Plaintiff Files Provision Claim from Estate of Deceased Mother
Lalic v Lalic [2022] NSWSC 31 (27 January 2022)
The plaintiff filed a claim for a provision out of the estate of his late mother who's estate principally consisted of real property devised to other adult children and plaintiff left with a share of residue. The plaintiff contended that he is a disability pensioner and unable to work. The Court, in determining whether provision should be made, assessed how the plaintiff received a gift of land from parents during their lifetime, undertook many years of unpaid work for family business and had a close relationship with the deceased.
Facts:
The plaintiff, Anthony (Tony) Lalic, applied for further provision out of the estate of his late mother, Zorka Lalic (deceased). The deceased died on 15 October 2019 at the age of 86. Her husband, Edward (Edo) Lalic, predeceased her. She is survived by her four adult children: the plaintiff, who is now aged 66; Robert (Bud) Lalic who is aged around 68; the defendant, Anne Lalic, who is now aged 49; and another son, Johnny Lalic, who is now aged 48. The deceased’s last will was made on 1 May 2008 (Will). Probate of the Will was granted to Anne on 22 May 2020 who was appointed as the sole executrix. Under the Will, the bulk of the deceased’s estate, which principally comprised real estate, was left to Anne and Johnny and a proportion of the residue was left to Tony.
Tony, by summons filed on 25 June 2020, sought an order pursuant to s 59 of the Succession Act 2006 (NSW) for provision from the deceased’s estate and/or notional estate. The proceeding was commenced within time and that Tony, as a child of the deceased, is an eligible person. The other potential eligible persons have been identified as the other beneficiaries under the Will (Anne, Bud and Johnny), Anne’s estranged husband, Robert Hayek, and Anne’s children. There is evidence that each of them has been notified of the proceeding. Anne has put her financial, material and other circumstances (including those of her children) in issue in response to Tony’s claim.
Johnny gave evidence about his personal relationship with and care of the deceased. The deceased was born in 1935. She and Edo were married in the former Yugoslavia in about 1953. Bud and Tony were both born there. In 1956, Edo migrated to Australia. The deceased, Bud and Tony remained in Yugoslavia before migrating to Australia to join Edo in 1963 or 1964.
The deceased, Edo, Tony and Bud moved into a two-bedroom house on five acres of land located on Cowpasture Road, Bonnyrigg Heights (Cowpasture property) which Edo had bought with money that he borrowed. Edo operated a carting business that involved collecting produce (such as tomatoes and cabbages). By the time that Tony was in high school, Edo had three trucks in operation. Family members, including the deceased, assisted Edo with the carting business.
Tony and Bud assisted Edo with the carting business from when they were in primary school. Anne and Johnny were born in May 1972 and June 1973 respectively. After Anne’s birth, the deceased stayed at home and did not work as much in the carting business. Tony was not paid for his work in the family carting business and gave evidence that he did not expect to ever be paid.
Johnny gave evidence that during his childhood and teenage years, he also worked in the carting business with Edo. Anne gave evidence that all the children helped with collecting the produce, travelling to the markets and unloading the truck, and that she assisted from around the age of eight until her parents retired in about 1990. By contrast, Tony deposes that Anne never assisted with loading and unloading the truck, that she would sometimes go along to the markets “for the ride”, and that Johnny helped in the business but not from the age of seven.
In 1989, Edo sold the Cowpasture property to developers for $550,000. The sale enabled Edo and the deceased to purchase and furnish a house on Minto Close, Bonnyrigg Heights (Minto Close property) and buy a new car and Edo to retire from the carrier business at the age of 65. Anne deposed that Bud and Tony continued the carting business after Edo retired and characterised the business as a gift to Tony. In cross-examination, Tony gave evidence that the carting business basically ceased in 1989, that he no longer worked in the business from that time and that Bud carried out work for one grower which Tony had no part in.
After the sub-division of the Cowpasture property was completed, Edo and the deceased transferred the three blocks of land they obtained as part of the sale of the property to their children. Tony and Bud received one block of land each. The third block of land was given to Anne and Johnny in equal shares. Tony and Bud have sold their blocks of land. Anne and Johnny continue to own their block of land, which is located on Middlehope Street, Bonnyrigg Heights (Middlehope land). On 14 July 1995, Edo died, all of Edo’s assets, including his interest in the Minto Close property, were transferred to the deceased. The deceased became increasingly dependent on her children, especially Anne and Johnny.
The deceased died in hospital on 15 October 2019. The deceased left an estate with an estimated value, for probate purposes, of $913,188.74. As at the date of the hearing, Tony’s entitlement under the Will (and that of Bud) was approximately $28,375 (based on a quarter share of the residue, namely the cash assets), whereas Anne and Johnny’s entitlements had a value of approximately $470,875 (based on a half share of the Minto Close property and motor vehicle and a quarter share of the residue). Tony’s submissions suggest that the deceased owed a moral obligation to him in circumstances where he is not well-off, he has health issues and his marriage has broken down. Anne submits that the deceased owed a moral obligation to her and Johnny as the children who cared for the deceased after Edo died
Issue:
Whether or not there should be an adequate provision for the claimant’s proper maintenance and advancement in life.
Applicable law:
Succession Act 2006 (NSW), ss 57, 58, 59 - pursuant to which before making an order for provision out of the deceased’s estate, the Court must be satisfied, at the time when the Court is considering the application, that adequate provision for the proper maintenance, education or advancement in life of Tony has not been made by deceased’s Will.
Succession Act 2006 (NSW), s 60 - provides that the Court may have regard to the matters set out in s 60(2) for the purpose of determining whether to make a family provision order and the nature of any such order.
Bates v Cooke [2015] NSWCA 278 - relied upon in holding that the evidence are but one of the various factual matters to be taken into account in the context of the available estate and a consideration of the effect on the competing claims of the other beneficiaries.
Blendell v Byrne; Estate of Blendell [2019] NSWSC 583 - where attention may also be given to how the claimant lived and might reasonably be expected to have lived in the future.
Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392 - provides that matters set out in s 60(2) may be relevant both to the question of any inadequacy of provision and, if the provision is found to be inadequate, whether an order for provision should be made and if so to what amount.
Megerditchian v Khatchadourian [2020] NSWCA 229 - provides that the Court’s assessment of whether there has been adequate provision for the claimant’s proper maintenance and advancement in life must be made when the Court is considering the application, rather than at the time of the deceased’s death or will, and requires an evaluative judgment of all of the circumstances.
Meres v Meres [2017] NSWSC 285 - provides that the Court's role goes no further than determining whether adequate provision for Tony’s proper maintenance, education and advancement in life has been made by the Will and, if not, the making of provision taking into account all the circumstances of the case.
Sgro v Thompson [2017] NSWCA 326 - provides that a multifaceted evaluative approach that takes account of all the factual circumstances relevant to the application is required in order to determine whether adequate provision was made for the claimant’s proper maintenance, education or advancement in life.
Squire v Squire [2019] NSWCA 90 - provides that the determination of what is adequate provision for the proper maintenance, education and advancement in life of a claimant is to be guided by applying the Court’s assessment of what is considered to be right and proper according to contemporary accepted community standards or what is considered to be the moral duty of the deceased.
Taylor v Farrugia [2009] NSWSC 801 - relied upon by Tony in contending that that as he is a child that has fallen on hard times, the deceased, as his parent, was expected to provide him with a buffer against contingencies if she had assets available or provide something to assist in his retirement where he would otherwise be left destitute because he has been unable to accumulate superannuation.
Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 - where the Court is left to form opinions on those matters on the basis of its own general knowledge and experience of current social conditions.
Analysis:
Tony’s evidence is that Bud would usually visit the deceased in the morning and afternoon while Anne took her children to and from school and would sometimes stay until around 5.30 pm. Tony also deposes that, during this period, he visited the deceased every day, arriving at around 9.30 am and staying with her until 3.30 pm, except when he was sick and could not go. Anne and Johnny accept that Tony spent time with the deceased but dispute that he was there every day. Anne and Johnny continued to live with the deceased after Edo died, the documentary records kept by Anne that record daily monitoring of the deceased’s blood sugar and pressure levels, the letters relating to the deceased’s medical condition that are addressed to Anne and more.
Tony had a close relationship with the deceased. He remained with her in Yugoslavia before coming to Australia and regularly visited her after he married and moved out of home. He lived with the deceased and Edo for a period after he separated from Frances, visited the deceased following Edo’s death and helped with maintaining the Minto Close property over the years. He also spent time with the deceased after she became bedridden in 2017.
The totality of the evidence suggests that Tony’s current financial circumstances have been caused, in part, by some of his lifestyle choices. His choice to remain living in the Raleigh Place property, rather than downsizing some years ago, has likely impacted his financial position, as has his continued interest in buying and maintaining multiple cars and keeping two large dogs, given the evidence of the costs relating to those interests, and his spending on trips and entertaining family. However, no submission was made that Tony’s disclosure was so inadequate that his claim should be dismissed. While it is incumbent on an applicant for provision to make full and frank disclosure to the Court of all details of their financial and material circumstances, it is possible to form an adequate view of Tony’s current financial circumstances so as to be able to assess his claim for provision.
In appropriate cases, if the deceased was capable of and did give due consideration to what provision for a claimant’s maintenance, education or advancement is proper, the Court should give considerable weight to the deceased’s testamentary wishes.
Conclusion:
Having undertaken an evaluative assessment and weighed all of the evidence and submissions, the Court concluded that, considered at the time of the determination of Tony’s application, the deceased’s Will did not make adequate provision for his proper maintenance and advancement in life and that further provision for Tony should be made. The Court ruled that the plaintiff is entitled to provision of a lump sum of $125,000 in lieu of the provision made for the plaintiff under the deceased’s will dated 1 May 2008.
