Re Saric; Saric v Vukasovic
[2017] VSC 759
•14 December 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2017 00261
IN THE MATTER of Part IV of the Administration and Probate Act1958 (Vic)
-and-
IN THE MATTER of the Will and Estate of DANKA SARIC deceased
| GRGO SARIC | Plaintiff |
| v | |
| TANJA VUKASOVIC (who is sued as the executrix of the will of the abovenamed deceased) | Defendant |
---
JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 September 2017; plaintiff’s summons filed 1 November 2017 on the papers |
DATE OF JUDGMENT: | 14 December 2017 |
CASE MAY BE CITED AS: | Re Saric; Saric v Vukasovic |
MEDIUM NEUTRAL CITATION: | [2017] VSC 759 |
---
FAMILY PROVISION — Where deceased made no provision for estranged husband — Where deceased owed limited moral responsibility to plaintiff — Provision made for plaintiff by way of an extended life interest in property owned by plaintiff and deceased as tenants in common in equal shares — Administration and Probate Act 1958, s 91.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr W F Gillies | Morgan Legal |
| For the Defendant | Mr R Boaden | Dominic Tesoriero & Co |
HER HONOUR:
Introduction
Danka Saric died on 1 June 2014, aged 60 years (‘the deceased’). The deceased was survived by her husband (‘the plaintiff’) and her three adult children, the defendant, Marija Saric and Andrija Saric.
By her will dated 31 October 2013, the deceased left her estate to her three children, with greater provision being made for Andrija, being the amount of $200,000 from the sale of her interest in the family home at 68 Ford Street, Ivanhoe (‘68 Ford Street’). Her will did not make and provision for the plaintiff for the reasons expressed therein as follows:
I DECLARE that I have made no provision herein for my husband because I believe that he has adequate assets of his own in Australia and in Croatia to be sufficiently financially secure and to allow him a comfortable life, such as he requires nothing further from me for his security in life, and I firmly believe that our children will attend to his other needs in his old age.
Probate of the deceased’s will was granted to the defendant on 12 September 2016.
The assets of the estate comprise the deceased’s half interest in 68 Ford Street and an investment property at Unit 3, 64 Ford Street Ivanhoe (‘Unit 3’). The deceased’s will also listed a number of loosely identified properties in Croatia that she left to her brother in Croatia and her children. These properties were not the subject of dispute, being small landlocked holdings of limited value.
When the deceased executed her will, her two properties in Ford Street were held jointly with the plaintiff. Before her death, the plaintiff and deceased changed the ownership to tenants in common in equal shares. This was done because the deceased wished to leave her interest in the properties for her children. The documents changing the ownership were lodged at the Land Titles Office on 23 June 2014, some three weeks after her death.
At trial, the agreed value of the deceased’s estate date amounted to $1,085,281.76 as follows:
(a) a half share in Unit 3 valued at $310,000;
(b) a half share in 68 Ford Street valued at $775,000;[1]
(c) an amount of $281.76 in Commonwealth Bank; and
(d) funds held by the estate’s solicitors.
[1]The properties are valued at the midpoint of market appraisals from Barry Plant Real Estate in Ivanhoe dated 29 June 2017.
The assets previously distributed from the estate include the sum of $4,419.69 being the proceeds from the Hesta Industry Super Fund paid to the plaintiff and the deceased’s personal chattels, which are of no commercial value.
The agreed outstanding estate liabilities total $142,600.62, excluding disputed funeral expenses, are as follows:
(a) the sum of $104,850 owing under a mortgage to St George Bank over Unit 3, which amount comprises one half of the joint debt between the deceased and the plaintiff;
(b) the sum of $35,000 being the estimated litigation costs of the estate. The estate solicitor’s currently hold $13,045.49 in trust. The remaining balance due amounts to $21,954.51;
(c) the estimated sum of $2,750, for the costs and disbursements for completing the administration of the estate.
The plaintiff claims reimbursement of $21,045 for the deceased’s funeral expenses, having paid $16,445 to the Greater Metropolitan Cemeteries Trust and $5,000 to Le Pine Funerals.
The defendant tendered evidence relating to the costs expended on the funeral and burial site. The defendant agreed the superannuation benefit was paid to the plaintiff and conceded the plaintiff had not been reimbursed for the balance of the funeral expenses. The defendant did not dispute the plaintiff’s entitlement to the superannuation as of right and that the debt of $5,000 is thereby not extinguished.
The defendant said the plaintiff had been refunded an amount of $3,293.15 in relation to the use of an alternative burial plot. An email from the Greater Metropolitan Cemeteries Trust dated 8 February 2017 confirmed the amount had been refunded. The defendant claims the refund was collected by the plaintiff whereas the plaintiff denied receiving this sum.
The defendant claimed the deceased’s three children, including herself, had also incurred expenses for the deceased’s funeral for which there has been no reimbursement as the estate has no liquid assets. Any reimbursements for funeral expenses cannot be made until the sale of the deceased’s interest of the properties.
Plaintiff’s application
The plaintiff seeks provision for his proper maintenance and support, pursuant to s 91 of the Administration and Probate Act 1958 (‘the Act’).[2]
[2]The deceased died prior to 1 January 2015 and the amendments to the family provision under made by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014, do not apply to the proceeding.
The agreed issues to be determined are:
(a) Did the deceased have any moral obligation to make provision for the plaintiff from her estate, given the relationship between the plaintiff and the deceased and the change of ownership of their real property from joint ownership to tenants in common?
(b) Should provision be made from the estate of the deceased for the plaintiff’s maintenance and support?
(c) What is the plaintiff’s need, if any, for provision for his maintenance and support?
If Unit 3 were sold at the estimated value of $620,000 to discharge the outstanding liabilities of the estate, there would be a limited amount of approximately $100,000 remaining from the estate’s share of the sale proceeds. After allowing for sale expenses of $20,000, discharge of the mortgage of $210,000 and an estimated capital gains tax figure between $60,000 and $80,000 on the sale, there would be $330,000 or $310,000 remaining. Taking the mid-range net amount of $320,000, the plaintiff and the estate would each receive $160,000. Further payments for the estimated costs of this proceeding and completion of the administration of the estate must then be paid. At trial, the plaintiff’s estimated costs were $25,000 and the defendant’s estimated costs were $22,000. In addition, there remains the question of the funeral and burial expenses totalling $37,000, of which the plaintiff claims $21,045 although this amount requires clarification.
The remaining asset of the estate is the deceased’s interest in 68 Ford Street valued at $775,000. The plaintiff seeks the whole of the deceased’s interest in 68 Ford Street. The defendant says that proper provision for the plaintiff would be an extended life interest in the deceased’s half share of either 68 Ford Street or Unit 3.
Prior to the trial, the tenant of Unit 3 gave notice of intention to vacate. This was communicated to the plaintiff and the defendant on 23 August 2017. Without the rental income from Unit 3, the interest on the mortgage has not been paid and the mortgagee has served a notice of default of under the mortgage. The defendant has not agreed to Unit 3 being re-let. By summons filed 30 October 2017, the plaintiff issued a summons seeking directions to the effect that the estate agree to Unit 3 being re-let. The parties filed affidavits in support and written submissions in respect of the plaintiff’s summons and these are considered in these reasons.
The evidence
The plaintiff relied on three affidavits sworn on 30 January, 23 May and 4 September 2017 respectively. The defendant relied on affidavits sworn on 13 April, 21 June and 29 August 2017 respectively. There was much common ground in the evidence, however, the plaintiff and the defendant diverged on the following main points:
(a) the circumstances surrounding an argument in 2009 between the deceased and the plaintiff;
(b) whether the living arrangements between the deceased and the plaintiff were such that they were living separately under the same roof;
(c) the circumstances surrounding the removal of the deceased from the family home at 68 Ford Street on 9 May 2014;
(d) the severance of the joint tenancies of Unit 3 and 68 Ford Street; and
(e) the plaintiff’s construction of a home in Croatia and his assets in Australia and Croatia.
Brief family history
The plaintiff was born on 20 February 1946. The plaintiff and the deceased married in Croatia in 1972 and came to Australia that year.
During the 1980s, the plaintiff retired from his employment and commenced working as a builder of residential properties.
During the period between 1976 and 2000, the plaintiff and the deceased bought, and in some cases sold, five properties in the State of Victoria: 64 Ford Street Ivanhoe, 66 Ford Street Ivanhoe, 68 Ford Street Ivanhoe, 17 Montgomery Street Heidelberg Heights and 20 Dresden Street Heidelberg Heights.
The plaintiff and the deceased subdivided 64 Ford Street into three lots and constructed a unit on each lot. In 2000, the plaintiff and the deceased sold Units 1 and 2 and moved into Unit 3.
In 2002, the house at 68 Ford Street was demolished. A new house was completed on the site in 2008 and the plaintiff and the deceased lived there together. The building of the house was funded from borrowings, using Unit 3 as security. By 2008, the family’s assets comprised 68 Ford Street and Unit 3, with the latter property mortgaged.
In 2005, the deceased was diagnosed with breast cancer and ceased her employment. The cancer was treated successfully with surgery and chemotherapy. The exact date that the deceased ceased employment is disputed. The plaintiff said the deceased had not worked since 2004, but was not clear on any details of her employment: he could not recall the hours worked by the deceased; the years of her employment; her employers; or whether she worked at night or during the day. The defendant said the deceased continued to work when she was in remission and then ceased her employment in 2009 after she was again diagnosed with cancer. With the return of the cancer, the deceased’s health progressively deteriorated. From this time onwards, her marriage with the plaintiff deteriorated.
Dispute between deceased and plaintiff in 2009
The defendant claims that in 2009 an argument took place between the deceased and the plaintiff. The deceased’s son, Andrija, intervened and removed the plaintiff from the family home at 68 Ford Street. The defendant said when they approached the front door during the argument, the plaintiff fell and suffered an injury that required treatment. The plaintiff was taken to St Vincent’s Hospital in an ambulance, accompanied by the deceased and Andrija.
The plaintiff disputes this version of events, alleging that the deceased assaulted him. His evidence did not explain clearly his position. He obtained an intervention order from the Heidelberg Magistrates’ Court against the deceased on 8 April 2009 for an alleged assault by the deceased. This order was made ex parte and was to expire on 7 April 2010, unless extended or varied prior to that date.
Both versions of events of this dispute were mentioned in a proceeding issued by the plaintiff against the Transport Accident Commission and heard in 2010.[3] In his reasons, Deputy President M F McNamara mentioned the incident, stating that while the plaintiff considered he had been assaulted by his wife, other family members ‘saw things differently and told the hospital staff that [the plaintiff] was merely the victim of a fall’.[4]
[3]Saric v Transport Accident Commission (General) [2010] VCAT 968 (30 April 2010) (Mcnamara, DP).
[4]Ibid [17].
It was common ground that the plaintiff’s first intervention order against the deceased was obtained when she was suffering from cancer and was generally unwell.
Further intervention orders obtained by the plaintiff against the deceased
On 19 March 2010, the plaintiff extended the original intervention order against the deceased. This extended order was to expire on 19 March 2011, unless extended or varied prior to that date.
Living arrangements between the plaintiff and the deceased
In his affidavit sworn 30 January 2017, the plaintiff deposes that after he obtained the intervention order in April 2009, the plaintiff and deceased continued living at 68 Ford Street, but they lived separately. He said that while they ate together, they kept their financial affairs separate. However, later the plaintiff refuted the defendant’s claim that he and the deceased were, in fact, separated, even though they were living separately under one roof. This was notwithstanding his previous sworn evidence and a letter from Centrelink to the deceased dated 13 April 2011, obtained by the defendant as a result of a request under the Freedom of Information Act 1982 (Cth), that stated:
Thank you for the recent information that you provided about your living arrangements. After careful consideration, a decision has been reached that your sickness allowance will continue. This decision is based on the information that you provided. I form the opinion that you are separated.
The plaintiff’s position is that although he and the deceased lived separately under one roof, they were not, in fact, separated and to this end he provided ongoing support to the deceased. His evidence on this issue was inconsistent and unreliable.
The defendant deposes that when the deceased lived at 68 Ford Street with the plaintiff, they lived separately and the plaintiff did his own shopping and cooking. She disputes the plaintiff’s claim that he cooked for the deceased, and states that either the deceased or Andrija, who lived at home, cooked for themselves. Both the defendant and Marija also visited the deceased to care for her and were in daily contact with her.
Removal of deceased from the family home on 9 May 2014
The defendant said the plaintiff and the deceased continued to live separately under one roof until 9 May 2014, when the police arrived at the family home and removed the deceased, despite the fact that she was quite ill. On 9 May 2014, the defendant was called by her sister and as a result of the call, she went to the Heidelberg Police Station to find out what was happening. The officer in charge told her that her mother had been removed from her home because she was in breach of an intervention order. The defendant said that Andrija drove the deceased to Marija’s home in Brunswick. Thereafter, the deceased remained living at Marija’s home until she was admitted to hospital on 27 May 2014.
It was common ground that on 28 April 2014, the plaintiff obtained a further intervention order against the deceased. The plaintiff said this last order was made as he claimed that the deceased was aggressive towards him. The plaintiff accepted that at this time the deceased was gravely ill.
The plaintiff’s evidence in relation to the events surrounding the removal of the deceased from the family home on 9 May 2014 is inconsistent. In his affidavit sworn 23 May 2017, he deposes that ‘Danka did not live with Marija from January 2014 until 21 May 2014. I took care of Danka until she died’ and further claimed that he took the deceased to all of her medical appointments and therapies. In cross-examination, the plaintiff could not clearly recall who the deceased’s doctors were and admitted that the daughters usually took to the deceased to her general practitioner.
In a later affidavit, the plaintiff deposes that ‘Danka decided that Marija could look after her better, so she stayed there from 9 May to 27 May 2014, until she was finally admitted to the Austin Hospital. She was not forcibly removed.’ At trial, the plaintiff denied that he had sought and obtained an intervention order before the deceased left the family home to live with Marija. During cross-examination, the plaintiff then admitted to calling the police on that day. He alleged that the deceased was aggressive towards him but otherwise could not recall what happened. The plaintiff also gave inconsistent evidence in relation to the events surrounding the removal of the deceased from the family home on that day. He first claimed that the deceased simply ‘went to Marija’s.’ However, when it was put to the plaintiff that two police ladies arrived that day, the plaintiff said the police did ‘nothing’ and that the deceased simply ‘left with Marija or Andrew’. The plaintiff then later admitted that the police had asked the deceased to leave 68 Ford Street.
Severance of the joint tenancies
The plaintiff deposes that he was not aware that the deceased had made a will and that he received a copy of the will approximately one year after her death. This is disputed by the defendant who says the plaintiff was aware the deceased was making her will. She deposes that discussions about the deceased’s will took place from at least 2010 with the return of the deceased’s cancer and, for many years, the deceased spoke about her intention to leave her assets to her children and that she also made a handwritten note to this effect dated 30 September 2010.
Prior to her death, the deceased and the plaintiff signed instruments of transfer that altered the ownership status of Unit 3 and 68 Ford Street from joint tenancies to tenants in common in equal shares.
The defendant claims that the deceased wanted to sever the joint tenancies because she understood this was necessary to enable her to leave her share of the two properties to her three adult children. The defendant says that the change in ownership, from joint tenancies to tenants in common, was in the nature of an informal property settlement between the plaintiff and the deceased. The defendant claimed that the plaintiff was well aware of the contents of the deceased’s will, and the deceased often expressed her intentions to bequeath her assets to her three children.
The plaintiff deposes that he reluctantly signed the instruments due to pressure from the deceased and his children. The defendant disputes this and says there were many discussions about the change in ownership of the properties. These discussions arose because the deceased was advised in 2012 by her solicitor that in order for her interest in the properties to pass to her children, the ownership needed to be changed from joint tenancies to tenants in common. The plaintiff did not want to sign the documents if his children could take the properties and it was explained to him at length that this would not happen. The defendant gave the necessary forms to the plaintiff and deposes that she welcomed the opportunity for him to discuss the changes in ownership further with Land Victoria and other advisers to provide him with an understanding of the change. The defendant deposes that the plaintiff told her that he sought advice from Land Victoria and that what the family had told him about the change in ownership was correct.
The arrangements were in place for the change of ownership of the properties to occur by July 2013, with the production of the title to Unit 3 by the bank. The defendant deposes the plaintiff thereafter would not engage in any matter relating to the impending death of the deceased, including the change of ownership of the properties. The defendant’s view was that the plaintiff took some pleasure in inflicting this suffering on the deceased. This caused much stress to the deceased during the last months of her life. Finally, on 27 May 2014, the plaintiff agreed to the change of ownership. The next day, the plaintiff and Marija went to the Land Titles office where he signed the necessary documents. By that stage, the title for Unit 3 had been returned to the bank so the change in ownership could not be processed. There was a further request for the title to be produced, however, the deceased died before it was delivered by the bank to Land Victoria on 20 June 2014. On 23 June 2014, the plaintiff and Marija again went to Land Victoria and the change of proprietorship of 68 Ford Street and Unit 3 was then processed.
The plaintiff’s evidence on this issue was inconsistent. In his 23 May 2017 affidavit, he claims that he was ‘forced’ to sign the transfer and ‘did not sign it by my own free will.’ In his later 24 September 2017 affidavit, he deposes that he signed the instruments of transfer as ‘it was my wife’s last wishes so I honoured them.’ The plaintiff denies that he went to Land Victoria in April 2013 for advice relating to the transfer. At trial, his evidence was that he was never properly informed about the transfer and remembered having some, but not other, conversations with the defendant about the transfer.
Plaintiff’s assets and activities in Croatia
In September 2014, the plaintiff travelled to Croatia. The defendant deposes that the plaintiff owns land in Croatia and has embarked on a project of building a new home for himself in Croatia. To this end, the defendant said that the plaintiff spent four or five months continually working on this new home during 2015 and that he returned to Croatia in 2016 to complete further works on the building. The defendant also said that the plaintiff has savings in various bank accounts and he owns property in Croatia. In cross-examination, the plaintiff’s evidence in relation to the number of bank accounts he owns and the various amounts that have been withdrawn from these accounts was both unclear and inconsistent. He was resistant to disclosing any of these details and was generally evasive.
The plaintiff claims to be assisting with the construction of a house in Croatia that is owned by his brothers and cousins and says that he does not intend to return to Croatia permanently. The plaintiff was insistent that the land in Croatia was originally owned by his grandfather and is now owned by his grandfather’s grandchildren. His firm view was that the title to the land is unclear, with the issue currently disputed in Croatia. The plaintiff produced no documentation to support his view. When provided with a copy of the title of the land in Croatia, that records him as a registered owner of the land, he denied such ownership. The plaintiff also deposes that he does not wish to move permanently to Croatia as he wants to be close with his family, although he readily conceded that he has not been in contact with his family since the death of the deceased.
It was common ground that subsequent to the death of the deceased, the relationship between the plaintiff and his children deteriorated in such a manner that there is now little to no communication, except by way of their legal representatives.
Plaintiff’s financial position
The plaintiff’s known real estate interests comprise his 50 per cent interest in both Unit 3 and 68 Ford Street valued at approximately $1,085,000 in total. He maintains that he has no assets in Croatia, except for a bank account containing approximately $200–$300. The plaintiff also seeks payment of the amount of $21,045 for the deceased’s funeral and burial expenses.
After migrating to Australia, the plaintiff worked as a builder for thirty years, mostly self-employed, but is now retired. He is currently receiving the aged pension, and a pension from Croatia of approximately $40 a month. He also received rental income from Unit 3 that was used to pay his share of the interest due on the mortgage. As the tenant has now vacated Unit 3, the mortgage is in arrears.
The plaintiff’s liabilities comprise interest payments to the Bank of Melbourne, with the total mortgage at trial being in the vicinity of $210,000, for which the plaintiff is responsible for half. The plaintiff rented 68 Ford Street for a period of time and received $3,924.46 in rent. The tenants have now left and the plaintiff is currently living there. He maintains that he is currently paying the rates for both properties without any assistance from the deceased’s estate. It was not clear why this was said when he is aware that the estate has no liquid assets, the rent from Unit 3 was applied towards outgoings for that property until recently when the tenant vacated, and he lives in 68 Ford Street without paying any rent to the estate.
The plaintiff deposes that he has liabilities in the vicinity of $40,000 being $5,000 for tax, legal expenses of $18,000 to solicitors, Les Christie and $7,000 to Ivan Martinovic and $10,000 owed to an unspecified finance company. The plaintiff did not produce any documentation to support these liabilities. In his affidavit sworn 30 January 2017, the plaintiff referred to an amount owing to Mr Christie that was $6,782.49 and that he had lodged a dispute with the Legal Services Commissioner about that amount.
Financial positions of the beneficiaries of the estate
The defendant is currently employed as a senior manager at an accounting firm and earns an approximate annual salary of $155,000. The defendant’s husband is employed as a manager and earns an approximate annual salary of $155 000. They own a property valued at approximately $1 million and own an investment property valued at approximately $1 million. Their current mortgage is approximately $590,000 and is secured over both properties. They have no substantial savings or any other significant investments and have three young children, aged eleven, nine and five.
Marija is employed as a part time teacher and earns an annual salary of $45,000. Her husband is employed as a manager and earns a gross annual salary of $125,000. They own a property valued at approximately $1.4 million and have a mortgage of $850,000. They have three young children, aged six, three and one.
Andrija lives in rented accommodation in London and works as an accountant. He has savings of approximately $50,000.
Under the deceased’s will, her interest in Unit 3 and 68 Ford Street are to be divided equally between the three children, save that Andrija is to receive $200,000 more than the defendant and Marija from the sale of 68 Ford Street.
Although the plaintiff sought to make a point of the financial circumstances of the defendant, it is unnecessary for any of the beneficiaries of the estate to show need or establish a moral obligation to be entitled to the provision left to them by the deceased.
Application of factors set out in ss 91(4)(e)–(o) and (p) of the Act
Of the specific matters to consider under ss 91(4)(e)–(o) and (p) of the Act, many of the facts have been set out above. For convenience, the conclusions in regard to the factors contained in ss 91(4)(e)–(o) and (p) of the Act will be briefly set out.
(e)any family or other relationship between the deceased person and the applicant, including the nature of the relationship and, where relevant, the length of the relationship
The plaintiff is the husband of the deceased. They were married in 1972. In the deceased’s last five years and particularly towards the end of her life, the marriage was unhappy. Their difficulties resulted in the plaintiff obtaining multiple ex parte intervention orders against the deceased, when she was ill with cancer, with the first intervention order made in 2009 and subsequently extended in 2010 for another year.
On 28 April 2014, the plaintiff obtained a further intervention order against the deceased. Approximately one month before her death, the plaintiff made a call to the police that ultimately caused the deceased to be removed from her home, despite the fact that she was terminally ill with cancer. The plaintiff’s conduct and the removal of the deceased from her home in the late stages of her illness was extraordinary, selfish and understandably caused distress and significant emotional turmoil for the family. The plaintiff showed little understanding of the deceased’s position. At no stage did he show any remorse for his conduct. His portrayal of himself as a caring husband who looked after the deceased during her long illness is fanciful. The evidence established that the deceased and the plaintiff lived separately and apart at 68 Ford Street from around 2009 onwards, with the adult children primarily caring for and looking after the deceased.
(f)any obligations or responsibilities of the deceased person to the applicant, any other applicant and the beneficiaries of the estate
The defendant accepts that the deceased had a limited moral obligation towards the plaintiff as her husband. While the plaintiff and the deceased were not divorced, the evidence strongly supports the conclusion that the marriage was one in name only, with both of them living separately under the one roof. This was accepted within the family and by Centrelink. The defendant’s evidence as to the reasons for the change of proprietorship of 68 Ford Street and Unit 3 is explicable in this context and there is no reason to doubt the defendant’s evidence on this issue.
The plaintiff’s behaviour towards the deceased is difficult to comprehend. Any moral obligation of the deceased towards the plaintiff is limited in light of the plaintiff’s behaviour towards the deceased in the last years of her life; her own intention to benefit her adult children on her death and the fact that the plaintiff and the deceased were living separately under the one roof.
The deceased also owed a moral responsibility towards her three adult children.
(g)the size and nature of the estate of the deceased person and any charges and liabilities to which the estate is subject.
The estate of the deceased is not large and is set out above.
(h)the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and for the foreseeable future.
The financial resources of the plaintiff are set out above. The plaintiff no longer works and receives the pension in Australia and a small pension from Croatia. His financial circumstances were otherwise unclear and remained unexplained. Although he denied owning property in Croatia, the evidence established that he owns an interest in the land upon which he is building a house. He was unable to explain adequately how he managed to finance travel to Croatia on a number of occasions since the death of the deceased or the building of the house. His evidence as to different account numbers of his banking records suggests that he may other accounts, despite the defendant requiring production of all of his bank accounts. His responses to questions on this issue failed to explain the different account numbers and his answers were either non responsive or evasive.
The financial resources of the deceased’s three children are set out above.
(i)any physical, mental or intellectual disability of any applicant or any beneficiary of the estate
The plaintiff deposes to being hit by a car as he crossed the road in September 2005. He claims that he refused a settlement offer of $7,500 from the Transport Accident Commission. The defendant exhibited an order dated 30 April 2010 from the VCAT in respect of the plaintiff’s claim against the Transport Accident Commission that affirmed the determinations of the Transport Accident Commission and denied the plaintiff’s claim.[5]
[5]Saric v Transport Accident Commission (General) [2010] VCAT 968 (30 April 2010) (Mcnamara, DP).
The plaintiff exhibited a letter dated 24 July 2008, that was in evidence in his case against the Transport Accident Commission, alleging that his shoulder and hip continue to remain painful. He also claimed to suffer from high blood pressure and stress as a result of this proceeding. He failed to produce any current medical evidence to support his claims. As he has managed to build an almost finished house in Croatia in recent times, on balance, his claims have little merit.
(j) the age of the applicant
The plaintiff is aged 71 years.
(k)any contribution (not for adequate consideration) of the applicant to building up the estate or to the welfare of the deceased or the family of the deceased
The plaintiff’s position is that 68 Ford Street and Unit 3 should be owned by him because he built them. He also says Unit 3 should be sold to pay the mortgage and the other liabilities be paid from the estate’s share of those sale proceeds. His position fails to take in to account the deceased’s significant contribution to the marriage, raising of the children, and working long hours for much of her married life, with some of those jobs worked at night to fit around the demands of the family.
The deceased stopped work when she first became ill in 2005. After her cancer went into remission, she re-commenced work until 2009 when the cancer stopped her from any further work. Both the plaintiff and the deceased contributed to building up the assets of the marriage and contributed to the welfare of the family. The assets in the deceased’s estate are the result of the joint enterprise of the plaintiff and the defendant over many years.
(l)any benefits previously given by the deceased person to any applicant or to any beneficiary
There is no evidence of any benefits previously given to the plaintiff or the three adult children.
(m)whether the applicant was being maintained by the deceased person before that person’s death either wholly or partly and, where the court considers it relevant, the extent to which and the basis upon which the deceased had assumed that responsibility
The plaintiff was not being maintained by the deceased before her death.
(n)the liability of any other person to maintain the applicant
There is no other person liable to maintain the plaintiff.
(o)the character and conduct of the applicant or any other person
Overall, the plaintiff presented as stubborn and unable to accept views that do not accord with his own. In giving his evidence, he exhibited bullying behaviour, was evasive and non-responsive. Overall, he did not present as a credible witness.
(p)any other matter the Court considers relevant
The deceased had a clear wish to benefit her three children on her death. This was a wish expressed to the children and the plaintiff over many years. The plaintiff was aware of the deceased’s wishes.
Consideration
In an application for further provision pursuant to s 91 of the Act, the Court must determine three questions:
(a) At the date of death of the deceased, whether the deceased had a responsibility to make provision for the proper maintenance and support of the plaintiff?
(b) If so, whether the deceased’s will made adequate provision for the proper maintenance and support of the plaintiff?
(c) If not, what is the amount of provision (if any) that the Court should order?
In determining these questions, the Court must bear in mind the weight given to the freedom of testation and interfere only if a testator has failed in his or her moral duty, having regard to the matters set out in ss 91(4)(e)–(p) of the Act. The Court must ensure that a testator’s moral duty reflects his or her obligation to make adequate or sufficient provision by what is right and proper according to community standards.[6]
[6]Smith v Jones [2015] VSC 398 (14 August 2015) [123]–[127] citing Collicoat v McMillan [1999] 3 VR 803, 818 ; Blair v Blair (2004) 10 VR 69, 77–80 (Chernov JA); Forsyth v Sinclair [2010] VSCA 147 (22 June 2010) [61] (Neave JA); Lee v Hearn (2005) 11 VR 270, 273–4 (Callaway JA); Andrew v Andrew (2012) 81 NSWLR 656, 660–1 (Allsop P), 679–80 (Barrett JA).
On the first question, the defendant accepts that the deceased owed a moral responsibility to the plaintiff, but submits that her responsibility was limited given that they were living separately and the plaintiff’s generally discreditable behaviour towards her in her final years.
On the second question, the plaintiff seeks provision by way of an absolute interest in 68 Ford Street. Alternatively, if an extended life interest in the deceased’s share of 68 Ford Street is ordered, he seeks adequate and flexible provision for his proper maintenance and support. He submits that his relationship with his adult children is now so ‘poisonous’ that an extended life interest in 68 Ford Street is not viable as he would be unable to discuss his future needs with them. The plaintiff also seeks that Unit 3 be sold and after repayment of the mortgage debt, the net balance be divided between the him as to one half and the remaining half be paid to the estate for the payment of estate liabilities, with the balance remaining to be paid the deceased’s adult children. On the calculations set out above, that balance after payment of all liabilities would be around $100,000.
The defendant accepts that the plaintiff needs a secure home and contends that an extended life interest in the deceased’s half share of 68 Ford Street or Unit 3 provides proper provision for the plaintiff’s proper maintenance and support, having regard to his own property entitlements.
The issue as to what provision should be made for the plaintiff in light of all the relevant circumstances must be answered by reference to a wise and just testator. The Court must place itself in the position of such a testator and consider what he or she ought to have done in all the circumstances of the case.[7] The Court must be mindful to interfere with the terms of a will only where a testator has failed in his or her moral duty.[8]
[7]Bosch v Perpetual Trustee Co Ltd [1938] AC 463, 478–9 (Lord Romer) citing Re Allardice(1910) 29 NZLR 959, and cited in Grey v Harrison [1997] 2 VR 359, 364–5 (Callaway JA); Collicoat v McMillan [1999] 3 VR 803, 815–19.
[8]Forsyth v Sinclair [2010] VSCA 147 (22 June 2010) [60] (Neave JA); Lee v Hearn (2005) 11 VR 270, 273–4 (Callaway JA); Grey v Harrison [1997] 2 VR 359, 365 (Callaway JA).
The plaintiff bears the onus of proving the extent of any provision that should be granted and the amount of the provision is determined at the date of the trial with reference to the plaintiff’ position at that time.[9]
[9]Coates v National Trustees Executors & Agency Co Ltd (1956) 95 CLR 494, 507–8 (Dixon CJ); Blore v Lang (1960) 104 CLR 124, 130 (Dixon CJ); Prosser v Twiss [1970] VR 225, 232 (Lush J); Slack v Rogan [2013] NSWSC 522 (10 May 2013) [127].
In determining the extent of any provision, the Court must have regard to the relative concepts of ‘adequate’ and ‘proper,’ which are assessed by reference to the Court’s inherent knowledge and inquiry into current social conditions and standards.[10] In this context, it is paramount that an applicant demonstrate need in order to be successful in his or her claim; mere proof of a moral claim is not in itself adequate.[11] However, an applicant is not required to show that his or her circumstances are destitute and, as such, the need is ‘not restricted to the requirements of basic necessity or sustenance.’[12]
[10]See, eg, Goodman v Windeyer (1980) 144 CLR 490, 501–2 (Gibbs J); Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9, 19 (Dixon CJ). See generally, G E Dal Pont, K F Mackie, Law of Succession, (LexisNexis Butterworths, 2nd ed, 2017) 606–7.
[11]MacEwan Shaw v Shaw (2003) 11 VR 95, 104 [50] (Dodds-Streeton J).
[12]Ball v Newey (1988) 13 NSWLR 489, 492.
In terms of making provision for a spouse, the general principle is that a testator should ensure that a spouse has a secure home, an income sufficient to permit the spouse to live in the style to which he or she is accustomed and be provided with a fund to meet any unforeseeable contingencies.[13] In this context, reference is often made to the award of a ‘nest egg’ for the exigencies of life.[14] Where there are competing claims, this necessarily involves a balancing exercise between the claims of other beneficiaries, the needs of an applicant and the size of the estate.[15] The appropriateness of each of these solutions, and indeed whether there is in fact an obligation to provide a home for an applicant, depends on all the facts and circumstances of the case, including the moral obligation owed by the testator to an applicant for provision.
[13]Luciano v Rosenblum (1985) 2 NSWLR 65, 69–70.
[14]Gigliotti v Gigliotti [2002] VSC 279 (19 July 2002) [13]; Penn v Richards [2002] VSC 378 (6 September 2002) [33]; Litchfield v Smith [2010] VSC 466 (20 October 2010) [92].
[15]Grey v Harrison [1997] 2 VR 359, 366–7 (Callaway JA); Friend v Brien [2014] NSWSC 613 (1 May 2014) [59].
In determining what is the appropriate provision in all of the circumstances, an applicant must adduce relevant evidence that supports his or her financial circumstances.[16] Moreover, an applicant should bring this information to the Court ‘as fully and frankly as possible.’[17] In this proceeding, the plaintiff has not been forthcoming about his current financial position. He is aged 71 years and receives two aged pensions, albeit one that is very small. He was a builder but apparently no longer works as a builder, although he has recently been building a house in Croatia. His evidence in relation to his various bank accounts and activities was evasive, non-responsive or unclear. His evidence makes it difficult to know what is his true financial position, especially in relation to his assets in Croatia and his bank accounts. These factors make it difficult to assess his financial needs. Notably the deceased believed he had sufficient assets, both in Australia and Croatia, to meet his future needs, as is made clear by her will.
[16]Collicoat v McMillan [1999] 3 VR 803, 825 citing Singer v Berghouse (1994) 181 CLR 201, 213 (Mason CJ, Deane and McHugh JJ).
[17]Thyssen v Pottenger [2003] NSWSC 787 (27 August 2003) [38]; Foye v Foye [2008] NSWSC 1305 (9 December 2008) [14]; McLeod v Radnidge [2009] NSWSC 1105 (16 October 2009) [34].
The character and conduct of an applicant is also relevant for the purposes of reducing or ‘limiting’ the moral duty that a testator may have otherwise owed an applicant. This factor is generally determined by reference to what is right and proper according to accepted community standards.[18] A number of instances adduced in evidence demonstrated the plaintiff’s reprehensible behaviour towards the deceased when she was ill with cancer and in the final years of her life. It cannot be said to be acceptable for ex parte intervention orders to be taken out against an elderly ill person or to call the police to have that person removed from her home in the weeks before her death. Even more disconcerting is the fact that the plaintiff exhibited no awareness or remorse for his behaviour in such distressing circumstances. This conduct is relevant when assessing the totality of the circumstances in terms of the moral responsibility of the deceased towards the plaintiff.
[18]Collicoat v McMillan [1999] 3 VR 803, 818 [43]; Lee v Hearn (2005) 11 VR 270, 274 [8] (Callaway JA).
The plaintiff relies on the current breakdown of his relationship with his children in support of claiming an absolute interest in 68 Ford Street. This is because an extended life interest would necessitate some dealings with the children, which would need to be through solicitors, to negotiate his future needs. While it is not the role of the Court to punish the plaintiff for his behaviour towards the deceased during the latter years of her life, it is likewise not its role to reward it.[19] The Court’s focus is on making adequate provision for the proper maintenance and support of a claimant. The plaintiff is unable to understand his role in the breakdown of the relationship with his children. He considers that his children are in the wrong and he takes no responsibility for the breakdown. This reasoning by the plaintiff’s is flawed as an extended life interest will probably require little interaction with his children and what interaction that might occur can easily be managed between solicitors.
[19]Unger v Sanchez [2009] VSC 541 (1 December 2009) [65]; Worsley v Solomon [2008] NSWSC 444 (9 May 2008) [38].
The known current financial position of the plaintiff is that he owns in his own right a half interest in 68 Ford Street valued at $775,000 and a half interest in Unit 3 valued at trial at approximately $160,000 after payment of the mortgage and expenses associated with the sale. The plaintiff expressed a clear attachment to live in 68 Ford Street, simply asserting this to be his preference. Apart from his expressed preference and the fact that he built 68 Ford Street, it remained unclear why the plaintiff would wish to live in a large family home. The plaintiff also built Unit 3 and the family lived in both properties over the years. In reality, the plaintiff’s preference derives from his belief that 68 Ford Street should be his property in its entirety. His position was that if he remarries and does not provide for his children, his children could make a claim on his estate. Given the breakdown in the relationship between the plaintiff and his three children, it can be inferred that the plaintiff is unlikely to leave any of his assets to his children at all on his death.
The plaintiff’s claim for an absolute interest in 68 Ford Street does not accord with the plaintiff’s known financial need and disregards the deceased’s testamentary intentions. The deceased wished to leave her assets to her three children. Her wishes were expressed on a number of occasions during her lifetime to the plaintiff and in her will. It was for this reason that she wanted the ownership of the properties to be changed from joint ownership to tenants in common. The plaintiff’s now expressed resistance to the change of ownership of the properties is not credible.
An extended life interest in either property would provide the plaintiff with a secure home and with his own financial resources, he would have security for his future. If the plaintiff were to receive an absolute interest in 68 Ford Street, Unit 3 would be sold and his share of the sale proceeds would give him a fund of around $160,000. On this scenario, the deceased’s children would be entitled to the remainder interest in 68 Ford Street on the death of the plaintiff but they would receive very little given the burden of the liabilities and expenses of the estate that would be deducted from the sale proceeds from the deceased’s half share of Unit 3.
An extended life interest in Unit 3 would provide a secure home for the plaintiff’s lifetime. Unit 3 is vacant and the mortgage is in arrears. An extended life interest in Unit 3 would mean that 68 Ford Street could be sold immediately. From the sale proceeds of 68 Ford Street, the mortgage over Unit 3 could be repaid. After repayment, the plaintiff’s net share from his half share of 68 Ford Street would be around $650,000. If and when the plaintiff decides that he wishes to move to alternative accommodation or supported accommodation, he will be able to do so. Upon the death of the plaintiff, the remainder interest of the deceased’s interest in Unit 3 or any replacement will pass to the deceased’s children. In the circumstances of the deceased’s limited moral responsibility to the plaintiff, provision of an extended life interest in Unit 3 for the plaintiff is proper provision for his maintenance and support.
Orders
The Court will order that, pursuant to s 91 of the Act, provision be made for the plaintiff from the estate of the deceased by the provision of an extended life interest in Unit 3.
Other matters
The parties were to make further enquiries as to the proper amounts that should be attributed to the funeral and burial expenses. If the parties are unable to reach agreement on these issues, short written submissions should be filed.
I will also hear the parties as to the costs of the proceeding. If the parties are unable to reach agreement on the costs of the proceeding, short written submissions should also be filed.
2
22
0