Galea v Camilleri

[2023] NSWSC 206

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Galea v Camilleri; The Estate of Patricia Camilleri [2023] NSWSC 206

Hearing dates:

20 – 24 February 2023

Date of orders:

15 March 2023

Decision date:

15 March 2023

Jurisdiction:

Equity

Before:

Meek J

Decision:

Claims regarding default made out. Claim for commission dismissed.

Catchwords:

SUCCESSION — Executors and administrators —Deceased died in 2014 leaving a substantial estate in excess of $23M the overwhelming majority of which was comprised of 12 pieces of real property 7 of which were specifically gifted and 5 of which fell into residue — The plaintiffs (3 of 6 children of the deceased) complained that the defendant executor (another child) engaged in conduct which has the effect of delaying administration of the estate and in particular complained of failures to promptly sell or rent or otherwise transfer assets of the estate constituting wilful default and devastavit — One of the plaintiffs commenced 3 proceedings including these proceedings against the estate. The first two proceedings (rectification/family provision and revocation of grant of probate) were previously dismissed — The defendant claimed commission asserting any delays are at least explained by addressing the prior proceedings

EVIDENCE — Mode of appearance at hearing — Audio visual and other mode of appearance — r 31.3 Uniform Civil Procedure Rules 2005 (NSW), Pt 1A Evidence (Audio and Audio Visual Links) Act 1998 (NSW)

EVIDENCE — Application of “rule” in Jones v Dunkel

EVIDENCE — Self-incrimination — Informing witnesses of rights — Obligation under s 132 Evidence Act 1995 (NSW) regarding objections pursuant to s 132 to answering questions — Objection may be taken by a witness to evidence on a particular topic as distinct from evidence on a particular question

SUCCESSION — Executors and administrators — devastavit and wilful default — Assessment of claims of devastavit and wilful default must be considered in light of the terms of the deceased’s Will and in particular whether the deceased has by provisions of the Will in the powers given to the executor modified fiduciary duties

SUCCESSION — Executors and administrators — Exercise of powers under Will — Discussion of discretionary considerations

SUCCESSION — Executors and administrators —devastavit and wilful default — Discussion of principles regarding wilful default

SUCCESSION — Executors and administrators —Even if an executor is not an initial purchaser, as long as a contract remains executory and the executor has power either to enforce it, rescind it or alter it, the executor is under the general law precluded from repurchasing the property from his own purchaser, or purchasing the property on his own account

TAXES AND DUTIES — Definition of “tax agent service” in Tax Agent Services Act 2009 (Cth) — “tax agent service” includes advising an entity about liabilities or obligations that arise or could arise under a taxation law or representing an entity in their dealings with the Commissioner

TAXES AND DUTIES — Whether work carried out by an accountant or registered tax agent in relation to the Duties Act 1997 (NSW) which is not a “taxation law” as defined involves such agent impermissibly engaging in legal practice such as to contravene s 10 Legal Profession Uniform Law (NSW) — Agent not joined as a party — In absence of joinder procedural fairness precludes finding on the issue determined

PROCEDURE — Notice of judgment — Where judgment affects rights or interest of person who is not a party — Giving of notice under UCPR 46.12 to enable non-party interests to be protected — Juulv Northey [2010] NSWCA 211 applied

WILLS, PROBATE and ADMINISTRATION — Executors — Claim for commission — Discussion of considerations regarding assessment of quantum — Principles applicable — Guideline rates — Standard of reasonableness

WILLS, PROBATE and ADMINISTRATION — Executors — Claim for commission — Factors relevant to determining the amount (if any) of commission — Discussion of principles and circumstances in which commission might be denied

Legislation Cited:

A New Tax System (Goods and Services Tax) Act1999 (Cth)

Civil Procedure Act 2005 (NSW)

Conveyancing Act 1919 (NSW)

Duties Act1997 (NSW)

Environmental Planning and Assessment Act1979 (NSW)

Evidence Act 1995 (NSW)

Evidence (Audio and Audio Visual Links) Act 1998 (NSW)

Income Tax Assessment Act 1997 (Cth)

Legal Profession Uniform Law Application Act2014 (NSW)

Legal Profession Uniform Law (NSW)

Probate and Administration Act 1898 (NSW)

Supreme Court Rules1970 (NSW)

Tax Agent Services Act 2009 (Cth)

Tax Agent Services Regulations 2022 (Cth)

Trustee Act1925 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Atkins v Godfrey [2006] WASC 83

Attorney-General (Cth) v Breckler (1999) 197 CLR 83; [1999] HCA 28

Bartlett v Barclays Bank Trust Co Ltd (No 2) [1980] Ch 515

Beck v Henley [2014] NSWCA 201; (2014) 11 ASTLR 457

Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305

Bowering v Knox and Bowering (No 2) [2014] NSWSC 1749

Brooks v Young (2018) 131 SASR 365; [2018] SASCFC 81

Chiro v Linton(No2) [2009] SASC 197

Clerical Administrative and Related Employees Superannuation Pty Ltd v Bishop [1997] FCA 714; (1997) 76 IR 139

Council of New South Wales Bar Association v Dwyer [2015] NSWCA 302

Council of the Law Society of New South Wales v Australian Injury Helpline Ltd (2008) 71 NSWLR 715; [2008] NSWSC 627

Delves v Gray [1902] 2 Ch D 606

Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599

Ex parte Bennett (1805) 10 Ves Jun 381; 32 ER 893

Felman v Law Institute of Victoria [1998] 4 VR 324

Ford v Princehorn; Estate of Ford [2012] NSWSC 1165

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Galea v Camilleri [2019] NSWSC 167

Garthshore v Chalie (1804) 10 Ves Jun 1; 32 ER 743

Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336

Gray v Guardian Trust Australia [2003] NSWSC 704

Howling v Kristofferson (Supreme Court (NSW), Cohen J, 14 October 1992, unrep)

In re Ralphs (deceased); Ralphs v District Bank Ltd [1968] 1 WLR 1522

In re Speight; Speight v Gaunt (1883) 22 Ch D 727

In re Tankard; Tankard v Midland Bank Executor and Trustee Co Ltd [1942] Ch 69

In the matter of Hoju Jobs Pty Ltd [2021] NSWSC 302

In the Will of Henry Sherringham (1901) 1 SR (NSW) 48

In the Will of James Greer (1911) 11 SR (NSW) 21

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

Jones v Estate of Farley (Supreme Court (NSW), Santow J, 10 October 1997, unrep)

Juulv Northey [2010] NSWCA 211

Karger v Paul [1984] VR 161

Kekatos v The Council of the Law Society of New South Wales [1999] NSWCA 288

Manfred v Maddrell (1950) 51 SR (NSW) 95

Mavrideros v Mack (1998) 45 NSWLR 80; [1998] NSWCA 286

Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146; [2002] NSWCA 22

Mordecai v Mordecai (1988) 12 NSWLR 58

Ollis v Melissari [2005] NSWSC 1016

Overdean Developments Pty Ltd v Garslev Holdings Pty Ltd (No 3) [2021] NSWSC 1482

R v Ahmed [2001] NSWCCA 450

Re Badstuebner (deceased) (2020) 4 Qd R 490; [2020] QSC 144

Re Buckingham (2016) 51 VR 453; [2016] VSC 757

Re Estate Ford; Application for Executor’s Commission [2016] NSWSC 6

Re Estate Gowing (2014) 17 BPR 32,763; [2014] NSWSC 247

Re Hillsea Pty Ltd [2019] NSWSC 1152

Re Tebbs (deceased); Redfern v Tebbs [1976] 1 WLR 924

Vaughan v Legal Services Board [2008] VSC 200

Walker v Walker [2022] NSWSC 1104

Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd (1998) 79 FCR 469; [1998] FCA 51

Williams v Scott [1900] AC 499

Xia vSantahPty Ltd [2003] NSWSC 807

Texts Cited:

Dal Pont GE, Law of Executors and Administrators (2022, LexisNexis)

Dal Pont GE, Law of Succession (3rd ed, 2021, LexisNexis)

Heydon JD and MJ Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis)

Janes Stephen, David Liebhold and Paul Studdert, Wills, Probate and Administration Law in New South Wales (2nd ed, 2020, Thomson Reuters)

Young, Newton and Cahill, Conveyancing Service NSW (LexisNexis, online)

Category:

Principal judgment

Parties:

Carol Galea (First Plaintiff)
Reno Camilleri (Second Plaintiff)
Peter Camilleri (Third Plaintiff)
John Camilleri (Defendant)

Representation:

Counsel:
A Crossland and A Rao (Plaintiffs)
L Ellison SC (Defendant)

Solicitors:
Elderlaw (Plaintiffs)
Turner Freeman (Defendant)

File Number(s):

2014/332336 and 2019/274722

JUDGMENT

1. HIS HONOUR: These proceedings relate to claims arising out of the estate of the late Patricia Camilleri (the deceased). Specifically, they involve a claim by some of the beneficiaries of the deceased’s estate against the executor of the estate, John Camilleri (John), alleging wrongdoing in the administration of the estate, and a claim by John for commission.

2. I have determined that the plaintiffs’ case of default by John is made out in some material respects but not in all respects. I reject John’s claim for commission. I set out below my reasons for those findings.

3. Without intending any disrespect, it is convenient to refer to various of the deceased’s family relations (many of whom bear the common surnames) by reference to their given or familiar family names.

4. Mr Crossland appeared with Ms Rao for the plaintiffs. Mr Ellison SC appeared for the defendant. For convenience, I will refer to the submissions on behalf of the plaintiffs as submissions by Mr Crossland. However, it was evident that throughout the hearing Ms Rao gave considerable assistance to Mr Crossland and her assistance to him should be properly acknowledged.

5. The parties provided written submissions both prior to the hearing and on the final day of the hearing in addition to their counsel making oral submissions on the final day of the hearing. 

6. I will make reference to the oral submissions by transcript page reference. For convenience, I will refer to the various written submission documents as follows: the plaintiffs’ opening written submissions (POS); John’s opening written submissions (JOS) and the plaintiffs’ concluding written submissions (PCS).

Factual Background

The parties

7. The deceased was married to Reno (Reno Senior) who predeceased her on 28 March 2007. Reno Senior was born in Malta and was a labourer. He was 5 years older than the deceased. The deceased was born in Leeton. They married in February 1962: CB 1224.

8. The deceased died on 21 October 2014 aged 72. She resided at a property in Shanes Park (Lot 77): CB 448. Reno Senior and the deceased (parents) prospered, amassing very significant property holdings in Western Sydney at Shanes Park, Arndell Park and Londonderry. In addition to owning land, they ran a poultry farm business from Lot 77: CB 122 [7]-[8].

9. The deceased and Reno Senior had six children being in age order Peter, John, David, Reno, Carol and Martin. Peter is also referred to in the evidence as Pio: CB 448.

10. John was born in February 1963 and was almost 60 at the time of the hearing: CB 1224. John is a turf farmer: CB 130, 268. Martin was born in September 1978 and is 15 years younger than John: CB 1229.

11. John indicated that his father, three days prior to his death in 2007, instructed John to “[l]ook after mummy and look after Martin”, which he did and took seriously in doing so: T 90.8-9, 92.45-93.14. John accepted that he and Martin are “[v]ery close”: T 157.27-28.

12. John described Martin as being “very close” with his parents being their “right-hand man” who “took care of all aspects of the running of their business and properties”: CB 246 [5].

