Begulic v The Public Trustee of Queensland [2011] QDC 316

DISTRICT COURT OF QUEENSLAND CITATION: Begulic v The Public Trustee of Queensland [2011] QDC 316 PARTIES: ASIM BEGULIC (Applicant) v THE PUBLIC TRUSTEE OF QUEENSLAND AS PERSONAL REPRESENTATIVE OF THE ESTATE OF RASIMA BEGULIC (DECEASED) (Respondent) FILE NO: 1442/11 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 23 December 2011 DELIVERED AT: Brisbane HEARING DATE: Application heard on the papers JUDGE: Long SC, DCJ ORDER: 1. That provision for the applicant be made out of the estate of Rasima Begulic (“the deceased”) by reading and construing the last Will of the deceased, dated 13 November 2003, as if the following clause 5 were substituted for clause 5 of the Will: “5. I give: (a) the sum of $65,000 to Asim Begulic; (b) The residue of my estate to Haris Catakovic.” 2. That the applicant will bear his own costs of this proceeding. 3. That the costs of and incidental to this proceeding incurred by the Public Trustee of Queensland be paid from the estate of the deceased, on the indemnity basis. CATCHWORDS: FAMILY PROVISION APPLICATION — need for court order to finalise proceedings – significance of agreement between the parties as to orders – orders made on the papers. LEGISLATION Succession Act 1981, s 41(1), (1A). Uniform Civil Procedure Rules , Part 6. CASES: Affoo v Public Trustee of Queensland [2011] QSC 309. -- 1 of 9 -- 2 Bartlett v Coomber [2008] NSWCA 100. Vigolo v Bostin[2005] 221 CLR 191. Watts v Public Trustee of Queensland (as executor of the estate of Neta May Bruigom) [2010] QSC 410. SOLICITORS: Waterford Law on behalf of the applicant. Official Solicitor to the Public Trustee on behalf of the respondent. [1] The parties have sought that the court make orders, on the papers and without any oral hearing. In the circumstances set out below and where there has been compliance with Part 6 of Chapter 13 of the UCPR, I am prepared to do so. [2] On 4 May 2011, the applicant filed an originating application seeking provision, out of the estate of the deceased, pursuant to s 41 of the Succession Act 1981. [3] Prior to that and on 31 January 2011 an order was made for the Public Trustee to administer the estate of the deceased in accordance with the deceased‘s Will, dated 13 November 2003. Pursuant to that Will, the deceased gave the whole of her estate to her nephew, Haris Catakovic. [4] The proposed application without oral hearing, was filed on 29 November 2011 by the Public Trustee and, in effect, seeks that effect be given to the compromise of the claim, by the parties and as a result of a mediation, on 22 November 2011. By that application, it is recognised that an order of the court is required to give effect to that compromise. [5] Such orders may only be made pursuant to s 41 of the Succession Act 1981 and, as has been recently observed in Affoo v Public Trustee of Queensland,1 such orders are made by exercise of discretion of the court. Although, any agreement that may be reached as to the orders that the parties believe should be made, will usually be a significant factor in the exercise of that discretion.2 1 The citation which is [2011] QSC 309 at [24]. 2 See also Bartlett v Coomber [2008] NSWCA 100 at [72], [84] and [90]-[91] and cf [57]-[58]. -- 2 of 9 -- 3 [6] In Watts v Public Trustee of Queensland (as executor of the estate of Neta May Bruigom),3 Jones J stated the court‘s position as follows:- ―Jurisdiction [11] This Court‘s jurisdiction to make an order will only arise if it is of the opinion that the disposition of the deceased‘s estate effected by her will is not such as to make adequate provision from her estate for the applicant. This is in accord with the approach to claims of this kind as determined by the High Court in Singer v Berghouse and confirmed in Vigolo v Bostin. In the former case the High Court was dealing with the provisions of the New South Wales legislation which provide the equivalent relief to that under s 41 of the Succession Act (Qld). From the joint judgment of Mason CJ, Deane and McHugh JJ the following passage appears (at p 208): ‗It is clear that, under these provisions, the Court is required to carry out a two stage process. The first stage calls for a determination of whether the applicant has been left without adequate provisions for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased‘s estate for the applicant. The first stage has been described as the ‗jurisdictional question‘. That description means no more than that the Court‘s power to make an order in favour of an application under s 7 is conditioned upon the Court being satisfied of the state of affairs predicated in s 9(2)(a).‘ [12] Following this decision, the New South Wales Supreme Court in two unreported decisions in 1995 dealt with the question in circumstances where the parties had settled claims under the family provision legislation. In the first case Hore v Perpetual Trustee Co Pty Ltd (unreported, NSWSC, 8 June 1995) Windeyer J referred to the Court‘s jurisdiction in these terms:- ‗Those provisions give the basis for exercise of jurisdiction by the court. Parties are absolutely entitled of course to make any rearrangement of the terms of the Will they wish, if all beneficiaries are of age and absolutely entitled. That has nothing whatever to do with the jurisdiction under the relevant Act. Section 7 and s 9(2) raise jurisdictional questions. This has been described in various ways, sometimes making it appear discretionary but there is no doubt now that for the court 3 [2010] QSC 410. -- 3 of 9 -- 4 to assume jurisdiction, the provisions of s 9(2) must be satisfied. As the power to make orders is governed by s 9(2) and s 7, the court cannot by consent, assume a wider jurisdiction. Parties cannot by consent, confer power upon the court to make orders which the court lacks power to make.‘ [13] In the second case Hadley v McNamara re the Estate of Mary Anne McNamara (unreported, NSWSC, 7 December 2005) Young J pointed to the change wrought by the decision of the High Court, he said:- ‗In former times the court used to look at these applications as if they were discretionary matters and seek to work out whether the court had jurisdiction. It is now clear that that is the wrong approach under the Family Provision Act and that if the parties agree to settle proceedings under the Family Provision Act, and there is no other interest involved, ordinarily the court should merely make the orders in accordance with the terms of settlement. There will, of course, be the odd exception where it clearly appears on the face of it that there is no jurisdiction in the sense that the plaintiff has no need of provision.‘ [14] The point was further considered by the Supreme Court in Western Australia in Schaechtele v Schaechtele where Le Miere J considered (at para 18):- ‗This Court cannot make an order giving effect to the proposed settlement unless the Court thinks that such provision should be made out of the estate of the deceased for the proper maintenance or support of the plaintiff. But that does not mean that the Court is in effect to hear the matter as if it were it a contested application and then to give or withhold orders to give effect to the settlement by comparing the settlement with the judgment which the Court would have given. The Court must give proper consideration to the evidence before it. The Court should be aware of the risks of litigation in an area in which reasonable people can reasonably reach different conclusions and give property weight to the fact that the parties wish to effect the settlement. If the Court is satisfied that the settlement falls within the bounds of a reasonable exercise of discretion then the Court should make orders to give effect to that settlement.‘ I respectfully agree with this approach to the question. -- 4 of 9 -- 5 [15] Once the court is of the view that the jurisdictional question has been satisfied then the issue arises as to the effect of the parties‘ agreement. Obviously considerable weight must be given to the agreement of the parties. The inquiry thereafter is limited. The circumstances would be unusual indeed for the court to override the agreement of the parties who are of full age and where there is no evidence of undue influences at work in the reaching of the agreement.‖ (citations omitted) [7] It should also be noted that claims of this kind are to be resolved upon the underlying principle or rationale that a court will not seek to rewrite the terms of a Will but will have regard to what a deceased person ought to have done in all the circumstances and the application of a test of what a ―wise and just, rather than a fond and foolish‖ person would do.4 In Vigolo v Bostin5 there are statements which support the underlying basis or justification for the court making orders of this kind as being ―in terms of familial obligation, not unnaturally or inappropriately described as moral‖6 and by resort to the concepts of ―moral duty‖ and ―moral claim‖.7 [8] Therefore and whilst the order of the court is ultimately made in the exercise of discretion, there are, in the first instance, jurisdictional conditions or requirements which underpin the exercise of power. However, it is also pertinent to note some observations made in Bartlett v Coomber8 to the following effect: (a) Family provision litigation takes place in an adversary context in which the active parties are usually expected to be the best judges of what is in their own interests. The policy of Australian law encourages settlement. The legal system would collapse were it not for the fact that most disputes are resolved by agreement. (b) One principle giving effect to this policy is the principle that a valid compromise gives effect to an agreement that effectively supersedes the antecedent rights of the parties. The possibility of greater success 4 See Bosch v Perpetual Trustee Co. (1938) in [AC 463 at 478-479]. 5 [2005] 221 CLR 191. 6 Per Gleeson CJ at 199. 7 Per Callanan and Heydon JJ at 217. 8 supra at footnote 2: at [57]-[58], [72] and [90]-[91]. -- 5 of 9 -- 6 and the risk of greater failure is transposed into an arrangement that frees the litigants of the risks, costs and toils of further dispute. (c) This principle is not displaced in the context of family provision applications, although the court may decline to give effect to a settlement if doing so fails to effectuate the specific policies of the Act, amounts to an abuse of process, or otherwise offends public policy in a demonstrable way. (d) A compromise made by the parties will generally be given effect to by the court and, because of the agreement, the court will generally be satisfied that the order agreed on is one which ought be made without the need for any significant investigation of the evidence. (e) The circumstances to which the court may have regard are wide and an agreement to settle a claim is part of them. There may be exceptions, but in almost every case an agreement which an executor has made in exercise of the statutory power to make compromises, with an understanding of the assets in the estate and in the interests of the persons otherwise entitled to them, and with legal advice, will ordinarily have an extremely strong claim for attention among the relevant circumstances. Such agreements are always subject to the necessity of obtaining the court‘s approval. However, the importance of such agreements is high. [9] The application of this approach is particularly apt, where as here, the public trustee is involved and the sole beneficiary of the estate under the Will is sui juris and has been an active participant in the mediated resolution. [10] In support of his application, the applicant deposed to evidence directed towards the requirements of s 41(1) and 1A (of the Succession Act 1981), including as to:- -- 6 of 9 -- 7 (a) His being married to the deceased for 43 years, without there being any children of the marriage, although they separated in 1990 and resumed co- habitation in 2003; (b) The applicant had worked for the whole of his life as a professional painter and the deceased did not work; (c) That on 16 February 2004 the deceased suffered a stroke and that as a result a highset house at Holland Park was sold and low set accommodation obtained at Albany Creek on 29 November 2004, with the applicant providing care for the deceased from the time of her discharge from hospital on 22 March 2004 until she passed away on 13 December 2010 and for the purpose he ceased work; (d) The applicant was born on 11 May 1941 and is therefore now 70 years of age and he resides in the house at Albany Creek which is registered in his name and the deceased‘s name as tenants-in-common in equal shares. He has limited assets comprising only that half share of the residential property, a Mazda motor vehicle valued at $10,000 and a Commonwealth Bank Account in the sum of $4,695.00. He has annual expenses of $14,723.21 and annual income of $15,236.00. He also confirms that he owns a property in Bosnia/Herzegovina. (e) He says that he suffers from ―stress‖ and that he had applied his superannuation entitlement in the sum of $53,000 to the mortgage on the family property. [11] The evidence provided by the sole beneficiary of the deceased‘s estate under the Will, is that: (a) He is a nephew of the deceased and aged 43 years, having been born on 14 February 1968. -- 7 of 9 -- 8 (b) He had a close relationship with his Aunt and in the period of her separation from the applicant, he moved in to live with and assist her. (c) He was a bankrupt from 2003 until December 2010 and as a consequence does not own any assets. Until 30 September 2011 he was in employment and in receipt of income of approximately $1800 per fortnight. [12] After payment of legal fees and costs of estate administration, the net value of the estate is estimated to be approximately $178,000. Conclusion [13] There is no need to discuss this evidence in any further detail, as it is apparent that there was a basis for the application9 and the position resolved by the parties necessarily implies that there is now sufficient acceptance of or, at least insufficient disputation about these and other relevant circumstances, to allow conclusions that adequate provision has not been made for the proper maintenance and support of the applicant and that some provision be made out of the estate, for him. [14] In the circumstances, I am satisfied that the agreed proposal of the parties, as to the provision from the estate for the applicant, is appropriate and I therefore make the following orders, so as to implement that proposal: 1. That provision for the applicant be made out of the estate of Rasima Begulic (―the deceased‖) by reading and construing the last Will of the deceased, dated 13 November 2003, as if the following clause 5 were substituted for clause 5 of the Will: ―5. I give: (a) The sum of $65,000 to Asim Begulic; (b) The residue of my estate to Haris Catakovic.‖ 2. That the applicant will bear his own costs of this proceeding. 9 Having regard to the requirements of s 41(1) and (1A) of the Succession Act 1981. -- 8 of 9 -- 9 3. That the costs of and incidental to this proceeding incurred by the Public Trustee of Queensland be paid from the estate of the deceased, on the indemnity basis. -- 9 of 9 --