Citation : ORESKI -v- IKAC [2007] WASC 195

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : ORESKI -v- IKAC [2007] WASC 195 (S)

Succession - Informal will - Wills Act 1970 (WA), s 34 - Unsigned document in form of will - Whether intended to be will of deceased - Relevant principles - Turns on own facts

Costs - Whether unsuccessful plaintiff in probate action entitled to have costs paid out of estate - Relevant principles - Turns on own facts

Wills Act 1970 (WA), s 34

1 MARTIN CJ: I agree with Newnes AJA that this appeal should be dismissed, for the reasons he gives.

2 McLURE JA: I agree with Newnes AJA for the reasons he gives that the appeal in respect of the substantive claim should be dismissed. I would also dismiss the challenge to the costs order. The appellant did not establish any express or implied material error of fact or law that would enliven this court's power to intervene.

3 NEWNES AJA: This is an appeal against a decision of Barker J refusing the appellant's application for a grant of probate of a document said to be the informal will of the late Zivojin Ikac (the deceased) and ordering that letters of administration be granted to the second respondent. The appellant also appeals against the costs orders subsequently made by his Honour.

4 The deceased was born on 28 July 1932 in Croatia. On 8 August 1956, he married the first respondent. On 23 October 1956, they had a son, the second respondent. Shortly afterwards, in November 1956, the deceased migrated to Australia. His wife and son did not come with him. In Australia, the deceased used the adopted name, Jimmy Hudson.

5 On 24 February 1965, the deceased became an Australian citizen. However, in July 1965, he returned to Yugoslavia and lived with the first respondent. On 1 November 1966, they had a second son, the third respondent.

6 There was evidence at the trial that between 1968 and 1986 the deceased lived and worked in West Germany, operating a restaurant or restaurants, without his wife and children, although the second respondent gave evidence that during these years his family travelled to West Germany each year to be with him during the school holidays and he often visited them in Yugoslavia.

7 In 1986, the deceased returned to Australia. His wife and children remained in Yugoslavia. By that time, it appears that other members of the family had migrated to Australia, including the appellant, who is the deceased's younger sister. The appellant migrated to Australia on 2 July 1974. It appears she had previously worked in the deceased's restaurant in West Germany.

8 Following the deceased's return to Australia in 1986, he lived with the appellant and her family for two or three years. He then purchased a house in Hamersley, a northern Perth suburb, and later acquired another property at Two Rocks, north of Perth. At about the time the deceased returned to Australia in 1986, he imported from Germany a Mercedes Benz car. The Mercedes Benz has a significant role in this matter.

9 There was some evidence that at the time the deceased returned to Australia in 1986 it was intended that his wife and children would join him once he was settled. There was evidence that, in 1988, the first respondent gave the deceased an amount of 49,000 DM to assist the deceased purchase the Hamersley property. In 1989, the second respondent travelled to Australia and stayed with his father for a period of six months. The second respondent's tourist visa then expired and he returned to Europe.

10 There was, however, conflicting evidence as to the deceased's relationship with his wife and two sons. The second respondent gave evidence that the family's plans to resettle in Australia had been delayed, first by the marriage in 1990 of the third respondent and the subsequent birth of a child to the third respondent and his wife, and then by the outbreak of war in the Balkans in 1991. The second respondent said that the deceased and the first respondent met in Munich in 1993 and agreed that the first respondent's move to Australia should be postponed in light of those events.

11 The second respondent gave evidence that he visited the deceased in Germany on a number of occasions between 1991 and 2001, and he also contacted the deceased by telephone about twice a year. He said the first respondent spoke by telephone to the deceased a few times each year.

12 The appellant, on the other hand, said that the relationship between the deceased and the first respondent had been strained for many years and, in 1989, there was a serious falling out between the deceased and his family, who refused to join him in Australia. The appellant said that from that point on the deceased ceased to have any dealings with his family. He did not visit Yugoslavia again. In 1998, he refused to sponsor, and discouraged the appellant from sponsoring, the second respondent who wanted to migrate to Australia.

13 The witnesses on both sides were in agreement, however, that the deceased was highly secretive in relation to his business dealings, travelled extensively and had no obvious source of income from any regular occupation. Nevertheless, he continued to have sufficient financial funds to maintain himself and to finance his travels. Where those funds came from appears to have been a mystery to all of the parties to this litigation.

14 The learned trial judge concluded that from 1986 until his death in 2004, the deceased was close to the appellant and her family in Perth. He enjoyed a good relationship with the appellant's two sons, David and Dennis Oreski.

15 It appears that the subject of the preparation of a will of the deceased was raised with him on at least two occasions in the period shortly before he died.

16 Mr Shain was an accountant whom the deceased consulted from time to time. Mr Shain gave evidence that, in October 2003, he accompanied the deceased when the deceased consulted a lawyer, Ms Banaszak of Banaszak Legal, about certain loan and security documents that he was required to sign. In the course of the consultation, Ms Banaszak mentioned in passing to the deceased that he should 'review his will', but the matter was not taken any further. Ms Banaszak gave evidence that the deceased did not consult her again.

17 Mr Shain gave evidence of a conversation he had with the deceased when they left Ms Banaszak's office. Mr Shain said he told the deceased that he should have a will. The deceased responded 'I will, I will, don't worry it's all under control'. He said to Mr Shain 'Who else do I have but [the appellant] and her boys?' Mr Shain said he told the deceased that he still had two sons, who were his 'flesh and blood'. According to Mr Shain, the deceased then referred to an argument he had had with the third respondent on a trip to Yugoslavia in 1989 and became upset and made it clear that he did not wish to speak about his family any further.

18 The appellant gave evidence that at a dinner at her home in March 2004, the deceased looked ill and said to her 'not good' and patted his chest, referring to a shortage of breath. The appellant said the deceased had had a history of heart problems. The appellant says she told the deceased that he needed to make his will and he said to her 'don't worry Sele [sister]'. Nothing further was said on the matter.

19 The body of the deceased was found at his home on 7 May 2004. Subsequently, David Oreski searched the deceased's house for a will, but was unable to find one. However, a business card of Banaszak Legal had been found in the deceased's wallet and, on 31 May 2004, Mr Oreski contacted Ms Banaszak to enquire whether she had prepared a will for the deceased. Ms Banaszak informed him that she had not and she did not know if a will existed.

20 On 3 June 2004, David Oreski and Mr Shain consulted Ms Banaszak for advice on the position in relation to the deceased's affairs if there was no will.

21 In about early June 2004, David Oreski and Dennis Oreski collected the deceased's Mercedes Benz car from the deceased's house, where it had stood since the deceased's death, and drove it to the appellant's house where it was parked in the driveway.

22 David Oreski gave evidence that while the deceased normally maintained the car in an immaculate condition, it needed to be cleaned, including the sheepskin car seat cover on the backseat, which was dusty. Mr Oreski said that, on or about 10 June 2004, he decided to clean the inside of the car to make it ready in case it had to be sold. He said that when he took the car seat cover off the rear seat, a large envelope and a fold-up map of Australia fell to the floor of the car. He said the envelope and map had been placed behind the upright portion of the car seat cover, that is, against the upright part of the backseat. The seat cover had a zip in the middle which enabled items to be slipped behind it.

23 The envelope contained a typed document (the will document) which appeared to be the will of the deceased. It was dated 2 February 2004 and had been typed on a typewriter rather than modern word processing equipment. The document contained provision for the signature of the deceased but it was unsigned.

24 The will document provided that the appellant was to receive the deceased's house and all his furniture and personal effects located there, his Mercedes Benz car, and the money in his bank accounts. The second and third respondents and David and Dennis Oreski were to receive the deceased's property in Two Rocks in four equal shares. The will document provided that the appellant was to be the executrix of the deceased's estate but if she predeceased the deceased, then David and Dennis Oreski were to be the joint executors. It also contained a statement that the deceased had excluded the first respondent from any share in his estate because she had been separated from him for more than 15 years.

25 Shortly after discovering the will document, Mr David Oreski contacted Ms Banaszak for advice on what to do about it. In 2005, the appellant commenced proceedings seeking a grant of probate in solemn form of the will document.

26 On 14 February 2006, the appellant's solicitors wrote to the respondents' solicitors as follows:

We advise that we are in possession of the typewriter that we have been instructed was used by the deceased to type the document the subject of these proceedings. We anticipate obtaining expert advice to substantiate this claim. In order to reduce the costs to the estate, please confirm if you have instructions to agree that the typewriter in our possession is in fact the same typewriter that was used by the deceased to type the relevant document in order to avoid the need for expert evidence. If you require an inspection of the typewriter please let us know.

27 It seems the respondents' solicitors did not concede that the typewriter was the one used to type the will document.

28 On 13 August 2007, two days before the commencement of the trial, the appellant's solicitors wrote to the respondents' solicitors, among other things, to 'confirm' that they were not in possession of the deceased's typewriter and referring them in that regard to the witness statement of Mr Shain, which had been filed on behalf of the appellant. I should say that in that statement Mr Shain said he thought the old typewriter which had been in the deceased's house was thrown out when the house was cleaned up after the death of the deceased.

29 The circumstances surrounding the correspondence about the typewriter were canvassed in the cross-examination of Ms Banaszak by the respondents' counsel. Ms Banaszak said that some time before she wrote the letter of 14 February 2006, Mr Shain had told her that the deceased's typewriter had been thrown out. Ms Banaszak said she had then asked David Oreski whether there was a typewriter that the deceased might have used to create the document. Subsequently, David Oreski had delivered a typewriter to her office. Ms Banaszak understood from what he told her that it was either the deceased's typewriter or a typewriter which the deceased had used to type the will document.

30 Ms Banaszak said that subsequently, in late 2006 or early 2007, the appellant had obtained expert evidence that the typewriter referred to in the letter of 14 February 2006 was not the one used to prepare the will document. Ms Banaszak said that that was what was meant by the letter of 13 August 2007.

31 David Oreski gave evidence that the typewriter he delivered to Ms Banaszak's office belonged to his late cousin, Mr Jugo Ikac, and the deceased had borrowed it on many occasions.

32 At the trial, evidence was given that the deceased's typewriter had been discarded with the rubbish when the deceased's house was cleaned up after his death. The appellant who was present on that occasion gave evidence that the typewriter was in poor condition and a number of 'wires' on it were 'broken'.

33 The learned primary judge considered that the will document was a relatively sophisticated document insofar as its legal drafting and content was concerned and disclosed a level of legal knowledge and terminology, and grammatical sophistication, that was far greater than might have been expected of the deceased. The will document used a number of expressions that were commonly used in wills drawn by legal practitioners, but were not in common parlance.

34 The learned primary judge drew attention to a number of features of the will document, including the distinction drawn in the will document between the appellant as the 'executrix' and the appellant's two sons as the 'joint executors', and expressions such as 'This is the will and testament of me Jimmy Hudson'; 'in the event that my sister pre deceases me'; to personal effects 'situated at' [the deceased's home address]; 'in this my will'; and cl 5 which provided:

I totally exclude my wife Marija Ikac from this my will who has been totally separated from me for over fifteen years.

35 His Honour observed that the explanation for the exclusion of the first respondent in cl 5 showed a sophisticated understanding of the capacity of wills to be challenged and he found it surprising that the deceased would have thought to include it.

36 Overall, the learned primary judge concluded the deceased was not a person of whom one would have expected the degree of legal or grammatical discrimination which was evident in the will document. There was nothing to indicate any possible source from which the deceased might have acquired it. His Honour observed that there was no evidence the deceased had a will-making kit, nor was there any evidence to suggest that the deceased consulted lawyers of his own accord, even infrequently. The only evidence of the deceased having consulted a lawyer was his visit to Ms Banaszak concerning the loan documents. The learned primary judge found there was no evidence to suggest that a legal practitioner or some other person, acting on the instructions of the deceased, was responsible for the creation of the will document.

37 The learned primary judge also found there was no evidence that the deceased had typed the will document. His Honour concluded that, on the evidence, the typewriter belonging to the deceased could not have been used as it was in a state of disrepair. The typewriter which the deceased had often borrowed from Mr Jugo Ikac had been found not to be the typewriter used to prepare the document.

38 His Honour concluded that the deceased was not responsible for the drafting or creation of the will document and there was no evidence as to by whom it was prepared.

