Ivanna Ann-Marie Ferenc Stojic v Simon Stojic

This judgment deals with another round in the multiple legal disputes arising from the death of Ivan Stojic (the “Deceased”), who died in Zagreb, Croatia on 13 June 2014. The Deceased left property in New South Wales; a total of five children by four partners; and multiple wills including, relevantly, wills dated 4 November 2013, 23 May 2014, and 6 June 2014. I will refer to the latter two wills as the “Disputed Wills”.

In Estate Stojic, Deceased [2017] NSWSC 168 (“Estate Stojic”), Lindsay J, sitting as Probate Judge, granted probate in solemn form of the Deceased’s will dated 4 November 2013 to the Deceased’s son, Simon Stojic, passing over the Disputed Wills. Without any disrespect intended, I shall refer to the various family members by their given names.

The Disputed Wills had been propounded by two of the Deceased’s other children, Ivanna and Matthew.

An appeal from Justice Lindsay’s decision in Estate Stojic has been expedited and is listed for hearing in two weeks on 26 September 2017. It was common ground that if the appeal is successful, then the grant of probate to Simon will be revoked in favour of one or both of Matthew and Ivanna.

There is clearly no love lost between the parties. Notwithstanding the proximity of the appeal, by notice of motion filed on 31 August 2017, Ivanna and Matthew ask the Court to revoke the grant of probate to Simon of the will dated 4 November 2013. They submit they should be granted letters of administration cta of that will or, in the alternative, Ms Pamela Suttor, solicitor, be reappointed as special administrator of the Deceased’s estate, a position she previously occupied.

Mr D A Smallbone of Counsel appeared for Ivanna and Matthew. He submitted that the estate was at hazard with Simon as executor and that, irrespective of the outcome of the appeal, Simon was unfit to administer the estate.

Mr R D Wilson of Senior Counsel, with Mr C Birtles of Counsel, appeared for Simon. He submitted that the evidence demonstrated no urgency in the nature of imminent risk to the estate and said nothing should happen pending the determination of the appeal from the decision in Estate Stojic. Mr Wilson also submitted that it was inappropriate for the application to be dealt with “on the run” in a motions list pursuant to a motion. Proceedings for the revocation of a grant should be brought in a separate proceeding by statement of claim to enable proper consideration of the issues.

Ms K Beashel appeared for the tutor of the minor plaintiff (Marijan Stojic) in one of the family provision proceedings pending in relation to the estate. Her submission was that the present application should be stood over until after the appeal is heard or, in the alternative, if the Court decided that an interim order should be made, then a special administrator should be appointed.

In my opinion, the evidence does not demonstrate that the estate is at such imminent risk that the application should be determined on the urgent — and procedurally somewhat irregular — basis propounded by Ivanna and Matthew. In reaching that conclusion I am not to be taken as expressing any view on the ultimate merits of their complaints about Simon. Orders in the nature of a stay of much of Simon’s powers as executor have been made by Lindsay J pending the appeal from his decision. The evidence does not disclose anything that is likely to happen in the short term against the interests of the estate which would warrant peremptory intervention by the Court.

Furthermore, it may be (again without expressing any view as to the likely outcome) that Ivanna and Matthew will achieve the result they seek through a victory in the Court of Appeal proceedings, the hearing of which is only two weeks away. For these two reasons — lack of demonstrated circumstances warranting urgent intervention and the imminence of the Court of Appeal proceedings — the Court will dismiss the motion.

I gratefully adopt the following from Lindsay J’s decision in Estate Stojic:

Upon the delivery of his reasons in Estate Stojic on 3 March 2017, Lindsay J made orders including the grant of probate of the 4 November 2013 will to Simon.

On 23 June 2017, Lindsay J made orders in chambers which included:

It was common ground that on 26 July 2017, Simon was arrested and subsequently charged with murder and firearms offences in relation to the shooting of a man not far from the premises of Statewide Office Furniture Pty Ltd (“Statewide”). Simon has pleaded not guilty. He remains in remand at the Silverwater Correctional Centre.

Simon is now the sole shareholder in Statewide. He was, previously, its sole director. However, on 3 August 2017, Mr Ian Robertson, an experienced retired chartered accountant who had previously served for 34 years as a director of Statewide, was appointed as sole director of that company. Mr Robertson’s uncontradicted affidavit evidence was:

Mr Smallbone began by drawing to attention that the Court has an inherent power to revoke a grant of probate. The categories upon which the Court can act are not closed. He relied on the well-known passage in Bates v Messner (1967) 67 SR (NSW) 187 at 191–192 per Asprey JA:

Mr Smallbone also referred to Re the Estate of S [1968] P 302 in which the Court said that it was “quite impossible” for the prisoner, serving a life sentence, to act as executrix of an estate. Although in that case the prisoner had been convicted, the point of the decision seemed to be as much driven by the practical effect of incarceration.

Against that legal background, it was submitted that the evidence was clear that those with the majority interest in the estate, even under the 2013 Will, did not trust Simon. Nor did they wish to have a special administrator appointed because of associated costs and inefficiencies. They also had complaints (about which I express no view) concerning some aspects of the way in which Ms Suttor had carried out her duties under her earlier appointment as special administrator.

Next, it was submitted that there were serious grounds to be concerned about Statewide being in default in relation to its premises in New South Wales, Queensland and Victoria, including by reason of failure to pay rent and for being indebted to the estate on a loan account. Either the estate or the Deceased’s self-managed superannuation fund is the company’s landlord in those locations. It was said that Simon was hopelessly conflicted by reason of being the sole shareholder in the company and that, for example, he had taken no steps to call in the loan.

Attention was then drawn to concerns which Ivanna and Matthew had that Simon would not take steps to prosecute certain proceedings in Croatia concerning assets located there.

The next matter was allegations that Simon had previously disregarded court orders, including Lindsay J’s orders of 23 June 2017 (see paragraph [13] above); orders made by Hallen J in the various family provision proceedings; and orders made in the Family Court. Furthermore, whether ordered to do so or not, Simon had failed to provide information concerning the affairs of the estate, notwithstanding repeated requests by Ivanna and Matthew’s solicitors.

It was next submitted that, although Simon was entitled to the presumption of innocence, as a practical matter it was not possible for him to undertake the role of executor while he was on remand at Silverwater.

Finally, it was submitted that it would no doubt be at least a month before the Court of Appeal delivered its reasons. Any decision to remove Simon as an executor did not need to await the outcome in the Court of Appeal. Even if Simon successfully defended the appeal, he was clearly unsuitable to be the executor of the Deceased’s estate.

Simon’s submissions may be summarised as follows.

Simon’s solicitors had no difficulty in obtaining instructions, notwithstanding his current incarceration. The uncontradicted evidence was that they could attend on him at Silverwater and he was available by fax, letter and telephone. The only particular impediment was that any letters sent to him could take an additional two days to reach him due to the internal procedures of the remand centre.

Much of the information that had been sought by Ivanna and Matthew’s solicitors had been provided. Their largest concern (in dollar terms), that an alleged $1,700,000 was unaccounted for in the estate accounts, had been resolved by the tender of Ms Suttor’s firm’s trust account records.

Statewide was now in the control of an independent director. There was no evidence of any particular risk in relation to that company or its affairs. The removal of Simon as executor would produce unwarranted procedural difficulties in the various proceedings. While it was conceded that the appeal could proceed if an order were made for Simon to represent the estate in those proceedings, it was submitted that more substantial difficulties would arise in relation to the family provision proceedings because Ivanna and Matthew were themselves plaintiffs in some of those proceedings.

The applicants were not entitled to seek a revocation of the grant made by Lindsay J by filing a notice of motion in the proceedings now subject to appeal. Apart from determining questions of stays and associated relief pending the hearing of the appeal, it was submitted that the Court’s jurisdiction had been exhausted in those proceedings. If Ivanna and Matthew wanted to revoke the grant to Simon, they had to commence separate proceedings by statement of claim. Instead, they were impermissibly using a notice of motion to seek a final revocation of the grant on the grounds of misconduct rather than demonstrating any need for interim relief pending the determination of the appeal.

In circumstances where, if they succeeded in the appeal, the grant to Simon would be revoked in favour of one or both of Ivanna and Matthew, the real question was whether interim orders were required pending the determination of the appeal. No such case has been made out. No urgent threat to the estate had been identified.

Furthermore, there was no reason to reappoint Ms Suttor pending determination of the appeal. However, if Simon was successful in the appeal and a further application to revoke the grant of probate to him was pressed, Simon reserved his right to submit that Ms Suttor should be appointed to administer the estate rather than Ivanna and Matthew.

For the following four reasons, the Court will dismiss Ivanna and Matthew’s notice of motion. This is, of course, an interlocutory decision. Once the Court of Appeal’s decision is known, there is no reason why they should not renew their application, if so advised, in the circumstances as they exist at that time. It will be entirely a matter for them (and one on which the Court does not have any view) whether they will do so or not.

The first reason is that, in my view, the estate and the beneficiaries are adequately protected by orders 5 and 7 made by Lindsay J on 23 June 2017 (see paragraph [13] above). While Ivanna and Matthew’s application was based upon serious allegations of Simon’s unsuitability to be executor, I did not understand them to be submitting that the Court should find that there is any kind of risk that Simon will breach those orders. On the evidence presented, and in the circumstances of an urgent hearing in the motions list, I would not be prepared to make a finding of that seriousness against Simon, even if one had been sought.

By reason of the orders made by Lindsay J on 23 June 2017, Simon has a very limited capacity to act as executor of the Deceased’s estate. His Honour’s orders preserve the status quo pending the appeal. Even if their appeal is unsuccessful, it will be open to Ivanna and Matthew to apply to have orders to the effect of those made by Lindsay J continued pending any further application they may be advised to make to revoke the grant of probate to Simon.

The second reason is that, when considered against the background of Linsday J’s orders to which I have just referred, I am unable to identify any immediate threat to the estate such that it might be said to be in jeopardy with sufficient certainty and imminence to warrant Simon’s peremptory removal as executor before the Court of Appeal has delivered its judgment.

When I invited Mr Smallbone to identify an immediate threat he responded as follows (T17;11–26):

I am not satisfied that that or any of the matters identified by Mr Smallbone just quoted, or any other matter referred to by Ivanna and Matthew, warrants urgent intervention by the Court.

It can be accepted that Ivanna and Matthew are frustrated about the slowness of the supply of information, but a large amount of it has now been provided. Ivanna and Matthew continue to challenge the adequacy of that information and I make no finding on that question. However, it does appear that the largest (in dollar terms) concerns about the administration of the estate have been answered by the tender of Ms Suttor’s trust account ledger.

In relation to other matters of concern, the payments required to be made by the estate to Ivanna under order 6 (see paragraph [13] above) are now completely up to date. Statewide is in the control of an independent director. To the extent that Simon is required to do anything, he is able to instruct his solicitors and they have reasonably ready access to him. Insofar as there has been a general attack on his fitness and propriety to act as an executor, because of the overall view I have taken in relation to this application it is not necessary for me to express any view. However, in relation to his current predicament he is undoubtedly entitled to the presumption of innocence.

The Court’s third reason for rejecting the present application is the imminence of the Court of Appeal hearing. This may give Ivanna and Matthew the result they want on a considered basis (although in saying that I am not to be taken as expressing any view on the likely outcome of the appeal). While nothing can be usefully said about when the Court of Appeal might deliver its judgment, I take into account that it is certainly open to the parties to draw any perceived need for the urgent provision of at least a result to the attention of the Court.

Fourth, in matters of urgency the Court will not permit form to triumph over substance. For the first and second reasons given above, I am not satisfied that this is a case of urgency. In those circumstances, I accept Mr Wilson SC’s submission that, for good reason, applications to revoke probate must be brought by statement of claim in fresh proceedings (Supreme Court Rules 1970 (NSW), Pt 78, r 48). The defendant executor is entitled to a proper opportunity to meet the allegations said to justify his or her removal.

Ivanna and Matthew’s notice of motion will be dismissed.

The orders of the Court are as follows: