Re Estate Charell, deceased

[2021] NSWSC 591

Supreme Court

New South Wales

Medium Neutral Citation:

Re Estate Charell, deceased [2021] NSWSC 591

Hearing dates:

27, 28 and 29 April 2021

Decision date:

26 May 2021

Jurisdiction:

Equity - Probate List

Before:

Lindsay J

Decision:

(1) The deceased’s will dated 20 July 2005 was valid and, accordingly, the grant of probate made to the defendant in common form on 9 January 2018 should not be revoked but, rather, endorsed as a grant in solemn form.

(2) The defendant should bear liability for the whole of the sum of $304,590.71 paid out for a discharge of the mortgage on the title to the Simpson Street property at the time of its sale on 10 May 2018, as a consequence of which she must reimburse the estate of the deceased the sum of $253,825.59 paid out of the estate’s share of the sale proceeds.

(3) Liability for the sum of $262,000 paid out of the proceeds of sale to obtain a discharge of an equitable charge protected by a caveat on the title to the property should be borne (as it has been) by the estate and the defendant in the same proportions as their ownership interests in the property.

(4) The defendant is not required to account for the sum of $27,160.29 received in 2016 as an insurance payout for storm damage to the property.

(5) The defendant’s net rental receipts for letting out that part of the property formerly occupied by the deceased (in the total sum of $72,272.44) for the period between September 2016 and 10 May 2018 – that is, for the period before the deceased’s death on 28 August 2017 as well as for the period after her death – should be accounted for in the same proportions as the ownership interests of the deceased and the defendant.

(6) Questions about whether any (and, if so, what) formal orders are to be made for accounts to be taken are reserved pending discussions between the parties.

(7) Further consideration of the plaintiff’s application for a family provision order is reserved pending those discussions and supplementary submissions, if any.

(8) Costs reserved.  

Catchwords:

SUCCESSION — Contested probate — Testamentary capacity — Whether the deceased understood the extent of her estate of which she was disposing at the time she executed a will.

SUCCESSION — Administration of estates — Whether defendant should bear liability for monies paid out for a discharge of mortgage and equitable charge on the title to the estate property — Whether defendant is required to account for monies received as an insurance payout for storm damage to property — Whether defendant is accountable for net rent receipts for letting out that part of the property formerly occupied by the deceased for the period before the deceased’s death as well as for the period after her death.   

SUCCESSION — Family provision — Claim by adult daughter – Further consideration of plaintiff’s claim reserved pending determination of size of deceased’s estate.

Legislation Cited:

Guardianship Act 1987 NSW

Guardianship Regulation 2000 NSW

Powers of Attorney Act 2003 NSW

Succession Act 2006 NSW

Uniform Civil Procedure Rules 2005 NSW

Cases Cited:

Banks v Goodfellow (1870) LR 5 QB 549

Clay v Clay (2001) 202 CLR 410

Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417

Drivas v Jakopovic (2019) 100 NSWLR 505

Dunkel v Izsak (1984) 3 BPR 966

Forgeard v Shanahan (1994) 35 NSWLR 206

Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432

Ramage v Waklaw (1988) 12 NSWLR 84

Ryan v Dries (2002) 10 BPR 19, 497

Taheri v Vitek (2014) 87 NSWLR 402

Texts Cited:

B.A. Helmore, The Law of Real Property in NSW (Law Book Co, 2^nd ed, 1966)

Category:

Principal judgment

Parties:

Plaintiff: Deborah Peta Losey
Defendant: Wendy Therese Charell

Representation:

Counsel:
Plaintiff: E Cohen
Defendant: M Klooster

Solicitors:
Plaintiff: Robinsons Lawyers
Defendant: Lang Gellert & Co.

File Number(s):

2018/00148267

Judgment

INTRODUCTION

1. Patricia Mavis Charell (“the deceased”) died on 28 August 2017, aged just short of 90 years, leaving two wills: one dated 20 July 2005, the other dated 25 July 1996. There is evidence that she also made a Will in 1989, but there is no evidence of its terms. It has no apparent contemporary relevance, however, because each of the 1996 and the 2005 Wills contained a revocation clause; the 1996 Will, at least, is agreed to have been valid when made; and the 1996 Will evidenced an intention on the part of the deceased, at that time, to treat her daughters equally.

2. The deceased was survived by her only children, two adult daughters: the plaintiff, Deborah, born in July 1958; and the defendant, Wendy, born in September 1949. She was predeceased by her former husband (the father of her daughters) and by a man with whom, after the break down of her marriage, she enjoyed a de facto relationship of about 10 years duration until his death in or about 1989.

3. Probate of the deceased’s Will dated 20 July 2005, was granted to the defendant in common form on 9 January 2018. After providing for payment of a legacy of $2,000 to a third party, the daughter of her de facto partner (which has been paid), the Will divided the deceased’s residuary estate between her daughters: two-thirds to the defendant and one-third to the plaintiff.

4. The prior Will of the deceased, dated 25 July 1996, provided for the whole of the deceased’s estate to be divided between the plaintiff and the defendant in equal shares.

5. At all material times, the major asset of the deceased was her interest in her home in Simpson Street, Bondi (folio identifier 2/522779), “the Simpson Street property”. The Inventory of Property attached to the grant of probate made on 9 January 2018 records her assets as being a five-sixths share in the Simpson Street property, together with about $940 in “cash” and personal effects of no real value. At the time of the deceased’s death the property (since sold for $2 million) was the subject of a registered mortgage and an unregistered charge protected by a caveat. The registered proprietors of the property were the deceased (as to a five sixths share) and the defendant (as to a one sixth share) as tenants in common.

6. In summary terms, the plaintiff seeks in these proceedings:

1. a determination that the Will of the deceased dated 20 July 2005 was invalid for a want of testamentary capacity.

2. an order that the grant of probate made to the defendant on 9 January 2018 in respect of that Will be revoked.

3. an order that the deceased’s Will dated 25 July 1996 be admitted to probate, coupled with an order that letters of administration of the estate of the deceased, with that Will annexed, be granted to her (the plaintiff).

4. an order that the defendant account to the estate of the deceased, principally, for:

1. the sum of $304,590.71 paid out for a discharge of the mortgage on the title to the Simpson Street property at the time of its sale on 10 May 2018.

2. the sum of $262,000 paid to the defendant’s former husband’s building company (principally for work done to the property) in discharge upon its sale of an equitable charge against the property protected by a caveat.

3. the sum of $27,160.29 representing the proceeds of an insurance claim (received in three instalments between 22 March and 8 June 2016) for storm damage to the property.

4. the defendant’s net rental receipts for letting out that part of the Simpson Street property formerly occupied by the deceased (in the total sum of $72,272.44), referable to the period between September 2016 and the time of her death in August 2017 (as to the sum of $41,698.26) and between the time of her death and settlement of the sale of the property on 10 May 2018 or thereabouts (as to the sum of $30,574.18).

5. in the event that the Will dated 20 July 2005 is held to have been valid, a family provision order under Chapter 3 of the Succession Act 2006 NSW.

7. On settlement of the sale of the Simpson Street property the net proceeds of sale were provisionally distributed to:

1. the defendant in her capacity as the legal representative of the deceased (that is, to the estate of the deceased), as to a five sixths share; and

2. the defendant in her personal capacity, as to a one sixth share.

8. The parties anticipate that adjustments will be made to their respective shares as beneficiaries of the deceased’s estate consequent upon the Court’s determination of the validity or otherwise of the will dated 20 July 2005 and rulings about how particular sums should be accounted for.

9. The burden of the sum of $304,519.71 paid out of the net proceeds of sale for a discharge of mortgage was provisionally allocated in accordance with the respective shares of the deceased’s estate and the defendant as tenants in common:

1. a five sixths share ($253,825.59) was paid by the deceased’s estate; and

2. a one sixth share ($50,765.12) was paid by the defendant.

10. The burden of the sum of $262,000 paid to the building company to obtain a discharge of its unregistered charge was provisionally allocated according to the ownership interests of the estate and the defendant:

1. a five sixths share ($218,333.33) was paid by the deceased’s estate; and

2. a one sixth share ($43,666.67) was paid by the defendant.

11. The narrative form in which the parties have presented accounting information to the Court does not readily lend itself to precise analysis. For that reason, and at the invitation of the parties, I propose to deal with contentious questions in principle, allowing the parties an opportunity to make necessary adjustments before formal orders are made disposing of the proceedings.

12. The parties have proceeded on the basis that, if the Court decides contentious questions in principle, it is not necessary to have an arithmetically precise quantification of the value of the deceased’s estate as a precondition to a determination of the plaintiff’s claim for a family provision order. The parties are content to proceed on the basis that, the contentious accounting questions having been determined, the size of the estate is sufficiently certain to enable an exercise of the Court’s family provision jurisdiction. I do not share their complacency, particularly as the plaintiff’s submissions in support of her claim for a family provision order are scant.

13. Upon settlement of the sale of the Simpson Street property:

1. The sum of $304,590.71 was paid out of the proceeds of sale and apportioned according to ownership interests.

2. The sum of $262,000 was paid out of the proceeds of sale and apportioned according to ownership interests.

3. After conveyancing adjustments and payment of expenses, a net balance of the proceeds of sale (in the sum of $1,374,228.95) was divided between the deceased’s estate and the defendant as follows:

1. $1,143,779.82 was retained on behalf of the deceased’s estate; and

2. $230,449.13 was paid to the defendant personally.

4. Interim distributions from the estate of the deceased have been made to each of the plaintiff (in the total sum of $200,000) and the defendant (in the sum of $45,000).

14. The parties’ disputes about accounting for the proceeds of an insurance claim (in the total sum $27,160.29) and rent (in the total sum of $72,272.44) find no reflection in statements accounting for the proceeds of sale of the Simpson Street property. The $27,160.29 was received into the deceased’s bank account and disbursed by the defendant at a time when she was acting as the deceased’s enduring attorney and guardian. The sum of $72,272.44 was received by the defendant from her letting agent, subject to any accounting rights or obligations she might have. $41,698.26 was received prior to the death of the deceased, $30,574.18 afterwards.

