Kornwasser v Spigelman [2022] VSC 759 (12 December 2022)

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FAMILY PROVISION AND MAINTENANCE – Application by adult daughter of testator – Large estate – Relevance of mutual wills – Expectation of substantial inheritance from mother – Amount of provision necessary for proper maintenance and support – Administration and Probate Act 1958 (Vic), Part IV, ss 91, 91A.

1 Abraham Spigelman died in Victoria on 25 May 2017, aged 88, after a long and remarkable life.^[1] He left his entire estate, valued at more than $13 million, to his wife Freda Spigelman. His youngest child and only daughter, Tobi Kornwasser, brings this proceeding under Pt IV of the Administration and Probate Act 1958 (Vic) (the Act), seeking an order that provision be made out of the estate for her proper maintenance and support.
2 Freda accepts that Abraham had a moral duty to provide for Tobi’s proper maintenance and support, that no provision for her is made in his will, and that an order for provision should be made out of his estate. The parties were in dispute about the amount of provision that should be ordered.
3 For the reasons that follow, I have concluded that a family provision order should be made for provision out of Abraham’s estate for Tobi’s proper maintenance and support in the amount of $3,150,000.

4 Abraham was born on 6 December 1928 into a Jewish family in Olkusz, Poland. In September 1939, when he was 11 years old, the German army invaded Poland. Abraham was separated from his family and over the next six years he was detained in concentration camps in Poland and Germany. He was in Buchenwald, malnourished and weak, when the American army liberated that camp on 11 April 1945. Abraham and his sister were the only members of his family to survive the Holocaust.
5 Through the Red Cross, Abraham was taken as a refugee to Switzerland, where he recuperated and learned a trade. He became a ‘cutter’, learning to cut collars. He was diligent, hard-working and determined to become financially independent. After a time, he migrated to Australia, arriving in Melbourne at the end of 1950.
6 Abraham and Freda met in Melbourne and married in 1954. Freda was also born in Poland, and her family had also endured displacement and loss during the war. After the end of the war, the surviving members of Freda’s family made their way to Melbourne.
7 Abraham and Freda were married for 63 years. They had four children: twin boys, Michael and Joseph; a third boy, Martin; and then a girl, Tobi, who was born on 23 December 1959. The family are members of the Adass Israel community, which Tobi described as ‘a very insular, self-sufficient community which practices among the strictest level of orthodoxy in the Jewish faith’.^[2]
8 The Spigelman siblings grew up in a close and loving family. Abraham doted on Tobi. As she put it:^[3]

9 Tobi also described a ‘wonderful and very close’ relationship with her brothers, in particular Michael, who she regarded as her protector. Their lives as children revolved around family, family occasions and the observance of religious traditions.
10 Tobi attended Adass Israel school in Melbourne, completing year 11, and then spent two years undertaking further Jewish studies at a seminary in Israel. After her return to Australia in 1978, she became engaged to a young man chosen by her parents, Leslie (Lazer) Kornwasser, who was also a member of the Adass community in Melbourne. Tobi and Lazer married in March 1979, and the first of their seven children was born in 1980. Their youngest child, Hadassa, was born in 1999.
11 The horrors that Abraham endured during the Holocaust shaped the way he built his life and work in Australia, and the way he cared for his family. He was determined that his family would always be financially secure and well provided for, and worked hard to achieve that. He established a successful quilt manufacturing business, which later expanded to importing and distributing Italian sheets and other textiles. Abraham also invested in property and, over time, participated in a number of large commercial and industrial developments across Melbourne. His businesses thrived and he achieved his objective of ensuring financial security for himself and his family.
12 Abraham’s determination to provide for his family found concrete expression in a number of ways. In the mid-1980s, Abraham and Freda bought a Property in East St Kilda for Tobi and Lazer, on which Abraham built and furnished a four-bedroom home. Tobi and Lazer own the Property as tenants in common in equal shares. Abraham and Freda made similar provision for each of their sons. The Spigelman family home, and the homes of each of the siblings, are within walking distance of each other and the Adass Israel synagogue in Ripponlea. Tobi and Michael live next door to each other in the same street in East St Kilda.
13 Over the years, Abraham paid many other expenses for Tobi and her family. After Tobi and Lazer were married, Abraham and Freda paid for them to travel to and live in Israel for about ten months so that Lazer could continue his religious studies there. They contributed to Tobi and Lazer’s living expenses on their return to Australia. Abraham paid almost all of the costs associated with sending Tobi and Lazer’s children to Israel for Jewish studies after high school, Tobi and Lazer’s share of the cost of the weddings of each their five married children, and contributed towards the purchase of houses for three of them. He also provided each of them with generous financial support to meet living and travel expenses, over many years. In 2015, Abraham gave $200,000 to Tobi’s family trust.

