Stojanovski v Stojanovski

[2019] NSWSC 1713

Supreme Court

New South Wales

Medium Neutral Citation:

Stojanovski v Stojanovski [2019] NSWSC 1713

Hearing dates:

28 November-2 December 2016, 17 February 2017, 31 August 2017, 1 May and 30 May-6 June 2019

Decision date:

04 December 2019

Jurisdiction:

Equity

Before:

Robb J

Decision:

Direct the parties to confer, and to agree short minutes if possible, or if not, propose appropriate short minutes of order for the consideration of the Court. See pars 613 to 618

Catchwords:

CONTRACTS — Formation — Agreement — Intersection of contract law with succession law — Enforceability of testamentary agreement — Agreement binding and plaintiff entitled to order that it be specifically performed — Standing of plaintiff under UCPR r 7.10(2)(b) to represent the estate for the purposes of this claim accepted — Standing of fourth defendant to resist this claim, accepted upon considerations of procedural fairness and natural justice — Enforceability of testamentary agreement upheld

 

SUCCESSION — Family provision — Claim by adult child — Proceedings not commenced within time — Whether sufficient cause shown to extend time — Extension of time permitted

SUCCESSION — Family provision — Claim by adult child — Claim made under Family Provision Act 1982 (NSW) — Whether adequate and proper provision made for the plaintiff — Where the course of the litigation itself over more than a decade, including and especially the amount of outstanding legal fees, has become a paramount factor in determining the material circumstances of the beneficiaries — Where plaintiff alleges that substantially all legal costs incurred are the fault of the first and fourth defendants — Where evidence shows failure of deed of release was substantially of plaintiff’s own making — Where plaintiff’s case has changed substantially over time, including by totally abandoning many claims — Where beneficiaries are in materially similar financial and personal circumstances — Consideration of whether claimant’s costs are permitted to be paid out of the deceased estate — No family provision ordered

Legislation Cited:

Bankruptcy Act 1966 (Cth)
Civil Procedure Act 2005 (NSW)
Conveyancing Act 1919 (NSW)
Family Law Act 1975 (Cth)
Family Provision Act 1982 (NSW)
Legal Profession Uniform Conduct (Barristers) Rules 2015
Legal Profession Uniform Law (NSW)
Limitation Act 1969 (NSW)
Real Property Act 1900 (NSW)
Succession Act 2006 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Anderson v Hill [2017] NSWSC 1149
Annetts v McCann (1990) 170 CLR 596; [1990] HCA 57
Birmingham v Renfrew (1937) 57 CLR 666; [1937] HCA 52
Boyd v Thorn (as Executrix of Estate of McAuley) [2016] NSWSC 588; (2016) 18 BPR 35,941
Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52; [2007] HCA 56
Henry v Hancock [2016] NSWSC 71
In the marriage of Reed (1989) 98 FLR 268; 13 Fam LR 566
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19
News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410
Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40
Squire v Squire [2019] NSWCA 90
Steinmetz v Shannon [2019] NSWCA 114
Stojanovski v Stojanovski [2012] NSWSC 1338
Stojanovski v Stojanovski (No 2) [2012] NSWSC 1547
Stojanovski v Stojanovski [2013] NSWSC 1491
Stojanovski v Stojanovski [2018] NSWSC 1967
Stojanovski v Stojanovski [2018] FCA 580
Stojanovski v Stojovski [2016] NSWSC 976
Verzar v Verzar [2014] NSWCA 45; (2014) 12 ASTLR 523
Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56
Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11

Texts Cited:

GE Dal Pont, Law of Costs (4th ed, 2018, LexisNexis Butterworths Australia)

Category:

Principal judgment

Parties:

Steven Stojanovski (plaintiff)
Robert Stojanovski (first defendant)
Jovanka Stojanovski (second defendant)
Jordan Stojanovski (third defendant)
Angelina Stojanovski (fourth defendant/cross-defendant)
Fabian Kane Micheletto (fifth defendant/first cross-claimant)
Michael Carrafa (sixth defendant/second cross-claimant)

Representation:

Counsel:
C Bevan; J Zmood (28 November to 2 December 2016) (plaintiff)
A Crossland and M Cowden (28 November to 2 December 2016); A Crossland (17 February 2017) (first defendant)
A Crossland and M Cowden (28 November to 2 December 2016); A Crossland (17 February 2017); M Cowden (31 August 2017); A Ahmad (1 May 2019); T Jonker (30 May 2019) (fourth defendant)
S Golledge SC (fifth and sixth defendants)

  Solicitors:
One Group Legal (plaintiff)
Foulsham & Geddes (28 November to 2 December 2016, 17 February 2017) (first defendant); otherwise self-represented (first defendant)
Excused (second defendant)
Excused (third defendant)
Foulsham & Geddes (28 November to 2 December 2016, 17 February and 31 August 2017) (fourth defendant/cross-defendant); otherwise self-represented (fourth defendant/cross-defendant)
Polczynski Robinson (fifth and sixth defendants/first and second cross-claimants)

File Number(s):

2012/89349

Judgment

The parties

1. These proceedings concern the estate of the late Nada Stojanovski, who died on 20 January 2006.

2. As the plaintiff and the first four defendants are members of the deceased's family, by birth or marriage, and all have the same surnames, I will, without meaning any disrespect, refer to the deceased and those parties by their given names.

3. The plaintiff, Steven Stojanovski, is Nada's first-born son.

4. The first defendant, Robert Stojanovski, is Nada's younger son and Steven's brother.

5. Jovanka Stojanovski, who is the second defendant, is Steven's estranged wife. Steven and Jovanka are parties to proceedings in the Family Court of Australia, the preparation and hearing of which has been deferred pending the determination of these proceedings. Whatever the outcome of these proceedings may be, the Family Court will then be asked to make orders for the division of the matrimonial property of Steven and Jovanka.

6. The third defendant, Jordan Stojanovski, is the sole executor of the will of Nada made on 3 January 2006, under a grant of probate made by this Court on 23 March 2006. Jordan is said to be incapacitated, and has not taken any active part in these proceedings.

7. The fourth defendant, Angelina Stojanovski, is Robert's ex-wife.

8. A bankruptcy order was made against Robert on 30 June 2017. It seems that the bankruptcy commenced on 25 March 2017. The fifth and sixth defendants, Mr Fabian Kane Micheletto and Mr Michael Carrafa, were appointed as Robert's trustees in bankruptcy. It will be convenient generally to refer to those gentlemen as the "trustees".

9. As will be seen, the nature of the issues changed significantly as a result of the filing by the trustees on 15 October 2018 of their defence to the fifth amended statement of claim filed by Steven. As will also be seen, however, Angelina has claimed, in practical terms, to be entitled to conduct the defence that was pleaded by Robert before he became bankrupt.

The properties

10. This is another case where the children of a deceased parent have fought so fiercely over the estate of the parent that they have substantially dissipated that estate and destroyed the testamentary intentions of the parent. It seems that Nada, who worked as a cleaner, was an exceptionally frugal and astute investor, who accumulated an enviable portfolio of properties that she ultimately wished to divide between her two sons on an approximately equal basis.

11. I will start my explanation of how the initial dispute between Steven and Robert arose by identifying the residential properties that were acquired by Nada, either alone or with one or both of her sons, and how she attempted to dispose of her interests in the properties on her death in a way that would achieve approximate equality between her sons. There is some dispute between Steven and Robert as to the extent to which each of them contributed to the acquisition of the various properties. It seems that Nada was primarily responsible for their acquisition. However, Nada chose not to acquire all of the properties in her own name alone, and in various ways put the whole or part of the title to the acquired properties in the names of one or both of her sons, and in most cases herself as well. The manner in which the title to the properties was held influenced the way that Nada attempted to divide all of the properties on a roughly equal basis between her two sons, and, as it has happened, created the seed for the present dispute. In common with the approach adopted by the parties, I will define the properties by reference to the names of the streets in which they are located.

Jersey Avenue, Mortdale (Jersey)

12. Jersey is unusual, as it is also known as Milsop Place, Mortdale. It is a large residential block with frontages to Jersey Avenue and Milsop Place. It is a single lot in a registered plan of subdivision. Dual occupancy has been permitted for the property. At the Milsop Place end there is a substantial residence. That residence has been the home of Jovanka for a number of decades, and she has been the sole occupier since the time of her separation from Steven. Initially, that was by mutual arrangement, but for some years it has been the result of an order made by the Family Court. Initially, there was also a substantial residence erected on the Jersey Avenue end of the property, apparently of some four bedrooms. Some time ago that residence burnt down. There is an issue between the parties as to whether approval will be given by the relevant council for Jersey to be subdivided into two lots, as that will make Jersey more valuable.

13. Jersey was acquired by Nada, Steven and Robert as joint tenants. As the title to Jersey was held in that manner at the time of Nada's death, Steven and Robert became joint tenants of Jersey by survivorship. As will be seen, the seed for the present dispute was Nada's attempt to oblige Robert to assign his half-interest as joint tenant in Jersey to Steven after Nada's death. Nada could not achieve that result by her will, as she would have been required to sever the joint tenancy, and even then she could only have devised her one-third interest to Steven by her will if she had severed the joint tenancy. Steven’s present interest in Jersey is a subject of the dispute between Steven and Jovanka in the Family Court, as will be the balance of the title to Jersey if Steven succeeds in these proceedings.

George Street, Mortdale (George)

14. A residence is erected on George, but the evidence suggests that the residence is rundown and is not in a habitable condition. Consequently, it is not tenanted. Apparently, considerable renovation work will be necessary to make the residence on George habitable. The evidence does not disclose the expected cost of this work.

15. George was acquired in the sole name of Nada, and remained in Nada's name at her death. Nada left the whole of her interest in George to Steven in her will. Strangely, although Robert has never challenged that gift, the title to George has never been transmitted to Steven. It is not clear why the transmission has not occurred. Initially, it appears that the certificate of title could not be found, and Jordan has not applied for the issue of a substitute. It may be that Jordan is now incapable of doing so. George is a subject of the dispute between Steven and Jovanka in the Family Court concerning the division of the matrimonial assets.

Breakwell Street, Mortdale (Breakwell)

16. A residence is erected on Breakwell which, for some time, has been the home of Angelina and the children of Angelina and Robert, following their separation.

17. Breakwell was acquired in the sole name of Nada, and was owned by her at her death. By her will, Nada left the whole of her interest in Breakwell to Robert. As will be explained in more detail below, Jordan transmitted the title to Breakwell to Robert, who initially transferred Breakwell to himself and Angelina in equal shares, and, later still, Robert gave his half-interest in Breakwell to Angelina. The trustees now have an interest in Breakwell, which is better explained later in these reasons.

Kemp Street, Mortdale (Kemp)

18. Kemp was originally acquired by Nada and Robert as joint tenants, and held by them in that manner at the time of Nada's death. Robert became entitled to the whole of Kemp at that time by survivorship. Robert gave the whole of his interest in Kemp to Angelina. Subsequently, the trustees have obtained an interest in Kemp.

Morts Road, Mortdale (Morts)

19. Morts was for many years the matrimonial home of Robert and Angelina. Notwithstanding the involvement that Nada had in the purchase of Morts, it was agreed by Nada and Robert that the title to the property would be put solely in Robert's name. Robert continued to own Morts at the date of Nada's death. In two steps, Robert first transferred a half-interest in Morts to Angelina, and then, at a later time, Robert transferred his remaining half-interest in Morts to Angelina. The trustees now have an interest in Morts.

20. Steven initially claimed by his pleadings in these proceedings that, by reason of the circumstances in which Robert obtained his half-interest in Kemp and the whole of the title to Morts, Robert held his interests in both properties on a resulting trust for Nada. Steven has abandoned his claim that Nada's estate is beneficially entitled to Robert's interests in Kemp and Morts on that basis. Steven no longer makes any claim on Morts at all.

The value of the properties

21. The parties have provided evidence as to the value of the properties. That evidence is generally in the form of kerbside appraisals for the properties (which is permitted by Family Provision Practice Note SC Eq 7 par 21(a)). Where the value has been expressed as a range, I have adopted the midpoint.

22. Steven provided the following appraisals of the values of the properties as at 23 November 2016 (Court Book Tab 8A and Exhibit C):

Kemp	Breakwell	Morts	Milsop	Jersey	Combined	George
$1.15M	$1.6M	$830K	-	-	$1.225M	$800K

23. Robert tendered appraisals produced by Richardson & Wrench as at 22 November 2016 as follows (Court Book Tab 8B):

Kemp	Breakwell	Morts	Milsop	Jersey	Combined	George
$1.075M	$1.675M	$1.2M	$1.6M	$1.0M	$2.0M	$1.4M

24. There is plainly a substantial disparity between the appraisals for Morts, the combined value of Milsop and Jersey and George.

25. One of the trustees, Mr Micheletto, obtained appraisals of the values of the properties from Richardson & Wrench as of 23 May 2019 as follows:

Kemp	Breakwell	Morts	Milsop	Jersey	Combined	George
$1.0M	$1.5M	$975K	$1.325M	$750K	$1.8M	$1.2M

26. Only approximate valuations can be determined based upon this evidence. No evidence was given by the agents who prepared the valuations, and no submissions were made by the parties concerning which appraisals should be preferred. The evidence obtained by the trustees is more recent, and I consider the trustees to be more neutral than Steven and Robert. For the purposes of these proceedings I propose to adopt the appraisals obtained by the trustees.

27. The appraisals for Milsop and Jersey assume that Jersey has been subdivided into two lots, and “Combined” is the appraisal for those properties sold as a single lot with the prospect of subdivision. There is a dispute between the parties as to whether the Court should accept that the Council will approve the subdivision of Jersey into two lots. I will address that subject below.

Nada’s will

28. It will be convenient at this point to set out the terms of Nada’s last will, which are as follows:

THIS IS THE LAST WILL AND TESTAMENT of me NADA STOJANOVSKI of [redacted] Breakwell Street Mortdale, 2223 in the State of New South Wales.

1.   I hereby revoke all former wills and testamentary dispositions previously made by me.

2.   I appoint as sole EXECUTOR of this my will Mr. JORDAN STOJANOVSKI of [redacted] Breakwell Street Mortdale 2223.

3.   In this my will the term "my trustee" shall mean and include executor or executors and trustee or trustees for this my will and the trusts arising under it.

4.   I distribute my estate both in property and personal as detailed below:

A/   To my eldest son Steven Stojanovski of [redacted] Milsop Place Mortdale 2223 I give the following properties with the following conditions as set out below.

[Redacted] George Street Mortdale (ref: Lot [redacted])

[redacted] Jersey Avenue Mortdale (ref: Lot [redacted]) [This property is currently under three (3) names, namely myself Nada Stojanovski, my son Robert Stojanovski and my other son Steven Stojanovski.] In line with my wishes Robert Stojanovski is to transfer his share in this property to his brother Steven Stojanovski.

Conditions:

In the event of the marriage breakup between Steven and his wife control of the above properties is to be given to the Trustee (Executor) for determination.

B/   To my younger son Robert Stojanovski of [redacted] Morts Road Mortdale 2223 I give the following properties with the following conditions as set out below.

[Redacted] Breakwell Street Mortdale 2223 (ref: Lot [redacted])

[Redacted] Kemp Street Mortdale 2223 (ref: AUTO CONSOLE [redacted])

Conditions:

In the event of the marriage breakup between Robert and his wife control of the above properties is to be given to the Trustee (Executor) for determination.

5/   All of my property in financial institutions is to be equally divided between my sons Steven and Robert Stojanovski.

29. Nada's will was duly signed at Kogarah on 3 January 2006 before two witnesses, being Mr Jonce Dunevski and Mr Pande Fuzevski.

30. By this inexpertly prepared will, Nada intended to achieve the following result. She would devise George to Steven. As upon her death, Steven and Robert would become half-owners of Jersey, Robert was required to transfer his half-share to Steven, so that Steven would become the sole owner of Jersey. As in practical terms, Jersey could be divided into two properties, representing the Jersey end and the Milsop end, Steven would acquire ownership of three properties. Theoretically, he could live in one and live off the rents of the other two.

31. As to Breakwell, Nada devised the whole of her interest to Robert. Nada intended to devise her half-interest in Kemp to Robert (although in law it would in fact pass to him by survivorship). Robert already held the title to Morts in his own name. That way, Robert would also become the sole owner of three properties, and would broadly be in the same position as Steven.

32. However, to achieve her ends, she had to oblige Robert to agree to transfer his half-interest in Jersey to Steven. That explains the parenthetical statement and reference to the transfer in Nada’s will in respect of Jersey. Nada may have been able to achieve an equivalent result by some other means, but it seems that, having devoted much of her life to acquiring the five properties, she wanted to give them in specie to her sons on her death.

33. No party attributed any significance to the conditions in clause 4 of Nada’s will concerning the consequences of any breakup between Steven and Robert and their wives. It will not be necessary to refer to the conditions further.

The testamentary agreement

34. To assist in giving effect to her testamentary intentions, on the same day as she made her last will, Nada required Robert to sign a statutory declaration (which I will call the testamentary agreement). Nada evidently thought that the document would be more effective if it was sworn as a statutory declaration. The document provided:

TO WHOM IT MAY CONCERN

I Robert Stojanovski of [redacted] Morts Road Mortdale 2223 solemnly declare and give my share of the property known as [redacted] Jersey Avenue Mortdale 2223, (ref: Lot [redacted]) to my eldest brother Steven Stojanovski of [redacted] Milsop Place Mortdale 2223 in line with my mother[']s last will.

35. This document was signed by Robert on 3 January 2006 at Kogarah, and witnessed by Mr Dunevski, who was a Justice of the Peace. After the testamentary agreement had been signed, Nada executed her will.

The source of the dispute

36. As mentioned above, Nada died on 20 January 2006. There appears to be no reason why Nada’s testamentary intentions would not have been implemented in full if Robert had acted in accordance with the testamentary agreement. However, he refused to do so. That refusal has put in train the events that have led to the present proceedings, as well as many other circumstances that are likely to lead to the financial ruin of both Steven and Robert.

37. Not only would Nada’s wishes have been given effect, if Robert had honoured the testamentary agreement, but Nada would have achieved a position where the properties that she had acquired would have been divided with rough equality between her two sons. Nada had some money in her estate at the time of her death, which was distributed in accordance with clause 5 of her will. As the financial and other circumstances of Steven and Robert at the date of Nada’s death were roughly equivalent, the matter would probably have ended there, as there were no real grounds at that time for either son to challenge the effect of Nada’s will by commencing proceedings for some further family provision.

38. Steven could have sought a remedy for Robert’s refusal to honour the testamentary agreement by instituting proceedings to enforce it. Strictly, Jordan, as Nada’s executor, was probably the proper party to enforce the agreement. There is no evidence that Steven requested Jordan to commence proceedings to enforce the agreement, or that Jordan declined to do so. It may be that, if Jordan had not been prepared to attempt to enforce the agreement, Steven, as the intended beneficiary, may have been given leave to represent the estate.. Steven may also have brought an action to replace Jordan as executor with another person. None of these matters were explored in the evidence. As will be seen, the fact is that Steven did not initially do anything to try to enforce directly the testamentary agreement.

39. Eventually, Steven instituted proceedings himself to enforce the testamentary agreement against Robert. Robert and Angelina contested that claim at the first stage of the hearing of these proceedings, which took place between 28 November and 2 December 2016. The reasons for the inordinate delay in the completion of the hearing, which occurred between 30 May and 6 June 2019, will be explained below. In the interval, as mentioned above, Robert became bankrupt. As Robert continued to hold a joint interest with Steven in Jersey at the date of his bankruptcy, Robert’s interest vested in the trustees. After the trustees were joined as fifth and sixth defendants to these proceedings, they filed a defence in which they admitted Steven’s claim for orders enforcing the testamentary agreement in favour of Steven. That may have been thought to end the need for the Court to determine Steven’s claim for the enforcement of the testamentary agreement. However, Angelina, on the basis of her claim in the Family Court for an appropriate distribution of the matrimonial assets as between Angelina and Robert, claimed to have standing to defend Steven’s claim to enforce the testamentary agreement. Steven challenged Angelina’s claim for standing at the second stage of the hearing. The claim to enforce the testamentary agreement was nonetheless dealt with at the hearing, on the basis that the Court would deal with the standing question in its judgment.

40. As will be seen, I have concluded that Steven is entitled to succeed on his claim to enforce the testamentary agreement. I will deal with the standing of Angelina and the reasons for my conclusions on the merits of the issue below.

41. The result will be that, putting aside all of the other developments since Nada’s death that ultimately have thwarted her testamentary intentions, Nada’s objective in the distribution of the properties that were acquired through her efforts will have belatedly been achieved. However, Steven has made a claim for family provision orders the need for which is no longer obviated by the roughly equal distribution of the properties as between Steven and Robert. That is partly a result of changes in Steven’s circumstances following Nada’s death, but it will also be seen that Robert’s circumstances have also changed in material ways. However, a singular feature of this matter is that the course of the litigation itself has become a paramount factor in determining the material circumstances of Steven and the other members of the Stojanovski family in ways that are relevant to Steven’s claim for further family provision.

Enforceability of testamentary agreement

42. Steven’s claim for an order enforcing the testamentary agreement remains a distinct claim in these proceedings and must be dealt with separately. It will be convenient to deal with that claim now.

43. Steven’s third further amended statement of claim was the operative pleading at the commencement of the first stage of the hearing of these proceedings. In practical terms, the forensic contest concerning the enforceability of the testamentary agreement was completed in that part of the hearing. The completion of submissions was left to the second stage of the hearing.

44. In prayer 9A of his third further amended statement of claim, Steven claimed a declaration that Robert holds his half-interest as joint tenant in Jersey on a constructive trust for the benefit of Steven.

45. Steven pleaded the basis of this claim in pars 2C and 2CA of his pleading. He alleged an agreement on 3 January 2006 between Nada, Robert and himself, or alternatively Nada and Robert, which was partly oral and partly in writing. No particulars were given or evidence tendered that Steven was present at or involved in this arrangement. The written part of the agreement was the document that I have called the testamentary agreement. Steven also relied upon the discussion that took place at the time between Nada and Robert in the presence of Messrs Fuzevski and Dunevski.

46. In his defence to the third further amended statement of claim, Robert simply denied the allegations in pars 2C and 2CA. Angelina’s defence was in the same terms.

47. It is appropriate at this point to deal with the issue of Steven’s standing to enforce the testamentary agreement. The agreement was made between Robert and Nada. Strictly, the only person who has standing to enforce the testamentary agreement is Jordan, as Nada’s executor. Steven apparently ignored the issue of standing when he amended his statement of claim in these proceedings to seek an order enforcing the testamentary agreement. In prayer 6 of his fourth further amended statement of claim filed on 16 March 2017, Steven applied under Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 7.10(2)(b) for an order appointing him as the representative of Nada’s estate for the purpose of the claim for the enforcement of the testamentary agreement against Robert. During the course of a number of preliminary hearings that took place before the second stage of the hearing, I indicated that I would make the order sought by Steven. I did so as an expedient, as Jordan had apparently become incompetent, although there was no evidence that proved Jordan's incapacity to represent Nada's estate in the proceedings. The transcripts show that I and the parties had thought that an order was formally made that Steven be given leave to represent the estate. I have not been able to find a record of that order in the Court's file. Accordingly, for more abundant precaution, I will make that order when I deliver this judgment. No party opposed that course of action being taken by the Court.

Trustees concede the testamentary agreement claim

48. When the sequestration order was made against Robert, his interest in Jersey vested in the trustees. Jordan had transmitted Nada’s joint interest in Jersey to Steven and Robert, so that they held Jersey as joint tenants. Robert had not purported to transfer his interest in Jersey to Angelina. Relevantly, in their defence to the fifth further amended statement of claim, the trustees admitted the allegation in par 2C as it then stood, which effectively admitted that, in consideration of Nada’s promise to give her interests in Breakwell and Kemp to Robert, Robert promised to transfer his one half-share in Jersey to Steven. By his fifth further amended statement of claim, Steven had expanded the detail of his allegations in support of this aspect of his claim. It is not necessary to set out those details. It is sufficient to note that, in pars 9 to 11 of their defence, the trustees generally admitted the allegations, with the consequence that they accepted that Steven was beneficially entitled to Robert’s half-share in Jersey. The trustees therefore accepted that Steven was entitled to an order that the trustees transfer that interest in Jersey to Steven, which is a claim introduced by Steven in prayer 9B of his fifth further amended statement of claim.

Angelina’s standing to resist the testamentary agreement claim

49. As Robert’s half-interest in Jersey has vested in the trustees, it might have been thought that they had the sole right to contest Steven’s claim, and that, as they had elected not to do so, Steven was entitled to the relief sought. Robert, being bankrupt, did not take part in the second stage of the hearing, although he gave evidence. However, Angelina claimed that she had a sufficient interest to resist Steven’s claim and she did so.

50. Steven’s position was that Angelina did not have standing to resist Steven’s claim in respect of the transfer of Robert’s half-interest in Jersey to Steven, and that the Court should not hear her on the issue. Steven submitted that Angelina did not have standing because she did not have any proprietary interest in Jersey. Her only potential interest was as a former wife of Robert who, as a result of subsisting proceedings in the Family Court for orders in relation to the matrimonial property, could potentially gain a proprietary interest in Robert’s share in Jersey as a result of such an order, or alternatively, the order eventually made by the Family Court may be more favourable to Angelina if Robert continued to own his share in Jersey at the time that order was made. Steven submitted that these interests were not sufficient to give Angelina standing to contest Steven’s beneficial entitlement to Robert’s half-share in Jersey. The trustees, properly, were neutral on this issue.

51. The Court attempted to resolve all issues of standing at a hearing of motions that took place before the beginning of the second stage of the hearing. For practical reasons, it was not feasible for the Court to decide the issue of Angelina’s standing before the resumption of the hearing. Also for practical reasons, it became necessary to permit Angelina in fact to contest the issue, as if she had standing, on the basis that the Court would reserve its decision on the question until it delivered these reasons for judgment. Consequently, Angelina has in fact had the opportunity to resist this aspect of Steven’s claim.

52. The question is whether, in deciding whether Steven is entitled to enforce the testamentary agreement, the Court should ignore Angelina’s opposition to that claim, and the submissions she made in support of her opposition.

53. The issue is not whether Angelina was entitled to be joined as a party to Steven’s claim to enforce the testamentary agreement. Angelina is already a party to these proceedings. She was joined as fourth defendant by an order made by Pembroke J on 9 August 2013, following Steven’s discovery that Robert had transferred his remaining interests in Breakwell, Kemp and Morts to Angelina. She was properly joined because Steven seeks proprietary relief against those properties in these proceedings. It is important to note that Angelina’s joinder was not conditional, and did not restrict her standing to participate in these proceedings to any particular issues. Consequently, Angelina in her defence denied Steven’s entitlement to enforce the testamentary agreement.

54. As Angelina is already a party, the question is whether she has standing to resist the enforcement of the testamentary agreement, given that the trustees, as the only persons other than Steven with a present proprietary interest in Jersey, have admitted his entitlement to the relief that he claims on the pleadings.

55. It is relevant to this question that, without opposition from Steven, at the beginning of the first stage of the hearing, the counsel and solicitor who originally represented Robert were given leave to represent Angelina instead. From that point, Angelina has already conducted the defence of Steven’s testamentary agreement claim in the interests of herself and Robert. This is therefore a special case, where the question of standing raised by Steven requires the Court to consider whether the Court should decline to entertain Angelina’s submissions on the testamentary agreement issue for the reason that Robert lost whatever interest he had in Jersey as a result of his bankruptcy and that the trustees became entitled to that interest.

56. Further, in some respects, Steven’s testamentary agreement case and his family provision case are intertwined, in that the outcome of the former may affect Steven’s chances of succeeding on the latter case. It may be that the defence of the family provision case may be enhanced if Steven succeeds on his testamentary agreement case, because his need for further provision will thereby be reduced. But it remains true that the Court cannot readily separate the two claims made by Steven.

57. It will also be appropriate to consider the nature of Angelina’s personal interest in resisting Steven’s testamentary agreement case.

58. It is not necessary for the Court to decide whether Angelina would have had a right to be joined as a party to the testamentary agreement case, if she had not in fact been joined as a party. It may be that Angelina would not have had a right to be joined, as Angelina does not have a present right or interest in Jersey: see News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 523-525; Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56 at [76]-[81; and]. John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [131]. Angelina also does not have any present right or interest in property associated with Jersey that would be affected by the making of an order that the trustees’ interest in Jersey is held on trust for Steven: see Boyd v Thorn (as Executrix of Estate of McAuley) [2016] NSWSC 588; (2016) 18 BPR 35,941. The issue of when a person has a right to be joined as a party to a claim is not without difficulty, and is best not pursued given that Angelina is already a party.

59. However, Angelina’s interest in Jersey is not as remote as may have been the interests of Robert’s unsecured creditors, whose rights consisted of proving Robert’s indebtedness and obtaining a sequestration order against him, for the purpose of obtaining a benefit through the actions of the trustees.

60. Angelina is a party to existing proceedings in the Family Court for the making of a property settlement order under s 79 of the Family Law Act 1975 (Cth) (Family Law Act). The effect of s 79(1) is that, in property settlement proceedings, the Family Court “may make such order as it considers appropriate…(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage – altering the interests of the bankruptcy trustee in the vested bankruptcy property; including…(d) an order requiring…(ii) the relevant bankruptcy trustee (if any); to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.” “Vested bankruptcy property” is defined as property of the bankrupt that has vested in the bankruptcy trustee under the Bankruptcy Act 1966 (Cth).

61. Further, the general notion of property that may be the subject of a property settlement order has been held to include the interest of a bankrupt in the surplus after payment of creditors and administration of the bankrupt’s estate: see for example In the marriage of Reed (1989) 98 FLR 268; 13 Fam LR 566.

62. Although the detail and possible outcomes of the Family Court proceedings between Angelina and Robert were not explored in these proceedings, as I understand it, it was accepted that the Family Court had jurisdiction to make a property settlement order that disturbed the effect of the Bankruptcy Act investing Robert’s half-interest in Jersey in the trustees. It would follow that, if this Court made an order that the trustees transfer the half-share in Jersey vested in them to Steven, that might have the effect of defeating a claim that is legitimately open to Angelina under the Family Law Act in her subsisting proceedings against Robert in the Family Court.

63. In my view, given that Angelina is an existing party, who was the party that actively defended Steven’s testamentary agreement claim up to the point when Robert was made bankrupt and his interest in Jersey vested in the trustees, and is accordingly at risk for an adverse costs order if that claim succeeds, the question of her standing to make submissions in resistance to the testamentary agreement claim depends upon considerations of procedural fairness and natural justice, and not strict notions of entitlement to joinder based upon the nature and existence of any right in Angelina to an interest in Jersey. In simple terms, the question is whether, on the particular facts of this case as considered above, natural justice and procedural fairness justify the Court permitting Angelina to finish her defence of the testamentary agreement claim in which she engaged before Robert’s bankruptcy.

64. The parties did not refer the Court to any authority that is of assistance in answering this question. The decision of Mason CJ and Deane and McHugh JJ in Annetts v McCann (1990) 170 CLR 596 at 599-601; [1990] HCA 57 may be of some guidance. That case concerned whether a coroner was required to give the parents of two boys who had died a right to make submissions at the inquest, after the parents had been granted a right to be represented. The plurality held, at 599, that the grant of representation “created a legitimate expectation that the Coroner would not make any finding adverse to the interests which they represent without giving them the opportunity to be heard in opposition to that finding”, and that, accordingly, the parents had a limited common law right to be heard. Their Honours held, however, at 601, that the parents’ entitlement to make submissions only extended to matters which were identified as a possible source of adverse findings concerning their interests. While this context is relatively remote from the present one, I consider that the reasoning of the plurality supports a conclusion in this case that the consequences of Robert’s bankruptcy should not include the Court depriving Angelina of the right to make submissions in opposition to Steven’s testamentary agreement case, in conclusion of the defence that she had previously been allowed to conduct, and given the real interest she has in Jersey, albeit that it is an interest that is contingent on a particular exercise by the Family Court of its jurisdiction in the existing proceedings. Put another way, I consider that principles of natural justice and procedural fairness, in all of the complicated and inextricable circumstances of these unusual proceedings, require that Angelina have or otherwise be granted a right to make submissions, and a right to have this Court actually consider those submissions, in relation to the testamentary agreement case.

Consideration of the merits of the testamentary agreement claim

65. I will now consider Steven’s claim to enforce the testamentary agreement on its merits.

65. It will be convenient to set out again the terms of the statutory declaration signed by Robert which is said by Steven, by reason of the circumstances in which it was signed and its reference to Nada’s will, to give rise to the testamentary agreement:

TO WHOM IT MAY CONCERN

I Robert Stojanovski of [redacted] Morts Road Mortdale 2223 solemnly declare and give my share of the property known as [redacted] Jersey Avenue Mortdale 2223, (ref: Lot [redacted]) to my eldest brother Steven Stojanovski of [redacted] Milsop Place Mortdale 2223 in line with my mother[']s last will.

67. The document refers to Nada’s will, which specifically stated the following in clause 4A in respect of Nada’s stated intention that Jersey would be given to Steven:

…[This property is currently under three (3) names, namely myself Nada Stojanovski, my son Robert Stojanovski and my other son Steven Stojanovski.] In line with my wishes Robert Stojanovski is to transfer his share in this property to his brother Steven Stojanovski.

68. In his submissions, Steven founded his claim to enforcement of the testamentary agreement on the decision of the High Court in Birmingham v Renfrew (1937) 57 CLR 666; [1937] HCA 52. That is a seminal Australian case dealing with the enforceability of mutual wills and the consequences of a person making a binding agreement not to change his or her will once made. It is not directly applicable in the present situation. While it is true that it is Steven’s case that Nada agreed to make a will giving specific benefits to Robert in return for Robert’s agreement to transfer a specific interest in his property to Steven following Nada’s death, Nada complied with her end of the bargain. She made a will that gave Robert the promised benefits and there is no issue in this case of a testator not having honoured a promise in respect of the testator’s will. The present case is, more simply, that Robert made a promise by means of his signing the statutory declaration to Nada to transfer to Steven on Nada’s death the interest that he would have in Jersey following Nada’s death, by reason of his existing joint tenancy and the acquisition of half of Nada’s interest by survivorship. That promise was supported by the consideration provided by Nada’s executed promise to leave her interests in Breakwell and Kemp to Robert in her will.

69. Properly, no suggestion was made in this case that Robert’s promise to transfer his interest in Jersey was not sufficiently evidenced by writing, as the terms of the statutory declaration were sufficiently clear, and were cross- referenced to the will, which provided evidence of the balance of the essential terms of the contract.

70. There is no doubt that Robert signed the statutory declaration, as he ultimately gave evidence of the circumstances in which he did so. I will deal with that evidence below.

71. Steven called as witnesses to the circumstances in which Robert signed the statutory declaration and Nada executed her will the witnesses who were present and signed one or both of the two documents.

1. Mr Dunevski’s evidence

72. Mr Jonce (John) Dunevski is a member of the Australian Macedonian community who was, with his wife, a friend of Nada. He provided a brief affidavit dated 11 March 2013, concerning the circumstances in which he came to be a witness to the statutory declaration signed by Robert as well as Nada’s will. Mr Dunevski said that he was a Justice of the Peace for about 15 years until 2007 or 2008.

73. According to Mr Dunevski, he learned that Nada was very ill with cancer and, on 3 January 2006, he and his wife made an unplanned visit to Nada in hospital. They had flowers and chocolate for Nada.

74. When Mr Dunevski and his wife entered Nada’s hospital room, Nada was in bed and her brother Pande (Peter) Fuzevski and his wife were in the room with her. While they were talking, Robert entered the room. After some introductions and discussion, Nada took a paper from her handbag and passed it to Robert. She said, according to par 8 of Mr Dunevski’s affidavit:

“Robert, I want to give you my house and I want to give Steven the other house he is living in. If you agree with this, please sign it”

75. Mr Dunevski, at par 9, said that he saw Robert read the paper and say words to the effect of: “O.K, I will sign this”.

76. Nada then asked Mr Dunevski whether he would witness Robert’s signature. Mr Dunevski agreed. Mr Dunevski said that it was his invariable practice to carry with him his Justice of the Peace stamp in his pocket. He asked Robert whether he had read and understood the paper, and Robert answered yes. Robert then signed the statutory declaration and Mr Dunevski applied his Justice of the Peace stamp and witnessed the document.

77. Mr Dunevski said that he believed that Robert signed the paper of his own free will and that he was not forced to sign the statutory declaration.

78. After Robert left the room, Nada asked Mr Dunevski to witness her will and he did so.

79. Mr Dunevski was thoroughly cross-examined by counsel for Angelina. Even though he had apparently lived in Australia for many years, Mr Dunevski spoke in broken English. It was suggested to him that he could not really have a recollection of the matters the subject of his affidavit, which was prepared about seven years after the statutory declaration was signed. It was also suggested that Mr Dunevski did not make an unplanned visit to the hospital, as that would have been too great a coincidence, given that Mr Dunevski was a Justice of the Peace and had his stamp with him.

80. In some ways Mr Dunevski’s evidence was unsatisfactory, as he appeared not to understand simple questions, which had to be repeated. He also seemed to resist giving straightforward responses, as he appeared to take exception to the suggestion made by the cross-examiner that his evidence was untrue or his recollection imperfect. However, Mr Dunevski appeared to me to be a candid witness, and I did not view his evidence as being evasive. Rather, I considered that he appeared to be overwhelmed by the circumstances and the consequences of his lack of fluency in responding in English to the questions.

81. Mr Dunevski adhered to his evidence and his repetitions of that evidence were in my view consistent. Mr Dunevski adhered to a recollection of the events which was in my view plausible given the simplicity of what occurred.

82. On a number of occasions, the cross-examiner suggested to Mr Dunevski that Robert resisted signing the statutory declaration on the ground that the subject was an important legal matter for which Nada needed legal advice, and that there was an argument between Robert and Mr Fuzevski as to whether it was appropriate for Robert to sign the document. Mr Dunevski denied the suggestion.

83. Eventually, Steven’s counsel objected to this line of questioning, on the reasonable ground that Robert and Angelina had not pleaded that his will was overborne when he signed the statutory declaration, that his defence was a simple denial of the allegation that he had entered into the testamentary agreement, and his own evidence was limited to the statement that he could not recall the events deposed to by Mr Dunevski.

84. A discussion then ensued between the bench and counsel for the parties in which, in brief, Angelina's counsel said that he was cross-examining in reliance upon evidence given by Robert in an affidavit dated 29 October 2012 in these proceedings that had not been included in the Court Book. Counsel said that Steven had notice of the contents of the affidavit, and there would need to be an argument about whether Robert would be given leave to rely upon it.

85. In brief, after further discussion, I said to counsel that he would have to apply to rely upon the affidavit, given that Robert had not given notice to Steven that he would seek at the hearing to rely upon an affidavit that had not been included in the Court Book. Counsel then stated that he had no further questions.

(2)     Mr Fuzevski’s evidence

86. Mr Pande (Peter) Fuzevski was Nada’s brother. He said that he had a close relationship with Nada from his childhood until the day Nada died. Mr Fuzevski migrated to Australia in about 1966.

87. In relation to the circumstances in which Robert signed the statutory declaration on 3 January 2006, Mr Fuzevski said, in his 11 March 2013 affidavit, that he was visiting Nada in hospital with his wife, when a man he recognised as Mr Dunevski entered the room. Robert arrived after about a half an hour or so.

88. After some discussion, the following occurred, according to Mr Fuzevski:

[22]…Nada pulled out an envelope from the bag. She then looked at Robert and said words to the effect of:

Nada said:   “Robert, please read this paperwork, I want to give Steve Milsop, so that he has a nice house and I want to give you Breakwell, so that you have a nice house and Steve will get George Street and you will get Kemp Street. That way, you both get the same thing. I do not want to mix both of you in Milsop”.

Robert said:   “Mum, we already worked out months ago who’s gonna get what and we already know”.

I then said to Robert:

“Well Robert, just look at the paperwork your mum’s prepared and see if that’s right”.

Robert said:    “We already know who’s gonna get what properties”.

Robert then picked up the paperwork and started reading it. After he read the paperwork, Robert said words to the effect of:

“Okay, no problems, I’ll sign it”.

Robert then signed the paperwork and then my sister asked John to witness the paperwork. John witnessed the paperwork. My sister then took the paperwork and put them [sic] back in the envelope.

89. Mr Fuzevski said that, at the time Robert signed the paper, he did not appear concerned about it. The signing of the document was very casual and very normal. Mr Fuzevski did not observe or notice that Robert was uncomfortable with signing the paperwork.

90. Mr Fuzevski said, at par 25, that he recalled Nada saying the following:

“I just want to make sure that everything is divided equally between my sons. I want Stephen [sic] to have a nice house and I want Robert to have a nice house. Stephen [sic] can have the house he built at Milsop and Robert can have Breakwell. Robert can have Kemp Street and Stephen [sic] can have George Street. That way, everything is equal”.

91. Mr Fuzevski’s English was also not entirely fluent. Mr Fuzevski claimed to have a good recollection of the events described in his affidavit, even though he acknowledged they had happened about 10 years before he gave his evidence, and he had refreshed his memory by looking at his affidavit a few days before he gave evidence.

92. The suggestion was made to Mr Fuzevski in cross-examination that he had understated his relationship with Mr Dunevski, when he said that he only saw Mr Dunevski on special occasions in the Macedonian community about once every three months. The basis of this suggestion was that Mr Dunevski must have been a close family friend, because Mr Dunevski had been the best man at Mr Fuzevski’s son’s wedding. Mr Fuzevski adhered to his evidence.

93. Mr Fuzevski denied the suggestion that he asked Mr Dunevski to visit the hospital because he knew that Mr Dunevski was a Justice of the Peace.

94. The cross-examiner put to Mr Fuzevski that he called Robert to ask him to go to the hospital because Mr Fuzevski wanted Robert to sign the statutory declaration. Mr Fuzevski responded by saying that Nada probably called Robert, and that Mr Fuzevski had not seen the document before he went to the hospital.

95. It was put to Mr Fuzevski that he told Robert to sign the statutory declaration. Counsel for Steven objected to the question, on the same grounds as have been outlined above in relation to the cross-examination of Mr Dunevski; being that Robert had not given evidence that he signed the statutory declaration under compulsion. The Court allowed the question, after it was told by Angelina's counsel that he had advised counsel for Steven that he intended to apply to read five paragraphs of Robert’s 29 October 2012 affidavit. The Court ruled that the significance of Mr Fuzevski’s response to the proposition put to him would be affected by whether or not the Court allowed Robert to rely upon the relevant part of the 29 October 2012 affidavit.

96. Mr Fuzevski’s response was as follows (TA97.31): “My sister said, “Read it carefully,” and nobody force[d] him to sign it.” The cross-examination continued briefly, but Mr Fuzevski denied that he had an argument with Robert about signing the statutory declaration.

97. Although Mr Fuzevski had some difficulty in responding to the questions put to him in cross-examination because of his somewhat broken English, I considered Mr Fuzevski to be a satisfactory witness. I accept that he was telling the truth about the essential elements of the events that happened in Nada’s hospital room on 3 January 2006. I find that his evidence was consistent with that given by Mr Dunevski, and no suggestion was made to either witness that they had cooperated in formulating the evidence that they gave.

(3)     Robert’s evidence

​

98. Robert was ultimately permitted to read pars 3 to 6 of an affidavit made by him on 29 October 2012, without objection (see TA282.44). Relevantly, Robert’s evidence was as follows:

4. Prior to her death my mother already had an existing Will. Despite this she said to me words to the following effect:

Mother:    “I need a solicitor to draw me up a Will.”

I contacted a number of solicitors prior to her death. They were prepared to come to the hospital to speak to my mother about her Will.

5. On 3 January 2006, I received a call from my uncle, Pande Fuzevski (“Peter”). I attended the hospital on the day to visit my mother and my uncle. On arriving at the hospital, my Uncle Peter produced a document. I had never seen that document prior to that moment and he said to me words to the following effect:

Uncle:       “Sign this document.”

6. At that time, my uncle also produced another document. He said to me words to the following effect:

Uncle:      “This is your mother’s Will that I have drawn up. I have a Justice of the Peace here who can sign after your mother signs. He can also witness your signature.”

Me:      “I am not going to sign anything. Mum should have a solicitor handle these matters. Not you or your friend.”

Uncle:      “Sign the document.”

My uncle and I argued. At that time, my mother became very agitated and was crying. I did not want to see her more upset. I knew she was dying. I signed the document and walked out. My uncle said to me words to the following effect:

Uncle:      “Don’t tell anyone about this. Don’t tell your wife.”

The Will and the document signed by me on 3 January 2006 have been provided to the Court.

99. Robert’s 29 October 2012 affidavit was then handed up to the Court and included in the Court Book in due course. The affidavit was sworn in the present proceedings, and it is not clear why Robert did not notify Steven that he would seek to rely upon the affidavit at the hearing. It appears that the oral evidence of Mr Dunevski and Mr Fuzevski was given in circumstances where Steven did not appreciate that Robert would seek to rely upon the evidence that is set out above.

100. In cross-examination, Robert substantially adhered to his version of the events that occurred in Nada’s hospital room on 3 January 2006 (TA322.37-328.50). Robert claimed that, when he signed the statutory declaration, he had no knowledge that Nada was waiting to make her will dependent upon whether he did sign it (TA328.6).

101. I do not think that it is necessary for the Court to decide on the basis of credit whether or not there was any resistance by Robert to his signing the statutory declaration. It is clear that he signed it. Given the passage of time and the possible difference in perspective of the witnesses, it is possible that they could honestly have had different recollections about Robert’s reaction to the request that he signed the statutory declaration.

102. I should record, however, that I consider that the credibility of Robert’s version of the events is diminished by his responses to Mr Dunevski’s and Mr Fuzevski’s evidence, in pars 42 and 51 of his 17 November 2016 affidavit, in which he did no more than “deny that the conversation alleged there took place”.

Conclusion on enforceability of testamentary agreement

103. It remains the case that the Court has received Robert’s evidence in his 29 October 2012 affidavit in circumstances where Robert’s only pleaded response to Steven’s testamentary agreement case was to deny the allegation that he entered into the testamentary agreement. Robert has not pleaded any conventional basis for the setting aside of the testamentary agreement, if it is proved to have been made by him. The evidence belatedly tendered by Robert appears to be most consistent with a claim that he signed the statutory declaration under some emotional duress. However, the evidence appears to fall far short of circumstances that would vitiate the testamentary agreement.

104. Even if Mr Fuzevski produced the document to Robert rather than Nada, I would infer, from Robert’s evidence that Nada started to cry when Robert resisted signing the document as demanded by Mr Fuzevski, that Nada wanted Robert to sign it. I would find as a fact, if I accepted Robert’s affidavit, that Nada wanted Robert to sign the document to complete her testamentary arrangements. Although Robert said: “I signed the document and walked out”, he did not say that he did not read it. In the absence of evidence to the contrary, if I were to accept Robert’s evidence, I would infer that he read the statutory declaration before he signed it. He gave evidence that Mr Fuzevski had produced Nada’s will in circumstances that would suggest that Mr Fuzevski gave Robert both the will and the draft statutory declaration. I would infer that Robert read both documents, at least sufficiently to know that one effect of both of them was that Steven would ultimately receive Jersey and George. If Robert had not read the documents sufficiently to learn this fact, there would have been no reason for him to have objected as strongly to signing the statutory declaration as he claims to have done.

105. This evidence is sufficient to establish that, even if under protest, Robert signed the statutory declaration knowing that the effect of the will and the testamentary agreement was that he would be left Breakwell and Kemp under the will, and Steven would receive George under the will and Robert’s interest in Jersey by reason of the performance of the testamentary agreement.

106. As Robert said in his 29 October 2012 affidavit that, after Mr Fuzevski had produced and asked him to sign the statutory declaration, Mr Fuzevski “produced another document” and said “This is your mother’s Will that I have drawn up”, I would not accept Robert’s evidence in cross-examination (at TA328.6 and 328.22) that Robert did not know that Nada intended to make her will following upon Robert’s signing the statutory declaration.

107. Robert’s own evidence shows that he did nothing to challenge the testamentary agreement before Nada’s death, and was content to receive the gifts made to him under the will in circumstances where he knew that Nada had believed that Robert would honour his obligation under the testamentary agreement. Even if Robert did sign the statutory declaration under some emotional pressure from Nada, I do not think that this affects the validity of the testamentary agreement in all the circumstances.

108. I therefore find that the testamentary agreement remains binding and Steven, as the representative in these proceedings of Nada’s estate, is entitled to an order that Robert (through the trustees) specifically perform his promise to transfer the whole of his interest in Jersey to Steven.

Family provision claim – statutory regime

109. Although the making by this Court of an order against the trustees that they specifically perform the testamentary agreement will have the nominal effect that Nada’s testamentary intentions have been implemented, that will not be the end of the matter. Because of events that have happened since Nada’s death, Steven now pursues his family provision claim in addition to his claim for the enforcement of the testamentary agreement.

609. Jovanka stated in the affidavit that it was provided in support of a costs application made by her against Robert, Angelina and the trustees. This claim is supported by copies of Jovanka’s solicitor’s tax invoices, which on a brief perusal appeared to support the amount of her claim.

610. The Court has not yet reached the stage where it is determining the costs orders that should be made in these proceedings. That is likely to be a complex exercise, and will be commenced after all parties have been given an opportunity to provide submissions to the Court. It will be advantageous to Jovanka if she is able to obtain some extra legal assistance in order to work out the most appropriate basis for her to justify her costs application.

611. As Jovanka was joined as an interested party, and it does not appear that any other party has sought orders against her personally, the justification for Jovanka incurring the legal fees that she has incurred is not clear. By this statement, I do not suggest that Jovanka may not be entitled to a costs order against some party or parties in respect of her legal costs. She does appear to have incurred substantial legal costs. It is just that without a proper explanation provided to the Court, in the usual course by a lawyer who understands the relevant principles, there may be an unfortunate risk that the Court will not learn the true position, which may jeopardise Jovanka’s prospects of obtaining the benefit of any costs order to which she should be entitled.

The result

613. The result of these proceedings is that Steven has succeeded on his testamentary agreement claim, but the Court will dismiss his family provision claim.

614. It will be necessary for the parties to confer, and to agree short minutes if possible, or if not, propose appropriate short minutes of order for the consideration of the Court.

615. It is probable that the orders that the Court should make will need to deal with consequential matters to give effect to the primary orders. There may also be outstanding subsidiary issues with which the Court has not yet dealt. The Court will be open to making appropriate orders to ensure that George is effectively transferred to Steven. There may be residual issues that remain to be dealt with in the administration of Nada’s estate, given the apparent incapacity of Jordan. It will also be necessary for the orders that the Court makes to provide for an appropriate mechanism to deal with all costs issues that arise.

616. The parties should include an order under UCPR r 7.10(2)(b) appointing Steven as the representative of Nada’s estate for the prosecution of the testamentary agreement claim.

617. I do not know whether it is necessary for the Court to make any further orders at this stage in respect of the cross-claim filed by the trustees on 15 October 2018, the substance of which has already been dealt with by the Chief Judge.

618. The parties are directed in the first instance to attempt to deal with the outstanding issues within the next 14 days. I appreciate that the parties may need a longer time, but I want to be able to monitor the parties’ progress.

619. It will be apparent from the detailed consideration of the history of this dispute that I have set out above that I consider that both Steven and Robert, as well as their lawyers from time to time, have made unfortunate decisions that have led to the parlous position in which Steven and Robert, as well as Jovanka and Angelina, now find themselves.

620. No good will be served by my listing those decisions, and it will be sufficient to note that Robert, and then Angelina in his stead, have fought Steven's claim that Robert should honour the promise that he made to Nada in the testamentary agreement to the end. On his part, Steven did not seek to enforce the testamentary agreement in a direct and efficient way, but has pursued a family provision claim that transformed into a claim that he be given provision at Robert's expense to pay all of the crippling legal costs that Steven has incurred, only for that claim to be abandoned at virtually the last minute.

621. All of the parties now face the reality that the determination of the appropriate costs orders will be a complex, problematic and expensive exercise. These tortuous proceedings have not resolved the dispute between the parties. When the necessary costs orders have been made, the parties will face the expense and delay involved in the assessment or taxation of those orders. While it will be a matter for the discretion of the Family Court, it is likely that the resolution of the matrimonial property proceedings will continue to be stayed for the time that it takes for the nature and value of the matrimonial property to be ascertained.

622. In the meantime, the trustees will continue to do their duty, which will necessarily involve their costs and expenses eating away at Robert's estate.

623. The parties have reached a real impasse, given what remains to be done to resolve these proceedings, and the possibility that the viability of the exercise will be undermined by the entitlement of Steven's lawyers to take a substantial proportion of his assets in payment of his fees on the one hand, and the effect of Robert's continuing bankruptcy on the other

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Decision last updated: 04 December 2019