Vukic v Luca Grbin & Ors; Estate of Zvonko Grbin

Barker v Furlong [1891] 2 Ch 172 Commonwealth v Verwayen (1990) 170 CLR 394 Crabb v Arun District Council [1976] Ch 179 Gee v Bell (1887) 35 Ch D 160 Giumelli v Giumelli (1999) 196 CLR 101 Grundt v Great Boulder Pty Gold Mines Limited (1937) 59 CLR 641 Henderson v Miles (No 2) [2005] NSWSC 867 Hughes v National Trustees Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134 Jennings v Rice [2002] EWCA Civ 159 Kingdon v Kirk (1887) 37 Ch D 141 Leue v Reynolds (1986) 4 NSWLR 590 CASES CITED : Lewis v Lewis [2001] NSWSC 321 Lieschke v Lieschke [2003] NSWSC 743 Lo Surdo v Public Trustee [2005] NSWSC 1186 Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361 Re Anderson (deceased) (1975) 11 SASR 276 Singer v Berghouse (No 2) (1994) 181 CLR 201 Stone v Smith (1887) 35 Ch D 188 Thompson v Palmer (1933) 49 CLR 507 Vigolo v Bostin [2005] 79 ALJR 731, (2005) 213 ALR 692 Walker v Walker (NSWSC, Young J, 17 May 1996) Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 Whalen v Byrnes [2003] NSWSC 915

Ina Vukic (Plaintiff) PARTIES : Luca Grbin (First Defendant) Ante Grbin (Second Defendant) Jagoda Hecimovic (Third Defendant)

COUNSEL : M Dempsey SC & A Seward (Plaintiff)

SOLICITORS : John S Zouroudis & Co (Plaintiff)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1532/04 Ina Vukic v Luca Grbin & ors; Estate of Zvonko Grbin JUDGMENT 1 HIS HONOUR: The Plaintiff Ina Vukic is a daughter of the late Zvonko Grbin who died on 26 August 2002 in Croatia, leaving a will dated 23 May 1990 by which he appointed his son the second Defendant Ante Grbin and Visko Tvrdeic his executors. Zvonko Grbin left his real property to be divided into six equal parts of which he gave three to Ante and one each to his wife the first Defendant Luca Grbin, his other daughter the third Defendant Jagoda Hecimovic, and the Plaintiff; and left any cash to Luca. The only known asset of his estate is real property at 462 Mowbray Road, Lane Cove in the State of New South Wales ("the House"), which is now worth about $770,000. The Plaintiff claims that she is entitled to an equitable estate by way of estoppel in the House, arising from her detrimental reliance on representations made to her by the Deceased to the effect that she would upon his death inherit a three-quarters interest in it. Alternatively she claims provision out of the estate pursuant to the Family Provision Act 1982 (NSW). 2 Ante renounced probate of the will, and Mr Tvrdeic has never sought probate. On 24 February 2004 the Plaintiff was granted administration pursuant to Wills, Probate and Administration Act 1898 (NSW), s 41A for the purposes of bringing an application under the Family Provision Act. 3 The Plaintiff commenced these proceedings on 18 February 2004. Initially, the summons did not name any defendant. On 8 March 2004, the Court made an order pursuant to the (then) Supreme Court Rules 1970 (NSW) Pt 77 r 61 joining each of the Defendants and directing filing and service of an amended summons reflecting their joinder. The Amended Summons was filed on 22 April 2004. Each of the Defendants has been served with the Amended Summons in Croatia, and none has filed an appearance: although at one stage it appeared that solicitors were acting for the first and second Defendants, they did not continue to do so; and the third Defendant filed an affidavit the tenor of which is to oppose the Plaintiff's claim, but which in the absence of an appearance I have not treated as being in evidence. On 18 November 2005, the Plaintiff was granted leave to proceed pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 11.4. 4 Save for the limited s 41A grant to the Plaintiff, there is no formal representative of the estate, which has an interest in the proceedings. However, all the persons interested in the estate are parties and have notice of the proceedings, and in those circumstances I am satisfied that it is appropriate to order, pursuant to UCPR r 7.10(2)(a), that the proceedings continue in the absence of a representative of the estate. 5 The Deceased, who was born on 28 September 1915, migrated to Australia in August 1958. He was joined in Australia by his wife Luca (born 12 December 1921) and his children Ante (born December 1941), Jagoda (born October 1946) and the Plaintiff, Ina, (born May 1949) in August 1962. The Deceased purchased the House on 13 September 1962, and lived there with his wife Luca and their three children from that time. 6 Jagoda returned to Croatia in July 1967, where she married, and thereafter lived in Zagreb. The Plaintiff went to Croatia to continue her studies in December 1969, she graduated in Psychology in 1976, married a Croatian citizen and purchased a small flat in Zagreb. Meanwhile, the Deceased and Luca visited Croatia for a year in 1972, returning to Australia in June 1973. 7 On 27 February 1973, Ante and his wife purchased a house at 484 Mowbray Road Lane Cove, which they let for rent while living rent free in the House. 8 The Deceased and Luca again visited Croatia between May 1976 and February 1977, and between December 1979 and May 1980. The Deceased retired at the age of 65 on 28 September 1980, whereupon he became eligible to receive an Australian aged pension. The Plaintiff returned to Australia, with her husband, in August 1980, and lived in the House with her husband, her parents, and Ante's family. In November 1980, she commenced full-time employment with the New South Wales Department of Health as a psychologist. 9 On 1 April 1981, the Deceased and Luca returned to live in Croatia from time to time. He asked the Plaintiff to live in and maintain the House, and she agreed to do so. In August 1981, Ante and his family returned to Croatia permanently. 10 The Plaintiff's daughter Sacha was born in May 1982. 11 In late 1983 or early 1984, the Deceased became concerned at the potential impact of the introduction of an assets test on his entitlement to an Australian pension; he believed that he had twelve months to return to Australia if he were to comply with conditions upon which his pension entitlement depended; due to ill-health he apparently obtained an extension of time for this purpose, and returned to Sydney in late 1985. While in Australia, in 1986 the Deceased made representations to the Plaintiff that if she lived in the house and paid the rates and maintenance, she would earn half of the House, and in his will he would leave one half of the house to her, and the other half equally between her and Jagoda, as Ante already had a house nearby and would be left most of the property in Croatia, although two small pieces would be provided there one each for the Plaintiff and Jagoda to build a place on; and that they had an agreement that the house was the Plaintiff's and she was responsible for payment of full rates. As a result, the Plaintiff believed that the Deceased would leave her three-quarters of the House if she stayed and lived at the house indefinitely and paid all the outgoings, and she did not pursue the opportunity of finding a house for herself in Sydney. 12 In April 1986, the Deceased and Luca returned to Croatia. On 10 June 1986, he entered into a "Deed of Gift" of all his real property located in the area of Zrvono to Ante, in which he recorded:- The gift giver emphasises that beside the gift receiver of his children he also has two daughters, that is, Ina Vukic and Jagoda Hecimovic, both from Zagreb, whom he has partially provided for, and for whom he will fully provide for with the real property that is located in Australia. 13 The Deceased and Luca returned to Australia in December 1989, and stayed in the House with the Plaintiff. During this visit, the Deceased made representations to the Plaintiff that if she continued to live in the House and pay all the expenses and maintain it, he would in his will leave her one whole half, and half of the other half, of the House. The Plaintiff remained in the House, maintaining it and paying all the outgoings, because she believed that her father would leave her three-quarters of the House. 14 On 23 May 1990, the Deceased made his will, in Australia, but written in Croatian. The Plaintiff was unaware of this. 15 The Deceased and Luca returned to Croatia in July 1990. However, following the outbreak of war in Croatia, they returned to Australia in October 1991, staying with the Plaintiff, her husband and her daughter in the House. In the course of this stay, the Deceased made representations to the Plaintiff that the House was her home, so she should make improvements if she wanted to; that he needed the house so he had peace of mind in case it became impossible to live in Croatia; and that the House would be mostly hers after his death as they had agreed. Believing that she would receive three-quarters of the House, the Plaintiff made plans for its maintenance and improvement. During this visit, the Deceased's nephew Mr Cebalo made an observation to the Deceased that the Plaintiff was looking after the house very well and spending a lot of money it; the Deceased responded that the house would all be hers. 16 The Plaintiff and her husband separated in 1992 and were divorced in 1993. 17 The Deceased and Luca left Australia for the last time in August 1994. 18 On 21 August 1996, the Deceased wrote to the Plaintiff advising that he had transferred all his Croatian property to Ante ten years earlier. Shortly afterwards, in a telephone conversation, he and Luca told her not to worry, and that she would be very happy with what she would get under their Will upon their death. 19 In September 1996, the Plaintiff resigned from the Department of Community Services and received a lump sum superannuation payment of about $58,000, which she expended on the maintenance conservation and improvement of the House. In 1997 she undertook further improvements, which linked the back flat to the main house. 20 Between 1998 and 2002, before the death of the Deceased, the Plaintiff told Mr Posa that her father had promised her that on his death she would inherit the house as long as she stayed there rent free and looked after it so that he could receive his Australian pension overseas. 21 In late 2001, the Deceased told the Plaintiff on the telephone that he was planning to come to Australia for a visit, and would put on paper everything to do with their agreement about the House. 22 I am not unconscious of the dangers of relying upon the uncorroborated evidence of a claimant against an estate in circumstances where the only person who can deny the allegations is deceased. It has often been said that such claims should be closely scrutinised. I have closely scrutinised the Plaintiff's evidence and am impressed by the consistency of her conduct with her evidence, and the detail of her evidence, which is not only uncontradicted but also unchallenged. And I am reinforced in accepting her evidence by the evidence of two additional witnesses: Mr Cebalo who deposes that, in response to his observation that the Plaintiff was looking after the house very well and spending a lot of money it, the Deceased told him that the house would all be hers; and Mr Posa who deposes that between 1998 and 2002, before the death of the Deceased, the Plaintiff told him that her father had promised her that on his death she would inherit the house as long as she stayed there rent free and looked after it so that he could receive his Australian pension overseas.

23 The Plaintiff is now 56 years of age. She is divorced and has a child aged 23. She has no real property in Australia, and a flat worth about $80,000 in Zagreb. Under the will, she would receive about $110,000 net from the sale of the House.

24 According to the Plaintiff - the Defendants having adduced no evidence of their financial position - Luca is 84 years of age. She lives in the family home in Zvomo, Croatia, with Ante; the Deed of Gift reserved to her a right to live there until her death. She continues to receive the Australian aged pension, which, in Croatia, is equivalent or superior to the average wage. Under the Will, she would receive a one-sixth interest in the House. 25 Jagoda (now aged 59) is married and lives with her husband (aged 68) in their own flat in Zagreb, which the Plaintiff estimates to be worth $213,000. Both receive state pensions which combined are equivalent to an average wage in Croatia. Under the Will, she would receive a one-sixth interest in the House. Their son (aged 35) lives with his wife in the Plaintiff's Zagreb flat, rent free. 26 Ante and his wife own a house in Lane Cove worth about $700,000. He owns substantial real property in Croatia, which was transferred to him by the Deceased in 1986. His home on the island of Korcula is in one or two of four apartments in a seaside block which he owns, letting the units which he does not occupy to tourists; the Plaintiff estimates it to be worth in excess of $1 million. His income is higher than the average wage in Croatia. Under the Will, he would receive a one-half interest in the House. 27 Equity comes to the relief of a plaintiff who has acted to his or her detriment on the basis of a fundamental assumption in the adoption of which the defendant has played such a part that it would be unfair or unjust if he or she were left free to ignore it, on the footing that it would be unconscionable for the defendant to deny the assumption [Grundt v Great Boulder Pty Gold Mines Limited (1937) 59 CLR 641, 675; Thompson v Palmer (1933) 49 CLR 507, 547; Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387, 404 (Mason CJ and Wilson J)]. It is essential to an equitable estoppel that the defendant knows or intends that the party who adopts it will act or abstain from acting in reliance on the assumption or expectation [Crabb v Arun District Council [1976] Ch 179, 188; Waltons v Maher, 423 (Brennan J)]. Such knowledge or intention may easily be inferred where the adoption of the assumption or expectation is induced by the making of a promise, but may also be found where the defendant encourages a plaintiff to adhere to an assumption or expectation already formed, or acquiesces in an assumption or expectation when in conscience objection ought to be stated [Waltons v Maher, 423 (Brennan J)]. The unconscionability which attracts the intervention of equity is the defendant's failure, having induced or acquiesced in the adoption of the assumption or expectation with knowledge that it would be relied on, to fulfil the assumption or expectation or otherwise avoid the detriment which that failure would occasion [Waltons v Maher, 423 (Brennan J)].

28 Although numerous attempts have been made to identify the various components of equitable estoppel, for present purposes, the matters which a plaintiff must establish to found an equitable estoppel may conveniently be summarised, in the present context, as follows:-

· First, in relation to the plaintiff's conduct: that the plaintiff acted (or abstained from acting) in reliance upon an assumption or expectation that a particular legal relationship existed or would exist between the plaintiff and the defendant, or that the plaintiff had or would acquire some interest in the defendant's property; · Secondly, in relation to the defendant's conduct: that the defendant induced the plaintiff to adopt the assumption or expectation and encouraged the reliant activities of the plaintiff, or at least failed to deny the assumption or expectation with knowledge that the plaintiff was relying on it to the plaintiff's potential detriment and that it could be fulfilled only by transfer of the defendant's property, a diminution of the defendant's rights or an increase in the defendant's obligations; · Thirdly, in relation to the interest or property: that the assumption or expectation was one which the defendant could lawfully satisfy.

[See generally, Waltons v Maher, 428-429 (Brennan J); Meagher, Gummow & Lehane, Equity: Doctrines & Remedies, (4th ed., 2002), [17-105]]. 29 As to the Plaintiff's conduct, I am satisfied that the Plaintiff believed and expected that she would inherit a three-quarter interest in the House, and upon the faith of that belief or expectation acted to her detriment by remaining in the property rather than finding a home for herself, retaining her flat in Zagreb rather than selling it and using the proceeds to assist the purchase of alternate accommodation for herself in or around Lane Cove at a time when the property market there was much more affordable, and conforming with the Deceased's wishes by expending moneys (to the extent of at least $127,252 since the first representation was made in 1986) and labour (to the value of at least $26,022 since 1986) on the upkeep maintenance and improvement of the Mowbray Road property; in short, she arranged and conducted her affairs and her life on the basis of that expectation. 30 As to the Deceased's conduct, I am satisfied that the Deceased made representations to the Plaintiff to the effect that if, during his lifetime, she lived in the Mowbray Road property and maintained it in good order and paid the outgoings, he would upon his death devise to her a three-quarter interest in it. I am also satisfied that the Deceased intended her to act as she did in respect of the Mowbray Road property, and that it was for his benefit that she do so, in that it enabled him to retain receipt of an Australian aged pension. 31 And as to the property, the expectation was one which the Deceased could have lawfully satisfied by leaving three-quarters, rather than a one-sixth, interest in the Mowbray Road property to the Plaintiff under his will. 32 In those circumstances it is unconscionable for the Deceased (and his estate) to depart from the expected state of affairs, as the Plaintiff will have incurred detriment - namely the expenditure of the moneys and labour and the loss of the opportunity to acquire a property for herself - if the expectation is not satisfied. In this case the unconscionability is accentuated by the circumstance that the Deceased (and his estate) have benefited from the Plaintiff's reliant conduct. 33 Although there remains some controversy as to whether in such a case the prima facie entitlement is to relief based on the assumed or expected state of affairs which the defendant is estopped from denying [Commonwealth v Verwayen (1990) 170 CLR 394, 443 (Deane J)], or is limited to the minimum equity needed to avoid the relevant detriment - which at least in some situations may still require nothing less than satisfaction of the expectation or assumption [Commonwealth v Verwayen, 412 (Mason CJ), 429 (Brennan J), 501 (McHugh J)], there are undoubtedly cases in which it is appropriate to hold a defendant to the assumed state of affairs, and there is a strong case in principle that in a proprietary estoppel case [as distinct from a "windfall equity" case, as to which see Henderson v Miles (No 2) [2005] NSWSC 867] the expectation basis of the equity favours the view that the prima facie entitlement is to satisfaction of the relevant expectation, although such a remedy may be declined in favour of a lesser one where it would be disproportionate to the requirements in the circumstances of conscionable behaviour [Giumelli v Giumelli (1999) 196 CLR 101, [48]-[50], [64]; Jennings v Rice [2002] EWCA Civ 159, [50]; Henderson v Miles (No 2), [57]-[89]]. 34 In the present case, as in Lieschke v Lieschke [2003] NSWSC 743, there are none of the special circumstances which militated against the grant of relief which would satisfy the expectation: conscionable behaviour on the part of the Deceased required no less than satisfaction of the expectation which he had created. 35 Accordingly I would uphold the Plaintiff's claim to a three quarters beneficial interest in the Mowbray Road property. However, the Plaintiff has submitted that rather than granting declaratory and consequential relief upon that basis, it is preferable to proceed under the Family Provision Act, chiefly because of the more convenient statutory remedies provided by that statute. 