39 His Honour further found that it was not possible to say that the will document reflected the deceased's testamentary intentions. The only evidence in support of the appellant's case that the deceased had adopted the will document as his own and intended it to be his last will, was the evidence of David Oreski that he had found it behind the seat cover in the backseat of the deceased's car. In the circumstances, that was not sufficient.

40 The learned primary judge accordingly held that the appellant had failed to establish that the deceased intended the will document to constitute his will.

41 On 30 August 2007, his Honour dismissed the appellant's claim and made the orders sought by the respondents on their counterclaim for a grant to the second respondent of letters of administration.

42 On 5 October 2007, the learned primary judge ordered that the costs of the respondents be taxed and paid out of the deceased's estate, and that the appellant bear her own costs of the action.

43 The learned primary judge found that it had been reasonable for the appellant to commence the proceedings to clarify the testamentary status of the will document, but had not been justified in continuing the proceedings after her solicitors obtained expert advice that the typewriter David Oreski said had been used by the deceased to type the document was not in fact the typewriter used. At that point, the only evidence to support the appellant's case was the claim of David Oreski that he had found the document in the deceased's car. His Honour held that from that point it was not reasonable for the appellant to continue the claim.

44 His Honour concluded that the appellant should therefore bear her own costs of the action. He ordered that the respondents' costs be paid out of the estate of the deceased.

45 The grounds of appeal are lengthy and it is not necessary to set them out.

46 It is sufficient to say that the appellant attacked a number of findings of fact of the learned primary judge on the ground that those findings were not open on the evidence before him. The appellant says, in substance, that those errors of fact led the learned primary judge erroneously to conclude that the deceased had not adopted the will document as his will, in circumstances where the will document had been found under a seat cover in the deceased's car (which was consistent with the secretive nature of the deceased) and where the contents of the will document were consistent with the evidence as to the attitude of the deceased to the appellant and her two sons, and the deceased's wife and his two sons.

47 The appellant also appeals against the order of the learned primary judge that the appellant bear her own costs of the action. The appellant contends, in effect, first, that the learned primary judge erred in failing to find that the litigation was caused by the deceased's actions in creating or causing the creation of a document which he had failed properly to execute and had concealed in his car, and therefore that the litigation fell within an exception to the rule that costs follow the event.

48 Secondly, the appellant contends that the learned primary judge erred in concluding that it was unreasonable for the appellant to have continued the litigation after an expert had determined that the particular typewriter thought to have been used to type the will document had not in fact been so used. The appellant contends that, in light of the circumstances in which the will document was found and the consistency of its terms with the relationships the deceased had with members of his family, his Honour should have found that it was reasonable for the appellant to have continued to seek to propound the will document.

49 The essential question on this appeal is whether the learned primary judge erred in finding that the appellant had failed to establish that the deceased intended the will document to be his will. I do not consider that it is necessary for the determination of this appeal to examine each of the specific errors of fact alleged by the appellant. I will deal in due course with the contested findings of fact which are relevant to the determination of the appeal.

50 Section 34 of the Wills Act 1970 (WA) (the Act) provides:

A document purporting to embody the testamentary intentions of a deceased person is a will of that person, notwithstanding that it has not been executed in accordance with section 8, if the Supreme Court is satisfied that the deceased intended the document to constitute his will.

51 It is clear that the will document has not been executed in accordance with s 8 of the Act. Indeed, it has not been executed at all. But the fact that a document has not been signed by the testator or testatrix does not mean that it falls outside s 34 of the Act and cannot be admitted to probate. A document which is unsigned is, within the meaning of s 34, a document which has not been executed in accordance with s 8 of the Act: see, for example, In the Estate of Williams (Dec) (1984) 36 SASR 423, 425; Re Application of Brown; Estate of Springfield (1991) 23 NSWLR 535, 539; Re Estate of Perriman (Dec) [2003] WASC 191 [18].

52 In Hatsatouris v Hatsatouris [2001] NSWCA 408 [56], Powell JA (with whom Priestley and Stein JJA agreed) identified three questions of fact that arise under the New South Wales equivalent to s 34, those questions being:

1. was there a document?
2. did the document purport to embody the testamentary wishes of the deceased?
3. did the evidence satisfy the court that, either at the time the document was brought into being or at some later time, the deceased, by some words or act, demonstrate that it was their intention that the document should, without more on his or her part, operate as his or her will?

53 That approach was followed in Perriman and by the learned primary judge in this case. In my respectful opinion, his Honour was right to do so. For present purposes, there is no material difference between s 34 of the Act and its New South Wales counterpart.

54 It is, however, important always to bear in mind that while it is necessary that the document in question sets out the deceased's testamentary intentions, that is not of itself sufficient. Section 34 does not enable any document which expresses the deceased's testamentary wishes to be admitted to probate. The document must be intended to be the legally operative act which disposes of the deceased's property upon their death; that is, it must have been intended by the deceased to have present operation as his or her will. A person may have set down in writing their testamentary intentions but not intend that the document be operative as a will. Thus, for example, it will not be sufficient if it is a document intended to record gifts or intended gifts during the deceased's lifetime, or to be a note of instructions, or a draft will or a 'trial run': In the Estate of Masters (Dec), Hill v Plummer (1994) 33 NSWLR 446, 455; Equity Trustees Ltd v Levin [2004] VSC 203. As Young CJ in Eq pointed out in Macey v Finch [2002] NSWSC 933 [23], even where a draft will has been prepared in accordance with the deceased's instructions, it is quite common for testators to change their mind after giving instructions or on seeing the draft will.

55 It is therefore of fundamental importance that the person seeking to propound the document establish that the deceased, by some words or act, demonstrated an intention that, without more, the document should have effect as his or her will.

56 In the present case, I consider the appellant fell well short of that. There is, in the first place, no evidence upon which the learned trial judge could have been satisfied that the will document embodied the deceased's testamentary intentions.

57 The only evidence to which the appellant could point of the deceased's expressed testamentary intentions was the evidence of Mr Shain as to the conversation he had with the deceased after leaving Ms Banaszak's office in October 2003. Self-evidently, that was of no real assistance as to the deceased's testamentary intentions in February 2004, or even in October 2003. And even if it were sought to extrapolate any such intentions from what was said by the deceased on that occasion, the will document does not appear to be consistent with the attitude he expressed in relation to his sons.

58 Nor could the deceased's testamentary intentions be inferred from the circumstances in which the will document came into being. The evidence did not establish that the will document had been prepared by the deceased or on his instructions.

59 In that connection, the appellant attacked the learned trial judge's finding that the deceased's own typewriter could not have been the one used to type the will document because it was in a state of disrepair. Counsel for the appellant argued that there was no evidence as to the condition of the typewriter at the date the will document was created. I do not consider there is any substance in that. The will document was dated 2 February 2004. Although there was some uncertainty as to the precise date, the evidence was that the deceased's house was cleaned up in about the middle of 2004. The appellant's own evidence was that at the time the house was cleaned up the deceased's typewriter was in a state of disrepair and it was discarded in the rubbish. The fact that, according to the evidence of David Oreski, the deceased had often borrowed the typewriter owned by Mr Jugo Ikac also indicated that the deceased's own typewriter was unusable. The finding that the deceased's typewriter could not have been used to type the will document was one that was well open to the learned trial judge.

60 The appellant, of course, accepted, after obtaining expert evidence, that Mr Jugo Ikac's typewriter was not the typewriter used. Ultimately, therefore, how and by whom the will document came to be prepared remained unexplained.

61 In addition, the learned primary judge found that the degree of legal knowledge and grammatical sophistication evident in the language used in the will document surpassed that which might reasonably have been expected of the deceased. That finding was attacked by the appellant on the ground that there was no evidence of the deceased's knowledge of legal matters and terminology, or of his English language skills beyond the evidence of Mr Shain that the deceased was 'quite an educated man and he could write quite well in English'.

62 I do not consider that anything turns on that finding for the purposes of this appeal but I should say that, in my view, the finding was open to the learned trial judge on the evidence. The language of the will document included terminology that would not ordinarily be used by a layman who did not have access to material such as a will-kit or a copy will. In that connection, I might observe, by way of example, that the distinction between 'executor' and 'executrix' is one that not only escapes most laymen, in my experience it escapes some lawyers as well. There was no evidence the deceased had access to material that would have enabled him to use the legal terminology as adroitly as he did.

63 There was also, in my view, no evidence upon which the learned trial judge could have been satisfied that the deceased had demonstrated an intention that the will document should operate as his will. The appellant simply could not point to any words or act of the deceased which demonstrated that it was the deceased's intention that the will document should, without more on his part, operate as his will.

64 The will document is unsigned, in circumstances where the appellant was unable to suggest any plausible reason for the failure of the deceased to sign it. As I have said, who prepared the will document and how it came to be prepared remained unexplained.

65 The fact that David Oreski said he found the will document behind the seat cover in the deceased's car does not seem to me to assist the appellant at all. In the first place, there is no evidence as to how it got there. More significantly, if it was intended by the deceased to be his will it is difficult to understand why, rather than keep it in a place where it was likely to be found after his death, instead he chose to keep it in a place where it was unlikely to be found. The fact that the deceased was secretive in his business dealings does not explain why he would adopt such a self-defeating course. In any event, the concealment of the unsigned will document in the deceased's car does not support the appellant's contention that the deceased intended it to be his will; if anything, it would tend to suggest that at the time of his death he had not formed such a final intention.

66 In my respectful view, the finding of the learned primary judge that he was not satisfied the deceased intended the will document to be his will was not only a finding that was open to his Honour, it was the only finding that was open to him on the evidence. It follows, in my opinion, that the appeal in respect of the substantive claim must be dismissed.

67 I turn then to the appeal against the order of the learned primary judge that the appellant bear her own costs of the action.

68 It is trite law that the court has a wide discretion in determining by whom the costs of an action should be borne. The general rule is that costs follow the event. In probate actions, however, two exceptions to the general rule have been recognised:

1. where the testator has, or those interested in the residue have, been the cause of the litigation, the costs of unsuccessfully opposing probate may be ordered to be paid out of the estate;
2. if the circumstances led reasonably to an investigation concerning the document propounded, the costs may be left to be borne by those who incurred them.

69 See, for example, Mitchell v Gard (1863) 164 ER 1280, 1281; Middlebrook v Middlebrook (1962) 36 ALJR 216, 217; Re Estate of Hodges (Dec); Shorter v Hodges (1988) 14 NSWLR 698, 709; Shorten v Shorten (No 2) [2003] NSWCA 60. As was pointed out in Shorten v Shorten [20], the two categories of exception tend to overlap, but they are not coterminous. See also in that respect the discussion in Perpetual Trustee Co Ltd v Baker [1999] NSWCA 244 [13] - [15].

70 As I have mentioned, the learned primary judge concluded that it was reasonable for the appellant to have commenced the action, but that it was not reasonable for her to have continued it after expert evidence was obtained that the typewriter thought to have been used to type the will document was not in fact the typewriter used. His Honour considered that at that point a critical plank in the appellant's case - her contention that the deceased had himself typed the will document - fell away.

71 It is, of course, well established that a discretionary judgment is not to be disturbed on appeal unless it is shown that the exercise of the discretion involved has miscarried. There is a presumption in favour of the correctness of the decision appealed from. A degree of satisfaction sufficient to overcome the presumption may exist where there has been an error which consists in acting upon a wrong principle, or taking into account extraneous or irrelevant matters or failing to take into account relevant considerations, or making a mistake as to the facts; or where, while the nature of the error may not be discoverable, the result may be so unreasonable or plainly unjust that the appellate court may infer there has been a failure properly to exercise the discretion: House v The King [1936] HCA 40; (1936) 55 CLR 499, 504, 505, Australian Coal and Shale Employees' Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621, 627.

72 I am unable to discern any error in his Honour's decision. The appellant's case was, at best, not promising from the outset. It rested essentially on two propositions; namely, that the deceased had prepared the will document himself and that its terms were consistent with his relationships with the appellant and her sons and with his own family. But in light of the evidence of the state of disrepair of the deceased's own typewriter, once it emerged that the typewriter which the deceased was in the habit of borrowing was not the typewriter used to type the will document, a very difficult case became hopeless.

73 In my view, it cannot be said that his Honour erred in deciding that it was unreasonable for the appellant to have continued to pursue the case after that point. Having reached that decision, his Honour was entitled to conclude that the appellant should bear her own costs of the action. I would dismiss the appeal on the question of costs.

74 I would dismiss the appeal in respect of the substantive claim and in respect of the costs order.