Mandas v Brazilek
[2012] VCC 1248
•4 September 2012
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION LIST
FAMILY PROPERTY DIVISION
Case No. CI-11-06378
IN THE MATTER of Part IV of the Administration and Probate Act 1958
and
IN THE MATTER of the Will and Estate of MARIJA MANDAS deceased
| ANTAL MANDAS | Plaintiff |
| v | |
| STIVAN BRAZILEK (who is sued as the Executor and Trustee of the Estate of MARIJA MANDAS deceased) | Defendant |
---
JUDGE: | HIS HONOUR JUDGE MISSO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 August 2012 | |
DATE OF JUDGMENT: | 4 September 2012 | |
CASE MAY BE CITED AS: | Mandas v Brazilek | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 1248 | |
REASONS FOR JUDGMENT
---
SUBJECT: TESTATOR'S FAMILY MAINTENANCE
CATCHWORDS: Claim by surviving spouse – surviving spouse and testatrix tenants in common in equal share in a unit – testatrix gave a conditional life interest to her surviving spouse – whether the surviving spouse could demonstrate need – whether a life interest was adequate provision for the surviving spouse’s maintenance and support
LEGISLATION CITED: Administration and Probate Act 1958, s91(1), (2), (3) and (4)
CASES CITED: Petrucci v Fields [2004] VSC 425; King v White [1992] 2 VR 417; Vigolo v Bostin (2005) 221 CLR 191; Worladge v Doddridge (1957) 97 CLR 1
JUDGMENT: The Will be amended to reflect a transfer of the testatrix's half interest in the unit to the plaintiff.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr B McCullagh | Neal Collin Lawyers |
| For the Defendant | Mr R Delahunty, Solicitor | Morley Naughton Pearn & Cook |
HIS HONOUR:
Introduction
1 By Originating Motion filed 23 December 2011, the plaintiff seeks an order pursuant to Part IV of the Administration and Probate Act 1958 (“the Act”) for provision to be made out of the estate of the deceased for his proper maintenance and support.
2 Mr B McCullagh of counsel appeared for the plaintiff. Mr R Delahunty, solicitor, appeared for the defendant.
3 The following evidence was adduced at the trial by the plaintiff:
· The plaintiff gave evidence and was cross-examined.
· The plaintiff tendered the following documents:[1]
[1]The letter “G” was not applied to an exhibit
§ Affidavit of the plaintiff sworn 15 March 2012: Exhibit A
§ Affidavit of the plaintiff sworn 30 May 2012: Exhibit B
§ Affidavit of the plaintiff sworn 4 July 2012: Exhibit C
§ Affidavit of the executor (unsworn): Exhibit D
§ Statement of receipts and expenditure as at 27 April 2010: Exhibit E
§ Photocopy of the Certificate of Title: Exhibit F
§ Medical report: Exhibit H
§ Letter of referral of Dr Gordon dated 11 February 2009: Exhibit J
§ Radiology report dated 2 March 2004: Exhibit K
§ Radiology report dated 18 May 2004: Exhibit L
§ Invoice of Kingston Funeral Services dated 7 September 2009: Exhibit M
§ Market valuation by Woodards dated 19 October 2011: Exhibit N
§ Market valuation by Barry Plant dated 21 August 2012: Exhibit O
§ The inventory of assets and liabilities: Exhibit P
§ Statement of receipts and expenditure of the deceased estate: Exhibit Q
§ Radiology report dated 18 May 2004: Exhibit R.[2]
[2]This exhibit is a duplicate of Exhibit K
4 The following evidence was adduced at the trial by the defendant:
· The defendant gave evidence and was cross-examined.
· Branco Blazevic gave evidence and was cross-examined.
· Hilda Lescesen gave evidence and was cross-examined
· The defendant tendered the following documents:
§ Letter dated 13 July 2012: Exhibit 1
§ Affidavit of the defendant sworn 22 May 2012: Exhibit 2
§ Interim administration statement dated 20 July 2012: Exhibit 3
§ Translated letter dated 14 July 2012 with six photographs: Exhibit 4
§ Council valuation issued 20 August 2012: Exhibit 5.
The Background Facts
5 Marija Mandas was born on 29 May 1928. Antal Mandas was born on 4 January 1937. They were both born in the old Yugoslavia. They migrated to Australia over four decades ago. They met in about 1972 at their workplace in Frankston.
6 Marija and Antal both had previous marriages. It was not long after they met that they developed a close association. They married in 1973. They commenced living together, shortly prior to their marriage, at unit 2, 123 Centre Road, Oakleigh (“the unit”).
7 Marija purchased the unit some time prior to 1973. The Title discloses that she became the registered proprietor of the unit on 15 October 1975 through dealing No. F895023. At the same time, Marija and Antal were registered as tenants in common in equal shares on 15 October 1975 through dealing No. F895024.
8 Mr McCullagh submitted that it was probable that Marija purchased the unit on vendor terms, which explains why she was occupying the unit in 1973 and only became the registered proprietor of the unit on 15 October 1975, when it is likely that the last instalment under a vendor terms contract was paid. It is probable that because she was married to Antal, they both agreed that immediately upon the completion of the vendor terms contract, they should both be registered as tenants in common in equal shares. Although it is merely historical, it is a likely explanation for the dealings which are endorsed on the Title.[3]
[3]Exhibit F
9 The only source of evidence regarding the means at the disposal of Marija which enabled her to purchase the unit came from Antal. It was his recollection that Marija purchased the unit in 1970. She purchased it for about $7,000. She paid $1,500 as a deposit. After Marija and Antal commenced living in the unit, the balance of the purchase price was paid from their wages and from $2,500 contributed by Antal. They were able to pay off the balance of the purchase price within two years of their marriage.
10 Marija died on 1 September 2009. She was eighty-two years of age. Marija had been in declining health from about 1989. There was some conflict in the evidence about the nature and extent of her declining health and when it became evident. Antal said that he stopped work in 1989 to look after Marija. At that time, Marija was on a Disability Pension. Antal obtained a Carer’s Pension. When they each reached sixty-five years of age, they were then in receipt of an Aged Pension.
11 Antal was cross-examined by Mr Delahunty, but it was not my impression that the cross-examination was intended to contradict much of Antal's evidence, but rather to demonstrate that Antal did not care for Marija on his own. I accept the plaintiff's evidence that over the thirty-six years of his marriage to Marija that he was a devoted husband and cared for her as best he could. I also accept the evidence of Mr Blazevic, Ms Lescesen and the defendant that they had a good relationship with Marija and Antal, and that they visited them often. It was quite different from the impression I was left with after I read the affidavit of the defendant sworn 22 May 2012[4] which suggested that there was some serious discord between members of Marija’s family and Antal.
[4]Exhibit 2
12 Some of the discord, or as it appeared to me, was based upon Marija and Antal conducting their financial affairs separately. They had separate banking accounts. On the occasions on which they travelled back to Serbia, they travelled separately. However, even if that was so, it is without doubt that they lived as man and wife for about thirty-six years, otherwise sharing what is, by tradition and convention, the lives which husbands and wives lead together. They apparently lived in a loving and harmonious environment, and that was confirmed by the evidence of the witnesses called by Mr Delahunty.
13 Antal has lived in the unit since the death of Marija. His only assets are his interest in the unit, about $7,500 in a bank account and a car which he purchased in 2008. He obtained the monies which are in his bank account from Marija. She obtained a compensation award for injuries which were work-related. She gave Antal about $24,000, which was about half of the compensation award.
14 The appearance of any discord evaporated during the hearing. Whilst Antal contested the extent to which members of Marija's family visited her in her last years and their assistance to her, I accept that the members of Marija's family were reasonably close to her and did visit her, showing an interest in her welfare and that of Antal.
The Will
15 I have set out the background facts before turning to the Will in order for the Will to be put into some context. Marija made a Will on 21 March 1975. The relevant part of the Will is as follows:
“I GIVE DEVISE AND BEQUEATH my half share in the dwelling known as Unit 2, 1123 Centre Road, South Oakleigh or such other dwelling as at the time of my death shall be the principal matrimonial residence of me and my said husband to my Trustees UPON TRUST for my husband for life or until he remarries subject to payment by him of rates, fire insurance premiums and the cost of maintaining the said dwelling in a tenantable state of repair AND upon the death or remarriage of my husband THEN UPON TRUST for such of my nieces… and my nephews … .”
16 The devise in the Will is consistent with Marija and Antal arriving at a recognition that their financial contributions to the purchase of the unit entitled them to a half share, and hence the reason why it was ultimately registered in their names as tenants in common in equal shares. However, Marija did not make another will.
The Competing Submissions
17 At the end of the evidence both Mr McCullagh and Mr Delahunty announced that the only issue falling for my consideration was whether Marija had discharged the moral duty she owed to Antal as a wise and just testatrix by making adequate provision for his proper maintenance and support by giving him a life interest in her half-share of the unit, subject to three conditions, namely, that he pay outgoings, pay the cost of maintaining the unit in a tenantable state of repair, and that he not remarry. Any one of those events would potentially be a trigger for the trustees of Marija's Will to determine the life interest. There was no issue that any of those triggers had occurred.
18 Mr McCullagh submitted that Marija, as a wise and just testatrix, should have devised the whole of her interest in the unit to Antal. In reply, Mr Delahunty submitted that the devise was more than adequate because it permitted Antal to live in the unit and to sell it and to use the proceeds of sale to purchase an alternative place of residence.
19 However, I am not convinced that Mr Delahunty's reading of the Will is correct. The drafting of that part of the Will which I have set out above provides Antal with the life interest in Marija's half-share while he is a resident in the unit. It says nothing about Antal selling the unit and using the proceeds to purchase something more appropriate, and then to use any residual capital, for example, to invest in some way. It does not make clear what is to happen when Antal reaches an age when he is no longer able to live in the unit and needs supported accommodation. Does that event determine the life interest and permit the trustees to pay Marija's life interest to her nieces and nephews?
The Legal Principles
20 The termination of the plaintiff's claim requires me to firstly determine whether Marija owed a responsibility to make provision for Antal. That is conceded. Next, to determine whether Marija made adequate provision for the proper maintenance and support of Antal. If the answer to the second question is answered in the negative, I am required to determine what is appropriate to provide for Antal's proper maintenance and support.
21 What is clear is that the Court is not entitled rewrite the Will in accordance with its own ideas of fairness or justice. The Court must place itself in the position of Marija and can consider what she should have done, in all the circumstances, in treating her as a wise and just testatrix.[5]
[5]Petrucci v Fields [2004] VSC 425
22 It is generally recognised that a surviving spouse has a higher moral claim on the estate of the deceased spouse than anyone else. In this case, given that their marriage was their principal marriage, Antal has a higher moral claim on the estate of Marija than her nieces and nephews.[6]
[6]King v White [1992] 2 VR 417
23 I am not persuaded that the short evidence given by Mr Blazevic establishes a competing moral claim on the bounty of Marija. He looked to me to be a relatively young man. His evidence was limited to the fact that he is unemployed and living with his parents. He gave no other evidence regarding his financial resources. Ms Lescesen, nor the other relatives of Marija, gave any evidence of competing moral claims.[7] In the absence of any such evidence, I am left with the evidence of Antal. It is evidence of a relatively small estate, barely sufficient to put a roof over Antal's head, to provide him with more appropriate accommodation and perhaps a nest egg from which he can meet the inevitable contingencies of life which he is likely to face in his advancing years.
[7]I permitted the tender of a letter of Ms Lescessen dated 13 July 2012 to be admitted into evidence: Exhibit 1, and a letter of other relatives who reside in Serbia: Exhibit 4
24 What Marija should have done, in occupying the position of a wise and just testatrix, was to consider the position of Antal and what he would need to meet the demands of his life in his advancing years. Inevitably, Antal is likely to require more appropriate accommodation and a nest egg in order to provide him with some financial security. A half interest in the unit was never likely to meet those demands.
25 Mr McCullagh submitted that the Will was likely to have been made by Marija in contemplation of the property transactions evident on the Title and at a time when perhaps her relationship with Antal had some uncertainties about it, but those uncertainties must have evaporated over a marriage that was nearly four decades long. He submitted that perhaps Marija simply did not bother to revisit her initial Will.
26 In the end, I am of the view that Antal has established the requisite degree of need. A sale of the unit will provide him with perhaps $200,000 on the basis of the highest estimate of the value of the unit provided by Mr Stickley of Barry Plant.[8] If Mr Stickley’s estimate is found to be optimistic and the other estimate is more realistic, then the plaintiff might be lucky to count on $150,000.[9] On any view, either sum is inadequate to provide Antal with more appropriate accommodation, and when and if the time comes for him to go into supported accommodation, it is unlikely to provide him with what I understand is the cost of an accommodation bond in supported accommodation.
[8]Valuation is $430,000 at the high end estimated on 21 August 2012 to be compared with the estimate of Mr Mizerni of Woodards of $330,000 at the high end estimated 19 October 2011
[9]My estimates are based upon the high-end valuations, less something for the costs of sale
27 It is trite to say that when it comes to determining what is adequate provision for the maintenance and support of a claimant, I am to consider the claimant's station in life, and expectations which that life has created, and what he would reasonably expect would be his standard of living in the future.[10] An assessment of what is adequate provision must be more than merely “keeping the wolf from the door”.[11]
[10]Vigolo v Bostin (2005) 221 CLR 191 at 228
[11]Worladge v Doddridge (1957) 97 CLR 1 at 12
28 I am obliged to give consideration to matters which are relevant under s91(4) of the Act.
29 I have essentially covered most of those matters, if not all, in the course of these reasons. Marija and Antal were husband and wife in a relationship of thirty-six years. It was conceded that Marija owed a responsibility to Antal, but not to any other persons. The estate is modest, as described above. Antal has little or no financial resources save for the value of the unit. Antal is a relatively elderly man in the twilight of his life. Antal made a contribution to the asset pool comprising the unit by reason of his work and commitment to his care of Marija over the years of their marriage. The only benefit Antal received was half of the compensation claim received by Marija. Antal is not being maintained by any other person. There is no other person who has a responsibility to maintain Antal. No evidence was given which called into question the character and conduct of Antal, and there are no other relevant matters which I need to consider.
30 The conclusion I have reached is that Marija was in breach of her moral duty to make adequate provision for the maintenance and support of Antal. Antal has demonstrated clear need which I consider can only be adequately met by the Will being amended to reflect a transfer of Marija’s half interest in the unit to Antal.
31 The only other matters which requires determination by me is whether Antal should have returned to him the costs of the funeral expenses which were met from his own monies. I do not propose to make any order of that kind.
32 In relation to the defendant’s claim for executor’s commission, I think it is entirely appropriate that his claim for executor’s commission be met by the estate. I was informed that the defendant took commission, but has returned that sum into the estate. I consider that it should be paid back to the defendant.
Orders
33 The orders I make are as follows:
(1) The last Will and testament of Marija Mandas be amended as follows:
“I GIFT DEVISE AND BEQUEATH my half share in the dwelling known as Unit 2, 1123 Centre Road, South Oakleigh to my said husband.”
(2) The costs of the plaintiff and the defendant be met by the estate on a solicitor‑client basis to be assessed by the Costs Court, in default of agreement.
(3) I grant liberty to apply to the parties relevant to whether the unit must be sold for the purpose of making any further orders as necessary to have a sale undertaken, to meet the costs of sale, the payment of the net proceeds of sale to the plaintiff, and the winding up of the estate by the payment of fees/commission of the defendant.
- - -
0
3
0