Savkulovski v Savkulovski

[2001] NSWSC 378

CITATION:	SAVKULOVSKI v SAVKULOVSKI [2001] NSWSC 378
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 4712/2000
HEARING DATE(S):	02/05/01
JUDGMENT DATE:	8 May 2001
PARTIES :	MENKA SAVKULOVSKI v KRSTE SAVKULOVSKI - ESTATE OF VANGEL SAVKULOVSKI
JUDGMENT OF:	Master Macready at 1

COUNSEL :	Mr J. Wilson for plaintiff Miss Y. Holt for defendant
SOLICITORS:	Moroney Rutter Mantach for plaintiff Ross Fiddes for defendant
CATCHWORDS:	Family Provision. - Application by elderly widow who needs a live in carer to look after her in her home in which she has lived for 35 years. - Long marriage and contrinbutions to the estate. - Order that the whole estate pass to the widow.
CASES CITED:	Singer v Berghouse (1994) 181 CLR 201 Golosky & Anor v Golosky, unreported 5 October 1993
DECISION:	Paragraph 30

1 MASTER: This is an application under the Family Provision Act in respect of the estate of the late Vangel Savkulovski who died on 16 July 1999 aged in his 70's. The deceased was survived by his widow, who is the plaintiff in this action. The deceased and his widow had no children.

2   The relevant members of the family who appear in the evidence given before me are as follows:

Vangel Savkulovski, the deceased;

Menka Savkulovski, his widow;
Tala Markovsky, a sister of Menka;
Boris Zulumovitch, brother of Menka;
Zora Zulumovitch, wife of Boris;
Krste Savkulovski, a brother of the deceased;
Dragi Savkulovski, a son of Krste and a nephew of the deceased;
Diana Zulumovski, a daughter of Boris.

3   The deceased made his last Will and Testament on 5 May 1997 and probate was granted to the defendant, the brother of the deceased, on 6 July 2000.

4   The provisions of the will provided for the plaintiff to receive:

(i) A joint life interest with the defendant in the property 58 Regent Street, New Lambton and upon the termination of the plaintiff's life interest to the defendant and Boris Zulumovitch as tenants in common in equal shares. During the joint life interest, the plaintiff has the right to exclusive occupancy of the residence whilst the defendant has a right to income from the lock up shop.
(ii) Furniture and personal effects in the home at 58 Regent Street, New Lambton.

5   To his brother the defendant:

(i) His interest in the property at 56 Regent Street, New Lambton.
(ii) His interest in the property at 61 Regent Street, New Lambton. His interest in each case was as a half owner.

6   The rest of his estate went to the defendant, the deceased's brother Metodi Savkulovski, his sisters Mara Staninovski and Dana Kumcevski, and twelve named nieces and nephews.

7   The deceased left the following assets:

Half interest in 56 Regent Street, New Lambton
Half interest in 58 Regent Street, New Lambton $170,000.00
Half interest in 61 Regent Street, New Lambton $180,000.00
Newcastle Permanent Building Society $54,596.00
ANZ Bank New Lambton $45,491.00
ST George Bank $75,671.00
Commonwealth Bank $12,638.00
Furniture crockery etc $5,000.00
Total $543,398.00
The current assessment of the net estate is $538,000.

8   In addition, the deceased and the plaintiff owned the following assets as joint tenants:

39 Phoebe Street, Hamilton $70,000.00
Newcastle Permanent Building Society 113,780.00.

9   There have been incurred costs in this estate on the plaintiff's part in the order of $50,000, and on the defendant's part $30,000; a total of $80,000. The net estate is thus slightly in excess of $450,000, which comprises property worth $350,000 and cash assets of about $100,000.

10   I will briefly deal with the chronology of the family. The plaintiff was born on 18 September 1923. She and the defendant married in 1941 in Macedonia. In 1957 they arrived in Australia and first lived at Port Kembla. In the early 1960's they moved to Newcastle and it was in 1962 that the plaintiff, the deceased, Boris and Zora Zulumovitch opened a retail shop at Islington. By 1964 they had acquired 56 and 58 Regent Street, New Lambton.

11   In 1971 the plaintiff and the deceased purchased 61 Regent Street, New Lambton as joint tenants. In 1975 they purchased 39 Phoebe Street, Islington, once again as joint tenants. By December 1976 the plaintiff and the deceased sold their retail business which was operating at Islington. They also sold that property in 1981.

12   On 8 April 1997 the title to the property at 61 Regent Street, New Lambton was changed from joint tenancy to tenancy in common. The plaintiff remembers nothing of this and why it was done. On 5 May, a month later, the deceased made his last Will and it is probable that the change was made in contemplation of him making the provisions which he desired to make, and in fact did make in his Will. He died on 16 July 1999, probate was granted and these proceedings were then commenced within time.

13 In applications under the Family Provision Act, the High Court has recently in Singer v Berghouse (1994) 181 CLR 201 set out the two stage approach that a Court must take. At page 209 it said the following:-

"The first question is, was the provision (if any) made for the applicant `inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between `adequate' and `proper' and the interrelationship which exists between`adequate provision' and`proper maintenance' etc were explained in Bosch V Perpetual trustee Co Limited. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.

