Santos v Santos [2004] NSWSC 679

New South Wales Supreme Court

CITATION : Santos v Santos [2004] NSWSC 679 HEARING DATE(S) : 29/07/2004 JUDGMENT DATE : 29 July 2004 JURISDICTION: Equity Division JUDGMENT OF : Master Macready at 1 DECISION :

CATCHWORDS : Family Provision. Application by former wife for provision. Deceased severs joint tenancy shortly before death and his interest passed to second wife. Small estate leading to sale of only asset. Orders apportioning costs and outstanding mortgage. PARTIES : Victoria Santos v Estrelita Santos FILE NUMBER(S) : SC 3561/2003 COUNSEL : A. Canceri for plaintiff J. Miller for defendant SOLICITORS : R.J. Russell for plaintiff Etheringtons Solicitors for defendant

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY

THURSDAY 29 JULY 2004

3561/03 - VICTORIA SANTOS v ESTRELITA SANTOS

JUDGMENT

1 MASTER: This is an application under the Family Provision Act in respect of the late Alberto Santos who died on 28 October 2002. He was survived by the plaintiff, a former wife, and the defendant who was his widow. 2 The deceased had five children. One of these was Marcus, son of the plaintiff and the deceased, who, unfortunately, died of spinal cancer on 22 January 1999, aged nineteen years. There is information that there were four children of the deceased born as a result of other relationships in the past. They were: Gloria Gabrina of the Philippines; Annabelle Rodriguez of Florida in the United States of America; Alberto Santos Junior of Hong Kong and Eddie of Hong Kong. 3 Notice has been given to Annabelle Rodriquez, who makes no claim. The addresses of the others are unknown and it is thus impractical to serve a notice on them pursuant to s 21. 4 Under the will of the deceased, which was made on 11 June 2002, the deceased left the whole of his estate to the defendant and appointed her as executrix. The assets in the estate consist primarily of a half share in the property known as 3 Linum Street, Macquarie Fields. The parties are agreed that the value of that property is $240,000, putting a half share at $120,000. The whole of the property is subject to a mortgage in the sum of $49,789. Taking into account the half share of this mortgage, the estate's half share is worth $95,105. 5 There was also a car which was the subject of hire purchase, but that has been distributed to the defendant who has continued to meet payments on that hire purchase agreement and that she substantially reduced the amount owing. 6 There are a number of other debts in the estate has. There is a David Jones account in the sum of $3716; a debt due to the defendant's niece by the deceased in the sum of $12,000; legal costs incurred by the deceased before his death of $1650. This gives a total of $17,366 and this would bring the estate share down to $77,739. 7 The defendant's costs are estimated at $19,799, reducing the estate further to $57,940. If the plaintiff's costs were to be paid out of this, and they are estimated at $9000, this leaves an estate of merely $48,940. 8 Clearly, the debts of $17,366 and the defendant's costs will have to be paid. This will mean that the property will in some way have to be sold, incurring sale expenses which are probably in the order of $5000. There is no evidence to suggest that the plaintiff could re-finance to meet these expenses in order to keep the house. 9 I will deal with a little of the family history. There is not much in the evidence about the deceased's earlier life. It is apparent that he married the plaintiff on 17 January 1975. As the deceased was already married at the time, that was an invalid marriage but the parties commenced living together. Their son Marcus was born on 7 February 1979. In 1981 there was a purchase by the plaintiff and the deceased as joint tenants of the property 3 Linum Street, Macquarie Fields. A deposit of $2500 was paid from the joint bank account and the balance of the purchase price was financed by a loan with the St George Bank. The evidence indicated that both the plaintiff and the deceased contributed to the savings account before the purchase. 10 On 4 April 1983 there was a marriage again between the plaintiff and the deceased, presumably after the earlier marriage had ceased, whether by way of death or divorce does not appear in the evidence. 11 On 25 April 1989 the plaintiff and the deceased separated. In May that year the deceased commenced cohabitation with the defendant. 12 On 15 April 1991 the plaintiff and the deceased were divorced. There was no property settlement at that time or subsequently. The plaintiff remained in occupation in the house. However, the deceased paid the mortgage payments until 1993. After that the deceased ceased making the payments and the plaintiff commenced those payments. She continued them until 1997 when the mortgage was repaid. 13 On 13 July 1991 the deceased and the defendant were married. 14 After the repayment of the St George mortgage there was, in 1997, a loan from Avco Finance which was secured by a mortgage on the property. This was done with the consent of the plaintiff. In 1998 there was a further Avco loan, also with the consent of the plaintiff. As I have recounted, on 21 January 1999 Marcus died; he was then aged nineteen years. 15 In September 1999 there was a further mortgage given in order to replace the Avco loan. By that stage the deceased had not been paying them but in fact had been making efforts to avoid paying the Avco loans. After some threats relating to the sale of the property, he took out a new mortgage with Direct Mortgage and that discharged the Avco loan. This was also consented to by the plaintiff and that mortgage remained in place until the death of the deceased, with the amount owing being approximately $50,000. 16 It seems the deceased made the repayments on the loan from 19 September 1999 until his death and thereafter the plaintiff has paid it. She still, of course, occupies the house. 17 It was on 11 June 2002 the deceased made his last will. On that date he also made a statutory declaration in which he set out the reasons why he had made no provision for his former wife. That was as follows: "I have omitted to provide for my former wife, Elsie Elaine Victoria Cashen Santos, as I have had minimal contact with her over a long period of time and I feel no obligation to make provision for her in my Will. This is because I was responsible for primarily paying the mortgage on the former matrimonial home, after separation and I allowed my former wife to remain in occupation of that home for a long period of time after separation without seeking recompense or a property settlement under the Family Law Act. I feel by these actions, I have discharged my obligations to my former wife." 18 On 18 September 2002 the joint tenancy between the plaintiff and the deceased was severed when the deceased adopted a procedure allowed by the Real Property Act in transferring his interest to himself. The deceased died, as I have said, on 28 October 2002 and a grant was made in February 2003. The summons to commence these proceedings was filed on 2 July 2003 and was within time. 19 It is necessary to deal with the question of eligibility. The plaintiff, as a former spouse, is, under the definition, an eligible person. However, in respect of such an eligible person, the factors warranting the making of the application have to be demonstrated under s 9 (1) of the Act. The question of factors warranting in respect of former spouses has been dealt with in a number of cases. In Dijkhuijs (formerly Coney) v Barclay (1988) 13 NSWLR 639, a number of the judges dealt with this matter. Kirby P had the following to day: "Fifthly, the respondent, picking up one of the themes of Mr Landa's comments, urged that s 9(1) of the Act was to be read in the light of the policy of the law to promote the finality of settlements of property disputes by orders made in the Family Court. Where such orders had been made, an order under the Act in the case of a former spouse should be exceptional. Only if this approach were adopted would the policy of the Family Law Act (Cth) be fully achieved. That policy is that parties whose marriage has been dissolved and in respect of whom orders have been made disposing of their matrimonial property, could go their separate way. Save for the rare and exceptional cases provided under the Family Law Act (Cth), such parties should henceforth face no financial obligation from one to the other. This public policy was referred to by Young J in O'Shaughnessy (at 149). It was also stressed by his Honour in the present case. There is no doubt that in most cases, t he achievement of a final property settlement in the Family Court would be seen by the parties, in current social circumstances, as terminating any moral claim of a former spouse to provision in the will of the other. Confronted by the news that he or she had been excluded from the will of the former spouse, the response would, in the overwhelming majority of cases, be: 'Our marriage was dissolved. We settled our financial affairs. We can each start a new life. That was the whole point of the Family Court proceedings.'' To this extent, I agree with what Young J has written in O'Shaughnessy and in this case." 20 Mahoney JA said: "That which the court 'shall first determine' is whether 'there are factors which warrant the making of the application'. That phrase may be contrasted with the references otherwise made to the determination of, for example, 'what provision (if any) ought to be made in favour of an eligible person ...' On the face of s 9(1) there is a distinction between "factors which warrant the making of the application' and the factors which warrant the making of an order.