Zaklan v Stojanovic - [2007] NSWSC 658

NEW SOUTH WALES SUPREME COURT

CITATION: Zaklan v Stojanovic [2007] NSWSC 658

JURISDICTION: Equity Division

FILE NUMBER(S): 2907 of 2006

HEARING DATE{S): 25/06/07

JUDGMENT DATE: 25 June 2007
EX TEMPORE DATE: 25 June 2007

PARTIES:
Vera Zaklan v Steven Stojanovic (Estate of Petar Zaklan)

JUDGMENT OF: Associate Justice Macready

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
Mr A.L. Hill for plaintiff
Mr G McGrath for defendant

SOLICITORS:
G Faura, Villari & Co
Stojanovic Solicitors

CATCHWORDS:
Family Provision. Application by widow who had separated from deceased prior to his death. Small estate. Order for legacy. No matter of principle.

LEGISLATION CITED:

CASES CITED:

DECISION:
Paragraph 24

JUDGMENT:

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE MACREADY

MONDAY 25 JUNE 2007

2907/06 - VERA ZAKLAN v STEVEN STOJANOVIC - ESTATE OF PETAR ZAKLAN

JUDGMENT

HIS HONOUR: This is an application under the Family Provision Act in respect of the estate of the late Petar Zaklan, who died on 8 September 2005. The deceased was survived by the plaintiff, his wife, and a sister, who is the deceased’s only sibling. The deceased and the plaintiff had no children.

The will of the deceased

The deceased made his last will on 30 March 2004. Under that we will he left the whole of his estate to his sister, Savka Zakula and appointed the defendant as his executor.

The estate of the deceased

The deceased, when he died, owned his unit. That has been sold and the estate has been reduced to cash. The present distributable estate is the sum of $85,782. Costs will have to come out of that. In the event that the plaintiff is successful, her costs have been estimated at $15,000 and the defendant's costs have been estimated at $19,000. Having regard to the size of the estate it is plain that the legal practitioners have capped their costs and that is pleasing to see that that matter is attended to in that way and that responsibility is accepted. Normally small estates sometimes can be used up completely by costs.

The background and the family history

The plaintiff was born in 1939 and in April 1971 after coming to Australia from Serbia she commenced work at the Crown Corning factory. She married the plaintiff on 27 January 1974 and they initially lived in a rented room in Bourke Street, Redfern. In 1978 the deceased and the plaintiff purchased a property at 5 Walker St Redfern for $26,600. They paid a deposit of $11,000 and the evidence is that the plaintiff contributed $8,000 of that and the deceased $3000. Thereafter the parties paid off the mortgage. Both were working and they managed to pay off the mortgage in about three years.
In 1984 the deceased left his employment with the Crown Corning factory and received a $20,000 payout. He travelled to Yugoslavia and took $15,000 of the $20,000 with him. A year later, at his request, the plaintiff went across and took the other $5,000 and gave it to the deceased. Apparently that was spent. The plaintiff says she only received her airfare but obviously she received something when they were both there. When they returned to Australia both the plaintiff and the deceased started receiving social security payments. In 1988 the deceased underwent a heart operation and received a disability pension. This meant that he could do less around the house to help the plaintiff. The plaintiff gave evidence, which was not contradicted, that the deceased started drinking from 1990 and became an alcoholic. There were some threats made to the plaintiff and the plaintiff was hospitalised one night during this period as a result of that conduct. She also gave evidence that the deceased would go on drinking binges and he would be away for some days at a time. She was obviously left in a situation where she had to support the household and this led her, at least for a period of six months from the end of 1992, to go back to work as a process worker.
In 1995 they sold the property at Redfern and purchased a property at Bourke Street, Canley Heights and they used part of the sale proceeds to do it up. In 1998 the plaintiff actually obtained an apprehended violence order against the deceased and eventually in May 1999 they separated. At that stage the property was sold for some $200,000, each receiving approximately $98,000. With her share the plaintiff bought a unit at 8/3-5 Church Street, Cabramatta for $72,000 and spent $16,000 on renovations. The deceased used only part of his for the purchase of a unit as he bought a unit at Lansdowne Road, Canley Heights for $68,000. This he changed in November 1999 when he purchased another unit at Cabramatta Road Cabramatta and sold his existing one.
The plaintiff gives evidence that from the time of separation, from about 1998 until 2002, she used to go and do shopping for the deceased and do cleaning and washing and ironing for him. I will come back to the detail of this because there is some contest on the evidence and particularly in regard to an alleged assault on the deceased by the plaintiff on 21 April 2001.
In March 2002 the plaintiff went to Serbia to nurse her brother who was dying of cancer and she returned a year later. The deceased sold his unit in Cabramatta and changed units again. After the plaintiff returned the deceased apparently was angry with her for going to Serbia and would not have her come to the unit unless he said she could. He made his will on 30 March 2004 and he died on 8 September 2005. Probate was granted and these proceedings were commenced within time.

Eligibility

The plaintiff is an eligible person as she is still the widow of the deceased. They were never divorced and there was never any formal property settlement between them. In applications under the Family Provision Act the High Court in Singer v Berghouse(1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following:-
“The first question is, was the provision (if any) made for the applicant inadequate for (his or her) proper maintenance, education and advancement in life? The difference between ‘adequate’ and ‘proper’ and the interrelationship which exists between ‘adequate provision’ and ‘proper maintenance’ etc were explained in Bosch v Perpetual Trustee Co Limited. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.
The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the order which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there we no assets from which an order could reasonably be made and making an order could disturb the testator’s arrangements to pay creditors”.
I turn to consider, as directed by the High Court, the plaintiff's situation in life.
The plaintiff is single. She has no dependants and is aged 68 years. She owns her unit, which is valued at about $160,000 and she has a mortgage of some $10,000 owing on it. It is a small two-bedroom unit but it requires some work to make it properly usable. She has no other significant property. She does not own a motor vehicle. She is currently on an aged pension of $492 per fortnight and a pharmaceutical allowance of $24 a fortnight. She has received a carer's pension in the past but that is now not available. She still has to make her mortgage repayments and her monthly outgoings are $997. Plainly she is in very modest circumstances.
So far as her health is concerned she has asthma for which she is treated. She has back and neck pains and she has circulatory problems in both her legs. She has difficulties with her vision and requires replacement of her glasses. She probably will have to have a cataract operation in respect of her right eye at some stage in the future. She has already had one for her left eye.
As far as the relationship with the deceased is concerned it is plain that in the later years after they retired in 1990 that the relationship was a difficult one. This seems to have been as the result of the alcoholism of the deceased. In the period, however, after separation the plaintiff says that she used to visit every three to four days. This is not really consistent with the evidence called by the defendant. The plaintiff called some evidence from a friend who says that she drove the plaintiff to the deceased's home with groceries and birdseed and that is the only other supporting evidence which she has called.
There were three or four people called for the defendant and some of those obviously spent a fair bit of time visiting the deceased. Plainly between them they would have had an opportunity to have seen the plaintiff there if she had been there as often as she said in her evidence. That, to my mind, indicates that, in fact, the evidence of the plaintiff may have been put to high. It seems to me that in this period the deceased was also assisted by a number of other people. They also did cleaning and shopping for him and generally looked after him. Although the plaintiff had a key to the premises, the other people also had a key to the premises.
There was one occasion when there plainly was an argument between the deceased and the plaintiff and the deceased made a statement to the police concerning this incident which occurred on 21 April 2002. It was an occasion when, according to the deceased, the plaintiff came and wanted to see their pet cockatoo, George. George was like a child to the plaintiff and the deceased who did not have children and the cockatoo was an important part of their lives. The deceased refused to let her see it claiming that he owned the bird and thereafter an argument ensued. Plainly the plaintiff scratched the deceased's face and then left the premises. Leaving that aside, when one stands back one still has a very substantial period when the parties lived together for some 24 years in the course of their marriage and there were difficulties in that period which were not, on the evidence before me, caused of the plaintiff.
It is also necessary to have a look at others who might have a claim on the bounty of the deceased. The only person in this category is the beneficiary, the deceased's sister, Savka Zakula. She is 74 years of age. She is married to her husband, who is 82 years of age. She resides in Serbia with her husband and she has a daughter who is now some 58 years old. They own a very small unit. There does not seem to be any reference to a mortgage or monies owing and they receive a total of about A$360 per month. It is hard to see how that relates to the cost of living but the evidence is that sometimes she does not have sufficient money to buy food. So obviously she also is in a difficult situation.
Widows' claims are frequently the subject of applications in this Court. The Court of Appeal in Goloski v Goloski (unreported 5 October 1993) has referred to formulations of the standard to be expected in respect of a widow in terms which refer to the decision of Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 and Elliott v Elliott, which was approved by the Court of Appeal on 24 April, 1986. There his Honour said:
"Where the marriage of a deceased and his widow has been long and harmonious, where the widow has loyally supported her husband and assisted him to build up and maintain his estate, the duty which they deceased owes to his widow can be no less than to the extent to which his assets permit him to achieve that result; first to ensure that his widow be secure in her home for the rest of her life and that if either the need arises or the whim strikes her she have the capacity to change her home; secondly that she have available to her an income sufficient to enable her to live in a reasonable degree of comfort and free from any financial worry; and, third, that she have available to her a fund to which she might have resort in order to provide herself with such modest luxuries as she might choose and which would provide her with a hedge against any unforeseen contingencies or disaster that life might bring".
Here, of course, we have a relationship where they did live together for a period of some 24 years and it was not all happy. Plainly there was support during the period that they lived together.
One of the things that is advanced on the defendant's part is that there was an informal property settlement. It is to be noted that the property settlement was simply a division equally between the parties. Plainly in respect of the contributions to the house the plaintiff contributed a greater proportion. She paid $8,000 out of the $11,000 deposit and notwithstanding the submission that might discount this, the evidence is simply that she paid the greater proportion. The two of them worked and paid off the house after about three years. Therefore, plainly, in my view, any kind of arrangement that was made would not equate to what would be a proper property settlement having regard to the contributions that both parties made at the time of purchase.
The contributions since the separation I think are not anywhere near as high as put by the plaintiff as plainly others helped the deceased and looked after him, for which, no doubt, he was grateful. It is unfortunate but as the parties had separated the relationship between them was not good thereafter.
It is necessary to see how the plaintiff says she has been left without adequate and proper provision for her maintenance, education and advancement in life. In her affidavit evidence she set out a number of things that have to be done to her unit, fixing broken fittings and fixtures and providing modest necessities. The total of these amounts come to some $8,000 She has a mortgage of about $10,000 which will need to be discharged, together with costs which would come from that. She is 68 years of age and at this stage of her life should not have to worry about having to pay off a mortgage. She only has a pension and it is hard enough surviving on the pension without having to pay a mortgage is well.
The other thing is the plaintiff's future is somewhat uncertain. She has some medical problem and in ordinary circumstances she would need some small legacy, maybe as she suggests $10000-$12000, to cover those matters. The claim she puts forward is a claim for a legacy out of the estate of $30,000. The estate, of course, is somewhat larger than that but not much larger because of the costs which will come out of it.

In my view having regard to the contributions which she made and the extent of the marriage it is appropriate that she receives a legacy. In my view the amount selected by the plaintiff is modest and proper in the circumstances.
Accordingly, the orders that I make are as follows:
1.            That the plaintiff receive a legacy out of the estate of the deceased in the sum of $30,000.
2.            That interest shall be payable on the legacy if not paid within one month on and from that date at the rate provided for under the Wills Probate and Administration Act 1898.
3.            That the plaintiff’s costs on the ordinary basis and the defendant’s on an indemnity basis be paid or retained out of the estate of the deceased and I noted in the judgment the capping that has been indicated.
4.            Exhibits may be returned.

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LAST UPDATED: 26 June 2007