[1990] HCA 39
Delaforce v Simpson-Cook (2010) 78 NSWLR 483
[2010] NSWCA 84
Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15
(1999) 161 ALR 599
Evans v Evans [2011] NSWCA 92
Foley v Foley [2008] NSWSC 233
Fox v Percy (2003) 214 CLR 118
[2003] HCA 22
Galaxidis v Galaxidis [2004] NSWCA 111
Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186
Source
Original judgment source is linked above.
Catchwords
[1990] HCA 39
Delaforce v Simpson-Cook (2010) 78 NSWLR 483[2010] NSWCA 84
Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15(1999) 161 ALR 599
Evans v Evans [2011] NSWCA 92
Foley v Foley [2008] NSWSC 233
Fox v Percy (2003) 214 CLR 118[2003] HCA 22
Galaxidis v Galaxidis [2004] NSWCA 111
Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186[1979] HCA 2
John v John[2014] HCA 19
Singer v Berghouse (1994) 181 CLR 201Byrne & Anor v Pickering [2011] NSWSC 572
Thorner v Major [2009] UKHL 18
Judgment (102 paragraphs)
[1]
INTRODUCTION
This is an application by two sisters, Nevenka Dmitrovic and Veselinka Dmitrovic-Gregory, against their other sister, Branka Kleut. In this judgment, I will refer to each of the three sisters and relevant family members by their first names without intending any overfamiliarity or disrespect.
By their application, Nevenka and Veselinka seek possession of parts of the land at a property at XX Cowper Street, Randwick, New South Wales (Cowper Street property) as the registered proprietors of the Cowper Street property, as well as damages and/or equitable compensation. Branka presently resides in a studio on the Cowper Street property and has occupied different parts of the Cowper Street property at various points in time since approximately 2001.
Branka has made a cross-claim in these proceedings, principally seeking:
1. a declaration that Nevenka and Veselinka hold part of their interest in the Cowper Street property on trust for her by reason of a proprietary estoppel in her favour; and
2. an extension of time for the making of an application for a family provision order under the Succession Act 2006 (NSW), and the making of such an order in her favour, for provision out of the estate or notional estate of the late Zora Dmitrovic, the mother of Nevenka, Branka and Veselinka.
The proceedings were originally commenced in the Common Law Division of this court. By reason of Branka's claim for a family provision order, the proceedings were transferred to the Equity Division (Succession and Probate List, now referred to as the Probate and Family Provision List) on 26 May 2023.
The main issues to be determined in these proceedings are:
1. Whether Nevenka and Veselinka are estopped from denying that Branka has an interest in the Cowper Street property by virtue of representations alleged to have been made to Branka by Nevenka and Zora about which Veselinka knew and assented.
2. Whether an extension of time to bring the family provision claim should be granted to Branka.
3. Whether a notional estate order should be made, the administration of Zora's estate having already been completed.
4. Whether there are grounds to make a family provision order in Branka's favour.
5. Whether an order for possession should be made in favour of Nevenka and Veselinka against Branka.
At the hearing, Mr D Price appeared for Nevenka and Veselinka, instructed by Adams & Co Lawyers. Mr T Morahan appeared for Branka, instructed by Lang Noonan Legal. In making closing submissions, neither counsel had access to the transcript of the oral evidence given at the hearing. In considering those submissions, I have made allowance for that fact.
[2]
Witnesses at the hearing
At the hearing, Nevenka and Veselinka were the principal witnesses in their own cases, each making multiple affidavits and being cross-examined. They also relied on an affidavit of costs affirmed by Sidney Barton Adams, who was not cross-examined.
At the hearing, Branka appeared as a witness in her own case. The other witnesses on whom Branka relied were her son, Goran Kleut, as well as a friend of Branka, Lisa Kathryn Colnan, and a former tenant of one of the units in the Cowper Street property, Kim Meddows. Each of Branka, Goran, Ms Colnan and Ms Meddows were cross-examined. Branka also relied on an affidavit of costs sworn by William Joseph Brett Noonan, who was not cross-examined.
[3]
General observations and credibility of witnesses
At the outset, I note that various conversations and events (and the order of those events) relevant to the issues arising for determination in these proceedings are disputed between the parties - on occasion, vehemently so and at considerable odds from each other's versions.
In every instance, I have endeavoured to evaluate each witness's evidence, not only in the light of their responses in the course of cross-examination, but also in light of the contemporaneous documents, the objectively established facts, the apparent logic of events and probabilities of human behaviour, the existence and nature of corroborative evidence, and the effect and impression given by the evidence as a whole.
This is in line with the appropriate approach to be taken by a trial judge in assessing the reliability of evidence given by witnesses in the course of trial proceedings. Among the principles that guide this undertaking are the following:
1. In circumstances where events have taken place long ago, the orthodox and sensible approach for a trial judge to take in assessing the credibility and reliability of the evidence of a witness about those events is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599, Gleeson CJ, Gaudron, Kirby and Hayne JJ at [15]-[16].
2. Scientific research has cast doubt on the ability of a trial judge to tell truth from falsehood accurately based on the appearance of witnesses such that trial judges should limit their reliance on the appearances of witnesses and develop their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, Gleeson CJ, Gummow and Kirby JJ at [30]-[31].
3. There are multiple problems with a trial judge making demeanour findings, ranging from systematic error or bias, memory malfunctions, the possibility that witnesses may be dishonest about only parts of their evidence, that a truthful witness may give accurate or inaccurate testimony and that a dishonest witness may appear to be truthful. A trial judge should keep in mind the guidance provided in Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 by Ipp JA (with whom Mason P and Tobias JA agreed) who said at [27]:
These problems and doubts about demeanour findings explain why trial judges are expected to weigh their impressions as to demeanour carefully against the probabilities and to examine whether the disputed evidence is consistent with the incontrovertible facts, facts that are not in dispute and other relevant evidence in the case. Of course, demeanour may trump the probabilities, but it should be apparent from the judge's reasons that the probabilities and consistency with other relevant evidence have properly been taken into account.
1. A trial judge should exercise restraint when forming a view about the credibility of a witness based on demeanour in giving evidence because it is a stressful and unfamiliar experience for most people, and particular care must be exercised in making demeanour findings where a witness is from a different cultural and ethnic background to that with which the trial judge is familiar: Goodrich, Ipp JA at [21]. As observed in Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140, by Atkin LJ at 152 (cited in Fox v Percy at [30]):
… an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.
1. The assessment of the credibility of a witness is a larger concept than demeanour and the latter is not to be overemphasised: White Constructions Pty Ltd v PBS Holdings Pty Ltd [2020] NSWCA 277, Bell P (as the Chief Justice then was) at [106] citing Goodrich at [16]-[27] (White JA agreeing generally at [154]-[156]); Admiral International Pty Ltd v Insurance Australia Ltd [2022] NSWCA 277, Bell CJ (Ward P and Macfarlan JA agreeing) at [102]-[103], citing White and Goodrich.
2. It is important to bear in mind that the ordinary human experience of a witness makes their memory of conversations fallible, as eloquently stated in the following oft-cited passage in Watson v Foxman (1995) 49 NSWLR 315, by McLelland CJ in Eq at 319 (recently approved in Touma v Highfields Australia Pty Ltd [2024] NSWCA 160, Basten AJA at [18] (White and Adamson JJA agreeing):
… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
In terms of the credibility of each of Nevenka, Veselinka and Branka as witnesses, bearing in mind the foregoing principles, I am inclined to make the following general remarks:
1. Nevenka tended towards an extreme version of events, and an extreme position in refuting Branka's account of relevant events. This sometimes-excessive contrariety was demonstrable in Nevenka's evidence as to Branka's involvement in and contributions to, for example, renovations and maintenance of the Cowper Street property and provision of care and assistance to Zora while she (Branka) was living at the Cowper Street property. Nevenka's contrariety, in circumstances where the evidence given by Ms Colnan and Ms Meddows at least partially corroborated Branka's account of her involvement at various points in the renovations of parts of the Cowper Street property, tends to undermine Nevenka's credit with respect to these matters and generally.
2. Also detracting from Nevenka's credibility is the inconsistency between the evidence given by her in these proceedings and the construction of the facts advanced on her behalf by solicitors instructed to act for her and Veselinka in earlier related proceedings against Branka in the New South Wales Civil and Administrative Tribunal (NCAT) in 2022. The central discrepancy between these accounts concerns the circumstances under which Branka came to be living in their mother's unit from early 2001 and later the studio at the Cowper Street property, and whether that arrangement arose pursuant to an express (verbal) agreement that Branka would provide carer services to Zora and assist with the general upkeep of the Cowper Street property. These matters, on which Nevenka was cross-examined at length (see, for instance, T95-104), are discussed below.
3. Veselinka likewise adopted an extreme version of events that was largely consistent with that given by Nevenka, who appeared to be the more dominant of the two sisters. Veselinka was circumspect in her responses to questions put to her in cross-examination and, as with Nevenka, when presented with documentary evidence of representations previously made by her that ran counter to her evidence in these proceedings, characterised those earlier representations as incorrect, while maintaining that her current evidence was truthful (T120-126).
4. During cross-examination, when questioned over her failure to produce a document that she referred to which was not in evidence and was the subject of a call by the defendant (T143-144), Veselinka was visibly distressed and confused. I do not consider that this undermines her credibility in any meaningful way and would prefer to give her the benefit of the doubt, noting that giving evidence can be a stressful and disorienting experience for many people unfamiliar with court processes and the adversarial tactics that are brought to bear in litigation.
5. Turning to Branka, I consider that she did not respond reasonably or honestly to a number of questions and propositions put to her in cross-examination. This was particularly so on the topic of the advantages, financial and otherwise, that she derived from living rent-free at the Cowper Street property over the period beginning in 2001 and running up until the present moment. I consider that this diminishes her credibility in relation to her evidence, both on those discrete matters and generally.
As a result of these general impressions formed by me, I have attempted, wherever possible, to anchor the following chronology in objectively established or corroborated facts and contemporaneous documents as opposed to the written or oral evidence given by any one party or witness in the proceedings.
In certain instances below, I have recorded the disparity in the versions given by the respective witnesses in their evidence about the same set of events. For many of those conflicting versions it is not necessary to resolve that disparity but where an event is central to the claims which are made in the proceedings, I have made findings about that event either at the point at which I have narrated the event or in my consideration of the different submissions made in relation to it.
[4]
Underlying basal facts
Nevenka, Branka and Veselinka are sisters and the daughters of Zora. Goran is Branka's son and Zora's grandson.
Nevenka is 74 years of age, Branka is 71 years of age and Veselinka is 68 years of age. Goran is 49 years of age. Zora died on 15 April 2017, aged 90 years.
Zora died leaving a will dated 29 June 2004 (Will), under which Nevenka was appointed executrix and trustee. By the Will, Zora devised the whole of her estate to Nevenka, on trust, to be liquidated with the proceeds to be used to pay out all liabilities of the estate and the balance to go to Nevenka.
On 20 October 2017, probate of the Will was granted to Nevenka.
On 22 August 2018, the administration of Zora's estate was completed.
[5]
1983 dispute: Avoca Street property
At some point prior to October 1983, Zora, Nevenka, Branka and Veselinka jointly purchased a three-bedroom unit at Avoca Street Randwick, New South Wales (Avoca Street property).
For a period of years, the Avoca Street property served as the home of Zora, Nevenka and Veselinka. Throughout that period, Branka lived elsewhere with Goran, who was a child at that time.
In 1983, a dispute in respect of the Avoca Street property arose between Branka on the one hand and Nevenka, Veselinka and Zora on the other.
On 5 October 1983, the solicitors then acting for Branka, Hunt & Hunt Solicitors, sent a letter to Zora, Nevenka and Veselinka in relation to that dispute. Hunt & Hunt proposed that Branka be paid out of her share in the Avoca Street property and an agreement entered into in the following terms:
1. Branka to receive $3,201.00.
2. [Zora], Veselinka and Nevenka to acquire Branka's interest in the [Avoca Street] property.
3. [Zora], Veselinka and Nevenka to pay stamp duty and valuation fee.
4. [Hunt & Hunt's] legal fees to be divided four ways.
The evidence before me does not disclose whether a transaction in these terms was actually entered into, then or subsequently. I understand, however, that the Avoca Street property was the predecessor family property to the Cowper Street property and have inferred that it was sold sometime between October 1983 and 1988.
[6]
Cowper Street property
In 1988, Zora, Nevenka and Veselinka acquired the Cowper Street property as tenants-in-common in the following shares:
1. Zora - 37.5% (three-eighths share).
2. Nevenka - 37.5% (three-eighths share).
3. Veselinka - 25% (one-quarter share).
At the time of purchase, the Cowper Street property consisted of three units, with each unit containing two bedrooms, a kitchen and a bathroom, as well as a shared laundry and a separate garage.
Initially, Nevenka occupied Unit 1, Veselinka occupied Unit 2 and Zora occupied Unit 3, and each of them were regarded as "owning" the unit they occupied.
Veselinka later rented out Unit 2 after she moved to Quandialla in the Central West region of New South Wales and took up residence with her husband at a farm property known as Kilmarnock. From that time, Unit 2 was tenanted with the rent paid to Veselinka, including by:
1. Two brothers, Patrick Kerlin and Daniel Kerlin, from April 1999 to April 2002; and
2. Kim Meddows from about 2006 to 2021. The evidence before me indicates that Ms Meddows occupied Unit 2 in the Cowper Street property from anywhere between January 2004 (according to Nevenka) and 2007 (according to Ms Meddows) up until 2021.
Over the years, building works were carried out at the Cowper Street property at various times, including as follows:
1. In 1992, the existing garage was removed and four garages and a workroom constructed in its place.
2. In late 1997 or early 1998, Unit 2 was renovated. Further renovations to Unit 2 were carried out in 2022.
3. In late 1997 and again in 2010 and between 2021 and 2022, Unit 3 was renovated.
4. In 2008, a studio was constructed above the garages. The construction and fitting out of the studio took place between 2008 and 2010.
5. In 2010, a top floor was added to Unit 1.
[7]
Purchase of the Clovelly Road property by Branka
On 10 February 1988, Branka purchased a unit at Clovelly Road, Randwick, New South Wales (Clovelly Road property) for $110,000.
Branka and Goran moved into and lived at the Clovelly Road property until late 2000 or early 2001.
[8]
Zora's earlier will
On 8 February 1989, Zora executed a will (earlier will) under which Nevenka and Veselinka were appointed executrices.
By the earlier will, Zora devised and bequeathed any motor vehicle owned by her at the time of her death to Goran, and the residue of her estate to Nevenka and Veselinka in equal shares.
[9]
Zora travels overseas
In June 2000, Zora left Australia to travel and spend time overseas in the former Yugoslavia and parts of Europe. At that time, in the absence of Zora, Unit 3 at the Cowper Street property became vacant.
[10]
Sale of the Clovelly Road property by Branka
In 2000, Branka decided to renovate and sell the Clovelly Road property.
In late 2000 or early 2001, Branka and Goran moved out of the Clovelly Road property to allow renovations and preparations for the sale of the property to proceed. At this time, Branka and Goran (who was then 25 years old and studying), at the invitation or suggestion of Zora and/or Nevenka, moved in to the Cowper Street property. The circumstances whereby Branka and Goran came to be living at the Cowper Street property on this occasion are contested (a matter which I have dealt with in more detail below).
In late 2000, Nevenka assisted Branka with renovations of the Clovelly Road property at no cost to Branka. Branka conceded in cross-examination that Nevenka assisted her with the renovations "[o]ut of the goodness of her heart", because she was being a "good sister" (T20-21).
On 28 March 2001, Branka sold the Clovelly Road property for $320,000, $210,000 more than the $110,000 she had paid for it in 1988.
[11]
Circumstances surrounding the occupation of the Cowper Street property by Branka and Goran from late 2000/early 2001
Branka says that in December 2000 she moved into her mother's second bedroom in Unit 3, and Goran moved into the studio or workroom at the Cowper Street property, using Unit 3 as his base. Nevenka says this occurred in February 2001. There does not appear to be a material difference between these dates so it is not necessary to resolve that issue.
According to Branka, the reason that she and Goran moved into the Cowper Street property was that when she told Zora they would not have anywhere to live when the Clovelly Road property was sold, Zora responded by saying "[y]ou can come and live with me and Goran can stay in the workroom". Branka says that this exchange occurred over the telephone, Zora being overseas at the time.
This is disputed by Nevenka, who says that she herself offered for Branka to move in to Unit 3 during a conversation between them that occurred in early 2001. Nevenka says that when Branka expressed a desire to renovate and sell the Clovelly Road property before purchasing a new property, Nevenka suggested to Branka that she could stay in Unit 3 while Zora was overseas, noting that Branka could complete the renovations of the Clovelly Road property and find a new property to move into before Zora's return. Branka denies that a conversation of this description took place.
Nevenka says that shortly after this conversation with Branka, she spoke to Zora over the phone, stating that she had told Branka to move into Unit 3 while Zora was overseas, citing Branka's plans to renovate and sell the Clovelly Road property before buying a new unit with a garage. Nevenka says that Zora responded by saying, "[d]o as you think is best."
In her evidence, Branka stated that she was not aware of this conversation between her mother and her sister, and denied that Nevenka was responsible for any arrangement for her to move in with Zora at the Cowper Street property. In cross-examination, however, when it was put to Branka that the invitation to move in to Unit 3 at this time came from both Zora and Nevenka, she was less categorical in her denial (T20):
Q. I suggest to you that the invitation was made to you by Nevenka. Do you agree with that?
A. No, by Mum.
Q. I suggest to you that it was also made to you by Nevenka.
A. By Mum and, do I say, Nevenka as well, because I spoke with Mum over the telephone.
In all the circumstances, I consider that Branka and Goran came to be living at the Cowper Street property in late 2000/early 2001 by invitation (or at the very least with the consent) of both Nevenka and Zora. I consider that this was an informal arrangement that made sense in the context of their family relationships at that time (whereby Nevenka was happy to assist Branka, for instance, with preparing the Clovelly Road property for sale without any expectation of payment), and which was an instance of Branka's mother and older sister helping her out financially.
[12]
Purchase of Dutruc Street property by Branka
On 21 February 2001, Branka purchased a three-bedroom unit at Dutruc Street, Randwick, New South Wales (Dutruc Street property) for $400,000.
Branka used the Dutruc Street property exclusively as an investment property; the evidence before me is that neither she nor Goran ever lived in the Dutruc Streety property. Branka continued to live in Zora's guest bedroom in Unit 3 of the Cowper Street property for the whole of the period that she owned the Dutruc Street property (between February 2001 and August 2006). Neither she nor Goran paid rent to Zora, Nevenka or Veselinka as the owners of the Cowper Street property during that time.
Nevenka gave evidence, and Branka agreed in cross-examination (T22), that rental payments collected from tenants of the Dutruc Street property were used to pay off the mortgage over that property.
[13]
Zora returns home
On 20 April 2001, Zora returned to Australia from overseas.
At this time, Zora moved back in to Unit 3 on the Cowper Street property, where Branka was living in Zora's second bedroom.
[14]
Branka - provision of care and assistance to Zora
Branka asserts that during the time she and Zora were occupying Unit 3 together (between April 2001 and January 2009), and at all times Branka was living at the Cowper Street property for the period that Zora was alive, she supported Zora emotionally and in her day-to-day activities.
In cross-examination, Branka stated that as at 2005 (T26):
A. [Zora] was getting weak, let's put it that way, because she was already 70 years old.
Q. She [Zora] didn't require assistance from anyone at that stage, did she?
A. She required assistance, you know, in housework.
Q. I suggest to you that -
A. Going shopping because she stopped driving the car at the age of 70 already. When I asked her, "Why did you stop, mum? Why didn't you continue driving?", she said, "I don't feel confident". So, yes, she did require assistance.
In cross-examination, Goran described the state of Zora's health and care needs as at 2006 as follows (T54):
Q. Now, in 2006, your grandmother was still living quite independently, wasn't she?
A. What do you mean by "independently"?
Q. She didn't need a carer, did she?
A. She didn't need a carer at that time, no.
Q. And she didn't require assistance with her activities of daily life?
A. Yes, she did.
Q. She did, did she?
A. Yeah.
Q. And in what way did she require that assistance?
A. She needed assistance walking and getting around. She needed lifts. I would go to the shops for her, all sorts of assistance. She was old.
Both Nevenka and Veselinka deny that Branka assisted Zora during the period from 2000 to Zora's death in 2017. Nevenka gave evidence that prior to 2010 (when Zora became ill), Zora did not require assistance from anyone and did her own shopping, cleaning and cooking.
I am of the view that while living at the Cowper Street property during the relevant period, Branka likely assisted her mother in various ways. This may well have included driving her to the shops and assisting her with housework. In all likelihood, and having regard to the surrounding circumstances, I consider that Zora's need for care and Branka's contribution to Zora's care was modest. I do not accept the evidence of Nevenka and Veselinka that their mother was entirely self-sufficient and received no assistance from Branka while they were living together in Unit 3. Nor am I persuaded by Branka's depiction of Zora's infirmity and frailty, which appears to be overstated. With regard to Goran's evidence of the same events, I am mindful that his natural tendency in these proceedings was to align his evidence with that of his mother, Branka.
I also consider that the parties' recollections, and in turn their respective accounts, of this matter are coloured by self-interest, resentment and acrimony. I am mindful not to permit that acrimony and antagonism to contaminate my findings here, in circumstances where the family relationships do appear at intermittent times to have been positive, functional and cooperative, involving some degree of mutual love and affection that guided their interactions and dealings with each other.
[15]
Renovations of Unit 2 at the Cowper Street property
According to Branka, shortly after moving in to Unit 3 at the Cowper Street property, the following sequence of events took place:
1. Unit 2 (the unit "owned" by Veselinka) became vacant.
2. Nevenka asked Branka if she would help with renovating Veselinka's unit.
3. Branka agreed to assist with renovating Unit 2.
4. Nevenka and Branka proceeded to demolish the existing kitchen in Unit 2 and install a new kitchen, replace the cupboards, paint Unit 2 and engage tradespeople to perform electrical and plumbing work in Unit 2.
5. These renovations were done to prepare Unit 2 for a new tenant.
In cross-examination, Branka was unable to give an exact date or date range (including the year) within which the above conversation with Nevenka or the Unit 2 renovations themselves occurred. She instead asserted that her recollection was tied to other events, maintaining that Unit 2 was renovated prior to Ms Meddows moving in to and occupying Unit 2 as a tenant (T17-18). The evidence before me is that Ms Meddows moved in to Unit 2 at the very earliest in January 2004, and the previous tenancy of the Kerlin brothers had ended in April 2002. On Branka's version of events, this would place the renovations of Unit 2 sometime between April 2002 and January 2004.
Both Nevenka and Veselinka deny that Branka assisted in the renovation of Unit 2 when she moved in with Zora. According to Nevenka and Veselinka, the relevant Unit 2 renovations predated Branka moving in to Unit 3 on the Cowper Street property. Veselinka states that Unit 2 was occupied by two brothers (presumably referring to the Kerlin brothers) at the time Branka moved in to Unit 3, and that the two brothers rented Unit 2 between April 1999 and April 2002. Nevenka states that Unit 2 was renovated in or around late 1997 or early 1998, before Branka moved in to Unit 3 (in late 2000 or early 2001).
No evidence (documentary or otherwise) capable of demonstrating conclusively the dates and durations of the tenancies at Unit 2 was put before me. Nor was I presented with documentation to verify the dates or date range during which renovations of Unit 2 were carried out. I am therefore deprived of a fairly straightforward means of testing the veracity of the evidence given by each of Branka and Nevenka and Veselinka on this matter.
I have made findings below in relation to Branka's assertions that she contributed and assisted with renovations of the different units on the Cowper Street property at various points in time.
[16]
Renovations of Unit 3 (and generally) at the Cowper Street property
According to Branka, upon completing the renovations to Unit 2, she and Nevenka proceeded to renovate Unit 3 (their mother's unit). Branka states that this work consisted of laying cork tiles in the kitchen, tiling the laundry, sanding and polishing the timber floors, and painting the walls in Unit 3. Branka says that she and Zora continued to live in Unit 3 while these renovations were underway.
In cross-examination, Branka was again unable to give an exact date or date range (including the year) within which these renovations occurred, but said that she and Nevenka conducted renovations to Unit 3 on two separate occasions (T22).
Nevenka and Veselinka categorically deny that Branka was involved in any of the renovations to the units at the Cowper Street property. Moreover, in response to Branka's evidence, Nevenka states that Unit 3 was in fact renovated in late 1997 and again in 2010. For her part, Veselinka states that she and Nevenka employed tradespeople to carry out renovations at the property well before Branka began living in Unit 3.
In this connection, Veselinka gave evidence relating to the state of Branka's physical health (and, by implication, her capacity to assist with renovations) in or around 2001. Veselinka says that around the time Branka moved in to Unit 3 at the Cowper Street property, Branka (who at that stage was working full-time) told Veselinka that she was unwell, suffering from emphysema, lupus and Sjogren's disease, and constantly tired, out of breath and struggling to work. This evidence from Veselinka is neither corroborated nor directly contradicted; however, Branka, at one point in cross-examination, seemed to develop something of a counternarrative, suggesting that her staying at the Cowper Street property was to the advantage of her family precisely because of her capacity for physical labour, her strength and her health (T23).
Goran gave evidence that while he was living at the Cowper Street property between approximately 2001 and August 2006, he witnessed Branka and Nevenka working on the Cowper Street property on multiple occasions. This included, he says, attending to maintenance and numerous jobs in Unit 3 as well as renovations to Nevenka's unit, Unit 1.
Nevenka denies that she and Branka worked on the Cowper Street property together, and denies that Unit 1 was renovated during this time. Veselinka also denies that Branka renovated or assisted with the renovation of Unit 1 during this period.
The evidence of other witnesses as to Branka's involvement in or contribution to renovations and building work at the Cowper Street property at various times is addressed below. As will become apparent, I have found that Branka had some level of involvement in and did contribute to renovations and building work at the Cowper Street property over the years.
[17]
Branka's alleged intention to move into the Dutruc Street property
According to Branka, when the renovations of Unit 3 were nearing completion, she intended to move out of the Cowper Street property and into the Dutruc Street property. Branka states that Zora said to her, "[w]hy can't you stay longer? You can rent your place and be able to help Goran financially while he is studying". Branka says that Zora was happy for Branka and Goran to stay with her and Nevenka because they lived as a family unit, got on well and supported each other.
In affidavit evidence, Branka suggested that this (the first) time Zora and Nevenka convinced her to stay living at the Cowper Street property was in 2004. In cross-examination, Branka was less certain and gave a range of possible dates between 2001 and 2006 (T23-26), noting that Goran was undertaking further study in the dramatic arts at the time (T25).
Branka was cross-examined on this aspect of her evidence, and in particular her reasons for remaining at the Cowper Street property at this time (T23). Branka maintained that Zora asked her to stay, that Zora always wanted her to stay in the family, and that it was to the family's advantage that she stayed:
Q. You say that your mother said to you, "Why can't you stay longer?"
A. Yes, Mum always wanted me to stay in the family.
Q. She said, "You can rent your place."
A. Yes.
Q. "And be able to help Goran financially while he is studying."
A. Yes, correct.
Q. So your mother knew that you had the apartment at Dutruc Street, did she?
A. Yes, she did.
Q. And there was no reason why you couldn't have moved out at that time, was there?
A. No particular reason, other than, you know, being asked by Mum, you know, and yeah, that will help Goran and so on, yeah.
Q. You agreed to stay because you thought it was to your advantage to stay, didn't you?
A. It was to my advantage, but also to the advantage of my family.
Q. So it was a double advantage to you, was it?
A. Not to me, but to the family.
Q. To you and to Goran.
A. Come on, you're twisting it, sir. My staying there was also to the advantage of my family because I was staying there and helping them. I've always helped in the family and carried the biggest burden because I was the tallest and the strongest in the family, and the healthiest.
For her part, Nevenka denies that Branka was living with her as a family and that Branka was helping her, saying that they did not spend time together other than in the context of Nevenka's visits to her mother while Branka was living in Unit 3 or when Zora later moved into Nevenka's unit, Unit 1. Nevenka says that from 2001 to 2017 Branka and Zora hardly spoke, Branka was of the view that they had nothing to talk about, and Zora told her on one occasion that they had not spoken for a week.
Veselinka says that her observations of interactions between Zora, Nevenka and Branka were that the relationship was strained and tense, with them being short and abrupt in their discussions.
In terms of Branka's reasons and/or motivations for remaining at the Cowper Street property at this time, Nevenka states that in or around March 2002, Branka said to her words to the effect of: "I am staying here because without the rent from Dutruc Street, I would not be able to pay my mortgage and Goran's school fees."
I note at this point the crystallisation of two opposing narratives, corresponding with each side's case, to explain Branka's ongoing occupation of the Cowper Street property. On the one hand is Branka's "family unit" narrative, incorporating themes of harmonious cohabitation and ascribing to Zora a desire to assist Branka and Goran financially as well as a desire for Branka to be around to assist the family. On the other hand, Nevenka and Veselinka describe a breakdown of sisterly and mother-daughter relations and communication, complete dysfunctionality and general discontent, and suggest that Branka's decision to remain living at Cowper Street was entirely mercenary, having nothing to do with Zora's and/or Nevenka's amenability to Branka's ongoing occupation of the Cowper Street property pursuant to a mutually beneficial family arrangement.
Considering the inherent probabilities of the situation, I do not subscribe to either of these narratives in absolute terms. Neither scenario leaves room or accounts for inevitable flux in the family relationships. To my mind, a status quo was achieved which was to Branka's benefit and which she was inclined to maintain whilst ever it suited her and Goran financially to do so. I consider that on this occasion she continued to live at the Cowper Street property on this basis, but not necessarily solely on this basis. Equally, I consider that she had reasons for remaining at Cowper Street that were independent of any request or invitation by Zora.
I do consider that Branka's refusal here (and at later points) to admit that staying at the Cowper Street property was to her financial advantage reflects very poorly on her credibility as a witness. Given the obvious financial advantage she derived from living there rent-free - even if this benefit could be said to be partially offset by certain other burdens she notionally took on, such as assisting Zora - I regard her oblique and qualified answers to the proposition as disingenuous.
[18]
The Will
On 29 June 2004, Zora executed the Will. The Will is in the following terms:
1 I HEREBY REVOKE all former wills and testamentary dispositions heretofore made by me and declare this to be my last Will and Testament.
2 I APPOINT my daughter NEVENKA DMITROVIC (hereinafter called my "Trustee") Executrix and Trustee of this my Will PROVIDED HOWEVER in the event that the said NEVENKA DMITROVIC shall be unable or unwilling to be my Trustee then I APPOINT my daughter BRANKA KLEUT Executrix and Trustee of this my Will in her place.
3 I GIVE DEVISE AND BEQUEATH the whole of my estate and property both real and personal of whatsoever kind and wheresoever situate unto my Trustee UPON TRUST to sell call in and convert into money such part or parts thereof as may not consist of money and TO HOLD the net proceeds of such sale calling in and conversion together with such part or parts of my estate and property as aforesaid as may consist of money or may for the time being remain unconverted upon the following further trusts namely:
3.1 To pay thereout all my just debts funeral and testamentary expenses including all probate death and estate duties of whatsoever kind which may be payable in my estate or in any way in consequence of my death.
3.2 To pay the balance then remaining unto my daughter NEVENKA DMITROVIC.
…
I consider that nothing turns on the appointment of Branka as an alternative executrix and trustee in the Will if Nevenka was unable or unwilling to perform those roles.
[19]
Purchase and sale of the Alison Road property by Branka
On 1 May 2005, Branka purchased a studio apartment at Alison Road, Kensington, New South Wales (Alison Road property) for $185,000.
Neither Branka nor Goran ever lived at the Alison Road property. I infer from this that it was used solely as an investment property.
On 13 October 2006, Branka sold the Alison Road property for $200,000, $15,000 more than the $185,000 she paid for it in May 2005.
[20]
Sale of the Dutruc Street property by Branka, purchase of the King Street property by Branka and Goran moves into the King Street property
On 15 August 2006, Branka sold the Dutruc Street property for $600,000, $200,000 more than the $400,000 she paid for it in February 2001. That same day, Branka purchased a two-bedroom unit at King Street, Randwick, New South Wales (King Street property) for $435,000.
According to Goran, Branka purchased the King Street property for him to live in and he moved out of the Cowper Street property and into the King Street property sometime after it was purchased.
Under cross-examination, Goran gave evidence that while he was living at the King Street property he paid rent to Branka over a discrete period of three months, and after that and otherwise only assisted his mother however and whenever he could (T58):
Q. Whilst you were living at King Street Randwick, did you pay any rents to your mother?
A. King Street, there was a period where me and a friend of mine were there, we were paying rent. He moved out about three months later, and then I'd assist with my mum however I can. We didn't have a rent per se agreement, but, yeah.
[21]
Branka's alleged intention to move into the King Street property
According to Branka, she intended to move into the King Street property along with Goran after purchasing it in August 2006, but Zora and Nevenka said they wanted her to continue to stay and live with them. Branka says that the three of them had the following exchange, which Nevenka denies:
Branka: I am not going to live in mum's second bedroom and I have all my furniture stored in the garage.
Nevenka: [W]hy don't you let Goran move out and into the unit, and you stay here living with us?
Branka: No, it is time for me to move out and live independently again.
Zora: [N]o, we get on so well, you must stay here with us.
Nevenka: I want you to stay and help me look after mum. You should let Goran get more independent and you can stay and help us. We are two lonely women living in this large house by ourselves.
Nevenka/Zora: We would feel more secure with you living here and you can help us.
Goran says that around this time, Branka discussed with him her decision to move out of the Cowper Street property and into a place of her own. Goran also says that he visited the Cowper Street property regularly after moving out and Zora, Nevenka and Branka all appeared to get on very well together and lived as a family. For her part, Nevenka denies that Goran visited regularly after moving out.
Nevenka agrees that shortly after Branka purchased the King Street property Branka expressed an intention to move out of the Cowper Street property and into the King Street property, but says that a few weeks later, Branka said to her words to the effect of, "I will stay longer to save more money, I don't want to pay a mortgage all my life."
Branka also says that Zora and Nevenka made her feel guilty for wanting to move away, and that they had the following exchange, which Nevenka also denies:
Nevenka and Zora: We will feel more secure if you were here and it will help Goran independently.
Nevenka: You can help me looking after mum, she is getting older and will need looking after.
All of this is contested by Nevenka and Veselinka. Nevenka says that in 2006, Zora lived independently and did not require anyone to look after her. Veselinka says that Zora did not have any health issues or require care at that time. Up until 2010, Nevenka says that Zora did not require assistance as she did her own shopping, cleaning and cooking and she regularly socialised with friends and family.
As detailed above, Goran's evidence is that in 2006, Zora's mobility was somewhat impaired and she needed assistance including lifts to and from the shops (T54).
The evidence given by the parties here works to continue reinforcing the respective opposing narratives adopted by each side, which I have referred to above. To my mind, the likelihood is that the truth lies somewhere in between; that is, Branka wished to stay living at the Cowper Street property because of the advantages to herself and Goran, and it served the interests of Nevenka and Zora, to some extent, for Branka to be available from time to time to assist Zora modestly as she grew older. On balance, I find that the suggestion and/or proposal that Branka remain living at the Cowper Street property came from Zora, Nevenka did not disagree with it, and Branka readily adopted it because she could see how it would benefit herself and Goran.
[22]
Nevenka's first alleged studio representation
Around this time, Branka says that she articulated to Nevenka a disinclination to continue staying in Zora's second bedroom in Unit 3 with her furniture in the garage. Branka says that she and Nevenka proceeded to have the following exchange:
Nevenka: I will build a studio over the garage and you can live there. It will be more comfortable for you.
Branka: Why would you want to do that?
Nevenka: So that you will agree to stay and live with us.
(Nevenka's first alleged studio representation)
Nevenka denies that an exchange along these lines ever took place. She was not challenged on this denial in the course of cross-examination.
Branka suggests that Nevenka's offer to build the studio above the garages at the Cowper Street property was made as an "inducement" for Branka to remain living at the Cowper Street property. Branka also says that around this time Nevenka told her that Branka staying with them would make them feel "more secure" (T28).
Branka was cross-examined on her evidence in relation to Nevenka's first alleged studio representation, and the reasons she says the offer to build the studio was made (T33-34). She conceded that in 2006, she had no specific need for a studio apartment to be built for her, but stated that Nevenka made the offer because both she and Zora wanted Branka to remain living with them. Branka said that for that reason, and because they were sisters, she did not consider it "extraordinary" for Nevenka to have made that offer.
For his part, Goran gave evidence that he was present during conversations where words to the above effect (including Nevenka's first alleged studio representation) were said. Goran also says he was present on several occasions when Zora and Nevenka discussed Branka's desire to move out.
Goran further asserts that on several occasions he was present during conversations about the construction of a studio above the garage, which was intended to serve as Branka's residence. Goran also says that both Zora and Nevenka said the following to him, which Nevenka denies:
We are building the studio for your mother.
This is going to be for your mother to move into so she will have a place of her own.
Goran was cross-examined on this matter, and in particular about the purpose for which the studio was being built and relevant representations alleged to have been made at this time (T55-57):
Q. In about 2006, Nevenka announced to the family that she was going to build a studio over the garages; didn't she?
A. There was no announcement to the family as such. I was told on a number of occasions through certain people that my mum, my grandma, [Nevenka], that they were building, they were planning on doing it, the planning stages were there for a while. I even helped with some of the blueprints, yeah. I was aware that it was happening.
…
Q. You give evidence that the deceased, your grandmother, and Nevenka said to you, "This is going to be for your mother to move into, so she will have a place of her own".
A. Yes.
Q. Well, she had a place of her own at that time; didn't she?
A. That was supposed to be for her, the place they were making.
Q. But she didn't need a place to move into because she had her own property [the King Street property]; did she not?
A. I was living in that property, and she needed a place to live.
Q. Well, there's no reason that she couldn't have lived in her property; is there?
A. Because I was there.
Q. Well, there's no reason you could not have gone and got your own property; is there?
A. I couldn't afford one at the time.
…
Q. I suggest that it was not said that this [the studio] was going to be for your mother to move into so she would have a place of her own.
A. You know, I would proudly say that that was built for my mum.
Q. Again, I suggest to you that, at that time, Nevenka and your grandmother both knew that your mother owned other properties and could move into those properties. Do you agree with that?
A. They knew that she owned other properties, but they wanted her close with them.
Ms Meddows gave evidence that she was informed by Nevenka that the studio was "for Branka to live in." Nevenka denies this and says she never spoke with Ms Meddows about the Cowper Street property, other than to notify her that there would be building work on the property.
Under the heading titled "Consideration" in the section dealing with Issue 1 below, I have set out my findings in relation to whether Nevenka's first alleged studio representation was made to Branka. In short, I have found that it was likely to have been made.
[23]
Zora's alleged promise
According to Branka, at the time she was speaking with Nevenka about Nevenka and Zora wanting her to stay at the property, Zora was present and they had the following further exchange (Zora's alleged promise):
Zora: You won't have to worry about your future living arrangements because I will leave you one third of my share in the house so that you will always have somewhere to live.
Branka: Alright I will stay, if you are going to build a studio and that I will have the security knowing that I will get a part ownership of the house.
Goran says that on more than one occasion, he witnessed Zora tell Branka that she need not be concerned about her living arrangements as she would have the studio and one-third of Zora's share of the Cowper Street property.
This is contested by Nevenka and Veselinka, who say that they never heard or observed Zora talk about the Will or state that Branka would receive the studio or a third of her share in the Cowper Street property. Veselinka also says that she, Nevenka and Zora never discussed leaving any part of the Cowper Street property to anyone.
Branka says that following Zora's alleged promise, she believed that she would have an exclusive right to occupy the studio for as long as she wished and that Zora would leave her an equal share of her interest in the Cowper Street property. In cross-examination (T31), when asked whether she was concerned that receiving one-third of Zora's three-eighths share in the Cowper Streety property might not translate into an entitlement to live in the house, Branka indicated that she did not have any such concern.
Under cross-examination (T32), Branka responded to questions put to her about why she made no attempts to confirm that Zora had taken steps to action her promise. Branka leaned, once more, on the fact of the mother-daughter relationship, appearing to suggest that this supplied a self-evident and stable basis for the making of Zora's alleged promise:
Q. Did you ask your mother if she had made a will to reflect that promise to you?
A. No, I didn't ask her about it.
Q. Weren't you concerned to ensure that she was going to do what she said she was going to do?
A. How can I pressure her to show me the will? I'm sorry, but that just wasn't acceptable in my way of thinking, sir. I know what my mother promised and why wouldn't she? I'm her daughter as well.
Q. So you didn't ask your mother to see her will?
A. No, I didn't ask to see her will.
Q. Did you ask if she was going to make a fresh will?
A. No, I wasn't pressuring my mother for a will or to have me included in the will as verbal she has promised or stated. I just thought it just makes sense. I'm her daughter.
Under the heading titled "Consideration" in the section dealing with Issue 1 below, I have set out my findings in relation to whether Zora's alleged promise was made to Branka. In my view, it was not.
[24]
Development approval for the studio is obtained
In around 2006 or early 2007, Nevenka applied for development approval for the construction of the studio on the Cowper Street property (development application).
On 2 May 2007, a proposed development plan for the construction of a first-floor studio above the existing garages on the Cowper Street property dated July 2006 (development plan) was received by Randwick City Council. The development plan, which had been produced by High Design, a professional architectural design and drafting service, listed Nevenka as the client.
On 5 June 2007, the development application was approved by Randwick City Council.
The notice of determination for the development application, issued by letter dated 6 June 2007 to Nevenka, included the following details:
Property Address: XX Cowper Street, RANDWICK NSW 2031
Description of Work: Construction of first floor studio above existing garages fronting Sydney Street.
Determination: Approved
Determination Date: 5 June 2007
Consent to operate from: 6 June 2007
Consent to lapse on: 6 June 2012
…
Under the subheading 'Conditions of consent', the notice of determination relevantly stipulated:
5. No cooking facilities or sanitary fittings other than those indicated on the approved plans are to be installed in the premises without the prior written consent of the Council.
…
7. The studio located above the garages to Sydney Street shall not be let, adapted or used for separate residential occupation or commercial purposes at any time.
…
20. An Occupation Certificate must be obtained […] prior to any occupation of the building work encompassed in this development consent …
An Occupation Certificate must not be issued for the development if the development is inconsistent with the development consent. The requirements of the Environmental Planning & Assessment Act 1979 and conditions of the development consent must be satisfied prior to the issuing of an occupation certificate.
…
According to Branka, she and Nevenka prepared the initial and revised plans for development approval of the studio. This is contested by Nevenka, who says that she prepared the initial draft plans and then instructed architects who completed the revised plan for the studio, which was then resubmitted for development approval.
In cross-examination, Branka accepted that she was not the client instructing the architects and that Nevenka dealt with the architects, but maintained that she, jointly with Nevenka, made decisions about the studio and its design and construction (T37).
Nevenka says that the studio was not approved for residential occupation by Randwick City Council and it was not built for Branka or anyone else to live in.
Ms Colnan gave evidence that after Branka moved in to the Cowper Street property, she would visit Branka on weekends for coffee around six times a year. Ms Colnan says that on one of these visits in or around 2007 or 2008, when the studio was being constructed on the Cowper Street property, Nevenka told her that the studio was being built for Branka. Ms Colnan states that Nevenka said the following words in her presence:
I want to get this building finished so that Branka can move in.
We are building the studio for Branka so that she can move in and be with us.
Nevenka denies having said this.
My findings in relation to the above evidence concerning steps preparatory to the construction of the studio on the Cowper Street property that were taken are as follows.
First, I reject Nevenka's evidence that the studio was not being built for Branka or anyone else to live in, in circumstances where Nevenka and Veselinka have failed to point to any alternative reason for constructing the studio or use (other than to house Branka) to which the studio was intended to be put. Supporting this impression is the fact that the conditions of the development consent made clear that the structure could not be leased or used for separate residential occupation or commercial purposes at any time. There is also the evidence of Ms Meddows and Ms Colnan, both of whom recall being told by Nevenka that the studio was being built for Branka to live in. Their accounts tend to corroborate Branka's version of events and as corroborative evidence emanating from persons independent of the family, I give particular weight to them.
Secondly, I consider that a finding by me that the studio was being built for Branka to live in (at least initially, and without precluding other uses which might later be contemplated) is consistent with the apparent logic of events. This is so where Branka was evidently living at the Cowper Street property on more than a temporary basis, having already bought and sold the Dutruc Street property and the Alison Road property and purchased the King Street property by this time, without setting herself up to live in any of those properties and instead using the former two as investment properties and reserving the latter as accommodation for Goran. It follows from this that Branka would, in all likelihood, have had some input in the design of a studio which was being constructed for her to move into. I am satisfied that Branka would have had some level of involvement in decisions concerning the design and construction of the studio.
Thirdly, only Branka was likely to fit the description of a person who could permissibly occupy the studio, given that it was a condition of the development approval that the studio was not to be used, let or adapted for separate residential occupation, but Branka was related to Zora and Nevenka and in that sense was not "separate" from the family group living at the Cowper Street property.
Accordingly, at this juncture, I make the following factual findings:
1. The studio was built for the intended purpose of housing Branka on the Cowper Street property.
2. I am satisfied that Nevenka's first alleged studio representation - whereby Nevenka told Branka that she would build a studio on the Cowper Street property for Branka to live in - was in fact made.
3. Branka contributed to the design and construction of the studio (a matter which is addressed further below).
[25]
Construction of the studio
Between the latter half of 2007 and 2008, the studio was constructed.
Nevenka says that from 2008 to 2010, she was the owner-builder of the studio. Nevenka says she undertook various building courses to become an owner-builder and also had meetings with engineers, builders and tradespeople regarding the building work and materials to be used.
According to Branka, she and Nevenka completed various work in the studio including tiling, painting, laying floorboards and skirting, fitting a door to the bathroom, installing door frames and architraves, and sanding and polishing the floors. Branka says that Nevenka paid for construction of the studio, but she paid for the flooring, tiling, electrical, fixtures and taps.
This is contested by Nevenka, who says that Branka did not complete any work on the studio other than helping her install the floorboards and did not pay for any materials, stating that she herself purchased everything for the studio at auctions. Nevenka did concede that Branka occasionally assisted her with some minor work and on one occasion helped polish the floor in the studio.
In cross-examination, Branka maintained that she assisted Nevenka with work on the studio and that she paid for an invoice of 18 June 2008 for granite tiles that was addressed to Nevenka in cash (T34-35). She also said that she gave Nevenka cash on a number of occasions, and that any receipts in respect of things that she had paid for in connection with the construction of the studio (T34):
… I've given to Nevenka as per her request so that she can claim it against the tax as capital, whatever - or whatever.
In cross-examination, when it was put to Branka that there was no requirement to contribute anything (in terms of finance) towards the construction of the studio as a condition of it being built, Branka gave the following responses (T35):
A requirement, as if someone forced me, there wasn't such a thing, but yes, "I'll pay for this, I'll pay for that, you pay for this, you pay for that", that's how it went.
…
There were no conditions other than just stay living with them and help around what I had been doing. What I had been doing even before I came and live in the house, I've been helping the family.
Ms Meddows gave evidence that during her time living in Unit 2 at the Cowper Street property (including during this period), she was in contact with Zora, Nevenka and Branka on an almost daily basis and that on most days she witnessed Branka and Nevenka working on the studio and performing tasks including painting, installing windows, laying timber floors and tiling. Ms Meddows also stated in her affidavit evidence that she witnessed Branka and Nevenka 'put[ting] in the fixtures' in the studio.
Under cross-examination, when asked about the work performed on the studio, Goran made some suggestion that Nevenka (at this stage aged in her fifties) was weaker than Branka and required her assistance with the construction work. He gave the following evidence (T55):
Q. You were aware that in 2007 and 2008, Nevenka did a lot of work building the studio unit at the Cowper Street property; aren't you? So she was physically fit enough to do that work; was she not?
A. They did do a lot of work, yes, both of them. [Nevenka] being the more frailer of the two, my mum was more physically fit. It's just how it was.
On these matters, I tend to find Branka's evidence more credible for several reasons. For one, Nevenka's evidence as to the nature and degree of Branka's contributions (in terms of labour) towards the construction of the studio is contradicted by that of a witness independent of the family, Ms Meddows. As frequently was the case with Nevenka's evidence, Nevenka took an extreme starting point, stating that Branka did not complete any work on the studio other than assisting with the installation of the floorboards, polishing the floor in the studio on one occasion and carrying out other occasional minor work. Against this is the evidence of Ms Meddows who says she observed Branka with Nevenka performing work on the studio extensively - painting, tiling, laying flooring, and installing windows - and fitting it out. While accepting that Nevenka may well have taken primary responsibility for and essentially project-managed the construction of the studio (as evidenced, among other things, by the appearance of her name on the development plan and Branka's own evidence that Nevenka liaised with the architects), I do not accept Nevenka's evidence that Branka's contributions to its construction were negligible.
In relation to Goran's evidence, I am cognisant of both sides in these proceedings pointing to bouts of ill-health suffered by each of Nevenka and Branka at different times as demonstrative of their limited capability to care for Zora or engage in physical labour of the kind the renovations to the Cowper Street property no doubt involved. The circumstances disclose that despite their respective illnesses, over a period of years the sisters carried out substantial improvements and modifications to the Cowper Street property, and were seen doing so. I am not prepared to draw inferences about the capacity (or incapacity) of either Nevenka or Branka to do the work involved in the relevant renovations on account of their actual or professed state(s) of health, or to make adverse findings as to their credibility as witnesses on such a basis, where both of them were evidently physically robust enough to perform the work and assisted each other in these endeavours.
As to Branka's financial contributions, there is a distinct lack of documentary evidence, such as invoices or receipts, capable of demonstrating whether and how much she paid towards the fitting out of the studio. Branka herself maintained that there was no formal division of the expenses between herself and Nevenka, and that they each paid for things here and there. Left to base my assessment on the factual surrounding circumstances, and the general impression I have formed of Branka's tendency to take financial advantage whenever it was available to her, I am satisfied that she contributed very little (if anything) to the expenses incurred in relation to the construction of the studio.
[26]
Purchase of the Don Juan Avenue property by Branka
On 19 December 2008, Branka purchased a one-bedroom unit at Don Juan Avenue, Randwick, New South Wales (Don Juan Avenue property) for $370,000.
Goran says that he moved in to the Don Juan Avenue property shortly after it was purchased. Branka says that Goran moving in to the Don Juan Avenue property was what was contemplated at that time. She made the following statements in cross-examination (T38):
Q. You had invited him to move into [the Don Juan Avenue property], had you?
A. Yes. That was the arrangement, family arrangement.
Q. You could have said to him, "No, I'm going to move in there."
A. No, I couldn't.
Q. Why could you not have done that?
A. Because I was staying with the family with the proviso that Goran can stay in my unit.
In cross-examination, Branka gave the following further evidence as to the occupation of the Don Juan Avenue property by Goran and his family, noting that they did not pay rent but covered some utility bills, and that there was no mortgage over the property (T40-41):
Q. At some point, your son and his partner moved into the Don Juan apartment. Is that right?
A. My son lived in Don Juan Avenue, and when his partner got pregnant, she came and lived with my son in the unit and their son also was born and lived with them in that unit as well.
Q. When did your son move into the Don Juan Avenue apartment?
A. You just told me the year and the month when the Don Juan was bought, that's when he moved in. And sorry, I don't remember it, but you've just told me the time, date, so yeah.
Q. Just before Christmas in 2008. Does that accord with your recollection?
A. Okay, let's say - let's say it is correct because you're looking at the information.
Q. When did your son's partner move into the unit?
A. Well, [Goran's son] was born 30 April - I think it's 30 April - 2012, so she moved in with him prior to that.
Q. I think you've told us that the Don Juan Avenue unit was a one-bedroom unit.
A. Yes, it was.
Q. Was Goran and his partner paying rent to you to live in that apartment?
A. No, they were not paying rent, but they were paying expenses regarding the unit.
Q. Was there a mortgage on the property?
A. No.
Q. The expenses that you refer to, are they the strata fees?
A. Strata, council rates, was it - water rates, yeah.
Q. So you had no financial expenditure connected to owning that property. Is that right?
A. That is correct.
In cross-examination, Goran accepted that while living at the Don Juan Avenue property he did not pay Branka any rent (T58-59). Goran said that when he was living at the Don Juan Avenue property, he was often borrowing money from his family and that he would sometimes contribute money towards electricity bills when he had it, but otherwise had to ask Branka to "help [him] out."
[27]
Occupation certificate for the studio obtained
On 24 December 2008, an occupation certificate for the studio was issued to Nevenka by Randwick City Council.
[28]
Branka moves into the studio
In January 2009, Branka moved out of Unit 3 and into the studio on the Cowper Street property.
At this time, according to Nevenka, Branka asked Nevenka if she could sleep in the studio at the Cowper Street property. Nevenka says that at this stage the painting of the studio had not yet been finished, and Branka offered to finish the painting. Nevenka says that she agreed that Branka could stay in the studio if Branka did the painting, contributed to the payment of utilities (water, council rates, electricity and gas), provided help in the garden, and cleaned around the house, and on the condition that she left the studio when Veselinka came to Sydney or if Nevenka needed it for anything. Branka denies that a conversation of this description took place.
According to Branka, after moving in to the studio she continued to care for Zora and she, Zora and Nevenka lived in harmony, enjoying spending time together and each doing "what [they] could to maintain the property, clean etc".
This is disputed by Nevenka and Veselinka. Nevenka says that from 2001 to 2017, she observed that Branka rarely spoke at length with Zora and that on one occasion Zora told her that it had been a week since Zora and Branka had spoken. Veselinka denies that the family lived together in harmony at this time.
Under cross-examination (T91-92), Nevenka agreed that she took no steps around this time to have Branka leave the property. Nevenka resisted any suggestion that Branka had a right to occupy the studio, stating that it was a case of Nevenka allowing Branka to be there subject to particular conditions, including that she complete the painting, perform gardening and maintenance work, and pay bills, and vacate the premises for Veselinka or other visitors as required. When asked about whether Branka complied with those conditions, Nevenka responded (T92):
A. She didn't, except her studio was always available for Veselinka when she came with her family.
Q. Well, if she didn't comply with the conditions, why didn't you throw her out?
A. I wanted.
Q. You wanted to?
A. Yes, and I told her, but she cried to mum.
In cross-examination, Veselinka accepted that on occasion when she came to Sydney she asked for Branka's permission to stay in the studio, as opposed to Branka being obliged to vacate the studio so that she could stay there (T128-130). Veselinka was taken to a series of text messages exchanged in May 2021 demonstrating these matters, including the following:
1. On 4 May 2021 at 8:44am, Veselinka texted Branka:
Good morning Branka. How r u today. Im planning to come over in a week or two to paint and clean up my flat. Could I please stay with u for a few days.
1. That same day at 8:57am, Branka replied as follows:
Most definitely, Goran is again at Byron, he is still here but hopefully he will move into the unit. If not, u and I will share the sofa bed. …
1. On 16 May 2021 at 1:08pm, Veselinka texted Branka:
… Im coming to Sydney on 18 May Tuesday night.
I will come by taxi.
It is still okay for me to stay overnight, is it?
If Goran is back, I will get myself a fold up bed and sleep in my flat until I finish the work.
1. At 2:07pm, Branka responded:
… Goran is back but still in the studio. You can stay with me but it might be a bit crowded a[t] night. …
In my assessment, I consider that it is likely that Nevenka permitted Branka to move into and occupy the studio, having built it for that purpose. This is reinforced by Veselinka evidently holding the view that she needed Branka's permission to stay in the studio on those occasions when she travelled to Sydney.
[29]
Branka's contributions to maintenance and upkeep of the Cowper Street property and renovations of the Cowper Street property
Nevenka and Veselinka say that at all relevant times while she was living at the Cowper Street property, Branka never provided any assistance with maintenance or cleaning of the property. Nevenka also says that Branka never made any contribution towards water bills or council rates and only made occasional contributions to electricity and gas bills.
Against this, Goran gave evidence that while he was living at the Cowper Street property between approximately 2001 and August 2006, he witnessed Branka and Nevenka working on the property on multiple occasions. This included, he says, attending to general property maintenance and numerous jobs in Zora's unit as well as renovations to Nevenka's unit.
Similarly, Ms Meddows gave evidence that while she was living in Unit 2 on the Cowper Street property, she observed Branka regularly assisting with general maintenance of the property and of Unit 2, either by herself or with Nevenka, including house repairs, gardening, tending to the lawns, painting and cleaning the gutters.
As noted above, Nevenka and Veselinka strenuously deny that Branka was involved in any of the renovations or improvements to the units on the Cowper Street property. Branka maintains that she assisted with renovations to all three units on the property at different times, including Unit 2 shortly after she moved into the Cowper Street property in or around 2001, Unit 3 thereafter, and Unit 1 in 2010 (the details of which are set out below), as well as with the construction of the studio.
Ms Colnan states that over a period of years when she would come to visit Branka at the Cowper Street property on weekends, she witnessed Branka assisting in the renovations of at least two apartments on the property. She says that on several occasions she observed Branka painting, laying timber floors and tiling and installing fixtures and fittings.
In cross-examination, Ms Colnan conceded that she did not herself witness Branka installing fixtures or laying tiles at the Cowper Street property, but that Branka and Nevenka told her they were doing it together. Ms Colnan also said that she witnessed Branka laying timber floors on one occasion and painting on two or three occasions, and said that when she would visit, it was clear to her that Branka had been tiling or carrying out other work on the property because (T70):
… she'd have paint on her, and she'd have glue from tiling, and yeah. She wasn't always very clean, so I knew she'd been working on the house.
According to Ms Colnan, Nevenka on one occasion said to her that she was grateful for Branka's assistance in the renovations and "for the money she saved [her] by not having to employ tradesmen." Nevenka denies having said this.
Like much of the evidence given by each of the sisters in these proceedings, their respective accounts of these matters tend towards the extreme, particularly in Nevenka's case. I am inclined to place the greatest weight on the evidence provided by Ms Meddows and Ms Colnan as witnesses outside the family, whose accounts give some corroboration to the version of events given by Branka and Goran. I also consider that Nevenka and Veselinka's denials that Branka performed any substantial work on the Cowper Street property, in circumstances where others have observed Branka engaging in maintenance and renovation work on different parts of the property at different times, undermine their credibility generally.
I am comfortably satisfied that it is likely that Branka did in fact perform work on the Cowper Street property throughout the period she was living there and likely attended to maintenance of the Cowper Street property too. The fact that she was seen doing such work by persons independent of the family also suggests to me that her contributions were more than nominal. I am not, however, satisfied that Branka made anything more than minor financial contributions while she lived in the studio given that there is no documentary evidence to support her having done so and given what I consider to be her utilisation of the living arrangements at the Cowper Street property to her financial advantage.
[30]
Sale of the King Street property by Branka
On 15 July 2009, Branka sold the King Street property for $565,000, $130,000 more than the $435,000 she paid for it in August 2006. By this time, Goran was living in the Don Juan Avenue property.
[31]
Renovations of Unit 1
In 2010, a top floor was added to Unit 1.
According to Branka, these works included extending Nevenka's unit by building an additional floor and remodelling the existing floor. Branka says that Nevenka paid for the construction, plumbing and electrical works involved in this set of renovations, but that she undertook most of the other work including tiling of the existing floor of the apartment, installing doors, tiling the walls, painting, sanding and polishing floors and stairs. She gave evidence that at one point in the course of renovating Nevenka's unit, she fell from a ladder and cracked several ribs.
Goran gave evidence that he observed Branka and Nevenka together renovating Nevenka's unit.
Nevenka denies that Branka provided any assistance with the renovation of her unit insofar as she denies any substantive involvement by Branka in renovations to the Cowper Street property.
Branka says she was happy to assist with the renovations of Nevenka's unit as they were family and she believed she had a place to live for as long as she liked.
Given my finding that it is likely that Branka assisted with earlier renovations, I consider that it is also likely that Branka undertook work on the renovations of Nevenka's unit.
[32]
Unit 3: Further renovations
Nevenka gave evidence that Unit 3 underwent further renovations in 2010.
[33]
Zora's declining health
Veselinka and Nevenka say that in around 2010, Zora became ill with emphysema, and later with gout and heart problems, and Nevenka became Zora's full-time carer. At this point in time, Nevenka was not working, having retired in late 2006. Branka was still working full-time.
Nevenka says that in early 2011, Zora moved into her unit (Unit 1) as Zora was becoming very sick and was increasingly dependent on her for assistance. Nevenka says that she organised medical and other appointments for Zora and cared for Zora until her death in 2017.
Nevenka and Veselinka assert that Branka had no role in caring for Zora from 2010 until Zora's death in 2017.
Branka gave no evidence as to the level of care she personally provided to Zora from this point in time until Zora's death in 2017 other than to say that Zora was in need of assistance at all relevant times while Branka was living at the Cowper Street property and that she rendered such assistance. Branka was not cross-examined on this matter.
My findings above that it is likely that Branka assisted Zora in various ways while living at the Cowper Street property during the relevant period are also relevant to the time that Zora's health was declining, but I consider that it is likely that the vast bulk of the care for Zora was undertaken by Nevenka given that Zora was living with her in Unit 1 and Branka was in full-time employment.
[34]
Branka moves into Nevenka's guest bedroom in Unit 1
According to Nevenka, in November 2012 Branka moved out of the studio and into the guest bedroom of Unit 1 and remained there until 10 March 2021, a period of just over eight years. Nevenka says that Branka moved into her guest bedroom as Nevenka had agreed to look after Goran's son, on the condition that Branka would sleep in her spare room and "look after him at night so that [she (Nevenka)] could have a good night's sleep."
Nevenka says that Branka lived in the studio for short periods of time while Branka was sick in 2015 or 2016 and when Zora passed away in 2017, but otherwise occupied Unit 1, noting that Branka's clothes remained in her spare room.
By Nevenka's account, the living arrangements at the Cowper Street property at this time were as follows (T103-105):
1. Zora, Nevenka and Branka all lived in Unit 1 (Nevenka's unit);
2. Nevenka slept in the main bedroom and Branka slept in the guest bedroom (upstairs);
3. Zora slept in an open area (downstairs);
4. Unit 2 was occupied by tenant(s);
5. Unit 3 (Zora's unit) was occupied by tenant(s); and
6. the studio was initially unoccupied but was later occupied by Goran and his family in 2019 (a matter addressed in more detail below).
During cross-examination, Branka initially agreed that she moved into Nevenka's unit in 2012, but proceeded to dispute the relevant dates put to her. She characterised the circumstances in which she came to be living in Unit 1 on the Cowper Street property as follows, agreeing that the arrangement had to do with Nevenka looking after Goran's young son but describing her occupation of Unit 1 as short-term and/or occasional (T39-40):
Q. You then moved back into Nevenka's unit in 2012. Correct?
A. Yes.
Q. And that was in 2012?
A. No. Why - no. I don't know where you're getting that, but anyway, no.
Q. I suggest to you that that was because Goran had asked Nevenka to look after his son for him because his wife was going back - perhaps it wasn't his wife, his partner was going back to work full time.
A. My sister looked after my grandson on occasions, and on those occasions when [Goran's son] stayed overnight, I then stayed with him in the second bedroom so that he wouldn't be a burden to Nevenka. I could have had him in my studio, but Nevenka insisted and mum that he sleeps there. And as I said, on the night that he stayed there, I slept with him in the same room so that Nevenka wouldn't have a burden.
Q. I suggest to you that after you moved back into Nevenka's unit in 2012, you remained living there until March 2021.
A. That is not true. That is not true, sir. Wherever you are getting that information, it is wrong.
Q. The reason that you were not living in the unit is that it didn't have a kitchen in it. That's correct, isn't it?
A. It had a kitchenette.
Q. Didn't have cooking facilities, did it?
A. Nevenka later on, I must say, Nevenka bought that stove and I paid for the installation of it. But Nevenka paid for it. So there was a stove in there. Still is.
The evidence about the living arrangements of Branka at the Cowper Street property between 2012 and 2021 highlights the significant swings in the relationship between Nevenka and Branka. Nevenka maintains that Branka moved into Unit 1 and remained there for that period. Branka says that she stayed in Unit 1 only on the nights that Nevenka had been caring for Goran's son. Again, I consider that the truth lies between these conflicting versions and that it is likely that Branka spent a substantial amount of time living with Nevenka in Unit 1 as Nevenka stated in her evidence but returned to the studio intermittently across that time, except for the period in which Goran and his family lived there in 2019.
[35]
Zora's death and Nevenka's second alleged studio representation
On 15 April 2017, Zora died leaving the Will and an estate worth $1.2 million.
Branka says that a short time after Zora's death, she had an exchange with Nevenka where Nevenka informed her that Nevenka was the sole beneficiary named in the Will; that Branka would have a right to live in the studio; and that Nevenka would leave her the studio in her will:
Nevenka: In her Will mum left everything to me.
Branka: Can I see her Will?
Nevenka: There is nothing to see, mum left everything to me. You have the studio and I will make sure it is in my Will that you get the studio. The rest will be shared between Goran, [Goran's son] and [Veselinka's son].
(Nevenka's second alleged studio representation)
This is contested by Nevenka, who denies the conversation and denies making any promise to Branka that she had a right to live in the studio or would obtain ownership of the studio via provision in Nevenka's will.
Branka says that she was confused that Zora had not done as she had promised by leaving Branka one third of her share in the Cowper Street property. Branka also says that following the above exchange with Nevenka, her understanding was she would be taken care of and had no reason to question anything, as she would have the studio and the three boys (Goran and Zora's great-grandchildren) would eventually get everything.
Nevenka says that she provided a copy of the Will to Veselinka and Branka in 2017. This is contested by Branka, who consistently denied receiving a copy of the Will. At the hearing before me, Nevenka was not challenged on this aspect of her evidence.
Veselinka says that Nevenka sent her a copy of the Will, probate papers and instructions in relation to challenging the Will on 16 September 2017.
According to Veselinka, shortly after this, when she came to Sydney in November 2017, she had the following conversation with Branka:
Veselinka I received Mum's will in the mail today.
Branka I got it too. Mum left Nevenka her flat. I was not expecting anything and that's all right.
For reasons I will set out in greater detail below, I do not consider the factual question of whether Branka received a copy of the Will at this time to be of crucial importance to the legal issues I am required to determine in the proceedings. Irrespective of which of Branka's or Nevenka and Veselinka's account I prefer, it is clear that Branka knew, as at 2017, that provision had not been made for her in the Will and that she stood to receive nothing under it.
In relation to Nevenka's second alleged studio representation, under the heading titled "Consideration" in the section dealing with Issue 1 below, I have set out my findings in relation to whether that representation was made to Branka. In short, I have found that a form of it was made, but that it did not extend to a promise on the part of Nevenka that she would leave the studio to Branka in her will. In my view, the representation that was made was as to Branka having a right to live in the studio and did not amount to a promise of any form of ownership of the studio.
[36]
Probate granted and administration of Zora's estate
On 20 October 2017, this court granted probate of the Will to Nevenka.
Nevenka says that following the grant of probate, she paid the following liabilities of the estate totalling $11,583 (with no remaining liabilities):
1. funeral expenses in the amount of $9,220;
2. fees for the granting of probate by this court in the amount of $2,032; and
3. fees for a perpetual interment right in the amount of $331.
According to Branka, Nevenka had been in control of Zora's affairs and was a signatory to Zora's bank account, so that neither she nor Veselinka had access to Zora's records.
On 22 August 2018, in accordance with the terms of the Will, Zora's interest in the Cowper Street property was transferred into Nevenka's name and the administration of the estate was duly completed. I note that this distribution took place after the expiration of the prescribed statutory 12-month period within which a family provision application can be made pursuant to s 58(2) of the Succession Act.
As at 22 August 2018, Nevenka and Veselinka became the registered owners of the Cowper Street property as tenants-in-common in unequal proportions. Nevenka's share of the Cowper Street property has increased to 75% (three-quarters share) and Veselinka's share remains 25% (one-quarter share) pursuant to the Will.
[37]
Goran and family move into the studio and sale of the Don Juan Avenue property
Nevenka gave evidence that in March 2019, she had a conversation with Branka in the course of which Branka expressed a wish to sell her unit (presumably meaning the Don Juan Avenue property) and buy a large one to move into, preferably in Randwick. Nevenka says that she offered for Goran to move into "the unit" (presumably referring to the studio at the Cowper Street property) while Branka was buying and selling units, noting this would take at least six months.
This is contested by Branka, who denies having had the above conversation with Nevenka but says that words to the following effect were exchanged between them around this time and that she ultimately accepted Nevenka's offer for Goran to move into the studio and Branka to move into Unit 1:
Branka: I am considering buying a bigger unit for Goran and his family to move into.
Nevenka: While you are selling your unit Goran can move into the studio and you can move into my second bedroom.
In cross-examination, Branka insisted that she never told Nevenka that she herself would be moving out of the Cowper Street property and into the new property, and that the plan at all times was for Goran and his family to eventually take up residence in the new property once it was purchased (T42).
Following this, in around August 2019, Goran, his partner and their son moved out of the Don Juan Avenue property and into the studio for a period of six months.
On 12 September 2019, Branka sold the Don Juan Avenue property for $695,000, $325,000 more than the $370,000 she paid when she acquired it in December 2008.
I prefer the evidence of Branka in relation to this episode as I consider that Branka wished to take financial advantage of living rent-free at the Cowper Street property (and in the studio which had been built for her) for as long as she possibly could. I consider that Branka is unlikely to have expressed any intention to move out when she had not even bought a property into which she, Goran and his family might move together. I think that it is likely that Branka was looking to house Goran and his family at no cost to them or her for the period before she was able to find another unit into which they could move.
[38]
Purchase of the Prince Street property
On 21 October 2019, Branka purchased a two-bedroom unit at Prince Street, Randwick, New South Wales (Prince Street property) for $940,000. There was no mortgage over the property.
According to Veselinka, Branka called her when she purchased the Prince Street property and said:
I have bought a 3 bedroom unit and me and my family will be moving in to it as soon as it gets renovated and the internet is connected.
In cross-examination, Branka maintained that she never represented to either of her sisters that she would move into the Prince Street property (T42). I accept Branka's evidence based on the probability that she wanted to be able to house all of her family, including herself, at no financial cost to her or them.
[39]
Nevenka's ill-health, conflict between Branka and Nevenka and Nevenka's third alleged studio representation
In November 2019, Nevenka suffered a lung infection. From this time, she has had ongoing respiratory health issues as a result of multiple reinfections, along with several admissions to hospital for treatment. Branka says that around this time, she took Nevenka to hospital on a number of occasions.
During this same period, it appears that the relationship between Nevenka and Branka (who was still living in Nevenka's unit at this point) began to sour significantly.
According to Branka, Nevenka stopped talking to her and on one occasion demanded that she leave Unit 1, saying (alleged expletives omitted), "Get out of my house. I gave you the studio, go and live there" (Nevenka's third alleged studio representation). Branka says that following this interaction, she became concerned about Nevenka's behaviour, which she perceived as confused, erratic and irrational.
For her part, Nevenka denies that she said the above words attributed to her by Branka, and denies that she exhibited confused or erratic behaviour at this or any other time. Veselinka says that she has never observed any such behaviour on the part of Nevenka.
Branka also says that around this time, she:
1. did some research to see if she was able to challenge the Will, at which point she discovered that she would have needed to do so within the 12 month-period following Zora's death;
2. became suspicious that Nevenka may have lied about the provisions of the Will, but was unable to confirm or otherwise test her suspicions because she did not have a copy of the Will; and
3. developed an assumption that she had missed any opportunity that she might have had to contest the Will, given that Zora had died in 2017.
I am unable to be satisfied about the alleged confused, erratic and irrational behaviour of Nevenka according to Branka. I have no doubt that there was a significant falling out between Nevenka and Branka around this time, in the course of which it is likely that they had heated and emotional exchanges.
As I have indicated under the heading titled "Consideration" in the section dealing with Issue 1 below, on the balance of probabilities, something similar to Nevenka's third alleged studio representation was made to Branka by Nevenka, although I am only satisfied that it imported Nevenka having given Branka the studio to live in, not to own.
[40]
Prince Street property renovations and Goran and family move into the Prince Street property
In 2020, over a period of months coinciding with the COVID-19 lockdown period(s) in Sydney, the Prince Street property was renovated.
Nevenka gave evidence that around the time Branka bought the Prince Street property, Branka told Nevenka that the bathroom need to be completely re-modelled. She also says that by the second half of 2020, renovations at the Prince Street property were completed and some of Branka's furniture had been transferred into it, although Branka remained living in Unit 1 on the Cowper Street property.
The nature of the renovations that were carried out at the Prince Street property is somewhat unclear. It appears that work was done to create an additional room at the Prince Street property by enclosing what was once a balcony. Both Branka (T42) and Goran (T59) deny that the result was an additional bedroom (or even a room that could be used as an extra bedroom), but without specifying how exactly that additional room is or has been used.
In the second half of 2020, shortly after the renovations to the Prince Street property were completed, Goran, his partner and his son moved out of the studio at the Cowper Street property and into the Prince Street property. In cross-examination, Branka indicated that because it took some time for the internet to get connected, Goran and his family moved out of the Cowper Street property and into the Prince Street property progressively (T44). Goran gave evidence that he and his family spent the first and second lockdowns (or part of them) living in the Prince Street property.
Goran and his family presently live at the Prince Street property. They have never paid rent to Branka while occupying the Prince Street property, but Branka says that whenever they have lived in a property owned by her, they have paid expenses (T43).
In response to questions I asked Goran at the hearing, he agreed that he does not pay any rent to Branka in respect of his (and his family's) living arrangements at the Prince Street property, but stated that they "take care of things" and send Branka money every so often (T60):
HIS HONOUR
Q. Mr Kleut, can I just ask you this: the arrangement that you have with your mother for living at Prince Street where you currently are -
A. Yes.
Q. - is that you don't pay any rent. Is that right?
A. Well, we don't pay rent, but we take care of things. I send my mum, every so often, some money, and that's the arrangement.
Q. As you understand it, the money that you give to your mother is in repayment of money that she has loaned you over several years from time to time.
A. I don't know if I could ever repay my mum the money that she has loaned me, but I know that there's still an internet bill that is under her name that I give money for, and certain things, yeah.
Q. You help out from time to time with the expenses that might arise on the property. Is that right?
A. Yes. Yeah, most of, yeah.
[41]
Dispute between Nevenka and Branka and Branka moves back into the studio
According to Nevenka, in early 2021, Branka represented to Nevenka that she would be moving out of the Cowper Street property and into the Prince Street property along with Goran and his family. Nevenka says that in February 2021, Branka told her that the internet at the Prince Street property would be connected on 15 March 2021 and said, "we are all moving out". Branka denies having said this, maintaining that she only ever said that Goran and his family would be moving into the Prince Street property, while she would be moving back into the studio, which she says she proceeded to do.
Under cross-examination, Branka insisted that there was never any question of her moving out of the Cowper Street property (T42):
Q. And in March 2021, you then told Nevenka that you were going to move into the Prince Street unit -
A. That is not true.
Q. - after the internet was connected?
A. I said Goran and his partner and [Goran's son] would be moving out when the internet was connected. I did not say -
HIS HONOUR
Q. So, moving out from -
A. From the studio into the Prince Street.
Q. Right.
A. I did not say I was going to move out, there was never a question of me moving out.
PRICE
Q. Because it was not in your financial interests to do so; was it?
A. No, it had nothing to do with that. The arrangement was firmly in place that I live in a studio, and that Nevenka and I are going to stay together and look after each other as we are getting old and frail.
On 10 March 2021, Nevenka returned from an overnight stay in hospital, having been admitted as an inpatient the previous day for treatment for pneumonia. Upon returning to her unit, where Branka was still living at this point, she and Branka had an argument the details of which are disputed but which appears to have been triggered by Nevenka asking Branka where her coffee-making equipment was, before descending into an aggressive verbal exchange, in the course of which:
1. Nevenka says she asked Branka, "Why don't you move into the studio while waiting for the internet connection [at the Prince Street property]?"; and
2. Branka says Nevenka told her to get out of her house and go and live in the studio (in terms identical to Nevenka's third alleged studio representation) (T46-47).
Following this exchange, Branka moved back into the studio, which she has continued to occupy ever since. Nevenka says that Branka has lived in the studio without her or Veselinka's permission since 15 March 2021.
According to Nevenka, in late March 2021, she and Branka had the following exchange:
Nevenka: When are you moving out?
Branka: When I am ready.
Branka strenuously denies that they had a conversation along these lines.
Veselinka gave evidence that when she was in Sydney several months later, in November 2021, Branka took her to see the Prince Street property. Veselinka says that on this occasion, Branka said to her, "We are all moving in together. I have my family and she can stay in that big old house all by herself."
It is clear to me that by this point in time, on either Branka's or Nevenka's version of events, the relationship between the sisters was rapidly deteriorating. Whatever the precise legal and social character of the arrangement pursuant to which Branka was living at the Cowper Street property at this time, that arrangement was fast becoming untenable in light of the degree of hostility between Branka and Nevenka.
[42]
Exchanges between Branka and Veselinka about Zora's alleged promise
On 9 April 2021 at 5:23pm, Veselinka sent Branka a WhatsApp message (Veselinka's WhatsApp message), stating:
… When she dies it would bring me extreme happiness when the house gets sold. [You] will get your money that was promised by mum and the bloody house gets flattened. …
It is clear from the context of this message, including the surrounding messages that were also admitted into evidence, that the "she" being referred to is Nevenka. I will not describe or set out in further detail the correspondence within which this statement from Veselinka is nested except to say that around this time Branka and Veselinka were exchanging messages where they appeared to be venting their frustrations about certain aspects of Nevenka's character and conduct to which they were exposed during certain periods in their adult lives when they were living with Nevenka.
In cross-examination, Veselinka suggested that amidst extensive back-and-forth correspondence with Branka over the phone and via text message around this time, she was simply agreeing with certain claims Branka was making to get Branka off her back or to see "what she was getting at" (T125):
A. There was phone calls and there was texts. And in some phone calls, she was saying that she should have money or whatever, and I was agreeing with her … I was saying things that she wanted to hear just to see where she was getting at, what she was getting at.
When asked what compelled her to refer to "money […] promised by [Zora]" to Branka in the above WhatsApp message, Veselinka stated that she could not remember specifically what had prompted her to put in print to Branka that Branka would get the money that had been promised to her by Zora (T125-126). Veselinka also stated that Zora had not made any promise to Branka that she would leave her money in the Will in Veselinka's presence, and that it seemed to her, presented with the text of this WhatsApp message now, that she was just trying to either brush Branka off or placate her (T126).
According to Branka, a short time after Veselinka sent her the above WhatsApp message (and prior to 21 June 2021), she had a conversation with Veselinka which included the following exchange:
Branka: What do you know about mum's promise to me?
Veselinka: Mum said to Nevenka in front of me Branka is to get one third of my share of the house.
(Veselinka's alleged statement)
Branka relies on Veselinka's alleged statement as corroboration of Zora's alleged promise.
Veselinka's evidence is that she never heard Zora tell Branka or anyone else that she was going to leave a third of her estate to Branka.
In assessing Veselinka's evidence here, I am conscious of the need to read Veselinka's WhatsApp message as part of a course of correspondence between her and Branka that was open and genial, reflecting the state of their relationship at that point in time, and within the broader context of the shifting alliances between the three sisters. Noting that tensions were high between Branka and Nevenka around this time (who, at least on Branka's account, were not speaking to each other), and that Veselinka and Branka appeared to be momentarily "allied" against their older sister, I am minded to weigh this contemporaneous document recording what was said by Veselinka to Branka with that important context in mind. In turn, in all the circumstances, I do not regard as dubious or unsatisfactory Veselinka's explanation of having said certain things merely to placate Branka or ingratiate herself with Branka. On the contrary, I consider that it is altogether probable that what was said here by Veselinka in Veselinka's WhatsApp message to Branka bore that very purpose, and does not provide corroboration of Zora's alleged promise.
For the reasons set out under the heading titled "Consideration" in the section dealing with Issue 1 below, I have also found that Veselinka's alleged statement was not made to Branka.
[43]
First request for Branka to vacate the Cowper Street property - letter of demand dated 14 June 2021
On 14 June 2021, Nevenka sent a letter to Branka asking her to vacate the Cowper Street property within two weeks (letter of demand). The letter of demand relevantly stated (quoted exactly as written):
I am writing this letter because you still didn't move out of my property into your own unit in Prince Street, Randwick that you purchased in 2019 and renovated in 2020 and in accordance with what you told me, that you will move out in March this year. l don't understand why are you putting me into the situation where I have to ask you in writing to move out. …
You have postponed you move to your unit firstly because you didn't read by-laws, than because of renovations and finally because of internet connection. In late January you told me that your internet will be connected on 15 March 2021 and that you will move out soon after. However, you are still in my studio without providing any explanation or without obtaining my permission to stay there. Even if I wanted to give you permission to stay in the studio I can't because it is not approved for occupation without use of a unit. That makes your stay in my studio illegal.
I didn't allow use of my unit any longer because you verbally attacked me as soon as I came back from hospital after bronchoscopy on 10 March 2021 with pneumonia. Despite my frail state you were very aggressive, even started walking towards me, yelling, calling me names and threatening which frightened me. I don't understand what it was for but I became fearful from you. I expected you to leave the studio as well soon after. When I asked you why aren't you moving out your answer was in a aggressive manner that you are not ready.
However, I know your unit is ready and your son's girlfriend has moved into the unit some months ago. I have been present when she asked you to move into the unit but I am not sure whether you are getting rent from her or whether you have more tenants in your unit. At the same time you are collecting government pension and living in my studio and occupying my three garages and workroom, rent free and without contribution towards any bills. You are also using my electricity for lights in the studio and to heat the garages which have no door. You have also destroyed all lights in the garages and fire alarms. I expect you to pay for it.
Prior to 9 March 2021 I have allowed you to reside in my unit and studio while you organize your housing situation and during worst of the pandemic. Earlier I have looked after you while you were sick and had hip replacements, one in 2017 and the other in 2019. Later on when you purchased a large unit I agreed for you to occupy my unit (together with me) and the studio together with the rest of your family until you finished renovation of the unit. Now that your unit is finished you are still not moving out.
Just to remind you that some years ago mom allowed you to stay with her rent free and without any contribution for bills so that you can organize your accommodation and pay for your son's private academy.
During that time you have renovated and than sold your unit in Clovelly Street, Randwick and purchased three bedroom unit in Dutruc Street also Randwick. When you son finished the school you sold the tree bedroom unit and purchased two bedroom unit in King Street, Randwick and a studio in Alison Road which you rented. Than you sold it all and purchased one bedroom unit in Don Juan Avenue Randwick which you claimed was too small for both.
Now that you purchased a large three bedroom unit in Prince Street, Randwick, finished all the renovations in 2020 you kept postponing you move into the unit.
…
Branka says that she received the letter of demand on 21 June 2021.
There are many assertions contained in the letter of demand, some of which were the subject of separate evidence (such as Branka's multiple property purchases, Nevenka alleging that Branka said on a number of occasions that she would move into the Prince Street property and Nevenka alleging that Branka behaved aggressively towards her when Nevenka returned from a hospital stay in March 2021), and others which are not (including alleged hip replacements for Branka in 2017 and 2019).
In cross-examination, Branka was asked about the letter of demand and its contents. She again denied that she ever expressed to Nevenka an intention to move out in March 2021 (T46-47). Branka agreed that she did not respond to Nevenka's letter in writing at the time, nor advert to it in any way (such as by contesting its contents) in her affidavit evidence in these proceedings (T44-45).
On 21 June 2021 between 3:51pm and 4:08pm, Branka and Veselinka exchanged WhatsApp messages regarding the letter of demand as follows (quoted exactly as written):
Branka: Hi. Just picked up registered letter from [Nevenka] where she is asking me to leave your and her property within 2 weeks. According to the letter she is acting also on your behalf. Is this true that you authorised her to do this on your behalf.
Veselinka: Im aware that she sent you a letter.
Branka: On behalf of you Also?
Veselinka: I haven't received a copy yet, so I don't know what's in it.
Branka: Oh, you are playing a double game! When you needed me to help you with things I was OK, now you are stabbing me in the back. Thanks
Reply to her letter in writing. Since you two are not talking to each other. Communicating by letter is one of the options as well as texting.
Veselinka: What do you want me to do. Help u take the house from [Nevenka] and me? I also own the house.
I am not stabbing you in the back. Yes I thank you for helping me and I thank [Nevenka] for helping me by putting me up for a few nights while I did not have a toilet or a shower. You both helped me. I appreciate that very much. If the house was only on her name I would leave you to alone time fight till death if you so desire. But I am an owner of the house two. I have a legal obligation.
[44]
In cross-examination (T132-134), Veselinka was asked why she had a complete change in attitude towards Branka within such a short period. Veselinka responded by saying "[Branka] was trying to take the house away from me". Veselinka was then asked, "[h]ow was [Branka] trying to take the house away from you?". Veselinka gave a lengthy discursive and non-responsive answer to that question, referring to the following conversations she alleged she had with Branka and Goran at about this time:
When I was renovating my - my bathroom, she was ready to move. I said, "Branka, you have to move. We have to sell this house. We own this house". And she said, "Oh, well, I haven't got much here anyway. I've already started taking things into the rubbish". And she numbered what she had, bed, some furniture, she said it wouldn't be hard to move. I said, "Well, all right, I'll help you move if you like". And the second day was the same conversation, and her son was coming up the steps and she said, "Shh, don't tell, don't say anything, don't tell Goran". And I said, "why?". "Oh, he gets very upset about that". And as he walked up the stairs, he said, "What's going on? What is the conversation?" I think he said, "I demand to know or I need to know what the conversation is", and Branka's going, "Nothing, nothing". And I turned to him and I said to him, "We have decided to sell the house, and you'll have to move so that we can sell the house". And he said to me, "Oh, wait - what about when I, I, I." I said, "Because [Nevenka's] sick, she might even go to a nursing home, and I just, you know, we need to sell the house," and he said, "Oh, I'll put her in a nursing home, and then she'll see how she feels." Well, from that conversation, I could not see any more conversation going on. I could not carry on any more conversation, and I just walked out.
I have not placed any store in the evidence of these conversations, none of which appeared in any of the multiple affidavits made by Veselinka for the purposes of these proceedings.
[45]
Renovations of Units 2 and 3
Nevenka gave evidence that she carried out further renovations of Unit 3 in 2021 and 2022, and renovations of Unit 2 in 2022.
[46]
Nevenka issues termination notice
On 5 January 2022, Nevenka sent Branka and Goran a notice to terminate tenancy agreement (termination notice), requesting that Branka and Goran deliver up vacant possession of the studio by 20 January 2022. The termination notice was expressed as being given on the grounds of:
1. destruction of the property (including garage doors, electric lights and plants);
2. aggressive behaviour (citing verbal abuse and threats of physical harm);
3. abuse, harassment and health hazard;
4. intimidation by Goran; and
5. illegal use of the premises (noting that the studio was not approved for use as a separate residential unit by the council).
The termination notice also set out Nevenka's belief that Branka was renting out the Prince Street property whilst she was living in the studio rent-free and without paying any bills, and Nevenka's understanding that Branka was receiving a pension despite owning the Prince Street property and therefore in contravention of the law.
[47]
NSW Civil and Administrative Tribunal proceedings
In early 2022, Nevenka brought an application against Branka and Goran to commence proceedings in NCAT seeking to exclude Branka and Goran from the Cowper Street property (NCAT proceedings). The precise terms of the application to NCAT are not in evidence.
On 22 February 2022, the then solicitors for Branka and Goran, Peter D White and Co, sent a letter to Nevenka which referred to the NCAT proceedings and enclosed by way of service:
1. A statement of Branka dated 22 February 2022 (Branka's statement to NCAT), to which was annexed a copy of the occupation certificate.
2. A statutory declaration sworn by Ms Meddows dated 22 February 2022; and
3. A copy of White and Co's letter dated 22 February 2022 to the Registrar of NCAT, which disputed NCAT's jurisdiction to hear Nevenka's application on the basis that Branka and Goran as the respondents were making a claim for squatters' rights or adverse possession and that it was not a tenancy matter.
Branka's statement to NCAT recorded, among other things, Branka's:
1. opposition to the making of the orders sought by Nevenka against Branka and Goran in relation to the Cowper Street property and the termination notice;
2. refusal to vacate the Cowper Street property;
3. denial of any damage occasioned or caused to the Cowper Street property, or aggressive behaviour towards Nevenka, by her or Goran;
4. account of financial contributions, which she estimated to be in excess of $100,000, and non-financial contributions made by her to the construction and outfitting of the studio since 2008;
5. account of assistance and care that she provided to Zora while living at the Cowper Street property, including shopping and general housework, and to Nevenka, including transportation to medical appointments;
6. assertion that she paid for her personal share of the utilities (gas and electricity); and
7. assertion of her entitlement to remain in the studio on the basis of adverse possession, namely her continuous occupation of the studio since 2008 for a period of over 12 years in the absence of any tenancy agreement.
The NCAT proceedings were listed for contested hearing by telephone on 6 June 2022.
On 9 May 2022, the then solicitors for Nevenka, Farrell Goode, wrote to NCAT in relation to the NCAT proceedings. Farrell Goode's letter asserted the jurisdiction of NCAT to hear Nevenka's application and the existence, since January 2009, of a verbal tenancy agreement pursuant to which Branka would have sole occupation of the studio in exchange for the provision of carer services to Zora and contribution to the payment of rates and utility bills and general maintenance and upkeep of the Cowper Street property. Farrell Goode pointed to Nevenka's actions in separately metering the gas supplied to the studio, the nature of the detached studio residence, Branka's payment of electricity bills, and the provision of services by Branka (including caring duties and general property maintenance) as indicia of a tenancy agreement under s 13 of the Residential Tenancies Act 2010 (NSW). Farrell Goode also submitted that each change in accommodation on the Cowper Street property by Branka gave rise to a new, separate tenancy agreement commencing from the date of the change in accommodation.
In the course of the hearing before me, both Nevenka and Veselinka were cross-examined on the circumstances by which Nevenka came to instruct Farrell Goode to represent her in the NCAT proceedings. It emerged that Farrell Goode (a firm of solicitors located in Temora, near to where Veselinka lives) were engaged on the recommendation and/or suggestion of Veselinka, and that either or both Nevenka and Veselinka gave instructions and conveyed information to Farrell Goode.
Nevenka and Veselinka were also cross-examined extensively on the contents of Farrell Goode's letter of 9 May 2022 to NCAT (authored by Mr James Read, solicitor). When asked about the inclusion of certain factual matters in that letter, Nevenka gave the following responses (T96-99):
Q. Now, in that letter, which is exhibit C, you say a number of factual matters, that in paragraph 1, it's, "The respondent, Branka Kleut, originally moved into the premises on or around late 2001, early 2002 in the mother's residence to assist with the maintenance of the property and care about applicant's mother if needed." You see that? It's the little one. It's sort of almost halfway down the first page.
"The respondent, Branka Kleut, originally moved into the premises on or around late 2001, early 2002 in the mother's residence on the property to assist with the maintenance of the property and care about the applicant's mother if needed."
…
Q. - if you made sure that the instructions that were given through Veselinka to Mr [Read] of this firm were accurate and you had an opportunity, you said, that you did, to read it before it was sent to NCAT. Are you now saying to this Court that little paragraph 1 is wrong?
A. Yes, totally wrong.
Q. How can that be?
A. Don't know. People make mistakes.
Q. You made the mistake.
A. I made mistake.
…
Q. Why is it wrong?
A. Because she didn't move, not to assist with maintenance of the property and care of an applicant's mother. She moved because of her property, her own property.
…
Q. Now, how then did this part about the care of your mother find its way into paragraph 1 of this letter?
A. Well, she put it in. He wrote it, Mr [Read].
Q. Mr [Read] just picked it out of the air and put it in?
A. No, I don't know how.
Q. Well, somebody must have told him, isn't that so?
A. I don't know.
Q. And you say it wasn't you?
A. No, it wasn't me.
Q. But it is the case; isn't it? It was true.
A. No.
Q. When you read this letter in draft form before it was sent to NCAT, didn't this jump out at you that the very first paragraph was wrong?
A. No, I don't know how well I was when I read this letter.
Q. Well, we don't know how well you were either.
A. Yes, you know, this is it. I missed it.
Q. You missed it?
A. Yes.
Q. Now, let's go to paragraph 2. The respondent, Branka Kleut, moved from the mother's residence into the detached studio in January 2009. At this stage, it was agreed that the respondent, Branka Kleut, would have sole occupation of the unit under a verbal tenancy agreement. See that?
A. Yeah, well, that's how he wanted it, but it wasn't, yeah.
Q. Well, you're saying that's wrong too?
A. Yes.
Q. Why is that wrong?
A. Well, I mean, she didn't have sole occupation under any tenancy act.
Q. But when you read this in draft form, didn't that word "sole" just jump out at you?
A. It didn't. No, it didn't.
Q. It didn't?
A. No.
Q. You must have known that was wrong, in your mind.
A. I don't know. By that time, I don't know what was I thinking. I don't know.
…
When asked about the references in Farrell Goode's letter of 9 May 2022 to the performance by Branka of general maintenance at the Cowper Street property, payment of electricity and gas charges and provision of care to Zora, and whether these stood out to her as incorrect (given her evidence in the present proceedings that Branka never did any of those things), Nevenka stated that although she likely had read the letter prior to its being sent to NCAT and had instructed Farrell Goode, these inaccuracies did not jump out at her and she could not explain how they had made their way into Farrell Goode's letter (T108-109). Nevenka was circumspect in her evidence about having corresponded with Mr Read of Farrell Goode, stating (variously) that she had provided him with instructions but that she did not recall speaking with him directly, that she had conveyed information to Mr Read via Veselinka who did speak with him directly, and that she did not recall giving him information of the kind that appeared in the 9 May 2022 letter (T95-102).
In cross-examination, Veselinka stated that the information contained in Farrell Goode's 9 May 2022 letter likely came from her, or from both her and Nevenka, and that she recalled sitting in the car on one occasion while Nevenka spoke to Mr Read on the phone (T119).
I note the discrepancies in the recollections of Nevenka and Veselinka as to who exactly spoke to Mr Read and supplied the information forming the basis of the 9 May 2022 letter to NCAT. I do not consider this to be especially significant. That said, I do regard as significant, and as bearing on any assessment of the credibility of each of them as witnesses, the fact that their evidence and the case put by them in the NCAT proceedings (as disclosed by the 9 May 2022 letter and related contemporaneous documents) differs so vastly from that advanced in these proceedings. As emphasised by me in the course of the hearing, the material originally placed before NCAT and now admitted into evidence in these proceedings is not to be taken as incontrovertible evidence of the truth of what it says, but rather as evidence of what was held out to be the factual scenario before NCAT (as is the proper approach to be taken in respect of prior inconsistent statements: Evidence Act 1995 (Cth), s 38(3); Stambolziovski v Nestorovic and Camanaro Prestige Properties Pty Ltd t/as Sydneyhome Real Estate [2015] NSWCA 332, Ward JA (as her Honour the President of the Court of Appeal then was) at [77]). On that basis, I am minded to treat the 9 May 2022 letter (at its highest) as damaging to the credit of Nevenka and Veselinka generally.
On 30 May 2022, Branka wrote directly to NCAT and submitted, among other things, that the dispute the subject of the NCAT proceedings had nothing to do with any alleged residential tenancy agreement but rather concerned "life tenancy / life estate / proprietary estoppel".
On 6 June 2022, orders were made in the NCAT proceedings. Finding that the tribunal lacked jurisdiction, there being no evidence of an intention to create legal relations in relation to Branka's living arrangements at the Cowper Street property, NCAT dismissed Nevenka's application.
[48]
Branka obtains a copy of the probate of the Will
According to Branka, on 1 June 2022 she sent Nevenka a letter requesting a copy of the Will, to which Nevenka never responded. Branka says that she then, on 3 June 2022, applied to this court for a copy of the probate of the Will, which she received on 22 June 2022.
Branka states that the first time she read a copy of the Will was upon receipt of the probate by her on 22 June 2022.
[49]
Further request for Branka to vacate the Cowper Street property
On 24 August 2022, the solicitors for Nevenka and Veselinka, Adams & Co, sent a letter to Branka advising that if she did not leave the Cowper Street property by 5pm on 10 September 2022 (within 14 days), Nevenka and Veselinka would commence proceedings in this court seeking possession of the Cowper Street property and Branka's exclusion from the Cowper Street property. In the letter, Adams and Co also noted that they would seek indemnity costs upon the conclusion of any such proceedings and asked that any future correspondence between the parties be conducted via their respective lawyers.
[50]
Present proceedings
On 3 November 2022, Nevenka and Veselinka commenced the present proceedings by filing a statement of claim in this court seeking, among other things, the following relief:
1. judgment for possession of parts of the land at the Cowper Street property, namely the studio above the garage, garages 1, 2 and 3 and the work room adjoining garage 4;
2. leave to issue a writ of possession; and
3. damages and/or equitable compensation.
On 5 December 2022, Branka filed a cross-claim against Nevenka (in her personal capacity and in her capacity as executrix of Zora's estate) and Veselinka, seeking the following relief:
1. a declaration that Nevenka and Veselinka hold part of their respective interests in the Cowper Street property on trust for her;
2. an order extending the time for the making of an application for family provision; and
3. an order for provision from the estate or notional estate of Zora.
[51]
Nevenka's expenditure on renovations of the Cowper Street property
Nevenka says that she has spent a total of $562,501.32 on renovations of the Cowper Street property, in the following years and amounts:
1. 1988: $4,500 for replacement of the sewer;
2. 1988: $2,000 for installation of steel bars on windows;
3. 1989: $2,500 for replacement of the front fence;
4. between 2008 and 2010: $400,000 (estimated) for construction of the studio;
5. prior to 2017: $50,000 (estimated) for construction work on the garages and $15,000 (estimated) for construction of pergola and concreting;
6. between 2021 and 2022: $79,101.32 for renovations of Unit 3; and
7. 2022: $9,400 for renovations of Unit 2.
[52]
Cowper Street property valuation
On 17 June 2024, real estate agency MGM Martin sent a letter to Nevenka providing their estimate of the Cowper Street property's current market value of around $4.9 million (Cowper Street property valuation). At the hearing before me, the parties indicated an agreed value for the Cowper Street property, in the current market, of $5 million (T145).
[53]
Prince Street property valuation
On 17 June 2024, MGM Martin sent a letter to Branka providing their estimate of the Prince Street property's selling price in the current market of around $1.25 million (Prince Street property valuation). This is $310,000 more than Branka paid for the acquisition of the Prince Street property in October 2019.
[54]
Employment status and financial circumstances of Branka, Nevenka and Veselinka
[55]
Branka
Branka gave evidence that in about 2001, at the time she moved into the Cowper Street property, she was employed as a payroll manager. Branka says that she retired in 2016. Nevenka says that Branka did not retire until March 2019, while Ms Colnan gave evidence that Branka was in full-time employment until about 2018.
Branka's net monthly income is $2,321.06 a month. Her financial position can be summarised as follows:
1. Assets worth approximately $1,334,935, comprising:
1. the Prince Street property (purchased for $940,000 in October 2019) with an estimated value of $1.25 million;
2. savings totalling $76,435 held across three bank accounts;
3. a motor vehicle with an estimated value of $6,500; and
4. jewellery with an estimated value of $2,000.
1. Liabilities amounting to approximately $26,441, including estimated legal fees of around $25,000 and a credit card debt of $1,411.
2. Income comprising a government aged pension of $2,232.60 per month and bank interest from a savings account of $88.46.
3. Estimated expenses of $1,855.59 per month covering utilities, food and household supplies, car insurance and medications.
[56]
Nevenka
Nevenka retired from full-time work in 2006, aged 55 years.
Nevenka's net monthly income is approximately $7,256.48. Her financial position can be summarised as follows:
1. Assets worth approximately $3,783,842.40, comprising a 75% interest in the Cowper Street property ($3.75 million), $16,000 in cash, $7,842.40 in shares, jewellery with a value of $3,000 and a motor vehicle worth $7,000.
2. Liabilities of around $40,700 including a $700 credit card debt and $40,000 in legal fees.
3. Income of $7,256.48 per month comprising a pension of $4,554.83, $2,678.14 in rental earnings from Unit 3 and approximately $23.51 in dividends from shares.
4. Monthly expenses of $4,598.95 including payment of council and water rates, medical expenses, food and household items, expenditure on Unit 3, plumbing and car insurance and maintenance.
In cross-examination, Nevenka accepted that her and Veselinka's estimated plumbing expenses of $506 a month - calculated by dividing the total amount of their expenditure over the past 12 months to address the penetration of the sewer at the Cowper Street property by a neighbour's tree - would not be ongoing (T114-115).
In relation to her health and medical circumstances, Nevenka says that since late 2019 when she suffered a lung infection, her lungs have been reinfected numerous times with antibiotic resistant bacteria and that she takes regular medication. Nevenka has been diagnosed with a chronic medical condition called bronchiectasis and her prognosis is uncertain. Nevenka says that in the future she will require a nurse to administer medication and treatment at her home and is also considering treatment overseas.
Nevenka estimates her future expenses as follows:
1. $200,000 for repairs, painting and establishment of a back yard garden at the Cowper Street property.
2. $5,000 for council approval for removal of a tree penetrating the sewer at the Cowper Street property and tree removal.
3. $1,200 for new glasses every 3-5 years.
4. $108,000 for 12 teeth implants.
5. $6,000 yearly for ongoing medical fees and medication.
6. $23,400 for domestic assistance (two hours per day for five days a week).
7. $120,000 for bacteriophage treatment (currently only available overseas).
In cross-examination, Nevenka accepted that the council had not yet given approval for the tree to be removed, and that the identified amount of $5,000 could be treated as a contingency amount (T115-116). Nevenka also accepted that she had not produced any documentation in support of the estimated amounts associated with, and the need for, each of the dental implants, domestic assistance, and bacteriophage treatment (T116).
[57]
Veselinka
Veselinka retired from work in 2006.
Veselinka's financial position can be summarised as follows:
1. Assets with a value of approximately $1,317,450, comprising a 25% interest in the Cowper Street property ($1.25 million) and $67,450 in savings held in bank accounts.
2. Liabilities of $40,000 (legal fees).
3. Income derived from rent for Unit 2 ($2,985 monthly) and fluctuating income generated by the farm at Kilmarnock, which operated at a net loss of approximately $26,700 in the 2023 financial year but yielded a profit of $69,000 in the 2022 financial year.
4. Monthly expenses totalling $2,659.94 including food and household supplies, expenditure in relation to Unit 2, council rates, plumbing and travel to and from Sydney.
In relation to her health, Veselinka states that she has a number of medical conditions which currently require treatment and will continue to pose a financial burden in the future. These include a disease affecting her colon and digestive tract, a prolapsed disc in her back (for which she takes pain medication and which may require surgery), type 2 diabetes and hypertension. Although minimal, Veselinka's current monthly expenses for medication of $26 and doctors' fees of $20.83 may increase in the future.
[58]
Legal principles
There was no dispute between the parties as to the legal principles to be applied in determining Branka's proprietary estoppel claim. I have outlined these below.
[59]
General principles
In Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7, Brennan J at 428-429 gave a classic formulation of the fundamental elements of equitable estoppel:
In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed or expected that a particular legal relationship then existed between the plaintiff and the defendant or that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.
The principles were posed slightly different in Walton Stores by Mason CJ and Wilson J in their joint judgment, fixing upon a common thread of unconscionability between instances of promissory estoppel and proprietary estoppel or estoppel by acquiescence, saying at 404 (citations omitted):
One may therefore discern in the cases a common thread which links them together, namely, the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has "played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it": per Dixon J. in Grundt; see also Thompson. Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption.
At 406, Mason CJ and Wilson J went on to state the relevant principles to be as follows (citations omitted):
The foregoing review of the doctrine of promissory estoppel indicates that the doctrine extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must be unconscionable. As failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his position or suffering detriment, does not bring promissory estoppel into play. Something more would be required. Humphreys Estate suggests that this may be found, if at all, in the creation or encouragement by the party estopped in the other party of an assumption that a contract will come into existence or a promise will be performed and that the other party relied on that assumption to his detriment to the knowledge of the first party. Humphreys Estate referred in terms to an assumption that the plaintiff would not exercise an existing legal right or liberty, the right or liberty to withdraw from the negotiations, but as a matter of substance such an assumption is indistinguishable from an assumption that a binding contract would eventuate. On the other hand the United States experience, distilled in the Restatement (2d, s90), suggests that the principle is to be expressed in terms of a reasonable expectation on the part of the promisor that his promise will induce action or forbearance by the promisee, the promise inducing such action or forbearance in circumstances where injustice arising from unconscionable conduct can only be avoided by holding the promisor to his promise.
In Pirrottina v Pirrottina [2024] NSWSC 558, a case to which each of the parties referred in their submissions, Rees J collected the relevant principles of proprietary estoppel. At [160], citing Ball J in Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle [2015] NSWSC 1603 at [60]-[73], her Honour identified estoppel by encouragement as a subvariant of proprietary estoppel and noted that an estoppel by encouragement:
1. arises when an owner of property has encouraged in another person an expectation of obtaining a proprietary interest and in so doing prompted that person to alter their position in reliance on that encouraged expectation to their detriment; and
2. may result in equity compelling the owner to fulfil the encouraged expectation in whole or part.
A substantially similar definition of estoppel by encouragement was given by Handley AJA (with whom Allsop P and Giles JA agreed) in Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 at [21].
In Pirrottina, Rees J proceeded to explicate the main elements of estoppel by encouragement, observing that these elements frequently overlap. Her Honour pinpointed unconscionability - in the sense of whether it would be unconscionable to permit departure from the encouraged expectation - as the essential concern of the doctrine, stating at [161]:
There are three main elements, being an assurance, reliance and detriment. As Walker LJ observed in Gillett v Holt [2001] Ch 210, these elements cannot be treated as "watertight compartments" and often overlap, "the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine. In the end the court must look at the matter in the round": at 225. As Walker LJ also observed in Jennings v Rice [2002] EWCA Civ 159, "The cases show a wide range of variation in … the quality of the assurances which give rise to the claimant's expectations and the extent of the claimant's detrimental reliance on the assurances. The doctrine applies only if these elements, in combination, make it unconscionable for the person giving the assurances … to go back on them": at [44].
Recently, in Slade v Brose [2024] NSWCA 197, Ward P (Stern and White JJA agreeing) at [198]-[201] gave the following comprehensive statement of the principles relating to proprietary estoppel and estoppel by encouragement:
[198] The [respondents'] case concerning estoppel by encouragement invokes the line of authority descending from Dillwyn v Llewelyn [1862] EWHC Ch J67; 45 ER 1285 and the dissenting judgment of Lord Kingsdown in Ramsden v Dyson (1866) LR 1 HL 129 (see at 170-171), i.e., in the words of Handley AJA, the estoppel which may arise when an owner of property has encouraged another to alter his or her position in the expectation of obtaining a proprietary interest and that other, in reliance on the expectation created or encouraged by the property owner, has changed his or her position to his or her detriment (see Delaforce at [21]).
[199] The [appellants] have pointed to the well-known formulation of the elements common to the doctrines of equitable estoppel ([of] which proprietary estoppel by encouragement is one) by Brennan J, as his Honour then was, in Waltons Stores v Maher (1988) 164 CLR 387 at 428-429; [1988] HCA 7 (Waltons Stores), emphasising the first of those elements, namely an assumption or expectation that a particular legal relationship between the parties then existed or would exist (and in the case of the expectation of a future legal relationship that the defendant would not be free to withdraw therefrom the expected legal relationship), in submitting that what was required here was for the [respondents] to establish that they reasonably understood that the promises made to them were irrevocable.
[200] However, it has been made clear that his Honour's elements are not to be applied in every case in a "mechanical fashion" (see Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 (Doueihi) at [166] (Gleeson JA, with whom Beazley P and Leeming JA agreed); DHJPM at [47]; Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 at 615-616 (Priestley JA)).
[201] In particular, the broader view reflected in the joint judgment of Mason CJ and Wilson J in Waltons Stores has prevailed (as recognised by White J, as his Honour then was, in Construction Technologies Australia Pty Ltd v Doueihi [2014] NSWSC 1717 (at [145]-[147]), affirmed on appeal in Doueihi). It is not necessary for a plaintiff to show that he or she assumed or expected that a "particular legal relationship" existed or would exist (see Doueihi at [153]-[170]). Nor is it necessary to show that the promise was irrevocable. It is unconscionability, rather than "ticking the box" of each of Brennan J's elements, which will be decisive (Doueihi at [166]-[167]) (see also Giumelli v Giumelli at 121).
The foregoing authorities make clear that an equitable estoppel claim is not to be determined in a formulaic or unduly mechanistic manner, although it should be assessed by reference to its relevant component parts (each of which are described below).
[60]
Representation
It is well-established in the law on equitable estoppel that in situations involving family members (as opposed to businesspeople in a commercial context), the relevant assurance or representation need not rise to the level of certainty sufficient to ground, for example, a contractual obligation: Wantagong at [63]. Rees J in Pirrottina articulated the rationale for this distinction, stating at [163]:
Where the parties involved are family members, the law does not require certainty in the promise or representation. Equitable estoppel may arise notwithstanding that the representation would be insufficiently certain to support a contract and may arise from vague assurances; the focus is on the expectation which it creates rather than the promise: DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728 at [54]-[55]. As Lord Walker observed in Cobbe v Yeoman's Row Management Ltd [2008] UKHL 55 at [68]: (emphasis added)
It is unprofitable to trawl through the authorities on domestic arrangements in order to compare the forms of words used by judges to describe the Claimants' expectations in cases where this issue (hope or something more?) was not squarely raised. But the fact that the issue is seldom raised is not, I think, coincidental. In the commercial context, the Claimant is typically a business person with access to legal advice and what he or she is expecting to get is a contract. In the domestic or family context, the typical Claimant is not a business person and is not receiving legal advice. What he or she wants and expects to get is an interest in immovable property, often for long-term occupation as a home. The focus is not on intangible legal rights but on the tangible property which he or she expects to get. The typical domestic Claimant does not stop to reflect (until disappointed expectations lead to litigation) whether some further legal transaction (such as a grant by deed, or the making of a will or codicil) is necessary to complete the promised title.
The authorities provide that the promise must nonetheless possess some degree of clarity, be unambiguous, and be intended to be taken seriously; in other words, it must be "a promise which one might reasonably expect to be relied upon by the person to whom it was made": Wantagong at [63], citing Thorner v Major [2009] UKHL 18; 3 All ER 945, Lord Walker of Gestingthorpe at [56]; Pirrottina at [162]. As indicated by Ball J in Wantagong at [63], citing Sullivan v Sullivan [2006] NSWCA 312, Hodgson JA at [85], the certainty of the assurance may be ascertained by assessing the reasonableness of the representee's interpretation of the assurance and their reliance on it.
On the particular attributes of a promise capable of founding an estoppel, including the requisite degree of specificity as to what is being promised, Ward P in Slade stated at [202]-[206]:
[202] True it is that there must be a careful identification of the nature of the assumption or expectation held by the plaintiff (to be assessed by reference to the circumstances of each case) (Doueihi at [186], citing Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 445; [1990] HCA 39; see also Thorner v Major at [56]) but the requirement of certainty for a representation or promise in a proprietary estoppel claim is less stringent than in other kinds of estoppel. See Flinn v Flinn [1999] VSCA 109, where Brooking JA (with whom Charles and Batt JJA agreed) concluded (at [80]) that "a promise may be definite in the sense that there is a clear promise to do something even though the something promised is not precisely defined" (see also Delaforce at [55]; Evans v Evans [2011] NSWCA 92 (Evans v Evans) at [116], [121] (Campbell JA, with whom Giles JA and Sackville AJA agreed); DHJPM at [54]).
[203] In Galaxidis, Tobias JA said (at [93]) that the representation or promise is sufficiently clear "if it is reasonable for the representee to have interpreted the representation in a particular way being a meaning which it is clearly capable of bearing and upon which it is reasonable for the representee to rely". See also the similar statement by Hodgson JA in Sullivan v Sullivan [2006] NSWCA 312 at [85] (McColl JA agreeing).
[204] While a distinction has sometimes been drawn in practice between arms-length/commercial cases and domestic/family cases when assessing the adequacy of an assurance or the reasonableness of an expectation or assumption (see, for example, DHJPM at [104]-[105]; Cobbe v Yeoman's Row Management Ltd [2008] UKHL 55 at [68] per Lord Walker), in the present case this does not assist the [appellants] since the representations were clearly in a family context …
[205] It is also relevant to note that the expectation reasonably derived from another's words and actions "need not depend on the words of a single conversation, but could arise from conduct over a period of time" (Evans v Evans at [107]). This is of particular relevance in the present case where the criticism made of the primary judge is that he found a "rolled up" representation.
[206] Finally … a proprietary claim does not necessarily fail simply because the representations or promises are conditional or subject to limitations (see Campbell JA in Waddell v Waddell at [53]).
[61]
Reliance
Reliance by the representee on the representation must be established both as a matter of fact, and by determining whether the representee would have conducted themselves differently had the representation not been made, or had the representor advised at the outset that the assurance would not be honoured: Wantagong at [83]; Pirrottina at [166].
In Slade, Ward P considered the element of reliance in the context of estoppel by encouragement, and, internal to that inquiry, the question of causation, referring to the reasoning of the plurality in Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 and stating at [239]-[244]:
[239] There is no presumption of reliance; reliance is a fact to be found (Sidhu v Van Dyke at [58]). What is required is satisfaction from the whole of the evidence of the fact of reliance on the balance of probabilities.
[240] Reliance in the context of estoppel by encouragement was considered by the High Court in Sidhu v Van Dyke. It is clear that it is not necessary that the relevant assumption be the "sole inducement operating on the mind of the party setting up the estoppel" (Sidhu v Van Dyke at [71]); it need only be a "contributing cause" (at [71]-[73] (French CJ, Kiefel, Bell and Keane JJ); [90] (Gageler J)).
[241] In Sidhu v Van Dyke the plurality formulated the question as whether (see at [66]) on all the facts there was satisfaction on the balance of probabilities that the promises in question contributed to the respondent's conduct (there, her conduct in "deciding to commit to her relationship with the appellant and adhering to that relationship" for a number of years). In concluding that there was a compelling case of reliance, the plurality referred, among other things to the "probabilities of human behaviour" (see at [69]). The plurality considered that the assurances made in that case had a "significant effect" upon the respondent's decision-making process and that it was indeed more likely than not that the respondent would have acted differently, had the promises not been made. At [76], the question posed by the plurality was "whether the respondent would have committed to, and remained in, the relationship with the appellant, with all that that entailed in terms of the effect upon the material well-being of herself and her son, had she not been given the assurances made by the appellant".
[242] In a separate judgment, Gageler J, as his Honour then was, agreeing with the plurality's reasons added (at [91]) that:
… the respondent needed to establish more than that she had the belief and took the belief into account when she acted or refrained from acting. She needed to establish that having the belief and taking the belief into account made a difference to her taking the course of action or inaction: that she would not have acted or refrained from acting if she did not have the belief.
[243] His Honour then went on to frame the question of causation (at [93]) as being "[d]espite any other contributing factors, would the party seeking to establish the estoppel have adopted a different course (of either action or refraining from action) to that which [the party] did had the relevant assumption not been induced?".
[244] In Q v E Co [2020] NSWCA 220 (Q v E Co), Meagher JA (with whom Leeming and Payne JJA agreed) agreed with the proposition that the two formulations of the question (i.e., whether the encouragement was a contributing cause and whether the party relying on the estoppel would have acted differently in the absence of the relevant encouragement) were one and the same (see at [88]), stating the test by reference to Sidhu v Van Dyke as the "but for" test (see at [89]).
Bringing together these principles, Ward P in Slade at [245] framed the causation question as follows:
The position thus is that it suffices if the encouragement was a "contributing cause" (as distinct from the "sole inducement" or a predominant cause); that the [respondents] did not need to prove "precisely" or "categorically" how they would have acted differently (see Priestley v Priestley [2017] NSWCA 155 (Priestley v Priestley) at [147] (Emmett AJA, with whom McColl JA agreed)); and that the question is whether, but for the relevant encouragement, the [respondents] would have acted differently; or, in other words, whether the encouraged assumption or representation "influenced" the [respondents'] course of action (or inaction) in a "significant" or "material" way in the sense that they would have acted differently had the (induced) assumption not been held.
[62]
Detriment
The necessary requirement in proprietary estoppel of material detriment to the representee has been articulated in terms of a finding that the representee would have been "better off" had they not relied on the representation: Wantagong at [90]; Pirrottina at [167]. The detriment in question must be substantial, and is not merely the loss flowing from non-fulfilment of the promise, or the loss of what the representee expected to receive, but rather depends on whether it would be unjust or inequitable in all the circumstances to allow the assurance to be disregarded: Wantagong at [68]-[69]; Pirrottina at [167].
Ward P in Slade at [274]-[275] clarified the test:
[274] … [D]etriment is a necessary element of proprietary estoppel. There is no presumption of detriment; rather, detriment must be established on the balance of probabilities (see Sidhu v Van Dyke). However, the concept of detriment in the context of proprietary estoppel is neither narrow nor technical (Donis v Donis (2007) 19 VR 577; [2007] VSCA 89 at [20] (Nettle JA, with whom Maxwell ACJ and Ashley JA agreed)).
[275] … [T]he question of detriment is assessed as at the time of departure from the relevant assumption or expectation ([DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348] at [72]). …
As to how any benefits obtained by the representee through their reliance on the alleged promise are to be accounted for in the analysis of detriment, Ward P at [285] remarked that such "countervailing benefits" are more relevant to the consideration of the unconscionability of departure from the promise than to the issue of detrimental reliance. Ward P at [285] and [287] also noted that:
[285] … [D]etriment is not to be determined by some form of precise arithmetical calculation or balance sheet-like approach in which the counterfactual opportunities are quantified and valued. That is made clear in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; [2014] HCA 14 at [88]; Q v E Co at [157]-[158] per Meagher JA; Soulos v Pagones [2023] NSWCA 243 at [389]-[392].
…
[287] The real question is whether the countervailing benefits in effect subsumed or sufficiently made good the representations so as to make it not unconscionable for the [representors] to depart from those representations. There are, of course, cases where a benefit (such as rent-free accommodation over a long period) might be treated as making good the promise or representation of an interest in property. Here, however, in the context of a farming operation conducted over a number of properties and over a number of years in reliance on the expectation that those properties (and business) would be transferred to the [respondents] ("all this will be yours") there was no error in my opinion in his Honour concluding that the countervailing benefits (valuable as they were) did not assuage the equity raised by the [respondents'] detrimental reliance on the [appellants'] representations and the renunciation of those representations by the [appellants]. …
Pirrottina concerned a dispute between two brothers, Rocco and Saverio (Sam) Pirrottina, who were engaged in citrus production at orchards located on a farm known as the Mangrove Mountain farm as part of a business that was effectively gifted to them by their parents some 20 years ago. One of the questions to be determined by Rees J in the proceedings was whether Sam held an equitable interest in an acre of land at the Mangrove Mountain farm ("the Lot") on which he had lived for 28 years, as a consequence of representations made by his parents to the effect that the Lot and the house located on it were his (at [2]). The evidence before Rees J was that Sam forfeited various opportunities in reliance on his parents' representations. At [177]-[178], her Honour considered the ways in which Sam had both benefitted from and suffered detriment as a result of his reliance on his parents' assurances in respect of the Lot, stating (emphasis added):
[177] … Sam both benefited from, and suffered detriment, as a consequence of reliance on his parents' assurances. Sam suffered a detriment as he forewent his parents' offer to buy him a block of land on which he could build a house in favour of a house being constructed on the Lot. Sam and his wife also forewent the possibility of a financial contribution to their married life from [his father-in-law] in favour of his contribution to the construction of a driveway, footpath and landscaping around the house. Sam ignored his father-in-law's offer of a job in Sydney in property development, although there is no evidence that such a career would have been more financially advantageous than continuing to live and work on the Mangrove Mountain farm. Nor is there evidence that, when continuing to work in the family business, Sam was paid at a level of remuneration below the market rate. Against this, Sam received a benefit in the form of rent-free housing, with utilities paid by his parents.
[178] Nonetheless, the detriment suffered by turning down his parents' offer to buy him a block of land of his own, rather than accommodation attended with the uncertainties of living on someone else's property, was a substantial detriment. In the circumstances, I consider that the elements of estoppel by encouragement are established such that Sam had an equitable interest in the Lot as a consequence of his parents' representations, on which he relied to his detriment, making it unconscionable for the parents to go back on their word, if they had chosen to do so.
[63]
Unconscionability
As the authorities make clear, in the context of equitable estoppel, unconscionability in the sense of disconformity with notions of good conscience must be the ultimate effect produced by each of the above elements in combination: Pirrottina at [161]. At [166], Rees J in Pirrottina, paraphrasing the language of the plurality in Sidhu at [77], observed that:
… the extent to which it is unconscionable for the representor to seek to resile from the position expressed in their assurances to the [representee] may be gauged by reflecting on the [representee's] likely response if the representator had advised at the outset that they would depart from the representation …
It is also well-established that unconscionability is neither an abstract or technical concept, nor some "universal standard"; its presence is to be determined by reference to all the circumstances, including the reasonableness of the representee's conduct in acting on the assumption, and the nature and severity of the detriment that the representee would sustain in so acting if departure from the assumed state of affairs were allowed (Commonwealth v Verwayen (1990) 170 CLR 394, Deane J at 445; [1990] HCA 39, cited in Standard Chartered Bank Aust Ltd v Bank of China (1991) 23 NSWLR 164, Giles J at 180). As Allsop P stated in Delaforce at [3]:
… Equity will look at all the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character. …
[64]
Branka
In oral argument and cross-examination of Nevenka and Veselinka, Branka leaned heavily on what she referred to as the "chronology", being the lapse of time between Branka first taking up residence at the Cowper Street property in around 2001, and action taken by Nevenka and Veselinka to evict Branka from the Cowper Street property beginning in 2021. Branka framed this 20-year gap as significant because it is logically consistent with an invitation, and/or acquiescence and encouragement, by Nevenka and Zora for Branka to live at the Cowper Street property (T1), and with a family arrangement pursuant to which Branka lived at and performed work on the Cowper Street property and was a contributing member of the family (T148). At the outset, I note that this construction, adopted by Branka, of the living arrangements and family relationships that obtained over the relevant period does not favour either party's case over the other, in circumstances where Nevenka and Veselinka contend that Branka had a tenancy at will, and Branka claims a right of sole occupancy in respect of the studio.
In short, Branka's estoppel claim is based on the following:
1. Assurances and/or representations which she says were made to her by Zora and Nevenka at various times, were witnessed by others including Goran, Ms Colnan and Ms Meddows, and engendered in her an expectation of receiving a proprietary interest in the Cowper Street property or parts of it.
2. Detrimental reliance by Branka on those representations such that she altered her position - by staying at the Cowper Street property, performing work on the Cowper Street property, and providing care and assistance to Zora - in the expectation of receiving the relevant proprietary interests.
3. The existence of circumstances, including Branka's acts of reliance and acquiescence by Nevenka and Veselinka in Zora's representations to Branka, which make it unconscionable for Nevenka and/or Veselinka to depart from the relevant assurances and representations including by now seeking to exclude Branka from the Cowper Street property.
Branka submits that each of the above elements satisfy the three components of a proprietary estoppel claim, being an assurance, reliance and detriment (Pirrottina, Rees J at [161]), and also make it unconscionable in all the circumstances for the alleged representations to be departed from.
[65]
Representations
The submissions of Branka on the representations on which she relies go to the existence of two species of proprietary interest which she says she was promised: first, a right to occupy the studio on the Cowper Street property, and second, a percentage interest in the Cowper Street property itself. The precise representations relied upon by Branka are as follows:
1. Nevenka's first alleged studio representation - to the effect that the studio was being built for Branka to live in, and which Branka says is corroborated by evidence given by Goran, Ms Colnan and Ms Meddows of their having witnessed relevant discussions (T156, 163-164).
2. Nevenka's second alleged studio representation and third alleged studio representation - whereby Nevenka is said to have represented to Branka that she held a proprietary interest in the studio in the form of a right to sole occupation of the studio for as long as she wished (T150-151).
3. Zora's alleged promise - being the main assurance whereby Zora is said to have promised to leave Branka one-third of her share of the Cowper Street property (a 12.5% interest in the Cowper Street property), which Branka contends Nevenka and Veselinka both acquiesced in (T154-155) and Goran's evidence corroborates (T163).
Branka submits that each of the above representations are actual statements; that is, Branka's estoppel case is not one that rests on purported representations capable of being implied by conduct, of the kind described by Rees J in Pirrottina at [155] (T165-166).
[66]
Reliance
In terms of reliance, Branka submits that she remained at the Cowper Street property, performed work (including renovations and construction) on the Cowper Street property (which Ms Meddows and Ms Colnan witnessed), and provided assistance to Zora in reliance on the above representations and assurances (T163).
Branka contends, for instance, that she stayed living at the Cowper Street property in reliance on Nevenka's first alleged studio representation. She notes that when she intended to move out of Cowper Street property and into the King Street property in 2006, Nevenka said to her words to the effect that she would construct a studio above the garages for Branka to live in, so that Branka would agree to stay with them, and that Branka altered her position in reliance on that promise.
[67]
Detriment
Branka submits that the detriment that will be visited upon her should Nevenka and Veselinka be permitted to resile from the alleged representations must be viewed not merely in financial terms, but also as encompassing emotional and other kinds of detriment (T162), although this submission was not developed beyond that bare assertion.
Regarding the issue of the potential benefit that Branka has derived from living at the Cowper Street property, Branka resisted the suggestion that living at the Cowper Street property, where she paid neither rent nor any living costs, enabled her to build up a property portfolio. She submitted that no necessary nexus between her rent-free status and her acquisition of a property portfolio (or at least her ability to trade in properties) can be drawn, particularly in circumstances where no attempts were made to develop the counterfactual by quantifying the rent that Branka might have paid while resident at the Cowper Street property (T157-158). She says that while her ability to acquire a property portfolio is a relevant consideration, it should not be treated as cancelling out, or converting any detriment she may suffer into an advantage (T158). Also emphasised by Branka is the fact that while she did acquire properties, she acquired those properties to house Goran and his family (T157).
While accepting that from time to time she had tenants in her properties paying rent, and that there was some financial benefit to her in being able to live rent-free at the Cowper Street property, Branka submits that the court should look at the whole of the circumstances. In all of the circumstances, Branka says, it cannot be said that living at the Cowper Street property has been to her advantage (T159). On the contrary, she says, remaining in a situation where she was required to move between parts of the Cowper Street property (T162), and sometimes live in quite difficult circumstances (particularly during the period she was living in Zora's second bedroom in Unit 3 (T157)) has been - and will be - to her detriment, if she is deprived of the proprietary interests in the Cowper Street property that she alleges she was promised.
In relation to detriment, Branka also pointed out (although this submission was neither developed nor elaborated upon) that she intended to move out of the Cowper Street property into the Dutruc Street property (in 2004) and later into the King Street property (in 2006); however, she remained living at the Cowper Street property on both occasions due to alleged entreaties by Nevenka and Zora that she continue living with them (T147). From the tenor of this submission, the essential argument appears to be that Branka forewent opportunities on both occasions to establish herself in one of her own properties, did so (at least on the second occasion, around which time Nevenka's first alleged studio representation and Zora's alleged promise were made) in the expectation of receiving proprietary interest(s) in the Cowper Street property, and that this should now figure in my consideration of how Branka will be disadvantaged by the non-fulfilment of those promises.
[68]
Unconscionability
Branka submits that it would be unconscionable for the alleged representations to be departed from here because of the abovementioned acts done by her in the expectation encouraged in her of receiving a 12.5% interest in the Cowper Street property and an open-ended right of sole occupation of the studio (T163).
In terms of acquiescence in Zora's alleged promise on the part of each of Nevenka and Veselinka, Branka points to:
1. Veselinka's WhatsApp message (where Veselinka, addressing Branka, refers to "your money that was promised by mum");
2. Veselinka's alleged statement ("Mum said to Nevenka in front of me Branka is to get one third of my share of the house"); and
3. Nevenka's purported silence and lack of objection at the time Zora's alleged promise was articulated to her (T155).
These instances of acquiescence by Nevenka and Veselinka, Branka submits, go to the unconscionability of them now departing from the alleged representations.
[69]
Nevenka and Veselinka
Nevenka and Veselinka submit that Branka's proprietary estoppel claim must fail, principally on account of the absence of any detriment suffered by Branka, although they also dispute that the representations and assurances relied upon by Branka were made as alleged and do not accept that there was reliance on those alleged representations.
[70]
Representations
On the representation element, Nevenka and Veselinka contend that the fact that Branka was permitted to reside at the Cowper Street property between 2001 and 2021, without objection from Nevenka and Veselinka, is not determinative and indeed is immaterial because such a circumstance is equally referable to there being a tenancy at will. They argue that being permitted to reside at the Cowper Street property for any length of time does not necessarily carry with it a right on the part of Branka to remain at the Cowper Street property for as long as she desires.
To my mind, this is at least in part a moot point: the case put by Branka is explicitly framed in terms of representations in the form of express statements, rather than conduct by Nevenka and Zora. That is, Branka does not identify the conduct of Nevenka, Veselinka and/or Zora in allowing her to occupy the Cowper Street property for an extended period as a material representation that lead to her developing an expectation of a proprietary interest in the Cowper Street property. Moreover, as stated above, I am satisfied that the asserted "family arrangement" is legally consistent with Branka occupying the property either as a tenant at will or as the holder of a right of sole occupancy of the studio.
As to the making and content of an assurance capable of founding an estoppel, Nevenka and Veselinka accept that where the parties involved are family members (as here), the law does not require certainty in the promise or representation. They observe that the representation must nonetheless be unambiguous and appear to have been intended to be taken seriously.
In relation to Nevenka's first, second and third alleged studio representations, Nevenka and Veselinka assert that statements to that effect - promising Branka a right to occupy the studio indefinitely - were never made. They have pointed to various factors which, they say, detract from or contradict Branka's account, including the following:
1. Nevenka, who denies having said the words constituting the alleged studio representations which are attributed to her by Branka, was not challenged on that denial in cross-examination. While accepting that there is no requirement to challenge a witness on every single matter which they dispute in cases involving duelling affidavits, Nevenka and Veselinka contend that this matter was so central to the case that Nevenka ought to have been challenged on her denial (T169).
2. There is inconsistency between Branka's accounts of the relevant conversation(s) in which the alleged studio representations are said to have been made by Nevenka, and between those accounts and the evidence given by Goran, Ms Colnan and Ms Meddows. Nevenka and Veselinka submit that the evidence given by Goran, Ms Colnan and Ms Meddows is not on all fours with the evidence of Branka. Nevenka and Veselinka make this submission even as they accept that the recollections of various persons of Nevenka having stated that the studio was for Branka to live in contain similarities, common themes and/or the same components.
Nevenka and Veselinka also contend that even if Nevenka had made the studio representations, the effect of those representations was not to promise a proprietary interest in the Cowper Street property of the kinds to which Branka now lays claim. For instance, they say that the words attributed to Nevenka comprising Nevenka's first alleged studio representation - "I will build a studio over the garage and you can live there" - are not to be interpreted as a promise of a right of sole occupation of the studio forever (T171). Nor, they say, should the evidence given by Goran, Ms Colnan and Ms Meddows of discussions witnessed by them, where Nevenka is alleged to have stated that the studio was being built for Branka to move into and/or live in, be treated as corroborative of a promise of a proprietary interest in the studio having been made by Nevenka. Nevenka and Veselinka submit that that evidence, if accepted, can go no further than confirming that the studio was to be made available for Branka to live in - not that the contemplated arrangement involved an indefinite right of occupation (T172-173).
Nevenka and Veselinka take a similar position regarding Zora's alleged promise. They assert the improbability of Zora promising one-third of her three-eighths share in the Cowper Street property to Branka, in circumstances where, at that time, Branka owned a property (the King Street property) that she could move into. In other words, they say that there was no need to make any assurances about Branka's future living arrangements of the kind Zora is alleged to have made.
In respect of Veselinka's WhatsApp message, which Branka cites both as an instance of Veselinka acquiescing in (or encouraging the expectation induced by Branka as a result of) Zora's alleged promise and as corroborative evidence of that promise, Nevenka and Veselinka say the text of the message is not corroborative of Zora's alleged promise (that Branka would receive a 12.5% interest in the Cowper Street property) because it is a vague and uncertain reference. They compare Veselinka's reference in the message to "money that was promised by mum", with the more precise language of "your share of the house", which was not used (T174).
As a final point on the representation element, Nevenka and Veselinka submit that the court should have regard to the position taken by Branka at the time the NCAT proceedings were commenced. They note that at that time, she asserted her entitlement to remain living in the studio on the Cowper Street property on the basis of adverse possession, rather than by reference to an express promise that she could continue to occupy the studio for as long as she wished. They refer to Branka's statement to NCAT and her construction of her rights in the NCAT proceedings, based on advice provided to her by her legal advisers at the time:
I claim the right to remain in the studio unit as my apartment because of my adverse possession of the unit which has continued as a continuous occupation for a period of over 12 years without any force or secrecy. There has never been any Tenancy Agreement for my occupation.
Nevenka and Veselinka state that this amounts to a concession that Branka did not have their consent to occupy the studio and that this ought to weigh in my consideration of whether or not the representations relied upon by Branka were made as alleged.
[71]
Reliance
Nevenka and Veselinka submit that the issue of reliance is to be approached by asking, first, whether Branka in fact relied on the alleged representations, and second, whether Branka would have acted differently if the alleged representations had not been made, citing Wantagong at [83] and Pirrottina at [166]. While maintaining that reliance cannot be demonstrated in this case, the material representations themselves having not been established, Nevenka and Veselinka submit that Branka, in any event, would not have acted differently if the alleged representations had not been made or she had been told that those representations would not be honoured.
In this connection, Nevenka and Veselinka submit that Branka would have done those things that Branka pinpoints as acts of reliance - namely, staying at the Cowper Street property, maintaining and renovating the Cowper Street property and performing other acts of service such as supporting and caring for Zora - irrespective of any promise or expectation of a proprietary interest in the Cowper Street property. They state that it was in Branka's economic interests to remain living at the Cowper Street property for the following reasons:
1. It did not involve any outlay on Branka's part. As conceded by her in cross-examination, Branka was not required to contribute to the costs of constructing the studio, or to pay rent or household expenses.
2. Branka did not have to forego any property interest she held, and could continue to trade in properties while living at the Cowper Street property rent-free. As conceded by her in cross-examination, Branka could have moved into one of her own properties at any time.
Nevenka and Veselinka say that these factors go some way towards demonstrating that Branka would have remained living at the Cowper Street property notwithstanding the absence of any expectation on Branka's part of receiving a proprietary interest in the Cowper Street property. They state that Branka's occupation of the Cowper Street property was independent of any representation made to her.
In addition, it is submitted that Branka would have contributed in certain ways to the family, helping with renovations and providing assistance to Zora, whether she lived at the Cowper Street property or not. Nevenka and Veselinka point to Branka's agreement, in response to questions put to her in cross-examination, that she could and would likely have continued to help Nevenka, Veselinka and Zora if she had been living at the Dutruc Street, King Street or Alison Road properties between 2001 and 2021 (T35), for "family reasons".
They point to Branka's acceptance, in cross-examination, that Nevenka assisted Branka with renovations of the Clovelly Road property because she was being a good sister, and say that in the same way, Branka helped with the renovations of the Cowper Street property including the studio (T181). The rendering of this assistance by Branka, they say, was done neither in reliance on Zora's alleged promise or Nevenka's first, second and third alleged studio representations, nor to her detriment.
Moreover, Nevenka and Veselinka submit that other incentives for Branka to perform the renovations and assist with the construction of the studio existed. They argue that the situation whereby Branka was permitted to occupy the studio as a bare licensee, for a period terminable at the discretion of the owner, provided her with an incentive to contribute to the construction of the studio and renovations of the Cowper Street property and ensure that the work was done sooner rather than later. While conceding that Branka's assistance with the renovations was not inconsistent with reliance by her upon the alleged representations, they submit that Branka has not demonstrated that she performed work on the Cowper Street property in reliance on the alleged representations as opposed to an expectation of occupying the studio as a tenant at will, and say that this is a question of causation in the reliance that has not been established (T182-183).
[72]
Detriment
On the question of detriment, Nevenka and Veselinka identify the relevant inquiry as whether Branka would have been better off had she not relied on the alleged representations, citing Wantagong at [90] and Pirrottina at [167]. They note, further, that this element is only capable of being satisfied by a detriment that is substantial (per Pirrottina at [167]).
Their argument is that rather than suffering a detriment by reason of her purported reliance on the alleged representations, Branka has substantially improved her financial position, contending that living rent-free at the Cowper Street property between 2001 and the present day was and has been to Branka's advantage. In this regard, they submit that in setting up the different properties owned by her at different points in time as investment properties (rather than living in them), Branka has been able to use the rental income to pay off the mortgages over those properties, such that she now owns the Prince Street property outright, unencumbered by a mortgage, and is in a position to provide the Prince Street property to Goran and his family as rent-free accommodation.
On the question posed to the parties by me at the hearing, of how the court ought to bring to account the benefit that Branka has derived from living rent-free at the Cowper Street property, counsel for Nevenka and Veselinka itemised the properties bought and sold by Branka between 1988 and 2020 (T177, T186-187), noting:
1. The purchase of the Clovelly Road property in February 1988 for $110,000;
2. The sale of the Clovelly Road property in March 2001 for $320,000;
3. The purchase of the Dutruc Street property in February 2001 for $400,000;
4. The purchase of the Alison Road property in May 2005 for $185,000;
5. The sale of the Dutruc Street property in August 2006 for $600,000;
6. The purchase of the King Street property in August 2006 for $435,000;
7. The sale of the Alison Road property in October 2006 for $200,000;
8. The purchase of the Don Juan Avenue property in December 2008 for $370,000;
9. The sale of the King Street property in July 2009 for $565,000;
10. The sale of the Don Juan Avenue property in September 2019 for $695,000;
11. The purchase of the Prince Street property in October 2019 for $940,000; and
12. The Prince Street property valuation, which indicates the property's present value (approximately $1.25 million).
Based on this, Nevenka and Veselinka submit that there has been significant financial gain by Branka in holding these various properties, and while it is not a simple mathematical exercise of subtracting the first purchase price of each property from the property's current value, when one considers that 12.5% of the value of $5 million (the estimated value of the Cowper Street property) is $625,000, the increase in value from Branka's property holdings obtained over time far exceeds her claim for $625,000 (the economic value of a one-eighth share in the Cowper Street property).
As to Branka's ability to provide a home (the Prince Street property) for her son and his family, and to know that they are being housed, Nevenka and Veselinka identify this as a further benefit Branka has derived from living rent-free at the Cowper Street property, but not one that is readily quantifiable. In their submission, this benefit is ultimately a corollary of the benefit she has obtained of being able to discharge the mortgage over the Prince Street property, and use the now unencumbered property in any way she wishes (T179).
In relation to acts of service to the family which Branka suggests were undertaken in reliance on Nevenka and Zora's alleged assurances, Nevenka and Veselinka observe that, as Branka herself accepted in cross-examination, this care and assistance (to the extent it was provided) was provided for "family reasons" and would have been provided by her even if she did not live at Cowper Street. Accordingly, they submit, insofar as Branka accepted that she would have engaged in those acts in any event, it cannot be said that Branka would have been better off for not having relied on the alleged representations, nor can it be said that those acts were undertaken in circumstances of detrimental reliance.
[73]
Unconscionability
Finally, Nevenka and Veselinka note that the three overlapping elements of representation, reliance and detriment comprising an estoppel are all directed to the overarching question of whether it would be unconscionable to permit departure from the encouraged expectation (citing Wantagong at [62] and Pirrottina at [161]).
On the question of unconscionability, Nevenka and Veselinka's primary submission is that, assuming I am against them on the issues of representation, reliance and detriment, in the circumstances of this case, it is not unconscionable for Zora's alleged promise and Nevenka's first, second and third alleged studio representations to be departed from, owing to the benefits that have flowed to Branka to date in connection with her occupation of the Cowper Street property. They say that what she has gained from living at the Cowper Street property is a crucial consideration in determining this issue.
[74]
Consideration
Having reviewed the principles set out above and each of the parties' submissions in respect of Branka's estoppel claim, in my opinion this is not a case in which equity will intervene to protect the proprietary interests to which Branka lays claim. The essential (although not the sole) basis for my conclusion is the distinct lack of detriment suffered by Branka, a matter on which I wholly agree with the submissions advanced by Nevenka and Veselinka. In the interests of completeness, however, I will set out my findings in respect of each limb of the claim in full.
[75]
Representations
I will deal firstly with the representations alleged to have been made by Nevenka. As a matter of fact and on the balance of probabilities, I have found that one or more representations along the lines of Nevenka's first, second and third alleged studio representations were made by Nevenka to Branka in the period immediately preceding and the period following the construction of the studio on the Cowper Street property. However, I do not consider that any of Nevenka's first, second or third studio representations extended beyond representations that Branka would be able to live in the studio, in the sense of constituting a promise of some form of ownership interest in the studio (and therefore the Cowper Street property). In my opinion, Nevenka was prepared to allow Branka to live in the studio but nothing more, and any statements she made to Branka were consistent with that position.
I do not consider that Branka's statement to NCAT asserting her entitlement to remain in the studio on the basis of her continuous occupation of the studio since 2008 (adverse possession), as opposed to an express promise that she could continue to occupy the studio for as long as she wished, makes that finding untenable. The fact that Branka, at the time the NCAT proceedings were on foot, adopted a legal construction of her asserted proprietary interest in the Cowper Street property that is different to that adopted by her in the present proceedings is, to my mind, of little consequence. That is because she adopted that construction of her proprietary interest in the studio on the basis of legal advice she received at that time in connection with the NCAT proceedings. I reject Nevenka and Veselinka's submission that Branka's statement to NCAT should be treated as a concession that she did not have their express permission to live on the property and therefore as ruling out, as a matter of fact, Nevenka's having made some form of the alleged studio representations.
It then falls to be determined whether those statements - to the effect that the studio was for Branka to live in - rise to the level of certainty required to constitute a promise of a proprietary interest in the form of an open-ended right of sole occupation of the studio capable of founding an estoppel, as contended for by Branka. On this question, I bear in mind the remarks of Lord Walker in Cobbe at [68], reproduced by Rees J in Pirrottina at [163], regarding representations made by one family member to another:
… What [the representee] wants and expects to get is an interest in immovable property, often for long-term occupation as a home. The focus is not on intangible legal rights but on the tangible property which he or she expects to get. The typical domestic Claimant does not stop to reflect (until disappointed expectations lead to litigation) whether some further legal transaction (such as a grant by deed, or the making of a will or codicil) is necessary to complete the promised title.
In my opinion, Nevenka's alleged studio representations do meet the relevant certainty threshold, for several reasons.
First, I note that the requirement of certainty for a promise in a proprietary estoppel claim is less stringent than in other kinds of estoppel (Slade, Ward P at [202]), and less stringent again in domestic cases (Pirrottina, Rees J at [163]).
Secondly, I consider that representations by Nevenka that the studio was for Branka to live in, or words conveying a similar sentiment, are clearly capable of denoting an indefinite right of sole occupation of the studio, and that it was reasonable in the circumstances for Branka to attach and rely on that meaning (see Galaxidis v Galaxidis [2004] NSWCA 111, Tobias JA at [93]). While imprecise and not self-evidently corresponding with any singular, defined category of proprietary interest at law, Nevenka's alleged studio representations do convey either or both that the studio was being constructed for the very purpose of housing Branka, and/or with her accommodation in particular in mind, which I regard as consistent with and capable of supporting a reasonable expectation of a right of sole occupancy.
Moreover, I am not persuaded by the submission put by Nevenka and Veselinka that the words attributed to Nevenka by Branka as well as independent and semi-independent witnesses go no further than suggesting that the studio was to be made available for Branka to live in, or that she was to occupy the studio as a tenant at will, given that those words are clearly also capable of bearing the meaning contended for by Branka, and that is all that is needed by way of certainty in the circumstances. In my view, a sufficiently clear and definite promise was made to Branka by Nevenka, and the substance of that promise was repeated to others including Goran, Ms Meddows and Ms Colnan, which suggests to me among other things that it was intended to be taken seriously. That suffices, notwithstanding what was promised was not precisely defined (Slade at [202]), articulated in lawyerly language or readily reducible to a lawyer's categories of analysis (Evans at [116]).
Turning to Zora's alleged promise, I am not persuaded by Nevenka and Veselinka's submission as to the inherent improbability of Zora having promised to give Branka one-third of her three-eighths share in the Cowper Street property. Although Branka owned a property (the King Street property) that she could have moved into at the time Zora is alleged to have made the relevant representation, and there was, strictly-speaking, no need to make any assurances about Branka's future living arrangements of the kind Zora is alleged to have made, it is not the case that such a promise from Zora is illogical in the context of all that was going on within the family and the living arrangements that were in place at that time. In this, I refer to the status quo that had been established by this point (some five years after Branka first moved into the Cowper Street property), whereby Branka lived at Cowper Street while trading in properties and supporting Goran, who relied on Branka to provide him with accommodation. As I have stated above, I am satisfied that this informal arrangement was to Branka's distinct advantage, and that she was concerned to sustain it so long as it suited her.
I am also satisfied that, whether I accept Branka's narrative that Zora and Nevenka wanted Branka to remain living with them and insisted that she do so, or prefer instead Nevenka's version of events, pursuant to which she passively and/or begrudgingly allowed Branka to continue living at the Cowper Street property, the evidence discloses at a minimum that Branka was permitted to occupy the Cowper Street property on more than a temporary or short-term basis. In those circumstances, and in circumstances where Branka had taken it upon herself to prop up her son, who was not self-sufficient, and Nevenka and Zora were alive to that undertaking by Branka, I consider that the possibility of Zora making a promise to make provision for Branka in her will in the manner alleged is not necessarily foreclosed.
Against this, I note that the only corroborative evidence available in respect of Zora's alleged promise is that of Goran. As I have stated above, I do not regard Goran as an independent witness and am conscious that his evidence in these proceedings has at all times been closely tied to that of Branka, which serves his own purposes and interests as well. For that reason, I do not place much store in what he has to say on this matter.
I also do not regard Veselinka's WhatsApp message and Veselinka's alleged statement as corroborating Branka's account of Zora's alleged promise. In respect of Veselinka's alleged statement, that is simply because I will not treat Branka's (disputed) evidence of words allegedly spoken by Veselinka as lending any additional credibility to Branka's own (disputed) account of words allegedly spoken by Zora. In respect of Veselinka's WhatsApp message, as I have noted above, I accept Veselinka's explanation of having written what is set out in Veselinka's WhatsApp message to placate Branka or ingratiate herself with Branka. I do not, however, make this finding on the ground identified by Nevenka and Veselinka that Veselinka's reference in her message to "money promised by mum" cannot be taken as corroborating an alleged promise of a percentage interest in the Cowper Street property. That is because Veselinka's WhatsApp message, when read in full and in its context - including the qualifying phrase "when the house gets sold" - , must be read as contemplating the conversion of a proprietary interest into a liquid asset upon the sale of the Cowper Street property. I do not consider that this is too great a stretch, particularly since the message's author, Veselinka, is a non-lawyer and was not communicating in a context where such distinctions matter.
While I do not consider the evidence of Nevenka and Veselinka (on this matter or any other) to be an especially solid basis to which to anchor my factual findings (given their demonstrated propensity to controvert Branka's evidence even where that evidence has been corroborated by persons independent of the family), I do consider that other elements of the factual matrix make it objectively improbable that Zora would have promised Branka a share in the Cowper Street property.
For instance, I put considerable store in the available documentary evidence, and the fact that Zora's testamentary intentions as disclosed by the earlier will and the Will did not extend to making provision of any kind for Branka. The evidence before me is that Branka was omitted from two successive iterations of Zora's will, which suggests to me a consistent and conscious choice by Zora to exclude her. Another relevant factual matter is the previous dispute between Zora, Nevenka and Veselinka on one side and Branka on the other regarding the predecessor family property in Avoca Street in or around October 1983. This earlier dispute points to an instance of unhappy dealings with real property within the family, where they all had an ownership interest, in circumstances where Branka was - actually or notionally - set against her mother and sisters.
The previous dispute concerning the Avoca Street property probably explains why Branka was not a registered proprietor of the Cowper Street property together with her mother and sisters and was not given any beneficial interest in the Cowper Street property in the earlier will or the Will by Zora. It also gives added force to the inherent unlikelihood that Zora's alleged promise of an interest in the Cowper Street property was ever made to Branka.
With the above context informing my assessment, I cannot be satisfied on the balance of probabilities that Zora made an assurance of the kind alleged by Branka in the form of Zora's alleged promise that Branka would receive one-third of Zora's share in the Cowper Street property. I note in this regard that allowing Branka to live at the Cowper Street property, even in a studio constructed for that very purpose, and giving her a percentage interest in that property are two distinct things, and the making of such a promise does tend to defy the general logic of events and relevant aspects of Zora's behaviour as just described. Accordingly, I consider that although there is strictly no need to determine that aspect of Branka's estoppel claim based on Zora's alleged promise any further, in case I am wrong in this conclusion, I have addressed the other elements of that claim below.
[76]
Reliance
For Branka's estoppel claim to succeed, I must be satisfied on the balance of probabilities that she performed certain acts in reliance on Nevenka's alleged studio representations, and that those representations were a contributing cause that influenced Branka's course of action in a significant or material way, such that she would have acted differently had those assurances not been given and the induced assumption of a proprietary interest in the studio not been held (Slade, Ward P at [245]).
On this question, I substantially agree with the submissions advanced by Nevenka and Veselinka. I am not satisfied that reliance on the part of Branka is established, mainly because causation in the requisite sense is absent. In my view, Branka would have done the acts pinpointed by her as acts of reliance - continuing to live at the Cowper Street property beyond 2006, contributing to renovations and construction on the Cowper Street property, and providing some level and form of assistance to Zora - even if Nevenka had not made the alleged studio representations.
Branka's ability to live rent-free and without any meaningful outlay at the Cowper Street property while trading in properties and/or acquiring properties for Goran and his family to live in at different points in time provided a powerful economic incentive for her to remain at the Cowper Street property. Aside from and independently of any promise of a defined proprietary interest or legal right of occupation, the informal arrangement pursuant to which Branka occupied the Cowper Street property prior to 2006 was undoubtedly to her advantage, notwithstanding it was legally precarious because it was subject at all times to the will of Zora, Nevenka and Veselinka as the Cowper Street property's registered proprietors. No real attempt was made by Branka to reckon with this fact, and no submissions directly dealing with the issue of causation (other than mere assertions that she intended at different points in time to move out) were put by her. I consider this to be unsatisfactory, given the obvious extant reasons Branka had for remaining at the Cowper Street property and the need to show that but for Nevenka's alleged studio representations, Branka would not have so remained or would otherwise have adopted a different course.
In my view, Branka has also failed to show that she contributed in particular ways to the family, helping with renovations and providing assistance to Zora, by reference substantially to an assumed state of affairs in accordance with which she was to receive a proprietary interest in the studio. That is so in circumstances where, by her own account and consistently with the narrative she presented in evidence, she was living at Cowper Street with Nevenka and Veselinka "as family". Moreover, in circumstances where Branka was already residing rent-free at the Cowper Street property on more than a temporary basis, and for that reason had an interest in seeing that the Cowper Street property was improved and/or added to (including for her own comfort), I am unable to conclude that the induced assumption of an indefinite right of sole occupation of the studio was a contributing cause with a significant effect in determining her conduct here. In this connection, I agree with Nevenka and Veselinka's submission that Branka has failed to demonstrate that she performed work on the Cowper Street property in reliance on Nevenka's alleged studio representations as opposed to, for example, an expectation of continuing to occupy the studio as a mere tenant at will, which, among other factors, undoubtedly supplies sufficient grounds for Branka to have pursued the course of conduct that she did.
For the same reasons, if I had found that Zora's alleged promise was made to Branka, I would also have found that Branka had failed to establish that she had relied on it in the way she contended. I consider that it is likely that Branka would have remained living at the Cowper Street property, contributing to renovations and construction there and rendering some level of assistance to Zora because it suited her economic and family interests to do so, not because she was relying on Zora's alleged promise.
[77]
Detriment and unconscionability
If my conclusion as to reliance is incorrect, I am satisfied that Branka's estoppel claim should nonetheless fail owing to the lack of any substantial detriment that she will suffer if Nevenka is permitted to resile from the alleged studio representations. My reasoning on this point also provides an answer to the question of unconscionability, and it is apt for me to address the two elements in tandem given the cross-over of the relevant considerations.
To my mind, even if it is accepted that Branka relied on Nevenka's alleged studio representations in the relevant sense, it is difficult to see how that reliance will have been to her detriment if those representations are departed from. I am not satisfied that Branka would have been "better off" had she not acted in reliance on Nevenka's assurances of a proprietary interest in the studio. In those circumstances, and for the reasons I set out in greater detail below, I do not think that notions of good conscience require that Nevenka be held to her promises.
To begin with, and even before I advert to the advantages that Branka derived from living at Cowper Street beyond 2006, it is altogether unclear what Branka is supposed to have lost, forfeited, or expended in reliance on the assumption engendered in her of receiving a right of sole occupation of the studio. I accept that she contributed to the improvement of the Cowper Street property, including the construction of the studio, in terms of labour and even potentially (if her evidence of having paid for certain things in cash is accepted) finance, and that this could be taken as money and effort "thrown away" if her expectation of a proprietary interest in the studio goes unrealised. I do not, however, consider that Branka would suffer anything more than a slight detriment by virtue of these moderate contributions alone, especially when one considers that she did not otherwise pay rent or contribute to household expenses while living at the Cowper Street property.
In terms of opportunities Branka gave up in anticipation of an entitlement to occupy the studio indefinitely, these were not articulated convincingly or with any precision. Although Goran and his family presently occupy the Prince Street property, which Branka owns outright, it remains open to her to move into that property. She is, in principle, in as ready a position to do so as she was to move out of the Cowper Street property and into one of the properties she then owned at any time prior to 2006, when Nevenka made the first alleged studio representation.
In my view, the present case can be distinguished from the factual scenario Rees J was presented with in Pirrottina. There, the representee (Sam) was shown to have passed up several valuable opportunities in reliance on his parents' assurances that the house on the Lot would be his. Those opportunities included a separate offer by his parents to buy him a block of land on which to build a house, the possibility of financial contribution to his marriage from his father-in-law and an offer of employment. In the result, her Honour concluded that ([178]):
… [T]he detriment [Sam] suffered by turning down his parents' offer to buy him a block of land of his own, rather than accommodation attended with the uncertainties of living on someone else's property, was a substantial detriment. In the circumstances, I consider that the elements of estoppel by encouragement are established such that Sam had an equitable interest in the Lot as a consequence of his parents' representations, on which he relied to his detriment, making it unconscionable for the parents to go back on their word, if they had chosen to do so.
Importantly, in Pirrottina, her Honour evidently considered that in all the circumstances that detriment eclipsed or outweighed the benefit Sam received in the form of rent-free housing with utilities paid for by his parents.
No substantive evidence or argument was put before me as to any analogous opportunities that Branka could be said to have now forfeited or put beyond her reach in reliance on Nevenka's assurances.
Turning to consider the countervailing benefits Branka has secured as a result of her reliance on Nevenka's alleged studio representations, the submissions of Nevenka and Veselinka on this matter have considerable force. Continuing to reside at the Cowper Street property after 2006, where Branka was not required to pay rent or household expenses and did not make major financial contributions to renovations of the Cowper Street property or the construction of the studio, meant that she retained the ability to trade in properties and ultimately achieve her present position of owning the Prince Street property (valued at approximately $1.25 million) outright. I agree with Nevenka and Veselinka's characterisation of the related benefit of being able to provide rent-free accommodation for her son and his family as essentially a corollary of the benefit she has obtained of being able to discharge the mortgage over the Prince Street property and now use the unencumbered property in any way she wishes.
I disagree with Branka's argument that no necessary nexus can be drawn between her position of living rent-free at the Cowper Street property and her ability to buy and sell properties in the manner that she did. As a matter of commercial and general common sense, the fact that she did not pay any rent or other outgoings in connection with her occupation of the Cowper Street property, and that she did not physically reside in any property of her own that she had purchased, such that she had the freedom to use those properties either to generate further income through the collection of rent or through renovating and selling them at a profit, or to house Goran, was clearly economically advantageous to her. I regard this as a significant factor which must be brought to account in my consideration of whether and how Branka will be disadvantaged by virtue of the non-fulfilment of Nevenka's promises.
My overall impression is that this case meets Ward P's description in Slade at [287] of a situation "where a benefit (such as rent-free accommodation over a long period) might be treated as making good the promise or representation of an interest in property". In my opinion, the benefits Branka derived from conduct she claims she undertook on the basis of an expectation of receiving a right to occupy the studio indefinitely (in particular, remaining at Cowper Street, where she has now lived continuously - and without paying rent - for just shy of 24 years) must be treated as effectively subsuming or making good Nevenka's alleged studio representations.
Having determined on the balance of probabilities that Zora did not make a representation to Branka of the kind alleged (promising Branka one-third of her three-eighths share in the Cowper Street property), I need not turn my mind to purported instances of encouragement and/or acquiescence in Zora's alleged promise on the part of each of Nevenka and Veselinka in assessing the unconscionability of departure from Zora's alleged promise. However, had I determined that Zora's alleged promise had in fact been made, for the same reasons as those given above in relation to any purported detrimental reliance by Branka on Nevenka's alleged studio representations, I would have concluded that the substantial benefits Branka has secured for herself through continuing to occupy the Cowper Street property mean that it is not unconscionable for Zora's alleged promise to go unfulfilled.
In all the circumstances, I do not consider that it is unconscionable, unjust or inequitable for Nevenka to depart from her alleged studio representations, and I am not satisfied that the elements of estoppel by encouragement are established in this case.
[78]
ISSUE 2: EXTENSION OF TIME FOR FAMILY PROVISION CLAIM
Having determined Branka's estoppel claim adversely to her, the family provision aspect of Branka's case remains to be determined on the basis set out below.
[79]
Legal principles
Section 58 of the Succession Act stipulates when an application for a family provision order may be made, providing that:
(1) An application for a family provision order may be made whether or not administration of the estate of the deceased person has been granted.
…
(2) An application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown or the parties to the proceedings consent to the application being made out of time.
(3) An application is taken to be made on the day it is filed in the Court's registry.
Certain policy reasons and considerations underlie the time constraint and the "sufficient cause" exception prescribed by s 58(2). This includes the need to ensure that applications for family provision do not unduly interfere with the prompt administration of deceased estates, reflected in the assessment by parliament that "the welfare of society in connection with the administration of deceased estates is best served by imposing a strictly limited time for making applications", particularly since eligible persons will, in the vast majority of cases, be on notice of the testator's death and the provision (or lack thereof) made for them (Madden-Smith v Madden (Estate of the late Doris Linda Madden) [2012] NSWSC 146, Pembroke J at [24]). As Pembroke J observed in Madden-Smith at [23]-[24]:
[23] … Section 58(2) reveals a clear legislative intention to limit applications for family provision orders to those made within a defined, and strictly confined, period. An application is made by filing an originating process commencing proceedings in the registry of the court: Section 58(3).
[24] … In most cases the putative claimant will be well aware of the testator's death and the (allegedly) insufficient provision made for him or her. There will only occasionally be a good excuse for not making a claim within time. In fact, experience indicates that the deceased's relatives usually pay uncommonly close attention to such matters. That is not to say that cases will not arise where, for legitimate reasons, a claimant is quite unaware of the death, or of his or her legal right to make a claim, and is unable to comply with the 12-month time limitation. In those circumstances, the statutory exception requiring 'sufficient cause' may well apply.
The 12-month limitation period for the bringing of such applications is not a mere formality or procedural rule; it is a substantive provision laid down by statute (Verzar v Verzar [2012] NSWSC 1380, Lindsay J at [98]; Stone v Stone [2016] NSWSC 605, Brereton J at [36]; Anderson v Yongpairojwong [2023] NSWSC 1359, Griffiths AJ at [254]) and ought to be treated as such.
A useful summary of the principles applicable to the determination of an application seeking an extension of time, cited in full by Griffiths AJ in Anderson at [255], appears in Thomas v Pickering; Byrne & Anor v Pickering [2011] NSWSC 572 at [84]-[90]. Paraphrasing Hallen AsJ, those guiding principles are as follows:
1. The court's decision to extend time is a discretionary decision unbounded by rigid rules or statutory criteria other than the threshold requirement of sufficient cause being shown.
2. Considerations relevant to the exercise of the discretion under s 58(2) include, principally, any reasons for the lateness of the claim, as well as whether any beneficiaries under the will would be unacceptably prejudiced if time were to be extended; whether there has been any unconscionable conduct by any of the parties; and the strength of the applicant's claim (as determined by the court).
3. Potential prejudice to the beneficiaries means any prejudice arising from the delay in lodging the claim rather than any disappointment consequent upon readjustment of the interests under the will in order to make provision for the applicant. A lengthy lapse of time between the deceased's death and the bringing of the application may itself generate prejudice.
4. Unconscionable conduct in this context refers to any deliberate delay in commencing proceedings calculated to induce in the beneficiaries a false sense of security; however, it is unlikely that a change of mind due to some change in the material or financial circumstances of the applicant that occurred after the expiry of the limitation period amounts to unconscionable conduct.
5. Where the delay in bringing the application is not excessive and the estate is yet to be distributed, a lack of knowledge about the right to bring a claim during the 12 months post-death, together with a prompt application to extend the time upon the right to claim becoming known, will usually be a sufficient explanation.
6. The applicant bears the onus of establishing sufficient cause.
The expression "sufficient cause" refers to sufficient explanation, justification or excuse for the application not having been made within the period prescribed by statute: Moore v Randall & Anor [2012] NSWSC 184, White J at [39]; Underwood v Gaudron [2014] NSWSC 1055, Hallen J at [119]. In Underwood (affirmed on appeal in Underwood v Gaudron [2015] NSWCA 269 (Underwood appeal decision)), Hallen J at [125] opined that in relation to sufficient cause, the court must consider not only the period prescribed by s 58(2), but also the period after those 12 months had expired and before the proceedings were brought, since that lapse of time will ordinarily induce in executors and beneficiaries a legitimate assumption that there will be no challenge to the will.
In terms of prejudice, circumstances found to constitute clear evidence of prejudice resulting from the delay in making the application include where the estate has been distributed and spent: Underwood, Hallen J at [129]. This was the case in Underwood, where the beneficiaries had used their share of moneys from the deceased's estate to pay for necessary renovations and/or modifications to their residences. In the Underwood appeal decision at [88]-[89], Basten JA (with whom Macfarlan and Ward JJA, as her Honour the President then was, agreed) described the situation as follows:
[88] The first respondent gave evidence that she had expended the balance of her share in making modifications to her home for the benefit of her husband who was by then confined to a wheelchair. The second respondent also provided evidence, by way of affidavit on which she was not cross-examined, that she had used the bulk of the moneys received from her mother's estate in the renovation and furnishing of her residence. The balance, she stated, was used for personal expenditure and general living expenses. She asserted that, if an order for provision were made, she would be forced to sell her residence.
[89] There was thus clear evidence of prejudice resulting from the delay. That factor, added to the incomplete justification for the delay and lack of notice to the respondents, permitted the Court, unless satisfied on a preliminary consideration of a strong claim for a family provision order, to refuse to "otherwise order" pursuant to s 58(2). On that basis, the application should have been dismissed without a full consideration of the circumstances of the claim.
In Verzar v Verzar [2014] NSWCA 45 (Verzar appeal decision), Meagher JA (with whom Macfarlan and Barrett JJA agreed) elaborated on the kinds of unconscionable conduct, on the part of either the applicant or the beneficiaries, that might justify the grant or refusal of the application to extend time, stating at [25]:
… In Re Dun (Deceased) (1956) 56 SR (NSW) 181, Myers J (at 183) suggested that such conduct by an applicant might include electing to be bound by the will or, knowing of his or her rights, delaying for a long period to make an application or lulling the beneficiaries into a false sense of security so that they order their affairs on the basis that their legacies will not be disturbed, or refrain from requiring a speedy distribution of the estate. A particular prejudice which may have to be considered is that which flows from allowing an out of time application to proceed, if that would or may have the effect of improving the applicant's position, from that which would have existed if it had been made in a timely way: Durham v Durham at [37], [56], [87] (Tobias JA; Campbell and Young JJA agreeing).
As indicated by Meagher JA in the Verzar appeal decision at [33]-[35], the relevance of the strength of the applicant's case for the making of a family provision order to the question of sufficient cause to extend time for the bringing of the application is twofold. The first aspect is whether the application as made and as at the time it is or is likely to be heard has sufficient prospects of success to justify an extension. The second aspect is whether allowing the family provision application to be brought out of time would or may have the effect of improving the applicant's position compared to that which they would have occupied had the application been brought within the statutory limitation period. In this connection, in the Verzar appeal decision at [35], Meagher JA noted:
Because the assessment of adequacy of provision for proper maintenance, education and advancement in life is to be made at the time the Court is hearing the application (ss 59(1)(c) and (2)), when addressing this question it is necessary first to consider when the application would have been likely to have been heard if made in a timely manner and then to compare the position in that event with the position in fact, namely that the application has been made out of time. Ordinarily, this analysis would assume, as is usually the case and as happened in this proceeding, that the application for an extension of time and the application for substantive relief are made in one proceeding and dealt with in a single hearing. …
[80]
Branka
At the outset, Branka made clear that the claim for family provision is secondary, "an insurance policy" next to her estoppel argument (T2). This was reflected in Branka's approach to this limb of her case, which was faintly put and, as I perceived it, half-heartedly advanced.
The need for sufficient cause to be shown pursuant to s 58 of the Succession Act, by reason of Branka's family provision order application having been made out of time, was not directly addressed by Branka in written submissions.
In oral submissions, Mr Morahan accepted that the extension of time aspect of Branka's family provision claim posed a particular problem for Branka. Branka's position on this issue, and explanation for the delay by her in making an application, emerged as follows:
1. Branka did not receive a copy of, or read, the Will until some five years after Zora's death. She received a copy of the probate on 22 June 2022, having applied to the Registry of this court for a copy of it on 3 June 2022.
2. Even if, contrary to Branka's evidence and as asserted by Nevenka, Branka sighted the Will at an earlier stage, Branka had no reason to rush to make a family provision claim. That was because, on Branka's account, Nevenka informed her a short time after Zora's death of the Will's contents, that Zora had left everything to Nevenka, that "[y]ou have the studio", and that Nevenka would make provision in her own will for Branka to receive the studio (T149). Branka submits that Nevenka's use of the present tense in the statement "[y]ou have the studio" is significant insofar as it implies something more permanent than a mere entitlement to occupy the studio at Nevenka's convenience, and is consistent with a current right of sole occupancy for as long as Branka wished (T149-150).
3. Branka accepted that the following evidence given by her was not favourable to her case (T152):
1. in late 2019, she conducted some research and discovered that she only had a period of 12 months from the date of death to challenge the Will;
2. she became suspicious that Nevenka may have lied about the provisions of the Will, but did not have a copy of it; and
3. at that time, she formed an assumption that she had missed any opportunity to contest the Will.
1. Branka conceded that at all times since probate was granted, she knew that she was not included the Will (although I am comfortably satisfied, in light of her own evidence as to what Nevenka allegedly said to her about the Will shortly after Zora died, that Branka had this knowledge as early as April 2017).
This was the extent of Branka's submissions on the s 58 hurdle.
[81]
Nevenka and Veselinka
Nevenka and Veselinka submit that Branka has failed to show a sufficient cause for extending the time to bring the family provision claim, as is required under s 58(2) of the Succession Act for an application made out of time, and for that reason the application should be refused.
Noting that a claimant, in seeking to show sufficient cause, should address both the period preceding expiration of the statutory limitation period and subsequent delay (citing Underwood at [125]), Nevenka and Veselinka submit that no comprehensive explanation has been provided in respect of either. They note that Branka knew that Zora had died on 15 April 2017, and characterise Branka's explanation for the delay - that she only read the Will for herself on 22 June 2022, and had assumed (upon learning of the statutory limitation period in 2019) that she no longer had the option of contesting the Will - as "slight", using the language adopted by Hallen J in Chu v Ngar [2015] NSWSC 1505 at [152].
Nevenka and Veselinka contend, further, that the delay occasions prejudice to them in circumstances where:
1. Nevenka carried out improvements to the Cowper Street property in the wake of Zora's death on the basis that Nevenka owned 75% of the Cowper Street property, per the provisions of the Will.
2. An order for provision in Branka's favour would mean that the Cowper Street property (Nevenka's home, where she has resided since 1988) would need to be sold (citing the Underwood appeal decision at [88]-[89]).
Referring to the material relevance of the strength of a claimant's case to the decision whether to extend time (citing the Verzar appeal decision, Meagher JA at [25]), Nevenka and Veselinka submit that Branka's case lacks strength on a number of fronts. They point to the difficulties faced by Branka in seeking a notional estate order in circumstances where Zora's estate has already been distributed, and in demonstrating grounds for the making of a family provision order given that she owns property in which she could live, her income exceeds her expenditure, and she was not materially dependant on Zora.
[82]
Consideration
In my view, Branka has failed to show sufficient cause under s 58(2) of the Succession Act insofar as she has failed to provide a satisfactory explanation for the delay in bringing the family provision application. I also consider that prejudice would be visited upon Nevenka as a beneficiary by virtue of the delay. In those circumstances, I am not prepared to exercise the power to otherwise order under s 58.
In exercising the discretion afforded to me by s 58(2), I place store in the following factors disclosed by the evidence:
1. Branka knew that she had been omitted from the Will as early as April 2017, having been informed of this fact by Nevenka shortly after Zora's death. Whether or not I accept Branka's evidence that she did not have access to or actually sight the Will until June 2022, I regard her early awareness of the Will's contents as significant.
2. Although Branka may have been unaware of her entitlement to bring a claim in the 12-month period following Zora's death, she did not, upon learning of that entitlement in or around late 2019, promptly apply to extend the time.
3. The extent of the delay in seeking to bring the application (six years after Zora's death and five years post-expiration of the statutory limitation period) is not insignificant and is largely unexplained.
By way of justification for the delay, Branka asserted that she believed that she had no need for provision from the Will, having been promised a right of sole occupancy of the studio and having received Nevenka's assurance that she would bequeath the studio to Branka.
The weight of judicial authority suggests that a mere change of mind or change of heart on the part of an eligible person who has decided not to make a claim, including on the basis of deterioration in that person's financial position, is ordinarily not a sufficient cause for granting an extension of time: Stone at [36]; Verzar at [103]; Zirkler v McKinnon [2002] NSWSC 285 at [31]-[33]; Foley v Foley [2008] NSWSC 233 at [36]-[37]; Taylor v Farrugia [2009] NSWSC 801 at [14]; Henry v Hancock [2016] NSWSC 71 at [47].
In Zirkler, Macready M described the position at [31]-[32]:
[31] … There are a number of cases where a change of heart has not been held to be a sufficient reason. In Re Lauer (1984) VR 180 it was held that the mere fact that the applicant's financial position had deteriorated cannot of itself be a ground for granting an extension of time under the Act nor could the mere fact that the value of the estate had been inflated beyond what might have been expected at the date of the testator's death be such a ground.
[32] Re Lauer was followed by Young J in Bearns v Bearns-Hayes (unreported 6 May 1997). In that case for a period of two years until late 1994 the plaintiff had no intention of making a claim as she had assurances from her family that her position with her home was secure and she had sufficient income. In late 1994 arguments broke out in the family as a result of which the plaintiff felt abandoned by her family and that she could not rely on the loose arrangements previously in place. His Honour found that this was not a sufficient reason.
Following this line of authority and reasoning, to the extent that Branka sought to justify her lateness in making an application by reference to a belief she held until around June 2021 (when Nevenka first requested that Branka leave the Cowper Street property) that she was and/or would be sufficiently provided for and had no need for provision out of Zora's estate, I do not regard that justification as constituting a sufficient cause.
Moreover, I am satisfied that Nevenka as a beneficiary would be prejudiced by the delay, and not merely in the sense of being exposed to disappointment consequent upon readjustment of the interests under the Will to allow provision to be made for Branka. The evidence before me is that in order to give effect to an order for provision in Branka's favour, the Cowper Street property (Nevenka's home, where she has resided since 1988 and which she has expended significant time, money and energy over a period of decades adding to and improving, including in the wake of Zora's death) would need to be sold and the proceeds then distributed among the three sisters. In those circumstances, and where several years have passed so as to engender in Nevenka a legitimate expectation that the status quo following the completed administration of Zora's estate would go undisturbed, I consider that she would be unacceptably prejudiced if I were to grant an extension of time for the making of the application.
In terms of the strength of Branka's claim, I agree with the submissions of Nevenka and Veselinka. I do not consider that Branka's claim for family provision is a meritorious one, for reasons I have set out in greater detail below, in my consideration of whether I would make a family provision order in Branka's favour.
In all the circumstances, I am not prepared to exercise the discretion to extend time in Branka's favour. If I were minded to order otherwise under s 58(2) of the Succession Act, I have addressed the remaining issues comprising Branka's claim below.
[83]
Legal principles
The circumstances in which a notional estate order - an order designating property that does not form part of the deceased's estate (including as a result of distribution of property from the estate) as "notional estate" of the deceased person - may be made are set out in Part 3.3 of the Succession Act.
The power to make a notional estate order does not arise unless, relevantly to the present case, the court is satisfied that the deceased's estate is insufficient for provision (or a costs order) to be made: s 88(b) of the Succession Act.
The court must not designate as notional estate property that exceeds what is necessary, in the court's opinion, to allow the provision that should be made: s 89(2). Section 78, meanwhile, expressly provides that the court can only make a notional estate order if a family provision order or certain costs orders are to be made, and s 79 (dealing with the designation of property where the estate of the deceased has already been distributed) states that the court may make such an order if satisfied that upon distribution of the estate, the designated property came to be held by a person (whether or not as a trustee) or subject to a trust.
A person's rights are extinguished to the extent that they are affected by a notional estate order: s 84.
Division 3 of Part 3.3 of the Succession Act imposes certain restrictions on the making of a notional estate order, and fixes general matters that must be considered by the court (s 87). Those (non-exhaustive) general matters are the need to avoid interfering with reasonable expectations attaching to property (s 87(a)); the substantial justice and merits involved in granting or refusing the order (s 87(b)); and any other matter the court considers relevant in the circumstances (s 87(c)).
In Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4, Basten JA at [125] gave some consideration to s 87(a) and concluded that the "reasonable expectations" referred to there must be taken to mean only that of the present holder(s) of an interest in the property, stating:
While it remains true that the section (which has not changed from the 1982 Act) is silent as to whose "reasonable expectations" must be considered, the requirement is a constraint on the making of a notional estate order. It is not sensibly construed as referring to the reasonable expectations of the applicant who wants a share of, but does not own, the property. Nor does it sensibly refer to the expectations of the deceased person, because the court must already have determined that an adjustment in the distribution effected by the will was appropriate: s 89(2). Since a notional estate order will only be made in relation to property which never was, or no longer is, part of the estate, it is unlikely to refer to the expectations of any person other than the person who is the present holder of an interest in the property. …
Basten JA's view on this point has received some support from single judges of this court (see, for instance, Graham v Vukic [2020] NSWSC 1801, Parker J at [127]).
By contrast, Beazley P (Meagher JA agreeing) in Phillips appeared to consider that the statutory phrase "reasonable expectations" in s 87 must be read as including those of the defendant whose property stands to be designated as notional estate, those of the deceased, and those of the applicant seeking family provision: Beazley P at [105], Meagher JA agreeing, citing John v John; John v John [2010] NSWSC 937 at [117]-[118] (Ward J, as her Honour the President then was) with apparent approval and in turn citing Petschelt v Petschelt [2002] NSWSC 706 at [68]. See also Kastrounis v Foundouradakis [2012] NSWSC 264 at [126]-[128] and Morgan v Black [2023] NSWSC 1073 at [192]-[195].
The apparent conflict between Beazley P and Basten JA on this matter has not yet been resolved by the Court of Appeal of this court.
On the s 87(a) point, Slattery J in Manning v Matsen [2015] NSWSC 1801 made the following illustrative remarks at [157]:
Common situations in which the "importance of not interfering with reasonable expectations in relation to property" may be raised are when a beneficiary who received the property in question has spent money or worked on the property, or where a promise has been made in relation to property and the beneficiary has acted on the fact of the promise: Kastrounis v Foundouradakis [2012] NSWSC 264 at [126]. A person may for example have reasonable expectations of remaining in possession of property if the property is obtained otherwise than by gift and a person in possession of the property has given up something of an equivalent value in order to obtain it: Wentworth v Wentworth [1992] NSWCA 268 (per Priestley JA, Samuels AP and Handley JA agreeing).
Section 90 of the Succession Act imposes additional restrictions on the making of notional estate orders in proceedings involving out of time family provision applications (s 90(1)(a)). Section 90(2) relevantly provides:
The Court must not make a notional estate order in the proceedings unless -
(a) it is satisfied that -
(i) the property to be designated as notional estate is property that was the subject of a relevant property transaction or of a distribution from the estate of a deceased person or from the estate of a deceased transferee, and
(ii) the person who holds the property holds it as a result of the relevant property transaction or distribution as trustee only, and
(iii) the property is not vested in interest in any beneficiary under the trust, or
(b) it is satisfied that there are other special circumstances that justify the making of the notional estate order.
The language of the provision makes clear that the court must be satisfied, as a precondition for the making of a notional estate order, that the conditions in either s 90(2)(a) or s 90(2)(b) obtain.
What is meant by "other special circumstances" in s 90(2)(b) has been considered in several cases. Those cases indicate that more is needed to establish special circumstances than that which would suffice to justify an extension of time under the Succession Act (i.e. sufficient cause). However, circumstances relevant to the court's consideration under s 58(2) of the Succession Act may also figure in the court's assessment of whether special circumstances exist to justify the making of a notional estate order: Stone at [71]; Purnell v Tindale [2020] NSWSC 746, Henry J at [327]; Campbell v Chabert-McKay [2010] NSWSC 859, White J at [86]-[87].
The following summary regarding s 90(2)(b), drawing on authorities that dealt with the predecessor provision, s 28(5) of the Family Provision Act 1982 (NSW), appears in Charnock v Handley [2011] NSWSC 1408, Hallen AsJ saying at [89]:
(a) The sub-section in the Act gives no direct indication of the nature of special circumstances; the term is incapable of precise, or exhaustive, definition; s 28(5) of the former Act gave some indication of the types of circumstances that may count as special circumstances, namely circumstances involving such things as property not finally vesting in interest, and lack of capacity in the plaintiff; those matters may amount to special circumstances under s 90.
(b) The term prescribes a verbal formula that is commonly used where it is intended that judicial discretion should not be confined by precise definition, or where the circumstances of potential relevance are so various as to defy precise definition.
(c) The qualifying adjective, "special", looks to circumstances that are unusual, uncommon or exceptional; the Oxford Dictionary defines "special" as meaning "of such a kind as to exceed or excel in some way that which is usual or common; exceptional in character, quality or degree"; the Macquarie Dictionary states the meaning: "of a distinct or particular character or purpose"; "being a particular one"; "particular, individual or certain"; "different from what is ordinary or visual"; "extraordinary, exceptional".
(d) A circumstance may be "special" by reason of degree, as well as of kind; circumstances need not be unique to be special, but they will be unusual; it is legitimate to have regard to a combination of factors in reaching the conclusion that they are special.
(e) More should be demonstrated to prove "special circumstances" than to justify an extension of time; the latter requires "sufficient cause" to be shown; however, to establish such special circumstances does not require the Court to exclude circumstances considered under s 58(2).
(f) In a case where an extension is sought, the sub-section superimposes a further requirement, or extra hurdle, over and above the matters that a Court will consider under s 87.
(g) Whether circumstances answer the description must depend upon the context in which they occur; it is the context that allows one to say that the circumstances in one case are markedly different from those in the usual run of cases. Their existence is also, in a sense, evaluative in character.
Brereton J in Stone listed several factual scenarios which were considered to answer the description or support findings of special circumstances (at [72], citations omitted):
Factors that have contributed to findings of special circumstances have included incapacity as a result of infancy, the fact that it was no fault of the applicant that application was not made within time, the strength on the merits of an applicant's claim, the absence of prejudice (such as the fact that there has been no significant dealing with the notional estate in the meantime), and the belated falsification, after time for bringing an application for provision had expired, of a reasonable expectation that if fulfilled would have made an application unnecessary.
[84]
Branka
No written or oral submissions were made by Branka on the application of Part 3.3 of the Succession Act and the need for a notional estate order in light of the completion of the administration of Zora's estate, which occurred in 2018.
[85]
Nevenka and Veselinka
Nevenka and Veselinka submit that Branka has failed to establish grounds for the making of a notional estate order.
Referring to s 87(a) and (b) of the Succession Act, Nevenka and Veselinka contend that:
1. Regard must be had to the reasonable expectations of Nevenka and Veselinka in relation to the Cowper Street property as the registered proprietors of that property, and the importance of non-interference with those expectations.
2. Substantial injustice would be caused to Nevenka were a percentage of the Cowper Street property to be designated as notional estate, as the only way provision can be made for Branka is from the sale of that property. Noting that the Cowper Street property is and has been her home since 1988, and that she has expended significant monies on improvements to it in the wake of Zora's death, they say that the prejudice to Nevenka of an order designating the Cowper Street property as notional estate is clear.
Turning to s 90, Nevenka and Veselinka note the application of that provision to the current proceedings (Branka's application having been brought out of time) and state that because the conditions in s 90(2)(a) are not met, s 90(2)(b) is the relevant limb. In other words, they say, the court must be satisfied that "other special circumstances" justify the making of a notional estate order in this case.
In terms of the interaction of s 58(2) and s 90(2)(b) of the Succession Act, Nevenka and Veselinka state that these requirements - the need for sufficient cause to be shown for an extension of time to bring the claim, and the need for other special circumstances justifying a notional estate order - are additional and/or discrete rather than co-extensive. They say, citing Hallen AsJ in Charnock at [89], that the consequence of the use of the phrase "other" in s 90(2)(b) is that something extra is needed, beyond circumstances capable of demonstrating a sufficient cause for the purposes of s 58(2).
In this connection, Nevenka and Veselinka assert that Branka has failed to adduce evidence of any other special circumstances, and for that reason the notional estate order should not be made.
[86]
Consideration
I agree with the submissions of Nevenka and Veselinka on the application of Part 3.3 of the Succession Act. Accordingly, even if Branka was successful in having the time for the making of the family provision claim extended, I would not make an order designating part of the Cowper Street property as notional estate of Zora.
Beginning with the s 87 general matters, following Beazley P in Phillips and Ward J in John, I have given weight to the reasonable expectations of each of Nevenka and Veselinka (as persons whose proprietary interests stand to be disturbed by any prospective notional estate order), Branka (as a person seeking provision from the deceased's estate) and Zora (the deceased). I consider that their expectations in relation to the Cowper Street property would be interfered with by the making (or refusal) of a notional estate order in the following ways:
1. Nevenka: This is a situation of the kind described by Slattery J in Manning, where a beneficiary who received the property (or, more accurately, an increased proportionate share of the property) in question has spent money or worked on the property, and formed an expectation that she would remain in possession of the property. I consider that this expectation was and is reasonably held, and has been cemented by the passage of some years during which nothing transpired to put Nevenka on notice that the distribution of Zora's estate in accordance with the Will would be disturbed, including by virtue of a claim by Branka.
2. Veselinka: As a joint owner of the Cowper Street property alongside Nevenka (holding a 25% share in the property), I must pay similar regard to her reasonable expectation of continuing to hold that proprietary interest.
3. Branka: I have taken into account Branka's expectation that she claims she held of receiving a percentage share of her mother's interest in the Cowper Street property. However, noting that established principle and s 87(a) of the Succession Act only requires that I consider any reasonable expectations in relation to property, I do not give this purported expectation of Branka much weight. That is because I am not satisfied that that expectation was altogether reasonable, having determined on the balance of probabilities that Zora made no promise to bequeath Branka one-third of her interest in the Cowper Street property, and in light of Branka's failure to take any steps to ensure that Zora would follow through on that alleged promise (T32).
4. Zora: To the extent that it is appropriate to consider the deceased's own expectations in relation to the Cowper Street property, I am conscious of her testamentary intention, as reflected in the terms of the Will, that Nevenka should receive the entirety of the residue of her estate (following payment of any debts and probate and estate duties). This included Nevenka receiving Zora's three-eighths share in the Cowper Street property upon her death. Noting that while Zora was alive, Nevenka was overwhelmingly responsible for all manner of caretaking in relation to the Cowper Street property, and that Veselinka did not reside or spend any significant amount of time at the Cowper Street property, I consider that any expectation on Zora's part that this state of affairs would continue was wholly reasonable.
5. In light of the above, I consider that the reasonable expectations of Nevenka, Veselinka and Zora in relation to the Cowper Street property would be substantially disrupted if I were to make an order designating that property as notional estate. The need to avoid interfering with such expectations is a particularly significant concern in this case.
In addition to the foregoing matters, I regard the following factors as bearing on the substantial justice and merits involved in granting or refusing the notional estate order:
1. Substantial injustice would be visited upon Nevenka were a percentage of the Cowper Street property to be designated as notional estate. That is for the reasons identified by Nevenka and Veselinka, namely that the Cowper Street property has been Nevenka's home since 1988, and that she has expended considerable time, effort and money in maintaining, improving and adding to the property, all while allowing Branka, since 2001, to reside there rent-free and without contributing to household expenses. I am satisfied that the only way provision can practically be made for Branka - through the designation of the Cowper Street property or part thereof as notional estate and its subsequent sale and distribution of the sale proceeds - stands to work a substantial injustice to Nevenka.
2. Conversely, I am not convinced that refusing the order would occasion any significant injustice vis-à-vis Branka, in circumstances where she has no real need for provision out of Zora's estate (as I will discuss below).
In respect of s 90, for reasons similar to those underpinning my conclusion regarding the lack of any demonstrated sufficient cause for extending time pursuant to s 58(2), I consider that no "other special circumstances" capable of justifying the making of a notional estate order arise in this case. I agree with the submissions of Nevenka and Veselinka on this point. To use the expression adopted by Brereton J in Stone at [71], no circumstances "unusual, uncommon or exceptional in character, quality or degree" - and no material or evidence indicative of such circumstances - are present here.
For the reasons outlined above, I would not make a notional estate order in respect of the Cowper Street property.
[87]
ISSUE 4: FAMILY PROVISION ORDER
Given my determination that Branka's claim for a family provision order should be dismissed on the bases outlined above, it is unnecessary to address at length the issue of whether, if those substantive hurdles had been overcome, I would have made an order in the exercise of the power under s 59(2) of the Succession Act for a family provision order in Branka's favour out of Zora's notional estate.
However, since I have referred, in dealing with the extension of time and notional estate order issues, to my view that Branka's claim for a family provision order would not succeed, I will set out the applicable legal principles and the parties' submissions and proceed to briefly explain why I would not, in the exercise of my discretion, have made such an order in any event.
[88]
Legal principles
Section 59 of the Succession Act relevantly provides:
(1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that -
(a) the person in whose favour the order is to be made is an eligible person [defined in s 57(1)(c) as including a child of the deceased person], and
…
(c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.
(2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made.
Note -
Property that may be the subject of a family provision order is set out in Division 3. This Part applies to property, including property that is designated as notional estate (see section 73). Part 3.3 sets out property that may be designated as part of the notional estate of a deceased person for the purpose of making a family provision order.
Section 60(2) contains a list of factors to which the court may have regard for the purpose of determining the eligibility of an applicant for family provision and whether and in what form a family provision order should be made. Those matters are:
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
(e) if the applicant is cohabiting with another person - the financial circumstances of the other person,
(f) any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g) the age of the applicant when the application is being considered,
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate,
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so,
(l) whether any other person is liable to support the applicant,
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
(n) the conduct of any other person before and after the date of the death of the deceased person,
(o) any relevant Aboriginal or Torres Strait Islander customary law,
(p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered.
In Baker v Baker [2024] NSWSC 559, Hammerschlag CJ in Eq at [20]-[26] helpfully summarised the provisions of the Succession Act and legal principles governing the making of family provision orders as follows:
[20] The following useful summary of the basal provisions of the Act concerning this type of application was recently provided by Basten AJ in Bohen v Mitchelmore [2024] NSWSC 171 (Bohen v Mitchelmore) at [18]-[20]:
[18] The statutory scheme for family provision orders is found in Pt 3.2 of the Succession Act. It commences by identifying classes of "eligible persons" who may make such an application: s 57. The classes include a child of the deceased person…
[19] The Court may make such an order if satisfied that, at the time the Court is considering the application, "adequate provision for the proper maintenance, education or advancement in life of the person … has not been made by the will of the deceased person": s 59(1)(c). If so satisfied, the Court is empowered to make "such order" as it thinks "ought to be made for the maintenance, education or advancement in life of the eligible person": s 59(2).
[20] In determining whether an order should be made and, if so, in what form, the court is empowered to have regard to matters set out in s 60(2) of the Succession Act. Those matters provide guidance, but are not exhaustively stated. Importantly, they inform the content of what may be considered "adequate" provision and "proper" maintenance, education or advancement in life. These matters require the Court to consider the family relationship between the applicant and the deceased person, "including the nature and duration of the relationship" (par (a)); "the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant … or to any beneficiary of the … estate" (par (b)); "the nature and extent of the … estate" (par (c)); "the financial resources (including earning capacity) and financial needs, both present and future, of the applicant" and of any beneficiary of the estate (par (d)); "the age of the applicant" (par (g)); "evidence of the testamentary intentions of the deceased person" (par (j)); "the character and conduct of the applicant before and after the date of the death of the deceased person" (par (m)); and "any other matter the Court considers relevant" (par (p)).
[21] It is well established that s 59 requires a two-step process. First, the Court considers whether adequate provision for the proper maintenance, education or advancement in life of the applicant for the order has not been made by the Will, and if the Court is satisfied that it has not been made, the Court may make such order for provision out of the deceased's estate as the Court thinks ought to be made for the maintenance, education or advancement in life of the applicant having regard to the facts known to the Court at the time the order is made (the emphasised words appear in s 59(2)). Those words focus attention on the necessity for the Court to have updated information, which in turn casts upon an applicant a duty to make full and frank disclosure of her or his financial circumstances as at the date of the hearing: DJ Singh v DH Singh and Others [2018] NSWCA 30 at [284]-[291].
[22] The requirement for the Court to have regard to the facts known to it at the time of the order brings with it the clear implication that the relevant facts will be placed before the Court. Added to this, an applicant's financial circumstances are matters specifically within their own knowledge. In Srekovic v Srekovic [2018] NSWSC 1597, Hallen J (as His Honour then was) had occasion to remark, with reference to Practice Note SC Eq 7 (as it then stood), that:
[228] I have stressed, on numerous occasions, the need of an applicant for provision to disclose her or his financial circumstances at or about the time of the hearing. Indeed, Paragraph 17 of Practice Note SC Eq. 7 requires updating affidavits to be filed and served, and, invariably, when a matter is set down for hearing, a direction is made for such affidavits to be served a few days prior to the final directions hearing. Regrettably, more often than not, as in this case, the direction is not complied with.
…
[24] If it becomes clear that there are pertinent facts which have not been placed before the Court, it cannot make the evaluative judgment which s 59(1)(c) requires it to make: Cringle v Cringle [2018] NSWSC 1558 at [35]-[36]; Stone v Stone [2019] NSWSC 233.
[25] The following canons emerge from the series of decisions cited immediately below:
(1) an applicant has the onus of establishing that adequate provision for their proper maintenance, education or advancement in life was not made by the will;
(2) the terms "proper" and "adequate" do not invoke any precise or immutable standard. The standard will depend on the circumstances of the case;
(3) the jurisdiction is not exclusively needs-based. There are other relevant considerations, as the list of relevant factors in s 60 makes clear;
(4) the notion of advancement in life is concerned or envisages, not merely maintaining a standard or status of an eligible person, but in an appropriate case improving and enhancing it;
(5) the Act does not create legal rights of inheritance;
(6) fairness and equality are not touchstones for relief, and it is not appropriate for the Court to endeavour to achieve an overall fair division of the deceased's estate; and
(7) the discretion to make an order is not untrammelled or to be exercised according to idiosyncratic notions of what is thought to be fair or in such a way as to transgress unnecessarily upon the deceased's freedom of testation.
Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; Hughes v National Trustees (1979) 143 CLR 134 at 149; Gorton v Parks (1989) 17 NSWLR 1; Singer v Berghouse (1994) 181 CLR 201; McKenzie v Topp [2004] VSC 90; Vigolo v Bostin (2005) 221 CLR 191 at [10]; Sung v Malaxos [2015] NSWSC 186 at [5]; Steinmetz v Shannon (2019) 99 NSWLR 687; Barbuto v Barbuto [2019] NSWSC 1023 at [308] and following; Bohen v Mitchelmore at [21] and following.
[26] Section 63(5) provides that a family provision order may be made in relation to property that is not part of the estate of the deceased if it is designated as notional estate of the deceased by an order under part 3.3.
Determining the adequacy of provision involves an evaluative judgment, on a question of objective fact, based on all the circumstances: Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1979) 143 CLR 134 at 147-8; [1979] HCA 2; White v Barron (1980) 144 CLR 431 at 434-5, 443; [1980] HCA 14; Singer v Berghouse (1994) 181 CLR 201 at 210-211; [1994] HCA 40.
Where a claim is brought by an adult child of the deceased, the following principles (lifted from Smith v Johnson [2015] NSWCA 297, Sackville AJA (Macfarlan and Ward JJA agreeing) at [62], reproducing Camernik v Reholc [2012] NSWSC 1537, Hallen J at [159]) offer guidance:
1. A child does not cease to be a natural recipient of parental ties, affection or support upon leaving home or merely because the bonds of childhood are relaxed.
2. Ordinarily (but without fixing this as a universal standard), there exists a community expectation that parents will raise and educate their children to the best of their ability while they remain children. Where feasible and where financial circumstances allow, this will probably mean securing them with a tertiary education and providing them with a start in life such as a deposit on a home. While this does not extend, in ordinary circumstances, to providing one's children with an unencumbered property or the finance to acquire an unencumbered house, in a particular case where assets permit and the relationship between the parties is such as to justify it, such an obligation may be taken to exist.
3. In general, the community does not expect a parent to look after their child for the duration of the child's life and into retirement, particularly where someone else (such as a spouse) has or may be taken to have assumed the primary obligation to do so. In respect of an adult child who remains a dependent of a parent, the community will usually expect the parent to make provision to fulfil that ongoing dependency after death.
4. Where a child, including an adult child, encounters hard times, or has been unable to accumulate superannuation or otherwise make provision for their retirement and there are assets available, then a parent may be expected to provide a buffer against contingencies and/or something to assist their child in their retirement if otherwise they would be left destitute.
5. If a person applying for family provision has obligations of support in respect of others (such as a parent's obligation to support a dependent child), that will be a relevant consideration in determining what is an appropriate provision for the maintenance of the applicant.
6. An applicant adult child is not required to show some special need or special claim.
7. An adult child's lack of savings sufficient to meet present and future demands, such as that of ill-health, which is likely to be of greater concern with age, but also of the ordinary vicissitudes of life, is a relevant consideration. An applicant's diminished or total lack of earning capacity could give rise to an increased call on the estate of the deceased.
8. The applicant bears the onus of establishing before the court, on the balance of probabilities, the justification for the claim.
[89]
Branka
In respect of her claim for family provision, Branka submits that she is an eligible person (being a daughter of the deceased); that Zora did not make adequate provision for Branka in the Will; that while she owns property (the Prince Street property), she has effectively gifted that property to Goran and his family; and that she has health problems and limited savings for the future contingencies of life.
In the course of closing submissions at the hearing before me, Branka accepted that the issue of need posed some difficulty (T166), but suggested that adequate provision would see Branka given something in the realm of one-third of Zora's share on an estate of $5 million (in other words, 12.5% of $5 million).
Branka submitted that I ought to compare her position with that of her sisters, noting:
1. Nevenka is reasonably well set up, with the "lion's share" (75%) of the Cowper Street property, and income slightly in excess of her monthly outgoings, although she has health problems which elevate her need.
2. Veselinka is likewise relatively well-off, residing at Kilmarnock and holding a 25% share in the Cowper Street property.
[90]
Nevenka and Veselinka
Nevenka and Veselinka submit that the critical point on which Branka's claim for family provision hinges, and must ultimately fail, is the adequacy of provision made for her by Zora in the Will. They say that in circumstances where Branka owns a property in which she could live, receives income in excess of her expenditure, does not assert any material needs, and was not materially dependent on Zora, it cannot be said, notwithstanding the Will conferred no benefit on Branka, that provision was inadequate and as such the jurisdictional requirement posed by s 59(1) of the Succession Act is not met.
On the relevance to this question of Branka's alleged acts of service, including assisting with renovations of the Cowper Street property and providing care to Zora, Nevenka and Veselinka submit, without admitting that conduct, that it would not entitle Branka to provision from Zora's estate. They say that family provision orders are not made as a reward for service, pointing to Windeyer J's remarks in Blore v Lang (1960) 104 CLR 124 at 137; [1960] HCA 73 to the effect that family provision orders aim to "provide for deserving persons according to their requirements, not to reward past services" and in the same case, Menzies and Fullagar JJ's statement at 134 that:
Bad conduct or character may disentitle a member of the family to needed assistance, but good conduct and honest worth are not to be rewarded by a generous but second-hand legacy at the hands of the court.
It is not the case, Nevenka and Veselinka say, citing Campbell JA (with whom Giles JA and Handley AJA agreed) in Hampson v Hampson [2010] NSWCA 359 at [80], that "[n]either entitlement to an award, nor its quantum, accrues good deed by good deed." In their submission, any work done by Branka to assist in the renovations of the Cowper Street property does not entitle Branka to a family provision order in her favour.
In terms of Branka's financial need, Nevenka and Veselinka place emphasis on the following factors:
1. At the time Zora made the Will and at all times since then, Branka has owned real estate in Randwick.
2. Branka presently owns the Prince Street property and is able to move into that property.
3. Branka possesses cash reserves in excess of $70,000.
4. Branka's monthly income exceeds her monthly expenses.
5. No evidence has been adduced (or any specific assertion made) of Branka's future needs or material dependence on Zora at any time.
For the foregoing reasons, Nevenka and Veselinka assert that the court should decline to make an order for family provision in Branka's favour.
[91]
Consideration
In reaching the conclusion that I would refuse the family provision order sought by Branka even if she had succeeded on the extension of time and notional estate issues, I have had regard to all of the evidence summarised above and all relevant s 60(2) matters. In all the circumstances, I cannot be satisfied that adequate provision for the proper maintenance, education or advancement in life of Branka was not made by the Will. That being so, the requirements for the exercise of the discretion conferred by s 59 are not met.
Of the non-exhaustive matters set out in s 60(2), I consider that the following considerations have particular force in the present case.
[92]
Nature of the relationship with the deceased
While I accept that Branka likely shared a loving relationship with her mother, the evidence tends to demonstrate that that relationship with Zora may not have been as close, as stable or as amicable as that between each of Nevenka and Veselinka and Zora, at least at different points in time. Again, this has to do with the alliances between the four women that formed and dissolved and re-formed over the years. In this connection, I place weight on the early dispute regarding the predecessor family property (the Avoca Street property), the joint ownership of the Cowper Street property by Zora, Nevenka and Veselinka (despite Veselinka living at Kilmarnock for much of the relevant period), and Zora's earlier will whereby she devised the residue of her estate to Nevenka and Veselinka in equal shares, omitting Branka. I am also conscious that it was Nevenka who became Zora's full-time carer when Zora's health deteriorated in around 2010, setting up a makeshift bedroom for Zora in her own unit from which she nursed her.
[93]
Obligations of the deceased and contributions to the deceased's estate and welfare
Having reviewed the principles applicable to claims by adult children, I am not satisfied that Zora owed Branka any obligations of care above and beyond what might be said to be usual, particularly given that Branka appears at all relevant times to have been self-sufficient. She has demonstrated extensive experience in trading in properties and canniness in making investments, and has only co-habited with her mother and sisters since 2001 for what she says are family (as opposed to financial) reasons. There is nothing to suggest any ongoing or material dependency on Zora on the part of Branka. The evidence before me is that she does not lack financial resources or reserves and owns property in her own right. Against this, Branka has an adult child who she has taken it upon herself to support - such as by providing rent-free accommodation and paying his tuition fees - well into adulthood and who might be regarded as a dependent of her own, and I note that this a relevant consideration in determining what might constitute appropriate provision for her maintenance.
In terms of contributions to Zora's estate and welfare, I again note that Nevenka's efforts outstrip that of Branka, but that Branka did contribute by providing some level of care and assistance to Zora while she was alive, and by assisting with renovations of the Cowper Street property. As stated above, I have found that these contributions to improving the Cowper Street property (and therefore part of Zora's estate) were more than nominal.
[94]
Nature of the estate or any property that could be designated as notional estate
The administration of Zora's estate was completed in 2018. The evidence before me is that the only property capable of being designated as notional estate of Zora is the Cowper Street property, which is presently held by Nevenka and Veselinka as tenants-in-common in unequal proportions (three-quarters and one-quarter shares respectively).
I have set out my conclusions as to the impact a notional estate order would have on the rights, interests and expectations of all relevant parties above.
[95]
Financial circumstances
Branka has assets with a combined value in excess of $1.33 million, including real property (the Prince Street property) and over $75,000 in savings. Her monthly income exceeds her monthly expenses by approximately $465. No evidence as to Branka's future financial needs was placed before me.
Nevenka has assets worth just over $3.8 million, including a 75% share of the Cowper Street property. Her monthly income exceeds her monthly expenses by around $2,657.50. Nevenka's estimated future expenses, including medical expenses, are not insignificant. I am satisfied that Nevenka, by reason of her chronic medical condition (but without entering into any detailed assessment or projection of the specific kind and cost of specialist treatment and domestic or in-home care assistance she may require at some future time), has substantial financial needs that, although presently met from her monthly income, may increase into the future with the progression of her illness.
Veselinka has assets worth approximately $1.3 million. Her monthly income exceeds her monthly expenses by approximately $325. I consider that she may have some moderate level of future financial need stemming from health conditions which she has deposed to suffering that is presently met by her monthly income.
[96]
Applicant's age, disability and present and future needs
There is no evidence of any physical, intellectual or mental disability of Branka, although I note her advanced age (71 years).
[97]
Deceased's testamentary intentions
The terms of the Will make plain Zora's intention that Nevenka would be the sole beneficiary in receipt of the assets of her estate.
[98]
Conclusion
In light of the above, in all the circumstances, I find that there would be no occasion to make an order for family provision in favour of Branka. The main factor compelling this conclusion is Branka's lack of need, which I discern from the present state of her financial circumstances (including ownership of unencumbered real estate in Randwick with a value in excess of $1 million) as disclosed. To my mind, that plain lack of need, in combination with Zora's clear testamentary intentions, the absence of evidence as to Branka's future needs or material dependence on Zora at any relevant time, and the other s 60(2) factors addressed above, means that, notwithstanding the Will conferred no benefit on Branka, provision was not inadequate and as such the jurisdictional requirement posed by s 59(1) of the Succession Act is not satisfied.
As an aside, I am minded to address Branka's submission as to the use to which the Prince Street property owned by her has been put. It was argued before me that the Prince Street property has effectively (although not technically) been gifted to Goran and his family, that it is their residence, and that she cannot, practically-speaking, live there with them. At the hearing, my attention was drawn to the "cultural overlay" of this arrangement (T162).
Whilst I accept that Branka has made the decision to support her adult son by providing him and his family with a home in which to live without paying rent, and I accept that it would, perhaps, be culturally inappropriate for her to request that he vacate the Price Street property, as a matter of law, she is the absolute owner of that property and is entitled and has the capacity to use it to meet her own accommodation needs - in the same way that Nevenka and Veselinka as the registered proprietors of the Cowper Street property are entitled to terminate the tenancy at will pursuant to which Branka occupied various parts of the Cowper Street property since 2001. The court must give due weight to Branka's ownership of the Prince Street property as part of her unencumbered assets for the purposes of determining the adequacy of provision under s 59, and, had I not already determined both that Branka's application under s 58(2) of the Succession Act should be refused and that no notional estate order should be made, I would have done so.
[99]
ISSUE 5: POSSESSION
Having determined all of the claims made in the cross-claim by Branka adversely to her, Branka has no right to remain at the Cowper Street property and each of Nevenka and Veselinka as the registered proprietors of the Cowper Street property are entitled to bring an end to Branka's occupation of the Cowper Street property.
Branka has previously been asked to leave the Cowper Street property: on 14 June 2021, by the letter of demand sent by Nevenka to Branka, which Branka received on 21 June 2021, demanding that she leave within two weeks; on 5 January 2022, by the termination notice sent by Nevenka to Branka, demanding that she leave within two weeks; and on 24 August 2022, by the letter from Adams & Co to Branka demanding that she leave within two weeks.
In all the circumstances, Nevenka and Veselinka are entitled to judgment for possession of the Cowper Street property. There is no basis on which the execution of a writ for possession should be delayed in light of the fact that Branka is the registered proprietor of the Prince Street property into which she is able to move.
[100]
COSTS
The costs of the proceedings, calculated on an indemnity basis up to and including the completion of the four-day hearing before me, of Nevenka and Veselinka are estimated to be $133,000.00 (exclusive of GST).
Branka's costs of the proceedings, calculated in the same manner, are estimated at $110,000.00 (exclusive of GST).
As the administration of Zora's estate has been completed, and I have determined that no notional estate order should be made, no costs can be awarded out of the estate or the notional estate of Zora. Accordingly, I will direct that the parties provide brief written submissions in respect of any proposed costs order, with the intention that the issue of costs, if disputed, be dealt with by me on the papers.
[101]
ORDERS
For the reasons I have given above, I propose to make the following orders:
1. Order that the cross-claim filed 5 December 2022 be dismissed.
2. Judgment for the plaintiffs against the defendant for possession of the whole of the land known as XX Cowper Street, Randwick, New South Wales, being the whole of the land comprised in certificate of title folio identifier Lot 1 in Deposited Plan 81492 (Property).
3. Grant leave to the plaintiffs to issue a writ of possession in relation to the Property.
4. Direct that:
1. The plaintiffs file and serve any submissions in respect of costs (limited to two pages, size 12 font, 1.5 spacing) within 7 days of today.
2. The defendant file and serve any submissions in respect of costs in response (limited to two pages, size 12 font, 1.5 spacing) within 14 days of today.
[102]
Amendments
04 December 2024 - Table of contents added
21 February 2025 - Table of Contents - corrected numbering.
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: 21 February 2025
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Charnock v Handley [2011] NSWSC 1408
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Hampson v Hampson [2010] NSWCA 359
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Hughes v National Trustees, Executors and Agency Company of Australasia Ltd (1979) 143 CLR 134; [1979] HCA 2
John v John; John v John [2010] NSWSC 937
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Category: Principal judgment
Parties: Nevenka Dmitrovic (First Plaintiff/First Cross-Defendant)
Veselinka Dmitrovic-Gregory (Second Plaintiff/Second Cross-Defendant)
Branka Kleut (Defendant/Cross-Claimant)
Nevenka Dmitrovic trading as Executrix of the Estate of the late Zora Dmitrovic (Third Cross-Defendant)
Representation: Counsel:
D Price (Plaintiffs/Cross-Defendants)
T Morahan (Defendant/Cross-Claimant)