Cerioni v Servi [2004] NSWSC 390

New South Wales Supreme Court

CITATION : Cerioni v Servi [2004] NSWSC 390 HEARING DATE(S) : 29 April 2004 JUDGMENT DATE : 29 April 2004

JUDGMENT OF : McDougall J at [1] DECISION : See para [35] of judgment

CATCHWORDS : FAMILY PROVISION ACT - widow's claim - no other eligible person - no question of principle LEGISLATION CITED : Family Provision Act 1982 Fanny Cerioni (Plaintiff) PARTIES : Enrico Servi (Defendant) (Estate of the late Andrea Cerioni) FILE NUMBER(S) : SC 5292/02 COUNSEL : J Conomos (Plaintiff) J A Trebeck (Defendant) SOLICITORS : Joseph M Blanco & Associates (Plaintiff) Hartmann & Associates (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

McDOUGALL J

29 April 2004 (Revised 30 April 2004)

5292/02 FANNY CERIONI v ENRICO SERVI (Estate of the late Andrea Cerioni) JUDGMENT 1 HIS HONOUR: The plaintiff is the widow of Andrea Cerioni. In these proceedings she seeks relief under s 7 of the Family Provision Act 1982.

2 The deceased was born in Italy on 15 June 1937. The plaintiff was born in Ecuador on 23 May 1946. The plaintiff and the deceased were married on 17 June 1996. At that time the plaintiff was aged 50 and the deceased was aged 60. The plaintiff had had an earlier marriage in Ecuador, of which one child was born. That marriage ended in divorce. 3 The plaintiff was introduced to the deceased by her sister and brother-in-law, Bianca and Giuseppe Sanchez. Mr and Mrs Sanchez were clearly friends of the deceased. The plaintiff and the deceased actually met whilst the deceased was on holiday in Ecuador. The plaintiff asserts that then (in 1995) the deceased proposed marriage to her. The evidence of the defendant is that the deceased did not decide to marry the plaintiff until after he returned to Australia. The circumstances of the conversation between the deceased and the defendant would indicate that there had been no prior proposal of marriage. The defendant was not cross-examined on his account of the conversation. 4 Be that as it may, in April 1996 the plaintiff came to Australia. She stayed with the deceased at his then home, 465 Cleveland Street, Redfern. The plaintiff's sister and brother-in-law and their son Richard were also living there. 5 The plaintiff says that she brought with her in cash $US22,000. She says that represented the proceeds of sale of a business that she had owned and operated in Ecuador. The defendant challenges the existence of that amount or that the plaintiff brought it to Australia. On balance, I think it is likely that the plaintiff did have an amount of about $US22,000 and she did bring it to Australia. I do not find it surprising (as the defendant's counsel appeared to suggest was the case) that she would have kept that amount in cash rather than put it in the bank, and that she did not disclose the existence of the amount to anyone, including her sister. 6 The plaintiff and the deceased, after their marriage in June 1996, continued to live in the Cleveland Street house. In December 1996, they went to Italy for a holiday. They stayed in the house of the deceased's mother. That was, on the evidence, the first time that the plaintiff and the deceased had been alone together, without the presence of the plaintiff's sister, brother-in-law and nephew. 7 The deceased decided in mid 1997 to sell his Cleveland Street house and to purchase a house at 36 Tramway Street, Rosebery. The change over amount required was about $90,000. The plaintiff says that she agreed that her amount of $US22,000 (which, she says she had given to her husband, the deceased, the previous year) could be applied towards the purchase price and associated expenses. 8 In November 1997, the deceased was diagnosed as suffering from Hepatitis B. 9 In 1999, the deceased was diagnosed with cancer of the liver. Thereafter, he received a disability pension and the plaintiff received a carer's pension. In August 2000, the deceased had a liver transplant. Sadly, although that appeared, for a short time, to halt the progress of the disease, it returned. In November 2001, the deceased's liver cancer was again manifest and his medical prognosis was poor. The deceased made a will on 28 December 2001 ("the Australian will"). In that will he gave the plaintiff $100,000. He gave the plaintiff's sister's $10,000 and the plaintiff's nephew $40,000. The residue of his estate he gave to his sisters, Angela Batisti and Ana Maria de Carli, and his brother Guiseppe Cerioni, all of whom were resident in Italy. 10 In January 2002, the deceased, who by then was terminally ill, decided to return to Italy. The plaintiff assisted in this. The deceased's nieces, Fiorella de Carli (who had been a frequent visitor to Australia over the years of the marriage) and Lorella de Carli, came to Australia and assisted in taking the deceased back to Italy. 11 The plaintiff's evidence is that there was withdrawn from a bank account in the name of the deceased some $50,000 and that this sum, together with a further sum of $68,000 in cash, was converted into a Euro bank draft and taken to Italy. However, as the evidence came out, I think it is clear that there was but one amount totalling about $68,000. It would appear that part of this was the bank account balance of about $50,000 and that the balance was made up of two cash sums given by the deceased to Fiorella and Lorella. 