New South Wales Supreme Court CITATION : Mifsud v Zarb [2003] NSWSC 983 HEARING DATE(S) : 28 October 2003 JUDGMENT DATE : 28 October 2003 JURISDICTION: Equity JUDGMENT OF : Master Macready at 1 DECISION : (1) In lieu of the provision of a half share of residue in favour of Yolanda Rosina Zarb, that she receive a legacy of $30,000; (2) That the plaintiff receive the whole of the residue of the estate; (3) That the plaintiff's cost on a party and party basis and the defendant's cost on an indemnity basis be retained or paid out of the estate of the deceased. CATCHWORDS : Family Provision - Application by a daughter who received half of her mother's house - Other half left to deceased's sister in law - Daughter awarded whole house subject to payment of small legacy to sister in law PARTIES : Rosanna Helena Mifsud v Yolanda Rosina Zarb - Estate of Helene Mifsud FILE NUMBER(S) : SC 1475/02 COUNSEL : Mr A M Colefax - Plaintiff Mr J D Smith - Defendant SOLICITORS : McCoy, Grove & Atkinson Solicitors Sydney - Plaintiff Messrs Ronald S Czinner & Co Solicitors Gladesville - Defendant IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER MACREADY TUESDAY 28 OCTOBER 2003 1475/02 Rosanna Helena Mifsud v Yolanda Rosina Zarb - Estate of Helene Mifsud JUDGMENT 1 Master: This is an application under the Family Provision Act in respect of the Estate of the late Helene Mifsud, who died on 15 August 2001 aged eighty-two years. The deceased was survived by her daughter, the plaintiff, and the defendant, who is her sister-in-law. The last will of the deceased 2 The deceased made her last will on 27 August 1999 under which she appointed the two parties as her executrices and under which she gave her daughter her furniture and personal items. She left the residue of her estate equally between her daughter and her sister-in-law. The estate of the deceased 3 Apart from the furniture, the only asset at the date of death was a bank account containing approximately $555, and her house at 23 Spring Street, Birchgrove, which the parties are agreed has a present value of $850,000. 4 Costs incurred to date are, for the plaintiff, $20,000; and for the defendant, $18,199. The plaintiff still owes a funeral account of $7503.98. 5 The deceased was born on 21 October 1919, and the defendant on 14 February 1931. The plaintiff was born in Egypt on 13 May 1951. Apparently the plaintiff was adopted by the deceased and her husband, who had no other children. In 1952 the plaintiff's father migrated to Australia and was followed the following year by the deceased and the plaintiff. 6 In 1957 the plaintiff's parents purchased a house at Birchgrove, and the family moved there at that time. The plaintiff was then at school and in 1970 she completed her schooling and gained employment as a clerk with the Registrar General's Department. She continued living at home. 7 It was in 1975 the plaintiff's father died. Both the deceased and the plaintiff continued thereafter to live in that property. 8 In 1981, as she grew older, the plaintiff left the Birchgrove property and did some travelling overseas and lived in rented accommodation or with friends. She still kept in regular contact with the deceased, including overnight stays from time to time. She added to her employment burden in 1990 when she commenced part-time weekend work at the Carlton Nursing Home. As a result of that employment, she had an injury to her back in 1990. 9 It was in 1992 the plaintiff returned to the family home at Birchgrove, and she lived there thereafter and still lives there to this day. It was in this period from 1992 onwards she shared in the expenses of the home, including maintenance and improvements. 10 The deceased had a heart attack in 1996 and thereafter was less able to attend to domestic tasks, and of course the burden for these fell upon the plaintiff. 11 The deceased made her last will, as I have recounted, on 27 August 1999. Apparently the reason she provided for a half share to be given to her sister-in-law was that the deceased was somewhat cross with the plaintiff, who had indicated that she would leave her estate, if and when she had some, to friends rather than family. 12 In 2001 the plaintiff had a second back injury at the nursing home and made a workers' compensation claim. 13 On 15 August 2001 the deceased died and the summons was filed herein on 13 February 2002, and was within time. The grant of probate was made on 26 June 2002. 14 The plaintiff is a daughter of the deceased and therefore is an eligible person. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two-stage approach that a court must take. At page 209 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 Limited. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or 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." 15 I turn to consider the situation of the plaintiff. She is fifty-two years of age, single, with no dependants. Leaving aside the estate property, she has the following assets: (1) A 1996 Holden Astra sedan worth $12,000; (2) Shares worth $5,000; (3) A bank account of about $800 and some items of furniture and personal effects. She also has superannuation which, when she retires at sixty, which she does intend to do, will give her a sum of about $200,000. 16 She has the following debts at the moment: (1) Funeral expenses $7503.98; (2) Credit union $21,260; This is a total of $31,184.98. 17 The plaintiff is employed during the week at the Registrar General's Department in a senior clerical position. Her gross salary is $719.20 per week. She works weekends for the nursing home, and this brings her total weekly gross salary to $1059.86. Her expenses, including tax and credit union repayments, are about $900 per week. 18 Although she has had some back problems in the past, she manages without difficulty now, although she is looking for some replacement work to working at the nursing home in order to save her back from any further injury. 