13. In about 2000, Martin started to assist the parents in carrying on the poultry business: CB 122 [8].

14. John denied that from the time of his mother’s death, he was in conflict with Carol and Reno. However, he accepted that there was conflict between Martin and Reno, there being a fight between them at the deceased’s hospital bed in the last days of her life: T 89.4-16. John has not spoken with Carol since about 2013, nor with Reno since about 2015, and John claimed that the last time he had spoken with Peter was before the auction of Property 430 (21 June 2018): T 120.23-42.

15. Sadly, since early 2014, about seven months prior to the deceased’s death, the family have engaged in various pieces of litigation impacting upon the deceased’s estate.

16. The litigation has included:

1. Proceedings commenced on or about 25 March 2014 in the District Court by Martin pursuant to a power of attorney on behalf of the deceased against Reno to recover a total of approximately $388,000 being the sum of $320,000 lent under a loan agreement between the deceased and Reno (loan agreement) plus $68,000 of interest (debt proceedings);

2. Proceedings commenced in the Supreme Court by John seeking probate of the deceased’s Will and Codicil (probate proceedings) (The date of commencement of the proceedings is not clearly revealed by the evidence. By reference to the proceedings file number the commencement was possibly in 2014. The POS suggest a date being in 2015, namely, 3 July 2015: POS [16]);

3. Proceedings commenced on 20 October 2015 in the Supreme Court by Carol seeking rectification of the deceased’s Will and in the alternative a family provision order (rectification and family provision proceedings);

4. Proceedings commenced on 7 August 2017 in the Supreme Court by Carol seeking revocation of the deceased’s Will (revocation proceedings);

5. These proceedings commenced on 3 September 2019 by Carol, Reno and Peter alleged maladministration of the deceased’s estate by John (administration proceedings);

6. An application by notice of motion dated 3 March 2021 and filed on 8 March 2021 in the probate proceedings by John seeking an order passing accounts of the administration of the deceased’s estate from 21 October 2014 to 31 March 2022 and allowing commission (commission proceedings).

17. Because various proceedings have been commenced by and against various family members, terminology of “plaintiff” and “defendant” is not entirely apt to identify the moving or defending party in any given proceedings.

18. For convenience, I will refer to the plaintiffs in the administration proceedings (being Carol, Reno and Peter) as collectively “the plaintiffs”. I will otherwise refer to the parties by their given names.

19. Four of the six proceedings have been finalised.

20. The two outstanding proceedings are the administration proceedings and the commission proceedings. Orders were made that both those proceedings be listed for hearing together, before me, and that evidence in one proceeding was to be evidence in the other, subject to relevance and any just objection by any party to either proceedings.

21. It is evident within the family, that is, between the six siblings, that the plaintiffs are aligned on the one hand and John and Martin (possibly with David) are aligned on the other.

Other relevant persons including various professionals

22. Repat Pty Ltd (Repat) is the trustee of the Camilleri Superannuation Fund. John and Martin were in 2015 directors of Repat: CB 510. Thereafter, or at least in 2017, Martin was a director of Repat: CB 530.

23. Apart from the family members, various other professional persons were involved in the proceedings either by providing services in respect of the estate, giving evidence or otherwise being referred to in evidence. Those persons included:

1. John Mann (Mr Mann) – a solicitor who acted for the deceased at least from the time of the making of the 2010 Will. Mr Mann initially practised at a firm Roberts Mann Solicitors and then at Turner Freeman Lawyers (Turner Freeman). Mr Mann also acted for Martin in 2014 in relation to the debt proceedings and was engaged by John to act on behalf of the estate and continued to act for John up to and including this hearing;

2. Kyle McCabe (Mr McCabe) – a solicitor who assisted Mr Mann whilst he was in the employ of Turner Freeman. Mr McCabe ceased to be an employee of Turner Freeman sometime during 2022 (T 63).

3. Chris Gough (Mr Gough) – a solicitor of the firm Storey & Gough who acted for Carol at least from June 2015 (CB 417) until about November 2016 (CB 595).

4. Rodney Lewis (Mr Lewis), William Geddes (Mr Geddes), Jacob Carswell–Doherty (Mr Carswell-Doherty) and Priscilla Sidey (Ms Sidey) – all solicitors with the firm Elderlaw Legal Services who commenced to act for Carol from approximately 20 October 2016 (CB 555) up to and including the hearing (as well as acting for Peter and Reno).

5. Chris Bryatt (Mr Bryatt) – a solicitor from the firm AR Walmsley & Co who acted for Reno in relation to the debt proceedings (CB 408).

6. Amanda Fisher (Ms Fisher) – an accountant of the firm of The Numbers Matter who acted for the deceased prior to her death, and for the estate after the deceased’s death.

7. Christopher Batten (Mr Batten) – a director and principal of MGS Private Pty Ltd (MGS) and an accountant/chartered tax advisor/registered tax agent (T 243) who gave “revenue” advice in relation to the deceased’s estate and John.

8. Ivan Semciw (Mr Semciw) – a retired real estate agent of the firm Best Commercial and Industrial Properties who marketed and facilitated the sale of what is described below as the Arndell Park property.

9. Paul Cutcliffe (Mr Cutcliffe) – a real estate agent with Jandamurra Pty Ltd t/a Cutcliffe Properties.

10. Mark Ellis (Mr Ellis) – a registered valuer of the company Independent Property Valuations Pty Ltd who prepared the valuation reports in respect of the Arndell Park property and what is described below as being Property 430.

24. Although Carol bears the surname Galea, in evidence Carol indicated that she was taking on her prior name of Camilleri: T 43.

25. John is married to Maryanne. Peter is married to Josephine. Reno is married to Cheryl (which appears to be a second marriage).

Wills and estate

Reno Senior’s Will

26. Reno Senior left a Will dated 9 November 2006 by which he appointed the deceased as his sole executrix and beneficiary. Although the precise details are not disclosed in the evidence, it is evident that a material portion of the deceased’s estate comprised property that was either held with Reno Senior or otherwise gifted by Reno Senior to the deceased.

Deceased’s Will

27. The deceased left a Will dated 20 September 2010 (Will) and a Codicil dated 15 November 2013 (Codicil) probate of which was granted to John on 14 August 2015 (probate). For convenience, where I refer to the Will of the deceased it is the “Will” as probated including the Codicil unless in the context it is necessary to distinguish between the two documents in which case I will expressly refer to the Codicil.

28. I outline details of the deceased’s estate below.

29. It suffices to note that the deceased’s estate was for probate purposes valued in excess of $23 million and a significant majority of the deceased’s estate was comprised of twelve pieces of real property, seven of which were specifically gifted to various of the deceased’s children and five of which fell into residue.

30. The properties were located in various locations. Four of the specifically gifted properties were located at Shane’s Park and the remaining three specifically gifted properties at Llandilo. One of the residuary properties was located at Arndell Park and the remaining four residuary properties at Londonderry.

31. The deceased by her Will appointed John and Carol as executors. The sole effect of the deceased’s Codicil was to revoke the appointment of Carol as an executrix.

32. The deceased by her Will left her estate by giving specific gifts to all her children and leaving the residue of her estate to such of her children (being all of them) who survived her, in equal shares.

Estate and entitlements under the Will

33. The gifts under the Will and the composition of residue are most easily seen by reference to two tables which I set out below identifying in the first table the specific gifts and their respective values and in the second table the residuary items and their respective values. Lot 1 was formerly known as Lot 280 A.

34. The specifically gifted assets are as follows:

Specific gifts	Property	Value $AUS
Carol	Lot 280 Llandilo (Carol’s property)	480,000
Peter	Lot 126 Shanes Park (Peter’s property)	695,000
David	Lot 127 Shanes Park (David’s property)	635,000
Reno	Lot 128 Shanes Park (Reno’s property)	650,000
John	Lot 82 Llandilo (John’s property)	1M
Martin	Lot 126 Shanes Park Lot 1 Llandilo (Martin’s property)	1.935M 1.040M
	Shareholding in RPM Cam Pty Ltd	2
	Shareholding in Repat Pty Ltd	2
	Balance of loan account in RPM Trust	(unspecified)
	Household contents	(unspecified)
	Farming equipment etc used in poultry business	419,213
Total	$6,854,217

35. The residuary assets are as follows:

Property	Value $AUS
Lot 162 Arndell Park (Arndell Park property)	9.6M
Lot B Londonderry (Property 430)	1.1M
Lot 111 Londonderry (Lot 112)	1.77M
Lot 112 Londonderry (Lot 112)	1.785M
Lot 8 Londonderry (Lot 8)	1.66M
National Australia Bank accounts x2	46,620.27
Camilleri Superannuation Fund	212,110.02
Debt from Reno	320,000
Interest on debt from Reno	109,052
Telstra shares 3760 @ $6.09 per share	22,898.40
Total	$16,625,680.69

36. For convenience, I refer to the 12 properties by reference to their lot numbers and/or describing the lots as being the property of the particular child who was specifically gifted that lot.

37. Two of the properties being Lot 162 and Lot B (which the plaintiffs claim should have been rented), I refer to as respectively the “Arndell Park property” and “Property 430” as that description in the first case and number in the second case were often used in evidence and it is convenient, to avoid confusion, to retain those descriptions.

38. In relation to the four Londonderry lots, it appears that Lots 8, 111 and 112 are vacant land with no town water or electricity and that the deceased used to run cattle on the properties: CB 1162.

39. The fourth lot, Property 430, is – in an email from Mr McCabe based on instructions from John – described as “the chicken farm”: CB 1162.

40. The inventory of property recorded that the total value of the estate was $23,479,896 (which figure has been arrived at by omitting the figure for cents for four items in the inventory of property being slightly less than all the figures actually totalled which was $23,479,897.69: CB 432). Based on the inventory of property:

1. the total value of the specific gifts under the Will was $6,854,217; and

2. the total value of the residuary estate was $16,625,680.69.

41. There were some additional assets of the estate which include assets in respect of which Reno Senior’s estate had an interest being IAG shares and Telstra shares. Further, the deceased was the registered proprietor of a Water Access Licence (WAL) which, according to John, was attached to the three properties being Lots 126, 127 and 128. After some degree of correspondence, John treated the asset as being a residual asset and, following invitation of offers from the respective beneficiaries, the WAL was transferred to Martin for the sum of $47,500: CB 137 [52]-[59], 164 [10]-[11], 271-272 [43]-[50].

Executorial powers

42. The deceased by clause 11 of her Will gave the executor various powers as follows:

My executor may in his discretion:

(a)   exercise any powers given to him by law;

(b)   exercise the powers of a trustee for sale in respect of any assets in my estate and my executor may:-

(i)    without being liable for any loss (including liability for taxation on capital gain) caused by so doing, postpone sale;

(ii)   without being liable for any loss (including liability for taxation on capital gain) caused by so doing, retain in its form of investment at my death any part of my estate, even though it is wasting, hazardous or reversionary;

(iii)    sell, by public auction or private sale, and for that purpose may extend credit;

…

(g)   make loans to beneficiaries:

(i).   secured or unsecured;

(ii).   on interest or interest free; and

(iii).   on whatever terms;

(h)   acquire or lease assets for occupation, use or enjoyment by a beneficiary (whether alone or with some other person or persons);

…

(I)    lease any part of my estate:

(i).    for the periods and upon and subject to the covenants and conditions which my executor thinks fit; and

(ii).    either with or without provisions for renewal or otherwise; and accept surrenders of leases or tenancies of my estate or any part of it;

(m)   maintain, repair, improve, develop, alter, renovate, pull down, erect or re-erect any part of my estate;

…

(o)    without the consent of any beneficiary, partition or appropriate any asset of the estate in or towards the satisfaction of a legacy or a share of any person or persons in my estate, and in doing so the following provisions apply:

(i).    the value of any such asset is that agreed by those of my beneficiaries affected or, if my executor is satisfied that no value can be agreed in this way, the value is determined by an independent valuer appointed by my executor for the purpose;

(ii).    my executor need not take into account any differences in value of particular assets to particular beneficiaries other than the value of the asset as decided subparagraph (i);

…

(r)    my executor may for any reason, for instance to allow an early distribution of residue, set aside out of my estate a fund sufficient to meet all debts, charges and other liabilities of my estate. If, having discharged all such debts, charges and other liabilities a balance remains, that balance does not form part of the residue of my estate, but is to be distributed as if it were.

Issues

Ultimate relief sought by plaintiffs after refinement and abandonment of claims for relief

43. The relief sought by the plaintiffs evolved over time.

44. Whilst I describe below the various issues litigated, it is important to understand the nature of the relief that was initially sought by the plaintiffs but later abandoned on the one hand and relief that was ultimately sought on the hearing on the other.

45. The plaintiffs had initially filed a Statement of Claim in which the substantive relief sought was:

1. revocation of the grant of probate and administration of the estate of the deceased with Will annexed being granted to Carol or in the alternative Reno, without being precluded by obligations to give notice of the application or provide an affidavit in relation to search for the Will of the deceased as required by s 42(2)-(3) Probate and Administration Act 1898 (NSW) (PA Act) (revocation relief);

2. orders pursuant to r 54.3(4) of Uniform Civil Procedure Rules2005 (NSW) (UCPR) directing the defendant to:

1. distribute to the beneficiaries of the estate the (net) proceeds of the sale of Property 430 (net proceeds relief); and

2. to instruct and provide with all relevant material a qualified accountant other than Mr Batten to make applications to Revenue NSW for concessional duty in relation to the transfer of Lot 111 to Peter and David and Lot 112 to Carol and Reno with the original signed transfers in relation to those lots being provided to those beneficiaries (duty relief);

3. declarations that John’s failure on the settlement of the contract for the sale of Property 430 to require Martin or his nominee to pay interest constituted a wilful default and an order for account on the basis of such wilful default, alternatively an order for verification of accounts of the estate (Property 430 wilful default relief);

4. orders pursuant to r 54.3(4) UCPR or alternatively general law requiring John to make available for inspection books and records of the estate as specified;

5. damages in devastavit; and

6. interest and costs: CB 34-36.

46. By the time of the hearing, the plaintiffs had amended the Statement of Claim a number of times and the then current form of Statement of Claim was a Third Further Amended Statement of Claim: CB 54. Relevantly:

1. the revocation relief had been abandoned;

2. the net proceeds relief and duty relief had been omitted and replaced by directions pursuant to r 54.3(4) UCPR that John distribute the residue of the estate (distribution of residue relief);

3. the Property 430 wilful default relief had been replaced by a broader claim for relief declaring that John had engaged in wilful default in his administration of the estate and an order for account on the basis of wilful default (general wilful default relief); and

4. relief of equitable compensation was sought as an alternative to damages in devastavit: CB 55.

47. Included within the Court Book was a form of a Fourth Further Amended Statement of Claim. On the first day of the hearing, Mr Crossland sought leave for the plaintiffs to file the Fourth Further Amended Statement of Claim in the form that is behind Tab 10 of the Court Book. The relief sought was not opposed. Subject to the document being signed by the legal representative on record and verified by the plaintiffs (which occurred) I granted such leave: T 1. That document formed the plaintiffs’ final claim for relief (final claim).

48. Importantly, for the purposes of the hearing:

1. the distribution of residue relief was abandoned;

2. the general wilful default relief was revised such that the plaintiffs:

1. still sought a declaration that John had engaged in a wilful default in his administration of the estate (wilful default declaratory relief); and

2. whilst formally seeking an account on the basis of wilful default (wilful default account relief), abandoned that relief on day 1 of the hearing – T 14);

3. the relief regarding damages in devastavit and equitable compensation was revised such that equitable compensation was no longer sought as being an alternative to damages in devastavit but rather as additional relief: CB 101.

A belated defence

49. I raised with counsel for the parties whether there was any defence to the plaintiffs’ claim based on the terms of the Will: T 3.

50. A defendant must specifically plead any matter that (a) if not pleaded specifically, may take the opposite party by surprise, or (b) the defendant alleges makes any claim, defence or other case of the opposite party not maintainable: r 14.14(2)(a),(b) UCPR.

51. John had, in prior defences, denied that he engaged in any wilful default. However, he had not previously pleaded any provision of the Will as an answer to the claims that he has committed a wilful default in his administration of the estate.

52. None of the issues in the Agreed Statement of Issues suggest that any provision of the Will was raised by John as an answer to the claims that he has committed a wilful default in his administration of the estate.

53. John had not raised in the JOS any provision of the Will as an answer to the claims that he has committed a wilful default in his administration of the estate.

54. However, John’s Defence to the final claim was amended to relevantly assert that:

1. he exercised the powers given to him under the Will – specifically referring to subclauses 11 (a), (b), (d), (h), (l) and (m) and additionally referring to s 154(1)(c) Conveyancing Act 1919 (NSW) (Conveyancing Act);

2. his conduct was at all times reasonable;

3. his conduct was at all times bona fide; and

4. at all times his exercise of discretion as executor was within the powers provided to him.

55. I note that s 154(1)(c) Conveyancing Act provides that an executor shall have and shall be deemed to have had power without the leave of a Court to lease the real estate of the deceased in possession for any term not exceeding three years.

56. On the second day of the hearing, Mr Ellison SC informed me that John had executed a Defence to the final claim and that he had provided Mr Crossland with an unexecuted copy: T 55. Eventually, it was filed without objection on the fourth day of the hearing: T 294.

The revised statement of issues

57. Pursuant to directions the parties produced an Agreed Statement of Issues in Dispute. This document was revised at the time of the hearing (Revised Statement of Issues).

58. The Revised Statement of Issues combined issues across the commission proceedings and administration proceedings.

59. There were 35 issues identified, with some of the issues additionally identifying various sub issues.

60. The issues were categorised under four headings:

1. A – issues arising from the administration proceedings;

2. B – matters to be addressed on a wilful default accounting;

3. C – other minor objections in relation to the passing of accounts; and

4. D – matters arising from the commission claim.

61. Generally speaking, the plaintiffs’ claims against John arise out of allegations that he has by delay and other actions caused waste to the estate with the result that the estate and the beneficiaries (or at least the plaintiffs) have suffered loss.

62. It is convenient to broadly describe the issues as follows on the understanding that on the plaintiffs’ case, in the event that it is found that John failed to act in accordance with his administration duties, it is alleged that there is a loss to the estate in many cases amounting to a wilful default.

63. Various issues were raised in relation to the engagement by John of Mr Batten.

64. Those issues were incorporated in a table of objections which had been directed to be provided by Hallen J, which table was amended: Tab 4, CB 72A-72C.

65. Further particularisation in relation to these items was set out in a separate table focussing upon two invoices issued by Mr Batten being invoices 1620 and 1720: CB 72D-72J.

66. In relation to the claim for commission, particular details of this appeared from a Points of Claim document filed on John’s behalf setting out reasons as to why it was said John should receive commission and calculations in respect of the quantum of such commission: CB 73-77.

67. A response to John’s Points of Claim was made on behalf of the plaintiffs by way of Points of Defence (CB 78-84) which Points of Defence were amended on the fourth day of the hearing to include particulars in relation to allegations that John breached fiduciary duties in relation to the purchase of Property 430 and otherwise abused his power as executor in respect of that.

68. It is not seriously in contest that the estate administration has not been completed. Mr Ellison SC submitted (at JOS [43]) that:

1. the estate has not been fully distributed;

2. the final distribution awaits the determination by [Revenue NSW] as to final financial stamp duty adjustment with regard to properties being received in specie by some beneficiaries pursuant to s 46 PA Act and in lieu of the entitlement to some or whole of residue; and

3. there is a minimum amount of cash currently held in the estate.

Summary of wilful default issues

69. For the purposes of addressing the claims in the proceedings I have grouped a number of the particular issues in the Revised Statement of Issues under a number of headings and I set out below a list of 15 issues which I have at least in part reordered to accord with a chronological flow of dealing with the issues.

70. The issues are:

1. Whether John’s failure to apply for probate before 3 July 2015 was an unreasonable delay: Issues 5, 32 (Delay in obtaining probate issue)?

2. Whether John failed to account for 83 IAG shares out of a total of 3459 IAG shares: Issue 19A, Item 422 at CB 72C (Missing IAG shares issue)?

3. Whether John had a duty to obtain market rent for the Arndell Park property between 11 September 2015 and 30 May 2018 with the consequence that the estate has suffered loss equal to market rent less an amount of $40,000 which John obtained for rent: Issues 1, 2, 3, 21 (Failure to rent Arndell Park property issue)?

4. Whether John’s failure to start transferring the seven properties the subject of specific gifts prior to November 2016 and failure to effect the last of the transfers until May 2017 were unreasonable delays: Issues 26, 32 (Delay in specific gift transfers issue)?

5. Whether John’s failure to appoint a selling agent for the Arndell Park property until January 2017 was an unreasonable delay prejudicing the beneficiaries: Issues 27, 32 (Delay in appointing a selling agent issue)?

6. Whether John and Martin were the ultimate purchasers of Property 430 at the time of the exchange of contracts or thereafter: Issues 5, 21 (Was John an ultimate purchaser of Property 430 issue)?

7. Whether John either by varying the contract for the sale of Property 430, or by other inaction, failed to ensure that the deposit payable in accordance with the contract was invested such that the estate suffered loss: Issues 6b, 11A, 21 (No deposit and failure to invest issue)?

8. Whether prior to completion of the sale of Property 430, John and Martin took possession of Property 430 and used it for commercial purposes without paying such funds to the estate: Issue 7, 21 (Commercial use by John and Martin issue)?

9. Whether John and Martin agreed between themselves for the completion to occur after 2 August 2018 at a “mutually convenient” time, and by delaying in serving a notice to complete in completion of the sale of Property 430 the estate has suffered loss: Issues 4, 6a, 8-11, 21, 28, 29 and 32 (Delay in completion of sale issue)?

10. Whether on the settlement of the sale of Property 430 John failed to secure proper adjustments for council and water rates and vendors fees: Issue 19A, Item 413 at CB 72B (Lack of proper settlement adjustments issue)?

11. Whether John failed to realise Telstra shares as an asset of the estate: Issues 12, 13 and 21 (Failure to realise Telstra shares issue)?

12. Whether John used estate funds to pay for renovation of David’s property: Issues 14, 15 and 21 (Use of funds to renovate David’s property issue)?

13. Whether John used estate funds to pay Mr Batten for work for John and/or Martin rather than the estate, and specifically whether Mr Batten carried out or purported to carry out legal work for the estate contrary to legislative provisions (Issues 18-19) and whether payments in relation to the following services were for John and Martin’s benefit:

1. advice in relation to the provisions or wording of a deed dated 8 November 2018 (November 2018 Deed) which was signed by the residuary beneficiaries (allegedly purely for John and Martin’s personal interest):

2. taxation advice allegedly to John and Martin in respect of the purchase of Property 430;

3. work and advice allegedly related to John and Martin in their attempts to obtain a duty exemption for the appropriation by them of Lot 8: Issues 17, 22, Amended Table–Item 749, 787, 788 and 789 relating to invoices 1620 and 1720 at CB 72A-72B, 72D-72J (Use of funds for personal interests issue)?

14. Whether John has failed to seek reimbursement from Mr Batten: Issues 18-20, 22 (Failure to seek reimbursement from Mr Batten issue)?

15. Whether John failed to take reasonable steps to ensure that Mr Batten made an application to Revenue NSW for an exemption of any duty payable by Carol and Reno in respect of the appropriation by them of Lot 111: Issues 30-32 (Failures to ensure application for duty exemption issue)?

Practical consequences of relief sought by the plaintiffs

71. I sought to clarify, in particular, the consequences of the nature of the revised relief bearing upon wilful default. Mr Crossland expressly indicated that the plaintiffs did not seek the wilful default account relief but did seek wilful default declaratory relief for the purposes of the Court ordering a monetary sum being damages and equitable compensation for whatever matters are found to be the subject of wilful default: T 14.4-37.

72. Mr Crossland did not seek any orders on behalf of the plaintiffs that the purchase of Property 430 (which was completed, but title for which has not been registered) should be set aside on any basis that John impermissibly as an executor purchased the property: T 316.

73. The conduct alleged against John (summarised above under the 15 issues) on the plaintiffs’ case, is said to have the cumulative effect that John either by delay or maladministration breached his duties as executor such that John ought to be denied his claim for commission.

71. Practically speaking, the plaintiffs’ claims of delay and maladministration are, on the plaintiffs’ case as I understood it, said to have the following general effects:

1. to justify a declaration that John has engaged in a wilful default in the administration of the estate; and

2. to justify an order for a monetary judgment against John; and

3. to defeat entirely or in part John’s claim for commission.

75. The 15 issues referable to the plaintiffs’ claims in the proceedings have different consequences in terms of declaratory relief and defeating John’s commission claim on the one hand and entitling a monetary order in favour of the estate on the other.

76. Seemingly, six of the issues were relied upon by the plaintiffs as having no specific monetary outcome but rather were relied upon as evidencing wilful default so as to ground declaratory relief and defeat John’s commission claim. These were: Issue 1 (Delay in obtaining probate issue), Issue 4 (Delay in specific gift transfers issue), Issue 5 (Delay in appointing a selling agent issue), Issue 6 (Was John an ultimate purchaser of Property 430 issue), Issue 9 (Delay in completion of sale issue) and Issue 15 (Failures to ensure timely application for duty exemption issue).

77. Potentially, the remaining nine issues also have monetary consequences.

78. I was presented with figures and or calculations by the plaintiffs in respect of only three of those issues namely, Issue 3 (Failure to rent Arndell Park property issue), Issue 7 (No deposit and failure to invest issue) and Issue 12 (Use of funds to renovate David’s property issue).

79. In relation to two of those issues, whilst I was not presented with specific calculations by the plaintiffs to support claims for damages, potentially from the evidentiary materials I could establish the monetary consequences namely, Issue 13 (Use of funds for personal interests issue) and Issue 14 (Failure to seek reimbursement from Mr Batten issue).

80. In relation to the remaining four issues, I was not provided with any calculations and the evidentiary material was not in any state that would enable me to make a calculation of a monetary consequence to the estate namely, Issue 2 (Missing IAG shares issue), Issue 8 (Commercial use by John and Martin issue), Issue 10 (Lack of proper settlement adjustments issue) and Issue 11 (Failure to realise Telstra shares issue).

81. That lack of material in relation to those issues has particular consequences in light of the relief sought. If the claim for wilful default account relief had not been abandoned potentially, I could have directed enquiry in relation to the financial consequences of breaches in respect of those items. However, in light of the abandonment of the wilful default account relief, I do not consider that I can direct such an account.

Ultimate relief sought by John

82. John’s claim on the other hand was, in essence, much simpler.

83. John denied that he had relevantly breached duties in a way that would justify a declaration that he had engaged in a wilful default.

84. Mr Ellison SC sought commission of between $400,000.00 and $500,000.00 to be awarded to John: CB 77 [21].

85. That range was supported by calculations assessing commission as an approximate guide using mid-points of percentage ranges of the value of the following categories of assets and income administered (CB 77 [19]):

1. assets realised $23,151,936.29 @ 1.125% = $260,459.28

2. assets transferred $13,254,217 @ 1.05% = $139,169.28

3. income realised $559,979.27@ 3% = $16,799.38

Total: $416,427.94

86. Generally, and subject to the terms of the Will and statutory provisions and powers, the role of an executor is to identify the assets of the estate, to take reasonable steps to get them in and to expend those assets in the due course of administration. Where a question arises as to whether or not the estate may have a cause of action to recover an asset the executor has to determine whether it is prudent for the executor, consistently with his or her executorial duties, to pursue that cause of action: Juul v Northey [2010] NSWCA 211 (Juul v Northey) at [196] per McColl JA (Basten JA – as his Honour then was – and Campbell JA agreeing) citing Gray v Guardian Trust Australia [2003] NSWSC 704 at [9] per Austin J.

87. It is in light of those basic principles and other particular principles referred to later on in the judgment that the issues fall to be considered.

Entitlement of John to commission

88. The question of what if any commission John might be entitled to in light of administration of the estate generally was particularly addressed by the parties by reference to:

1. whether the administration of the estate was complex;

2. what work or labour John did in relation to administration of the estate as distinct from work carried out by other professionals; and

3. whether any of the alleged wilful default failures (if found) justified depriving John of any commission.

Evidence

Affidavits

89. On the hearing the plaintiffs read and relied upon substantive affidavits from each of the plaintiffs Carol, Reno and Peter. There was a brief affidavit from Josephine addressing the circumstances of the auction of Property 430. Additionally, there were affidavits from a number of the plaintiffs’ solicitors being Mr Geddes, Mr Carswell-Doherty and Ms Sidey.

90. The defendant read affidavits of himself and Mr McCabe.

91. Further, Mr Batten was called in John’s case and gave oral evidence.

Documentary evidence

92. Each party, apart from affidavit evidence, adduced documentary material.

93. The documentary evidence is extensive extending to almost 1,670 pages. It includes Wills, bank account records, correspondence between the parties and their respective legal advisers and other professionals, transactional documents such as contracts for sale of properties, title searches, invoices for various matters including professional services and estate account materials prepared by Ms Fisher and John.

94. The following accounting materials were adduced disclosing the financial dealings of the estate:

1. financial statements of account prepared by Ms Fisher for the estate for the financial years from the date of death to 30 June 2015 (CB 419-426), 30 June 2016 (CB 472-480), 30 June 2017 (CB 660-668), 30 June 2018 (CB 1068-1076), 30 June 2019 (CB 1235-1243), for the six months ended 31 December 2019 (CB 1417-1425);

2. trust tax returns for the financial years ended 2017, 2018 and 2019: CB 1244-1281;

3. an account summary for the period from date of death to 8 August 2020 (listing assets – realised, transferred, realised and subsequently reinvested and unrealised; reconciliation of funds held, and listing of receipts and payments: CB 1510-1525; and

4. NAB account for the estate for the period from 26 February 2016 to 30 November 2022: CB 1644-1704.

95. The financial accounts (as distinct from the trust tax returns) for the estate for the years ended 30 June 2015 to 30 June 2019, whilst disclosing receipt of rental income, do not provide any breakdown as to which of the properties provided such rental income.

96. There were no trust tax returns adduced in evidence for the financial years for 2015 and 2016.

97. The trust tax returns for the financial years ended 30 June 2017 to 30 June 2019 contain rental schedules for various of the properties.

98. The account summary for the period from date of death to 8 August 2020 noted above included:

1. a detailed statement of receipts of the estate from the period of the date of the deceased’s death to 29 October 2021 listing 486 line items (which appears at CB 1515-1520A); and

2. a detailed statement of payments made in respect of the estate from the date of death until 6 August 2020 listing approximately 310 items (501- 810) (which appears at CB 1521-1525).

99. Ultimately, on the hearing, a revised form of account summary was provided which became Exhibit D1 comprising two volumes both of summary and supporting documentation.

Findings

100. The overwhelming form of evidence in the proceedings (other than evidence from witnesses who were called without having given affidavit evidence and cross-examination) was documentary.

101. In assessing the evidence in the proceedings, I have approached and weighed the evidence having regard to objective surrounding facts which are either undisputed or established by contemporaneous documents and the inherent probabilities of life as they bear upon the events: see e.g. In the matter of Hoju Jobs Pty Ltd [2021] NSWSC 302 per Williams J at [77] citing Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 at [15] per Gleeson CJ, Gaudron, Kirby and Hayne JJ; Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at 129 per Gleeson CJ, Gummow and Kirby JJ; Re Hillsea Pty Ltd [2019] NSWSC 1152 at [16] per Black J.

102. The facts that I set out particularly in relation to the general events in respect of administration of the estate in relation to those matters should be regarded as findings of the Court unless qualified or otherwise indicated.

103. However, in dealing with the contested issues regarding the complaints of maladministration and wilful default, I have separately addressed those issues below when addressing issues regarding the credit and reliability of the parties and various witnesses.

104. In assessing the facts, I have been mindful to not elevate to incontrovertible fact assertions in the solicitor correspondence which appear to be either an expression of opinion by the respective solicitor corresponding or instructions of the particular client. Whilst a degree of the documentary evidence contains correspondence between the respective solicitors for the parties which sets out disputed contentions, nonetheless, much of the material in the documents records, in a contemporaneous way, the occurrence of events or parties’ assertions at a particular point in time.

Mode of giving evidence in the proceedings

105. Proceedings in the Supreme Court of New South Wales are generally held in person: see e.g. Xia v Santah Pty Ltd [2003] NSWSC 807 at [9] per Palmer J. In proceedings commenced by statement of claim, subject to the rules of Court and the Evidence Act 1995 (NSW) (Evidence Act), evidence must be given orally at Court: r 31.1(2) UCPR. The Court may direct that all or any of a witness’ evidence in such a trial be given by affidavit: r 31.1(3) UCPR.

106. However, the Court may permit parties or witnesses to the proceedings to give evidence and make submissions by telephone, video link or other form of communication: r 31.3(1) UCPR.

107. Such a decision, as to whether to permit the giving of evidence and making of submissions by telephone, video link or other form of communication, is “for the management of proceedings” within the meaning of s 58 Civil Procedure Act 2005 (NSW) (CPA).

108. The Court, in deciding whether to make any order for the management of the proceedings, must seek to act in accordance with the dictates of justice: s 58(1) CPA.

109. For the purposes of determining what the dictates of justice are in a particular case, the Court must have regard to the provisions in ss 56 and 57 CPA and may have regard to the matters set out in s 58(2)(b) CPA to the extent which the Court considers them relevant.

110. Mr McCabe was overseas in Fiji and unable to attend the hearing in person. Mr Semciw was travelling between Melbourne and Sydney and likewise unable to attend the hearing in person. I indicated at the time that I would make an order formalising the giving of evidence by audio visual link.

111. That could be done by an order under r 31.3(1) UCPR or possibly by an order for the hearing of evidence pursuant to the provisions of s 5B Evidence (Audio and Audio Visual Links) Act 1998 (NSW) (Audio Visual Links Act).

112. No submissions were addressed to whether Fiji is or is not a “participating State” for the purposes of Pt 1A of the Audio Visual Links Act. I doubt that Fiji is such a “participating State” for the purposes of Pt 1A of the Audio Visual Links Act. However, for more abundant caution, I order nunc pro tunc simply pursuant to r 31.3 UCPR, that the oral evidence of Mr McCabe and Mr Semciw at the trial be by Audio Visual Link provided by the Court.

Informing witnesses of rights

113. The Evidence Act requires that if it appears to the Court that a witness or a party may have grounds for making an application or objection under a provision of Pt 3.10, the Court must satisfy itself that the witness or party is aware of the effect of that provision: s 132.

114. Section 132 imposes an obligation on a trial judge to inform a witness or party that he or she may have grounds for making an objection to giving evidence. This provision operates to ensure fairness to the witness or party who has a basis for making an objection: R v Ahmed [2001] NSWCCA 450 at [37] per Bell J (Heydon JA and Dowd J at [1], [2] agreeing).

115. The provisions of Pt 3.10 encompass various privileges including legal advice privilege (s 118), litigation privilege (s 119) as well as privilege in respect of self-incrimination: s 128.

116. Consistent with the obligation, notwithstanding that Mr Batten was represented by Senior Counsel, who made a preliminary objection to Mr Batten giving evidence, I independently had an obligation to address the issue.

117. I gave “information” to Mr Batten.

118. There was some debate as to whether there was necessity for Mr Batten to object to each and every question or whether a more global objection could be made.

119. Ms Seiden SC, who appeared for Mr Batten, submitted that the expression in s 128 “if a witness objects to giving particular evidence, or evidence on a particular matter” indicated that objection could be taken by a witness to evidence on a particular topic as distinct from evidence on a particular question. I accept that submission.

120. I note that there is support for that approach in Ollis v Melissari [2005] NSWSC 1016. Campbell J (as his Honour then was) addressed the then form of s 128 Evidence Act. His Honour expressed the view that the “particular evidence” which is referred to is not confined to particular questions as they are asked one by one. Rather, it is capable of extending to a witness expressing an unwillingness to giving evidence on particular topics: at [5]-[9].

Credit issues and inferences

Credit and reliability of the plaintiffs and their other witnesses

121. Carol was briefly cross-examined for about 20 minutes. She was questioned regarding her dissatisfaction with the terms of the deceased’s Will as regards Lot 280 and the various proceedings brought by her. She initially did not have recollection regarding the precise nature of the rectification and family provision proceedings: T 44-45. But, nonetheless, she was able to identify what she thought was the inadequacy regarding the Will: T 45.

122. She stated that she believed when her mother died that she was a co-executrix: T 45. Nonetheless, she said she took no steps herself to formalise her role as executrix and appears to have left that task to John on the basis that “John was normally in control of everything and if you went and involved yourself too much John would get very dis-happy with you”: T 48.

123. Carol indicated that she did not see the Codicil until the middle of 2015 and until that time did not know that she was not an executrix: T 48.20-49.12.

124. Carol was cross-examined regarding the reason for her delaying for a period of approximately two years from the time that she saw the Codicil and approximately 51 weeks between 15 August 2016 and 7 August 2017 before filing the revocation claim. Essentially, her explanation for the delay was that she had “read up a little bit more about dementia patients and understanding it”: T 49.

125. There was no significant challenge to Carol’s credit. I accept Carol attempted to give her evidence as best she could recall it.

126. None of Reno, Peter nor Josephine were required for cross-examination: T 50. None of the plaintiffs’ solicitors were required for cross-examination.

127. Mr Ellis, despite being a joint expert, was effectively called in the plaintiffs’ case.

128. He gave evidence and was cross-examined on the third day: T 188-218.

129. Subject to a number of amendments which he identified in relation to his report regarding the Arndell Park property, he verified the contents of both reports relating to the Arndell Park property and Property 430: T 189.

130. I was impressed by Mr Ellis as he presented as an honest witness. He appeared to me to make appropriate concessions. I address more particularly the effect of his evidence below.

Credit and reliability of John and his other witnesses

131. Each of John, Mr McCabe and Mr Batten were cross-examined.

John

132. John sought to give the impression that he was a simple man. On several occasions, he described himself as “just a turf farmer” distinguishing his occupation and expertise from that of a lawyer (T 143.40, 149.16) and a brain surgeon: T 149.16-20.

133. I pause to observe that the issue regarding John’s credit and reliability has nothing to do with academic or professional expertise and everything to do with honesty and reliability.

134. The main events which the case addresses date back over 8 years to October 2014.

135. One might expect John to have some (though not perfect) recollection of the main events bearing upon administration. Further, given the claims made against John, one might have expected him to have had at least some recollection regarding events of administration of the estate and, additionally, to have made some effort to familiarise himself with the history of what occurred during the administration of the estate.

136. John was not an impressive witness. This was evidenced in his poor recollection, his lack of willingness to accept certain matters put to him which he later essentially accepted, his reluctance to respond to some questions without first saying what he wished to say and his evasive answers.

137. Examples of John’s poor recollection included:

1. His failure to recollect when he made an application for probate of the deceased’s Will: T 101.12-19.

2. His failure to recall reasons why it took him eight months to apply for probate only initially offering that it was because of the dispute with Carol until it was pointed out to him that there were no such proceedings until after probate: T 102.11-103.33.

3. His failure to recall what happened in the eight-month period between his mother’s death and probate – several times essentially asserting that if something is in his affidavit then that is what happened: T 103.17-104.12; see also 111.7, 111.34-37, 118.8-36, 286.

138. Examples of John’s failure to initially acknowledge matters in cross-examination which he later acknowledged (or vice versa) included:

1. Initially, he denied relying upon Martin at different points in the task of administering, looking after and managing the estate: T 90.40. However, it became obvious that Martin has assisted in providing, for example, funding for estate expenses initially (a fact which John had acknowledged in his affidavit evidence) and further that he had received assistance from Martin in providing information in respect of the objection to land tax assessment: T 90.44-92.38.

2. Initially, John denied that when he became executor that Reno was relying upon the distribution of the estate’s assets to repay the loan from the estate (T 93.45-49). After some questioning on this topic, John accepted that he knew that the longer it took to distribute the specific land from the estate the more it would hurt Reno because he would have to continue paying interest on the loan: T 96.1-6.

3. His initial denial that there was family conflict from the date of his mother’s death (T 89.4-6) but then asserting that there was family conflict as a reason in response to assertion that there was nothing stopping him from October 2014 from engaging a valuer to do valuations: T 103.7-9.

4. His initial response to a question that, having received valuations in March 2015, he agreed he “must’ve sat on them” for more than two months before he made the probate application (T 105.31-33) then later denying that he had given evidence to that effect: T 110.5-42.

1. His initial acceptance that requests by Carol’s solicitor as early as 11 August 2015 for provision of documents establishing the values of real estate were never fulfilled followed by his immediate assertion that he never refused “nobody nothing” and, when pressed on it, his simple assertion “[w]ell, something’s happened”: T 113.14-45.

139. Examples of John’s reluctance to respond to some questions without first saying what he wished to say appeared early on in his cross-examination: T 107.39-42, 108.29-31.

140. Examples of John’s evasive answers included:

1. His responses in relation to provision of copies of valuations (T 115.8-11):

Q. Is that a practice you often engaged in when dealing with your solicitors, you'd receive correspondence from the other side and you'd just refuse to give or fail to give instructions about what to do?

A. I don't have much to do with solicitors.

2. His begrudging responses (see more below with respect to commission) in relation to questioning about the delay for a period of about six years in providing information to the other side regarding rental of the deceased’s properties (particularly the Arndell Park property) including (T 116.37-116.45):

Q. Do you accept that you withheld the information in relation to what you'd done in relation to renting out that property until you swore your affidavit on 18 June 2021?

A. That property was rented since mum and dad had it. It just kept going.

Q. Do you accept that you deliberately withheld that information until you swore your affidavit?

A. No.

141. I address more specifically aspects of John’s evidence which I found unsatisfactory further below, particularly in relation to the purchase of Property 430.

Mr McCabe

142. Mr McCabe, at the time of the hearing, was overseas on leave. He was cross-examined by audio visual link on the second day of the hearing: T 63-86. He had to access documents sent electronically to him.

143. He had left Turner Freeman last year and is employed elsewhere as a solicitor.

144. Mr McCabe gave his evidence in a straightforward manner. He was generally concise in giving his evidence, without embellishment.

145. He impressed me as someone who was attempting to tell the Court the truth as best that he could recollect it.

146. There was one curious aspect of Mr McCabe’s evidence which I comment on below in which he could not recall whether he took certain steps in the matter. However, I do not find that Mr McCabe’s lack of recollection was other than simple frailty of mind on the issue.

Mr Batten

147. Mr Batten did not swear an affidavit in the proceedings. He was called to give evidence. There were, nonetheless, numerous documents emanating from Mr Batten and MGS which were adduced as part of Exhibit JP1.

148. When Mr Batten was called to give evidence, he appeared represented by Ms Seiden SC and sought a certificate pursuant to s 128 Evidence Act.

149. Following submissions, I indicated that I would grant Mr Batten a certificate.

150. Mr Batten proceeded to be cross-examined.

151. I requested counsel for the parties (including Ms Seiden SC) to identify to me the relevant transcript for which a certificate would be ultimately issued for Mr Batten.

152. Mr Batten gave evidence on the fourth day of the hearing: T 243. He was examined in chief by Mr Ellison SC (T 243-251) and then cross-examined by Mr Crossland: T 251-283.

153. The context of Mr Batten giving evidence needs to be recalled. There are allegations that he was impermissibly conducting legal work.

154. My impression is that Mr Batten was understandably guarded in giving his evidence. I did not regard that as being untoward given the seriousness of the allegations made against him.

155. Making due allowance for that context, my impression is that Mr Batten otherwise gave his evidence in a straightforward manner. His responses were mostly very short.

156. At times he paused before giving responses which, again, having regard to the context, I regarded as being entirely understandable.

157. My general impression is that Mr Batten attempted to give truthful evidence so far as he could recall it.

What inference arises from the absence of evidence from Martin

158. On the second day of the hearing, in response to a question from myself, Mr Ellison SC confirmed that there were no affidavits in the proceedings from Martin: T 78.25.

159. I asked whether anything was going to be made of that to which Mr Crossland indicated that it was likely that it would, but he would need to consider his position: T 78.

160. John spoke with Martin on the telephone overnight between the second and third day of the hearing indicating that Martin called him and he took the call but did not speak with him about the case: T 157.8-22, T 157.39-40.

161. Ultimately, Mr Crossland submitted that a Jones v Dunkel inference should be drawn from the failure of Martin to give evidence in relation to the purchase of Property 430: PCS [21].

162. Mr Ellison SC submitted that the principle was not operative on the facts: T 335.3-10.

163. The rule in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 is one of commonsense reasoning. It provides that an unexplained failure by a party to call a witness may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted the case of the party who might be expected to call the witness: e.g. Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 (Ghazal) at 343C per Kirby P (Mahoney and Clarke JJA agreeing).

164. The rule has no application if the failure to call the witness is satisfactorily explained or readily understood. Usual explanations include the absence of a witness from Court and a reasonable explanation for not compelling the witness’ attendance by subpoena. However, the failure by a party to call a witness likely to be friendly to the interests of the other party has been held sufficient to entitle a Court not to draw an adverse interest from such failure: Ghazal at 343D.

165. It is clear in the proceedings that there were critical issues as to what arrangements there were between John and Martin as to the purchase of Property 430 and the payment of the deposit. It was obvious from the tenor of John’s affidavit evidence that Martin was a witness more likely to be friendly to the interests of John than to the interests of the plaintiffs.

166. It seems to me that evidence from Martin would be able to shed light on various issues in the proceedings including when he and John discussed that John would have an interest in purchasing or taking an interest in Property 430 and the terms regarding payment of the deposit in respect of that property.

167. In light of John’s lack of detail and clarity regarding what occurred in respect of his arrangements with Martin it seems to me that, potentially, Martin would have been able to shed light on those issues.

168. It is clear that John and Martin are close. Martin lives in Sydney (T 157.8) and as noted above, they spoke during the hearing. Further, no explanation was given by John or indeed any person in John’s case as to why Martin was not called. A comment made by Mr McCabe, that Martin had recently separated from his partner and was quite concerned that there would be any trace of the money attributed to him (T 83.32-38), was not made in any context providing an explanation for Martin not giving evidence in the proceedings.

169. Mr Batten was subpoenaed to give evidence in John’s case. It seems to me, similarly, that Martin could have been subpoenaed to give evidence.

170. I consider that Martin’s evidence would not have assisted John, particularly in relation to the purchase of Property 430.

171. However, I make it clear that irrespective of whatever inference might be drawn from the failure to call Martin as a witness, the findings I have made regarding John’s evidence as noted below are made without reference to any Jones v Dunkel inference.

Events

172. Because a number of the significant issues relate to complaints of delay, an assessment of any undue delay is necessarily informed by context for the steps taken. It is appropriate to record the salient administration events.

173. In particular, this is in part necessary because Mr Ellison SC refers to the rectification and family provision proceedings and the revocation proceedings as providing some explanation for John’s conduct and timing in relation to the administration of the estate.

Events following probate (August 2015)

174. On 14 August 2015, probate of the deceased’s Will and Codicil issued to John: CB 430.

175. Between 7-11 September 2015, it is evident that Ms Fisher carried out some degree of work in relation to the estate including in relation to the deceased’s superannuation: CB 432A.

176. On 30 September 2015, Mr Gough wrote to Turner Freeman raising three particular matters in respect of the estate, namely: (1) concerns in respect of the Codicil (2) an issue as to whether there had been an error in the Will regarding devising Lot 280 and (3) concern regarding failure to provide information in respect of assets not included in the inventory of property: CB 433.

177. The concern in relation to Lot 280 was that Carol (and Peter and Reno) believed that there was an error in the Will such that, while it was intended by the deceased (on Carol’s view) that Carol was to be gifted Lot 280 “with the corner block”, it was devised to her but excluding the house situated at the location. It was asserted that the house (part of Lot 1 in DP 864236) had been devised to Martin with the residue of Lot 1: CB 433.

178. On 30 September 2015, Ms Fisher rendered the first of a number of invoices in relation to her services: CB 435A.

179. On 13 October 2015, Turner Freeman responded to Mr Gough in relation to the three items raised (Codicil, Lot 280, nondisclosure of assets): CB 436.

Rectification and family provision proceedings (October 2015)

180. On 20 October 2015, Carol commenced the rectification and family provision proceedings by form of a summons: CB 439.

181. The effect of the rectification order sought was to amend the deceased’s Will to delete the reference to “known as Lot 280…” and to add the words “and part of Lot 1… (formerly Lot 280A…) known as 280…”.

182. On 20 October 2015, John and Martin, in their capacity as directors of Repat, signed a declaration in respect of the Camilleri Superannuation Fund: CB 510.

183. On 22 October 2015, there was an appearance in the District Court relating to the debt proceedings. Relevantly:

1. John was substituted as plaintiff in place of the deceased in the proceedings and orders were made for an amended statement of claim to be filed and served; and

2. it appears there were some discussions between the respective counsel who appeared with a view to attempting to try to resolve the proceedings. That did not occur at that stage. The proceedings were stood over to 17 December 2015: CB 444.

184. On 30 October 2015, Mr Gough wrote to Turner Freeman advising that his clients wished to have the opportunity to purchase the five residuary real properties: CB 447.

185. On 14 December 2015, an auditor certified that the Camilleri superannuation fund had complied with the relevant legislative requirements for superannuation funds for the financial year encompassing the deceased’s death: CB 507.

Land tax issues (December 2015-July 2015)

186. On 17 December 2015, the Office of State Revenue (OSR) issued a land tax assessment for the deceased in respect of the 2011-2015 tax years in the total sum of $334,442.75, which assessment was duly paid on 27 January 2016: CB 449.

187. The assessment details relevantly listed eleven of the twelve properties for the assessment for the 2012 tax year. The one property that was not listed was Lot 1 (the property gifted to Martin and the subject of contention by Carol). The assessment noted, at least at that stage, that three of the properties, namely, the Arndell Park property, Property 430 and Lot 77, were exempt: CB 451-452.

188. It seems that the Arndell Park property and Property 430 were exempt because the land was zoned rural or nonurban use for primary production: CB 452.

189. Lot 77 was also characterised in this way. However, one additional reason why it might be exempt is that it was the lot on which the deceased resided.

190. In January 2016, the deceased’s share of the Camilleri superannuation fund was redeemed, and the proceeds paid into the deceased’s bank account: MFI-2; CB 133 [24].

191. On 29 January 2016, Ms Fisher lodged a land tax questionnaire, advising that “all properties” were used in primary production activities and, as such, were said to be exempt from land tax: CB 640.

192. On 5 February 2016, Ms Fisher provided further information regarding land tax claiming exemption: CB 640.

193. On 26 February 2016, an NAB bank account for the estate of the deceased was opened: MFI-2; CB 133 [22]. From this time, all transactions for income and payments were, according to Ms Fisher, processed through that account: CB 640.

194. On 13 March 2016, construction work was carried out on David’s property being work renovating the laundry, painting the inside of the house and sanding and recoating all interior timber floors.

195. On 5 April 2016, Ms Fisher lodged a formal objection to the amended land tax assessment: CB 641.

196. On 11 July 2016, Ms Fisher provided further information to the OSR regarding land tax: CB 641.

197. On 5 April 2016, Carol filed a statement of claim in the rectification and family provision proceedings: CB 461.

198. On 2 May 2016, John as executor reached a settlement with Reno in relation to the debt proceedings. The settlement was formalised in a form of deed of settlement and release: see CB 471A.

199. On or about 26 June 2016, there was an unsuccessful mediation of the rectification and family provision proceedings: CB 132 [17].

200. On 30 June 2016, the estate paid the invoice from Mielen Enterprises Pty Ltd for work done on David’s property: CB 460A.

201. On or after 30 June 2016, Ms Fisher prepared estate accounts: CB 472.

202. On 27 July 2016, the OSR issued a revised land tax assessment notice for the land tax years 2011-2016 in which land tax was assessed at nil: CB 547-552.

Dismissal of rectification and family provision proceedings (August 2016)

203. On 15 August 2016, the rectification and family provision proceedings were dismissed: Galea v Camilleri [2019] NSWSC 167 (Galea v Camilleri) at [31].

Correspondence about the estate and transmission of properties (August-December 2016)

204. On 28 August 2016, Turner Freeman corresponded with Fairfax Lawyers (the latter acting for Reno) providing a copy of the grant of probate and noted that they had been instructed to prepare necessary transmission applications. The letter also noted that litigation commenced by one of the beneficiaries (Carol) had resolved and that the estate was not subject to nor on notice of any further litigation: CB 553.

205. On 28 September 2016, Turner Freeman wrote to Storey & Gough enclosing a trust account cheque in the sum of $40,000 in respect of Carol’s legal costs as agreed: CB 554. The cheque for $40,000 was signed by Maryanne, John’s wife: CB 554, 556.

206. On 20 October 2016, Mr Lewis wrote to Turner Freeman raising questions regarding the estate’s assets (NAB term deposit and WAL): CB 554.

207. In or around November 2016, transmission applications and accompanying purchaser declarations were sent to beneficiaries for executions without transmission of the properties which were the subject of specific gifts: CB 133 [27].

208. On 25 November 2016, Turner Freeman wrote to Mr Lewis enclosing a transmission application in respect of Carol’s property and addressing the issues regarding the interest-bearing term deposit, the WAL and management of the estate assets: CB 595. The letter provided an explanation regarding the signing of the cheque signed by Maryanne and noted that no further transactions would be authorised by Maryanne: CB 595.

209. On 29 November 2016, Fairfax Lawyers wrote to Turner Freeman enclosing a copy of a transmission application signed by Reno in respect of Lot 128 raising other questions regarding matters in respect of the WAL, leasing of a number of the estate properties and issues arising in respect of the deed of settlement and release between Reno and the estate: CB 597.

210. On 8 December 2016, the title to the Arndell Park property was registered in John’s name: CB 707.

211. On or prior to 13 December 2016, John signed a transmission application in respect of the residuary properties which was lodged with the Office of the Registrar General: CB 600.

Proposal to sell Arndell Park property (December 2016)

212. On 19 December 2016, Turner Freeman wrote to the beneficiaries to provide an update as to the administration of the estate and indicating that it was the intention of John to sell the Arndell Park property in priority to the other residual properties noting that, at that stage, a selling agent had not been confirmed. It was noted that the remaining (residual) properties would be sold by public auction following the sale of the Arndell Park property and that notice of such auctions would be given to the residuary beneficiaries. The letter also addressed some issues in relation to the WAL: CB 601.

213. Throughout December 2016 and into early January 2017, the signed forms of transmission applications were received from various beneficiaries to be lodged with Land and Property Information (LPI): CB 133 [28].

214. On 11 January 2017, Mr Lewis wrote to Turner Freeman responding to the 19 December 2016 letter and seeking clarification as to whether it was proposed that the Arndell Park property would be sold by public auction: CB 605.

215. By mid-January 2017, all properties which were the subject of specific gifts had been transferred to the respective beneficiaries: CB 133 [29].

Agent engaged/marketing of Arndell Park property (February 2017)

216. On 1 February 2017, Mr Semciw wrote to John thanking him for the opportunity to discuss the prospective sale of the Arndell Park property and outlining a number of matters including his proposed marketing strategy and in respect of advertising. He requested (in as many words) a copy of the proposed contract for sale: CB 607.

217. On or about 2 February 2017, Mr Semciw prepared a form of Agency Agreement which was seemingly provided to John: CB 633-634.

218. On 15 February 2017, Mr Lewis wrote to Turner Freeman reiterating his request as to whether the Arndell Park property would be sold at auction and also addressing a number of matters in respect of water rights, estate accounts and medical records for the deceased: CB 16.

219. On 28 February 2017, John signed the Exclusive Selling Agency Agreement in respect of the Arndell Park property with Mr Semciw: CB 633-634.

220. The Agency Agreement notes the agent’s estimate of the selling price as being above $16 million plus GST. The exclusive agency period was under the agreement to commence on 1 February 2017 and end at midnight on 30 November 2017: CB 633-634.

221. Shortly after John signed the Agency Agreement, Mr Semciw provided him with a form of information memorandum regarding the Arndell Park property: CB 613-632.

222. On 29 March 2017, Ms Fisher provided to the attention of the beneficiaries of the estate a report regarding financial transactions of the estate from the date of death to 31 December 2016: CB 640.

223. On 22 May 2017, Mr Lewis wrote to Turner Freeman requesting an opportunity to inspect the estate accounts: CB 642.

224. On 1 June 2017, Cutcliffe Properties provided to John an appraisal in respect of the four Londonderry residuary properties suggesting they be auctioned: CB 643.

225. On 2 June 2017, Martin signed a declaration in his capacity as a director of Repat in respect of the Camilleri Superannuation Fund: CB 530.

226. On or prior to 9 June 2017, Reno was registered as proprietor of Reno’s property (Lot 128) and the title search disclosed a mortgage to the ANZ Bank: CB 671.

227. On or about 22 June 2017, Mr Semciw provided material in respect of certain of the lots for the Arndell Park property which material, it seems, was listed either on Domain or an Allhomes website: CB 644-658.

1. Wilful default must (generally) be pleaded with particulars of the allegation of wilful default either in the pleadings or set out in a supporting affidavit or witness statement.

2. The breach of duty need not be conscious wrongdoing and wilful default is not co-extensive with breach of trust: there may be a breach of trust which is not wilful default.

3. A plaintiff must prove, inter alia, that the defendant is an accounting party, and that he, the plaintiff, is entitled to some sum from the defendant, although he is uncertain what is the quantum of that sum. He must do more than demonstrate that he might be owed some money, or that he wants to have a kind of general discovery. 

4. As such the decree for an account on the basis of wilful default is not a mere direction to inquire and report. It is a decree affirming his rights, only leaving it to be inquired into, how much is due to him from the party accounting.

5. An executor or administrator is in the position of a gratuitous bailee, who cannot be charged with the loss of his testator’s assets without wilful default.

6. Wilful default in such a context is an omission or passive breach of duty by an executor to do something which, as a prudent executor, he ought to have done – as distinct from an active breach of executorial duties, that is to say something which the executor ought not to have done.

7. Examples include: simple failure to get in an asset of the estate, sale of a trust asset at an undervalue or less than the full value of the asset and failure to obtain rent for a stranger’s occupation of a trust property.

8. To make an executor account on the footing of wilful default, the plaintiff must plead that assets might have been received but for the default of the representative and must prove at least one example of wilful default on the part of the defendant.

9. The allegation of wilful default must be made good at the hearing and cannot be left for decision at some later stage of the action.

10. The burden of proof lies on the plaintiff to adduce proper evidence to show not only such a loss, but a loss under such circumstances as to show default on the part of the executor such that but for the wilful neglect or default of the defendant, an item might have been received.

11. The executor bears an evidentiary onus in seeking to resist the finding of wilful default and, in that respect, they could seek to demonstrate action (whether by proceedings or otherwise) for the recovery of an asset would be fruitless.

12. A wilful default order requires the defendant to replenish funds wrongfully depleted by him or her and in that sense to make restitution for the benefit of the plaintiff.

13. An order that an account be taken and that the defendant pay the amount found to be due on the taking of such accounts is a final order which cannot later be varied (absent any relevant statutory provision).

14. An order merely for the taking of accounts, under which the proceedings are adjourned for further consideration will not determine the plaintiffs’ claim for relief and is an interlocutory order, which will not be a “perfect judgment” until an order that money be paid.

15. It is not open to the primary judge to review and reconsider what he had decided at the wilful default hearing.

16. Where findings may affect, even indirectly, non-parties’ interests or for the taking of an account or making of an enquiry in proceedings for administration of the estate of a deceased person, notice should be given to such a person pursuant to r 46.12 UCPR so as to permit the person to have an opportunity to intervene in the proceedings and seek to protect their interests.

17. The procedure for the removal of executors differs from that for the removal of trustees.

18. Removal of executors is achieved by the Court, in its probate jurisdiction, revoking the grant of probate upon a proper case being established. Although the “sorts of situation that can count as a ‘proper case’ are not rigidly confined” generally the Court will exercise its discretion to revoke a grant of probate if the due and proper administration of an estate has either been put in jeopardy or prevented either by reasons of acts or omissions on the part of the executor or by virtue of matters personal to the executor, for example, mental infirmity, ill health, or by virtue of the proof of other matters which established that the executor was not a fit and proper person to carry out the duties he or she had sworn to perform.

19. The Court has an inherent jurisdiction to remove a trustee where the welfare of the beneficiaries and of the trust estate requires such a remedy, a condition which is said to be satisfied where the Court considers that the continuance of the trustee in the trust would prevent its proper execution.

20. If a Court concludes that an executor has been guilty of wilful default, and that the occasion of wilful default relates to matters personal to an executor, such as where the executor owes (but denied owing) money to the estate, the executor ought to be removed from that role to ensure an independent legal personal representative can consider whether, in light of the finding, they should take proceedings to recover the funds found to be owing to the estate.

21. Any such newly appointed independent legal personal representatives would (because estate assets had not been got in) be administrators de bonis non administravit, rather than executors.

Principles regarding pausing administration pending litigation

1058. Ordinarily, if there is an issue regarding an executor dealing with assets whilst dealing with a pending family provision claim, a proposal is put forward or negotiated between the respective competing and affected parties and some acceptable regime agreed to. If there is doubt regarding what an executor may prudently do, then it is open to the executor to apply to the Court for advice or a determination regarding the matter.

1059. In In re Ralphs (deceased); Ralphs v District Bank Ltd [1968] 1 WLR 1522, Cross J, at 1525, said about trustees in a difficult position:

They should form their own view, with the assistance, of course, of their legal advisers, as to the payments which could properly be made, and if they are not prepared to make such payments on their own responsibility, they should ask the parties who might conceivably be affected ... for their consent. If such consent is not forthcoming the executors can apply for the court for leave to make the payment in question, and the court, if it thinks that any withholding of consent was unreasonable could throw the costs of the application on the party to blame.

1060. During the hearing I referred (T 310) to the decision of Young CJ in Eq (as his Honour then was) in Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305. His Honour at [16] referred to the passage of his Lordship, Cross J, above and stated that:

That passage throws up the principle that trustees cannot merely take the view that if there are contested proceedings they cannot do anything in and about the estate, particularly making any interim distributions, until all those problems are resolved. It is the duty of the trustees to direct their minds to the proper administration of the estate. Everyone knows it is difficult where there are warring members of a family who will not budge from their positions, but it needs to be done. If the trustee is to seek consent he or she has to make a decision as to what should happen and, if necessary, seek the imprimatur of the court.

The wilful default claims

1061. Mr Crossland indicated that the plaintiffs rely upon the matters set out in their Points of Defence document: POS [75] (especially at [22]). I note that the Point of Defence document was subsequently amended, and leave given for it to be filed in Court on 23 February 2023.

1062. The amendment related to issues regarding the auction of Property 430 essentially to the effect that:

1. John did not inform beneficiaries until 18 June 2018 that an auction of Property 430 would be held on 21 June 2018;

2. John reached an agreement with Martin that if he was the successful bidder at the auction they would treat the bid as a bid also made on behalf of John or, alternatively, John promised Martin prior to the auction that if Martin was the successful bidder he would not have to pay a deposit but he did not make an equivalent promise to the other beneficiaries, with the consequence that Carol and Reno, believing that they would have to pay a deposit if they were the successful bidders, did not attend the auction: [22(n)].

1063. I have considered the terms of the Amended Points of Defence. I do not propose to recite in detail the various defences which run to 7.5 pages.

1064. In substance, the defences are:

1. the complaints raised against John identified within the issues listed in this judgment, with the effect that John delayed in his administration of the estate and preferred his own interests over those of beneficiaries; and

2. the fact that much of the work carried out by John involved assistance from professionals with minimal or no particular work carried out by him – in particular, disputing that John regularly consulted with such professionals.

1065. Mr Crossland especially relied upon two instances of John’s conduct as giving rise to wilful defaults.

1066. First, he submitted that failure to obtain rent or commercial or non-nominal rent for estate property is an instance of wilful default: Bartlett v Barclays Bank Trust Co Ltd (No 2) [1980] Ch 515 at 546 per Brightman LJ: POS [50]-[51].

1067. Secondly, he submitted that John’s conduct in relation to the purchase of Property 430 constituted a wilful default, and that an executor who purchases a portion of the trust estate at auction (without any entitlement to do so) may be disentitled to commission (citing In the Will of James Greer at 23 per Street J) a fortiori where, as here, the executor is an undisclosed purchaser of Property 430: POS [61], [74(b)], [76].

Defendant’s submissions as to commission

1068. John’s affidavit evidence acknowledged that the process of lodging and proceeding with the objection to the land tax assessment delayed the administration of the estate. However, he claimed that this resulted in a very favourable outcome for the beneficiaries: CB 135 [38].

1069. Mr Ellison SC submitted that a comparison of the Points of Claim filed 18 May 2022 by John and the Points of Defence filed 19 May 2022 by the plaintiffs shows that, save for the quantum of commission and the matters raised in paragraph 22 of the Points of Defence, there appears to be no dispute the executor is entitled to commission “presumably, significant”: JOS [23].

1070. Mr Ellison SC accepted that in respect of the claim for commission, John acknowledges a percentage may be inappropriate given the rise in real property values significantly inflating the value of the estate and in circumstances where it was events generally outside of the control of the executor which caused the significant rise: JOS [24].

1071. In summary, Mr Ellison SC submitted on John’s behalf (JOS [26], [50]-[55]) that the administration of the deceased’s estate has been complex, time-consuming and has taken a significant emotional toll on John (CB 77 [20]):

1. It is eight and a half years since the death of the deceased (October 2014).

2. It is seven and a half years since probate was granted (October 2015).

3. The deceased held significant and detailed real and personal property.

4. The defendant has successfully defended two proceedings brought by Carol and other plaintiffs.

5. The defendant is defending the current proceedings for well over 3 years.

6. The defendant has had to arrange the sale of five parcels of realty and the deceased’s water licence: CB 136-137.

7. The defendant has dealt with the OSR for land tax and a Trustee Act, s 46 Application and the ATO with regard to CGT: CB 977, 1367, 1379.

8. The initial land tax assessment of $334,000 (CB 546) was reduced to $164,000 and then to a nil assessment with the assistance of Ms Fisher: CB 134 [33]-[39], 1582.

9. The ATO provided a favourable private ruling with regard to CGT: CB 1399.

10. Transmission applications with regard to devises to specific beneficiaries were provided in November 2016 and by various dates in 2017, all realty had been transferred.

11. There were interim distributions of capital to each (residuary) beneficiary as follows:

1. April 2018 – $7,900 (CB 1345 ff);

2. July 2018 – $2.5 million (CB 1351 ff);

3. September 2019 – $500,000; and

4. January 2021 – $200,000.

12. The defendant successfully continued and concluded proceedings commenced by the deceased against Reno for recovery of a large debt: CB 366, 380.

13. It was entirely appropriate and necessary for John to engage professionals, the failure to engage those professionals bearing in mind the need to sell valuable realty and obtain land tax and CGT rulings would have been negligent. Whilst professional tasks were left to those professionals, John nevertheless had to give continuing instructions over a number of years and make many administrative decisions.

14. Whilst there was some minimal delay in transferring properties, the claims by Carol (and others) and especially her family provision claim justified a delay in transferring any asset in circumstances where any entitlement of any beneficiary could have been at risk by a successful family provision claim which would have been directed to a rearrangement of any part or parts of the deceased’s estate.

15. Whilst the second litigation only dealt with the effect of the codicil (which removed Carol as a co-executor), the first litigation involving both family provision and rectification concluded in August 2016. The transferring of the specific devises commenced in November 2016 and concluded within months.

16. In respect of the whole of the administration of the estate and in respect of each beneficiary, there is no evidence any delay (however brief or lengthy) caused any prejudice.

Plaintiffs’ submissions

1072. The plaintiffs object to John receiving any commission whatsoever: POS [5]. In any event, Mr Crossland submitted that John as executor has no entitlement to commission and that the grant and quantum of commission is in the discretion of the Court: POS [73].

1073. In substance, he submitted that by reason of John’s wilful defaults, John was disentitled to commission. The claims in relation to wilful defaults essentially related to each of the above-mentioned issues.

Determination

1074. I have accepted that in relation to a number of claims there are breaches of duty by John.

1075. Whilst, as I have noted, Mr Crossland asserted that all of the wilful default claims bore upon John’s claim to commission, the two particular matters that he identified as breaches which could critically underpin a denial of any claim by John to commission were in relation to the Arndell Park property and Property 430.

1076. In relation to the claims by the plaintiffs regarding the Arndell Park property, I am not persuaded that there was a breach by John regarding rental of the Arndell Park property in the manner suggested by the plaintiffs. However, I consider there was delay by John for a period of about three months (mid-August 2018 to mid-December 2016) in considering and taking any steps to obtain a market rate of rent for the Arndell Park property: Issue 3.

1077. In relation to the claims regarding Property 430, there were and are critical breaches by John. Specifically:

1. The taking of an interest in Property 430 that way was a breach by John of his duties as executor. There was no informed consent, at least of the plaintiffs, to John taking that interest: Issue 6.

2. Further, the failure to invest the sum of $300,000 as a deposit was a breach by John of his executorial duties: Issue 7.

3. There was delay in completing the purchase of Property 430 and an agreement between Martin and John to reschedule settlement to timing after stamp duty advice was received. The consequential delay on the part of John amounts to a wilful default: Issue 9.

1078. The lack of proper settlement adjustments was irregular: Issue 10.

1079. The eight-month delay between 18 December 2018 and the lodgement on 15 August 2019 in John taking steps to ensure that Mr Batten made an application to obtain concessional stamp duty on the part of the plaintiffs in relation to Lots 111 and 112 is delay which was beyond what might be regarded as reasonable: Issue 15.

1080. On the other issues, in summary, I have found that:

1. There was no significantly undue delay by John: (a) in applying for and obtaining the grant of probate: Issue 1; (b) not arranging for transfer of the specifically gifted properties earlier than he did: Issue 4; and (c) in relation to not appointing the selling agent earlier than he did: Issue 5.

2. Whilst there is an explanation as to what occurred in relation to the IAG and Telstra shares, there is, in my view: (a) no satisfactory explanation for the delay by John of almost 5 years in arranging for sale of the IAG shares: Issue 2; and (b) prima facie loss to the estate by the delayed sale of Telstra shares: Issue 11.

3. I am not persuaded that there were unaccounted profits or impermissible commercial gain from use of Property 430 by John and Martin: Issue 8.

4. I am not positively satisfied that no adjustment has been made for $13,097 paid by the estate in relation to renovation work on David’s property: Issue 12.

5. I am not persuaded that the claims made by the plaintiffs against John in respect of Mr Batten’s invoices establish any relevant default such as would impact upon John’s claim for commission: Issues 13 and 14.

1081. No detailed submissions were directed by Mr Ellison SC to guiding the Court in assessing how, if I found any breaches by John, such breaches should moderate the amount of commission claimed.

1082. In some respects, the forensic battle between the parties consisted of assertions by John to be awarded the commission claimed and assertions by the plaintiffs as to awarding no commission at all.

1083. John accepted that there is nothing about the land tax objection application that delayed his rights to sell the Arndell Park property and Property 430 and that he could have sold those properties at any time after he became executor: T 120.9-21.

1084. John understood from 2014 that his siblings were waiting for their distribution from the estate and did not want delays: T 88.49-89.2.

1085. John accepted that he knew that it would be a “bad thing” for him to prefer his interests in the estate over those of the other beneficiaries although he denied that he had so preferred his interests: T 93.16-26.

1086. There were serious breaches by John. It appeared evident, despite John’s begrudging willingness to accept it, that requests from Carol’s solicitors on 11 August 2015 (CB 429) to be provided with details of rentals in respect of the deceased’s properties were not effectively answered until almost 6 years later, and the first time John provided any details regarding the tenancy of the Arndell Park property was in his seventh affidavit dated 18 June 2021 (CB 246-247): T 115.13-116.45.

1087. My assessment of the matter is that the default by John in relation to Property 430 is very significant.

1088. I agree with the submission of Mr Crossland that John’s conduct in relation to Property 430, in particular, in the lack of transparency regarding his involvement in obtaining an interest and lack of consent from the plaintiffs in obtaining any such interest are of a graver nature than those which presented themselves in In the Will of James Greer, in which commission was denied.

1089. I accept that the Arndell Park property was successfully sold for a substantial price and that there was some degree of “pain and trouble” in John dealing with Carol’s claims in the rectification and family provision proceedings and revocation proceedings.

1090. However, John was considerably assisted by professionals in the administration of the estate. John acknowledges: the assistance he received from Ms Fisher, at least initially, in ascertaining and calculating the nature of the value of the deceased estate’s (CB 130 [10]); Ms Fisher’s assistance with Mr Batten in handling all of the accounting and tax affairs of the estate (CB 182 [13]) and their assistance in finalising those affairs and preparing accounts: CB 183 [24]-[26].

1081. Overall, my assessment is that John’s conduct of the administration of the estate was unnecessarily prolonged in the respects that I have indicated and gave rise to some degree of loss (albeit mostly unquantified) in other respects that I have indicated.

1082. I consider that John’s lack of transparency in his failure essentially up to the time of the hearing to not disclose his interest in Property 430 and failure to seek any informed consent to obtain such an interest was a breach of his duty. The breach was further compounded by the failure to invest the deposit and delay in completing settlement of the sale, to suit his own interests.

1083. No submission was put that a power under the Will permitted John to purchase or otherwise obtain an ownership interest in Property 430.

1084. John’s conduct in becoming a purchaser or otherwise obtaining an ownership interest in Property 430 was sufficiently grave as to go to the core of his duties and reveals a disdain for the role and office.

1085. I consider that, having regard to those matters and the other defaults that I have found, John so materially failed the standard that no commission ought to be awarded.

Conclusion

1096. I find that the plaintiffs’ case of default by John is made out in some material respects but not in all respects. I reject John’s claim for commission.

1097. I direct the parties to bring in short minutes of order to give effect to these reasons for judgment.

1098. In bringing in short minutes of order the parties should include orders regarding proposed cost orders and provide any evidence regarding costs and brief submissions (no more than five pages) addressing costs.

1099. The orders of the Court are:

1. Direct the parties to submit agreed short minutes of order to give effect to the reasons for judgment, including as to costs, or if there is no agreement between them, their respective draft orders, submissions (not exceeding five pages) and any affidavits by 4:00 PM on 29 March 2023.

2. Adjourn the proceedings to 9:30 AM on 30 March 2023 or such other time as may be arranged with my Associate.

**********

Amendments

18 April 2023 - [5] – change “final day of hearing” to “final day of the hearing”

[16(2)] – change “in Supreme Court” to “in the Supreme Court”

[16(6)] – change “8 August 2020” to “31 March 2022”

[40] – change “23,439,896” to “23,479,896”

[42] – indentation amended

[70(4)] – change “affect” to “effect”

[78] – change “John’s property” to “David’s property”

[101] – change “at [15] Gleeson CJ” to “at [15] per Gleeson CJ”

[111] – insert space between “r” and “31.3(1) UCPR”

[238] – change “$60 million” to “16 million”

[241] – add comma after “Further”

[248(1)] – change "$50 million" to "$15 million"

[248(2)] – change "$40 million" to "$14 million"

[291] – change "$50 million" to "$15 million"

[343] – change “issue 13” to “Issue 13”

[362] – change “are set out” to “as set out”

[375] – change “do not wish to speak to Mr Batten” to “did not wish to speak to Mr Batten”

[405] – change “of an immediate update regarding at” to “of an immediate update regarding it”

[410] – change “improvements shut such as” to “improvements such as”

[411] – change “concrete service” to “concrete surface”

[431] – change “cited” to “sighted”

[448] – change “Ultimately there were two issues” to “Ultimately, there were two issues”

[509] – change “The plaintiffs written closing submissions” to “The plaintiffs’ written closing submissions”

[514(2)] – change “as an asset of the deceased estate” to “as an asset of the deceased’s estate”

[514(3)] – change “an asset of the deceased estate” to “an asset of the deceased’s estate”

[547] – change “Beasley P” to “Beazley P”

[575] – change “once were sold” to “once it was sold”

[585] – change “considered it, seems to me” to “considered it, it seems to me”

[591] – change “However use” to “However, use”

[616] – change “was to precisely” to “as to precisely”

[616] – change “appointment I have” to “appointment, I have”

[618] – change “became either a purchaser or having some interest” to “became either a purchaser or a person with some interest”

[631] – change “further lacked less than fully frank disclosure” to “further lacked fully frank disclosure”

[650] – change “”send an email to let the beneficiaries know that (T” to “”send an email to let the beneficiaries know that” (T”

[650] – change “44) later altered” to “44) but later altered”

[650] – change “to send it to”: T” to “to send it to: T”

[656] – change “on use of the word” to “on his use of the word”

[662] – change “75.32-34” to “75.32-34.”

[663] – change “that was the handwriting” “that it was the handwriting”

[680] – change “on that date CB 1134” to “on that date: CB 1134”

[755] – change “didn’t” to “did not”

[755] – change “: : T 180.35-.181.T 181.8-.33” to “T 180.35-181.6, 181.8-33.”

[757] – change “Cleary” to “Clearly”

[791] – change “$500” to “$500,000”

[806] – change “state” to “the estate”

[824] – change “to a wilful default. I was not” to “to a wilful default I was not

[825] – change “On 30 June 2016” to “On 30 June 2016,”

[855] – change “cl” to “reg”

[869(3)] – change “(Cl 10)” to “(clause 10)”

[870(2)] - change “he would require” to “he will require”

[870(2)] – change “2109” to “1209”

[915] – change “the clients” to “their clients”

[927] – change “his clients” to “their clients”

[931(2)] – change “the provision valuations” to “the provision of valuations”

[941] – change “items” to “item”

[984] – change “Issue 13 and the events” to “Issue 13 the events”

[989] – change “the November 2018,” to “the November 2018 Deed,”

[1013] – change “8 August 2020” to “31 March 2022”

[1032] – change “at 362-363” to “at 362-363.”

[1042] – change “affecting” to “effecting”

[1054(1)] – change “the administration, (i.e.” to “the administration (i.e.”

[1061] – change “plaintiffs’” to “plaintiffs”

[1062(2)] – change “pay deposit” “pay a deposit”

[1071(12)] – change “Successfully continuing and concluding proceedings” to “The defendant successfully continued and concluded proceedings”

[1071(15)] – change “transfer of the specific devices” to “transfer of the specific devises”

[1072] – change “grant in quantum” to “grant and quantum”

[1086] – change “later John provided any details” to “later, and the first time John provided any details”

[1094] – change “reveal” to “reveals”

Decision last updated: 18 April 2023