Application by NSW Trustee & Guardian (Estate of the late Marko Sijakovic) [2012] NSWSC 1532

Supreme Court of NSW|2012-11-30|Before: Hallen J

Judgment - IN CHAMBERS 1HIS HONOUR: On 30 November 2012, Registrar Musgrave referred this matter to me as part of the Friday application list. The court file was not available at the time it was referred and I requested Mr M Gorrick, counsel for the Plaintiff, to provide me with a copy of the documents that had been filed. In order to avoid a further appearance on behalf of the Plaintiff, and since the matter was, in any event, to proceed ex parte, I made an order that I would deal with the matter in Chambers. 2Mr Gorrick consented to this course and provided a copy of the following documents on Wednesday 5 December 2012, together with an outline of submissions and proposed Short Minutes: (a) Summons filed 9 December 2010; (b) Affidavit of Sandra Malouf sworn 10 August 2011; (c) Affidavit of Sandra Malouf sworn 22 October 2012. 3I am grateful to counsel and his instructing solicitors for his, and their, efforts in providing these documents, and otherwise, enabling the matter to be dealt with in this way.

The Proceedings 4In a case where there is uncertainty about a factual matter relevant to the distribution of a deceased's estate, the Court may, in certain circumstances, make an order that the executor or administrator is at liberty to distribute on some particular factual basis - e.g. that a missing beneficiary was unmarried and predeceased the deceased without issue. It is this type of order that is termed "a Benjamin order". It derives from the case of Re Benjamin; Neville v Benjamin [1902] 1 Ch 723. 5The Plaintiff, the NSW Trustee and Guardian, seeks a Benjamin order in respect of the distribution of the estate of Marko Sijakovic ("the deceased"). The deceased died, intestate, on 5 February 2006. The order, if made, will enable the Plaintiff to complete the administration of the deceased's estate. 6The Plaintiff, which was then known as the Public Trustee, obtained Letters of Administration on 23 November 2006. The office of the Public Trustee, which was established as a corporation sole by s 7 of the now repealed Public Trustee Act 1913, has been abolished and the corporation sole dissolved: Paragraph 10(1) of Schedule 1 of the NSW Trustee and Guardian Act 2009. By Paragraph 11 of Schedule 1, the NSW Trustee & Guardian is to be taken, for all purposes, to be a continuation of, and the same legal entity as, the Public Trustee. 7From the date of the grant of administration, the Plaintiff appears to have been carrying out searches and seeking information concerning the manner in which, and to whom, the deceased's estate should be distributed. These searches have now been completed and the Plaintiff wishes to proceed to complete the administration of the deceased's estate.

The Background Facts 8I am satisfied that the Plaintiff has carried out the necessary, and proper, investigations to determine the persons who are, or who may be, entitled on intestacy to the deceased's estate. I am also satisfied that the following facts have been established. The extensive searches carried out by the Plaintiff, and the affidavits of the Plaintiff's senior legal officer, who has exhibited, or annexed, a copy of the various certificates (and, where such certificates or other documents were in another language, has obtained translations thereof), substantiate the following facts. (a) The deceased was born, in Serbia, in April 1922, and was aged 84 at the date of his death. (b) The deceased arrived in Australia, as a refugee, in late 1949, following application being made through the International Refugee Organization. (c) In November 1949, the deceased stated, in writing, that he had no children, either alive or who had predeceased him. (d) In February 1971, the deceased married Milka Terebuh. At the date of their marriage, Ms Terebuh was a widow who was 52 years of age, having been born in February 1919. The deceased was then 48 years of age. (e) The Marriage Certificate of the deceased and Ms Terebuh reveals that, at the date of the marriage, the deceased's father, Krista Sijakovic, and his mother, Stamisava Resimic, was each deceased. (f) Ms Terebuh died on 9 July 1987, aged 68 years. (g) There were no children of the marriage of the deceased and Ms Terebuh. (h) At the date of his death, the deceased appears to have had no other children. He had not remarried, and he did not leave any person who, at the time of his death, was a partner with him in a de facto relationship within the meaning of s 4 of the Property (Relationships) Act 1984. (i) The deceased's parents, Krista Sijakovic and Stamisava Resimic, had four children, namely, Vitor, who was born in March 1910; Vasilije, born in 1913; Svetomir, who was born in August 1915; and the deceased. (j) The deceased's brother, Vitor, died in March 1987, leaving three children, namely Petar, who was born in April 1940 and who was alive at the date of the deceased's death; Predrag, who was born in December 1949, and who was alive at the date of the deceased's death, but who died in August 2008; and Nenad, who was born in December 1956 and who died in October 1988, leaving two children, namely Ivana, who was born in August 1980, and who was alive at the date of the deceased's death, and Ivan, who was born in June 1982 and who was alive at the date of the deceased's death. (k) The deceased's brother, Vasilije, died in World War II, leaving one child, namely Slavko, who was born in March 1940, and who was alive at the date of the deceased's death. (l) The deceased's brother, Svetomir, died in 1971, leaving no issue. (m) The person who appears to have been entitled to Predrag's estate was his son, Nebosja Sijakovic. Three other persons, described in a decision of 6 July 2012, of the Municipal Court in Visegrad, as "legal inheritors" were said to "have ceded their shares of the inheritance in favour of Nebosja and for that reason the Court didn't declare them heirs".

The Nature of the Plaintiff's Claim 9Uniform Civil Procedure Rules 2005 ("UCPR"), rule 54.3(2) relevantly provides that proceedings may be brought for the determination of any question which could be determined in administration proceedings, including any question arising in the administration of an estate or in the execution of a trust, or any question as to the composition of any class of persons having a beneficial interest in an estate or any question as to the rights, or interests, of a person who claims to be entitled on the intestacy of a deceased person. On occasion, these types of questions are referred to as "next of kin proceedings". 10Master Macready (as his Honour then was) in Public Trustee v Solah [1999] NSWSC 660 at [7], said: "In the present proceedings it is necessary to make a finding that the next of kin who are entitled on the intestacy of the deceased consists of those persons who have come in and proved their claim. The proper approach in respect of such an enquiry was referred to in Walsh v Weigall [1887] VicLawRp 88; (1887) 13 VLR 449 at 453. "The object of an administration decree is to enable the estate to be distributed with safety to the executor or administrator who, acting under the direction of the Court, is protected even if other claimants may afterwards come forward and establish their claims. But such distribution, whilst it protects the executor or administrator, in no way precludes the rights of subsequent claimants, who may at any time institute proceedings against the persons amongst whom the estate has been distributed to compel them to refund in whole or in part, as the case may be, what they have received. If the view of the Chief Clerk be correct, then in many cases it would be impossible ever to distribute the estate at all. The mistake into which he has fallen, I think, is that he regards the decree as imposing a duty upon him to report all the possible next-of-kin, and to forbear reporting until it has be demonstrated that there are and can be no others than those he reports; whereas his duty is to take all necessary steps by advertisement or to otherwise to invite claimants, and then to report only such as have proved their claims before him. ... the rights of persons shown by evidence to occupy a certain relationship to the testator or intestate cannot be ignored on the mere surmise that there may possibly be in existence and unheard of, other persons of equal kin or nearer of kin than they. The practice I have stated was that which prevailed before the Judicature Act, and the practice under that Act has not been altered in this respect, ..." 11In West v Weston [1998] NSWSC 419, Young J (as his Honour then was) gave the following description of the next of kin procedure: "24 Essentially, if the evidence adduced by the parties is insufficient to enable the inquiries to be satisfactorily answered, then an advertisement is placed, prepared by the parties and approved by the Master, fixing a time within which each claimant is to come in and prove his or her claim, appointing a day for adjudicating thereon. Unless otherwise ordered, all persons who do not come in and prove their claims within that time will be excluded from the benefit of the order." 12More recently, in Clarke v McFarlane [2008] NSWSC 432, in proceedings which, in substance, though not exactly in form, was a next of kin inquiry, to determine who were the next of kin of the deceased entitled upon intestacy, Brereton J wrote: "[6] Next of kin proceedings traditionally involve strict proof, and I do not think the administrators should be unduly criticised for insisting on strict proof. " 13This requirement means that proof should be by means of admissible evidence that is clear and cogent. 14I followed these decisions in NSW Trustee & Guardian v Hull & Anor [2011] NSWSC 1106. 15It is necessary to identify the next of kin, as best one can, in this case in order to determine whether to make the order sought by the Plaintiff.

The Intestacy Legislation 16Since the deceased was domiciled in New South Wales at the time of his death, it is the law of New South Wales that determines the succession to his intestate estate: Public Trustee v Kehagias [2009] NSWSC 972, per McLaughlin AsJ, at [11]. 17The scheme of distribution on intestacy as at the date of the deceased's death, in February 2006, was set out in s 61A - s 61F of the (now repealed) Wills Probate and Administration Act 1898. 18Section 61B(1) provided that where a person dies wholly intestate, the real and personal estate of that person shall, subject to the payment of all such funeral and administration expenses, debts and other liabilities as are properly payable out of the estate, be distributed or held in trust in the manner specified in this section, and the real estate of that person shall be held as if it had been devised to the persons for whom it is held in trust under this section. There is then provided a fixed list to be followed in determining the distribution of the intestate's estate. 19Section 61B(6) provided that if the intestate left no spouse, no issue and no parents, the estate shall be held for the following persons living at the death of the intestate and in the following order and manner, firstly, and relevantly, in statutory trust for the brothers and sisters of the whole blood of the intestate. Siblings who share both parents are brothers and sisters of the whole blood. 20Where the estate, or any part of the estate, was directed to be held on statutory trust for any class of relatives other than issue of the intestate, "that estate or part shall be held in trust corresponding to the statutory trust for the issue of the intestate as if that trust were repeated with the substitution of references to the members or member of that class for references to the children or child of the intestate": s 61C(3) of the Wills Probate and Administration Act. No issue whose parent was living at the date of death of the intestate and capable of taking, can take: s 61C(1)(b) of the Wills Probate and Administration Act. 21A division of the property that is the subject of the trust, per stirpes (and not per capita) ensues. Thus, for example, the property is divided into shares equal in number to the number of siblings of the deceased who either survived him, or predeceased him leaving issue who survived. Any surviving sibling of the deceased would, thus, be entitled to one of the shares, whereas in the case of a sibling of the deceased who predeceased him leaving issue who survived, the issue would be entitled to share equally one of the shares amongst themselves. 22In Re Boyd (No 2) (NSWSC, 19 July 1995, unreported) Young J (as his Honour then was) referred to the meaning of the section as follows: "... It seems to me that the key words in subs 3 are "in trust corresponding to the statutory trust", which is one composite expression. The work that s61C (3) has to do is to equate all statutory trusts to the statutory trust for issue to save the drafter having to repeat it over and over again. On this construction, all one does is to see, where there is a brother and sister of the intestate, whether there is a child or more remote issue of that brother or sister alive at the date of death of the intestate. If there is, that person takes the share that the brother or sister of the intestate would have taken had he or she not predeceased the intestate."

Benjamin Order 23In Williams, Mortimer & Sunnucks, Executors, Administrators and Probate, 17th ed, (1993), at 938, the learned authors state: "It may happen that distribution is held up because the representatives cannot be sure who is entitled. Thus a person's right to share in the estate may turn on the question whether another predeceased the testator, predeceased him without issue, and it may be uncertain on the facts whether this happened. In these circumstances, the representatives may apply to the court for a "Benjamin" order - Re Benjamin [1902] 1 Ch 723, that is, an order permitting them to distribute the estate on the footing that certain events have or have not happened. The effect of such an order is to relieve the representatives of liability in their capacity as representatives should the hypothesis on which they are to be permitted to distribute turn out to be wrong. Thus, where a beneficiary who was thought to have predeceased a testator subsequently appears, he will not be entitled to bring a claim against the representatives for his share of the estate. He may, however, be entitled to claim in equity against the beneficiaries who have been wrongly paid or perhaps bring a tracing action against the recipients of the share - Re Diplock [1951] AC 251." 24In Gonzales v Claridades [2003] NSWSC 508; (2003) 58 NSWLR 188, at [75], Campbell J (as his Honour then was) said: "The Court can, in some circumstances, where there is uncertainty about a factual matter relevant to the distribution of a deceased estate, make an order that the executors are at liberty to distribute on some particular factual basis - eg that a missing beneficiary under the testator's will was unmarried and predeceased the testator without issue (Re Benjamin [1902] 1 Ch 723). Parry & Clark, The Law of Succession, 10th edition (1996) page 471-2 say: "The particular footing set out in the order is, of course, based on probable inferences from the proved facts, but the order does not constitute a positive declaration of rights (Hansell v Spink [1943] Ch 396, 399; Re Green's Will Trusts [1985] 3 All ER 455 at 462 ("the true view is that a Re Benjamin order does not vary or destroy beneficial interests. It merely enables trust property to be distributed in accordance with the practical probabilities.")) and, according, it does not prevent any missing beneficiary (if he subsequently appears) from pursuing his remedy against a recipient of the deceased's assets. Sometimes a Benjamin Order is made after an inquiry by the court has proved inconclusive, but such an order may be made without any prior inquiry by the court if suitable advertisements for a missing beneficiary produce no claims, or even without any advertisements if the inference from the proved facts is irresistible (as in Re Green's Will Trusts, supra (by her will T, who died in 1976, gave her estate to her son B; B had been a gunner in a bomber which went missing in a raid on Berlin in 1943; nothing ever heard of the bomber or its crew; irresistible inference crew perished, though T believed when she died that B was still alive)." (Some footnotes omitted) See also Hardingham Neave & Ford, Wills and Intestacy in Australia and New Zealand, 2nd edition, paragraph [3604]. 76 The basis for making such orders was explained by Mahoney J in Wilcox v Poole [1974] 2 NSWLR 693. At 697, his Honour quoted from Daniell's Chancery Practice, 8th edition, pages 1539-40, "There are some cases in which, although the interest of a party in the fund is not absolute, but subject to a contingency, it has been ordered to be paid out at once, the contingency being remote; and formerly the parties receiving the money entered into a recognizance or undertaking to refund it, in the event of the happening of the contingency; but it is no longer the practice, on making orders presuming death, to require security to refund. This has been done when the right of the parties for subject to the contingency of a female who is past the age of child-bearing, having children, or where a person has been presumed to be dead." Mahoney J at 697 described the principle as, "a beneficial one which may enable parties to have the early enjoyment of property to which they will, as a matter of practical certainty, ultimately become entitled". At 699, his Honour said: "the principle ... does not affect the legal rights of the parties in the strict sense, and concedes that there is no entitlement as of right to the distribution of the property in question. The principle is one which is invoked merely by way of convenience in administration." 25In Lempens v Reid [2009] SASC 179, Gray J, at [32], said: "The effect of a Re Benjamin order is to enable the executor to distribute the estate to those members of the class which have been ascertained at the time of distribution, whilst ensuring protection of the executor if a person entitled to a portion of the estate subsequently appears. If such a person does appear, he or she is not entitled to make a claim against the executor for that portion but may claim against beneficiaries who have been paid incorrectly. If a Re Benjamin type order were considered appropriate in the circumstances of these proceedings, it may be necessary for the Court to order that further enquiries be undertaken, to ascertain whether members of the class can be located, prior to any distribution of the gift contained in the subject clause." (Omitting citations)

Result 26Applying the sections referred to, in relation to the deceased's estate, it is the issue of the deceased's siblings who will share the deceased's estate on intestacy, per stirpes, with the result that one half of the intestate estate will be divided between the children of Vitor and the other half of the intestate estate will pass to Slavko, the only surviving child of Vasilije. (The deceased's brother, Svetomir, predeceased the deceased, leaving no issue.) 27In the case of Predrag's estate, Nebosja Sijakovic should establish that he is entitled to take the whole of the share to which Predrag was entitled. Presumably, there will be evidence that the three other persons who may have been entitled to a part of Predrag's share are no longer so entitled. 28Because one can never be sure that the deceased did not have any children, the proviso in order (a) below has been included. 29I order that: (a) The Plaintiff be at liberty to distribute the intestate estate of Marko Sijakovic upon the basis that one half of the deceased's estate will be shared equally between the issue of the deceased's brother, Vitor Sijakovic, namely Petar Sijakovic, Predrag Sijakovic, and the two children of Nenad, being Ivana Sijakovic and Ivan Sijakovic; and the other one half of the deceased's estate to Slavko Sijakovic, the only surviving issue of the deceased's brother, Vasilije Sijakovic, the deceased's brother, Svetomir Sijakovic, having predeceased the deceased and having left no issue, but, in each case, without prejudice to the rights of any children of the deceased or those claiming through them to trace his, her, or their, share into the hands of the recipients if it were ever established that they survived the deceased or otherwise as the case may be. (b) The Plaintiff be at liberty to distribute the one sixth share of the estate passing to Predrag Sijakovic to the beneficiary, or beneficiaries, entitled to his estate, he having survived the deceased but having died on 15 August 2008. (c) The Plaintiff's costs of the proceedings, calculated on the indemnity basis, be paid out of the deceased's Estate. (d) The exhibits may be returned.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 December 2012

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