Stojic v Stojic

Supreme Court of NSW|2008-12-14|Before: Ward CJ

Background

The disputes between the respective Stojic family members, following the death on 13 June 2014 of Ivan Stojic, have had a tortuous history.
Ivan Stojic (the deceased) was survived by five children: Anton, Simon, Ivan Matthew (who is referred to as Matthew), Ivanna and Marijan (from his relationships with four different women spanning over 40 years). There are currently five separate proceedings in the Family Provision list brought, respectively, by Ivanna, Matthew, Anton, Marijan and Sanja (Ivanna's mother).
Ivanna and Matthew (the plaintiffs in the probate proceedings), represented here by DA Smallbone of Counsel, have been appointed as special administrators of the deceased's estate in connection with certain of the litigation involving the estate in this Court. Mr Smallbone also represents Ivanna in her separate family provision proceedings.
Anton is represented on the present application by K Pierce of Counsel, he being counsel appearing for Anton in separate family provision list proceedings brought by Anton (proceedings no 2015/174075).
Simon is the subject of the application for an appointment of a tutor and I will come back to Simon's position in due course.
Matthew is represented on the present application by M Stevens of Counsel, he being the counsel appearing for Matthew in his separate family provision proceedings commenced by Matthew (proceedings no 2015/60779).
Marijan is represented on the present application by I R Coleman SC, he being the counsel appearing in his separate family provision proceedings commenced by Marijan, by his tutor (his mother, Jagoda Vukoje) (proceedings no 2015/166103).

Appointment of a tutor

I will deal first with the issue of the appointment of a tutor.
A Consent to Act as tutor, signed by Stephen Davies who appears in Court today, has been filed in Court. Stephen is the step-father of Simon Stojic. (Simon is presently on remand in custody having been charged with a serious criminal offence.) Last year, on 9 August 2017, a joint enduring power of attorney was registered pursuant to which Mr Davies and his wife (Simon's mother, Sharon Anne Davies) were appointed as his attorneys.
Mr Davies has affirmed an affidavit on 11 December 2018 which I have read on this application. In that affidavit, Mr Davies explains that, due to reasons of the recent ill-health of his wife, it has been agreed between he and his wife that he should be the person who accepts appointment as tutor in these proceedings and appointment as case guardian in the Family Court proceedings to which I will refer shortly, for the purpose of entering into settlement deeds with the plaintiff's estate and with Simon's ex-wife, Jolene Stojic.
Mr Davies has deposed (at [17] of his affidavit) that Simon's ex-wife has been legally represented during the course of the Family Court proceedings and throughout the negotiations leading up to the proposed compromise the subject of the present application. (Her solicitors have indicated their consent to the proposed compromise.)
Mr Davies has deposed that he does not have an interest in the proceedings adverse to the interests of Simon Stojic.
