Rukavina v Rukavina (as Executor of the Estate of Petar Rukavina, deceased)
[2023] VCC 2122
•24 November 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
FAMILY PROPERTY LIST
Case No. CI-22-01193
| FRANKA RUKAVINA | Plaintiff |
| v | |
| IVAN RUKAVINA (as Executor of the Estate of PETAR RUKAVINA, deceased) | Defendant |
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JUDGE: | HIS HONOUR JUDGE FRAATZ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 29, 30, 31 May; 1, 2 and 5 June 2023 | |
DATE OF JUDGMENT: | 24 November 2023 | |
CASE MAY BE CITED AS: | Rukavina v Rukavina (as Executor of the Estate of Petar Rukavina, deceased) | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 2122 | |
REASONS FOR JUDGMENT
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Subject:TESTATOR’S FAMILY MAINTENANCE
Catchwords: Testator’s family maintenance and provision – application by adult daughter of testator – whether adequate provision for the need of adult daughter – competing need of adult son who cared for deceased – whether conduct towards the deceased by adult daughter or son amounts to disentitling conduct
Legislation Cited: Administration and Probate Act 1958 (Vic), s91
Cases Cited:Singer v Berghouse (1994) 181 CLR 201; Re Flavel; Flavel v Flavel [2020] VSC 19; McKenzie v Topp [2004] VSC 90; Poole v Barrow [2014] VSC 576; Pavlidis v Pavlidis [2023] VSC 92; Saric v Vukasovic [2019] VSCA 57; Walsh v Walsh [2013] NSWSC 1065; Grey v Harrison [1997] 2 VR 359; Re Donateo [2021] VSC 792; Firth v Reeves [2019] VSC 357; Pontifical Society for Propagation of Faith v Scales (1962) 107 CLR 9; Hughes v National Trustees, Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134
Judgment: Family provision orders granted
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr K Mihaly | Local Lawyers |
| For the Defendant | Mr I Rukavina, in person |
HIS HONOUR:
1Petar Rukavina (Petar or “the deceased”) died on 6 June 2021 at age 95. He was survived by his six adult children: Franka (the plaintiff), Marija, Manda, Anka, Dragica and Ivan (the defendant). As was the practice adopted at trial, I shall refer to the parties and the deceased by their first names.
2By his last will dated 2 October 2012, Petar appointed his only son, Ivan, as Executor. He bequeathed the sum of $10,000 to each of his five daughters, with the net residue of the Estate to Ivan absolutely.
3The Inventory of Assets and Liabilities dated 28 September 2021 records an Estate valued at $712,363.01. The major asset of the Estate is the deceased’s home at Oleander Drive, St Albans, Victoria (“property”) registered to the deceased and his wife, Matija Rukavina (deceased on 20 May 2019), with an estimated value at the time of $700,000.[1] Probate was granted on 5 October 2021.[2]
[1]The agreed value of the property as at the date of hearing was $615,000: Bertacco Property Valuation dated 28 April 2023, Exhibit E; Transcript (“T”) 459
[2]Originating Motion in this proceeding was filed on 1 April 2022
4Ivan remains in possession of the property. The balance of the Estate comprised cash in the Commonwealth Bank of Australia Pensioner Security Account, which has since been defrayed towards administration costs.
5Franka brings a claim against Ivan pursuant to Part IV of the Administration and Probate Act 1958 (Vic) (“the Act”) for further provision from the Estate.
Statutory framework
6The determination of an application for a family provision order under the Act is a two-stage process.[3] The Court must first be satisfied that the threshold requirements for the making of a family provision order under s91(2) are met.
[3]Singer v Berghouse (1994) 181 CLR 201 at 209-210
7If satisfied that there is power to make a family provision order, the Court must then determine whether to grant a family provision order; and, if so, the amount of any such provision. It must take into account:
(a) the degree to which, at the time of death, Petar had a moral duty to provide for the eligible person;[4]
(b) the degree to which the distribution of Petar’s estate fails to make adequate provision for the proper maintenance and support of the eligible person;[5] and
(c) the degree to which Franka is not capable, by reasonable means, of providing adequately for her own proper maintenance and support.[6]
[4]s91(4)(a)
[5]s91(4)(b)
[6]s91(4)(c)
8In making a family provision order, the Court must have regard to:
(a) Petar’s will;
(b) any evidence of Petar’s reasons for making the dispositions in Petar’s will; and
(c) any other evidence of Petar’s intentions in relation to providing for eligible persons.[7]
[7]s91A(1)
9Section 91A(2) of the Act lists a number of other criteria to which the Court may have regard.
10An order for provision must not provide for an amount greater than is necessary for the applicant’s proper maintenance and support.[8]
[8]s91(5)(b)
The issues
11It is not in dispute that Petar had testamentary capacity at the time of execution of his will, or that he made a deliberate decision to provide for his son, Ivan, over his five daughters. This decision was based in part upon Petar’s belief that each of his daughters, at the time of making his will, had their own property, had stable long-term husbands or partners, and did not need assistance; and that Ivan did not own his own home or have a partner, and was the deceased’s carer.
12It is also not in dispute that as an adult child of the deceased, Franka is an eligible person within the meaning of the Act.[9]
[9]s90, “eligible person”, (f)
13The Court must be satisfied that:
(a) at the time of death, the deceased had a moral duty to provide for the eligible person’s proper maintenance and support; and
(b) the distribution of Petar’s estate fails to make adequate provision for the proper maintenance and support of Franka.[10]
[10]s91(2)(d) of the Act
14At trial, Ivan’s submissions were to the effect that, as a consequence of Franka’s conduct, the deceased did not have a moral duty to provide for her proper maintenance and support. Ivan also submitted that any financial need of Franka was of her own making, and for this reason also Petar did not have a moral duty to provide for her.
15Ivan does not dispute that, if Petar owed a moral duty to provide for Franka at the time of his death, the distribution of his estate failed to make adequate provision for her proper maintenance and support.
16It is agreed that:
(a) Petar was 95 at the time of his death at the Doutta Galla Woornack Aged Care Facility in Sunshine West. The cause of death[11] was Alzheimer’s Disease related complications (one year); Type 2 Diabetes on Insulin (two years);[12]
(b) for the last nine years of his life, Petar required significant care in the context of his medical condition of diabetes mellitus, hypercholesterolemia and Alzheimer’s Disease;[13]
(c) Ivan was the deceased’s carer from August 2012 until Petar passed away in June 2021; and
(d) both Franka and Ivan have financial needs.
[11]Exhibit F - Death Certificate
[12]To the extent of any inconsistency as to the duration of last illness, I prefer the contemporaneous medical evidence tendered which records a diagnosis with Alzheimer’s Disease in 2012, and a past history of Type 2 Diabetes as at 2014: Exhibit 8 - Letter from Dr Darko Sulava, the deceased’s treating general practitioner, dated 18 June 2014
[13]Exhibit 12 - Letter from Dr Victor Chong, neurologist, dated 4 June 2014
17The questions for the Court to determine are as follows:
(a) whether Petar, at the date of his death, had a moral duty to provide for the proper maintenance and support of Franka;
(b) if so, in what amount should further provision be ordered.
Ruling in relation to admissibility of report of Zac Stojcevski dated 2 March 2023
18During the course of the trial I indicated that I would provide in my reasons a ruling as to whether a report of Zac Stojcevski, psychologist, dated 2 March 2023 should be accepted into evidence. Ivan sought to tender the document, over objection from Franka.
19Paragraph 8 of the Court’s order made 7 February 2023 provides that unless otherwise ordered, no expert evidence may be relied upon in this proceeding save in relation to the value of the estate property. The psychologist’s letter constitutes expert opinion.
20Prior to trial the plaintiff’s solicitors put Ivan on notice that should he wish to rely on Mr Stojcevski’s evidence, he must apply to the Court for consent to do so; and that if leave is granted, the plaintiff would require the opportunity to cross-examine Mr Stojcevski at trial.
21Ivan did not call Mr Stojcevski as a witness. In the absence of consent or a timely application for leave, the report dated 2 March 2023 should not be admitted into evidence, as the plaintiff was not able to cross-examine him as to his opinion. Much of the report was inadmissible in any event, and the remainder of only limited assistance in relation to the issues in dispute.
The Rukavina family
22The following facts are not contentious.
23The deceased was born in Croatia, as were Franka and Ivan.
Franka
24Franka, the eldest daughter of the deceased, is now aged 74 years.
25She married Mile (“Michael”) Uremovic in Croatia in 1966. They had two children, Deanna in 1972, and Katarina in 1975, who in turn have each had three sons.
26Franka was the first to immigrate to Australia, arriving with Michael in 1968. They settled in Sydney. Franka and Michael sponsored Petar to immigrate to Australia in about 1974.
27Michael and Franka were both declared bankrupt in 1996[14] in the wake of a failed property development. Michael had a building and construction business, and Franka’s evidence included that a finance broker went to jail for what he did to her and others; and that Michael had problems with addiction to alcohol at the time which contributed to the collapse of the business. There was domestic violence. They separated that year and divorced in 2004. Michael died in 2016.
[14]Exhibit H
28Franka was in a domestic relationship with Luka Saric from 2005. They moved to Melbourne from Sydney in 2006, initially staying at the property with Petar and Matija for two months, before moving to rental accommodation in the general area of the property.
29Franka was declared bankrupt again in October 2007.[15] Petar provided some financial support in terms of ongoing living expenses to Franka at the time.
[15]Exhibit I
30From about 2017, although they share a house, Franka says she has not been in a romantic relationship with Luka Saric; and they are not living as a couple on a genuine domestic basis. Luka does, however, provide ongoing financial support to Franka in terms of providing accommodation. They currently live in rental premises. The future of that relationship is unclear.
31Franka retired in 2021.[16] She remains generally in good health, although suffers from the following medical conditions:
· adverse consequences from cataract surgery, involving ongoing treatment. The vision in her right eye is greatly diminished;[17]
· operated Bilateral Carpal Tunnel Syndrome, involving ongoing pain and some incapacity in terms of her activities of daily living;[18]
· a requirement for dental work. Her teeth are in poor condition and she has had six removed; and
· a complaint of mental health issues, unsupported by medical evidence.
[16]T130
[17]Exhibit V - Bundle of medical records relating to the Plaintiff’s right eye
[18]Exhibit W - Bundle of medical records of the Plaintiff regarding her bilateral carpal tunnel syndrome
Ivan
32Born in 1963, Ivan immigrated to Australia in about 1983.
33He initially worked in the Queensland mines, before moving to Sydney for about a year. In May 1985, Ivan also moved to Melbourne and worked on the Westgate Freeway. He lived with his parents from 1985 until February 1991.
34Ivan was a boxer of note, winning the King’s Cup Gold Medal in 1988 and, upon turning professional in 1989, the Australian and Australasian welterweight titles. He moved to the USA in 1991 in pursuit of his boxing career, before returning to Australia in 2000 following the failure of his marriage. He settled in Sydney, where he found work as a commercial painter.
35In 2020, Ivan suffered an injury during the course of his employment as a painter when he fell off a roof. Although there is limited evidence before the Court as to his health, it is not in dispute Ivan broke several ribs, and shattered his pelvis, which required internal steel fixation;[19] or that he suffers from ongoing incapacity as a result of this injury.
[19]X-rays of Ivan Rukavina’s pelvis; Exhibit 16
Petar Rukavina
36When Petar arrived in Australia in 1974, he initially lived in Sydney with Franka and Michael for two years, who also supported him in terms of his living expenses during this period. In 1981, Petar sponsored Matija’s immigration.
37Petar worked in construction in New South Wales until he and Matija moved to Melbourne in early 1984. Not long after arriving in Melbourne, they purchased the property in Oleander Drive.
38In 1987, Petar was involved in a motor vehicle accident and was unable to work until about 1989. During this period, Ivan supported his father and mother (who did not work).
39A poor interpersonal relationship between Ivan and his sisters began to develop when the Rukavina family was making arrangements for the care of their mother, including her entry into a nursing home in 2009. At the same time, the family was trying to manage Petar’s emerging short-term memory and cognitive problems.
40Petar’s daughters, including Franka, provided some care to Petar during this period. Franka visited him from time to time at the property to clean, wash his clothes and cook for him. She also spoke with him on the phone regularly.
41Franka’s evidence included that in the period prior to Ivan returning to Melbourne, “our father was always saying he’s okay, he don’t need a doctor, nothing wrong with him.”[20] She thought “he was okay”, but in time considered it necessary for a member of the family provide live-in care for Petar, whose confusion and short-term memory had worsened since 2009.
[20]T228
42In May 2012, Ivan’s father and sisters requested Ivan relocate from Sydney to Melbourne to live with Petar and take care of him.
43When Ivan returned to Melbourne from Sydney in August 2012, Ivan said:
“… he looks so skinny when he take the clothes off him, you know, when he’s – they have no clothes on him. He looks like those people in Bosnia and Serbia in the concentration camps. Ribs – you can see every rib on him. He was so weak.”[21]
[21]T255
44During cross-examination, Ivan suggested to Franka that he was very skinny at the time. Franka did not dispute this, and responded, “Maybe he like to be skinny.”[22]
[22]T234
45Ivan’s uncontested evidence was that the property was dirty, and his father had bottles of medication that were years old because Petar had not had adequate supervision in complying with medication. His bills were not paid, and the house was in disarray.
46In or about August 2012, Ivan took his father to see his general practitioner for twenty years, Dr Darko Sulava. Petar’s medical records reflect that it had been almost a year since Petar had been seen for his diabetes, and prior to that his visits had become scarce and widespread. Dr Sulava reported that initially, Petar’s “condition was one of neglect and [he] was showing signs of dementia”,[23] but nevertheless he was “managing still all right.”[24]
[23]Exhibit 8
[24]T329
47As at June 2014, Dr Sulava reported that Petar had been assessed and appropriately treated by Ivan, who since 2012 had brought his father in regularly for consultations and assessments.[25] Further:
“It is my opinion and recommendation, that Mr Ivan Rukavina be provided the necessary support to assist him [in] caring for his frail and dementia-affected, father. This duty, is for him alone, somewhat difficult and often concerning because, during his time away working, there is no one to look after his, physically still relatively well, but psychologically, confused father.”
[25]Exhibit 8
48Ivan provided a high level of appropriate care to Petar. Ivan alone regularly took his father to the doctor, took care of his medication, arranged for modifications to the house to accommodate his father better, and also maintained the property during this period. He arranged for social contact for his father, including taking him to the soccer club in North Sunshine not far from where they lived.
49After putting in place arrangements to meet his father’s needs, Ivan returned to work full-time as an employee painter for almost a year, before commencing his own business. This allowed him more flexibility to provide the necessary care for his father and work on average 15 to 20 hours per week.
50Petar was formally diagnosed with dementia in or about December 2012,[26] and in January 2013, State Trustees were appointed as his administrator.
[26]Exhibit K
51During 2013, Ivan painted and renovated Petar’s house with blinds, tiles, a new stove, some furniture and other modifications.
52From 2013, Ivan liaised as required with State Trustees in their capacity as administrator of Petar’s affairs.
53By 2014, Petar was often repeating himself and misplacing personal items. His personality had changed, in that he had become more aggressive and impulsive. Before Ivan took control of his finances, the deceased would go shopping with money allocated to him by State Trustees and purchase alcohol. When Ivan returned home from work, he would find his father drunk and urine all over the house. By this stage, Petar was frail and significantly affected by dementia, psychologically confused, and had become very much dependent on Ivan in relation to his activities of daily living.
54By February 2017, Petar was incapable of making independent decisions, and Ivan was appointed administrator of his affairs. This order was extended in 2019; and Ivan was appointed the deceased’s guardian in 2020.
55From January 2017, Ivan complied with his responsibilities as his father’s administrator, including attending a number of hearings at VCAT.
56During this period, there was conflict between Ivan and his sisters, including Franka, who had difficulty at times contacting their father by phone because Ivan had diverted incoming calls to his own mobile phone number.
57Whilst the evidence on this issue was a little unclear, I find that the deceased’s home telephone bill was not paid by State Trustees in 2013, and it was cut off. Ivan reinstated the phone service and diverted the new number to his mobile phone. Petar was able to use the home phone to make calls, and Ivan left various numbers on the wall for emergencies.[27] This caused some distress in the family, as the corollary to this arrangement was that Ivan effectively controlled telephone access to his father because it was only available when Ivan was home.
[27]Exhibit 13 - impact statement of Mr Ivan Rukavina dated 30 August 2016
58Ivan was criticised for placing his father into respite care while visiting Croatia in 2017 and 2018, and Perth in 2021, and not telling Franka. He accepted that in 2021, he lied to Franka about where her father was at the time of his trip to Perth. This history is consistent with Ivan and his sisters’ compromised relationship.
59It is unfortunate that Ivan did not inform his sisters of arrangements in place for their father whilst he was away, but this is of marginal relevance in the scheme of things. Ivan was entitled as his father’s sole carer to respite, and there was no evidence or even a suggestion as to what appropriate alternative accommodation arrangements should have been put in place. Ivan’s evidence that his other sisters never visited his father was not challenged. There is no suggestion that Petar was not appropriately cared for during these periods.
60From August 2012 to June 2021, Ivan managed Petar’s treatment for diabetes, a hernia, cancer, and related surgical and other treatment. He arranged for nurses from Bolton Clarke to attend to him daily for administration of medication and for showering twice a week. He toileted his father during the night, and towards the end of his life changed his diapers.
61Melanie Walters, a social worker with Bolton Clarke reported in 2020[28] that:
“Mr Petar Rukavina is a 94 year old Croatian speaking gentleman who currently resides in his own home in St Albans with his son Ivan Rukavina as co -resident and his primary carer. The home … has modifications suited to his medical needs which are limited mobility and is considered a high falls risk as a result. Mr Rukavina requires personal care assistance provided twice a week and Bolton Clarke nursing services also provide medications administration daily.
Son Ivan is primary carer and … manages his father’s daily care needs. Ivan attended to the shopping, cooking, cleaning and transport to medical appointments as required. Ivan works full time however is flexible in his hours of work and location. It is noted by attending Bolton Clarke staff Ivan is often present when Bolton Clarke are providing care to Mr Rukavina to assist wherever possible.
Bolton Clarke staff have regular communication with Ivan regarding care and medication management. He ensures care needs of his father are met daily by attending medical appointments and pharmacy as required in his father’s medication care. It is also noted Ivan will often provide this additional care when he is at home with his father cancelling services not required. Bolton Clarke staff have consistently noted Mr Petar Rukavina as in ‘good spirits’ when attending his care daily.”
[28]Exhibit 9
62Stephanie Tupua-Tuuta and Vlatka Vrseija of Bolton Clarke, personal carer and enrolled nurse respectively, gave uncontested evidence to the effect that Ivan provided an appropriate level of care to Petar.
63On the sole occasion in 2012 Petar’s doctor recalled family members other than Ivan bringing Petar for medical treatment, Dr Sulava said that two of his daughters raised the possibility of placing Petar into a nursing home. He recalled Petar was upset at this suggestion and that he wanted to stay at his home for as long as he could.[29] This “occasion Mr Petar Rukavinas [sic] two daughters were present at the consultations … was, essentially marred by their interpersonal relationship, which obviously was not on the best of terms.”[30]
[29]T333
[30]Exhibit 8
64Franka was involved to some extent in Petar’s care in the final years of his life, in that she regularly provided some meals when she visited.
65When it became apparent that he would no longer be able to provide appropriate care indefinitely, Ivan arranged for Petar to move into a proposed new Croatian nursing home in Geelong, where the nurses would speak his language; however, this project was delayed by COVID.
66By mid May 2021, Ivan was no longer able to care for Petar at home due to his increasing medical needs, and placed his father in Doutta Galla Respite Care.
67Ivan organised his father’s funeral service with the assistance of Franka, and paid funeral and testamentary expenses of $18,000 out of his own money, without contribution from any of his sisters.
68One of the features of the trial was Ivan’s disputed evidence about the amount of financial assistance he provided to his father during the period of time from 2013 to 2017 when State Trustees was appointed administrator. This dispute was relevant to this proceeding because of Ivan’s claims to improvement of the estate, and whether he had been reimbursed by State Trustees for expenses he incurred related to his father’s care, including for medication. On any view Ivan, as part of the care of his father, was subject to additional administrative responsibilities over and above his role as personal carer for a long period of time before he was appointed administrator of his father’s affairs in 2017.
69After hearing all of the evidence, I accept Ivan’s characterisation of the care he provided to Petar:
“I was my father’s friend when he needed one. I listened to my father’s stories again and again, I cook for him, I bath him, I shopped for him, I made him feel comfortable at the end of his life, my care and attention extend his life.”[31]
[31]T483
Attempts to transfer the property during Petar’s life
70Ivan’s evidence included that when Franka and Luka Saric moved from Sydney to Melbourne in 2007, Franka tried to convince Petar and Matija to transfer the title of the property into her name, and that in return she would look after her parents and the property.[32] On Ivan’s account, Petar responded by telling her to come and live with them, work and save the money to buy their own house.[33]
[32]Exhibit 5 - witness statement of Ivan Rukavina signed 18 March 2023, par. Cb
[33]Exhibit 4 - position statement of Ivan Rukavina dated 29 August 2022, page 2
71Franka denied this had occurred.[34]
[34]T192
72Even if this conversation did occur, it has little bearing on the issues in this proceeding. The transfer did not eventuate.
73On the basis that it was his father’s intention to transfer the property to him, Ivan wrote a letter to a conveyancing firm in May 2021 which he and his father signed.
74The letter to conveyancing.com dated 14 May 2021 stated:
“To Whom It May Concern,
Please find attached a letter from my Father, Petar Rukavina, informing me that it is his intention to transfer the title of the residence at Oleander Drive, St Albans, to my name, Ivan Rukavina.
I have been my father’s carer since 1 August 2012, and was appointed as his administrator by the Victorian Civil and Administrative Tribunal (VCAT) on 13 January 2017 and confirmed on 14 September 2020.
Please proceed with the necessary actions to effect the transfer as soon as possible. Could you please clarify if Stamp Duty is payable on this transfer.
If you need any further documentation, please advise me about them. I will be able to bring my father to your office if that would facilitate the process.”[35]
[35]Exhibit AE
75The letter from Petar to Ivan was not attached and is not in evidence.
76Ivan’s evidence in relation to the letters was as follows:
(a) the letter to the conveyancing firm reflected his father’s intentions, but it was never sent because his father was dying at that stage;[36]
(b) he did speak to a conveyancer over the phone,[37] who advised him stamp duty of around $70,000 would have been payable; and
(c) because of the stamp duty payable, and he was going to inherit the property under the will anyway, the transfer of the property did not proceed.[38]
[36]T424
[37]T436
[38]Exhibit 4 - position statement of Ivan Rukavina dated 29 August 2022, page 4; T454
77The evidence does not establish that Ivan did anything further after making the oral enquiry as to stamp duty payable. His evidence that he never sent the letter was not challenged.
78Petar passed away on 6 June 2021, a little over three weeks later.
79By May 2021, Ivan was in the process of admitting his father into care because he was no longer able to look after him. By this stage, Ivan agreed his father could not make independent decisions.[39] He also confirmed that Petar had problems with his short-term memory because of his dementia.[40] Ivan accepted that since February 2017, his father had no capacity to look after himself unassisted or make independent decisions; and that he prepared the letter because Petar was unable to do so. Ivan read the letter out to his father in Croatian.
[39]T426
[40]See eg Exhibit 12 - Letter from Victor Chong, under letterhead of Dr David Freilich, Neurologist, dated 4 June 2014
80Ivan maintained that in May 2021, Petar knew “basic things”, and in his mind he had a capacity to make “moral” decisions including in relation to his testamentary intentions, and that it was always Petar’s wish for him to inherit the property.
81Under cross-examination, Ivan agreed that he knew he was not allowed to use his power as his father’s administrator to benefit himself if it was not going to benefit Petar.[41]
[41]T431
82I find that Petar had advanced dementia in May 2021, and was very unlikely at the time to have had capacity to make independent financial decisions.
83I do not accept Franka’s submission that a significant negative inference should be drawn about the character of Ivan because of the 14 May 2021 letter. While I infer Ivan was motivated at least in part to write the letter in order to avoid a claim being made against the property as part of the estate, he did not proceed with the proposed transfer. There is no doubt that it would have been improper to use his position as administrator to effect such a transfer without valuable consideration, or appropriate medical and legal certification that Petar had the necessary capacity. The enquiry itself, and its motivation, is relevant as a discretionary consideration under s91A(2) of the Act, but is not conduct sufficient to displace Ivan as a beneficiary under the will.
Did Petar owe Franka a moral obligation?
84Franka bears the onus of proof, on the balance of probabilities, of the justification for the claim; however, the onus of proof to establish disentitling or diminishing conduct is upon Ivan.[42] It is not for Ivan to establish need or otherwise justify his position as a beneficiary of the estate.
[42]Re Flavel; Flavel v Flavel [2020] VSC 19 at [64]
85As Cameron J stated in Re Flavel; Flavel v Flavel:[43]
“The conduct of an applicant may be relevant to an application under Part IV of the Act in two ways:
(a) diminishing the extent of the deceased’s moral duty toward the applicant; or
(b) as a factor to which the court may have regard in the exercise of its discretion to order further provision from the estate.
The practical effect of both is the same – diminishing an applicant’s entitlement to further provision. The applicant’s conduct may be taken into account in refusing to make an order entirely, or in reducing the quantum of relief to which they are entitled. The onus of proof to establish disentitling or diminishing conduct is upon the party resisting the application for provision.
The relevant ‘character or conduct’ for the purpose of the court’s assessment is:
(a) the conduct of the applicant toward the deceased; or
(b) character or conduct which shows that the applicant’s need is a result of their own default.”
[43][2020] VSC 19, [63] – [65]
86Franka submitted that the deceased owed a moral obligation to her to provide for her proper maintenance and support, and that any lack of support afforded to her father in the latter years of his life was in part a consequence of the relationship between her and Ivan.
87For his part, Ivan submitted that Franka’s financial situation was of her own making. He relied upon her conduct over many years of failing to provide adequate care to the deceased before August 2012, and thereafter not maintaining appropriate or regular contact, including on birthdays and at Christmas, and not supporting or providing any material assistance to Ivan’s care of the deceased.
88Ivan’s principal submission was that Franka, by her conduct, discharged any moral obligation which might otherwise have been owed to her. In closing submissions, he submitted:
“From 17 years old of age my sister, Franka, has demonstrated behaviours that disrespect family values, authorities and culture. She ran away at the age of 17 to get married without the consent of father or mother.
…
Franka has squandered the money from her late husband and others. Her property projects and her superannuation ...
…
And her late husband house sale proceeds in Sydney, and other borrowings.”[44]
[44]T478-479
89He also submitted that Franka:
(a) did not repay a loan of $100,000 in 1990;
(b) went bankrupt twice from a seemingly good financial position owning various properties; and
(c) was “trouble” her whole life.
90Courts have long recognised that family disharmony or dysfunction, and a parent’s disappointment in a child, are commonplace in family relationships; such matters are only one of the factors to be considered by the Court under the Act.
91I accept that intra-familial relationships are likely to have affected the relationship between Petar and Franka, and that the practical effect of diversion of Petar’s phone number to Ivan – for whatever reason – meant that phone contact was more difficult. I reject the suggestion that Ivan actively tried to prevent Franka from going to see her father. I do not consider any reduced phone contact was reflective of any material estrangement between Franka and her father.
92Ultimately, I do not accept Ivan’s submission that any moral duty that Petar had to provide for Franka was nullified by any estrangement, or by her character and conduct towards Petar and the rest of her family in terms of her relationship with Michael or any other partner. Nor has Ivan established any reprehensible conduct which would diminish the extent of Petar’s moral duty to Franka.
93The extent and quality of Franka’s relationship with the deceased was the subject of conflicting evidence, yet even on Ivan’s account, it was not sufficient to disentitle her from family provision on the basis of reprehensible conduct or otherwise having regard to “the character and conduct of the eligible person.”[45]
[45]Section 91A(2)(k) of the Act
94The evidence relied upon by Ivan, including regular but infrequent attendances at the home, limited phone calls, meals being dropped off and other support provided by Franka to the deceased, does not establish conduct which disentitles her, and nor does it otherwise reduce the moral duty to provide for her.
95The extent of Franka’s responsibility for her current financial situation is a relevant factor. Where an applicant has caused their own financial difficulties, it may reduce the moral obligation of the deceased to provide for those difficulties.[46]
[46]Poole v Barrow [2014] VSC 576, [21]
96In McKenzie v Topp,[47] Nettle J considered the previous version of the current s91A(k):
“It appears that the requirement to have regard to character and conduct in s. 91(o) of the Act now stands in place of the former provisions of s. 96(1) (which provided that if the character and conduct of the plaintiff were such as to disentitle that person to relief the court might refuse to grant an order). I take it therefore that the sort of character and conduct to which one is to have regard for the purposes of s. 91(o) is limited, as it was under the former s. 96(1), to misconduct towards the testatrix or which shows that the plaintiff’s need is the result of his own default.”[48]
[47][2004] VSC 90
[48]Ibid, [39]
97Franka concedes it is a relevant factor if an applicant for family provision is the cause of their own financial demise,[49] but says she was not the cause of her own financial difficulties.
[49]T511
98Even though her husband and a financial adviser may have contributed, I reject the submission that Franka was not responsible for the circumstances of her first bankruptcy. She was involved in the family property development business with her husband and had enjoyed its successes over time. In any event this was over 25 years ago and has limited relevance.
99Franka adduced no evidence about the circumstances of her more recent period as a bankrupt between 2007 and 2010, and I infer that she was responsible for it.
100Franka rejected an offer from Ivan made before Petar’s death to guarantee a loan to purchase a property instead of paying rent so that she and Luka Saric could have more stable accommodation.
101I find that Petar had a moral obligation to provide for Franka’s proper maintenance and support as at the date of his death. Franka was living in rented premises, twice bankrupt and not working. To use the language of the authorities, she had fallen on hard times.
102I consider that Franka, however, caused a substantial component of her own financial difficulties, which reduced the moral obligation of the deceased to provide for those difficulties at the time of his death.
103As at June 2021, in my view the fixed sum of $10,000 in Petar’s will does not make adequate provision for her proper maintenance and support.
Should the Court make an order for further provision?
Relevant principles
104I adopt the principles set out in Forbes J’s decision in Pavlidis v Pavlidis,[50] which considers an application by an adult child and competing need of a sibling, and an allegation of disentitling conduct.[51]
[50][2023] VSC 92
[51]Ibid, at [85]-[94]
105Her Honour stated:
“The power to make a family provision order displaces the testator’s freedom to dispose of her property as she sees fit. It is based upon the recognition that a testator has a responsibility to make provision for certain persons, and intrudes only when satisfied that the obligation has not been met. Historically this has been described as a ‘moral duty’, distinguishing it from a legally enforceable obligation. The extent of the obligation is judged by the Court placing itself in the position of a ‘wise and just testator’, and judged according to current community standards.
…
The adequacy of provision is assessed at the time of death, in light of matters known or reasonably foreseeable to a testator. Where further provision is to be made, the Court assesses need and the claimant’s circumstances as at the time of trial.”[52]
[52]Ibid, at [90]-[94]
106The discretion to make a family provision order is to be exercised:
(a) carefully and conservatively;[53]
(b) with deference to the terms of the testator’s will and their stated intentions; and
(c) according to prevailing community perceptions of the provision that would be made by a wise and just testator.
[53]Saric v Vukasovic [2019] VSCA 57, [11] (Tate, Niall, Emerton JJA)
107In Walsh v Walsh,[54] Hallen J helpfully summarised from the authorities a number of general principles in relation to claims made by adult children. The summary included:
(a)The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b)It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, … although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation.
(c)Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child’s life and into retirement … Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute.
(d)…
(e)There is no need for an applicant adult child to show some special need or some special claim.
(f)The adult child’s lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration. … Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life, is relevant. … In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased.
[54][2013] NSWSC 1065
108The community usually expects:
(a) provision from available assets if a child has fallen on hard times, to buffer against contingencies;
(b) if circumstances permit, provision to go beyond the bare necessities of life; and
(c) acknowledgement of a child’s lack of financial reserves to meet their needs, including ill health in advancing years, protection against the vicissitudes of life and support if a child is unable to earn (or has limited means of earning) an income.
109In Grey v Harrison,[55] Callaway JA, with whom Tadgell and Charles JJA agreed, explained:
“There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, in much the same way as there is a range of awards for pain and suffering or a range of available sentences. Minds may legitimately differ as to the provision that should be made. Furthermore, it is not at all clear that reasons for an appropriate provision need be fully articulated. To borrow again from the analogy of sentencing, what is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight.”[56]
[55][1997] 2 VR 359
[56]Ibid 366-7 (emphasis in original)
110It is not in dispute that Petar had testamentary capacity when he signed his will. Accordingly, I must take into account his clearly expressed intention, unfair or not, that nearly all of his estate go to Ivan and $10,000 each to Franka and her sisters. The Court’s role is to assess what is the least amount that a wise and just testator, wishing to leave nearly all of his estate to Ivan and only $10,000 each to his five older sisters, would nonetheless leave (albeit reluctantly) to Franka having regard to his moral obligation to provide for her.[57]
[57]s91(5)(a); see Gorton J in Re Donateo [2021] VSC 792
111It is important that the Court does not underestimate the significance of the freedom of testation.[58] Of course, the testator’s expressed intentions as contained in the will are but one of several factors for the Court to take into account. The weight to be attached to such expressions will depend upon the specific circumstances of the particular case.
[58]Grey v Harrison at 363 and 366, per Callaway JA
112As stated by John Dixon J, “[c]oncepts of ‘fairness’ or ‘equality’ of treatment between beneficiaries have little role to play in determining the jurisdictional question, and equality of treatment is not a necessary element of testamentary duty”.[59] There is no presumption that children will be treated equally.
[59]Firth v Reeves [2019] VSC 357, at [72]
113Where a testator lacks an estate that is capable of meeting all of their moral obligations, the obligations will compete against each other.
114Family disharmony is commonplace and thus only one factor to be taken into account (as opposed to being inherently disentitling), and has even less relevance where the disharmony is not between the testator and his family but between the testator’s family members.
115The question of what is adequate and proper was considered in Pontifical Society for Propagation of Faith v Scales.[60] Dixon CJ said:
“The Court is given not only a discretion as to the nature and amount of the provision it directs but, what is even more important, a discretion as to making a provision at all. All authorities agree that it was never meant that the Court should rewrite the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator’s decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court.”[61]
[60](1962) 107 CLR 9
[61]Ibid 19
Current circumstances of Franka and Ivan
116It is not in dispute that Franka and Ivan both are in difficult financial positions and have need.
117Franka is in receipt of the Age Pension, receiving approximately $26,000 per annum. Before retiring, she earned approximately $50,000 per annum as an aged care worker. She has accessed her superannuation on hardship grounds. She has almost no money in her bank account, does not keep any cash, and owns no substantial assets.
118Ivan is in receipt of a JobSeeker allowance, and other than approximately $15,000 in superannuation, has no cash reserves. Due to serious injury, he is not working. He is 60 years of age, single and lives alone at the property.
119Franka presently receives some financial support from her long-term partner and current friend, Luka Saric; and also relies upon her daughters for financial support.
120Ivan has no children or other financial support available to him.
Mandatory factors
121In considering whether further provision should be made, the Court must take into account the factors s91(4)(a), (b) and (c); and s91A(1) of the Act.
122The Court must have regard to Petar’s will – it is the first mandatory consideration in s91A. It must also consider any evidence of his reason for making the dispositions in the will.
123Petar executed his last will on 2 October 2012.[62] Petar’s solicitor, Mr Zeljko Stojakovic, prepared the will on the same day he took instructions. There was no one else present when Petar made his will. Mr Stojakovic speaks Croatian, Petar’s native language, and had no concerns about the deceased’s capacity. His evidence included:
“I think I understand him, what he wanted, and that’s what I did. I think he was okay with that, making his will.”[63]
[62]Exhibit A
[63]T321
124Petar’s instructions to his solicitors included the reason the majority of the estate was to be given to Ivan:
“he was concerned that his own son doesn’t have house, doesn’t have place where to live. And he said all his family members houses – or other daughters, that they have their own properties. And they are – he said well off, work. Well off means for me different things. I asked him what he means. He said they have their own house and they are comfortable. And [Ivan is] the only one who didn’t have the house…
... I explain to him that will could be contested if everything goes to [Ivan]. And then he says he would leave $10,000 for each of them. I told him it doesn’t stop them from contesting, but that’s how he wanted.”[64]
[64]T322
125Under cross-examination, Mr Stojakovic confirmed that:
“When I ask him how they are comfortable, he say they each have property of their own, they have partners or husbands, and they are okay. They don’t need anything from him. And of the son, he said, “I don’t have a problem”, he’s taking care of him, and he doesn’t have place where to live.”[65]
[65]T323
126Ivan’s father told him about the contents of the will after he had prepared and signed it in August 2012. Ivan was not present when Petar provided instructions to Mr Stojakovic.
127I accept the evidence of Petar’s solicitor as to the deceased’s intentions. Mr Stojakovic was not instructed about any daughter’s particular circumstances. It is likely his instructions were based in part on a misunderstanding on Petar’s part as to Franka’s circumstances, in that she did not own her own home, but the evidence is uncertain at best. Franka was living with Luka Saric at the time in rented premises. The evidence otherwise establishes the matters comprising Petar’s instructions to his solicitor as set out above, including his clear and rational intention in relation to providing for Ivan.
128Franka submitted that a wise and just testator, in light of matters known or reasonably foreseeable at the time of death, would have provided for Franka’s financial needs.
129I find that Petar at his death knew or ought to have known that Franka:
(a) was still working;
(b) had been in a long-term stable relationship for many years with a partner who had access to funds following a property settlement with his ex-wife; and
(c) was living in rented premises and enjoyed a relatively comfortable life with Luca Saric, including overseas travel.
130In the context of his ongoing relationship with his daughter, I infer that Petar was aware of Franka’s historical bankruptcies at the time he made his will.
131I cannot infer on the evidence that Petar would reasonably have known that Franka was not in a stable and ongoing relationship with Luka Saric.
Section 91A(2) discretionary considerations
132I set out below my findings in relation to the relevant discretionary considerations under s91A(2) of the Act.
a. any family or other relationship between Petar and the claimant, including the nature and length of the relationship;
133Franka was Petar’s eldest child.
134Over the period when she lived in Sydney between 1984 and 2006, Franka was in regular telephone contact with Petar, and saw him occasionally – sometimes in Sydney when Petar visited Franka from time to time; and on other occasions in Melbourne.
135Franka travelled to Melbourne to assist her father and mother when Petar had surgery in 1993.
136From 2006 to 2012, Franka visited Petar regularly, but less so in the last nine years of his life after Ivan moved to Melbourne to care for him. Although she provided food from time to time, Franka took no part in the day-to-day care of Petar, and made no financial contributions to his care or to the estate.
b. any obligations or responsibilities of Petar to the claimant, any other eligible person or beneficiary of the estate;
137Apart from any obligations and responsibilities that arise as part of being a parent, the deceased did not have any obligations and responsibilities to Franka.
138In addition to being owed such obligations, Ivan returned to Melbourne at the request of his father and sisters to care for Petar, and did so for nine years at least in part upon the basis of his father’s conduct expressed intention that as his carer, Ivan would be entitled to retain the property upon Petar’s death. A wise and just father, having allowed Ivan to base many years of his life on that foundation, would not later attempt to deprive him of what had become necessary for his support.[66]
[66] See Hughes v National Trustees, Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134, 148
139I infer no other beneficiary has need, as there is no evidence available to the Court as to the financial resources of any other beneficiaries.
c. the size and nature of the estate;
140It is a relatively small estate, comprising the family home. The parties have agreed the value of the property at $615,000.00.[67]
[67]Exhibit E - Report by Bertacco Property Valuation dated 28 April 2023
141This is an important factor in assessing what proper maintenance and support might entail in the circumstances of this case, particularly having regard to the competing obligations and responsibilities of the deceased to Franka and Ivan.
142A family provision order may necessitate sale of the sole asset, where Ivan currently resides.
d. the financial resources (including earning capacity) and financial needs of the claimant, any other eligible person or beneficiary of the estate at the time of the hearing and for the foreseeable future;
143It is not in dispute that Franka has significant financial needs. She lives in rented accommodation, still owes $2,000 on her 2012 Honda Civic, and has no superannuation left. She did not have much superannuation when she finished work because she had already accessed it.[68]
[68]T175
144Franka ceased work in 2021, following 30 years as a personal carer in Aged Care. At 74 years, she currently receives the Age Pension, approximately $1,020 per fortnight. It is well established that a pension is not enough to absolve the deceased of a moral obligation to Franka.
145She is able to rely on her two daughters to help her when she is short of money.[69]
[69]T131
146Luka Saric provides financial assistance to her presently, in that they live together in his rented premises. Luka pays the rent and all utilities. Franka pays for some groceries, Luka’s health and funeral insurance, and his mobile phone bills. Franka’s intention if this arrangement does not continue is to move to Adelaide to be near her daughter, Deanna, who I infer will continue to support her mother.
147Ivan is aged 60, and is currently on JobSeeker allowance, with little or no earning capacity following a workplace accident in 2020. He is not in a relationship, has no family to help or support him, and presently lives alone in the property.
148Since a motor vehicle accident in January 2022, which Ivan says exacerbated his injuries, he has almost ceased working.
149Ivan was cross-examined about his painting activity since January 2022. Ivan denied working cash-in-hand to save for a holiday, and said that four relatively small purchases of paint between November 2022 and February 2023 were either for painting work he conducted at the property, or paint for friends obtained at discounted prices using his trade account. He denied that a Facebook post on his painting business’ page in November 2022 showing recently-completed painting related to any paid work he had performed. Whilst the evidence and common sense suggests it is possible, the evidence is not sufficient to establish that Ivan has done any paid work since January 2022.
150On the evidence available to me, Ivan has no effective earning capacity.
e. any physical, mental or intellectual disability of any eligible person or beneficiary of the estate;
151Other than Ivan’s injury to his pelvis, this factor is not relevant.
f. the age of the claimant;
152Franka’s age is 74 years.
g. any contribution of the eligible person to building up the estate or the welfare of Petar or Petar’s family;
153Franka and her husband sponsored Petar’s immigration to Australia in 1974. He lived with Franka, who provided support for a couple of years including keeping house and subsidising his living expenses. She also provided support to her mother from when she arrived in Australia in 1981 until Petar and Matija moved to Melbourne in 1984.
154Ivan lived with his parents from 1985 until February 1991. In 1987, Petar had a car accident and was unable to work and was on Workers’ Compensation until about 1989. During this time, Ivan supported his father and mother (who did not work) both financially and socially.
155Franka provided some support to her father from 2009 when Petar was no longer able to manage his wife’s dementia and diabetes, and she was placed in a nursing home.
156Both Ivan and Franka contributed to the welfare and care of the deceased, in the ordinary course of their relationships with the deceased, until Petar became difficult to manage, and Ivan took over his care in August 2012. He provided this care, save for some visits and food provided by Franka, without assistance from his siblings. He also contributed to the estate by maintaining and improving the property over a nine-year period, including using his trade contacts for purchase of fittings, and performing work himself.
157Although the extent is disputed, I accept that Ivan met the ongoing expenses in relation to the property. Some work was paid for, and other work was performed by him.
158Ivan’s evidence included that $12,000 reimbursed to him by his father’s administrator from 2013, State Trustees, did not represent all of his expenditure on his father’s medication and other expenses, including improvements to the property. Due to the state of the evidence, I give limited weight to this factor.
h. any benefits previously given by Petar to the claimant, any other eligible person or any beneficiary;
159Whilst Ivan has lived rent-free in the property for several years, this factor also establishes to some extent an element of dependency upon Petar, in the context of Ivan’s role as a carer.
160Petar supported Franka after her first bankruptcy in 1996, when she lived in Melbourne with her parents for a few months in 1997. Franka and Luka also lived with Petar for a couple of months when they moved to Melbourne from Sydney in 2006.
i. whether Franka was being wholly or partly maintained by Petar before his death;
161This factor is not relevant.
j. the liability of any other person to maintain the eligible person;
162Franka’s friend Luka and her daughter are presently providing significant financial support to her, but not in the circumstance of any legal obligation to do so.
k. the character and conduct of the eligible person or any other person;
163It is for Franka to establish that a moral obligation exists. Given that Ivan is a beneficiary of the estate, rather than a claimant, it is not necessary for him to justify his entitlement to his inheritance.
164While Ivan’s conduct in relation to the abortive attempt to transfer the property to himself shortly prior to Petar’s death is a relevant matter to consider under s91A(2)(k) of the Act, it does not displace the deceased’s testamentary intentions, or Ivan’s demonstrable need. The proposed transfer in May 2021 on one view is not inconsistent with the deceased’s intentions expressed in his will.
165I otherwise refer to my findings above in relation to the parties’ character and conduct.
l. the effects a family provision order would have on the amounts received from Petar’s estate by other beneficiaries;
166Ivan has undertaken to make the testamentary dispositions to each of his sisters,[70] so he is the only beneficiary affected by a family provision order in favour of Franka.
[70]T440
m. Any other matter the Court considers relevant.
167I infer that Franka and her sisters recognised that it was Ivan who was most likely to be able to best care for their father.
168Ivan’s role as the deceased’s primary carer for nine years must be given due weight in the assessment of what constitutes adequate provision for Franka’s proper maintenance and support.
In what amount should provision be made?
169Franka submits that she was owed an ordinary moral obligation on the part of the deceased, and that an appropriate amount of family provision is $300,000, being approximately half of Petar’s estate.
170Ivan submits that Petar used his freedom of testation to will the house to him, in the context of a moral obligation to him to properly cater for his advancement in life and maintenance of his health; and that his needs are greater than Franka’s. If the deceased did owe a moral obligation to provide for Franka, Ivan submits the amount of family provision should not exceed one-sixth of the value of the residue of the Estate.
171Both Franka and Ivan have demonstrated financial need because of their present, somewhat precarious circumstances. Although neither is working, Ivan may have a capacity to work on a very limited basis. Franka is in receipt of support from her partner and children. Both are on Centrelink benefits, and have various medical conditions.
172Petar’s will and the evidence of his solicitor as to the reasons for making the dispositions in his will, together with the very substantial support provided by Ivan to Petar in his final years, are important considerations.
173I reject Franka’s submission that simply because there is not enough in the estate to go around, there is nothing left over for the freedom of testation; in other words, that freedom of testation is largely eroded. The question must be resolved by establishing the extent of the moral obligation, and then considering the relevant factors in s91A of the Act, giving due weight to each.
174Recalling that the discretion is to be exercised carefully and conservatively, I will order provision for Franka of the sum of $110,000 for her proper maintenance and support in addition to the amount already provided in the will.
175In all the circumstances, a wise and just testator would view the further amount of $110,000 as adequate and proper. Such a sum from a relatively small estate provides Franka with a financial buffer, while at the same time giving due consideration to Ivan’s care of his father over nine years, the competing claim of Ivan, and the terms of the will, including the intention of the testator that Ivan should take the majority of the estate.
176I will hear from the parties as to the form of final orders, and costs.
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