Ivanna Ann-Marie Ferenc Stojic v Simon Stojic

The facts

1. I gratefully adopt the following from Lindsay J's decision in Estate Stojic: "FAMILY RELATIONSHIPS 15. The parties invite the Court to tread warily in these proceedings in characterisation of the Deceased's domestic partners because, apparently, that is an issue in other proceedings. It is not necessary for me to make a finding about the precise character of the Deceased's relationships (and I do not intend to do so) because there is no dispute as to the paternity of the five children who identify as his children. 16. By Sharon Ann, the Deceased had two sons. Anton Stojic was born in 1965 and is presently aged 51 years. Simon Stojic (the defendant) was born in 1971, and is presently aged 45 years. 17. By Monica Ward, the Deceased had one son. Ivan Matthew Stojic (the second plaintiff) was born in 1979, and is presently aged 37 years. Ivan Matthew is sometimes described in the evidence as "Ivan Matthew", sometimes as "Matthew". 18. By Sanya Ferenc, the Deceased had a daughter. Ivanna Ann-Marie Ferenc Stojic (the first plaintiff) was born in 1998, and is presently aged 18 years. These proceedings were commenced in her name by her mother as tutor. It is accepted on both sides of the record that, having recently attained her majority, she is entitled, and obliged, to be treated as a party in her own right. 19. By Jagoda Vukoje, the Deceased had a son. Marijan Stojic was born in or about 2004, and is presently aged about 13 years. LITIGIOUS ENTANGLEMENTS 20. Marijan, who suffers the disability of autism, is the only one of the Deceased's five children not an active player in the acrimonious disputation that has attended the Deceased's estate (before and after his death) since about October 2013. 21. That disputation has pitted Simon (the defendant) against each of the Deceased's children other than Marijan. The plaintiffs (Ivanna and Matthew) have acted in concert with Anton against Simon in a common endeavour to undo transactions effected by the Deceased, in and about October 2013, for the benefit of Simon. 22. The 2014 Wills occupy one field of disputation. 23. Another concerns ownership and control of the Deceased's family company, Statewide Office Furniture Pty Limited, so far the focus of two separate sets of proceedings (respectively numbered 2014/176361and 2016/81147) in the Court's Corporations List. The company manufactures metal office furniture and related products. 24. A third field of disputation concerns applications for family provision relief made, under Chapter 3 of the Succession Act 2006 NSW, by each of Ivanna (case number 2015/150539), Matthew (case number 2015/60779), Anton (case number 2015/174075) and Marijan (case number 2015/166103). … 29. The Deceased's family is engaged in a ruinous litigious civil war which must be fought one battle (one set of proceedings) at a time. The current battlefield is confined to a determination of the validity or otherwise of the 2014 Wills. … THE COMPETING APPLICATIONS 32. Simon seeks an order that the 2013 Will be admitted to probate in solemn form and that probate of it be granted to him. 33. Ivanna and Matthew seek to have one or the other of the 2014 Wills admitted to probate, with a grant of letters of administration made to them in lieu of a grant of probate to Anton, the executor named in the Wills. Anton supports them in this. He renounced probate. He is in indifferent health, having had a long history of mental health problems. THE SIZE AND COMPOSITION OF THE DECEASED'S ESTATE 34. According to an executor's affidavit sworn by Simon on 17 February 2017, and not disputed by his adversaries at the final hearing of the proceedings (which concluded that day), the Deceased's estate has an estimated net value of about $8.1 million. 35. The bulk of the estate comprises land in Garema Circuit, Kingsgrove, in the State of NSW (presently leased to, and occupied by, Statewide Office Furniture Pty Limited); accrued rent relating to those premises; and a loan account with the company. 36. The company's lease (registered number AI 498322) provides for a 5 year term expiring on 30 June 2018, with an option to renew for a further 5 year term."
2. Upon the delivery of his reasons in Estate Stojic on 3 March 2017, Lindsay J made orders including the grant of probate of the 4 November 2013 will to Simon.
3. On 23 June 2017, Lindsay J made orders in chambers which included: "1. NOTE that these notations and orders are made, in lieu of a stay of orders made by Lindsay J on 3 March 2017, pending a determination of the appeal proceedings numbered 2017/88978 ("the Appeal") instituted by the plaintiffs in the Court of Appeal. … 5. ORDER, pending determination of the Appeal or further order, that the defendant Simon Slavko Stojic by himself, his servants or agents be restrained from making any distribution from the estate of Ivan Stojic late of Zagreb, Croatia, who died on 13 June, 2014, except: (a) so far as these orders expressly permit; or (b) with leave of the Court first had and obtained; or (c) with the consent in writing of all parties by their solicitors. 6. ORDER, pending determination of the Appeal or further order, that the defendant by way of interim distribution out of the estate of the late Ivan Stojic pursuant to UCPR r. 54.3, make payments of $3,500 per month to Ivanna Ann-Marie Ferenc Stojic, for the months of March, 2017 and each subsequent month, by: (a) a payment of $10,500 within 21 days (for the months of March to May, 2017); and (b) thereafter payments of $3,500 per month commencing on 26 June, 2017 and thereafter on the 26th day of each month. 7. ORDER, pending determination of the Appeal or further order, that the defendant Simon Slavko Stojic by himself, his servants or agents be restrained from selling, transferring, disposing of, or encumbering, any asset of the estate and or any asset of the Superannuation Fund in which the estate is interested, except: (a) so far as these orders expressly permit; or (b) with leave of the Court first had and obtained; or (c) with the consent in writing of all parties by their solicitors. 8. ORDER that these Orders shall not prevent the defendant as co-trustee of the said Superannuation Fund, from undertaking in conjunction with his co-trustee Jagoda Vukoje the following actions: (a) obtaining and paying for valuations of the Fund's land at 2/12 Boolara Street, Hemmant, in the State of Queensland and 1/1 Thorncroft Street, Campbellfield in the State of Victoria; (b) releasing to Jagoda Vukoje her entitlement in the said Superannuation Fund; (c) paying the proper and ordinary expenses of administration of the said Superannuation Fund from cash funds held in the names of the trustees of the said Superannuation Fund. 9. ORDER that the defendant do by himself, his servants or agents, deliver to the plaintiffs by their solicitor: (a) an account of his receipts and payments up to 31 May, 2017 as executor of the estate of the late Ivan Stokic [sic], listing date, payer/payee, purpose and amount of each payment; and (b) an account of his receipts and payments up to 31 May, 2017 as trustee of the said Superannuation Fund, listing date, payer/payee, purpose and amount of each payment; and (c) a statement of the current amount of rental arrears due from Statewide Office Furniture Pty Ltd to the estate; and (d) a statement of the current balance of the loan account liability of Statewide Office Furniture Pty Ltd to the estate, within 14 days after these orders. 10. ORDER that the defendant do by himself, his servants or agents, deliver to the plaintiffs by their solicitor: (a) within 21 days hereafter, any accounts of receipts or payments which he has received from the Special Administrator Pamela Suttor, (b) within 21 days after receipt by him, any further accounts of receipts or payments which he hereafter receives from the Special Administrator Pamela Suttor. 11. ORDER, pending determination of the Appeal or further order, that the defendant do by himself, his servants or agents, deliver to the plaintiffs by their solicitor, periodic accounts for the month of June, 2017 and each subsequent month of: (a) his receipts and payments in each calendar month as executor of the estate of the late Ivan Stokic [sic], listing date, payer/payee, purpose and amount of each payment; and (b) his receipts and payments in each calendar month as trustee of the said Superannuation Fund, listing date, payer/payee, purpose and amount of each payment; within 21 days after the end of the month."
4. It was common ground that on 26 July 2017, Simon was arrested and subsequently charged with murder and firearms offences in relation to the shooting of a man not far from the premises of Statewide Office Furniture Pty Ltd ("Statewide"). Simon has pleaded not guilty. He remains in remand at the Silverwater Correctional Centre.
5. Simon is now the sole shareholder in Statewide. He was, previously, its sole director. However, on 3 August 2017, Mr Ian Robertson, an experienced retired chartered accountant who had previously served for 34 years as a director of Statewide, was appointed as sole director of that company. Mr Robertson's uncontradicted affidavit evidence was: "4. Since my appointment as the sole director of the Company I have assisted staff in the management of the company. I am aware that there are rental arrears in regard to the Kingsgrove premises occupied by the Company. To the best of my knowledge and belief, rent is unpaid for the months of June, July and August in a total amount of $99,508.20. I have advised Teece Hodgson & Ward, that I believe that the Company should be able to have these arrears paid by the 31st October 2017. I am also aware that the Company has a liability to the estate of the late Ivan Stojic in the amount of $787,597.15. Annexed and marked "B" is a true copy of the General Ledger of the Company as at 30th June 2017 for the Loan Account of the estate of the late Ivan Stojic. To the best of my knowledge and belief there are no unsatisfied requests for payment in regard to this loan account. 5. In the course of performance of the said duties and any other duties in my capacity as a director, I make all the decisions independently and do not consult with the Defendant. I have had no communication oral or written with the Defendant since my appointment as the sole director of the Company. 6. I am aware of the allegations made on behalf of the Plaintiffs in respect of the financial position of the Company and the imminent risk of it going into voluntary administration. I do not believe that there is an imminent risk of it going into voluntary administration. As the sole director of the Company I do not have any plans to have the Company placed into voluntary administration."

Ivanna and Matthew's submissions

1. Mr Smallbone began by drawing to attention that the Court has an inherent power to revoke a grant of probate. The categories upon which the Court can act are not closed. He relied on the well-known passage in Bates v Messner (1967) 67 SR (NSW) 187 at 191-192 per Asprey JA: ".. where circumstances clearly appear to have arisen after a grant of probate which impel the court to the firm conclusion that the due and proper administration of an estate has either been put in jeopardy or has been prevented either by reason of acts or omissions on the part of the executor or by virtue of matters personal to him, for example, mental infirmity, ill health, or by virtue of the proof of other matters which establish that the executor is not a fit and proper person to carry out the duties which he has sworn to the court that he will perform, the court may exercise its inherent jurisdiction to revoke the grant."
2. Mr Smallbone also referred to Re the Estate of S [1968] P 302 in which the Court said that it was "quite impossible" for the prisoner, serving a life sentence, to act as executrix of an estate. Although in that case the prisoner had been convicted, the point of the decision seemed to be as much driven by the practical effect of incarceration.
3. Against that legal background, it was submitted that the evidence was clear that those with the majority interest in the estate, even under the 2013 Will, did not trust Simon. Nor did they wish to have a special administrator appointed because of associated costs and inefficiencies. They also had complaints (about which I express no view) concerning some aspects of the way in which Ms Suttor had carried out her duties under her earlier appointment as special administrator.
4. Next, it was submitted that there were serious grounds to be concerned about Statewide being in default in relation to its premises in New South Wales, Queensland and Victoria, including by reason of failure to pay rent and for being indebted to the estate on a loan account. Either the estate or the Deceased's self-managed superannuation fund is the company's landlord in those locations. It was said that Simon was hopelessly conflicted by reason of being the sole shareholder in the company and that, for example, he had taken no steps to call in the loan.
5. Attention was then drawn to concerns which Ivanna and Matthew had that Simon would not take steps to prosecute certain proceedings in Croatia concerning assets located there.
6. The next matter was allegations that Simon had previously disregarded court orders, including Lindsay J's orders of 23 June 2017 (see paragraph [13] above); orders made by Hallen J in the various family provision proceedings; and orders made in the Family Court. Furthermore, whether ordered to do so or not, Simon had failed to provide information concerning the affairs of the estate, notwithstanding repeated requests by Ivanna and Matthew's solicitors.
7. It was next submitted that, although Simon was entitled to the presumption of innocence, as a practical matter it was not possible for him to undertake the role of executor while he was on remand at Silverwater.
8. Finally, it was submitted that it would no doubt be at least a month before the Court of Appeal delivered its reasons. Any decision to remove Simon as an executor did not need to await the outcome in the Court of Appeal. Even if Simon successfully defended the appeal, he was clearly unsuitable to be the executor of the Deceased's estate.

Simon's submissions

1. Simon's submissions may be summarised as follows.
2. Simon's solicitors had no difficulty in obtaining instructions, notwithstanding his current incarceration. The uncontradicted evidence was that they could attend on him at Silverwater and he was available by fax, letter and telephone. The only particular impediment was that any letters sent to him could take an additional two days to reach him due to the internal procedures of the remand centre.
3. Much of the information that had been sought by Ivanna and Matthew's solicitors had been provided. Their largest concern (in dollar terms), that an alleged $1,700,000 was unaccounted for in the estate accounts, had been resolved by the tender of Ms Suttor's firm's trust account records.
4. Statewide was now in the control of an independent director. There was no evidence of any particular risk in relation to that company or its affairs. The removal of Simon as executor would produce unwarranted procedural difficulties in the various proceedings. While it was conceded that the appeal could proceed if an order were made for Simon to represent the estate in those proceedings, it was submitted that more substantial difficulties would arise in relation to the family provision proceedings because Ivanna and Matthew were themselves plaintiffs in some of those proceedings.
5. The applicants were not entitled to seek a revocation of the grant made by Lindsay J by filing a notice of motion in the proceedings now subject to appeal. Apart from determining questions of stays and associated relief pending the hearing of the appeal, it was submitted that the Court's jurisdiction had been exhausted in those proceedings. If Ivanna and Matthew wanted to revoke the grant to Simon, they had to commence separate proceedings by statement of claim. Instead, they were impermissibly using a notice of motion to seek a final revocation of the grant on the grounds of misconduct rather than demonstrating any need for interim relief pending the determination of the appeal.
6. In circumstances where, if they succeeded in the appeal, the grant to Simon would be revoked in favour of one or both of Ivanna and Matthew, the real question was whether interim orders were required pending the determination of the appeal. No such case has been made out. No urgent threat to the estate had been identified.
7. Furthermore, there was no reason to reappoint Ms Suttor pending determination of the appeal. However, if Simon was successful in the appeal and a further application to revoke the grant of probate to him was pressed, Simon reserved his right to submit that Ms Suttor should be appointed to administer the estate rather than Ivanna and Matthew.

Consideration

1. For the following four reasons, the Court will dismiss Ivanna and Matthew's notice of motion. This is, of course, an interlocutory decision. Once the Court of Appeal's decision is known, there is no reason why they should not renew their application, if so advised, in the circumstances as they exist at that time. It will be entirely a matter for them (and one on which the Court does not have any view) whether they will do so or not.
2. The first reason is that, in my view, the estate and the beneficiaries are adequately protected by orders 5 and 7 made by Lindsay J on 23 June 2017 (see paragraph [13] above). While Ivanna and Matthew's application was based upon serious allegations of Simon's unsuitability to be executor, I did not understand them to be submitting that the Court should find that there is any kind of risk that Simon will breach those orders. On the evidence presented, and in the circumstances of an urgent hearing in the motions list, I would not be prepared to make a finding of that seriousness against Simon, even if one had been sought.
3. By reason of the orders made by Lindsay J on 23 June 2017, Simon has a very limited capacity to act as executor of the Deceased's estate. His Honour's orders preserve the status quo pending the appeal. Even if their appeal is unsuccessful, it will be open to Ivanna and Matthew to apply to have orders to the effect of those made by Lindsay J continued pending any further application they may be advised to make to revoke the grant of probate to Simon.
4. The second reason is that, when considered against the background of Linsday J's orders to which I have just referred, I am unable to identify any immediate threat to the estate such that it might be said to be in jeopardy with sufficient certainty and imminence to warrant Simon's peremptory removal as executor before the Court of Appeal has delivered its judgment.
5. When I invited Mr Smallbone to identify an immediate threat he responded as follows (T17;11-26): "SMALLBONE: The immediate threat is that we just don't know what is happening with the funds of the estate. This executor has been ordered to provide monthly accounts and rental statements, and he just doesn't do it, with a very limited exception. And he says, for example, he has now complied with the order in respect of the balance of the loan account. But all that does is make a change on the information previously supplied, in his favour, without giving any explanation at all why that change has been made or what integers have made up the difference. So where an executor withholds information that he has been ordered to supply, a plaintiff is in the position that, if anything happens, by the time it happens, it will be too late to do anything about it, particularly if it involves assets overseas or funds being spent in breach of orders as has happened in the past."
6. I am not satisfied that that or any of the matters identified by Mr Smallbone just quoted, or any other matter referred to by Ivanna and Matthew, warrants urgent intervention by the Court.
7. It can be accepted that Ivanna and Matthew are frustrated about the slowness of the supply of information, but a large amount of it has now been provided. Ivanna and Matthew continue to challenge the adequacy of that information and I make no finding on that question. However, it does appear that the largest (in dollar terms) concerns about the administration of the estate have been answered by the tender of Ms Suttor's trust account ledger.
8. In relation to other matters of concern, the payments required to be made by the estate to Ivanna under order 6 (see paragraph [13] above) are now completely up to date. Statewide is in the control of an independent director. To the extent that Simon is required to do anything, he is able to instruct his solicitors and they have reasonably ready access to him. Insofar as there has been a general attack on his fitness and propriety to act as an executor, because of the overall view I have taken in relation to this application it is not necessary for me to express any view. However, in relation to his current predicament he is undoubtedly entitled to the presumption of innocence.
9. The Court's third reason for rejecting the present application is the imminence of the Court of Appeal hearing. This may give Ivanna and Matthew the result they want on a considered basis (although in saying that I am not to be taken as expressing any view on the likely outcome of the appeal). While nothing can be usefully said about when the Court of Appeal might deliver its judgment, I take into account that it is certainly open to the parties to draw any perceived need for the urgent provision of at least a result to the attention of the Court.
10. Fourth, in matters of urgency the Court will not permit form to triumph over substance. For the first and second reasons given above, I am not satisfied that this is a case of urgency. In those circumstances, I accept Mr Wilson SC's submission that, for good reason, applications to revoke probate must be brought by statement of claim in fresh proceedings (Supreme Court Rules 1970 (NSW), Pt 78, r 48). The defendant executor is entitled to a proper opportunity to meet the allegations said to justify his or her removal.
11. Ivanna and Matthew's notice of motion will be dismissed.
12. The orders of the Court are as follows: 1. The plaintiffs' motion filed on 31 August 2017 is dismissed. 2. The plaintiffs are to pay the defendant's costs of that motion on the ordinary basis.

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: 13 September 2017