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Krstic v State Trustees Ltd

Krstic v State Trustees Ltd

Case [2012] VSC 344 9 November 2012

Adverse Possession

Contingent or Vested Interests

Intestacy

Succession Law

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
PROBATE LIST

No. 00872 of 2012

IN THE MATTER of the Will and Estate of PETER KRSTIC, deceased

and

IN THE MATTER of an Application pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2005 for the determination of questions arising in the administration of the Estate

MARK STEFAN KRSTIC	First Plaintiff
and
NICHOLAS THOMAS KRSTIC	Second Plaintiff
v
STATE TRUSTEES LIMITED (ACN 064 593 148) (who is sued as the executor of the will and estate of PETER KRSTIC, deceased)	Defendant

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JUDGE:	McMILLAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 June 2012
DATE OF JUDGMENT:	9 November 2012
CASE MAY BE CITED AS:	Krstic v State Trustees Ltd
MEDIUM NEUTRAL CITATION:	[2012] VSC 344

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WILL — Principles of construction of a will — Application of the rule in Saunders v Vautier (1841) 4 Beav 115; 41 ER 482 — Contingent or vested interests — Gift of residue to children upon attaining certain ages — Gift over to grandchildren if age contingencies of children not attained — Failure of gift over to grandchildren — Intestacy.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	R. B. Phillips	McNab McNab & Starke
For the Defendant	A. Bolkas	State Trustees Limited

HER HONOUR:

Introduction

In this proceeding, the plaintiffs, Mark Stefan Krstic (‘Mark’) and Nicholas Krstic (‘Nicholas’), seek the determination of two questions concerning the proper construction of the will of their late father, Peter Krstic (‘the deceased’). The first question relates to the gift of the residuary estate and the second question relates to a legacy to Nicholas.

Factual Background

The deceased died on 24 March 2007 leaving a will dated 21 August 2003 (‘the will’). Probate of the will was granted to the defendant on 5 June 2007.

Pursuant to his will, the deceased provided as follows:

a) $20,000 to Fiona Garraway;[1]
[1]A foreshadowed claim by Fiona Garraway alleging a domestic relationship with the deceased during his lifetime was settled and funded from the deceased’s superannuation fund.

b) $5,000 to Somers Yacht Club;

c) $20,000 to the deceased’s sons, Mark and Nicholas, who survive him and attain the age of 21 years; and

d) The residuary estate to such of Mark and Nicholas as survive him and attain the age of 40 years and 36 years respectively with a gift over to the deceased’s grandchildren who survive him and attain 35 years.

The deceased was survived by his two sons and neither of them had any children. At the date of hearing, Mark (born on 9 August 1987) was 24 years of age and Nicholas (born 29 November 1991) was 20 years of age.

The deceased’s estate comprised a small amount of cash and the deceased’s home. After payment of debts and expenses and allowing for the legacies, the residue of the estate is now approximately $450,566 less ongoing administration expenses, taxation, legal fees and property related expenses.

The First Question for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Krstic v State Trustees Ltd

Details

AGLC: Krstic v State Trustees Ltd [2012] VSC 344
Case: [2012] VSC 344
Decision Date: 9 November 2012

CaseChat Overview and Summary

The case of Krstic v State Trustees Ltd involved a dispute concerning the interpretation of a will. The deceased had bequeathed his estate's residue to his children on the condition that they attain specific ages. If the children failed to meet these age requirements, the residue was to pass to the grandchildren. The dispute arose when the children did not meet the age conditions, and the grandchildren claimed that the residue should vest in them. The matter was brought before the court to determine the proper interpretation of the will and the effect of the age contingencies on the disposition of the estate.

The primary legal issue before the court was the application of the rule in Saunders v Vautier, which holds that where a will provides for the property to be held by two or more persons jointly, and any one of them may compel the sale of the property during their joint lives, the property cannot vest in any one of them until the death of the others. The court had to decide whether the gift of residue to the children was contingent upon their attainment of the specified ages or if it vested in them immediately upon the testator's death, subject to the condition that they attain those ages. If the gift to the children failed due to the non-attainment of the age conditions, the court also needed to determine whether the gift over to the grandchildren was valid or if the residue would instead pass under the rules of intestacy.

The court held that the gift to the children was contingent upon their attainment of the specified ages, and as they had not met these conditions, the gift failed. Consequently, the gift over to the grandchildren was not triggered because the children's interest never vested. Since the gift over to the grandchildren was contingent on the failure of the primary gift to the children, and that primary gift did not vest, the residue passed under the rules of intestacy. The court applied the principle that a gift over cannot take effect if the preceding gift fails unless the will expressly provides for such a contingency.

The court ordered that the residue of the estate be distributed according to the rules of intestacy, as the primary gift to the children had failed and the gift over to the grandchildren was not effective. The grandchildren's claim was dismissed, and the estate was to be distributed among the deceased's other legal heirs.

Orders