36 The Deceased is a person in respect of whom administration has been granted, in that administration pursuant to Wills Probate and Administration Act, s 41A was granted to the Plaintiff on 24 February 2004. The Plaintiff's summons was filed on 18 February 2004, within 18 months of the Deceased's death on 26 August 2002, and is brought within time, notwithstanding that there was no grant of administration at the time of the institution of proceedings [Leue v Reynolds (1986) 4 NSWLR 590; Whalen v Byrnes [2003] NSWSC 915, [29]]. The Plaintiff, being a child of the Deceased, is an "eligible person" in relation to the Deceased within category (b) of the definition of that term in Family Provision Act, s 6(1), and accordingly has standing to apply for provision out of his estate under that Act. Appropriate notices have been given to the only other eligible persons, namely Luca, Ante and Jagoda who have been joined as defendants and served but have not appeared. 37 In proceedings for provision out of an estate under Family Provision Act, s 7 there is a two-step process. The first step is to determine whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. This is a question of fact, and requires an assessment of what in all the circumstances was the proper level of maintenance, etc, appropriate for the applicant having regard inter alia to the applicant's financial position, the size and nature of the estate, the totality of the relationship between the applicant and the deceased (including any contributions made by the applicant to the deceased's estate and/or welfare), and the relationship between the deceased and other persons who have a legitimate claim upon his or her bounty. The second step, which only arises if the first is answered affirmatively, is to determine what provision ought to be made out of the estate for the applicant. This involves a discretionary judgment, in which the court considers all of the facts and circumstances in order to evaluate what provision community standards would require a person in the position of the testator to make for the applicant [Singer v Berghouse (No 2) (1994) 181 CLR 201, 208; Vigolo v Bostin [2005] 79 ALJR 731; (2005) 213 ALR 692, [5], [74]-[75], [112]; Lo Surdo v Public Trustee [2005] NSWSC 1186, [44]-[50]; Walker v Walker (NSWSC, Young J, 17 May 1996)]. 38 Promises made and expectations raised by testators have always been regarded as relevant to the ascertainment of what is proper provision for a claimant [Re Anderson (deceased) (1975) 11 SASR 276, 284; Hughes v National Trustees Executors & Agency Co of Australasia Ltd (1979) 143 CLR 134, 148]. This is particularly so where a claimant has relied to his or her detriment on any such promise or expectation. The requirements of conscionable behaviour which inform the doctrine of equitable estoppel are philosophically closely analogous to the concept of "moral duty" which has traditionally informed the exercise of jurisdiction under the Family Provision Act and its predecessors and, some of the observations in Singer v Berghouse (No 2) notwithstanding, continues to do so [Vigolo v Bostin; Palmer v Dolman [2005] NSWCA 361, [74]]. Thus, although a claim under the Family Provision Act is to be distinguished from one for a constructive trust or equitable estoppel and some different considerations apply (including in particular the interests of beneficiaries under the Will, and other eligible persons) [Vigolo v Bostin, [76]-[78]], nonetheless the conclusions expressed above as to the requirements in the circumstances of conscionable behaviour are highly relevant also to what is proper provision for the Plaintiff [cf Lewis v Lewis [2001] nswsc 321, [76]]. 39 The Plaintiff's present income of $52,000 per annum supports her day-to-day expenses but little more. At her age, with that income, with her assets (including the one-sixth share in the House to which she would be entitled under the Will) amounting to about $190,000, and having expended her superannuation benefit on the House, she would have great difficulty in borrowing sufficient to enable her to purchase accommodation in the locality in which she has lived since the early 1960s (except for the period she spent in Zagreb) and to which she is accustomed. While the three-quarter interest claimed by the Plaintiff is a very large share of the Estate, it is to be born in mind that the Deceased had provided for Ante many years earlier by the transfer of substantial real property in Croatia, and for Luca by a lifetime right of residence in the family home on Korcula. The Plaintiff has lived in the Mowbray Road house since she was a child, except for the period between December 1969 and August 1980 when she lived in Zagreb, Croatia. Since 1981 she has done so at the request of the Deceased, and since 1986 on the basis that she could do so rent free provided that she pay all expenses and outgoings and be responsible for its maintenance and upkeep, in order to maintain his eligibility for an Australian aged pension. In that way she has made substantial contributions to his estate - and in particular to the House - and his welfare. In those circumstances I am satisfied that the Plaintiff has been left with inadequate provision for her proper maintenance and advancement in life.

40 Given the Plaintiff's reliance upon the expectation of inheritance of a three-quarter interest in the House, encouraged as it was by the Deceased; the ample provision already made for Ante, and the circumstance that he has his own property in Lane Cove also; that some provision, apparently by way of a lifetime right of residence, has been made for Luca in Croatia; and that no evidence has been adduced by the Defendants, including as to their financial position, from which it may be inferred that their financial position is not a reason for declining to make what would otherwise be an appropriate provision for the Plaintiff; community standards would have required no less than that the Deceased fulfil the expectation which he had created, by leaving a three-quarter interest in the House to the Plaintiff. Moreover, given her long-standing occupation of the house and her age, proper provision required also that there be a mechanism by which the Plaintiff could retain occupation so long as she desired, or have the opportunity to buy out the other interests.

41 Having regard to the provision already made for Ante, the increased provision for the Plaintiff should be borne primarily by the interest which he would otherwise have received in the House. The Plaintiff does not wish to disturb Jagoda's one-sixth interest, and proposes that, to the extent that Ante's is insufficient to satisfy the provision to be made for her, the burden be born by Luca's interest. It was submitted for the Plaintiff that I should simply order that she receive 10 one-twelfth shares of the House, leaving Jagoda with the remaining two one-twelfth shares - in effect treating one-twelfth as the Plaintiff's costs - and an order which had the effect of extinguishing Luca's interest was foreshadowed in the Amended Summons. But while this is a conveniently attractive proposition, I do not think it is appropriate. First, I could not be satisfied that the Plaintiff's reasonable costs of an undefended application - albeit one which involved service ex juris through diplomatic channels - would equate to one-twelfth of the value of the House, which is about $65,000. Secondly, the Amended Summons served on the Defendants claimed primarily a beneficial three-fourths interest, alternatively a lifetime right of residence, and alternatively provision under the Family Provision Act. A reasonable recipient would interpret it as claiming, at the highest, a three-quarter interest. In those circumstances, where the Defendants have not appeared, the Court should not grant relief which exceeds that claimed in the process which was served [Gee v Bell (1887) 35 Ch D 160; Stone v Smith (1887) 35 Ch D 188; Kingdon v Kirk (1887) 37 Ch D 141; Barker v Furlong [1891] 2 Ch 172, 178-179]. Thirdly, the Deceased's obligation to his widow substantially exceeds his obligation to his daughter Jagoda, who is married and lives with her husband in her own home. While he has made some provision during his lifetime for his widow by reserving for her a lifetime right of residence in the family home in Korcula, and Luca puts no claim of need before the court, so that I am entitled to infer that her financial position is not such as to militate against making the order which the Plaintiff seeks, I do not see why provision for the Plaintiff should be born by the interest of Luca before it is born by that of Jagoda: it should be born equally by each of their interests. Accordingly, the Plaintiff should receive six one-eighth shares in the House, Luca should receive one one-eighth share, and Jagoda should also receive one one-eighth share.

42 However, this result would leave the Plaintiff's continued occupation of the House at the mercy of Luca and Jagoda who would be entitled to bring an application under Conveyancing Act 1919 (NSW), s 66G for the appointment of trustees for sale, and to that extent the provision for her would remain inadequate. There is no utility in Luca and Jagoda, resident in Croatia, retaining a beneficial interest in the House share as tenants-in-common with the Plaintiff. Their beneficial interests can now, in the light of the valuation evidence, be quantified and converted into charges. The interests of the first and third Defendants would not be substantially detrimentally affected if they were converted into legacies equivalent in value to a one-eighth share in the House, secured on the House. Family Provision Act, s 10 authorises orders making consequential provision for other eligible persons and beneficiaries in such manner and to such extent as the Court thinks necessary to adjust all the interests concerned and to do justice in the circumstances. The evidence establishes that the House was worth $770,000 as at 2 September 2005. One-eighth of that is $96,250. Having regard to the time which will have passed between the date of the valuation and the date of payment of the legacies, justice will be done by substituting legacies of $100,000 charged on the House, for the beneficial interests of the first and third Defendants in the House under the Will.

43 Prima facie, the Plaintiff, who has succeeded, is entitled to her costs, on the party/party basis, out of the estate. The only known asset of the Estate is the House. As Ante's share in the House will be exhausted by the provision to be made for the Plaintiff, that will leave only the interests of the Plaintiff, Luca and Jagoda available to satisfy a costs order. The Plaintiff's entitlement to a three-quarter share in it should not be diminished by having to bear costs out of that share: such a result would reduce the provision below what is in the circumstances adequate for her proper maintenance and advancement. The Plaintiff proposes that the burden of the costs order be born primarily by Luca's share, but I do not see why in justice Luca's share should bear the Plaintiff's costs alone. The Plaintiff's costs should be paid out of the residuary estate, which in substance means equally out of Luca's and Jagoda's shares. 44 The Plaintiff has submitted she should be entitled to costs on an indemnity basis, because she was the administrator pursuant to the s 41A grant, and because of offers which she made which, though not formal offers of compromise under the rules of Court, were not less favourable (for the Defendants) than the ultimate result. 45 I do not think indemnity costs are justified on the basis that the Plaintiff was the administrator. Although it is conventional to award an executor/defendant's costs in proceedings under the Family Provision Act on the indemnity basis, that reflects the circumstance that the executor is joined as defendant by virtue of his or her office as such and is entitled to be indemnified for costs incurred in defending the interests of the estate. That reasoning does not apply to a s 41A administrator who obtains a grant for the purpose of prosecuting a claim against the estate. 46 The first offer relied on in support of the application for indemnity costs - which was that the Plaintiff receive three-fourths and Jagoda one-fourth of the House - was not as favourable for Luca as the result which she ultimately received, and I think the Defendants were entitled to reject it. Nor was the second offer - by which the Plaintiff offered to accept a life estate coupled with a charge for her expenditure - necessarily more favourable to the Defendants than the ultimate result, since it would have deferred until after the Plaintiff's death receipt by the Defendants of any benefit from the Estate. Again, I think the Defendants were entitled to reject it. I take into account that although the Defendants did not consent, and put the Plaintiff to the costs of service overseas and proving her case, the case did proceed undefended. Proceedings would have been required to obtain an order, even if the Defendants had consented to the Plaintiff's application. The costs of service overseas will presumably be recoverable in full as disbursements. And I have regard also to the overall size of the Estate, and the Plaintiff's share under the orders that I propose to make. On balance, the Plaintiff should bear her own costs to the extent that they exceed what is allowed on a party/party basis.

47 The only grant is a s 41A grant to the Plaintiff for the limited purpose of making her application. One executor named in the Will has renounced and the other shows no inclination to apply for a grant. Other than the Plaintiff, all the beneficiaries are in Croatia. In order to give effect to the orders I propose to make, it would ordinarily be necessary for the Plaintiff to obtain a grant of administration cta. However, under Family Provision Act, s 15(1)(a)(v), the court can make a vesting order which has the same effect as a vesting order under the Trustee Act 1925 (NSW), s 78.

48 My orders are:-

1. Order, pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 7.10(2)(a), that the proceedings continue in the absence of a representative of the estate of Zvonko Grbin deceased ("the Estate").
2. Order pursuant to Family Provision Act 1982 (NSW), ss 7 and 10, that in lieu of the provisions of the Will of the late Zvonko Grbin deceased: (a) the first Defendant Luca Grbin receive from the Estate a legacy of $100,000, such legacy to be charged on the property situate at and known as 462 Mowbray Road, Lane Cove in the State of New South Wales, being the land comprised in Folio Identifier 7/407994 ("the Property"), and not to bear interest if paid within 90 days of this judgment and thereafter until payment to bear interest at the rate prescribed from time to time for interest on unpaid judgment debts;

(b) the third Defendant Jagoda Hemicovic receive from the Estate a legacy of $100,000, such legacy to be charged on the Property, and not to bear interest if paid within 90 days of this judgment and thereafter until payment to bear interest at the rate prescribed from time to time for interest on unpaid judgment debts;

(c) the Plaintiff Ina Vukic receive from the estate of the deceased the Property, subject to the charges referred to in (a) and (b);

(d) the first Defendant Luca Grbin receive the rest and residue of the Estate. 3. Order pursuant to Family Provision Act 1982 (NSW), s 15(1)(a)(v) that the Property vest in the Plaintiff, subject to the charges referred to in Order 2. 4. Order that the Plaintiff's costs, assessed on the party/party basis, be paid or retained, as to one-half out of the first Defendant's and as to one-half out of the third Defendant's legacies referred to in Order 2(a) and (b) respectively, and that such costs may be set off against those legacies. 5. Reserve liberty to the Plaintiff, the first Defendant and the third Defendant to apply in the event of any difficulty arising in the implementation of these orders, including for further orders to give effect to the charges referred to in 2(a) and (b). 6. Direct that within seven days, the Plaintiff serve on each Defendant by the means specified below, a copy of this judgment and a sealed copy of these orders, endorsed with a notice in the following form: "To the Defendants: These orders having been made in your absence, the Court may under Uniform Civil Procedure Rules 2005 (NSW), r 36.16(2)(b) set aside or vary these orders", and make and file and affidavit of such service: (a) the first Defendant by certified air mail addressed to her at O. Korcula, 20275 Zrnovo, Croatia, and by delivery to the document exchange box of Meehans Solicitors at DX 5136 CAMPBELLTOWN for the attention of Paul Meehan/Caroline Bonnar;

(b) the second Defendant by certified air mail addressed to him at O. Korcula, 20275 Zrnovo, Croatia, and by delivery to the document exchange box of Meehans Solicitors at DX 5136 CAMPBELLTOWN for the attention of Paul Meehan/Caroline Bonnar;

(c) the third Defendant by certified airmail addressed to her at Predovecka 17, 10000, Zagreb, Croatia. **********

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