The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors."

14   I turn to consider the plaintiff's financial position. The plaintiff owns the following assets: 39 Phoebe Street Islington, $100,000; a half share of 61 Regent Street New Lambton, $180,000; money in bank accounts of $178,000 and loans due from relatives, $30,000. The plaintiff's weekly income from rents and interest before tax is $451 per week based on her 1999 income tax return. Her weekly outgoings are $564, leaving a shortfall of $113 per week. She lives in the property at 58 Regent Street, New Lambton. This property comprises shop premises on the ground floor and a residence on the first floor. The property at 58 Regent Street New Lambton was owned by the deceased with his brother-in-law, Boris Zulumovitch, each holding a half interest as tenants in common in equal shares. The plaintiff has lived in that property for something like thirty-five years and she has expressed a wish to continue living in that home. Her brother Boris Zulumovitch has sworn an affidavit in which he says that the plaintiff can reside in the property as long as she wishes, that he has made a will in which he has left all of his assets to his wife and that he has requested his wife not to dispossess the plaintiff from 58 Regent Street, New Lambton.

15   It is necessary to also take into account the situation of others who have a claim on the bounty of the deceased. These are the people who take an interest under the Will of the deceased. One of these is the brother-in-law, Boris. There is no evidence of his financial circumstances, and accordingly, the Court can assume that he does not wish these to be taken into account. He, in fact, supports the application made by the plaintiff and this is no doubt on the basis that he will, in due course, be the beneficiary of the plaintiff's estate when she dies.

16   Krste Savkulovski, he also provided no evidence of his financial circumstances, and accordingly the Court can disregard those matters. He did give evidence in which he discussed the help that he had given, from time to time during his life time. For example, following the purchase of 61 Regent Street he helped the deceased do some minor repairs to the property and prepare it for tenants. He talks of painting and cleaning the property. He also talks of, in 1996, assisting in removing rubbish on the block when the house was being demolished. The brother and his wife also, of course, continued their family interaction with the plaintiff and at times assisted when the deceased was ill. However, there is no real evidence of any contribution to the estate of the deceased. All contributions to the estate have been made by the plaintiff or Boris and his wife.

17   There was also evidence given by one of the nephews of the deceased, Dragi Savkulovski. He is 43 years of age, having been born on 14 February 1958. His financial situation is not strong. He has cars worth about $16,500, some $3,000 in NRMA shares, personal belongings and a small amount of superannuation. He has, for some time, in fact since a child, had some difficulty because he suffered injuries in an explosion which affected his left hand and one eye. His schooling was not successful and he has worked in a number of labouring positions and cleaning positions. He has little work at the moment and obviously needs some assistance. He, himself, speaks of helping his father assist the deceased in the matters which I have mentioned earlier. None of the other people who took under the Will of the deceased have filed any evidence, either of their contact with the deceased or of their financial situation. They were in fact requested to do so, but apparently declined.

18   It is necessary, in considering the plaintiff's claim, to look at the principles which apply to widows' claims. The provisions normally made in respect of widows have been set out in many cases, and recently the President of the Court of Appeal in Golosky & Anor v Golosky, unreported 5 October 1993, summarised in the following terms:

"In testing the Master's decision it is appropriate to keep in mind the principles which governed the approach which he was obliged to take to the widow's application under the Act. Relevantly, these included:

(a) Proper respect was to be paid for the right of testamentary disposition which is the fundamental premise upon which the provisions of the Act are based. That premise requires the court, out of respect for the continuing right of testamentary disposition, to limit its disturbance of the testator's will to that which is necessary to achieve the purposes of the Act, and not more. See The Pontifical Society for the Propogation of the Faith and St Charles Seminary, Perth V Scales (1962) 107 CLR 9, 19; White v Barron and Anor , above, 458; Hunter , above, 576;

(b) The purpose of the jurisdiction is not the correction of the hurt feelings of sense of wrong of the competing claimants upon the estate of the testator. The Court is obliged simply to respond to the application of the eligible person who was a member of the testator's household and to consider whether, as claimed, the provision made by the will is inadequate for that person's proper maintenance and advancement in life. See Heyward v Fisher, Court of Appeal , unreported, 26 April 1985; (1985) NSWJB 81.

(c) Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of the testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69-70;

(d) A mere right of residence will usually be an unsatisfactory method of providing for a spouse's accommodation to fulfil the foregoing normal presupposition. This is because a spouse may be compelled by sickness, age, urgent supervening necessity or otherwise, with good reason, to leave the residence. The spouse provided and will then be left without the kind of protection which is normally expected will be provided by a testator who is both wise and just. See Moore v Moore , Court of Appeal, unreported, 16 May 1984, per Hutley JA;

(e) Considering what is`proper' and by inference what is`improper' as a provision in a will, it is appropriate to take into account all of the circumstances of the case including such matters as the nature and quality of the relationship between the testator and the claimant; the character and conduct of the claimant; the present and reasonably anticipated future needs of the claimant; the size and nature of the estate and of any relevant dispositions which may have reduced he estate available for distribution according to the will; the nature and relative strengths of the competing claims of testamentary recognition; and any contributions of the claimant to the property or to the welfare of the deceased. See Re Fulop Deceased (1987) 8 NSWLR 679 (sc); Churton v Christian and Ors (1988) 13 NSWLR 241 (CA), 252."

