Re Baljak; Garfirth v Baljak - [2022] VSC 415

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2022 00963

IN THE MATTER of the will and estate of LAZAR BALJAK, deceased

NEIL PETER WILLIAM GARFIRTH and DARREN STEPHEN GOLDSMITH (as executors of the will and estate of LAZAR BALJAK, deceased)	Plaintiffs
v
ALAN BALJAK, MILJENKO BALJAK and MIROSLAV BALJAK	Defendants

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JUDGE:	Richards J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 July 2022
DATE OF JUDGMENT:	27 July 2022
CASE MAY BE CITED AS:	Re Baljak; Garfirth v Baljak
MEDIUM NEUTRAL CITATION:	[2022] VSC 415

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WILLS, PROBATE AND ADMINISTRATION – Application for judicial advice – Whether appropriate for executors to compromise proceedings under Part IV of the Administration and Probate Act 1958 (Vic) in light of an ongoing Croatian proceeding concerning the will – Whether appropriate for executors to distribute estate without making retention or provision for any potential liability arising from Croatian proceeding – Where compromise only concerns property of estate in Victoria, not Croatia – Appropriate for executors to compromise and distribute estate as proposed – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 54.02.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr C Northrop	Goldsmiths Lawyers
For the Defendants	Ms E Konstantinou	Frenkel Partners

HER HONOUR:

Lazar Baljak was born in Croatia in 1928, and migrated to Australia in 1952. He became an Australian citizen and lived here until his death on 7 February 2014. Lazar did not marry and had no children. At the time of his death he was in a domestic relationship with Amila Cimerman. He also had six nieces and nephews, Aleksandra Baljak Bisko, Milica Baljak (also known as Mila Vukotic), Miljenko Baljak, Miroslav Baljak, Alan Baljak and Mirko Baljak.[1]
[1]For clarity and convenience I refer in this judgment to Lazar Baljak, members of his family, and Amila Cimerman by their given names. No disrespect is intended.

Lazar’s estate included two properties in Victoria: a house in Dumfries Road, Keysborough and a commercial property in Coleman Parade, Glen Waverley. He also had an amount of cash invested with banks in Victoria and New South Wales.

By his will dated 29 May 2013, Lazar appointed Neil Garfirth and Darren Goldsmith of the firm Goldsmiths Lawyers as his Executors. Probate of the will was granted by this Court on 4 July 2014. The estate — comprising the real property in Victoria and the cash in the banks — was valued at more than $4,800,000 for probate purposes.

Clause 2 of the will provided for the following bequests:

(a) the Keysborough property to Amila;

(b) the sum of $100,000 to Aleksandra;

(c) the sum of $100,000 to Mila;

(d) the Glen Waverley property to Alan; and

(e) the residuary estate to Miljenko and Miroslav in equal shares.

The will made no provision for Mirko.

Separately from the grant of probate in Victoria, Mirko initiated probate proceedings in Croatia. At a hearing before a notary public on 19 January 2016, it…

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.

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Details

Case: [2022] VSC 415
Decision Date: 27 July 2022

CaseChat Overview and Summary

The applicants, Garfirth and Baljak, sought judicial advice regarding the appropriate course of action for the executors of the estate of Baljak, who had passed away. The applicants were concerned about the executors' intention to compromise proceedings under Part IV of the Administration and Probate Act 1958 (Vic) while there was an ongoing proceeding in Croatia concerning the validity of Baljak's will. Additionally, the applicants questioned whether it was appropriate for the executors to distribute the estate without making any retention or provision for any potential liability that might arise from the Croatian proceeding. The compromise only involved property within the estate in Victoria and did not extend to any property in Croatia.

The court had to determine whether the executors were acting appropriately by compromising the proceedings in Victoria and distributing the estate without making any provision for potential liabilities from the Croatian proceeding. The court also had to consider whether the executors should take into account the ongoing Croatian proceeding when deciding to compromise and distribute the estate.

The court held that it was appropriate for the executors to compromise the proceedings in Victoria and distribute the estate as proposed, as the compromise only concerned property within Victoria and did not involve any property in Croatia. The court emphasised that the executors were not required to consider the Croatian proceeding when deciding to compromise and distribute the estate. The court also noted that the executors were not obliged to make any provision for potential liabilities arising from the Croatian proceeding, as the compromise only involved property within Victoria. The court concluded that the executors were acting within their discretion and that the compromise and distribution of the estate were appropriate.

The court ordered that the executors could proceed with compromising the proceedings and distributing the estate as proposed, without making any provision for potential liabilities arising from the Croatian proceeding. The court also ordered that the applicants' application for judicial advice be dismissed.

Orders