Kaljo v Mitchell

[2025] NSWSC 404

Supreme Court

New South Wales

Medium Neutral Citation:

Kaljo v Mitchell [2025] NSWSC 404

Hearing dates:

In Chambers

Date of orders:

29 April 2025

Decision date:

29 April 2025

Jurisdiction:

Equity - Probate List

Before:

Slattery J

Decision:

Independent administrator appointed. Each party order to bear his and her own costs.

Catchwords:

SUCCESSION — Executors and administrators — Rights, powers and duties – Competition to represent Estate – Financial interests of parties in maintaining litigation.

SUCCESSION – Competing Wills – Appointment of Independent Administrator.

CIVIL PROCEDURE – Simultaneous proceedings – Where litigant seeks for matters to be heard separately – Order for matters to be heard together.

MORTGAGES AND SECURITIES – Interests of creditors – Where creditor provides reverse mortgage facilities – Where value of the estate property has significantly increased since deceased entered into reverse mortgage.

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Probate and Administration Act 1898 (NSW)

Cases Cited:

Ainsworth v Criminal Justice Commission (Qld) (1992) 175 CLR 564

Catholic Metropolitan Cemeteries Trust v Attorney General of New South Wales [2024] NSWCA 30

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41

Jurak v Latham [2023] NSWSC 1318

Leung v Fordyce [2019] NSWSC 18

McArthur v Janssen [2024] WASCA 15

Midgley v Midgley [1893] 3 Ch 282

Oil Basins Ltd v The Commonwealth (1993) 178 CLR 643

Re Atkinson (Dec'd) [1971] VR 612

Re Burbidge (No 2) (Unreported, SC(NSW), Young J, 25 June 1993)

Russian Commercial & Industrial Bank v British Bank for Foreign Trade [1921] 2 AC 438

Spillane v Hall [2013] NSWSC 229

Szlazko v Travini [2004] NSWSC 610

Texts Cited:

Dal Pont, Law of Succession, 3rd ed., 2021.

J. Heydon, M. Leeming and P. Turner, Meagher, Gummow & Lehane's Equity Doctrines & Remedies, 5th ed., 2015.

Category:

Procedural rulings

Parties:

Terese Marie Kaljo (Plaintiff)
Trent Mitchell (Defendant)

Representation:

Counsel:
D C Price (Plaintiff)
J Brown (Defendant)

Solicitors:
Andrew Loel, Toomey Pegg, Solicitors (Plaintiff)

Adrian Corbould, Turnbull Hill Lawyers (Defendant)

File Number(s):

2023/464008

Publication restriction:

N/A

JUDGMENT

1. Marie Elizabeth Campbell died on 1 July 2022 survived by her daughter, Therese Marie Kaljo and two other children. Ms Kaljo seeks probate of the last will executed by her mother, the deceased, on 29 April 2022, being proceedings 2022/346585 (“the probate proceedings”). That will gave the whole of the deceased’s estate to Ms Kaljo and her siblings.

2. Ms Kaljo joined Mr Trent Mitchell as the defendant in the probate proceedings. Mr Mitchell is a grandnephew of the deceased and a residuary beneficiary under an earlier will of the deceased, executed on 7 April 2020. Mr Mitchell Cross-Claims in the probate proceedings for a grant of letters of administration with the 2020 will annexed.

3. Mr Mitchell, who takes no benefit under the 2022 will, alleges that the deceased lacked testamentary capacity, when she executed the 2022 will. Ms Kaljo claims that the deceased had sufficient testamentary capacity to make the 2022 will. She says that the deceased did not know and approve the contents of the 2020 will, which was procured by Mr Mitchell’s undue influence.

4. Ms Kaljo has commenced related proceedings in Equity, proceedings 2023/464008, (“the trust proceedings”). In the trust proceedings Ms Kaljo seeks declaratory relief that the principal asset in the name of the deceased at the time of her death, a house in Double Bay, was held on trust for herself and her two siblings. The trust is claimed to arise from an agreement settling contested divorce proceedings in this Court between the deceased and her former husband, Aldur, the father of Ms Kaljo and her two siblings, Phillip and Richard. Mr Mitchell disputes that any trust for Ms Kaljo and her siblings was created under the settlement agreement and says that the Double Bay property is beneficially owned by the estate.