12 When the deceased, the plaintiff and Fiorella and Lorella went to Italy, the deceased paid for the travel expenses. The Euro bank draft equivalent to about $68,000 was given to the deceased's family in Italy, so it is said to pay for the cost of treatment and for funeral expenses. There is no evidence as to how much of that amount was required for those purposes and I infer, on the evidence, that a substantial portion of the amount in fact remained and has been used by the deceased's Italian family for their benefit. In saying that, I mean no criticism: it was clearly the deceased's intention that this should be so. 13 On 25 January 2002, in circumstances that have attracted some excitement in this case, the deceased made a will in Italy, ("the Italian will"). By that will the deceased revoked "any previous disposition by will." (I quote from the translation into English) and stated "I name as heirs my brother Giuseppe and my sisters Ana and Angela, living [sic: obviously, "leaving"] my entire estate to be shared out in equal parts among them." The deceased died in Italy on 25 February 2002 and was there buried. The plaintiff returned to Australia, not knowing of the Italian will, on 5 March 2002. 14 The deceased's Australian will named the defendant as executor. The defendant did not know of the existence of the Italian will. Accordingly, he applied for probate of the Australian will and this was duly granted on 19 August 2002. 15 Thereafter, the Italian will came to the attention of the defendant or his solicitor. At first it was thought that the two wills might stand together; but upon consideration this proved not to be so. Accordingly, on 22 September 2003, probate of the Australian will was revoked and the defendant was granted letters of administration cta of the Italian will. These proceedings had by then commenced, and the parties very sensibly consented for their continuation in relation to the new will. Consent orders to that effect were made on 11 November 2000. 16 There was a deal of affidavit evidence dealing with the relationship between the deceased and the plaintiff. In the circumstances, I do not think it necessary to traverse that evidence. There are two reasons for this. Firstly, much of what was said was denied; and for reasons of economy, bearing in mind the relatively small amount of the estate (to which I will come) the differences were not pursued in cross-examination. In those circumstances, I cannot with confidence make findings of fact on matters that are in dispute. 17 More importantly, the defendant does not deny that the deceased was not left with adequate provision and does not deny that some provision should be made for her. The issue is what provision should be made. 18 The substantial asset of the deceased was his house at 36 Tramway Street, Rosebery. The estimated value of that is $700,000. The debts of the estate include a liability for costs of about $53,000. The costs of sale of the Tramway Street property would be about $22,500. The defendant intends to make a claim for commission. That could range between $15,000 and $19,000. The plaintiff's costs of these proceedings have been estimated at $61,000; that is, presumably, on a solicitor and client basis. 19 If all these expenses are subtracted from the value of the house, the distributable estate in round figures is $545,000. 20 The plaintiff has expressed a wish to continue to live in the Tramway Street property. Quite how that can happen, given the need of the estate in any event to pay very substantial debts, has not been explained. There is certainly no basis to conclude that the plaintiff could raise the money either through commercial lenders or through friends or family. I must, therefore, proceed on the basis that the administration of the estate will require that the 36 Tramway Street property be sold. That being so, the question for me really bears upon the appropriate method of division of the net proceeds of sale, namely (as I have said) about $545,000. 21 It is, in my view, clear that adequate provision for the plaintiff would start with the provision of a residence. Again, the defendant does not submit that this is not so. There is evidence that an appropriate one bedroom unit in the vicinity where the plaintiff's sister, brother-in-law and nephew now live could be bought for about $240,000. There would be some costs of the purchase and of removal although the plaintiff, as a first home buyer, would not be liable for stamp duty. There may also be a need to buy furniture and appliances since the contents of the Rosebery house are assets of the estate. 22 The plaintiff's circumstances are not those of a wealthy person. On the evidence, she has two pensions, one granted in Australia and one granted by the Italian Government. The amount of her Australian pension is $389 a fortnight. The amount of her Italian pension is the Australian dollar equivalent of 75 Euros monthly. On present rates that appears to be about $120 a month. 23 The plaintiff has a bank account in which there is presently a credit sum of $8,400. She says that of this a sum $2,900 should not be present, that it is a mistake made by the bank. That is a reference to a deposit made on 30 March 2004. I do not find the plaintiff's explanation of the bank mistake to be convincing. However, even if it be appropriate to treat the resource as $8,400 rather than $5,500, it is clear that the plaintiff does not have much in the way of reserve capital. She does apparently have a Mitsubishi Pajero motor vehicle given to her by the deceased, but there is no evidence of its value. 