Zaleski v Patterson & Anor: Estate G.C. Hazzard

Supreme Court of NSW|2005-02-04|Before: Palmer J

CITATION : Zaleski v Patterson & Anor: Estate G.C. Hazzard [2005] NSWSC 54

CATCHWORDS : FAMILY PROVISION ACT - Claimant lived in domestic relationship with deceased for eight months prior to deceased's death - deceased left marriage of thirty years to live with claimant - claimant misrepresented her true financial position for purposes of claim.

LEGISLATION CITED : Family Provision Act 1982 (NSW) - s.7

C.M. Simpson - Plaintiff COUNSEL : A.L. Hill, P.M. Jeffries - Defendants

James C. Hall - Plaintiff SOLICITORS : McCabe Terrill - Defendants

1 The Plaintiff, Mrs Zaleski, seeks an order under s.7 of the Family Provision Act 1982 (NSW), for her maintenance out of the estate of the late Gregory Charles Hazzard. The Plaintiff brings her claim as a person with whom the deceased was living in a domestic relationship at the time of his death. There is no dispute that the Plaintiff was in such a relationship with the deceased and that she is an eligible person as defined in the Act. 2 The deceased died on 30 June 2002, leaving a will dated 28 October 1979. The will left the whole of his estate to the Second Defendant who was, as at the date of the deceased's death, still his wife. Probate of the will was granted to the First Defendant as executor on 17 June 2003. 3 The deceased was born in 1951. He married the Second Defendant, who was born in 1952, in March 1972. There were two children of the marriage, Cassandra born in 1975, and Luke born in 1979. Without intending any disrespect, and purely for the sake of intelligible reference, I will refer to the members of the Hazzard family as Greg, Lesley, Cassandra and Luke. The relevant facts

4 Greg and Lesley appear to have had a happy marriage up until the events now in issue. The evidence given by Lesley, Cassandra, Luke and friends of the family depicts Greg as a happy, stable man in a responsible position in employment, a supportive and caring husband, a devoted, affectionate father who participated enthusiastically in his children's activities, and a respected and loyal friend to many people. 5 Greg and Lesley first lived in a house at Kings Langley which they improved and extended considerably over the years, mainly by their joint personal efforts. Greg enjoyed doing building work and Lesley assisted him when she could. Together they provided a comfortable home for the family. 6 In 1993, the family realised a long-held dream of living near the beach. Greg and Lesley bought, as joint tenants, a run-down little house in Lagoon Street, Narrabeen, only a short distance from the sea. They both set about doing considerable renovations and improvements, working themselves mostly on weekends and often with the assistance of their children. The purchase and renovations of the houses at Kings Langley and then at Narrabeen, were paid for both by Greg and Lesley. Lesley took on part-time work to supplement Greg's income, working on Saturdays and three or four nights a week and her income was used to meet mortgage repayments and the cost of building materials for the renovations. 7 After four years of work, done mostly by Greg with the assistance of the family, the house at Narrabeen was transformed into a spacious and very comfortable home. The whole family was very proud of this achievement. 8 In March 2001, Greg and Lesley went on a cruise of the Pacific Islands to celebrate Greg's fiftieth birthday. After they returned, Lesley noticed that Greg was spending a great deal of time at the computer, apparently playing cards with a person identified as "Blue Sapphire 13". When Lesley inquired who "Blue Sapphire 13" was, Greg told her that she was a lady of sixty-five years of age living in Texas. 9 "Blue Sapphire 13" was in fact, Mrs Zaleski, who was indeed at that time sixty-five years of age and living in Austin, Texas. Mrs Zaleski was married and living with her husband Constance. They had been married for forty-four years and had four grown up children and a number of grandchildren. 10 The relationship between Greg and Mrs Zaleski quickly developed from Internet communication to almost daily telephone calls. In May 2001, Greg asked Mrs Zaleski to come to Australia and she agreed. She arrived in early July 2001 and a sexual relationship commenced immediately. They travelled together to the Gold Coast for a week. Greg told Lesley that he had to go away for a conference. The following week, Greg spent the day with Mrs Zaleski and returned home each night. Mrs Zaleski returned to Texas on 25 July 2001. Greg paid for Mrs Zaleski's expenses while she was in Australia. 11 According to Mrs Zaleski, in August 2001 Greg asked her in several telephone calls to leave her husband and come to Australia to live with him. In a telephone conversation with Greg on 16 August 2001, Mrs Zaleski agreed, apparently without regret according to her own evidence. She immediately told her husband that she was leaving him. The following day, that is 17 August, Greg told Lesley that he was leaving her for Mrs Zaleski and that he was going to Texas to help her pack up and move to Australia to live with him. Lesley had had no inkling of the relationship between Greg and Mrs Zaleski up until that point. 12 On 22 August 2001, Mrs Zaleski filed a petition for divorce in the District Court of Texas. On 5 September 2001, Greg went to Texas to help Mrs Zaleski to arrange her affairs and to move to Australia. Mrs Zaleski left her employment and reached agreement with Mr Zaleski as to the division of the matrimonial property. She attempted to sell the matrimonial home in Nasco Drive, Austin, but decided to wait until market conditions improved. 13 A property agreement between Mr and Mrs Zaleski was executed on 22 October 2001. Very soon afterwards, Mrs Zaleski left for Australia and arrived on 27 October 2001. Greg had returned to Sydney a few days earlier and had rented a unit in Narrabeen. He and Mrs Zaleski lived there together from late October 2001.

14 The sudden and unexplained end of the marital relationship with Greg and Lesley deeply shocked their children and their families. It is very clear from the evidence that Lesley, Cassandra, Luke and the extended families could not bring themselves to accept what had happened or, indeed, even to meet Mrs Zaleski. The relationship between Greg and his children, which had been very close and loving, became strained and distant, if not hostile at times. 15 On 30 June 2002, some seven months after Greg had commenced living with Mrs Zaleski in Sydney, he took his own life without any warning. On 11 July 2002, Mrs Zaleski returned to Texas and resumed residence in the former matrimonial home in Nasco Drive. In December 2002, Mrs Zaleski's solicitors gave notice of a claim under the Family Provision Act to the solicitors for Greg's estate, and on 18 December 2003 she commenced these proceedings.

16 During his life time, Greg's major asset was his interest as joint tenant with Lesley in the matrimonial home at Narrabeen. That interest and other property held as joint tenants passed to Lesley's survivorship upon Greg's death, so that the majority of assets requiring consideration fall into the category of notional estate. The parties have helpfully agreed upon a statement of the position of the estate: "Estate: 99/100th interest 203/20-24 Albert Road, Strathfield 62,753.62 - net balance realised after payment of Agent's Commission, selling costs and adjustments Shares 27,317.00 Colonial First State 4,700.00 NAB account no. 534250856 0.99 Long Service Leave 5,779.39 Total Estate $100,551.00

Liabilities: NAB Visa account 17,803.55 NAB Visa account 29.95 Emmerson & Emmerson on Grant of Probate 4,100.00 Taxation 2,725.00 Funeral expenses 4,500.00 Estimated CGT 10,000.00 Total liabilities $ 39,158.50 Net Estate $ 61,392.50

No allowance is made in relation to any right to reimbursement in the Second Defendant in respect of payments made in respect of the Strathfield unit or liability to the estate in respect of rentals received from that unit.

Notional Estate: Half interest 99 Lagoon Street, Narrabeen 457,500.00 Half interest in Seashells Time Share Resort 2,750.00 Plum-MLC Vanguard Initiative Super Benefit 232,426.01 AMP Super Benefits 66,716.54 Net Notional Estate $759,392.55

Net estate 61,392.50 Net notional estate 759,392.55 TOTAL NET ESTATE $ 820,785.05

The net estate is therefore $820,785 less, of course, a provision for legal costs. They amount in total to some $30,000 on behalf of the Plaintiff and $48,000 on behalf of the Defendants.

