New South Wales Supreme Court CITATION : YANG v DE BORTOLI AS EXECUTOR OF THE ESTATE OF THE LATE FRANK CEH [2010] NSWSC 1437 HEARING DATE(S) : 26 November 2010 JUDGMENT DATE : 13 December 2010 JUDGMENT OF : Tamberlin AJ at 1 1. Grant leave to serve short notice of the Notice of Motion. 2. Until further order, order the plaintiff and Frank Zekun Ceh exclusive occupation of the premises known as the Booker Bay property. DECISION : 3. Until further order, the defendants pay from the estate of the late Frank Ceh all outgoings including rates and insurances on the property. 4. Until further order, the defendants be restrained from taking any steps to remove or replace the plaintiff in her employment at the Ettalong Beach Motel. 5. The costs of the parties be paid from the assets of the estate. 6. Liberty to all parties to apply on 2 days' prior notice. CATCHWORDS : INJUNCTION – applicant is an applicant under s 59 of Succession Act 2006 (NSW) for family provision – threat to prevent her managing a motel asset of the estate – whether claimant eligible person – whether evidence that assets of estate placed at risk – whether any reasonable claim – balance of convenience LEGISLATION CITED : Succession Act 2006 (NSW), s 59 Supreme Court Act 1970 (NSW), s 66 CATEGORY : Procedural and other rulings Wen Hui Yang – Plaintiff PARTIES : Graziano De Bortoli as Executor of the Estate of the late Frank Ceh – First Defendant Frank Gelonesi as Executor of the Estate of the late Frank Ceh – Second Defendant FILE NUMBER(S) : SC 2010/390738 COUNSEL : R E Quickenden – Plaintiff W Carney - Defendants SOLICITORS : Nash Allen Williams & Wotton – Plaintiff Simone Legal – Defendants IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TAMBERLIN AJ 13 DECEMBER 2010 2010/390738 WEN HUI YANG v GRAZIANO DE BORTOLI AS EXECUTOR OF THE ESTATE OF THE LATE FRANK CEH JUDGMENT 1 HIS HONOUR: On 10 June 2010 the plaintiff filed a Summons seeking an order under s 59(2) the Succession Act 2006 (NSW) for provision out of the deceased estate of Frank Ceh in her favour. 2 On 11 November 2010 the Notice of Motion to which these reasons relate was filed seeking a number of orders concerning occupation of premises at Booker Bay, New South Wales; the Ettalong Beach Motel (Ettalong) and orders relating to payment of outgoings on the Motel, and most relevantly an order to restrain the defendants as executors of the Estate of the late Frank Ceh from taking any steps to remove or replace the plaintiff in her employment at Ettalong. 3 The parties have agreed on several of the orders sought including orders relating to occupation of the premises at Booker Bay, and payment of outgoings thereon. 4 The live issue between the parties is whether the defendants should be restrained from taking steps to remove the plaintiff from her management duties at the Motel or, alternatively, whether the defendants as executors should be advised to pay an amount of $800 per week as interim maintenance pending the hearing of the plaintiff's claim under the Succession Act. BACKGROUND 5 The plaintiff, Ms Wen Hui Yang, is 42 years of age. According to her affidavit of 4 June 2010, she came to Australia on 4 July 1998 on a business visa and is now an Australian citizen. She met the deceased in 2003 and formed a relationship commencing to cohabit with the deceased in April 2004 when she moved into the deceased's home at Booker Bay. She commenced working at the Ettalong Motel in December 2004 and her work there increased to a stage where she eventually was working on a fulltime basis in the business. 6 The deceased died on 15 June 2009 leaving a Will made on 11 January 2008. In that Will he left everything to his son Frank Ceh who is now almost five years of age and is the child of the relationship. Nothing was left to the plaintiff. The plaintiff claims that the deceased had a substantial drinking problem and that while she looked after him for several years there were short periods of separation because of domestic violence. On 1 January 2007 she left the Booker Bay home. However, she says there was a reconciliation and she returned. She says that a house was purchased with some funds from herself and the deceased at Kariong in her name only. The deceased guaranteed the mortgage. The deceased made repayments from his company, Parform Pty Ltd, and he paid rates and insurances on the property which continued up until his death. Whilst at Kariong she moved to and from the Booker Bay residence regularly and used Kariong as a refuge when the deceased was drinking. I note that the nature and extent of the alleged drinking problem of the deceased is disputed as is the characterisation and closeness of the relationship, particularly around the time of death. 7 After the deceased's death, the plaintiff sold the Kariong property for $382,000 and purchased an investment unit with part of the proceeds which she rents out. Since the deceased's death she says she has been working 4-5 days a week at the Motel and managing its affairs. 8 The present application for interlocutory relief arises from a letter written on 8 November 2010 to the solicitors for Ms Yang by the solicitors for the executors informing them that the defendants had determined to liquidate all assets of the estate and convert them to cash for investment, on behalf of the beneficiary Frank Ceh and stating that she should make immediate arrangements to vacate Booker Bay and remove herself from the Motel. This was accompanied by a threat that if there was no confirmation that there would be compliance with their request the defendants proposed to make arrangements for the changing of locks on both properties by the following day. 9 The basis for the order sought by way of interlocutory injunction is s 66(4) of the Supreme Court Act 1970 (NSW). The principles on which interlocutory judgments can be granted are well settled and require a consideration of the relevant circumstances, nature and strength of the plaintiff's case and the balance of convenience. 10 The plaintiff's case in the Summons proceeding is that she is an "eligible person" under s 57 of the Succession Act and she says that she had de facto relationship for three years with the deceased and had a son with him and that she is entitled to make a claim on the estate. She says she worked in the Motel business without receiving any wage for approximately six years from 2004 until 2009. The claim is disputed. 11 There is no dispute that the estate is a substantial one and is worth over $10 million comprising the Booker Bay residence, the Motel at Ettalong, properties at West Gosford and Wetherill Park and motor vehicles. There is also a liability to the ANZ Bank in the order of $400,000. 12 There is a dispute between the parties as to whether the plaintiff was in a de facto relationship with the deceased at the time of death but at a prima facie level on the evidence presently before me there is considerable weight to her claim of a de facto relationship at that time. It is not possible to express any concluded view on this matter at this early stage and bearing in mind that this is an interlocutory hearing. 13 The plaintiff says there is no evidence of any sound reason why she should cease to occupy and manage the Motel at Ettalong. This is the quantitative issue. 14 The defendants have filed affidavits on the basis of which they claim there are reasons to believe that the due and proper administration of the estate in the interests of the parties beneficially entitled thereto require them to take steps to ensure that the Motel business in particular is run in a proper and reasonable manner so as not to endanger the assets of the estate. They claim that these affidavits indicate that the assets are in jeopardy due to mismanagement and misconduct on the part of the plaintiff. There are allegations of the suspected siphoning off of funds from income of the Motel business. 15 More precisely a number of allegations are levelled by Mr De Bortoli in his affidavit of 17 November 2010 and other affidavits filed on behalf of the defendants. He is an accountant and says that he has examined the books and records of the Motel and he makes a number of assertions including for example a statement that an amount of $15,000 is unaccounted for in the records. He suspects that the records have been amended to reduce the income generated from the Motel and fears there may have been further misappropriation and he refers to the way in which entries in pencil are inserted and then erased. 16 The evidence adduced on behalf of Mr De Bortoli in relation to these matters is unsatisfactory raising imprecise allegations and far-reaching inferences for which no proper basis has been provided. For example, he claims that for the period July 2009 to June 2010 a sum of $15,012 is unaccounted for and he annexes some monthly income summaries. These income summaries do not relate to that period. They cover a period from 12 July 2010 to 12 September 2010. He also alleges that some items in a purchase requisition form were not approved before expenditure was incurred and that the plaintiff had taken cash from the Motel and paid invoices in respect of work on the properties. There is no indication that these expenditures were not by way of improvement of the properties. There are also generalised allegations that the plaintiff had taken cash from the Motel but these are not spelled out in detail and are relatively insignificant amounts. 17 There is also an allegation that the plaintiff spent $21,000 on the Booker Bay property which form parts of the estate in making improvements. Again, there is no indication that this expenditure was not for the enhancement of the value of property. 18 There is also some evidence from a Ms Catherine Jurca who lived with Ms Yang at Booker Bay and worked in the Motel. She says that she lived at Booker Bay from February 2010 to November 2010 and although not an accountant she claims to have some experience in managing financial records for a small business and made allegations about rooms being let in return for payment in cash. However, her observations as to the entries in books and her general conclusions about the books are not substantiated by any specific details or examples nor with the benefit of any professional experience. Ms Yang has filed a number of affidavits dealing with the allegations and explaining in some detail the problems experienced in managing the Motel. She denies having taken money from the Motel for her own account and she points out there were personal differences with Ms Jurca who was asked to leave Booker Bay by Ms Yang. 19 So far as the status quo is concerned the position is that the plaintiff has been operating the Motel for 17 months since the death of the deceased and prior to that time she was operating it with the deceased for about five years. The evidence sought to be relied on in relation to fraud or stealing is insufficient on its face and in the light of denials to make good the allegations by the defendants. The Motel has effectively been the main source of income for the plaintiff for over six years. 20 The estate is a large one by any standards and the amounts in respect of which allegations are made are relatively small. There is no suggestion that the plaintiff is in any way deficient in her care and attention to the son of the deceased. Moreover, the material which has been adduced by the defendants in relation to their fears concerning the administration of the estate and the preservation of the assets is vague, generalised and unconvincing as presently before me. 21 In addition I consider that the plaintiff is presently well aware that her expenditures and actions in relation to the estate assets are and will continue to be closely scrutinised by the executor and that this realisation will have the effect of making her conduct in relation to the Motel business more focused, particularly having regard to the fact that there will be a close consideration of all the relevant circumstances on the substantive hearing of her pending application under the Succession Act. 22 Accordingly, I consider that the plaintiff has an arguable case in the Summons proceeding and that her conduct is unlikely to endanger the assets of the estate or the due administration of the estate. The balance of convenience falls strongly in favour of preserving the status quo and permitting her to continue the administration and management of the Motel business having regard to the fact that she has now performed the task for some years. In these circumstances it is appropriate that interlocutory relief should be granted to ensure that she is not prevented from managing the Motel business. 23 Accordingly, the orders I make are that there be leave to serve short notice of the Notice of Motion and that it be made returnable before me. Until further order, I order that the plaintiff and Frank Zekun Ceh exclusively occupy the premises known as the Booker Bay property; that until further order the defendants pay from the estate of the late Frank Ceh all outgoings including rates and insurances on the property, and that until further order the defendants be restrained from taking any steps to remove or replace the plaintiff in her employment at the Ettalong Beach Motel. 24 I order that the costs of the parties be paid from the assets of the estate and I reserve liberty to all parties to apply on 2 days' prior notice. ********** 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. 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