14 Abraham made his last will on 11 February 2013 and a codicil dated 12 December 2014 (together, the Will). Also on 11 February 2013, Freda made a will in substantially the same terms as Abraham, and signed a joint letter of wishes with her husband. Clause 2 of both wills contains a mutual will agreement.^[4]
15 Pursuant to the Will, Abraham relevantly:

16 Probate of the Will was granted to Freda on 4 December 2018. In the inventory filed in support of the application for probate, the estate was valued at $13,018,815.65 net. The estate’s main assets were debts owed by various Spigelman family and related company loan accounts. By the time of the trial, the estate was valued at $10,937,133.70. The reduction in the estate’s value was due to the purchase of a property for one of Tobi’s children from estate funds.
17 While there was some debate about the legal effect of the mutual will agreement, Freda’s unequivocal evidence was that she intends to honour it. She said that she and Abraham chose to execute mutual wills because they understood that the surviving spouse would continue to provide for family members in the same way that they had while both of them were alive. She described her will as providing, save for some specific bequests, for each of her four children equally. At the time of the trial, she estimated her estate to be worth about $42 million.
18 Freda’s will appoints her two oldest sons, Michael and Joseph, to act as her executors and trustees. There are specific bequests that relate to Freda’s superannuation entitlements in several superannuation funds. These entitlements are to be distributed in accordance with the last binding death benefit nomination signed by Freda. In respect of each superannuation fund, any entitlements distributed to Freda’s executors are to be divided into four equal shares, to be held in a separate trust fund for each of Michael, Joseph, Martin and Tobi. Freda’s residual estate is to be held by her trustees on trust to divide into four equal shares, each to be held on trust in a separate fund for each of her four children. Tobi is to be the ‘Specified Beneficiary’ of each of the will trusts that bear her name, including the Tobi Spigelman Will Trust. The trustees of these will trusts are to be Michael, Joseph and Tobi, acting by majority.
19 The terms of the will trusts are set out in the schedule to Freda’s will. The beneficiaries of each will trust are to be the Specified Beneficiary and a wide class of other ‘General Beneficiaries’, including the Specified Beneficiary’s parents, children, and grandchildren, their spouses and widows, uncles, aunts, nephews, nieces and cousins. The trustees of the will trusts are to have power to pay or transfer all or part of the trust fund to or for the benefit of any of the beneficiaries ‘in such manner as they shall think fit’.
20 The joint letter of wishes signed by Abraham and Freda on 11 February 2013 records, among other things, their desires as to the administration of the various trusts they had established, including the will trusts. The letter merely reflects their wishes; it does not seek to impose any legal or binding obligations on the trustees ‘except insofar as it is within the discretion of the Trustees to comply with such wishes and insofar as the Trustees are prepared to do so’.^[5]
21 Relevantly, Abraham and Freda expressed their wish that, after the death of the surviving spouse, the net income of all of the trusts should be:^[6]

The same wish was expressed in relation to the balance of the assets and capital of the trusts, both before they vest, and when they are wound up.^[7]
22 In short, Tobi stands to inherit one quarter of her mother’s estate — at present in the order of $10 million — as the Specified Beneficiary of the Tobi Spigelman Will Trust and the other will trusts in her name. However, the will trusts are to be discretionary trusts and will not be controlled by Tobi. She is to be one of three trustees, together with her brothers Michael and Joseph, and in the event of disagreement, decisions are to be made by majority.

23 Tobi’s marriage with Lazer is at an end. They separated under one roof in February 2018. Lazer moved out of the Property in October 2020, soon after Tobi obtained a family violence final intervention order against him. From that time, Lazer stopped paying anything towards Tobi’s living expenses. They are not yet divorced, under either secular or Jewish law. Tobi said that Lazer was withholding a gett (a divorce under Jewish law) until the property settlement between them was finalised. In February 2019, they obtained a divorce ruling from a Beth Din (a rabbinical court), which relevantly provided:

24 Property settlement proceedings under the Family Law Act 1975 (Cth) were still pending at the time of the trial of this proceeding. Tobi’s evidence was that she regards herself as bound by the Beth Din ruling, but is not confident that her husband will honour it. If the property settlement proceedings cannot be resolved by agreement, Tobi’s lawyers have advised her to budget for future legal costs of $150,000.
25 Tobi’s main asset is her half-interest in the Property, which is estimated to have a market value of $2,800,000. She wishes, as part of the property settlement with Lazer, to acquire his share of the Property. If that occurs, she will become responsible for rates, insurance and other outgoings on the Property, which are currently being paid by Lazer. In addition, the Property is in need of substantial repair and refurbishment, and various items of furniture need to be replaced.
26 Her other main assets are:

27 Tobi and Freda are the only members of the York Super Fund, and are the directors of its trustee company, York Investments Pty Ltd. The main asset of the York Super Fund is a commercial property in Hallam, which was valued at around $3,300,000 as at 30 June 2021, and currently generates rental income of $200,000 per year. The York Super Fund’s assets may have increased since 30 June 2021. An appraisal in August 2022 valued the commercial property in the vicinity of $4,800,000 to $4,950,000, and as at 26 August 2022, there was $1,079,418.72 in York Investments’ account with the Commonwealth Bank. I prefer to rely on the valuation in the financial statements for the year ended 30 June 2021, which showed net assets of $4,161,995.
28 In around April or May 2018, Tobi told her mother that she wished to cash out her superannuation benefits from the York Super Fund. This would have necessitated selling the commercial property, which Freda was reluctant to do. On 27 February 2020, Freda’s solicitors proposed two options for Tobi’s consideration:

29 Tobi has not accepted either proposal, and nor has she sought to draw an income from the York Super Fund. As best I could understand, this is because she does not trust her mother and her brothers Michael and Joseph, who she said effectively control the fund. Tobi said that she has been trying since around 2017 to obtain information about the York Super Fund and to become a co-signatory to the bank account, without success, and has been excluded from decisions about the fund. She is not confident that she has been provided with accurate or complete information about her entitlement, and cannot verify whether the fund is compliant. She also said that she wished to retain her interest in the York Super Fund because it is tax-efficient.
30 Tobi is not in paid employment. At present, she depends on financial support from her mother, in the form of a fortnightly cash gift of $3,000. Tobi highlighted the voluntary nature of these gifts, which could end at any time. However, Freda’s evidence was that she would like to continue giving Tobi this support ‘until she can be provided out of the will fully’, and would continue doing so ‘as long as is necessary’.^[9]
31 Of the fortnightly payments she receives from her mother, Tobi gives 20% to charitable organisations to distribute to people in her community who are in need, in accordance with rabbinical advice. She uses the balance to meet her living expenses, and has little to nothing left at the end of each fortnight. At times she has not been able to make ends meet. She has borrowed small amounts from family and friends, and has sought other assistance to pay bills that are in arrears.
32 Adherence to orthodox Judaism as practised by the Adass Israel community involves some strict requirements. These include daily prayers, pious dress, and adherence to and participation in religious observances including attendance at the Adass Israel synagogue in Ripponlea. Car travel is forbidden on Sabbath and festival days, and so members of the community must live within walking distance of their synagogue. Observing the dietary restrictions of the faith involves purchasing kosher food and preparing it according to strict kosher requirements. This necessitates two separate sets of kitchen appliances and cooking equipment, cutlery, crockery, and so forth for everyday use, with additional sets required for Passover.
33 All of Tobi’s children are now adults, all but two of them are married, and all but two of them live in Israel or the United States. Her youngest child, Hadassa, still resides with Tobi, although since October 2021 she has spent most of her time in the United States on a two-year religious worker’s visa. Before the COVID-19 pandemic, Tobi travelled regularly — about three times each year — to Israel and the United States to spend time with her children and their families. She has 23 grandchildren, 20 of whom live overseas. She wishes to resume this travel but at present cannot afford to do so.
34 While her family and her religion remain at the centre of her life, Tobi’s previously close relationship with her brothers has soured. She and her brother Michael no longer speak, despite being neighbours, and she no longer feels included in family celebrations. I need not make findings about the reasons for this painful development. My strong impression is that there is very little prospect of a reconciliation. It is clear that Tobi does not trust her brothers, and is aggrieved about the extent of Michael and Joseph’s control over the Spigelman family’s financial affairs.
35 Tobi provided a breakdown of her claimed expenses, as at August 2022, as follows:

1. Non-recurring expenses — Capital sum
Legal fees
Family Law	$150,000
Part IV	$200,000
Home repairs
Home repairs and refurbishment	$780,054
Furniture, appliances, household items and furnishings	$220,000
Family law settlement
Buy [Lazer] share house	$1.5 – $2.0 million
New cars
New car [Tobi and Dassy] (large car for family)	$110,000 — Mazda CX9 and Camry
Children expenses
Weddings and trousseau, Malki and Dassy	$250,000
Assisted care
Provision for old age care	$2,248,185 (Capital sum to pay for full time in-home care at $260,000 per annum, payments to start in 15 years’ time and last for 10 years, the above sum being equivalent to $3,502,600 in 15 years
Total	$5,458,239 – $5,598,239
2. Capital sum required to invest to produce income for annual expenses
Life expectancy by Australian Life tables — a further 25.77408 years
Income p/a of (a) $250,000 — lump sum of $4,000,000 – $4,300,000 (b) $200,000 — lump sum of $3,200,000 – $3,500,000 (c) $150,000 — lump sum of $2,400,000 – $2,700,000
3. Annual expenses — Household (Tobi and Dassy)
Rates and taxes	$3,200
Gas, electricity, water	$5,500
Insurance: House and contents, life and disability, car, private health	$8,800 total (car $1,400, house $3,600, private health $3,800)
Petrol, car service and maintenance	$4,500
Replace cars for me and Dassy — annual provision/6 years	$18,350
Medical, dental, optical	$4,000/$7,000
Domestic help, regular and Passover	$11,475 (6 hours per week @ $35 per hour + 15 hours pre Passover)
Skincare and make-up, toiletries	$9,500
Wigs, wig care, hairdressing	$12,000
Personal care and grooming	$10,500
Ancillary medical	$10,400
Chemist, nutritional supplements	$7,100
Telephone (Dassy and me), mobile, internet, replace — annual cost	$2,500
New computer — update every 3 years. Printer, scanner	$1,500
Gardening	$8,000
Books and magazines, subscription	$4,000 (Jewish periodicals and AFR $2,050 per annum, $1,450 for books and subscriptions)
Entertainment and hobbies	$9,500
Dry cleaning	$1,300
Gifts to children, grandchildren, friends, and when invited to bar mitzvah, weddings	$40,000
Clothing and footwear	$16,000
Travel to family celebrations and vice versa	$130,000 (with some overlap with holidays and pilgrimages)
Food, groceries, cooking implements	$40,000 – $60,000
Financial planning advice	$10,000
Accountant	$9,000
Memberships	$1,800
Religious items	$7,500
Pilgrimages	$60–$80,000 (with some overlap with holidays and family travel)
Holidays	$40,000–$55,000 (with some overlap with family travel and pilgrimages)
Repairs and maintenance	$7,000
Home maintenance update every 4 years	$7,000
Furniture and appliances replacement	$8,500
Total annual expenses	$508,925 – $576,925

36 This itemisation of expenses was the subject of cross-examination and submissions. Tobi acknowledged that there was some overlap between the items claimed. To the extent relevant, I discuss the items claimed further below, when considering what provision is necessary for Tobi’s maintenance and support.

37 Part IV of the Act deals with family provision. Section 90A provides that an eligible person may apply to the Court for a family provision order. The term ‘eligible person’ is defined in s 90 to mean, relevantly:

39 Section 91A identifies several factors that the Court must have regard to in making a family provision order, and a number of other factors that may be relevant, as follows:

40 The basis of the Court’s jurisdiction under Pt IV of the Act is the legislature’s recognition of the moral responsibility owed by testators to make adequate provision for certain family members and others who were dependent on them at the time of their death.^[10] When considering whether adequate provision has been made for an eligible person, and what is necessary for their proper maintenance and support, the Court must assume the position of a wise and just testator (as distinct from a fond and foolish one), judged by current community standards.^[11] The Court should not be drawn into rewriting the testator’s will by reference to general considerations of fairness.^[12]
41 In a case such as this one, where it is accepted that the testator had a moral duty to provide for the claimant, there are two separate, interrelated matters to be assessed:

42 While the assessment of what is proper maintenance and support is structured by the considerations set out in s 91A of the Act, there is ample authority that also provides guidance about the way in which the assessment should be approached. The proper maintenance and support of a child claiming provision is relative to their ‘age, sex, condition and mode of life and situation generally’.^[16] It encompasses ‘enough to keep the “wolf from the door” and sufficient to “keep the wolf from pattering around the house”; not just sufficient for the bread and butter of life but for a little of the cheese or jam that a just and wise parent would appreciate should be provided if circumstances permit’.^[17]
43 Pt IV of the Act distinguishes the position of an adult child from that of a younger child or a child with a disability. In the case of a claim by an adult child, the relevant principles were helpfully summarised by Hallen J in Walsh v Walsh.^[18] Relevantly in this case, an important consideration is the degree to which the child remained dependent on their parent in adulthood, and the corresponding community expectation that the parent will make provision to fulfil that ongoing dependency after death.^[19]
44 These general principles may be applied more liberally to a claim for provision from a large estate, for two reasons. First, it is easier for all competing moral claims to be satisfied from a large estate.^[20] Second, the assessment of what amounts to proper provision is affected by the lifestyle that has been enjoyed by a claimant because of their association with the testator.^[21] However, the amount of provision ordered must not exceed what is necessary for the claimant’s proper maintenance and support.^[22]
45 Overall, the assessment calls for an instinctive synthesis of the relevant considerations; it is not an exercise involving precise mathematical calculations.^[23]

46 There was no issue about Tobi’s eligibility to apply for an order for provision under Pt IV of the Act. As mentioned at the outset, Freda does not dispute that Abraham had a moral duty to provide for Tobi’s possible maintenance and support. Freda also accepted that Abraham had not made adequate — indeed any — provision for Tobi in his will.
47 Freda did not resist the making of a family provision order in Tobi’s favour. However, she disputed that provision should be made in the amount claimed. More particularly, the parties were in dispute as to:

48 I consider each of those issues in turn. The last issue requires an assessment of the mandatory ss 91(4) and 91A(1) factors, and the relevant factors under s 91A(2).

49 Tobi is now aged 62. She did not complete her formal schooling, and has no tertiary, professional or trade qualifications. For most of her adult life, her energies were invested in her home, her family, and her religion. She has only ever worked in family businesses, and has not been in the paid workforce since 2013. She has limited if any capacity to earn an independent income.
50 While Tobi has an unencumbered half-interest in the Property, she has not accumulated any other assets of note in her own name from which she could derive an income. However, she has more than $2 million in superannuation entitlements with the York Super Fund. Tobi could have had access to this amount in full in 2020, or alternatively could have started to draw an income from the fund from that time. Her explanations for not doing either were contradictory and, in my view, unsatisfactory. There was no evidence to support her concern that the York Super Fund may not be compliant. In the end, Tobi accepted that she could draw on these funds to provide for her own maintenance and support, and that they should be taken into account.
51 I accept that Freda will keep making regular payments to Tobi to cover her living expenses, amounting to $78,000 each year. Freda’s evidence was that she would continue these payments as long as is necessary. That evidence, and the fact she has made the payments throughout this litigation and despite some very strained relationships within the family, persuade me that she is likely to continue to do so during her lifetime.

52 As outlined above, Tobi has an expectation of a very substantial inheritance — in the order of $10 million — on her mother’s death. Tobi can have some confidence that Freda’s estate will be disposed of in accordance with her will made on 11 February 2013. The doctrine of mutual wills has the effect that Freda’s estate is held subject to a constructive trust in the terms of that will, which would override any later will that Freda might make, and may be specifically enforced by Tobi as a beneficiary of the trust.^[24] More importantly, I accept without reservation Freda’s evidence that she intends to honour the mutual will agreement, and make provision for her four children as she and Abraham agreed.
53 However, Tobi’s share of her mother’s estate is to be held in discretionary will trusts. Tobi, Michael and Joseph are to be the trustees of these trusts, with decisions to be made by a majority. Tobi does not trust that she will receive the benefit of her inheritance, which she considers will be under the control of her two older brothers.
54 While I accept that Tobi’s fears are genuinely held, I am not satisfied that there is an objective factual basis for them. There was no evidence to support a finding that Michael and Joseph are likely to administer the will trusts contrary to their fiduciary obligations as trustees, or in disregard of their parents’ joint letter of wishes. I am not persuaded that there is any real likelihood that Tobi will not receive the benefits of those trusts. Even if Tobi’s fears were to be realised, she would have a range of remedies available to her as the primary object of the trusts, up to and including applying to the Court to remove her brothers as trustees.^[25]
55 It follows that the question of what provision is necessary for Tobi’s proper maintenance and support is to be answered on the basis that she will in time inherit one quarter of her mother’s sizeable estate.

56 In closing submissions, Tobi claimed to need an amount of $4,990,000 for her proper maintenance and support, comprising:

57 Freda accepted that provision of around $2,595,000 should be made for Tobi, comprising:

58 I will consider the ss 91(4) and 91A factors in turn.
59 In relation to the mandatory considerations set out in s 91(4) of the Act:

61 Not all of the matters set out in s 91A(2) are relevant in this case. In my view, the salient considerations here are:

62 In relation to the specific items that Tobi claims are necessary for her proper maintenance and support, now and for the foreseeable future, I make the following findings:^[39]

63 Having regard to all of these matters, I have concluded that a family provision order should be made for provision out of Abraham’s estate in Tobi’s favour in the amount of $3,150,000. This equates to the amount that I have assessed as being necessary for her proper maintenance and support.^[41]

64 The parties should confer and attempt to agree on draft orders that give effect to this judgment, and in relation to the costs of the proceeding. If they are unable to reach agreement on the form of the orders, or the appropriate costs order, I will list the matter for a further short hearing on a mutually convenient date in the new year.

^[1] For clarity and convenience, I refer in this judgment to Abraham Spigelman and members of his family by their given names. No disrespect is intended.

^[4] It was not suggested that this agreement was affected by the codicil to Abraham’s will.

^[5] Joint letter of wishes of Abraham and Freda Spigelman dated 11 February 2013, cl 16.

^[11] Bosch v Perpetual Trustee, 478–9; White v Barron [1980] HCA 14; (1980) 144 CLR 431, 440–1 (Stephen J), 444–5 (Mason J), 460 (Wilson J); Davison v Kempson [2018] VSCA 51, [35].

^[16] The Pontifical Society for the Propagation of the Faith and St Charles Seminary, Perth v Scales [1962] HCA 19; (1962) 107 CLR 9, 19 (Dixon CJ).

^[21] Anasson v Phillips (Supreme Court of New South Wales, Young J, 4 March 1998), 20.

^[23] Blair v Blair [2004] VSCA 149; (2004) 10 VR 69, [30] (Chernov JA, Nettle JA and Hansen AJA agreeing); Davison v Kempson, [70]–[71].

^[24] Birmingham v Renfrew [1937] HCA 52; (1937) 57 CLR 666, 682–91 (Dixon J); Baird v Smee [2000] NSWCA 253, [64]–[65] (Giles JA); Flocas v Carlson (2015) 15 ASTLR 192, [178]–[192]. I express no conclusion about whether the constructive trust attaches to all of Freda’s estate, or only to the property she inherited from Abraham.

TOBI KORNWASSER	Plaintiff

v

FREDA SPIGELMAN (as the executor of the will of Abraham Spigelman, deceased)	Defendant

JUDGE:	Richards J
WHERE HELD:	Melbourne
DATE OF HEARING:	30–31 August, 1 September 2022
DATE OF JUDGMENT:	12 December 2022
CASE MAY BE CITED AS:	Kornwasser v Spigelman
MEDIUM NEUTRAL CITATION:	[2022] VSC 759

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Verspaandonk	HWL Ebsworth Lawyers

For the Defendant	Mr S Pitt	Arnold Bloch Leibler

Supreme Court of Victoria

Kornwasser v Spigelman [2022] VSC 759 (12 December 2022)