Re Levine; Jerome Levine v Kathryn Madeiros and Others 1994 Civil Jur. No. 44
| Jurisdiction | Bermuda |
| Judgment Date | 14 June 1995 |
| Date | 14 June 1995 |
| Docket Number | Civil Jurisdiction 1994 No: 44 |
| Court | Supreme Court (Bermuda) |
In the Supreme Court of Bermuda
Meerabux, J
Civil Jurisdiction 1994 No: 44
and
Saul Froomkin Q.C. for the Plaintiff
Narinder Hargun for the Defendants
Re Coventry (deceased)UNK [1979] 2 All ER 408
Re Moody (deceased)UNK [1992] 2 All ER 524
Re Jennings, deceasedELR [1994] Ch 286
Re Besterman, deceasedELR [1984] 1 Ch 458
Sharp v SharpTLR The Times 17 February 1981
Wachtel v WachtelWLR [1973] 2 WLR 366
Stead v SteadFLR [1985] 1 FLR 16
Re Bunning, deceasedELR [1984] 1 Ch 480
Succession Act 1974, s. 13, 14, 15
Will — Application by husband of deceased for reasonable financial provision — Husband not Bermudian — Property purchased in wife's name — Factors to consider — Lump sum payment — Comparison with application under Matrimonial Causes Act
Meerabux, J.
This is an application by the Plaintiff for reasonable financial provision out of the estate of his wife, Mrs. Levine, under section 14 of the Succession Act 1974, Title 26, Item I, (hereafter referred to as ‘the 1974 Act’).
From the evidence I find the following. The circumstances giving rise to this application stem from the death of the testate on 21 September 1992 of one Mrs. Levine who was born on 8 January 1908, aged 84 years. Mrs. Levine was previously married to John Madeiros in 1927, which marriage lasted for 19 years and produced one child whose name is Lawrence J. Madeiros. Following a separation and divorce from Mr. Madeiros, Mrs. Levine married the Plaintiff on 9 February 1946. There were no children of that marriage.
At the time of the deceased's marriage in 1946 to the Plaintiff, the deceased had already owned two properties in Bermuda—‘Mulberry Cottage’ and a six acre farm with a two bedroom cottage on it. The Plaintiff had nothing to do with the acquisition of the properties. The deceased also brought into the marriage the not insignificant sum in 1946 of approximately £1,000.
By her last will dated 21 September, 1990 the deceased, having appointed the Plaintiff and her grand-daughter, the First Defendant, to be executors and trustees, bequeathed as follows:
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‘4. I BEQUEATH all cash or monies held by me at the date of my death in any Bank or Savings Account in Bermuda unto my Trustees UPON TRUST to GIVE and DIVIDE the same in the following shares:-
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(i) the sum of $50,000.00 to my husband the said JEROME LEVINE and
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(ii) the remainder of the said monies unto my son LAWRENCE JOHN MADEIROS and my five grandchildren BRUCE LAWRENCE MADEIROS, CLIVE ANTHONY MADEIROS, KATHRYN JANE MADEIROS, GEOFFREY CRAIG MADEIROS and TERENCE PHILIP MADEIROS (the last five of whom are hereinafter referred to as ‘my said grandchildren’) in equal shares absolutely.
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5 I GIVE and BEQUEATH all cash or monies held by me at the date of my death in any bank, savings or other similar account in the United Kingdom to my daughter-in-law JOYCE LILLIAN MADEIROS absolutely.
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6. I GIVE and DEVISE the dwelling house at 8 Cherry Close, Bloxham, Banbury, Oxon 154TD in the United Kingdom and the land held therewith to JOYCE LILLIAN MADEIROS for her use and benefit absolutely.
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7. I GIVE DEVISE and BEQUEATH unto my Trustees all shares of which I may be possessed at my death in the Bank of N.T. Butterfield, Bermuda Electric Light Company and the Bermuda Telephone Company upon trust to GIVE and DEVISE the same equally between my son the said Lawrence John Madeiros and my said grandchildren in as nearly equal shares as is numerically possible.
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8. I DEVISE unto my Trustees the following dwelling houses in the Islands of Bermuda namely:
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(i) ‘Lee Dale’ in Cavendish Heights
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(ii) ‘Dover Court’ in Cavendish Heights
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(iii)‘Mulberry Cottage’ in Sandy's Parish
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together with any contents thereof and the land held therewith UPON TRUST to sell the same and to divide the proceeds of such a sale equally between my son the said Lawrence John Madeiros and my said grandchildren.
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9. SUBJECT AS AFORESAID I GIVE, DEVISE AND BEQUEATH all the residue of my real and personal property upon trust that my Trustees shall sell call in and convert into money the same or such part thereof as shall not consist of money and to hold the said monies (hereinafter called ‘the Trust Fund’) upon trust for Lawrence John Madeiros and my said grandchildren in equal shares absolutely.
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10. I DIRECT that my Trustees shall, upon valuation of my said real property for the purposes of sale, offer for sale the said property unto the beneficiaries under clause 4(ii) herein in a descending order from the eldest surviving beneficiary to the youngest, and such said beneficiary so electing to be granted one calendar month to enter into a binding sales agreement.
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11. If any of my said grandchildren predeceases me then:-
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(i) if he or she leaves a child or children surviving them such child or children shall take the share which such deceased grandchild would have taken and if more that one in equal shares absolutely;
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(ii) if her or she leaves no child surviving, then the share which such deceased grandchild would have taken shall be divided in equal shares among the other surviving grandchildren.’
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The deceased's will was proved on 5 October 1993, the gross value of her estate as stated in paragraph 7 of the Plaintiffs affidavit dated 1 February 1994 amounted to $1,966,911.63. After the passing of the joint interest in ‘Bermudorama’, the payment of $50,000.00 legacy to the Plaintiff, the payment of funeral expenses and the payment of estate duty, I find that the value of the assets to be as follows:
| Gross value | $1,996,911.63 |
| Less $475,000.00 half value of Bermudorama | |
| Less 50,000.00 bequeathed to Plaintiff | |
| Less 10,737.00 funeral expenses | |
| Less 95.401.00 estate duty | |
| $631.138.00 | 631,138.00 |
| $1,335,773.63 |
I now turn to the Plaintiff and his circumstances which I find from the evidence to be as set out hereunder. The Plaintiff was born in New York City in the United States of America on 12 January 1917 and is now 78 years of age. He was drafted into the United States Army in January 1941 and stationed in Bermuda in April 1941. While stationed in Bermuda he met his wife Nina Madeiros in 1943. He was discharged from the Army on 12 July 1945 and commenced employment on 13 July 1945 with the United States Civil Service. As stated above he and the deceased were married on 9 February 1946 and there were no children of the marriage.
In an affidavit sworn on 1 February 1994 the Plaintiff said that he continued to live and work in Bermuda for the United States Civil Service until his voluntary retirement on 25 August 1993 after 421/2 years total service (including military service). After retirement he stayed on in Bermuda, employed on annually renewable work permits unto 31 March 1993. He received a Spouse's Employment Rights Certificate (No. 45) which was effective from 18 December 1987 until 21 September 1992 when his certificate became null and void with the death of his wife. From September 1983 until October 1985 he was employed by the Bermuda College as Controller but resigned when his wife was stricken with cancer. After his wife's eventual recovery he took up part-time employment three days a week with S. Arthur Morris, Chartered Accountant, from June 1988 until October 1991 when he returned to Bermuda College on the same part-time basis of three days per week until March 1993 when his position was made redundant.
Although he lived and worked in Bermuda for some fifty-two consecutive years, he did not possess Bermuda Status and remained a US citizen resident in Bermuda. He never applied for Bermuda status for the following reasons: First, until 1990 or thereabouts it was not possible under US law to obtain Bermuda status without losing one's US citizenship; and secondly as the spouse of a US citizen employed by the US Government, his wife was declared non-resident for exchange control purposes. His spouse was consequently able to convert the rental income from their rental properties together with dividends from their Bermuda shareholdings into US dollars without payment of Overseas Investments Tax and was permitted to maintain US dollar accounts in her name. His wife did not wish to lose this advantage and after, there was a change in the US law allowing him to apply for Bermuda status, she would not support his application. Further, because the investments were in his wife's sole name, they accrued certain US tax advantages. As an American citizen, notwithstanding that he resided in Bermuda for more than 50 years, he was liable to pay US income tax. As a married couple, comprising a US citizen and a non-resident alien spouse, they had the option of filing a ‘Joint Return’ or he as a ‘Married Person Filing Separately’. In a ‘Joint Return’ his wife as a non-resident alien was obliged to declare her income also for US tax purposes which would have resulted in a higher tax payment for them as a team because of declaring their combined incomes. They decided many years ago that he should file as a ‘Married Person Filing Separately’ and thus report only the income credited in his name, i.e. US salary, pension, and interest on accounts held in his name only. He said that the salary he earned working in Bermuda was excluded from US Income Tax as ‘Foreign Earned Income’. This latter category ‘Married Persons Filing Separately’ paid tax at a higher rate than allowed for a ‘Joint Return’, but, since the total income reported would exclude the income credited in his wife's name, the net tax payable was less.
He said that at the time of their marriage his wife owned ‘Mulberry Cottage’ on George's Bay Road, Sandys Parish...
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