19 The plaintiff appears to have had a good relationship with the deceased and lived with her all her life, except for the eleven years period in her thirties. She was there to look after her mother when her father died, and in the later years took over all the tasks around the home as the deceased became older. She would often take her mother on outings several times a week. 20 From 1992, when she moved back home, she shared equally with her mother the costs involved, and particularly with maintenance and improvements. There are a number of those. For instance, they had the outside of the house professionally painted; the plaintiff herself painted the interior of the home. They had cladding on the back portion of the home, replacing fibro cement with Hardiplank. 21 There was the installation of a new roof over the kitchen, bathroom and the toilet, and there was the installation of a new kitchen, including a new refrigerator and a stove. New ceilings were placed in the hall and two upstairs rooms. There was new flooring for both upstairs balconies, and a new roof for those balconies, as well as latticework to replace old wrought iron. 22 There were new floor coverings in the kitchen and the laundry, and there was the replacement of the old bath/shower in the bathroom, because of the plaintiff's mother's difficulty in the use of the bath. There was new guttering and electrical work, and work fitting security doors and windows. 23 Since the date of death, the plaintiff spent about $25,000 on repairs and improvements to the house. Some of these were major, such as the new roof repairs, the walls and the ceilings. Apparently the defendant has made no contributions to this work. 24 It is necessary to consider the situation of anyone else having a claim on the bounty of the deceased. In this case, the only person is the defendant. 25 The defendant and her husband, who are seventy-two and seventy-one years of age, live by themselves, and have no dependants. They own their own home at Baulkham Hills, with a value of about $400,000, which is unencumbered. They own a 1994 Ford Laser motor vehicle, worth about $10,000, and some personal effects. They have no superannuation and live on the aged pension, which gives them a combined income of $361.60 per week. There is no evidence of any contributions by them to the estate of the deceased. 26 The defendant and her husband met the deceased in 1951 in Egypt and kept in close touch when they migrated to Australia. They spoke daily and would take the deceased to the local club on a weekly basis. Clearly, there has always been a good relationship between the families. 27 This is a claim by a daughter of the deceased and she is asking that she receive the whole of the home, which was the only asset in the estate. 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." The plaintiff says she wants to live in the house, which is a three bedroom house, as she knows the area. She has lived there virtually all her life. If she had to sell she would have to move away to a somewhat cheaper area. 28 The question that obviously arises in the case is whether the plaintiff, if she was successful, would have to sell the house in any event to pay court costs of $38,000 and the funeral account of $7502. She has discussed this matter with the manager of her credit union, in respect of which she has been a member for thirty-five years. He indicated there would be no difficulty in getting $40,000 and the repayments would cost her an extra $60 a week. This is well within her surplus income that she has of $160 per week. Probably in those circumstances it would be capable for her to borrow further funds. 29 Ordinarily, one would think the provision that has been made for the plaintiff was sufficient, notwithstanding her desire to live in Balmain or Birchgrove. But there are, however, other circumstances. One is the substantial contributions to the estate of the deceased before the date of death, and also quite substantial repairs and contributions made after the date of death. 30 The next matter is there has been a long and close association between the mother and the daughter. For most of her life the plaintiff has lived with her mother and in the latter years, she has supported her as a good daughter. 31 It is not appropriate to embark in this case on a consideration of whether the mother's reasons for leaving the plaintiff with only a half share were right or wrong. The question is primarily a consideration of the competing claims, and whether the plaintiff has been left without adequate and proper provision for maintenance, education and advancement in life. In my view she has been left without adequate provision. 32 The defendant, however, is in a difficult situation. She and her husband have nothing behind them and they have little hope of repaying their credit card debt. They are only living on the pension. They have nothing to make their lives more comfortable and provide for any unforeseen emergency. 33 In those circumstances I think that some small legacy in lieu of the defendant's half share in the residue is appropriate and can be probably accommodated by the plaintiff by borrowing until she receives her superannuation benefits in eight years time. 34 Accordingly, the orders I make are: (1) In lieu of the provision of a half share of residue in favour of Yolanda Rosina Zarb, that she receive a legacy of $30,000. (2) That the plaintiff receive the whole of the residue of the estate. (3) That the plaintiff's costs on a party/party basis and the defendant's on an indemnity basis be retained or paid out of the estate of the deceased. 35 I order the exhibits be returned. ********** Last Modified: 10/30/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.