Noel Mockett Brown as executor of the estate of the late Petar Vezmar (aka Peter Vezmar)

The deceased Petar Vezmar died on 19 June 2013, resident and domiciled in Australia and holding dual Australian and Serbian citizenship. He had never married, but he had one son Djordje Vezmar. Probate of his will dated 30 March 2013 and codicil dated 27 May 2013 was granted on 30 September 2013 to Noel Mockett Brown, one of the executors named in the will and codicil, Donna Radojka Nikolic the other executor having renounced. By summons filed on 14 August 2015 Mr Brown in his capacity as executor applies pursuant to (NSW) Trustee Act 1924, s 63, for advice in respect of certain provisions of the will.

The will dated 20 March 2013 relevantly provided as follows:

By codicil dated 27 May 2013 the deceased inter alia revoked clause 8.4 of the will.

Mr Brown was the deceased’s solicitor during his lifetime. The will was made in Australia, where the deceased was domiciled, and was prepared by an Australian solicitor. It dealt with Australian assets as well as the Serbian property.

At his death, the deceased owned the real property at 81 Boze Jankovica, Belgrade, Serbia, which was valued for probate purposes at 220,000 Euros (equivalent to AUD$321,402); a more current estimate is said to be 175,000 Euros (equivalent to AUD$250,000). The deceased’s half-sister Vera Acimov survived him by 30 days and is still alive. His son Djordje Vezmar also survives.

The executor has received advice from three Serbian attorneys, which is not entirely consistent, as to the applicable Serbian law. Where I summarise these advices below, I have at times paraphrased and rearranged their contents so as to reflect, as best I am able, what I understand them to convey.

Attorney Samardzija of Popovic Popovic Samardzija & Popovic provided advice, dated 12 November 2013, to the effect that:

In a telephone conference with Senior Counsel on 27 November 2013, reported in counsel’s letter of 2 December 2013, Mr Samardzija advised:

Attorney Nenadovic provided advice to Mr Nenad Milojevic, the trustee referred to in clause 8.2 of the will, who in turn provided that advice to Mr Brown. Aspects of it are difficult to understand, but the following can be distilled from it:

In a letter of 26 April 2014, Attorney Nenadovic further stated:

In the light of those advices, the executor obtained an opinion of Dr Bell SC, dated 30 July 2014, who advised that further answers in relation to Serbian law were required, including in particular, though not limited to:

Dr Bell advised that without such further information, it would not be proper for Mr Brown to enter into any agreement with regard to the subject property, other than to permit Ms Acimov to live there for the time being.

Mr Brown then sought advice from other Serbian attorneys, and Attorney Savic gave advice dated 30 August 2014 to the following effect:

In a further advice dated 19 September 2014, Attorney Savic confirmed that:

In the summons, the executor seeks advice to the effect that in the events which have happened and upon the true construction of the will and codicil, he is justified in dealing with the gift of the Belgrade property as if it were an absolute gift to Vera Acimov, and in so doing to disregard the right of any remainderman child or grandchild of the said Vera Acimov, and further in that regard to treat the gift in clause 6.2 of the will as if it has no operation and has lapsed.

In my view, the position is as follows.

The deceased died domiciled in New South Wales, and left property in New South Wales (as well as elsewhere). His will was, according to New South Wales law, properly proved in New South Wales.

The will was intended to operate in respect of the deceased’s estate in New South Wales and also in respect of his foreign estate, in particular the Belgrade property in Serbia.

The first question is, what law applies to the devolution of the Belgrade property. At least in the first instance (that is, subject the operation of any renvoi), that is a question to be answered by reference to New South Wales rules of private international law.

Construction of a will, even in respect of immovable property, is under New South Wales law governed by the law of the domicile of the testator when the will was made; however, this is subject to the proviso that the construction so reached must in no way conflict with the law of the country in which the property is situated – as if the disposition is not permitted or recognised by the lex situs, it cannot be given effect [Philipson-Stow v Inland Revenue Commissioners [1961] AC 726, 761 (Lord Denning); Public Trustee v Vodjdani (1988) 49 SASR 236]. The validity and effectiveness of a testamentary disposition of immovable property is governed by the lex situs [Re Piercy; Whitwham v Piercy [1895] 1 Ch 83, 89-90 (North J)]. Thus, under New South Wales law, Serbian law as the lex situs governs the validity and effectiveness of the gift of the Belgrade property in clause 6.1, and also controls – though it does not govern – the construction of that gift.

The advices of the Serbian attorneys are unanimous and unequivocal that Serbian law governs the inheritance of the Belgrade property, either on the basis of the deceased’s (dual) Serbian nationality or as the lex situs (or both). Accordingly, no question of renvoi arises.

While the evidence leaves the effect of Serbian law unclear in some respects, and while not all the questions raised by Dr Bell’s advice have been answered, there is sufficient clarity to permit the proper course to be stated.

Two Serbian attorneys have advised that Serbian law does not recognise the institution of trust and would disregard the trust, treating the gift as an absolute gift to Vera. Another Serbian attorney has advised that Serbian law can recognise trusts, but appears to suggest that there is insufficient evidence to enabe it to do so in this case. Mr Milojevic would not permit the executor to provide Attorney Nenadovic’s advice to Attorney Samardzija, and those of the contrary view have not been referred to the Serbian Law on Trusts and Foundations and have not commented on the suggestion that Serbian law might recognise a trust. In those circumstances, it is not possible to form a sensible opinion as to which view is correct.

However, it is unnecessary for present purposes to do so. All the Serbian attorneys appear to agree, at least, that Serbian law is “exclusively competent” in this case, and that “inheritance proceedings” would have to be initiated before the competent court in Serbia. Because Serbia asserts exclusive jurisdiction and would not recognise an Australian decree in this respect, and because there is no means by which the executor (or trustee) can deal with the Serbian property, an application to the Serbian court is inevitable. That court will then determine the question of succession to the Belgrade property, applying its own law.

Although not unequivocal, the evidence indicates that while an application for probate in Serbia is an “ex officio” proceeding, the executor can initiate or propose that such proceedings be taken. In any event, even if such proceedings can be instituted only by the heir, it is the duty of the executor under Australian law to facilitate such proceedings. Thus, in my view, it is manifest that the executor should do whatever is reasonably necessary to cause inheritance proceedings to be commenced in Serbia, and act upon the advice of Serbian attorneys in that respect. That is likely to require full disclosure of the Australian estate and administration in order to satisfy the Serbian court that the reserved portion attributable to Djordje Vezmar will not be impaired.

That course may well result in Vera taking the Belgrade property absolutely, though it may possibly result in effect being given to the trust (although this seems unlikely, as even the attorney who refers to the Law on Trusts and Foundations does not express an affirmative opinion that a trust would be recognised in this case and states that there are difficulties in the way of recognition). In the latter event, the gift in clause 6.1 would plainly have taken effect and no question would arise in respect of clause 6.2. But in the former – apparently more likely – event, a question would arise as to the effect of that outcome in relation to the trusts created by the will. Such question is to be determined by the governing law of the trust [Canterbury Corp v Wyburn and the Melbourne Hospital [1895] AC 89, 96 (Lord Hobhouse)]. In this case, that is New South Wales law.

Prima facie, it seems to me that in that event, although Serbian law did not recognise the trust referred to in clause 6.1, the gift (of the property to Vera) would still have taken effect (albeit not precisely as intended according to New South Wales law). It seems to me, at this stage, that the intent of clause 6.2 was to cover the situation that for some reason or another it might not be possible for the property to pass to Vera, rather than that the trust not be recognised. If that view be correct, then clause 6.2 would remain irrelevant. However, that is a question of construction in which the interests of the potential beneficiaries of the clause 8 trust on the one hand (the child or grandchildren of Vera), and the residuary beneficiary (Djordje Vezmar) on the other, would have an interest and should be afforded an opportunity to be heard.

The court therefore orders that: