Uglesic v Uglesic - [2010] SASC 215

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
UGLESIC v UGLESIC & ANOR
[2010] SASC 215
Reasons for Decision of Judge Lunn a Master of the Supreme Court
16 July 2010
SUCCESSION - FAMILY PROVISION AND MAINTENANCE
Claim under Inheritance (Family Provision) Act 1972 by 70 year-old son of deceased - modest net estate of $388,000 - summary determination - held plaintiff had not materially contributed to building up of the assets of the deceased - any moral obligation of deceased to plaintiff earlier in his life counteracted by failure of plaintiff to assist him later in his life - claim dismissed.

UGLESIC v UGLESIC & ANOR
[2010] SASC 215
JUDGE LUNN:
Reasons on summary determination of claim under Inheritance (Family Provision) Act 1972
Family tree

Domenik Uglesic (“the deceased”) was born in Croatia on 13 November 1919. He married his wife in Croatia. There were three children of the marriage, being the plaintiff born in 1939, Ivan born in about 1940 and Dusan, the first defendant, born in about 1954. Plaintiff has two children born in 1972 and 1975. Ivan had three children. The first defendant has two children, Bianca who was born in about 1992 and the second defendant, Adam, who was born in about 1999.
Relevant family history
The plaintiff had a primary school education in Croatia, but no opportunity to go to high school. When he was aged seventeen, he left Croatia, worked in France for almost two years and then in 1959 migrated with his brother Ivan to South Australia. In 1962 the plaintiff and Ivan sponsored their parents and the first defendant to migrate to Australia and he paid two thirds of the costs associated with this migration. Upon the arrival of the deceased in South Australia all the family lived together in rented accommodation.
The deceased required the plaintiff to hand over to him each week his wages less a small amount the plaintiff retained for pocket money. The plaintiff received full board and lodging from his parents.
In 1962 the deceased and the plaintiff jointly bought land at Ottoway on which they erected two adjoining units. They jointly borrowed a substantial, but unstated, sum of money to pay for the land and the cost of the building. Both the deceased and the plaintiff physically worked in the building of the units, and presumably in about equal proportions. In about 1964 the whole family moved into one of the units and the other unit was rented out. The deceased made the mortgage payments. In 1967 the plaintiff acquired a new car on hire purchase which apparently was paid for out of moneys obtained by the deceased from the plaintiff’s earnings. It was the only car in the family.
In about 1969 the plaintiff stopped paying his wages to the deceased and told him that he was saving money to enable him to go overseas. This upset the deceased. In about 1970 the plaintiff went to Croatia for 12 months where he was married on 30 January 1971. The deceased contributed $1,500 towards the cost of the plaintiff and his wife returning to Australia. The plaintiff and his wife lived in the same Ottoway unit as the deceased and the rest of the family for some months until the tenants left the other Ottoway unit. In 1972 the plaintiff and his wife then moved into that unit.
In 1972 the deceased paid half of the outstanding balance on the mortgage on the Ottoway units, which was about $3,000, and left it to the plaintiff to pay the balance of the mortgage. There was scanty evidence on the topic, but it seems that the deceased and the plaintiff accepted that they had each contributed half of the money repaid under the mortgage.
In about 1981 the plaintiff and his wife moved to a house at Redwood Park which they had purchased and which has since been their home. The plaintiff rented out the Ottoway unit which he had previously occupied and took the rent from it. There was significant friction between the deceased and the plaintiff’s tenants in the Ottoway unit which soured the relations between the deceased and the plaintiff.
The first defendant continued to live with his parents until he was married in 1978 and then he left home. In 1977 he had completed a university degree in Law. He was given free board and lodging by his parents. On his marriage he purchased with his wife a home at Valley View.
In the early 1990’s the deceased’s wife developed Alzheimer’s disease which became progressively worse. The deceased was her primary carer. In order to resolve the friction between himself and the tenants in the other unit the deceased offered to buy the plaintiff’s unit for $40,000. The offer was rejected as the plaintiff considered the unit was worth more than this sum. Apparently the deceased could not afford to pay more than $40,000 at that time. The deceased then decided he would be better off by selling the Ottoway units and buying the Valley View property from the first defendant who had recently purchased another house at nearby Highbury. The deceased agreed to buy the Valley View house for $125,000[1]. In September 1993 the deceased and the plaintiff sold the Ottoway units and each received about $68,000 for their respective shares. This left the deceased about $10,000 short of what he needed to pay for the Valley View property and the first defendant lent him the $10,000 which he repaid over the next three years.
[1] There is a dispute on the evidence which I cannot resolve about whether $125,000 was then the true market value of this property. The plaintiff says it was, but the first defendant says it was not and it was worth more.
In April 1994, Ivan died which distressed the deceased. In October 1996 the deceased’s wife died. He continued to live alone in the Valley View house.
On 20 June 2000 the deceased made what was to be his last Will. It appointed the first defendant to be his executor and left him the residue of the estate. He left the Valley View house to the second defendant. He did not leave anything to the plaintiff, the plaintiff’s children or the first defendant’s daughter.
After the death of his wife, the health of the deceased progressively deteriorated. He was hospitalised on a number of occasions. He became increasingly frail, and while still able to live on his own in the Valley View house, he required significant assistance in many activities which was given to him by the first defendant and his family.
The deceased died on 25 April 2009. Probate over his last Will was granted to the first defendant on 12 August 2009. The plaintiff instituted this action seeking provision for himself under the Inheritance (Family Provision) Act 1972 (“the Act”) on 6 October 2009. No other potential claimant has sought to make a claim under the Act.
Size of the Estate
The Government valuation of the Valley View house as at the date of death was $300,000. The first defendant put in evidence an appraisal from a local land agent giving an estimated selling price of $320,000 to $330,000 as at 13 March 2010. At the hearing the plaintiff sought to tender a valuation of the house from a licensed valuer. The defendants objected on the basis that they had not had prior notice of it and it was outside the time which had been allowed to the plaintiff by a direction of 22 April 2010 to serve such a valuation. I accepted the tender de bene esse. Nothing of any substance was subsequently said about this valuation. Its conclusion is not so significantly different from the appraisal figure to make it unjust to the plaintiff to exclude it from evidence. No explanation was offered about why the previous direction for service of any such valuation had not been complied with. I reject its tender.
The other assets of the deceased’s estate at the date of death totalled $73,817. Liabilities of the estate were $15,562 of which $14,269 was the anticipated stamp duty and registration fees for the transfer of the Valley View house to the second defendant. Nothing was stated about the costs of the administration. On the current value of the house this produces a net estate of between $378,000 and $388,000 subject to the costs of administration and of this action. In a comparison of cases under the Act it would be regarded as a modest estate.
Statement by the Deceased
At the time of making his last Will, the deceased also signed a document in Croatian and a translation of which is:
TESTAMENT
I leave my only home which is wholly mine, with all the possessions in the house, I leave to my grandson ADAM UGLESIC and no-one else.
I have many family in Australia, and all of those never came to see Dad and Mum to ask: How are you Dad and Mum; Do you need anything; Do you have any illness/pain Dad and Mum.
No-one else came to see us – so I wish to state that no-one is to receive that which is mine, that I made in 40 years in Australia.
No-one gave me one dollar.
Only my son Dusan, who came and visited Dad and Mum every week and whenever we needed something he was here.
That way everyone knows what the situation is.
D Uglesic [signature]
This action is being disposed of by a summary determination under 6R312(12A). Under sub-r (12A) the matter may be determined on evidence which does not conform with rules of evidence. Thus the rule against hearsay does not necessarily bar me from giving some weight to the contents of this document in the conclusions, set out below, which I have reached on the other evidence about the relationship between the plaintiff and the deceased.
Relationship between the plaintiff and the deceased
From at least 1969 when the plaintiff stopped paying his wages to the deceased the relationship between them was strained. During the 1980s it became even less cordial because of the problems which the deceased was having with the plaintiff’s tenants in the adjoining unit. The deceased was angry and upset when the plaintiff would not sell his unit to him for $40,000 and insisted on getting full value for his share of the units. The deceased was under considerable strain at that time in caring for his demented wife and thought he could expect some charity and indulgence from the plaintiff in obtaining a more suitable home which the plaintiff was not prepared to extend to him. In this the deceased had a justifiable grievance. It was only the assistance which he received from the first defendant which enabled him to complete the purchase of the Valley View property.
Up until the death of the deceased’s wife there had been regular family gatherings involving all the family members in Adelaide. After the death of the wife they became less frequent and within a few years they were not attended by the plaintiff and his family.
In his initial affidavit the plaintiff incorrectly stated the position when he said “over the last ten years I have had a good relationship with the deceased and visited him at least once a week or once a fortnight”. In that period it was generally a bad relationship. On the evidence it is clear that during the last ten years of the deceased’s life the plaintiff only visited him sporadically at the Valley View house, and nothing like once a fortnight. The plaintiff did not visit the deceased when he was in hospital, although in part this could be excused by his own medical problems and possibly on some occasions because he did not know the deceased was in hospital. However, there were several occasions on which he went to the Modbury Hospital while the deceased was there, but he did not go to see him.
In about 1999 the plaintiff’s two children had each asked the deceased for money which he had refused to give them and which was a cause of friction. The deceased had no subsequent contact with them.
The plaintiff said that he would have assisted the deceased in the latter part of his life if the deceased had asked him to do so, but he did not ever make such requests. In view of the strained relations between them, and apparently a number of arguments, it is not surprising that the deceased preferred to ask the first defendant for assistance rather than the plaintiff. However, the plaintiff must have known about many of the needs of the deceased, but he made no significant offers to assist him.
There was a dispute about whether the plaintiff had taken the deceased to various medical appointments. I find that prior to the death of the deceased’s wife the plaintiff had taken him on a few occasions to various appointments, but thereafter he did not.
Health, financial position and needs of the plaintiff
The plaintiff retired from work as an aluminium fabricator in 1989 and has since with his wife been in receipt of an aged pension, the amount of which was not stated. In 1989 he received a damages award of $58,000 for a neck injury. He used this money, and his share of the proceeds of the sale of the Ottoway units, to purchase an investment property in Modbury. He sold that in 2000 and cleared about $130,000. Of this only about $23,000 now remains in a bank account. The balance has been spent on supplementing his pension, presumably for living expenses, and on six trips to Croatia with his family and one trip to America. He and his wife own their home at Redwood Park which is valued at about $350,000 and which is freehold. He owns a car valued at about $10,000. Neither he nor his wife have any superannuation entitlements. His wife is not employed.
In November 2008 the plaintiff suffered a heart attack from which he has made a slow recovery and has consequentially developed an anxiety condition causing him agitation and apprehension for which he requires continuing medical treatment. There is no evidence about his prognosis or what, if any, expenses he has for his ongoing medical treatment.
The plaintiff did not give evidence of any particular financial needs which he has or may have in the foreseeable future.
Relationship of first defendant and the deceased
They had an extremely close relationship. During his adult life the first defendant had given considerable assistance in many ways to the deceased and apparently did everything which the deceased asked of him. He was particularly supportive of the deceased in his ill health in his last years. While the deceased undoubtedly favoured him over the plaintiff this is not to be held against the first defendant.
Financial position of the first defendant
The first defendant and his wife jointly own their home at Highbury which has a Government valuation of $580,000 and which is subject to a mortgage of about $100,000. He has about $11,000 in a bank account, but credit card and overdraft debts of about $14,000. He has a superannuation benefit which would entitle him an annual pension of about $69,000 on his retirement. His wife also has a small superannuation entitlement.
As a lawyer the plaintiff earns about $133,350 per annum and has had a bonus of $20,000 in the last financial year, but which may not continue in the future. His wife is a qualified teacher, but has not worked as such for about twenty years and has not been employed in any capacity for about the last three years.
The first defendant’s daughter is in her first year of a tourism course at Uni SA. The first defendant continues to support her financially and to pay her HECS fees. His son Adam is at St Ignatius College in year five which will cost the first defendant about $14,000 this year. He expects that Adam will matriculate at St Ignatius College and then undertake a university course for which the first defendant expects to support him. In the past few years his income has not been sufficient to meet all of the educational expenses for his children and his other outgoings and he has had to drawn down on his house mortgage to meet the deficit. He has not been able to afford any overseas holidays, but has had a few holidays interstate.
Relationship of the second defendant to the deceased
The deceased was particularly fond of the second defendant and they enjoyed a close, warm and loving relationship. The saw each other at least once a week and often more regularly.
Financial position and needs of the second defendant
The second defendant has no assets of any significance. He relies entirely on his parents for his support and ability to advance in life. The first defendant estimated that the high school and university HECS fees of Adam on present day costs would be about $150,000. It appeared the first defendant had some expectation that the income produced from the Valley View house, or the proceeds of its sale, could assist him in paying these amounts on behalf of Adam. Adam also requires orthodontic treatment, the estimated cost of which is $6,550.
Financial contribution of the plaintiff to the assets of the deceased
A major part of the plaintiff’s case was that by giving almost all of his wages to the deceased from 1961 to 1969 he materially benefitted the financial position of the deceased. Although there was some attempt in submissions to quantify the extent of this benefit, it is a futile exercise as there is not evidence on some relevant matters. A proper deduction needs to be made from the amount of the wages paid to the deceased for the board and keep of the plaintiff, but I have no idea what is a proper allowance for that in the relevant years. There is no evidence about how much money was paid to the mortgagee. I do not know whether the amounts paid by the plaintiff to the deceased, less the proper allowance for board, exceed half of what was being paid under the mortgage. The plaintiff’s counsel submitted that the deceased had profited by a surplus from what he was paid by the plaintiff against half of what was being paid on the mortgage. The evidence was that the deceased was endeavouring to pay off the mortgage as quickly as possible which suggests that any surplus may have been applied to the mortgage, half of which would have been to the benefit of the plaintiff.
The plaintiff gave some general evidence that from about 1964 until 1969 the deceased was earning about £16-17 per week compared to his own £26-27 a week[2]. He also said that after decimal conversion in February 1966 he was earning $70-80 per week and keeping about $5 a week for his pocket money. He did not say what the deceased was earning in dollar terms after decimal conversion. Presumably the earnings of the deceased had also increased as had those of the plaintiff, but there is no evidence about the amounts. The evidence on the topic was very vague and general. While I am prepared to find that in 1961 to 1969 the plaintiff was contributing more money to the household pool run by the deceased than was the deceased himself, it is impossible to say how much more was contributed by the plaintiff.
[2] Later the plaintiff conceded that he was only giving about £25-26 of his earnings to the deceased.
It seemed common ground that on a final accounting between the plaintiff and the deceased on the mortgage they had each paid half. I do not know how this was achieved. After the plaintiff stopped paying his wages to the deceased in 1969 the deceased had himself to meet all the payments due under the mortgage out of his own resources after that time, and at least until the plaintiff returned to the family home in about 1972. How this was dealt with between the plaintiff and the defendant is not disclosed in the evidence, but it would seem that it was an imposition on the deceased. It may be that any amounts payable in this period by the deceased could have been offset against any surplus which the deceased had obtained from the plaintiff prior to 1969, but I do not know. On the termination of their joint venture for the units the plaintiff insisted upon his full legal entitlement of a half of the proceeds of sale, which presumably recouped him for his contribution of half the amounts repayable under the mortgage. At that time he apparently did not contend that he was entitled to more than half of the proceeds of sale because he had contributed more than had the deceased. On the evidence I am not prepared to find that the financial and other contributions of the plaintiff toward the acquisition of the Ottoway units exceeded one half of their cost. If he did pay more than his half share, it is not likely to have been a significant amount.
Jurisdictional threshold

In order to succeed in his claim under the Act, the plaintiff must establish that the failure of the deceased to make provision for him was inadequate in all the circumstances for what was the proper level of maintenance and support appropriate for the plaintiff having regard, among other things, to the plaintiff’s financial position, the size and nature of the deceased’s estate, the totality of their relationship and the relationship between the deceased and the defendants.[3]
[3] Singer v Berghouse (1994) 181 CLR 201 at 209-10; Bowyer v Wood (2007) 99 SASR 190.
The plaintiff and his wife are moderately well off. They have expended a considerable amount of money on overseas travel. However, it could not be said that the plaintiff is so well off that he has no financial need, although it is not a pressing or substantial need.
The first defendant had a substantial moral claim on the bounty of the deceased because of the considerable assistance which he had given him over many years. The first defendant has no need of financial assistance except for the substantial future costs of educating the second defendant. Under the terms of the deceased’s Will it is possible that either the proceeds of the sale, or rental income, from the Valley View house could be applied towards the education and other expenses of the second defendant. The defendants did not seek to differentiate between such needs and whether they were needs of the first defendant or of the second defendant. However, in any event such needs of the defendants could be met even if they did not obtain their full entitlements under the Will because of some provision being made for the plaintiff.[4] Hence the competing moral entitlements of the defendants to the bounty of the deceased are not a relevant factor in determining whether the plaintiff can meet the jurisdictional threshold under the Act.
[4] No submissions were made by the defendants’ counsel about how any provision for the plaintiff, if ordered, should be borne as to between the entitlements of the defendants to the estate.
The plaintiff’s primary contention was that he had substantially assisted the deceased to build up his assets by his financial and labour contributions to the Ottoway units. I do not accept this. The plaintiff has not proved on the balance of probabilities that his financial and non-financial contributions to the deceased’s acquisition of a half interest in the Ottoway units resulted from the money which he gave to the deceased between 1961 and 1969 and his labour in building the units. I accept that it was unlikely that the deceased could have acquired his interest in the Ottoway units unless the plaintiff had also participated in the joint venture, as presumably the earnings of the deceased alone would not have been sufficient to have supported the necessary borrowings. However, as he significantly profited by obtaining his full legal entitlement on the sale of the units he has been largely recompensed for any detriment which he suffered by participating in the project. Although his counsel submitted that his lifestyle from 1961 to 1969 had been restricted because of his participation in the project, there was no evidence that he complained about it, or was not happy about it, until 1969.
The plaintiff certainly benefited the deceased by sponsoring him to migrate to Australia and by paying two thirds of the fares of the deceased, his wife and the first defendant. Up until about the death of the deceased’s wife he rendered some services to the deceased and a few sporadically thereafter. However, insofar as these benefits to the deceased might have created a moral obligation on him they were cancelled out by the plaintiff’s ungracious refusal to assist the deceased financially in his time of need in leaving the Ottoway unit and in acquiring the Valley View house.
Accordingly I find that the plaintiff has not established the necessary jurisdictional threshold for a claim under the Act and his claim must be dismissed.
I will hear the parties on costs.