 1200 IAG shares and a small amount of personalty. She had a savings account of about $3,700.00. 4 The liabilities in the estate amounted to $8,565.68 which has been paid by the defendant on behalf of the estate. From the proceeds of sale the four legacies of $20,000.00 including that to the plaintiff were paid. As to the balance, the defendant retained approximately $16,649.00 and she directed the solicitor to pay various amounts to her children by way of gift from her share of the residue $140,000.00. 5 The defendant's costs in this matter are estimated at $30,000.00 and the plaintiff's costs are estimated to be $33,337.00. Family history 6 As I have mentioned, the deceased had five children. The defendant, the eldest, was born in February 1942, Peter, a son, in January 1943, Udo, a son in December 1943, the plaintiff, Dieter in November 1946 and a daughter, Astrid, was born in May 1951. The family travelled to Australia in 1956. In 1962 the deceased's husband was injured in a vehicle accident and lost a leg. He received compensation for that injury in 1966, which led to the purchase of various properties including that which was owned at the date of death. The deceased's husband died in 1973. 7 The defendant, Ingrid, married at 21 years of age in 1963 and her three children were born in 1964, 1968 and 1969. 8 In 1989 the deceased moved from Blacktown to Maroochydore in Queensland and in 1994 she moved from Maroochydore to Tewantin. At that stage she gave each of her children a sum of $8,000.00. The plaintiff left school in 1961 and commenced a motor mechanics apprenticeship. He married in 1970 and has three children from that marriage. In 1976 he moved to Queensland and started a plastering business. In 1986 the plaintiff was divorced and he moved to Sydney where he resided with the deceased for a short time. He injured his back at work in 1986 and in 1987 had three different operations performed on his back. In 1989 the plaintiff travelled overseas including some time with his mother and in 1990 he commenced shift work on the Gold Coast and lived at Southport. In 1998 he ceased work as a security guard at Surfers Paradise and from May that year has been in receipt of a disability pension. At about that time he purchased a 1973 Kombi Campervan I which to live and he applied to the Queensland Department of Housing for lodging. In 1999 he had a fourth back operation being a laminectomy. 9 In 1997 the deceased moved from her retirement home at Tewantin back to Blacktown. As I have said she made her will on 10 March 2000 and in November 2001 she moved from Blacktown to Bateman's Bay so that she could be closer to her daughter, the defendant. Unfortunately she became ill on arrival at Bateman's Bay and was admitted to the local hospital. She was subsequently admitted to the Woden Valley Hospital in Canberra where she died on 21 January 2002. 10 A grant of probate was promptly obtained on 19 February 2002. The ordinary advertisement as to the distribution of the estate for claims was published on 1 March 2002. The house was sold and the proceeds were available by 4 June 2002 when the legacies were paid. The other amounts paid at that stage were to the defendant's daughter, Corina ($80,000.00), the defendant's daughter, Lisa ($30,000.00) and the defendant's son Robert ($30,000.00). 11 These proceedings were commenced on 16 July 2003, which is within the time limit under the Act for the making of such a claim. Eligibility 12 The plaintiff is an eligible person. In applications under the Act, the High Court in Singer v Berghouse (No 2) (1994) 181 CLR 201 set out the two-stage approach that a Court must take. At pages 209-210 it said the following: "The first question is, was the provision (if any) made for the applicant 'inadequate for [his or her] proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc. were explained in Bosch v. Perpetual Trustee Co. Ltd . The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate for what, in all the circumstances, was the proper level of maintenance etc. appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v. Leeder, where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

Situation of the plaintiff 13 The plaintiff is 57 years of age, married and has no dependents. Dr Stephen Buckley gave evidence in respect of the plaintiff's medical problems. His conclusion at the end of his detailed report was as follows: "Mr Dieter Woelfle has both upper motor neurone impairment with spasticity of his lower limbs and a neuropathic bladder as a result of spinal cord impairment, and lower motor neurone impairment as a result of a severe degenerative disc herniation causing compression of the S1 nerve roots, and consequent absent ankle jerks and neuropathic pain in his right leg. As a result of these impairments he will require assistance in the ordinary management of his household, and has high requirements for medical supervision. He is unemployable on the open employment market, and has marked sexual dysfunction." 14 The plaintiff has very few assets. He has two bank accounts having a total of $2,662.00. He owns his VW Kombi Campervan which three weeks ago was partially damaged by an engine fire. It is almost worthless and he needs to spend money in order to repair it. For many years he has lived in the VW Kombi Campervan and continues to do so. According to the plaintiff, his wife (who he has recently married) has no assets. She has not sworn an affidavit in these proceedings. 15 There were submissions made as to the fact that little reliance could be placed upon the plaintiff's evidence as to his assets and income. He certainly receives his disability pension of $223.00 per week and that is not sufficient to cover his estimate of expenses, namely, $235.00 per week. According to the plaintiff he has been living off capital, which substantially came from the $20,000.00 he received from the estate. 16 The defendant set out to trap the plaintiff and she arranged for a private investigator to make a booking with the plaintiff to carry out a photographic shoot. This occurred and the plaintiff was paid $150.00 by the private investigator for taking some photographs of a model at Surfers Paradise. During that period the plaintiff made a number of statements to the investigator about the strength of his photographic business. This was apparently an attempt by the plaintiff to try and impress a person who he believed might be able to give him some future work. For a year or two the plaintiff had a website which he had arranged through a photographic firm to advertise his services. The plaintiff's evidence indicated that he had obtained very little work over the prior two or three years. In effect he had shot a friend's wedding and the photographs for Mr Cook although he had been involved in some work that might have led to further sales. 17 I have seen the plaintiff in the witness box and I am satisfied that his account of his interest in photography and the difficulties which he has encountered with his major hobby have been accurate. There is also evidence from his daughter who lives nearby and corroborates that he has not been successful in his business. 18 The plaintiff is in a situation where his camera is broken and valueless and he either has to borrow the camera owned by his wife (which is about her only asset) or his daughter's good, professional camera. 19 Having regard to the evidence I am satisfied that the plaintiff has not so far managed to make any success of his photographic endeavours although he is clearly keen to do so. 20 It is necessary to see the nature of the relationship between the plaintiff and the deceased. There had not been any falling out between the plaintiff and the deceased although there was a period between 1989 and 1994 when the deceased complained that she had not seen her son and in 1994 when she made $8,000.00 available to each of her children that prompted the plaintiff to come and see her to collect his $8,000.00. According to the plaintiff he then kept contact during this period but was working as a shift worker and on the weekend. It may be that the true situation is that the deceased thought that the contact at this time was not as much as she wished. Clearly, however, the deceased and the plaintiff did things together such as when they were overseas in 1989 and travelled in Germany for three weeks together. 21 There is nothing in the relationship between the plaintiff and the deceased that would lead me to be critical of the plaintiff in this regard. Situation of Ingrid Fembock 22 The defendant is aged 62 years, she is married and has no dependents. Her husband has suffered from bowel cancer in the past and he has undergone a number of operations for that condition. The defendant and her husband own their property at Bateman's Bay that is worth about $500,000.00. They have a car which the defendant received from the estate worth about $3,000.00. The defendant also has term deposits worth about $40,000.00 as well as 1,000 Telstra shares and 1,200 IAG shares which she received from the estate. Her husband has a number of assets including a term deposit of $100,000.00 and property at Berridale worth about $290,000.00. Their income for the year ended 30 June 2002 was $13,917.00 and that means that they have to live in a very modest way. The defendant's husband, who was a carpenter, has not been able to work as a result of his bowel cancer and the chemotherapy treatment he has had to undergo. 23 The defendant also has an outstanding debt to the Taxation Department of $10,671.31 which is disputed. It is not known whether that will eventually have to be paid. 24 It is clear that the defendant and her husband had a very good relationship with the deceased. They appear to have been the ones who took on the burden of caring for the deceased and it is not surprising given the work that they did for her that greater provision was made for the defendant. At times they would drive return trips of some 3,000 kilometres in order to assist the deceased move to Queensland and when the deceased was living in Sydney they would drive some 300 kilometres to see her for several days each month. 25 It is necessary to see how the plaintiff says that he has been left without adequate and proper provision for his maintenance, education and advancement in life. 26 The main contention raised by the plaintiff is, of course, his future care. Dr Buckley gave evidence of a number of expenses that the plaintiff would incur for medical treatment and checks over the next few years. These expenses totalled some $87,102.37. There is no doubt that he would have these needs and it is also clear that his private health insurance would not cover all these expenses and, accordingly, it is likely that he would have to find somewhere in the order of $34,840.00 for such expenses. He has also sought some $16,880.00 to cover his future private health insurance payments. There was no cross-examination as to that claim. 27 I have already referred to what has happened to the plaintiff's VW Kombi Campervan. He wishes to buy a good second hand vehicle to replace it at a cost of between $15,000.00 and $25,000.00. If the plaintiff is to continue with his wish to set up his photography business which I will refer to shortly, he will clearly need an appropriate vehicle. 28 The plaintiff also expressed a need to purchase a dwelling at a cost of somewhere between $100,000.000 to $150,000.00 which would be available in an area where he would like to live. However, such a need is certainly not one which would ordinarily be recognised.

29 In Shearer v The Public Trustee and Hawke v The Public Trustee, Young J, (unreported, NSWSC, 29 March 1998), his Honour had this to say:- "The community's attitude is not to be judged by a feeling as to whether it is morally wrong for a person to leave property otherwise than to her spouse or children. One must really look at the obligations to provide for persons who have some dependants. Where the applicant is a spouse it is nowadays usually thought that to leave a spouse with a mere right of residence is insufficient provision. However, that is not the case with children, and as far as I am aware it has never been said by any court that it is an obligation that the community expects that a mother will leave her child in a position where the child has a house of his or her own. " 30 In the present case the amount of the estate would not permit nor would it be warranted to provide the plaintiff with a debt free home. To an extent the plaintiff realises this because he has limited his claim before the court to seek an amount of $80,000.00 in addition to the amount of $20,000.00 which he has received under the will. 31 Obviously there would be some costs associated with obtaining rental accommodation and this is probably the only alternative open to the plaintiff if he does not wish to live in the VW Kombi Campervan. 32 The plaintiff also advanced a claim to have a fund of between $15,000.00 and $20,000.00 to obtain modern photographic equipment such as digital cameras as well as $5,000.00 to $6,000.00 to set up rooms for a studio with appropriate lighting equipment. This raised the question of how serious the plaintiff was about this and whether he would be likely to succeed. It is apparent from the plaintiff's affidavits that photography has been a great hobby for him and his efforts so far to expand that into something more have been unsuccessful. However, it must be remembered that he does not have any reasonable facilities, has to operate from his van and hardly had the ability to advertise or advance himself. The only thing he has been able to do is to put a web page together with the help of a photographic shop, which resulted in the application by the private investigator and perhaps one other person. 33 The plaintiff had a number of jobs and it is plain because of his injuries he cannot expect to do any manual, heavy work and there is the opinion of Dr Buckley to which I have already referred which indicates his difficulties. 34 I have a strong impression that the plaintiff is a very keen photographer and if one thinks about it, it is probably one of the few things where he might be able to advance himself in life and perhaps break into what is no doubt a fairly difficult profession. It is clear that he would need capital to do that and accordingly in my view he does have a real need in this respect. 35 The needs identified, leaving aside what will be necessary for him to rent a property are in the order of $100,000.00 at their upper limit. The claim that the plaintiff advances therefore is within those amounts. There was criticism of the genuineness of the plaintiff's claim based upon what he did with the $20,000.00 that he received from the estate of the deceased. He used $2,000.00 to pay off urgent debts and then applied $9,000.00 to pay $3,000.00 to each of his three children. He kept the balance and has lived on it while these proceedings have been coming on for hearing. He has sworn that his children were needy and in these circumstances although perhaps one could criticise him for not looking after himself, he clearly felt a strong moral responsibility to help his children. It does not seem to me to be the actions of spendthrift but more the actions of a parent concerned for the welfare of his children. 36 I am satisfied that it is appropriate that provision should be made for the plaintiff on his application. The amount of his provision must be determined bearing in mind the position of the defendant and the enormous help the defendant and her husband gave to the deceased during her lifetime. The appropriate amount of provision is in the sum of $70,000.00 37 In those circumstances where there has been a distribution of the estate under s24 of the Act the Court can designate property as a notional estate. The property that could be designated is, of course, the defendant's interest in her matrimonial home, her bank deposits and shares. 38 Section 27 of the Act is in the following terms:

"(1) On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered: (a) the importance of not interfering with reasonable expectations in relation to property; (b) the substantial justice and merits involved in making or refusing to make the order; and (c) any other matter which it considers relevant in the circumstances.

(2) In determining what property should be designated as notional estate of a deceased person, the Court shall have regard to: (a) the value and nature of property the subject of any relevant prescribed transaction or distribution from the estate of the deceased person; (b) where, in relation to any such prescribed transaction, consideration was given, the value and nature of the consideration; (c) any changes over the time which has elapsed since any such prescribed transaction was entered into, any such distribution was made or any such consideration was given in the value of property of the same nature as the property the subject of the prescribed transaction, the distribution or the consideration, as the case may be; (d) whether property of the same nature as the property the subject of any such prescribed transaction, any such distribution or any such consideration could, during the time which has elapsed since the prescribed transaction was entered into, the distribution was made or the consideration was given, as the case may be, have been applied so as to produce income; and (e) any other matter which it considers relevant in the circumstances." 39 Under s27(1)(a) of the Act there are no matters which have been advanced which should lead to any reasonable expectation on the part of the defendant. Although she was substantially helpful to the deceased this is not what is referred to in the section. The defendant has not changed her position in reliance on promises made by the deceased. The one matter that was raised by the defendant was the fact that the application was not made by the plaintiff until almost the end of the time of period allowed. Clearly as the defendant acknowledged the plaintiff told her shortly after the death of the deceased that he was going to contest the will. Somewhat foolishly the defendant did not take him seriously. There is no evidence that the defendant told the plaintiff that she was going to give property away to her children and this is something she has done entirely at her own risk. The publication of the appropriate notices a month after the grant of probate does not assist. See the comments I made in D'Albora v D'Albora [1999] NSWSC 468. 40 Under sub-section (b) the Court has to consider the substantial justice and merits of the case. I have already discussed the fact that I think the plaintiff should receive some award and there is clearly a need to provide for the plaintiff in excess of the amount he has already received. Although there will be some hardship caused to the defendant as a result of the orders I propose to make, she and her husband do have appropriate assets and the difficult situation they are in has been brought about by the defendant's actions in giving away the estate before commencement of these proceedings. 41 There are no other matters that require consideration. 42 Under s28 of the Act the Court need only designate such property as is necessary for the purposes of any orders. Orders

1. I order that the plaintiff have an additional legacy of $70,000.00.

(a) The defendant's interest in her jointly owned property at 5 Towrang Avenue, Surf Beach.

(b) The defendant's fixed deposit with Colonial First State Account No 090000130641 with the Commonwealth Bank of Australia, Term Deposit 062650(50073666)

(d) The defendant's shares in NRMA to the extent necessary to meet a legacy in 1 above and the costs hereafter ordered. 3. I order the plaintiff's costs on a party and party basis and the defendant's costs on an indemnity basis to be paid or retained out of the notional estate.

4. Interest to be payable on the legacy in 1 above if the legacy is not paid within two months of today's date and from that date at the rate provided for under the Wills, Probate and Administration Act 1898 (NSW) . **********

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