IMO will and estate of Tavra
[2011] VSC 359
•8 August 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 01394 of 2010
IN THE MATTER of Part IV of the Administration and Probate Act 1958 and in the Will and Estate of Ante Tavra, deceased
| DARIO TAVRA (through his litigation guardian Cameron MacSween) | Plaintiff |
| v | |
| IVAN PETELIN and JOZICA PETELIN (who are sued as the executors of the will of Ante Tavra, deceased) | Defendants |
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JUDGE: | ZAMMIT As J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 27 and 28 July 2011 | |
DATE OF RULING: | 8 August 2011 | |
CASE MAY BE CITED AS: | IMO will and estate of Tavra | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 359 | |
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ADMINISTRATION AND PROBATE – Responsibility of testator to make provision for the proper maintenance and support of only adult son – Only son permanently and significantly injured – Administration and Probate Act 1958 (Vic) s 91.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr W. Gillies | R B Legal Pty Ltd |
| For the Defendants | Ms C. Sparke | A B Natoli Pty |
HER HONOUR:
Dario Tavra, the plaintiff, is the only son of Ante Tavra (the deceased). The deceased died on 12 August 2009.
The deceased left an estate which has been realised and that has a value of $2,873,881.07 (less costs yet to be paid).
On 13 October 2009, probate of the deceased’s will dated 24 April 2009 was granted to Ivan and Jozica Petelin, the defendants as the executors named in the will. The defendants are the sole beneficiaries of the deceased’s estate. They were the deceased’s friends and lived in the same neighbourhood as the deceased.
The plaintiff’s claim for provision out of the deceased’s estate is made pursuant to Part IV of the Administration and Probate Act1958 (Vic). The defendants concede that some provision should be made. The only question for determination is the extent of the provision.
The plaintiff was born in 1963. The plaintiff’s parents separated in 1974 and divorced on 6 October 1976.
After the separation, the plaintiff lived with his mother, Ms Despot. His mother subsequently met another man and they lived together from approximately November 1975.
Following the separation from the deceased, Ms Despot had no support from the deceased for the plaintiff. When they divorced, the plaintiff’s parents jointly owned a home in Princess Street, Kew; a home in Oakleigh; and a small amount of money in the bank. Ms Despot relinquished her interest in both properties and the money after the divorce in favour of the deceased, on the strength of his promise to her that he would leave everything to the plaintiff.
Ms Despot described the deceased as a very abusive husband and that on one occasion he beat her so badly she could not recognise herself in the mirror.
The plaintiff’s evidence in relation to the deceased was that the deceased was a heavy drinker all his life and was frequently violent to his mother but not to him. The evidence does not support that the deceased was a heavy drinker.
The plaintiff had an accident on 30 June 1992 while working as a courier. His injuries occurred when a car turned in front of him as he was driving on Bourke Road. At the time of the accident he was in a long term relationship, which broke up some years after the accident.
The plaintiff sustained a head injury and an injury to his cervical and upper thoracic spine. He has been left with some residual neck stiffness and pain equivalent to a 30% impairment of the cervical spine function. In addition, the plaintiff sustained severe injury to his left knee which was described by Dr Kevin King, orthopaedic surgeon, as “a rather stiff unstable and painful knee”. Dr King considers the plaintiff has secondary osteoarthritic changes in his left hip joint and that he has about 30% overall loss of function in the left lower limb. As at 17 June 2011, Dr King’s overall impression was that the plaintiff was chronically and quite severely disabled, and permanently unfit to return to the work he had done over the years as a motorcycle courier or any other occupation, requiring concentration and a significant degree of standing, walking, bending and lifting.
In a report dated 13 May 2006, Dr Peter Dohrmann, neurosurgeon, described the plaintiff as having a residual permanent neurological impairment the result of traumatic brain injury. Referring to the Guide to the Evaluation of Permanent Impairment (2nd edition) of the American Medical Association, Dr Dohrmann’s opinion as at May 2006, is that the plaintiff was suffering from a 30% whole person impairment with supervision needed and that he exhibited severe emotional disturbance under ordinary stress, giving rise to a 40% whole person impairment.
Dr Nigel Strauss, psychiatrist, assessed the plaintiff on 7 June 2011. Dr Strauss concluded that on mental status examination the plaintiff presented as a childish, immature, inappropriate man with limited insight. Dr Strauss concluded that the plaintiff was not depressed; his thinking was reasonably positive but immature. Dr Strauss noted that the plaintiff was oriented in time, place and person but that his general fund of information was lacking.
Dr Simon Crowe, neuropsychologist, performed a neuropsychological assessment on 1 July 2011. Dr Crowe is of the opinion that:
The pattern of performances revealed by Mr Tavra on this occasion indicate a man of 48 years and four months who was subjected to a very severe closed head injury some 19 years ago who presents at this point in time as being of borderline low average intelligence but with particular deficits in the area of working memory and association with a relatively dense verbal specific memory deficit in formal testing. Mr Tavra performs at a level expected for someone with a moderately severe head injury, previously described on most other aspects of neurocognitive function and on tests of psychopathology the pattern of performance is consistent with a high tendency to somatise his concern, raising a possibility of somatoform disorder. In my previous assessment of him he acknowledged severe levels of self‑reported depression, moderate levels of self-reported anxiety and a moderate tendency towards somatisation.[1]
[1]Affidavit of Simon F. Crowe sworn 10 July 2011, Exhibit SC-2, [3.7].
In addition to his affidavit evidence, the plaintiff gave viva voce evidence. While I consider the plaintiff to be a truthful witness, he understandably struggled in relation to being able to recall precise dates. He had significant difficulty recalling events that occurred in the past in relation to the deceased and in particular the contact that he had with the deceased pre and post his accident in June 1992.
As noted, the plaintiff lived with his mother following his parents’ separation in 1974. At approximately 16 years of age he moved back in with the deceased at Walpole Street, Kew for approximately 12 months.
From approximately 18 years of age, the plaintiff appears to have had very little to do with the deceased.
I am satisfied that up until the date of his accident the plaintiff only saw the deceased sporadically and it is likely that he did not see the deceased at all between the age of 22 and 27.
Following the accident the plaintiff again appears to have had very limited contact with the deceased. The plaintiff did not give his address to the deceased and appeared to be resentful of a possible intrusion by the deceased into his life. The plaintiff described the deceased as being a drinker and difficult to communicate with. While I am satisfied that the deceased was abusive towards his former wife Ms Despot, I do not accept that the deceased was a drinker or necessarily abusive towards the plaintiff. I am satisfied that the plaintiff’s lack of contact with the deceased through his teens was arguably through no fault of his own. However, the evidence is that as an adult the plaintiff made only limited attempts to contact the deceased.
The plaintiff in his affidavit said that he used to visit the deceased as regularly as once a week but in the last year of his life he probably only saw him four or five times. This is inconsistent with the evidence given by other witnesses which on one version of events suggested he did not see the deceased on a regular basis after his accident and that in fact the contact was limited to a few visits.
While I would not describe the relationship between the plaintiff and the deceased as one of complete estrangement, it was not a close relationship and clearly not a relationship where they played a significant part in one another’s lives.
I accept that the distant relationship between the plaintiff and the deceased, particularly prior to the accident was due to a choice made by the plaintiff to live his life independently and to not have the deceased intrude into, or control, his life.
Plaintiff’s current circumstances
The plaintiff currently rents a house at 30 Ursa Street, Balwyn. He has lived at 30 Ursa Street for approximately 12 years.
The plaintiff has very limited social opportunities and described enjoying working in the garden and cutting his lawn which gave him something to do. Mr MacSween, the plaintiff’s litigation guardian, noted that the plaintiff’s current rental accommodation allows him to build things and work on his own motor bike.
It is clear from the medical reports that the plaintiff will have difficulty in establishing long-term relationships and friendships and engaging in social activities.
The plaintiff will not be able to work in the future and given his physical injuries including his brain injury, his ability to live independently in the future must be somewhat restricted.
The plaintiff remains on WorkCover payments. Those payments at present are $903 per week after tax. He will continue to receive that sum (indexed) until he is 65 years of age. At this stage, no common law claim has been made on behalf of the plaintiff.
The plaintiff has some belongings in his house including a leather couch, a washing machine, some beds and other household effects. He owns a motorcycle and pays $1,300 rent per month. His only source of income is his WorkCover benefit. The plaintiff has limited savings in the bank of approximately $1,000. He has no other money. Any excess money that he has after he has paid for rent, food and the like is spent on clothes and medication.
The deceased’s relationship with the Petelins
A significant part of the evidence by affidavit and viva voce concerned the nature and longevity of the relationship between the deceased and the defendants.
Counsel for the plaintiff conceded that towards the end of the deceased’s life the defendants were friendly; they helped, assisted and looked after the deceased.
I am satisfied that the defendants were friends of the deceased from 1979 and that the friendship became closer from 2000 onwards after the death of Mr Petelin’s brother.
The deceased became quite ill in November 2008. I accept that from that time onwards the defendants provided the deceased with care and attended to his daily needs. The defendants offered for the deceased to move in with them some time after he was discharged from hospital in January 2009. The offer was not accepted by the deceased.
The care provided by the defendants in the last eight months of the deceased’s life included daily visits, sometimes visiting up to four times each day, preparing meals, and assisting the deceased with very personal matters including changing nappies.
It was asserted by Bogdan Voyicic, a friend of the deceased, that the defendants only became involved in the deceased’s life from approximately April 2009.
I do not accept Mr Voyicic’s evidence. To my mind, Mr Voyicic did not give his evidence in a convincing manner.
Susie Petelin, the defendants’ adult daughter, gave evidence that she knew the deceased as an uncle figure. Ms Petelin described regularly visiting her parents who she would often find at the deceased’s home. In the later stage of the deceased’s life, Ms Petelin observed her parents caring for and assisting the deceased.
Legal principles
Jurisdiction to make an order under Part IV of the Administration and Probate Act 1958 (Vic) is dependent upon being satisfied that the deceased had a responsibility to make provision for the plaintiff and upon being satisfied that the will does not make adequate provision for the proper maintenance and support of the plaintiff.[2] His Honour Nettle J noted in McKenzie v Topp:[3]
Each condition invokes consideration of the question of what is the provision that a wise and just stepmother would have thought it her moral duty to make in the interests of her stepson had she been fully aware of all the relevant circumstances. The question is to be answered as at the date of death according to the standards of a wise and just testatrix – or, in other words, according to the standards of a fair and reasonable woman in the community – and in answering the question the Court is bound to have regard to the factors adumbrated in s 91(4)(e)-(o), as well as to any other matter that the Court considers relevant. (citations omitted)
[2]Administration and Probate Act 1958 (Vic), s 91(1) and s 91(3).
[3][2004] VSC 90, [15].
The plaintiff is obliged to show that the testator failed by his will to make adequate provision for his maintenance and support. Any alleged failure must be judged as at the date of the testator’s death, having regard to the value of the estate at that time, the plaintiff’s claim upon the bounty of the testator and the competing moral claims of the actual beneficiaries in the will.
The defendants in this case acknowledge that the will makes no provision for the plaintiff, the deceased’s son. It is conceded that the plaintiff ought to receive provision. The extent of that provision is to be measured properly taking into account the matters set out in s 91(4)(e)-(p).
The question of what was adequate and proper was dealt with by Dixon CJ in Pontifical Society for Propagation of the Faith v Scales:[4]
It has often been pointed out that very important words in the statute are ‘adequate provision for the proper maintenance and support’ and that each of these words must be given its value. ‘Adequate’ and ‘proper’ in particular must be considered as words which must always be relative. The ‘proper’ maintenance and support of a son claiming the statutory provision must be relative to his age, sex, condition and mode of life and situation generally. What is ‘adequate’ must be relative not only to his needs but to his own capacity and resources for meeting them. There is then a relation to be considered between these matters on the one hand, and on the other, the nature, extent and character of the estate and other demands upon it, and also what the testator claims or preferable dispositions. The words ‘proper maintenance and support’, although they must be treated as elastic, cannot be pressed beyond their fair meaning. The Court is given not only a discretion as to the nature and amount of the provision it directs, but what is even more important, is discretion as to making a provision at all. All authorities agree that it was never meant that the Court should re-write the will of a testator. Nor was it intended that the freedom of testamentary disposition be so encroached upon that the testator’s decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court.
[4](1962) 107 CLR 9, 19.
In determining what is adequate and proper, the Court’s approach to quantum of provision is careful and conservative.[5]
[5]McKenzie v Topp [2004] VSC 90, 63.
What order should be made?
I turn to the question of what amount of provision I should order be made, for the proper maintenance and support of the plaintiff, out of the estate of the testator.
Section 91(4)(e)-(o) sets out a number of factors, which the Court must take into account in determining whether the deceased had a responsibility to make provision for the plaintiff, whether in fact the deceased had discharged that responsibility and if not, the amount of provision which should be ordered by the Court in favour of the plaintiff. Section 91(4)(p) also requires the Court to take into account “any other matter the Court considers relevant”.
The starting point for determining the question of the amount of provision to be ordered in favour of the plaintiff is the size and nature of the estate of the testator (s 91(4)(g)).
The estate is valued at $2,873,881 excluding the legal costs of both parties. The inventory of assets and liability discloses the house at 14 Walpole Street, Kew and a bank account. There do not appear to be any personal effects of any value.
The next relevant set of factors concern the nature of the plaintiff’s claim and the circumstances of the plaintiff as described in s 91(4)(e), (f), (h), (i), (j) and (o).
The deceased had a responsibility to the plaintiff as his adult son, to make such provision as would provide a reasonable measure of protection to the plaintiff against his vulnerability to the vicissitudes of life. The plaintiff is now 48 years old. He has no assets. He will receive weekly earnings until the age of 65 at approximately $903 per week which will be indexed. The plaintiff’s medical expenses in relation to his work injuries will be covered by WorkCover, however any other medical expenses non-related to his work injuries will have to be paid for by the plaintiff.
The plaintiff is clearly in a position of special need given the injuries he has sustained from the accident in 1992. The injuries and the impact that they have on the plaintiff’s life and his future cannot be understated. The uncontested medical evidence is that the plaintiff has sustained significant brain injury and physical injuries which are permanent.
The unchallenged actuarial evidence of Mr Corey Plover, actuary, is that the plaintiff will require a lump sum of $568,000 to maintain the equivalent levels of his current net income ($833 per week) from age 65 until his expected death. Again it was unchallenged that the plaintiff’s life expectancy was 35.15 years. Mr Plover’s evidence is that the amount of $568,000 is expected to be sufficient to be invested in Commonwealth Bonds yielding 5.4% in order to generate the equivalent of $833 of disposable weekly income after taxation. Mr Plover provided a comparison demonstrating that the estimate would drop from $568,000 to $459,000 under the assumption of a 6.5% investment rate and about $286,000 under the assumption of a 9% investment return.
The plaintiff requires accommodation. His litigation guardian, Mr MacSween, said it was concerning that the plaintiff continues to pay rent as he needs a house of his own. Mr MacSween considered that if the plaintiff continues to rent he will struggle later in life and that he would be in a far better position if he owned his own home. I consider it would be appropriate for the plaintiff to own his own home given his injuries and his present and likely needs in the future.
Mr Jeremey Desmier, real estate agent, gave evidence on behalf of the plaintiff. Mr Desmier met with the plaintiff and ascertained what the plaintiff’s requirements and desires were in relation to a dwelling. He inspected the plaintiff’s current accommodation at 30 Ursa Street and provided three examples of what he considered would be suitable properties for the plaintiff to purchase and reside in.
Mr Desmier’s evidence was that the plaintiff indicated that he wanted to remain in the local area and would want to maintain at least his current standard of living. The plaintiff indicated that he does not actually need a large back garden and would gladly give up some land size, especially if the property included a substantial garage and/or workshop. The plaintiff’s current accommodation comprises four main rooms, brick veneer construction and is described as comfortable but dated. The property is on a generous allotment and includes a car port and a lock up shed.
Mr Desmier considered that even if the plaintiff were to scale down to a smaller allotment which afforded comparable living areas and secure garaging, such a property in the same area would cost between $900,000 to $1.2m. Mr Desmier said that in the current market property values are down 5 to 10%.
Mr Desmier said that a fair assessment of the house in which the plaintiff currently resides in Ursa Street is more likely in the current market to be valued in the “high $800,000 to $900,000”. Stamp duty will also have to be paid.
The defendants submit that the plaintiff’s needs could be adequately met looking outside of Balwyn. Properties which were said to be comparable to that in which the plaintiff currently resides in alternative suburbs were tendered into evidence by the defendants.
I accept that given the plaintiff’s circumstances it would be adequate and proper for him to purchase a property in his local area. He has been residing in this area for 12 years and specifically expressed a desire to remain there.
The defendants submit that any nest egg awarded to the plaintiff should be limited to that which is appropriate for that of a son with a limited relationship, rather than “setting him up” for life. The defendants submit that if the plaintiff was awarded provision in order to purchase his own home, he would no longer need to find money for the payment of rent. However, the properties which were flagged as comparable to that in which the plaintiff currently resides were dated properties which will require work. The plaintiff would also incur expenses associated with a residential property including rates, maintenance and general upkeep costs.
The plaintiff said that he led a fairly simple lifestyle. At the moment he derives pleasure from being able to mow his own lawns and said that this gave him something to do even if it took two to three days to finish the task. The difficulty is that given his physical injuries as described by Dr Kevin King and Dr Peter Dohrmann, the plaintiff may require assistance in the future for a variety of tasks and for his own day to day needs.
The plaintiff has a limited circle of friends and he has only his mother at this stage. He has half brothers and sisters who he does not appear to have any regular contact with.
In my view, the factors discussed give rise to a need for the deceased to have made such provision as would provide a reasonable buffer to the plaintiff who through no fault of his own has sustained serious injuries which have had, and will continue to have, a drastic impact on his life and his needs. He should be provided with a reasonable buffer against the various vicissitudes to which he might be subjected and provide him with some ongoing security.
Section 91(4)(k), (l), (m) and (o) is not relevant to this case. There was no evidence of the plaintiff contributing to the deceased’s estate or his welfare. There were no gifts given by the deceased and the deceased had not maintained the plaintiff from when the plaintiff was 11 years old. There was no suggestion of any conduct by the plaintiff or his character which in any way acted to disentitle him.
Pursuant to s 91(4)(p) the Court can consider any other matter it considers relevant. In this case, the defendants say nothing about their financial position or other claims on the testator’s bounty. I am therefore entitled to assume that the beneficiaries have no special claim other than relationship and in particular that they have adequate resources upon which to live.
The defendants submit that I must consider the beneficiaries’ comparative moral claims that they have in light of the quality, length and nature of their relationship with the deceased. The defendants submit when the Court has regard to any other matter (s 91(4)(p)), that this is a consideration which must be factored into account.
I accept that the defendants had a long friendship with the deceased and that they provided care and assistance to the deceased which enabled him to remain at home even when he was extremely ill.
A beneficiary in a will is under no obligation to justify the bequest he or she has received under the will. Ultimately it is for the plaintiff to establish his moral claim and it is the right of the testator to do what he pleased with his own.[6]
[6]Re Waters (deceased) (1975) 11 SASR 315, 318-19.
I consider that a wise and just testator would have made adequate and proper provision for the plaintiff so as to provide for secure accommodation in his local area; an income stream equivalent to the modest income he currently receives by way of WorkCover benefits; and a modest nest egg to provide some sort of buffer for the plaintiff against the vicissitudes of life in the context of his special circumstances.
I consider that the plaintiff will need between $900,000 to $1 million plus stamp duty in order to secure a property, albeit smaller than the one in which he lives, in the same area. In addition, the plaintiff will require an ongoing income stream after age 65. I accept the actuary’s calculation in the range of $459,000 to $568,000. Further, given the plaintiff’s needs and circumstances a nest egg for the plaintiff’s future is appropriate.
Accordingly, the amount I consider necessary for the adequate and proper provision of the plaintiff is $1.9m.
Conclusion
For the reasons given, there will be an order that provision be made out of the estate in favour of the plaintiff by way of lump sum payment in the sum of $1.9m.
Such sum is to be paid into the Senior Master’s Fund of the Supreme Court.
I shall hear counsel on the question of costs.
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