5. The trust proceedings and the probate proceedings are now being case managed together in the probate list. The immediate issue which arises for determination is raised by competing motions brought by Ms Kaljo and Mr Mitchell is how the estate will be represented in the trust proceedings and the probate proceedings. The background to these motions is that if Ms Kaljo is successful in the trust proceedings, the estate will be insolvent, and the probate proceedings will lack utility.

6. In the probate proceedings Ms Kaljo and Mr Mitchell represent competing interests: she is propounding 2022 will and he the 2020 will. But the estate is not presently represented in the trust proceedings. Ms Kaljo and Mr Mitchell agree that the estate should be represented to contest the trust proceedings, but they cannot agree upon who should provide the representation and on what terms.

7. Mr Mitchell only has a contingent interest in the estate, which arises if his Cross-Claim succeeds in establishing the validity of the 2020 will. He has no interest in funding the defence of the trust proceedings, if he were to fail in the probate proceedings and the 2022 will were to be admitted to probate. But he does have an interest in the trust proceedings being defended to protect his position pending his possible success on the Cross-Claim in the probate proceedings. He proposes that he be appointed to defend the trust proceedings but on terms that he be indemnified out of the estate up to a budgetary limit.

8. Ms Kaljo has no interest in the trust proceedings being defended. She cannot defend them herself. She is on the other side of the Court record. She says that Mr Mitchell is the proper contradictor of her claim in the trust proceedings. She submits that if he does not wish to defend the proceedings at his own expense then an independent administrator should be appointed to take judicial advice in the first instance as to whether the trust proceedings should be defended. She says that the trust proceedings present a strong case against the estate and that the independent administrator should not take an active role to defend the proceedings at the expense of the estate. Ms Kaljo is concerned if Mr Mitchell were to be appointed to defend the trust proceedings the estate assets are at risk of being wasted on an unnecessary defence.

9. Two motions filed in the probate list raise these matters for consideration. Pursuant to orders made by the Court on 26 April 2024:

1. Ms Kaljo filed a motion on 10 May 2024 seeking the appointment of an independent administrator to represent the interests of the deceased’s estate; and

2. Mr Mitchell filed a notice of motion on 10 May 2024 seeking to have the proceedings struck out, or in the alternative, that he be appointed administrator of the estate pendente lite upon terms that he obtains judicial advice as to whether he is entitled to defend the proceedings.

10. The matter was argued on various occasions in the second half of 2024 during the probate list and final written submissions lodged on 10 December 2024, when the matter was referred for consideration in chambers.

11. Mr DC Price of counsel instructed by Andrew Loel of Toomey Pegg, Solicitors, appeared for the Ms Kaljo. Mr J Brown of counsel instructed by Adrian Corbould of Turnbull Hill appeared for Mr Mitchell.

The Estate of Marie Elizabeth Campbell

12. The deceased swore an affidavit on 29 August 1996 during litigation in which she was involved. That affidavit revealed some of the history set out here. The Court also has before it the affidavits of Ms Kaljo, her brother Richard Kaljo (her brother Philip died in 2018), and Mr Mitchell. Those affidavits have not been tested and are not yet the subject of findings of fact. Some of their contents are set out here to provide background as to the case that will be presented at the hearing of the probate and trust proceedings.

13. The deceased married Aldur Kaljo on 26 June 1953. Their marriage was dissolved by orders of this Court on 9 May 1974 after an acrimonious separation in 1972. The records of this Court show that for many years after those orders the deceased and her former husband were actively engaged in litigation against one another.

14. Mr Kaljo was required by the 9 May 1974 orders (a) to purchase a house for the deceased to live in, and (b) after 5 November 1984, to sell the house and divide the proceeds among their children.

15. After further conflict about these property orders the deceased and Mr Kaljo agreed by deed on 29 December 1978 to acquire a property in the name of family friends, which would be held by them on trust for the deceased for life with the remainder interest going to the children. The deceased then purchased the Double Bay property.

16. Ms Kaljo says that she and her husband assisted in renovating the Double Bay property.

17. In 1994 Ms Kaljo says the deceased agreed with her children to vary the structure agreed in December 1978 deed. She says that the children relinquished their remainder interest in the Double Bay property in exchange for the deceased’s promise to leave the property to them in her will. That is the trust on which Ms Kaljo now sues.

18. Mr Mitchell claims a close relationship with the deceased and places a different construction on these events. He says that the deceased said to him when she was getting remarried to Mr Campbell, that she wanted the security of a home. He says that the deceased had told him that one of her children, Phillip (now deceased), had asked for money from her and for her to buy out his interest. Even if this is correct, the 29 August 1996 affidavit offers support for the inference that the deceased promised to give the Double Bay property to her children in her will as Mr Kaljo claims.

19. Ms Kaljo says that although she was somewhat reluctant to agree to this, she did it to support her mother on her mother’s impending marriage to her second husband, Mr Ken Campbell in December 1994 and because it would make no practical difference as the deceased would be occupying and using the Double Bay property during her lifetime.

20. Aldur died shortly after Mr Campbell and the deceased married. The deceased commenced family provision proceedings against Aldur’s substantial estate in 1996. Ms Kaljo, Mr Richard Kaljo and Mr Kevin Faggotter, were the executors of Aldur’s estate and became the defendants in those proceedings, which were settled for a payment of $300,000 to the deceased. The 29 August 1996 affidavit was sworn in support of the application for approval of release of the deceased’s rights against the estate in the family provision proceedings.

21. In about July 2020 Ms Kaljo became aware from her mother that with the assistance of Mr Mitchell she had entered what Ms Kaljo thought was a reverse mortgage with HomeSafe Solutions Pty Limited (“Homesafe”). Ms Kaljo initially thought that this was so that the deceased would have some “pocket money”. The deceased explained little of this transaction to her daughter at the time, but this did not worry Ms Kaljo greatly, because Ms Kaljo thought that it only involved a small amount of money.

22. But after the death of the deceased, Ms Kaljo says that she discovered that the deceased had entered a contract for the sale of an interest in the Double Bay property on 27 July 2018 to Homesafe. The contract records that the deceased agreed to sell 28.19276% of the deceased’s interest in the Double Bay property for $702,391 with a remaining balance of $1.00 payable on the date of completion. The completion date was defined under the contract as being 12 months after the grant of probate or letters of administration, or on another date in certain circumstances.

23. Ms Kaljo points to unusual aspects of this contract. The deceased’s acceptance form signed on 7 June 2018 records email address for the deceased that she had never used but which belongs to Mr Mitchell. And Ms Kaljo’s opinion is that the acceptance form is not in her mother’s handwriting and that it incorrectly refers to Mr Mitchell as her mother’s nephew, not her grandnephew.

24. Mr Mitchell says that the HomeSafe transaction followed an earlier reverse mortgage that the deceased had taken out in 2012 to finance a divorce from her second husband, Mr Campbell. Mr Mitchell says that he and his mother, the deceased’s niece, had drawn the opportunity of the HomeSafe mortgage to the deceased’s attention but that the deceased obtained independent legal advice from a solicitor, Mr Peter White, before entering the HomeSafe transaction. He says that the deceased spoke to him about her financial transactions, including this one because she trusted him, and she appointed him as her attorney in 2014.

25. Ms Kaljo gained access to the 29 August 1996 affidavit after she had commenced the probate proceedings. After initially seeking to amend the statement of claim in the probate proceedings, guidance by Lindsay J at a listing hearing on 8 December 2023 led to Ms Kaljo commencing the trust proceedings on 22 December 2023.

26. In late 2024 the legal representatives of Mr Mitchell issued subpoenas with the Court’s leave to several persons. These included Mr Richard Glover, a now retired solicitor, who had acted for Ms Kaljo in the family provision proceedings brought by her mother against her father’s estate, the surviving trustee of the 1978 trust and various other lawyers who had acted on the transactions described above. Issues of the adequacy of production in answer to these subpoenas are not yet resolved.

The Homesafe Solutions Pty Limited Claim

27. The present proceedings are complicated by a claim now threatened by Homesafe against the estate. Homesafe has communicated that it may commence proceedings for the appointment of an administrator pendente lite of the estate under Probate and Administration Act1898, s 73 (“PAA Act”) with a view ultimately to realising the Double Bay property.