19   In talking of the need to provide a house and a sum for contingencies, the President is clearly referring to passages in Luciano v Rosenblum and other cases. As was pointed out by the Court of Appeal in Elliott v Elliott, unreported, 29 April 1986, such a type of provision only applies where it can be said there has been a long and happy marriage and a widow has helped build up the estate of the deceased. The Court also accepted that she should have sufficient income to enable her to live in a reasonable degree of comfort and free from any financial worry.

20   Here we have a plaintiff and a deceased who are married for 58 years. They worked hard all their life together in the stores which they ran. In this case there has been a substantial contribution to the estate of the deceased by the plaintiff. The evidence does not suggest that it was not a happy relationship.

21   The plaintiff has accommodation due to the good graces of her brother Boris. Probably this will be sufficient in part because she will be looked after as part of the extended family. However, the Will, as it stands, only provides her with a life interest. This is not satisfactory, as the above extract from Golosky v Golosky illustrates. There is little for contingencies and she has a limited income. She is presently living on capital, as I have recounted earlier.

22   The plaintiff herself is 77 years old and her family has a history of longevity. Her great grandmother lived to 115 years of age, her grandmother lived to 112 years of age. At the moment the plaintiff is quite emphatic that she wishes to continue to live in 58 Regent Street where she has lived for the last 35 years.

23   The evidence of Patricia Margaret Rumble, an occupational therapist, discloses that the plaintiff is incapable of living by herself. The plaintiff's sister Tala lives with the plaintiff at 58 Regent Street. The sister is 82 years of age, and wishes to return to her home in Macedonia. All her children and numerous grandchildren reside in Macedonia. It is likely that she will return shortly. After she returns to Macedonia, the plaintiff will require a live in carer if she wishes to continue living at 58 Regent Street. There is evidence of the cost of a live in carer and these costs are based on the evidence of Dena Blackman of Dial-an-Angel. Mrs Lindsay, a chartered accountant, has provided evidence of the capital required to meet the cost of having live-in care on the assumption that she continue to live at Regent Street for a period of time, such as five years before admission to a suitable nursing home.

24   On the figures prepared by Mrs Lindsay and on the assumptions

(a) that the plaintiff will have a normal life expectancy for a 77 year old female
(b) that the plaintiff would live in her home for five years before moving to a suitable nursing home
then the expected cost of a live in carer while at 58 Regent Street and the cost of acquiring suitable accommodation in a nursing home is $694,012. If her life expectancy were to be doubled the amount would be $878,079. I think for the purposes of this case I ought to adopt the former, although noting that there may be some argument to suggest a longer life expectancy. These figures take into consideration the income from the plaintiff's existing assets.

25   Simply put, the submissions of the plaintiff are that the estate is not large enough to provide for the plaintiff, given her needs and her desire to live in her familiar home. The only other claims on the estate are those of the beneficiaries in the Will, two of these, the deceased's brother and nephew, have put on evidence. Their claims, however, mast rank after that of the widow. Although there was some concern expressed in documents by the deceased about the need to look after Dragi, he does not seem to have in fact done this in any particular way in the Will.

26   There were submissions on behalf of the defendant that the funds will not go to the plaintiff. This was based upon the fact that a car was purchased using the plaintiff's money and that it was not used to provide solely for her transportation. There were also loans of $10,000 and $20,000 to both Boris and Diana. They will no doubt be paid back. I have no doubt about the bona fides of both these members of the family who, in my view, have the plaintiff's welfare at heart.

27   The family situation, including the provisions of the plaintiff's will, is more likely to lead to the plaintiff being properly cared for by the family. I see no need to appoint any independent trustee.

28   There was criticism of the approach adopted by the accountant. It was suggested that she should have factored in the gradual use of capital over the life expectancy of the plaintiff. The problem with this submission is that

(a) it assumes an accuracy of prediction which may not be able to be achieved;
(b) it removes the security from financial worry, which is an essential part of the proper provision for a widow.

29   The plaintiff has some particular needs. Were it not for these, some part of the estate could have passed to the residuary beneficiaries. Probably the deceased did not appreciate the position in which his widow is now placed by reason of her inability to look after herself without care.

30   In the circumstances, I order:-

(a) That in lieu of the provisions of clause 3 of the Will of the deceased, the whole of the estate is to pass to the plaintiff.
(b) The plaintiff's costs on a party and party basis and the defendant's on an indemnity basis be paid or retained out of the estate of the deceased.

31   I will not make any order in respect of exhibits.

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Last Modified: 05/16/2001