The need for an appointment of a tutor arises by reference to the fact that orders were made by Rothman J on 30 November 2018 (see R v Stojic [2018] NSWSC 1893) (following his Honour's conclusion that opinion evidence from certain psychiatrists as to Simon's mental condition should be accepted and finding that Simon was unfit to be tried) referring Simon to the Mental Health Review Tribunal pursuant to s 14(a)A of the Mental Health (Forensic Provisions) Act 1990 (NSW) and remanding Mr Stojic in custody in accordance with s 14(b)(iii) of the Act until the determination of the Mental Health Review Tribunal pursuant to s 16 of the Act.
Simon Stojic has been incarcerated for some time, having been charged with a serious criminal offence. Pursuant to r 7.13 of the Uniform Civil Procedure Rules 2005 (NSW), a "person under legal incapacity" is defined to include a person who is incapable of managing his or her affairs. Section 3(1) of the Civil Procedure Act 2005 (NSW) similarly includes reference to a person under legal capacity and includes within the definition of person under a legal incapacity (at par (b)) "an involuntary patient, a forensic patient or a correctional patient within the meaning of the Mental Health Act, 2007". Those terms are defined in s 4(1) of the Mental Health Act. "Forensic patient" is there defined to have the same meaning as it has in the Mental Health (Forensic Provisions) Act 1900 (NSW), which definition includes (see (a)) a person who is detained in a correctional centre pursuant to an order under s 14 of that Act.
In light of the decision of Rothman J (to which I have referred above) it is clear that Simon Stojic is a person who is incapable of managing his affairs as defined in the Civil Procedure Act, having been found unfit to be tried for the offence with which he has been charged and having been remanded in custody pending proceedings in the New South Wales Civil Administrative Tribunal (NCAT) pursuant to s 14 of the Mental Health (Forensic Provisions) Act.
As a result, pursuant to r 7.14(1) of the Uniform Civil Procedure Rules, Simon Stojic can neither proceed nor be proceeded against except by his tutor; and see r 7.17(1) of the UCPR in that regard. Pursuant to r 7.18(c6) of the UCPR, application for appointment of a tutor may be made by a court of its own motion or upon the motion of any person.
Rule 7.14(2) of the UCPR provides that: Unless the Court otherwise orders otherwise, the tutor of a person a person under a legal incapacity may not commence or carry on proceedings except by a solicitor.
Mr Davies, who has consented to act as Simon's tutor, has instructed solicitors in the past in relation to other proceedings in which Simon is involved (namely the Family Court proceedings) and that solicitor (Ms Angelina Torrisi) has given advice and assisted Mr and Mrs Davies in the negotiation of the proposed settlement but has indicated an unwillingness or unpreparedness to act as a solicitor for the purposes of the probate proceedings (see T 3.1 and the affidavit affirmed 11 December 2018 of the plaintiffs' solicitor Mr Peter Murphy at p 21). However, Ms Torrisi has given her opinion that it is in the interest of Simon to enter into the compromise.
I am satisfied that it is appropriate to make the orders sought for the appointment of Stephen Davies as a tutor for the defendant (Ivan SlavcoSimon Stojic) and (in circumstances where there is before me a negotiated agreement for the settlement of these proceedings) that the tutor should be at liberty to carry on the defence of the claim in these proceedings and be at liberty to carry on the cross-claim in these proceedings notwithstanding the absence of a solicitor acting on the record for him in these proceedings as tutor for the defendantSimon and cross-claim in these proceedings.

Approval of the proposed settlement

The second aspect of the matter that requires approval relates to the proposed settlement which has been reached between the plaintiffs, the defendant by his joint attorneys and his ex-wife. It is comprised in two deeds which are exhibited to the affidavit of Stephen Davies affirmed 11 December 2018.
The first of those, Exhibit A on this application, is a Deed of Agreement (essentially relating to the settlement of the Family Court proceedings - see T 4.30), the parties to which are Matthew and Ivanna, as administrators of the estate of the late Ivan Stojic; Simon Stojic by his tutor, case guardian and attorneys; Jolene Yolanda Stojic, Simon's ex-wife; and each of Matthew and Ivanna Stojic in their individual capacities. A condition precedent to that deed of agreement is set out in cl 1 of the deed of agreement: CONDITION PRECEDENT TO SETTLEMENT 1. The payment of the settlement sums set out in this Deed and resolution of all claims between the parties in accordance with the terms of this Deed are subject to the following conditions being satisfied in order to give full effect to the settlement: 1.1 Stephen being appointed as Case Guardian in the Family Court proceedings and Tutor in the Supreme Court proceedings in order to give legal effect to the orders intended to be made in each of the respective proceedings. 1.2 Sharon and Stephen as attorneys, and Stephen as Tutor and Case Guardian, executing a Deed acceptable to Matthew and Ivanna to conclude all claims between Matthew, Ivanna, Simon and the estate of the deceased ("the Estate Deed"). 1.3 Orders being made in the Family Court of Australia to give effect to the agreement as set out in this Deed. 1.4 Orders being made in the Supreme Court of New South Wales to the effect of those set out in appendix 1 of this Deed.
The second of the deeds, Exhibit B on this application, is an Estate Deed of Agreement between the same parties (essentially concerning the settlement of the probate proceedings).
The gravamen of the settlement is this. There is a fund of $2.8 million, which is currently under the control of the Family Court, pursuant to orders made in the Family Court proceedings between Simon Stojic and his former wife, Jolene, in which proceedings Matthew and Ivanna have intervened. That $2.8 million represents what remains of the net proceeds from the sale of two properties, one at Bardwell Park and one at Grays Point; being that which has been able to be located and preserved in Australia of the assets in respect of which the estate claims an interest (see T 5.30).
The settlement proposed makes provision, in effect, for the payment of $1 million to Jolene, $1 million to Simon and the balance of $800,000 to the estate. There are a series of releases and indemnities provided, which I am informed by Mr Smallbone are designed to ensure that Jolene and Simon will keep their portion of the settlement funds free of claims by the other parties (T 5.32). There are provisions dealing with the costs of the various proceedings, the effect of which, as I understand it, is that Simon will pay his own costs of the various proceedings but will be relieved from any extant orders in relation to the payment by him of costs (including any orders in earlier Court of Appeal proceedings relating to the challenge made in relation to the 23 May 2014 will).
The respective deeds of settlement are subject to conditions precedent, including the appointment of Mr Davies as case guardian in the Family Court proceedings and orders being made in the Family Court of Australia to give effect to the agreement set out in the Deed of Agreement. Exhibit C in these proceedings is a copy of orders made yesterday by McClelland J in the Family Court, appointing Mr Davies as case guardian and approving the settlement. In that regard those conditions precedent have now been satisfied. The conditions precedent also include the appointment of Mr Davies as tutor in the probate proceedings and approval of the Estate Deed of Settlement.
There is in evidence (Exhibit 1) correspondence tendered by Mr Coleman SC between his instructing solicitors and the solicitors acting for the plaintiffs in which confirmation was sought, in effect, that the proposed settlement would not act or potentially act to reduce estate assets such that the claims of the Family Provision claimants who remain after the orders sought are made are not significantly held up by the assets of the estate being insufficient to meet such claims and any orders made for costs (see at [4] of the letter from Pearson Emerson Meyer); and there was a response from the plaintiffs' solicitors to that request. I am informed that Marijan's solicitors are satisfied with the response that has been received to that request and therefore Marijan does not oppose the making of the orders that are now being sought to be made.
I should note that on the making of the orders in relation to the proceedings, there will still remain on foot three separate family provision claims (those being claims made on behalf of Anton, Marijan and Sanja (the mother of Ivanna)). They will remain on foot and have been listed in a forthcoming directions list before the Family Provision List Judge next this year.
Approval for the settlement of the probate proceedings is required because of the provisions of s 76 of the Civil Procedure Act (and I also note that the Estate Deed of Agreement contains provisions that would compromise claims on behalf of the estate in respect of proceedings which have not been commenced, and that compromise cannot be executed unless and until the plaintiffs obtain a grant of probate and the Court approves the settlement under s 75 of the Civil Procedure Act).
I have had regard to the requirements applicable when considering approval of settlement of a claim pursuant to s 75(2) of the Civil Procedure Act where, before proceedings are commenced with respect to any claim by or on behalf or against a person under legal incapacity there is an agreement for the compromise of settlement of that claim; as well as the applicable principles relating to approval of settlement proceedings pursuant to s 76 of the Civil Procedure Act.
I note that the Court's function on regarding an application for approval of such kind is essentially protective of the incapable person. The Court must scrutinise the terms of settlement or compromise to protect the interests of a person under a legal incapacity. The proper discharge of this function requires the Court to determine whether it is satisfied that the settlement or compromise is beneficial to the interests of the person under the legal incapacity. It has been said that the question of benefit will typically turn on an assessment as to whether there is sufficient prospect of obtaining a more favourable judgment to outweigh the value of the certainty reflected in the settlement as compromised. Ordinarily, the reasonableness of the compromise should be attested to by the incapable person's tutor and supported by counsel's advice.
Before me in evidence are letters from the various of the legal representatives for the respective parties to the separate family provision proceedings setting out their clients' position in relation to the proposed settlement (see letter dated 7 December 2018 from Blanchfield Nicholls, acting for Matthew in his family provision proceedings; email of 10 December 2018 from Simpson Partners acting for Sanja Ferenc in her family provision proceedings); and Counsel appearing for each of Ivanna, Anton and Marijan in their separate family provision proceedings were in Court on the present application.
Mr Davies (now Simon's tutor) has received advice in relation to the litigation and has deposed that he and his wife (being those holding an enduring joint power of attorney in favour of Simon), have formed the view that the agreement set out in the Family Court deed and the estate deed is in Simon's best interests for the following reasons.:
First, that Simon will receive in excess of $1 million from the funds currently subject to orders of the Family Court.
Second, that Simon will retain all other assets in his possession, and in this regard I note that part of the agreement is to exclude from the estate assets a bank account or proceeds of a bank account held in Simon's name in Croatia.
Third, that this settlement resolves all of the litigation against Simon in both the Family Court and the Supreme Court of New South Wales bringing certainty of outcome of the proceedings.
Fourth, that by that reason Simon can fund and concentrate on the defence of his criminal law proceedings. I note that at this stage the conduct of those proceedings is subject to a review by the Mental Health Review Tribunal.
Fifth, that in the event that the various litigation against Simon was concluded favourably to his ex-wife or to the estate, Simon's assets may have been reduced to nil and thus that this settlement puts an end to Simon incurring any further liability for legal fees in defending the proceedings and will enable Simon to have a fund for his future.
I have also read on this application an affidavit affirmed 11 December 2018 of Peter Murphy, the solicitor for the plaintiffs in the probate proceedings. Mr Murphy sets out the long history to the litigation, which has a complex factual matrix. He has set out in that affidavit the process in relation to negotiation of the terms of settlement and the particulars of the terms of settlement.
From [57]-[63] of his affidavit, Mr Murphy sets out why, in his opinion, the settlement is an appropriate compromise between the parties and the estate beneficiaries and from [64] to [72] of his affidavit what he considers to be the benefit of the settlement to the defendant. In that regard he annexes to his affidavit an email sent by Angelina Torrisi on 10 December 2018 (to which I have earlier referred). Ms Torrisi in that email confirms that the proposed tutor and case guardian of Simon has been legally represented throughout the negotiations leading up to settlement including the finalisation of the deeds and proposed Court orders and notes that her firm has recommended that this is the best course of action to finalise all matters on behalf of Simon as it is in his best interests for him to do so for the reasons set out and confirmed in the affidavit of Stephen Davies.
I accept the plaintiffs' submission that it is the in the best interests of Simon that the Deed of Agreement and the Estate Deed of Agreement be approved, having taken into account the evidence to which I have just referred.

Grant of probate in solemn form

The third matter before me relates to the application for a grant in solemn form of the last will of the deceased. As noted above, the making of such a grant is also a condition precedent of the settlement deed.
In this regard I note that the will in question is a will dated 23 May 2014, which was executed by the deceased at the Australian Embassy in Zagreb, Croatia.
I have read on this application an affidavit of Jeremy Hawson affirmed 5 June 2015. Mr Hawson is an employee of the Department of Foreign Affairs and Trade (DFAT) and at the relevant time was working in the Australian Embassy in Zagreb. Mr Hawson witnessed the execution by the deceased of his will and deposes that ordinarily, prior to witnessing a signature on a will, he would need to be satisfied as to the identity of the individual signing it (see [6] of his affidavit) and he deposes to his "invariable" "routine" practice of following the policies and procedures set out regarding the witnessing of signatures at Australian Embassies and Consulate Generals in the DFAT material services handbook. He believes there is no reason he would not have done so on that occasion and for that reason he is able to say that he sighted photographic identification upon execution of the will by the testator. While he does not recall specific details of the matter, he deposes that had he had any concerns that a client was not aware of what the client was signing or showed any signs of being under duress he would not have witnessed the signing of the will and he would have referred it to the Consular Policy Section in Canberra for advice. (He did not do so on this occasion.)
As adverted to earlier, there was a hearing before Lindsay J in which there was put in issue both the testamentary capacity of the deceased at the time of the making of the 23 May 2014 will and as to the deceased's knowledge and understanding of the contents of the will. His Honour, for reasons set out in Estate Stojic Deceased [2017] NSWSC 168 at [82] found that the deceased had the requisite testamentary capacity at the time of making the 23 May 2014 will. However, his Honour was not satisfied that the onus had been discharged in relation to the deceased's knowledge at that time.
The matter then came before the Court of Appeal (proceedings no 2017/0088978). The Court of Appeal overturned the finding in relation to knowledge but did not disturb the finding in relation to testamentary capacity and remitted the matter for retrial exclusive of the issue of testamentary capacity.
I have read the following affidavits, which were before Lindsay J when the matter was first heard by Lindsay J. In particular, I have read an affidavit of Marijan Stojic (not the deceased's son who is here represented but the deceased's nephew) sworn 16 July 2015 in which Mr Marijan Stojic gives evidence as to his attendance at the deceased's flat in Zagreb approximately three or four days before the will was signed and to his conversations with the deceased, including as to the deceased's reasons for excluding his son, Simon, from any testamentary disposition under the will.
I have read an affidavit of Ivan Matthew Stojic (Matthew) sworn 11 July 2016 in which, relevantly, Mr Stojic deposes at [15] that he saw his father read newspapers and magazines in English each day and that he saw him watch CNN and Al Jazeera news bulletins. He deposes that his father spoke about the news and his father was able to read English quite well (see at [15]).
I have read the affidavit sworn 24 April 2015 of Ivanna, the only daughter of the deceased (save for portions of the affidavit which were not read on the application before me, on the basis that when Ms Stojic gave oral evidence before Lindsay J she withdrew her those parts of her affidavit - see T 10.2). Relevantly, Ms Stojic's affidavit goes to the fact that the deceased was in possession of the will prior to attending at the embassy for its execution.
Finally, I have read the affidavit sworn 4 June 2015 of Joseph Assi, a management consultant and legal broker, deposing to the circumstances in which the will was drafted and the affidavit of Josip Dezina sworn 25 April 2015 as to the deceased's operation of the State Wide Office Furniture business and matters relating to the break down in the relationship between the deceased and Simon, which apparently led to the deceased deciding to disinherit his son. I note that the deceased established in the 1970's and ran for some decades an office furniture manufacturing and distribution company in Australia with a base in Sydney and warehouses in Brisbane and Melbourne.
It is submitted for the plaintiffs that, in light of the evidence to which I have been taken, the 2014 will was the deceased's formal expression of his testamentary wishes and that the Court can be satisfied that the deceased knew and approved its contents and that will reflected the true will of the deceased. I am satisfied as to those matters by reference to the material to which I was taken on this application.
I note that Anton Stojic is the executor named in the 2014 will. I understand that it is common ground that he has renounced probate. All other beneficiaries named in the 2013 and 2014 wills, and interested thus in the grant, have participated in the proceedings. I accept that the evidence is sufficient to discharge the relevant onus in circumstances where I accept that it is plain on the evidence that the deceased was intent on removing the defendant as a beneficiary of his estate.
I am satisfied that, having regard to the history of the litigation, a grant in solemn form will serve the due administration of justice, the various adversaries now having come to an agreement on the making of the grant.
Accordingly, I make orders in accordance with the short minutes handed up, which I will initial and date with the amendment to the notation in item 14 such that it will read "Notes that the parties have agreed to enter into a deed of agreement …", and I will initial that amendment.

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: 30 January 2019

Mental Health (Forensic Provisions) Act 1990(NSW)

Mental Health (Forensic Provisions) Act 1900(NSW)

CIVIL PROCEDURE - Probate and administration of estates - grant of probate in solemn form Legislation Cited: Civil Procedure Act 2005 (NSW), ss 3(1), 75, 76 Mental Health (Forensic Provisions) Act 1900 (NSW), ss 4(1), 14, 14A, 16 Uniform Civil Procedure Rules 2005 (NSW), rr 7.13, 7.14, 7.17(1), 7.18(c6) Cases Cited: Estate Stojic Deceased [2017] NSWSC 168 R v Stojic [2018] NSWSC 1893 Category: Procedural and other rulings Parties: Ivanna Ann-Marie Ferenc Stojic, by her guardian Sanja Ferenc (First plaintiff) Ivan Matthew Stojic (Second plaintiff) Simon Stojic (Defendant) Representation: Counsel: DA Smallbone (Plaintiffs) Simon Stojic (Defendant) (Represented by his step-father, Stephen Davies)

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