Grant v Grant; Grant v Grant (No. 6)

[2022] NSWSC 714

Supreme Court

New South Wales

Medium Neutral Citation:

Grant v Grant; Grant v Grant (No. 6) [2022] NSWSC 714

Hearing dates:

14 September 2022 and 25 October 2022

Date of orders:

28 October 2022

Decision date:

28 October 2022

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Additional specified lump sum costs order made in respect of the plaintiff’s costs up to 10 June 2022. Equitable compensation awarded in favour of the estate against the second defendant in the sum of $83,200 in respect of the occupation of estate property. Judgment for other expenses given. Directions made for the calculation of interest.

Catchwords:

COSTS – gross sum costs order – Civil Procedure Act 2005, s 98(4)(c) – specified gross sum costs orders already made in long running and strongly contested proceedings among family members in relation to the estate of a deceased parent – specified gross sum costs order already made in respect of period up to 4 April 2022 not quantified – additional claim for a specified gross sum instead of assessed costs in respect of the period 4 April 2022 to 10 June 2022 and quantification – whether additional specified gross sum costs orders should be made.

EQUITABLE COMPENSATION – constructive trusts – calculation of quantum of equitable compensation – finding that property held on constructive trust for the benefit of an elderly person and after his death his estate – property transferred into the name of the second defendant during the deceased’s lifetime and Court determines that the second defendant holds the property on constructive trust for the elderly plaintiff and later his estate – second defendant grants life estate of the property to the first defendant – first defendant occupies the property – what measure of equitable compensation should be paid for depriving the deceased and his estate of the use of the property – calculation of the quantum of appropriate equitable compensation.

CIVIL PROCEDURE – stay of proceedings – judgment entered in favour of the plaintiff in respect of costs and equitable compensation – plaintiff is a special administrator of the estate of the deceased – plaintiff is named executor in the last will of the deceased in 2018 – second defendant is beneficiary under prior will in 2012 – second defendant seeks stay of judgment for costs and equitable compensation – whether a stay should be granted pending determination of related probate proceedings challenging the 2018 will and seeking to propound for admission to probate the 2012 will.

Legislation Cited:

Civil Procedure Act 2005, s 98(4)(c)

Cases Cited:

Grant v Grant [2021] NSWCA 181

Grant v Grant; Grant v Grant (No 2) [2020] NSWSC 1288

Grant v Grant; Grant v Grant (No 3) [2021] NSWSC 1

Grant v Grant; Grant v Grant (No. 4) [2022] NSWSC 106

Grant v Grant; Grant v Grant (No. 5) [2022] NSWSC 773

Category:

Consequential orders

Parties:

In proceedings 2017/316190 ("the estate recovery proceedings"):

Representative of the Estate of Alan Grant: Seth Grant
First Defendant: Nerez Grant
Second Defendant: Kashaya Grant

In proceedings 2018/139174 (“the family provision proceedings”):

Plaintiff: Nerez Grant
Executor of Gwynneth Grant’s estate: Seth Grant

Representation:

Counsel: L. Ellison SC for the executor: Seth Grant

Solicitors:
For the Estate in the Estate Recovery proceedings and for Gwynneth Grant’s Estate in the Family Provision Proceedings: Chantelle Tabone, Teece Hodgson & Ward Solicitors

First Defendant in both the Estate Recovery and Family Provision proceedings: in person
Second Defendant in the Estate Recovery proceedings: in person

File Number(s):

2017/00316190; 2018/00139174

Publication restriction:

No

Judgment

1. This is the Court’s sixth judgment in these twin proceedings concerning the Grant family. The two proceedings have been referred to in all previous judgments as the “estate recovery” proceedings and the “family provision” proceedings. This judgment adopts the same terminology and should be read together with the Court’s earlier judgments. Events, matters and persons are referred to in this judgment in the same way as the previous judgments.

2. The Court’s fourth judgment, Grant v Grant; Grant v Grant (No. 4) [2022] NSWSC 106 sets out the background to the earlier judgments of the Court. In summary the Court’s second judgment contains the principal findings and conclusions in the action, disposing of both the estate proceedings and the family provision proceedings: Grant v Grant; Grant v Grant (No. 2) [2020] NSWSC 1288. This was followed by a judgment awarding indemnity costs in both proceedings to the successful plaintiff, Seth Grant, the legal representative of the estate of the late Dr Alan Grant: Grant v Grant; Grant v Grant (No. 3) [2021] NSWSC 1. The unsuccessful defendants at trial, Nerez Grant and Kashaya Williams, appealed against these judgments, but their appeals were dismissed: Grant v Grant [2021] NSWCA 181.

3. The fourth judgment dealt with a contest concerning consequential orders in the estate recovery proceedings. It resulted in the Court making orders in relation to the administration of the estate generally, including the appointment of Seth Grant as a special administrator of the estate, the appointment of a special administrator of the estate in relation to the Killcare property, the sale of the Killcare property, and orders for the the administration of the proceeds of sale of the Killcare property: Grant v Grant; Grant v Grant (No. 4) [2022] NSWSC 106.

4. Orders for the possession of the Killcare property were made in the fourth judgment in favour of the special administrator of the Killcare property. A writ for possession of the Killcare property was issued and it was sold after the fourth judgment. And the proceeds of sale have been paid by the special administrator in relation to the Killcare property to the special administrator of the estate. Some minor aspects of the accounting between the Killcare special administrator and the special administrator are dealt with below.

5. The Court’s fifth judgment considered an application by the special administrator for orders under the Civil Procedure Act 2005, s 98(4)(c) (“the CP Act”) for a specified gross sum instead of assessed costs in both the estate recovery proceedings and the family provision proceedings: Grant v Grant; Grant v Grant (No. 5) [2022] NSWSC 773. In the fifth judgment, which was given at the conclusion of the hearing on 10 June 2022, the Court indicated it would make an order under CP Act, s 98(4)(c) in favour of the plaintiff against the second defendant Ms Williams (the first defendant Ms Grant then being bankrupt) in the estate recovery proceedings up to 4 April 2022, directed the calculation of the correct amount for the entry of judgment in accordance with the reasons in the fifth judgment, ordered Ms Williams to pay the plaintiff’s costs of the CP Act, s 98(4)(c) application, reserved for further consideration the making of the CP Act, s 98(4)(c) application in respect of costs incurred after 4 April 2022, and made directions in relation to an anticipated contest between the parties about the potential earnings of the Killcare property prior to the plaintiff taking possession of it. The Court adjourned the proceedings for an in person hearing on 14 September 2022.

6. After the fifth judgment both parties provided materials to the Court in relation to contested issues of equitable compensation for the defendants depriving the plaintiff of the use of the property. And the plaintiff provided calculation of the appropriate quantum of the CP Act, s 98(4)(c) order made with the fifth judgment.

7. An in-person hearing occurred on 14 September 2022. But it emerged that the parties wanted an opportunity to put on additional evidence which the Court gave. The matter returned to Court on 25 October 2022.

8. This sixth judgment considers three matters:

1. The estate’s application for a CP Act, s 98(4)(c) order for costs incurred after 4 April 2022 and up to 10 June 2022;

2. Calculation of the correct quantum of equitable compensation for depriving the plaintiff of the Killcare property; and

3. Consideration of the second defendant’s stay application.

9. Each of these issues will be dealt with in turn. These reasons also enter judgment after the calculation of previous CP Act, s 98(4)(c) orders.

(a) Specified Gross Sum Costs Orders – 4 April to 10 June 2022

10. The Court’s fifth judgment considered an affidavit of the plaintiff sworn on 4 April 2022 in support of gross sum costs orders, the contents of this affidavit were summarised in the estate’s written submissions of 20 May 2022. The Court extracted this summary of the costs, before the application of any discounts, and set it out in in the Court’s fifth judgment in respect of the estate recovery proceedings (at [23]), and in respect of the family provision proceedings (at [24]). As appears from the fifth judgment, in respect of the estate recovery proceedings the overall total of the costs up to the date of the plaintiff’s affidavit on 4 April 2022 was $580,334.82 and the total for the family provision proceedings up to that date was $182,281.49.

11. In the Court’s fifth judgment the Court indicated it would in fixing a CP Act, s 98(4)(c) order allow to 100 per cent of counsel’s fees and other disbursements and 95 per cent of solicitor’s costs in respect of the costs claimed in the plaintiff’s affidavit of 4 April 2022.

12. The Court then directed the solicitors for the estate to calculate the correct amount for the entry of judgment for the estate’s costs as at 10 June 2022 in accordance with the discounts directed in the fifth judgment. The plaintiff’s solicitors did that by submitting another affidavit of 24 June 2022, which was read in the proceedings. This affidavit undertook a calculation of legal fees up to 4 April 2022, discounted in accordance with the reasoning and orders of the fifth judgment: fifth judgment orders at [38](1).

13. In addition the plaintiff’s affidavit of 24 June 2022 adduced evidence of the estate’s costs in the estate recovery proceedings between 4 April 2022 and 10 June 2022.

14. The plaintiff’s costs up to and including 4 April 2022 of the estate recovery proceedings and the the appeal proceedings, discounted in accordance with the fifth judgment are $567,165.45. In relation to the family provision proceedings the plaintiff’s affidavit of 24 June 2022 shows that the total costs discounted in accordance with the fifth judgment, which would have been payable by Ms Nerez Grant but for her bankruptcy, was $175,198.09. But because of Ms Grant’s bankruptcy the Court cannot take a step against her in these proceedings by making a declaration to that effect.

15. In his 24 June 2022 affidavit the plaintiff explained that since the swearing of his 4 April 2022 affidavit he became aware that one disbursement, an invoice of $1,155, properly belonged to the family provision proceedings but had been calculated by mistake as part of the estate recovery proceedings. The final figures above include an adjustment, removing that amount as a costs liability from the estate recovery proceedings into the family provision proceedings.

16. The plaintiff’s affidavit of 24 June 2022 gives evidence of the estate’s costs from 4 April 2022 to 20 June 2022, excluding an invoice for the rental of the Killcare property, which is not a cost of the proceedings but of the rental of the property. The total costs incurred including disbursements for the period are $14,371. Discounted in accordance with the 10 June 2022 orders produces a final figure for this period of $14,092.45.

17. In the orders of the Court’s fifth judgment (at [38](4)) the Court noted that the plaintiff should be fully compensated in the estate recovery proceedings by Ms Williams for the costs of bringing the application under CP Act, s 98(4)(c). The Court indicated that subject to the receipt of appropriate affidavit evidence in support by 24 June 2022 the Court would consider making a CP Act, s 98(4)(c) order like that in respect of costs up to 4 April 2022. The Court sees no reason why that order should not be made in similar terms for the same reasons that it was made up to 4 June 2022. The evidence presented to the Court in respect of the later period is of a similar character to that presented in respect of the earlier period and the circumstances are comparable, so it is appropriate to make the same order.

18. Therefore, the total order for costs that should be made under CP Act, s 98(4)(c) against Ms Williams, the second defendant, up to 10 June 2022 is $581,257.90 (being $567,165.45 + $14,092.45). The Court will enter judgment for the sum of $581,257.90 in respect of costs of the proceedings up to 10 June 2022.

19. Mr Ellison SC on behalf of the estate abandoned any claim for costs between 10 June 2022 and the hearing on 25 October 2022. This represented a reasonable approach to prevent the proceedings having to come back again with a supplementary affidavit, bringing costs up to date and thereby incurring further costs.

(b) Equitable Compensation for the Defendants’ Occupation of the Killcare Property

20. The estate claims equitable compensation for being deprived of the use of the Killcare property. The basic facts surrounding the defendants’ legal ownership of the property are not in dispute. Ms Nerez Grant deposed that she commenced living in the Killcare property in January 2014. Ms Grant transferred the house to Ms Williams and was granted a life interest by Ms Williams on 29 September 2017. This is the date from which the plaintiff claims compensation for Ms Nerez Grant’s use of the Killcare property, that is from 29 September 2017 until the estate regained possession of it on 10 April 2022.

21. The estate has produced expert evidence dated 8 December 2021 about the rental income for this period from Kathy Baker, a real estate agent of Belle Property Killcare. The Court is prepared to receive appraisal evidence on such an issue and indicated it would do so on both sides. Ms Williams did not file any expert evidence in response to the leave to adduce this evidence. The Court accepts the appraisal evidence of Ms Baker. She says that the Killcare property was suitable for permanent rental as a whole house for $1,000 per week or as holiday rental at $650 per night for the whole property. She says the house is approved as a single house and not as a dual occupancy, so it needs to be let as one property for insurance to be valid. This is sufficient material for the Court to act on.

22. Ms Williams asserts that dual occupancy of both the main house and the annex of the Killcare property was permissible. The Court will not accept that assertion without evidence. The Court gave Ms Williams an opportunity to adduce expert evidence to assist her case and she has not adduced expert evidence to underpin that contention. The only direct evidence the Court has on the issue is that of Ms Baker and the Court accepts it.

23. Both Kashaya Williams and Nerez Grant provided affidavit evidence in relation to occupation of the Killcare property, initially each by affidavit dated 6 May 2022 and a supplementary affidavit of Kashaya Williams of 28 September 2022, all of which were read in the proceedings. Seth Grant’s evidence was provided by affidavit on 14 July 2022. Ms Grant provided evidence that the rental income she received between November 2019 and her departure from the premises was $47,851.46, which minus expenses incurred, left only a net balance of income of $6,468.99. Expenses included cleaning, laundry, electricity, garden maintenance, electrical repairs, refrigerator repairs and other similar expenses for renting out the property as an Airbnb rental. But the difficulty with this evidence is that despite multiple attempts to seek the production of documents from Nerez Grant to justify these expenses and this income, nothing was produced. She has given no account of any monies received by way of rental and no other account of any expenses incurred by way of rental. She says that she rented the property out as an Airbnb opportunity. Seth Grant’s affidavit certainly indicates that it was advertised on that basis and it is likely that she did.

24. Initially the Court was inclined to give the plaintiffs an account of profits in respect of rent actually received by Ms Grant, less expenses, but the evidence of Ms Grant is so unreliable and so unsupported by documents that that course is not open. For the Court to attempt to ascertain the actual expenses that Ms Grant incurred would be to engage in an exercise of sheer speculation, based upon the unsubstantiated assertions that she has advanced.

25. Ms Williams’ affidavit has thrown no further light upon the issue. Ms Williams did not visit there after 2017 as she says more than “half a dozen times”. The Court accepts Ms Williams that it was her mother, Ms Grant, who organised and managed all the rentals.

26. In these circumstances the appropriate course is to give the estate the only compensation which is realistically available, that is compensation for being deprived of the use of the property by Nerez Grant’s occupation. The evidence set out earlier in this section gives the financial basis for that.

27. The Court can only assess equitable compensation for deprivation of this property on a broad-brush basis, taking into account the relevant factors as best the Court can. A beachside property such as the Killcare property could not have been easily rented all year round. The Covid 19 pandemic hit in March 2020 and continued right up until the time that Ms Grant left the property, substantially interfering with the rental it would have earned. A calculation should be in respect of the whole property. There would have been expenses of rental involved as well that would have to be deducted. The period of rental is from December 2017 to April 2020 is four and a half years. Doing the best it can the Court will allow rental compensation for two years only for this period, which is at the figure estimated by Belle Property. This takes into account all the factors above, except for expenses. The Court will discount the $1,000 per week by 20 per cent to $800 per week over the two year period being allowed, on account of expenses and to take account that the sum is an average taken over a five year term. Thus the damages will be $800 over 104 weeks, namely $83,200. An interest calculation on that figure, given the way it has been estimated, is not feasible and will not be allowed.

28. The estate sought reimbursement of various amounts paid by the Killcare property special administrator. The Court is prepared to make orders of that character. To assist the Court, if a specific order is proposed by the estate it should be provided to the Court for consideration for the making of orders in chambers.

(c) Second Defendant’s Stay Application

29. In the expectation that the Court might soon enter judgment against her, the second defendant, Ms Williams, attempted to file a motion staying all judgments and orders that might be made against her in the estate recovery proceedings. The Court did not require her to file a motion but allowed her to move orally for the stay orders that she foreshadowed. The orders that she sought was that any judgment against her in the estate recovery proceedings be stayed until the outcome of probate proceedings she has commenced in this Court in relation to the estate of her late grandfather, in proceedings 2021/00339080 Kashaya Williams v Seth Grant (“the probate proceedings”). Ms Williams argued that the Court should stay the judgment that is to be entered today, because she may be successful in the probate proceedings and may derive benefits from Dr Grant’s estate, which she could offset against the estate’s judgment against her in these proceedings.

30. Hallen J is case managing the probate proceedings in the Court’s Probate List. By her Statement of Claim in the probate proceedings Ms Williams, as plaintiff, seeks declarations that the document purporting to be the will of Dr Alan Grant dated 1 May 2018 is not valid and a further declaration that the will of Dr Grant dated 10 July 2012 is a valid will of Dr Grant. The probate proceedings seek a grant of probate of the 2012 will of Dr Grant to Miles Alan Leon Grant in solemn form, the named executor of the will. At a directions hearing held in these proceedings a legal representative of Miles Grant indicated to this Court that his client was renouncing any role as executor under that will, and wished to take no further part in the probate proceedings.

29. The 2012 will gave the deceased’s estate to Nerez Grant, Kashaya Williams and Miles Grant in equal shares. It made no provision for Seth Grant or any of Dr Grant’s other children. Although the figures are not precise the net value of the estate is probably in the order of $2.5 million. For present purposes it is not necessary further to discuss the 2012 will or the 2018 will. The circumstances of the execution of those wills, to the extent they are presently known, are discussed in the Court’s second judgment.

30. The present issue is as to whether the Court’s judgments today for should be stayed. The Court is of the view that a stay should not be granted for the following reasons.

31. First, on the evidence before this Court at the time of the first hearing, there is little compelling reason to impugn the 2018 will. At the time of its second judgment the Court was able to consider many of the circumstances surrounding the execution of the 2018 will and made several observations in the second judgment about those circumstances, including that some evidence cast doubt upon the late Dr Grant’s capacity, yet other evidence showed he was improving considerably in the Montana nursing home: second judgment at [254] to [262]. In the second judgment the Court was not making findings about the validity of the will: second judgment at [260]. But here Ms Williams has not made an evidence-based case in support of the motion based in expert or other evidence which would indicate any real doubt surrounding the capacity of the deceased to execute the 2018 will or that he lacked the knowledge and approval to do so.

32. On her application for a stay Ms Williams described her case to be presented in the probate proceedings at the level of mere assertion. It is not at all clear on the evidence what material is being advanced in a case to persuade the Court that the 2018 will should be set aside. The Court is not inclined to grant a stay based upon contentions that do not really elaborate whether there is any serious challenge to the validity of the 2018 will, based in admissible evidence.

33. Second, Ms Williams has incurred a liability to the estate as a knowing participant in a dishonest scheme to deprive the deceased and then the estate of its most substantial asset, the Killcare property: second judgment at [361] – [374]. The estate has been seriously depleted because of her conduct and that of others and has only been kept afloat for the conduct of these proceedings by reason of loans made to the estate by the present plaintiff, Seth Grant. Moreover, the estate has present liabilities to Seth Grant, which need to be paid and which have been outstanding throughout the life of this litigation. Balancing the prospects of a speculative setoff of Ms Williams’ possible entitlements under the 2012 will (only after successfully challenging the 2018 will) against present pressing liabilities of the estate, which have been incurred to neutralise the costs of the defendant’s own knowing participation in dishonest conduct, the Court is not moved to grant a stay to Ms Williams and will decline her oral application.

34. Third, the probate judge may be able to consider a more formal application by Ms Williams based upon the evidence proposed to be advanced in the probate proceedings. If there is such evidence available in the probate proceedings the Court does not want to disadvantage Ms Williams from ultimately arguing for a stay.

35. The matter is to be listed before the probate judge on 12 November 2022. The course the Court will take therefore is to grant a temporary stay for 28 days from the judgments above to enable Ms Williams to take such further course as she wishes. But by taking this course the Court should not be taken as indicating any view about what course the probate judge should take about such a motion. This order has merely been made to hold the position so that Ms Williams has not been denied the opportunity of taking that course.

Conclusion and Orders

38. This should be the last occasion on which I need to deal with issues in this case. It is appropriate therefore that I consider what if any further action should be taken in relation to the Court’s findings of misconduct against Nerez Grant and Ms Williams in the second judgment. Seth Grant has also provided to the Court a list of possible acts of contempt of court that he requests the Court to consider with a view to referral to the Prothonotary for further investigation.

39. The Court will consider these matters in chambers and when it takes further action upon them it will inform parties of that action.

40. If there is any calculation error detected in the Court’s judgments here the Court will grant liberty to apply for 21 days to correct any errors found that need to be adjusted.

41. For these reasons the Court will make the following orders:

1. For the purposes of these orders, proceedings number 2017/316190 are referred to as “the estate recovery proceedings”, proceedings number 2018/139174 are referred to as “the family provision proceedings”;

2. Enter judgment in the estate recovery proceedings against the second defendant, Kashaya Williams:

1. for the estate’s costs up to 10 June 2022 in the sum of $581,257.90; and

2. for equitable compensation for deprivation of the Killcare property in the sum of $83,200.

3. Stay the judgments in Order 2 for 28 days from today;

4. Grant liberty to apply for 21 days in respect of any adjustments to the Courts calculations in this judgment.

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Decision last updated: 28 October 2022