Kozlowski v Kozlowski

Case [2013] SASCFC 112

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

KOZLOWSKI v KOZLOWSKI

[2013] SASCFC 112

Judgment of The Full Court

(The Honourable Justice Sulan, The Honourable Justice Vanstone and The Honourable Justice Anderson)

18 October 2013

SUCCESSION - FAMILY PROVISION

SUCCESSION - FAMILY PROVISION - CRITERIA FOR DETERMINING APPLICATION - TREATMENT OF PARTICULAR APPLICANTS - CHILDREN - ADULT SONS

Appeal against orders made pursuant to the Inheritance (Family Provision) Act 1972 (SA) granting the first respondent’s application for provision under s 7 of the Act. The estate consisted of a house purchased by the deceased for the use and benefit of his son, the first respondent. The Judge held that the first respondent had established a moral claim to the house and that the rules of intestacy made inadequate provision for him. The Judge found that the deceased had arranged for the other members of the first respondent’s family to have access to properties during his lifetime. The Judge found that adequate provision under the Act was for the first respondent to receive the proceeds from the sale of the property after deducting the costs of the administration and funeral costs. The Judge ordered that the first respondent’s costs be paid by the appellant.

Whether the Judge erred in exercising his discretion under s 7 of the Inheritance (Family Provision) Act 1972 (SA) by effectively awarding the first respondent the whole of the deceased’s estate. Whether the Judge conflated the concept of a moral claim with a bare promise that would not ordinarily be binding during a person’s life by equating a moral duty with the finding that there was an intention on behalf of the deceased that the Mendez Street property would belong to the first respondent. Whether the Judge’s discretion to award costs in favour of the first respondent miscarried.

Held:  per Sulan J (Vanstone and Anderson JJ agreeing)

(1)  The Judge fell into error by misconstruing the effect of the finding that the first respondent had established a moral claim.  The finding that there was a moral claim was relevant to determining whether adequate provision had been made for the first respondent.  It enlivened the Court’s discretion to consider what provision ought to be made.  It did not follow that the first respondent was therefore entitled to the whole of the property.

(2)  The finding that the first respondent’s proper maintenance, education or advancement in life, assessed against the other claimants to the estate, required that he receive, effectively, all the proceeds of the sale of the property, was not supportable.

(3)  Having regard to all the circumstances, the appropriate order is that the deceased’s funeral expenses and the costs of administration to be paid from the proceeds of the sale of the property.  Of the remaining balance, one quarter go to the second respondent and the remaining three quarters to be divided equally between the appellant and the first respondent.  The personal effects of the deceased be given to the appellant.

(4)  In all the circumstances, the appropriate…

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Kozlowski v Kozlowski [2013] SASCFC 112
Case
[2013] SASCFC 112
Decision Date

CaseChat Overview and Summary

The case of *Kozlowski v Kozlowski* involved an appeal by Maria Kozlowski, the second respondent and appellant, against a decision concerning the distribution of the estate of the deceased, Marian Kozlowski. The dispute centred on the adequacy of provision made for the first respondent, Stefan Kozlowski, from the deceased's estate, and the trial judge's exercise of discretion in awarding costs. The appeal was heard by Sulan, Vanstone, and Anderson JJ.

The primary legal issues before the court were whether the trial judge had erred in finding that the first respondent was entitled to effectively the entirety of the proceeds from the sale of a property, and whether the judge's award of costs to the first respondent was appropriate. The court was required to consider the criteria for determining applications for family provision, particularly in relation to adult sons, and to assess whether the provision made for the first respondent was adequate in light of other potential claimants to the estate.

Sulan J, with whom Vanstone and Anderson JJ agreed, held that the trial judge had fallen into error by misconstruing the effect of finding a moral claim. The existence of a moral claim, while relevant to enlivening the court's discretion to consider provision, did not automatically entitle the first respondent to the whole of the property. Furthermore, the finding that the first respondent's proper maintenance, education, or advancement in life necessitated receiving effectively all the proceeds of the property sale was deemed not supportable.

Consequently, the court ordered that the deceased's funeral expenses and costs of administration be paid from the sale proceeds. Of the remaining balance, one quarter was to be allocated to the second respondent, Julie Kozlowski, and the remaining three quarters were to be divided equally between the appellant and the first respondent. The deceased's personal effects were to be given to the appellant. In relation to costs, the court ordered that each party bear their own costs of the trial.

Orders

Orders of the court

Held: per Sulan J (Vanstone and Anderson JJ agreeing)

(1) The Judge fell into error by misconstruing the effect of the finding that the first respondent had established a moral claim. The finding that there was a moral claim was relevant to determining whether adequate provision had been made for the first respondent. It enlivened the Court’s discretion to consider what provision ought to be made. It did not follow that the first respondent was therefore entitled to the whole of the property.

(2) The finding that the first respondent’s proper maintenance, education or advancement in life, assessed against the other claimants to the estate, required that he receive, effectively, all the proceeds of the sale of the property, was not supportable.

(3) Having regard to all the circumstances, the appropriate order is that the deceased’s funeral expenses and the costs of administration to be paid from the proceeds of the sale of the property. Of the remaining balance, one quarter go to the second respondent and the remaining three quarters to be divided equally between the appellant and the first respondent. The personal effects of the deceased be given to the appellant.

(4) In all the circumstances, the appropriate order as to costs of the trial is that each party bear their own costs.

Background

Background to the litigation

The second defendant and appellant, Maria Kozlowski, appeals against the decision on the ground that the trial Judge erred in exercising his discretion to grant the respondent’s application in the terms that he did. The appellant further contends that the trial Judge’s exercise of discretion to award costs in favour of the respondent miscarried.Background The deceased, Marian Kozlowski, died intestate on 22 March 2003 at the age of 64. He was survived by his wife Maria Kozlowski (the appellant) and the two children of the marriage, Stefan Kozlowski and Julie Kozlowski, the first and second respondents respectively. The deceased and the appellant married on 27 February 1971. The first respondent was born on 7 July that year and his sister, the second respondent, was born on 30 May 1975. Sometime between 1982 and 1984 the deceased and the appellant separated. They never divorced and there was no property settlement. At the time, the first respondent was aged 12 years. He went to live with the appellant. After separating from the appellant, the deceased received a significant compensation claim for an injury he sustained in a serious motor vehicle accident in or around 1986. He used the proceeds of the compensation payment to acquire several properties with the appellant as joint tenants. The following properties were acquired:·6 Hooper Street, Paralowie (“the Hooper Street property”);·23 Sansom Street, Woodville North (“the Sansom Street property”); and·11 Penola Street, Kilkenny (“the Penola Street property”). From 1996, the second respondent commenced living at the Hooper Street property. The deceased resided at the Penola Street property and the appellant at the Sansom Street property. The appellant gave evidence that she was not estranged from the deceased but that she was not able to live with him because of his violence towards her. She said that she paid all of the deceased’s bills and provided food and clothing for him. She stated that she assisted the deceased for 21 years, from the time they lived apart until his death. This included a seven month period following the deceased’s car accident during which he required around the clock care. In 2002, a property located at 3A Farr Street, Woodville North (“the Farr Street property”) was purchased for $356,797. The deceased contributed $240,680.98, the appellant paid $74,319.02 and the second respondent took out a $41,797 mortgage to pay the remainder. Following proceedings in the District Court after the death of the deceased,[1] a Judge found that the Farr Street property was owned by Julie Kozlowski but that the appellant retained a right to occupy it for her life. On 12 December 2002, the second respondent became the registered proprietor of that property. From that date, the appellant began residing at those premises, and was continuing to do so as at the date of trial.[1] Kozlowski v Kozlowski [2011] SADC 89. In 1995, the deceased purchased a property on Mendez St, Paralowie (“the Mendez Street property”). It was purchased for $91,990.00 and was registered in the name of the deceased. The first respondent claimed that the property was purchased for him by the deceased for his sole benefit and enjoyment. He commenced living at the Mendez Street property at the invitation of the deceased. He married his wife, Pamela Kozlowski, in 1996. On 23 March 2002, their daughter Maykala Kozlowski was born, followed by their son Dylan Kozlowski on 12 April 2004.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

ANDERSON J

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Ratio Decidendi

Legal Principle Established

Established by: ANDERSON J

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