24 There is no basis in the evidence for concluding that the plaintiff needs a substantial residence. Her sister, brother-in-law and nephew are housed in their own accommodation. Her son lives in Italy. There was, I think, some confusion as to precisely where he lives and what he does, but the best view of the evidence appears to be that he lives in Italy and that he visits her. I do not think that any need has been shown for the plaintiff's accommodation to include accommodation for her son. 25 The position of the beneficiaries under the will is that, of course, they are the siblings of the deceased and the objects of his testamentory bounty. It appears that they all live in modest circumstances in Italy. There was no evidence that any of them has any debt or any health problems or any particular need. That having been said, I accept that they do not need to justify that they have been selected by the deceased as the objects of his bounty. In any event, I would accept that ties of love and affection would cause the deceased to remember them in some way. 26 The question of provision starts, as I have said, with the need for accommodation. Mr Trebeck, Counsel for the defendant, disputed that there was any further need for the plaintiff to have a significant capital sum to protect her against the contingencies of life. He pointed to the fact she had worked in Ecuador and that her skills were, as he put it, transportable to Australia. He submitted that there was no reason why she could not obtain work in Australia. The plaintiff said that her health had prevented her from doing so after the death of the deceased. Her affidavit evidence was that she suffered from stomach ulcers, arthritis, elevated cholesterol and stress. In the witness box she added that she suffered from back pain. I find it a little difficult to accept that, if the back pain is such as to prevent her from seeking work, it would not have been mentioned in one of her affidavits. That is not to say she does not suffer from back pain. It is simply to indicate that I do not think that the back pain is, by itself, a sufficient reason (if reason be needed) why she should not seek work. 27 However, I think that it is unrealistic to say that a woman of her age and background, having very little English and having the health problems that have not been challenged, has high prospects of employment. I think that the likelihood is that she will continue to depend on her pension entitlements for subsistence. That, to my mind, indicates had she has some need for a further capital sum. 28 The plaintiff said that she was intending to repay to her sister and brother-in-law the sum of $6,900. The evidence on that was a little confusing. She said that it represented the accumulation of moneys lent by the sister and brother-in-law over the years. However, I think she came to accept that the moneys in question had been given to her whilst her sister, brother-in-law and nephew lived with her in the Tramway Street house and I think she accepted, in substance, that the moneys represented, in effect, their contributions toward household expenses. I do not think that it is appropriate to regard the amount as a debt due. 29 When one looks at the factors to which s 9 of the Act draws attention, it is apparent that the financial contributions made by the plaintiff to her marriage with the deceased were of a relatively small kind. I accept there were also non-financial contributions of the usual type. Indeed, as the evidence has evolved, that is not really in dispute (the dispute as to the nature and extent of those non-financial contributions being one of those that, because of the very sensible approach taken to cross-examination, cannot be resolved). 30 There is no suggestion of disentitling conduct. There is no suggestion that relevant circumstances disentitles the plaintiff to receive provision. The defendant does, however, point to the relatively short duration of the marriage. 31 As to this last point, it is clear that (regardless of the precise circumstances of the proposal) the plaintiff remained living in Australia because the deceased proposed marriage to her. On her story the proposal was made in Ecuador and she came to Australia to fulfill it. On the defendant's story, the proposal was made in Australia whilst the plaintiff was present on a tourist's visa. On either view, the plaintiff could not have married the deceased and lived with him, except by giving up her life in Ecuador. 32 In all the circumstances, I think that the appropriate provision for the plaintiff is an amount to cover the purchase of a home unit and associated expenses and to provide her with a capital reserve. I do not think that it is appropriate that she should have the whole of the estate: both because to give her this would be to make provision that could not be regarded as merely adequate and because to do so would ignore the claims that the beneficiaries have. However, the simple fact is that the plaintiff is an eligible person and the beneficiaries under the will are not. 33 Calculation of a monetary amount under the Act is never a precise science. In this case, taking into account the various factors to which I have referred, I think that the appropriate provision is a legacy in the sum of $375,000. That will, of course, require that the property be sold. I will, therefore, invite the parties to put submissions as to the time from which interest on that legacy should run, (the time must, of course, recognise the need to sell the house, and the exexutor's duty to do so in a way that is beneficial having regard to the interest of all parties). 34 Of course, the plaintiff should have her costs and the defendant's costs on an indemnity basis should be paid out of the estate. 35 I make the following orders: