Solicitors:
Noel Brown & Associates (applicant)
File Number(s): 2015/238492
[2]
Judgment
For reasons given in a decision of 7 October 2015, [1] with which this judgment should be read, I gave advice that the plaintiff would be justified in causing proceedings to be brought in the competent Serbian court for administration of the deceased's Serbian estate and doing all things reasonably incidental thereto and acting upon the advice of Serbian attorneys in connection therewith. The proceedings have since been adjourned from time to time while proceedings were brought in the Second Basic Court in Belgrade, where they were heard on 9 September and decided on 21 September 2016.
The decision of the Belgrade court identified as assets of the estate the real property at 81 Boze Jankovica (being the Belgrade property referred to in the previous judgment), and foreign currency assets held with Eurobank, and proclaimed as heirs of those assets, "on the testamentary basis of inheritance", Vera Acimov in respect of the Belgrade property; and Djordje Vezmar in respect of the foreign currency assets.
For reasons given in my previous judgment, succession to real property in Serbia is governed by Serbian law. The decision of the Belgrade court means that the Belgrade property devolves absolutely to Vera Acimov, free of the trusts referred to in clause 6.1 and clause 8 of the will.
In the previous judgment, I expressed the provisional view that, were that to be the outcome of the Serbian proceedings, then although Serbian law did not recognise the trust referred to in clause 6.1, the gift (of the property to Vera) would still have taken effect (albeit not precisely as intended according to New South Wales law) - the intent of clause 6.2 being to cover the situation that for some reason or another it might not be possible for the property to pass to Vera (rather than that the trust not be recognised) - with the consequence that clause 6.2 would remain irrelevant. [2]
I also then observed that that was a question of construction, in which the potential beneficiaries of the clause 8 trust on the one hand (the child or grandchildren of Vera Acimov), and the residuary beneficiary (Djordje Vezmar) on the other, would have an interest and should be afforded an opportunity to be heard. [3] The residuary beneficiary Djordje Vezmar is a New South Wales resident, and notice to him would present no difficulty. Vera Acimov has one child Boris Miklusev born 9 December 1978, and a granddaughter Brenda Mikuslev born 9 April 2009. They both reside with Vera Acimov at Svetog Save 45, 25360, Apatin, Serbia. Their interests are for present purposes identical.
Further consideration has strengthened my provisional view. The scheme of the will was that the Belgrade property would devolve to Vera Acimov for life and thereafter on discretionary trust for her child and grandchildren. The effect of the decision of the Belgrade court is that Vera Acimov will receive the property absolutely, and there is no provision for her child and grandchild. However, to the extent that her inheritance is enlarged from that intended under the will, so is her capacity to provide for the child and grandchild, who reside with her. The intent of clause 6.2 was to provide a gift for the benefit of Vera Acimov, her child and grandchildren, in substitution for the Belgrade property, if for some reason the gift of the Belgrade property could not take effect. It would be a bizarre result if, having received absolutely the property in which the testator intended she receive a life estate, Vera Acimov could also insist upon the gift in substitution. In my view, the gift of the property to Vera Acimov, referred to in clause 6.1, has taken effect, albeit that the trusts attached to it cannot.
Ordinarily the court is reluctant, as a matter of discretion, to resolve questions concerning the respective rights of beneficiaries on an application for judicial advice. Thus in In the matter of International Art Holdings Pty Ltd (admin apptd); International Art Holdings Pty Ltd (admin apptd) & ors v Adams & ors, [4] Ward J (as her Honour then was) observed:
As a general rule, however, (see Jacobs' Law of Trusts in Australia (7th edn) [at 2134]), where the question concerns the respective rights of beneficiaries or their identity, it is not considered appropriate to give a trustee opinion or advice under s 63; rather the proper procedure is by way of originating summons where all parties are served and have the opportunity to be heard (the authors there referring to Re Kirkegaard [1950] St R Qd 144; Re Petersen [1920] St R Qd 42).
However, that is a matter of discretion, not of jurisdiction. Section 63 includes explicit provision for a case in which the identity or rights of beneficiaries are affected:
(8) Where the question is who are the beneficiaries or what are their rights as between themselves, the trustee before conveying or distributing any property in accordance with the opinion advice or direction shall, unless the Court otherwise directs, give notice to any person whose rights as beneficiary may be prejudiced by the conveyance or distribution.
(9) The notice shall state shortly the opinion advice or direction, and the intention of the trustee to convey or distribute in accordance therewith.
(10) Any person who claims that the person's rights as beneficiary will be prejudiced by the conveyance or distribution may within such time as may be prescribed by rules of court, or as may be fixed by the Court, apply to the Court for such order or directions as the circumstances may require, and during such time and while the application is pending, the trustee shall abstain from making the conveyance or distribution.
(11) Subject to subsection (10), and subject to any appeal, any person on whom notice of any application under this section is served, or to whom notice is given in accordance with subsection (8), shall be bound by any opinion advice direction or order given or made under this section as if the opinion advice direction or order had been given or made in proceedings to which the person was a party.
The rules of court relevantly provide only, by UCPR r 55.3, that the time for an application under s 63(10) is 28 days after receipt of the notice under s 63(8), but "subject to that subsection", thus preserving the ability of the court to fix some other time.
In the circumstances of this case, where the beneficiaries who might wish to contest the construction which I presently favour reside abroad, and may well not wish to do so, it seems to me that the just, quick and cheap administration of the estate will be facilitated by adoption of that procedure, rather than the reconstitution of the proceedings and the joinder of, or prior notification to, defendants. The right of the affected beneficiaries to contest the advice is preserved, if they wish to do so, pursuant to s 63(10).
Given the overseas residence of the affected beneficiaries, I propose to extend to 42 days the time for them to apply under s 63(10).
The Court orders that:
1. Subject to compliance with (NSW) Trustee Act 1925, s 63(8), (9) and (10), the plaintiff would be justified in distributing the estate on the footing that:
1. The gift referred to in clause 6.1 of the will has taken effect;
2. The gift referred to in clause 6.2 of the will, and the trust referred to in clause 8 of the will, have no operation.
1. Pursuant to (NSW) Trustee Act 1925, s 63(8), the time for an application under s 63(10) in respect of the advice contained in order 1 is 42 days after receipt by the applicant of notice under s 63(8) or the date of entry of these orders, whichever is the later.
2. The plaintiff's costs of the proceedings be retained out of the estate of the deceased.
3. There be liberty to apply.
[3]
Endnotes
Noel Mockett Brown as executor of the estate of the late Petar Vezmar (aka Peter Vezmar) [2015] NSWSC 1470.
[2015] NSWSC 1470 at [26]-[27].
[2015] NSWSC 1470 at [27].
[2011] NSWSC 164 at [38]; see also Application of Willoughby City Council (as manager of the Talus Reserve Trust) & anor [2016] NSWSC 1717 at [85]-[86].
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Decision last updated: 09 December 2016
Parties
Applicant/Plaintiff:
International Art Holdings Pty Ltd (admin apptd), In the matter of; International Art Holdings Pty Ltd (admin apptd) & ors