Mrs Zaleski's financial position, according to her affidavit evidence

17 Mrs Zaleski is now sixty-seven years of age. Shortly after Greg's death, she returned to Texas and resumed living in her house at Nasco Drive, Austin. She is in good health apart from needing some dental treatment. From my observation of Mrs Zaleski in the witness box, she is an intelligent, alert and active lady of strong character. 18 According to Mrs Zaleski's affidavit evidence, her position is as follows. Because of her love for Greg, she obtained a divorce from her husband, gave up a secure and well-paid job as an accountant in Austin, Texas, together with the continuing attached retirement fund benefits, and moved to Australia. She now lives alone at the Nasco Drive house. She has been continuously looking for employment since September 2002 but without success. 19 A major obstacle to re-employment is the fact that she does not own a car and cannot afford to buy one. The fact that she has no car causes her other great hardship. Her house is almost a kilometre walk from a bus stop, and it is very difficult for her to wait for the bus in the extreme weather conditions which Texas experiences. In order to buy food, she must walk almost a kilometre to the nearest shopping centre. On the few occasions she has done this, she has arrived home feeling exhausted, light-headed and faint. She has therefore been compelled to rely on the generosity of neighbours to drive her, but this makes her feel humiliated. To purchase clothing and household items, Mrs Zaleski must walk to the bus stop, take a bus to central Austin and transfer to another bus route. 20 Mrs Zaleski attends church every Sunday and often likes to go to the church during the week for choir practice and meetings. Because she has no car and has to walk a kilometre to the church, she finds this very difficult and feels unsafe when she has to walk home in the dark after choir practice. Mrs Zaleski says, therefore, that she has a strong case for provision from Greg's assets to enable her to purchase a car. She has made enquiries and thinks that a suitable car may be purchased from between AUD19,000 and AUD23,000. 21 Mrs Zaleski's assets are: her home at Nasco Drive valued at USD232,618; a retirement fund constituted by investments now valued at USD112,000; a 51% share in a photography business conducted by her son, Christopher. The business is not profitable and its liabilities equal or exceed assets. She believes that her interest in the business has no value; a small amount of cash in savings account. 22 Mrs Zaleski's liabilities are: a credit card debt of about USD3,600; a mortgage on the Nasco Drive house, USD28,455; loans from Mr Zaleski totalling USD6,837 to assist with replacement of the garage door and specified medical expenses. 23 Mrs Zaleski's weekly income is entirely derived from a retirement pension and social security which totals USD458 per week. Her weekly expenses including the mortgage payments, total USD766. Because Mrs Zaleski's weekly income is insufficient to cover her weekly expenses, she cannot afford to incur many of her normal weekly items of expenditure. 24 The position generally presented by Mrs Zaleski in her affidavit evidence is that of a single, elderly lady living alone in difficult financial circumstances.

25 Regrettably, the account of Mrs Zaleski's financial position given in her affidavit is not accurate. In fact, I am compelled to conclude that it is substantially and deliberately misleading, as emerged from Mrs Zaleski's cross examination. Mrs Zaleski's financial position, as I find it in fact to be, is as follows. 26 When Mrs Zaleski returned to the Nasco Drive house in Austin, her ex-husband, Mr Zaleski, who resided there while she was in Australia, continued to live there with her. Mrs Zaleski was asked directly in cross examination whether Mr Zaleski was living at the Nasco Drive house. She evaded that question twice by saying that "he spent some time there" . She reluctantly conceded, however, that Mr Zaleski stays at her home, "has some clothes there" , sleeps there "occasionally" , and that she usually sees him once a day. He does the household maintenance and is there every day to drive her wherever she wants to go. She said on a number of occasions in her evidence that she and Mr Zaleski had always remained very good friends. 27 When asked where Mr Zaleski lived if he were not living full-time at the Nasco Drive house she said, however, that she did not know and had never asked Mr Zaleski. I find this answer highly improbable, particularly when coupled with the following evidence which emerged during Mrs Zaleski's cross examination. 28 A bank account with the Bank of America which was in Mrs Zaleski's sole name when she resided in Australia was changed to include the name of Mr Zaleski shortly after Mrs Zaleski's return to Texas. Mrs Zaleski denied that she had authorised this change, but she could give no explanation of how the inclusion of Mr Zaleski's name on the account could have happened. I find this evidence quite improbable and unsatisfactory. 29 An up-to-date certificate of voter registration for Mr Zaleski was tendered showing that his current address is recorded as the Nasco Drive house. Mrs Zaleski conceded that Mr Zaleski had driven her to the polling booths to vote at a recent election. Her explanation was that Mr Zaleski simply omitted to change his address. 30 A current certificate of registration of a Buick motor vehicle was tendered. It showed that the registered owners of the car were both Mr and Mrs Zaleski and that their address was the Nasco Drive house. A current record of Mr Zaleski's driver's licence was tendered. It showed that his address was the Nasco Drive house. A current driving licence for Mrs Zaleski was also tendered. It is clear that she and Mr Zaleski are registered owners of the Buick car and that Mrs Zaleski is currently licensed to drive a motor vehicle. 31 A receipt from a tradesman dated 16 November 2002 was tendered showing that Mr Zaleski had certified that some work done on the house at Nasco Drive had been properly carried out. A similar certificate dated 20 April 2004, signed by Mr Zaleski was also tendered. 32 Documentary evidence also shows that, since Mrs Zaleski's return to Texas, she has gone on two holidays with Mr Zaleski. Most significantly, the credit card records of Mrs Zaleski show, as she eventually conceded in cross examination, that almost all of the personal expenses which she has incurred on her credit cards since her return from Australia have been paid for by Mr Zaleski. 33 In the light of these circumstances, Mrs Zaleski's evidence that Mr Zaleski must simply have omitted to change his address on a number of critical records and that she does not know where he lives presently is completely incredible and I do not accept it. 34 I am satisfied that when Mrs Zaleski returned to Austin, Texas in July 2002 she resumed cohabitation with Mr Zaleski and that thereafter Mr Zaleski has contributed substantially to her support and maintenance. I have no evidence from which I can conclude that this situation will not continue. 35 Greg was not unaware that Mrs Zaleski had a continuing relationship with Mr Zaleski even while she was living in Australia. During the period from the end of October 2001 until 10 July 2002, when Mrs Zaleski left Australia, Mrs Zaleski made a total of ninety-seven telephone calls to Mr Zaleski, many of them lengthy. Mrs Zaleski attempted to explain these telephone calls in cross examination by saying that she was requesting Mr Zaleski to send her regularly some non-prescription medication that was not available in Australia, that she was enquiring about her grandchildren, and that she was discussing taxation or financial matters. 36 I do not accept that evidence. Greg himself did not perceive that to be the character of the continuing telephone calls and the relationship between Mr and Mrs Zaleski. He left two suicide notes. One of those notes was addressed to Mrs Zaleski, and read: " Judy I suggest you pack up & go back to Cy. He still loves you & you him a little I know (all the phone calls to him) Good luck"

Mrs Zaleski did not disclose that suicide note in her evidence. 37 Another significant misstatement by Mrs Zaleski in her affidavit evidence was the value of her house at Nasco Drive. She gave that value as USD230,000. However, in cross examination she conceded that that was the value of the house as shown in the US equivalent of a land tax assessment valuation, and that the current market value of the house was about USD350,000, a misstatement in value in her favour for the purpose of her claim of some USD118,000. 38 Because of the unsatisfactory evidence given by Mrs Zaleski, I am unable to accept uncritically that she has continually endeavoured to obtain employment since her return to Texas, but has been frustrated by her lack of a car. The evidence shows, as I have said, not only that she is the joint owner of a car and has a current driver's licence, but that she has a sum of USD112,000 approximately in her retirement fund from which she could draw sufficient funds to purchase a car, if she wished. 39 In short, as the Defendants submit, Mrs Zaleski has deliberately chosen not to put her true financial position to the Court, not in minor respects, but in critically important respects. I cannot accept her evidence generally with any confidence. There may be other assets and income to which she has recourse which she has not disclosed and which have not been revealed by the Defendants' investigations. I am unable, therefore, to be satisfied of what her true financial position is and what, if any, need she may have for provision from Greg's estate. 40 I bear in mind that Mrs Zaleski did give up her job in Texas to come to Australia, but her evidence about the telephone conversation with Greg on 16 August 2001 shows that she did so willingly and freely. She was in Australia only for about eight months. As I have said, I am unable to rely on Mrs Zaleski's evidence that she has been unable to obtain employment since her return, despite genuine efforts to do so. 41 I bear in mind also that after Greg's death, some AUD20,000 was provided out of Greg's estate to cover various expenses which Mrs Zaleski had incurred, so that to that extent she has already received some benefit from the estate. 42 In summary, because Mrs Zaleski has not disclosed her true financial position fully and frankly, I hold that Mrs Zaleski has failed to prove any need for any provision out of the estate of Greg. I should, however, go on to give other reasons why I would dismiss Mrs Zaleski's application.

43 I must bear in mind the competing claims on Greg's testamentary disposition, both by Mrs Zaleski, who was unquestionably living in a domestic relationship with him, and by his wife, Lesley. On the one hand, as I have noted, Mrs Zaleski lived in a domestic relationship with Greg for about eight months. On the other hand, as at the date of Greg's death he had been married to Lesley for almost thirty years. Together, he and Lesley had not only had a family but had largely built and/or refurbished two houses. In that endeavour Lesley contributed very substantially both financially and by her physical efforts. In order to make that contribution, Lesley had engaged in as much part-time work as she could. 44 The state of Lesley's health is not entirely good. As at the date of Greg's departure in September 2001, Lesley had diabetes and was insulin-dependent, needing injections twice daily. However, since then she has been able to take oral medication. She is now on three tablets daily for treatment of her diabetes. Lesley also suffers from high blood pressure and is required to seek medical assessment of her condition and blood tests approximately every two months. 45 Lesley has endeavoured to obtain permanent employment since Greg's death to assist with her financial position. However, she does not have any technical or professional qualifications and she has been successful only in obtaining casual employment. She has no guarantee of any security of employment. 46 Lesley's living expenses are almost $2,000 a month. She has some income from a unit in which both she and Greg invested. She has medical bills to pay as well as expenses such as rates and insurance and so on, amounting to about $3,600 or $3,700 per year. She has other weekly expenses of some $645. She has been receiving since Greg's death an income from her casual employment of approximately $600 net per week. Her son Luke lives with her at the moment and is paying board of some $70 a week. He contributes to the payment of telephone and electricity bills. 47 In view of the length of the marriage, in view of the very considerable financial contributions to Greg's financial position and welfare which Lesley has made over some thirty years of marriage, it seems to me that Lesley's claim on the testamentary disposition of Greg is an extremely high one. In my opinion, it completely outweighs such claim as Mrs Zaleski has on his testamentary disposition, bearing in mind the nature of the relationship, its duration and the fact that the estate has already provided some $20,000 to pay her expenses. 48 For those reasons also, in my opinion, Mrs Zaleski is not entitled to any provision out of the estate of the deceased. The Summons is therefore dismissed. I will hear argument as to costs. 49 As I have said in my judgment, this is a case in which Mrs Zaleski has made a claim against the estate based upon deliberate and substantial misstatement. It is true that she is a "Category A Applicant", that is, she was a person living in a domestic relationship with the deceased at the time of his death, but she has deliberately misrepresented her financial position, which is the very foundation of her claim. In those circumstances, I do not think it appropriate to allow her costs out of the estate. Indeed, this is one of those rare cases where I think it is appropriate to make an order that she pay the Defendants' costs. 50 The orders of the Court will therefore be:

ii) the Plaintiff will pay the Defendants' costs. ~ oOo ~

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Family Provision Act 1982(NSW)

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Judgment (22 paragraphs)

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