28. As the narrative above explains, Homesafe claims that the deceased entered a contract for the sale of the Double Bay property on 27 July 2018. It claims that under the contract the deceased agreed to sell 28.19276% of the deceased’s interest in the Double Bay property for $702,391 with a remaining balance of $1.00 payable on the date of completion. The completion date was defined under the contract as being 12 months after the grant of probate or letters of administration, or other date in certain circumstances.

29. The purchase price under the contract implies valuation of the whole property of $2,491,387. This is significantly below the present market value of the property which reasonably current online property searches conducted by the parties indicate may potentially attract a market price of over $5 million. Homesafe holds first mortgage security over the Double Bay property to secure its financial interest in the contract. After the death of the deceased, Homesafe sent notices of its claim under the contract to Ms Kaljo.

30. Ms Kaljo says that she is not fully cognisant of the circumstances of the deceased’s execution of the 2018 contract with Homesafe. Her affidavit suggests that there may perhaps be grounds for a later challenge to the Homesafe contract, as it is not clear on her version that the deceased had the benefit of independent legal advice in full appreciation of her financial circumstances or that she controlled and fully benefited from the $702,391 said to be derived from the transaction. Although Mr Mitchell provides a competing account which may perhaps put some of these concerns to rest. Some work would need to be done to establish objectively that this transaction was a provident one from deceased’s perspective.

The Parties’ Submissions

31. Each of the parties advanced thorough submissions.

32. Mr Mitchell's submissions. Mr Mitchell submits that Ms Kaljo’s claim in the trust proceedings should presently be dismissed as against him, as he is not the proper defendant. He also submits that the probate proceedings should be resolved first, because he may only arguable be the proper defendant to those proceedings if he is successful in the probate proceedings and he is granted administration of the estate with the 2020 will annexed.

33. Mr Mitchell has no interest under the 2022 will and presently has no established legal or equitable interest in the estate of the deceased. He submits that but for Ms Kaljo’s commencement of the probate proceedings, he would only have been partially burdened with indemnifying the costs of the executor of the 2020 will in defending the estate of the deceased against Ms Kaljo’s claim in equity.

34. As Ms Kaljo is executor under both the 2020 will and the 2022 will, should the probate proceedings be decided adversely to her she would still be able to administer the estate under the prior will.

35. Mr Mitchell proposes a practical solution in conformity with what he says is the objects of Civil Procedure Act 2005, s 56. He submits the plaintiff needs a someone to defend the trust proceedings and the estate needs to be protected from her claim in the trust proceedings unless overwhelming evidence or judicial advice indicates that the proceedings should not be defended.

36. He submits that the deceased’s 29 August 1996 affidavit does not provide overwhelming evidence in Ms Kaljo’s favour in the trust proceedings. He says that, rather than establishing a trust, the affidavit raises issues whether the trust alleged and dealings prior to it “were procured by fraud”. He submits that the 29 August 1996 affidavit was sworn in proceedings in which the plaintiff took up the role of executor and defendant in family provision proceedings brought by the deceased against the estate of her former husband Aldur. He submits that the 29 August 1996 affidavit is consistent with or shows: (a) the deceased minimising her assets to advantage her family provision claim, (b) the deceased still regarding the Double Bay property as her primary ownership asset, (c) dealings in which Ms Kaljo releases rights to the Double Bay property, and (d) a prenuptial agreement between the deceased and her then new husband to ensure that he did not receive the Double Bay property.

37. Not all these contentions are consistent with one another but some of the issues they raise may have some possible foundation in the 29 August 1996 affidavit and the evidentiary materials to which it refers.

38. Added to these matters Mr Mitchell submits that the same solicitor acted in the various family law disputes resulting in the purchase of the Double Bay property for the deceased, drafted the 2022 will, acted for Ms Kaljo in filing the probate proceedings and acted for both Ms Kaljo and her father on several legal transactions that would have given that solicitor close knowledge of the beneficial ownership of the Double Bay property.

39. This background leads Mr Mitchell to submit that it would be unconscionable for him to be appointed as a defendant in the trust proceedings without also being given a limited special grant, indemnified by the estate and provided with specific powers to investigate the various proceedings referred to in the 29 August 1996 affidavit, including looking at the proceedings in which it was sworn, uplifting relevant Court records, issuing subpoenas, interviewing legal practitioners involved in the proceedings where files no longer exist, and selling the Double Bay property to fund their costs.

40. If an independent administrator were to be appointed, that administrator would require a special limited grant with equivalent powers to those identified above, to investigate what is submitted to be a tenuous claim by the plaintiff in the trust proceedings.

41. Mr Mitchell submits that had the plaintiff not brought the trust proceedings the present contest could have awaited the outcome of the probate proceedings and that is what should occur now. But he also submits that if the Court requires the proceedings to be defended now before the probate proceedings are resolved then either Mr Mitchell or an independent administrator should be appointed with full indemnities to ensure that the claim in the trust proceedings is properly defended.

31. Ms Kaljo’s submissions. Ms Kaljo submits that it is first necessary to ascertain the proper contradictor in the trust proceedings, and that should be a person with a true interest in opposing the declaration being made: Ainsworth v Criminal Justice Commission (Qld) (1992) 175 CLR 564 at 581-2. 3.3. A party has a true interest in opposing a declaration if the matter is of real importance to the party: Russian Commercial & Industrial Bank v British Bank for Foreign Trade [1921] 2 AC 438 at 448. 3.4. The requirement of a contradictor is satisfied if there is a party that has a true interest in opposing the declaratory relief claimed, even if that party does not actually oppose the relief being granted: Oil Basins Ltd v The Commonwealth (1993) 178 CLR 643 at 649 650 (Dawson J); Catholic Metropolitan Cemeteries Trust v Attorney General of New South Wales [2024] NSWCA 30 at [26].

32. Ms Kaljo submits that Mr Mitchell contention that he is not a proper defendant in the trust proceedings because he does not have a grant of representation in respect of the deceased's estate and because he is not named in the 2022 will is misconceived.

33. She submits that Mr Mitchell has a real interest in whether the Double Bay property forms part of the Deceased's estate. Mr Mitchell propounds the 2020 will under which he claims he would receive one-third of the her estate. If the Double Bay property does not form part of her estate, the estate will be insolvent, and any interest of Mr Mitchell will be of no value.

34. Ms Kaljo also submits that Mr Mitchell's contention that the estate must oppose the plaintiff's claim in the trust proceedings is wrong for five reasons:

1. The estate does not have a beneficial interest in the Double Bay property. The estate’s only interest is for its assets to be ascertained.

2. A requirement to defend the plaintiffs’ claim would prefer the interests of the defendant over the plaintiff.

3. Third, the legal personal representative of an estate must ascertain the estate's assets: Dal Pont, Law of Succession, 3rd ed., 2021, [12.12]. Only after the assets are identified, does the obligation to collect them arise.

4. The representative of an estate is not obliged to defend all claims against the estate and should not "unthinkingly defend a claim" but should first assess its legitimacy claim before taking steps to defend it: Leung v Fordyce [2019] NSWSC 18 at [89] Kunc J. Only claims that lack legitimacy or which are defensible that the representative of an estate must defend: Midgley v Midgley [1893] 3 Ch 282 at 299; McArthur v Janssen [2024] WASCA 15 at [171].

5. The representative of an estate is not obliged to spend their own funds in defending claims. Where there are no estate assets to fund proceedings, the representative of an estate is not obliged to conduct proceedings in the absence of an indemnity from the beneficiary: Re Atkinson (Dec'd) [1971] VR 612 at 616; Spillane v Hall [2013] NSWSC 229 at 22 per Sackar J citing Re Burbidge (No 2) (Unreported, SC(NSW), Young J, 25 June 1993).

46. As Ms Kaljo's claim is based upon the deceased's affidavit sworn 29 August 1996, it cannot be said that the trust proceedings lack legitimacy. Mr Mitchell has not put any material or otherwise raised any basis to identify a defence to the claim.

47. Without an obligation to defend the proceedings the interests of the deceased's estate are to avoid the unnecessary incurring of costs: Szlazko v Travini [2004] NSWSC 610; Jurak v Latham [2023] NSWSC 1318. This is particularly so when Mr Mitchell is the only person who would benefit from that defence.

48. No person other than Mr Mitchell has an interest adverse to the relief sought in the trust proceedings. Mr Mitchell is, therefore, properly named as a defendant in the trust proceedings.

49. Ms Kaljo accepts an order should be made appointing a representative of the estate. She submits that representative should be added as a party to the trust proceedings, so the estate is bound by the Court's determination as to whether the Double Bay property is held on trust for Ms Kaljo and her siblings or is an asset of the estate. Ms Kaljo submits that a representative of the estate should, in the circumstances, file a submitting appearance.

50. Finally, Ms Kaljo submits that Mr Mitchell should not have an indemnity for his legal costs out of the estate. She submits that he representative of a deceased estate is subject to fiduciary duties because such a person acts on behalf of those entitled to the estate: Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96-97; J. Heydon, M. Leeming and P. Turner, Meagher, Gummow & Lehane's Equity Doctrines & Remedies, 5th ed., 2015, [5-005].

51. Ms Kaljo submits that fundamental problems would arise if Mr Mitchell were appointed to represent the estate. She submits that the appointment: (1) would create a conflict with the representative’s obligations not to prefer his own interests and to act impartially between beneficiaries, and (2) would confer a personal benefit on Mr Mitchell at the expense of the estate, namely the estate would pay Mr Mitchell’s costs in pursuing his personal interests.

52. As a corollary, Ms Kaljo submits it is not appropriate for the representative of the estate to be required to litigate Mr Mitchell's opposition to the trust proceedings. Ms Kaljo also submits that the trust proceedings should be heard before the probate proceedings to serve the statutory directive in Civil Procedure Act 2005 s 56. She says the trust proceedings are likely to be heard and determined far more quickly than the probate proceedings and one outcome of the trust proceedings will make the probate proceedings unnecessary.

53. Finally, Ms Kaljo submits the Court should dismiss Mr Mitchell’s motion and make the orders sought on her motion.

Consideration

54. The first question is the structure of the proceedings. The parties have put submissions predicated upon the assumption that the trust proceedings or the probate proceedings will be heard first. The Court does not accept Ms Kaljo’s submission that the trust proceedings are straightforward and less complex than the probate proceedings, such that the trust proceedings will inevitably be determined quickly and the probate proceedings lengthier, so the trust proceedings could be determined first. Nor does the Court accept that the probate proceedings should be determined first.

55. The matters raised by Mr Mitchell portend the potential for an active contest in the trust proceedings as to whether the Double Bay property is held on trust for Ms Kaljo and her siblings. Although the documentary evidence based on the 29 August 1996 affidavit supports Ms Kaljo’s case in the trust proceedings the challenges to that case cannot be dismissed.

56. Questions of knowledge and approval of the 2022 will and alleged undue influence in relation to that will, are likely to bring into play contests about the relationships of Ms Kaljo, Mr Richard Kaljo and Mr Mitchell with the deceased. The examination of these relationships in the probate proceedings will overlap with the transactions and discussions surrounding the 1996 family provision proceedings brought by the deceased against Aldur’s estate and the restructuring of the family law settlement between the deceased and Aldur. This common history also provides a foundation for assessing the credibility of the parties’ competing versions of conversations with the deceased and with one another in the 2010s.

57. It is undesirable that such overlapping factual matters be determined in two separate proceedings. The probate and trust proceedings should be heard together. Accelerating the trust proceedings is uncertain and is likely to duplicate fact-finding across two hearings. And whichever hearing were to go first, the outcome may make the other hearing unnecessary.

58. The next question is should Mr Mitchell remain as a defendant in the trust proceedings. In the Court’s opinion he should not be left to defend the trust proceedings from his own pocket. Whilst he has a contingent interest in defending the trust proceedings, he should not be required to subsidise the preservation of estate assets out of his own pocket. Looked at objectively, the defence of the trust proceedings (if they should be defended) is action to preserve the estate, so that it is available for distribution after the probate contest. If the person claiming as plaintiff in the trust proceedings was not Ms Kaljo, there would be little question that the estate should be defended from its own resources. Joining Mr Mitchell as a defendant in the trust proceedings and requiring him to defend them from his own resources unfairly shifts the burden of preserving estate assets onto him personally. The fact that he may have a contingent interest in defending the estate does not change this. He should therefore be removed as a personal defendant.

59. The next question is who should represent the estate. Both parties agree that the estate should be represented. Mr Mitchell seeks a limited grant of administration himself, or in the alternative a grant to an independent administrator after he is removed as a defendant in his personal capacity. Ms Kaljo seeks the appointment of an independent administrator.

60. A salient feature of this case is the strong distrust between the parties. There may be some economic advantages in appointing Mr Mitchell as administrator of the estate to defend the trust proceedings because of the preliminary work that he has already done in formulating a defence to the trust proceedings. But Ms Kaljo fears that he would misuse estate assets to unreasonably attempt to thwart the claim against the estate in the trust proceedings. The advantages of appointing Mr Mitchell are relatively fleeting, because his work can be made available to an independent administrator. These advantages are outweighed by the need for confidence in the proper administration of the estate.

61. The Court will appoint an independent administrator to take judicial advice as to whether the trust proceedings should be defended and if that advice is to defend them, then to undertake that defence in a joint hearing of the trust and probate proceedings. The parties should each provide the names of two potential independent administrators to the Court so the Court does not know which administrator has been nominated by which party and the Court will select an administrator from among the nominees.

62. Mr Mitchell submits, correctly, that Homesafe should not be appointed interim administrator. Mr Mitchell contends that Homesafe should not be appointed because it seeks to realise the main asset of the estate, the Double Bay property, “significantly below market value” before the proceedings are determined and before Mr Mitchell himself fully understands the contract between the deceased and Homesafe.

63. Mr Mitchell submits that the way Ms Kaljo has handled Homesafe’s claim also adds to the reasons why she should not be appointed as administrator of the estate. Mr Mitchell says that Ms Kaljo has known about Homesafe’s claim since the time of her mother’s death and has not brought it to the attention of the Court, until Homesafe threatened to commence proceedings to enforce its contract with the deceased. The Court does not accept that Mr Mitchell’s characterisation of Ms Kaljo’s conduct in relation to Homesafe is correct but the issue is now irrelevant.

64. The Court has dealt with Homesafe's claim by indicating to the parties that if Homesafe seeks to enforce its mortgage that any such proceedings can be joined with the trust proceedings and the probate proceedings.

65. Finally, Homesafe's interim position is secure and predictable. It is in no danger of loss of its maintainable equity in the Double Bay property. Any costs of the trust and probate proceedings will not come out of its share of the Double Bay property. These proceedings are being actively case managed towards a conclusion after which Homesafe will be able to realise any equity it can establish in the property. But until these proceedings are resolved it is unclear who will be the co-owner with Homesafe and therefore Homesafe's counterparty in any negotiations about the property. Therefore, Homesafe will need to await the outcome of these proceedings.

66. It may be that upon the resolution of these proceedings either the estate or Ms Kaljo may also wish to consider a challenge to Homesafe's 2018 contract with the deceased. But that challenge cannot yet take place. The best the Court can do in the circumstances is to progress these proceedings and keep Homesafe informed of their progress. The directions made below provide for that to occur.

Conclusions and Orders

67. This leads to the remaining issues of costs. In the Court’s view, subject to further submissions, the allocation of the costs of the present motions should be that the parties should bear their own costs. If any party disagrees with that outcome, that party can apply to argue question of costs at its own risk as to costs.

68. For these reasons Court makes the following orders on the motions. The Court:

1. ORDERS that Mr Trent Mitchell be removed as defendant in proceedings number 2023/464008 and that in his place an independent administrator be appointed.

2. DIRECTS the parties either to agree upon an independent administrator or to provide the names of independent administrators to the chambers of the probate list shows within seven days in accordance with the reasons, on a blind basis.

3. ORDERS that proceedings number 2022/346585 be heard together with proceedings number 2023/464008 and that evidence in one will be evidence in the other.

4. ORDERS that each party bear his and her own costs of this application, but should a different cost outcome be sought an application should be made to the chambers of the probate judge within 14 days.

5. DIRECTS that the parties provide a copy of these reasons and of future orders made in these proceedings to Homesafe Solutions Pty Limited, which will be at liberty to attend and be heard at future directions hearings without having to commence proceedings.

6. GRANTS liberty to apply.

**********

Decision last updated: 29 April 2025