Vukic v Luca Grbin & Ors; Estate of Zvonko Grbin (No. 2)

[2006] NSWSC 212

Reported Decision: 65 NSWLR 370

New South Wales

Supreme Court

CITATION:	Vukic v Luca Grbin & Ors; Estate of Zvonko Grbin (No. 2) [2006] NSWSC 212
HEARING DATE(S):	10 February 2006
JUDGMENT DATE :	10 February 2006
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	02/10/2006
CATCHWORDS:	SUCCESSION – FAMILY PROVISION AND MAINTENANCE – TAXES AND DUTIES – STAMP DUTIES – Vesting order under Family Provision Act – whether liable only to nominal duty as transfer by legal personal representative to beneficiary under trust in will – held, it is.
LEGISLATION CITED:	Duties Act 1997, ss 8(1)(b)(v), 63(a)(i) Family Provision Act, ss 14(1), 15(1)(a)(v) Trustee Act, s 78(2) Uniform Civil Procedure Rules, r 36.16(1)
PARTIES:	Ina Vukic (Plaintiff) Luca Grbin (First Defendant) Ante Grbin (Second Defendant) Jagoda Hecimovic (Third Defendant)
FILE NUMBER(S):	SC 1532/2004
COUNSEL:	M Dempsey SC & A Seward (Plaintiff)
SOLICITORS:	John S Zouroudis & Co (Plaintiff)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY JUDGE LIST

BRERETON J

Friday 10 February 2006

1532/04 Ina Vukic Estate of Zvonko Grbin v Luca Grbin & 2 ors

JUDGMENT (ex tempore)

1 HIS HONOUR: On 9 February 2006 I gave judgment and made orders which included an order to the effect that by way of provision for her maintenance and advancement in life, the plaintiff receive from the estate of the deceased the property subject to charges of $100,000 in favour of each of the first and third defendants, and, pursuant to Family Provision Act, s 15(1)(a)(v), that the property vest in the plaintiff subject to those charges.

2 Those orders have not yet been entered and, at the request of junior counsel for the plaintiff, I earlier today directed that they not be entered until further order. When they were made, the Court had not adverted to potential stamp duty consequences and burdens which might be visited on the plaintiff by the vesting order, Counsel for the plaintiff having, at that stage, formed the view, on instructions, that there would be no relevant stamp duty consequences.

3 Since then, the prospect has arisen that there might be a stamp duty burden for the plaintiff in respect of the vesting order. That arises in the following way: Duties Act 1997, s 8(1)(b)(v), has the effect that duty is imposed on a vesting of dutiable property by or as a consequence of an order of a court. Dutiable property includes land in New South Wales.

4 However, Duties Act, s 63, provides that only nominal duty of $10 is chargeable in respect of a transfer of dutiable property not made for valuable consideration by the legal personal representative of a deceased person to a beneficiarym being a transfer made under and in conformity in the trust contained in the will of the deceased person, or arising as on intestacy. Other parts of s 63 make clear that its overall intent is to exclude transfers and transmissions of dutiable property from a deceased estate to the persons beneficially entitled under the will or on intestacy from ad valorem duty and subject then to only $10 duty. The section, however, does not, on its face, cover a transfer or transmission effected by way of vesting, in the absence of the legal personal representative being a party to it, although it is very much to be doubted that such a situation was intended to be excluded from its provisions.

5 Family Provision Act, s 14(1), provides that an order made by the Court for provision out of the estate of a deceased person shall, except insofar as the Court otherwise directs, take effect as if the provision had been made, where the deceased person died leaving a will, in a codicil to the will, or, where the deceased person died intestate, in a will of the deceased person. The effect, therefore, of order 2 made by me on 9 February, is that those provisions take effect as if they were in a codicil to the deceased's will. A transfer of the house to the plaintiff will, therefore, be a transfer made under and in conformity with the trusts contained in the will of the deceased person, for the purposes of Duties Act, s 63(a)(i).

6 The vesting order which I made was made under s 15(1)(a)(v) of the Family Provision Act. The same section provides, by sub-section (2), that the provisions of s 78, except sub-section (1), of the Trustee Act, apply to and in relation to an order made under sub-section (1), for the vesting of the property in a person, in the same way as they apply to and in relation to a vesting order referred to in those provisions, and, in the case of s 78(2) of the Trustee Act, as if the provisions of sub-section (1) and the other provisions of the Family Provision Act were contained in Pt 3 of the Trustee Act. In the Trustee Act, s 78(2) provides that a vesting order shall have the same effect as if the trustee or other person to whose rights or supposed rights provisions of Pt 3 of the Trustee Act respectively relate had been an ascertained and existing person of full capacity and had executed a conveyance or release to the effect intended by the order.

7 It seems, therefore, that a vesting order under the Family Provision Act has the same effect as if the legal personal representative of the deceased had executed a transfer of the property to the person in whom it vests pursuant to the order. Accordingly, by that somewhat circuitous route, the vesting order is, indeed, a transfer of dutiable property not made for valuable consideration by the legal personal representative of the deceased to a beneficiary for the purpose of the Duties Act s 63(a), or at least has effect as if it were such a transfer. On that basis, it seems to me, it is chargeable to duty only to the extent of $10.

8 However, as it is possible that minds might differ on this topic, and being informed that, if it were liable to ad valorem duty, the vesting order would attract duty in the vicinity of $31,000, it is necessary to consider what should be done in the event that it does, indeed, attract duty.

9 As it is, the plaintiff’s assets essentially comprise her flat in Zagreb, worth about $80,000, other than what she is to receive under the will. Under the orders of 9 February, she will need $200,000 to pay out the legacies charged on the house if she wishes to retain it. She is 56 years of age and has an income of about $52,000 per annum. As I have expressed in the principal judgment that income is sufficient to cover her outgoings, but there is little left over, and at her age and her stage in her career, she will not be in a strong position to borrow much more than she will need to make up the difference between the $80,000 which she has in Zagreb, and the $200,000 which she will need to acquire the outstanding interests in the house. As I have concluded that adequate provision for her proper maintenance requires the preservation for her of the ability to remain in the house, I do not think that ad valorem duty, if it is assessed against her, should be borne by her interest.

10 Accordingly, pursuant to Uniform Civil Procedure Rules, r 36.16(1), this application having been made before the judgment of 9 February 2006 was entered, I vary the orders made on 9 February 2006 by adding at the end of paragraph 2 the following:

Provided however, that if any stamp duty in excess of $10 is assessed on the vesting order contained in paragraph 3, and conditional upon the plaintiff having made all reasonable endeavours and submissions to persuade the Commissioner of Stamp Duties that the vesting order ought not be assessed with duty in excess of $10, each of the legacies referred to in orders 2(a) and 2(b) shall be reduced by one half of the duty so assessed to the extent that it exceeds $10.
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