15. Insofar as the plaintiff seeks an order that the defendant account to the estate of the deceased for particular dealings, her standing to represent the estate is a function of the fact that she seeks to protect her interest in the estate as a beneficiary against the legal personal representative of the deceased in her personal capacity and as executor of the Will of the deceased admitted to probate: Ramage v Waklaw (1988) 12 NSWLR 84; Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432. Although the plaintiff’s claims for relief do not include a claim for an order that the estate of the deceased be administered under the direction of the Court, an order for general administration is not necessary. A partial administration order can be made by virtue of the Uniform Civil Procedure Rules 2005 NSW, rules 54.3 and 54.6. Insofar as the plaintiff seeks an accounting, the proceedings bear the character of an administration suit.

16. The plaintiff’s case is informed by an intuitive, subjective belief that the deceased was committed to treating her daughters “equally” (as contemplated by the Will dated 25 July 1996); but there is no contention that the deceased was bound to treat her daughters “equally” and, perhaps, there has been insufficient reflection on what is meant by “equality” in the context of the personal circumstances of the family.

17. In closing submissions, counsel for the plaintiff announced that the plaintiff does not press her claim for a family provision order if she succeeds on her “two main complaints”: namely, her challenge to the validity of the will dated 20 July 2005 (which, if successful, will uncontroversially lead to admission to probate of the will dated 25 July 1996) and her contention that the $304,590.71 paid out of the proceeds of sale of the Simpson Street property on 10 May 2018 for a discharge of mortgage (colloquially known as the “Aussie Home Loan Mortgage”) should be borne by the defendant’s share of the deceased’s estate.

Renovations and Funding

18. Between 1996-2016 or thereabouts the Simpson Street property was the subject of three stages of renovation, each apparently funded on the security of the property:

1. The first stage of building work was done in 1996-1997, when $105,000 was borrowed from Perpetual Trustees Australia Ltd, $50,000 of which the defendant concedes was applied by her specifically for her own personal benefit.

2. The second stage of building work was done in about 2005, following a refinancing of the Perpetual Trustees Ltd mortgage. That mortgage was paid out by Aussie Mortgages Ltd, which took a fresh mortgage for $300,000. The defendant concedes that she used $10,000 of the fresh loan specifically for her own personal purposes.

3. The third stage of building work was done in 2016 (following the deceased’s admission to a nursing home in January 2016), essentially on credit, with payment for the building work being made out of the net proceeds of sale, in the sum of $262,000. The defendant concedes that $2,000 of that amount was used by her for her own personal purposes.

19. The evidence relating to work done on the Simpson Street property, and arrangements for funding of that work, is imprecise. The plaintiff agrees that work was done on the property, but there are few primary records available to provide a foundation for precise findings about what was done, when it was done, what precisely it cost and how precisely its costs were funded.

20. Upon a consideration of accounting questions, a practical necessity is that attention must be focused on particular controversial questions identified by the parties. There is likely to be no practical utility in an order, simply, for accounts to be taken.

21. On the findings made in this judgment, the defendant bears the burden of the whole of the mortgage debt of $304,590.71 paid out on settlement of the Simpson Street sale. The sums of $50,000 and $10,000 (referred to in paragraph 18) applied by the defendant, from borrowed funds, for her own personal benefit, are subsumed in the payout figure of $304,590.71, liability for which is to be borne by her. No separate accounting is thus required for the $60,000.

22. If she has not already done so, the defendant has to account to the estate of the deceased for the $2,000 applied by her for her personal purposes from the “building loan”.

THE MATRIX OF PRIMARY DOCUMENTS

23. In the light of subsequent developments, notice must be taken of clause 7 of the Will dated 25 July 1996, which reads as follows:

“7.   I DIRECT the attention of my Trustee [the deceased’s solicitor, Mr Peter Wise] to the existence of a Deed entered into between myself [the deceased] and my daughter Wendy Therese Charell [the defendant] on 11^th July, 1996 pursuant to which:-

a)   Wendy became entitled to a 13.4% [sic] share in my property at […] Simpson Street, Bondi; and

b)   Wendy became responsible for repayment of a first mortgage advance of $105,000 from Perpetual Trustees Australia Ltd which is secured over my said property.

I confirm that upon distribution of the net proceeds of the sale of my said property: -

a)   Wendy shall be entitled to 13.4% [sic] in her own right;

b)   Only the remaining 86.6% [sic] shall form part of my Estate;

c)   All moneys payable to Perpetual Trustees Australia Ltd or any substituted mortgagee upon discharge of the mortgage shall be paid by Wendy.”

24. Immediately before 11 July 1996 title to the Simpson Street property was registered in the name of the deceased alone as the proprietor of an unencumbered estate in fee simple.

25. On 11 July 1996:

1. the deceased and the defendant executed the deed referred to in clause 7 of the deceased’s Will dated 25 July 1996; and

2. the deceased (as mortgagor) and the defendant (as borrower) executed in favour of Perpetual Trustees Australia Ltd a mortgage (subsequently registered as dealing number 2305519) securing a loan of $105,000 made to the defendant. (The mortgage may have been a vehicle for a business known as “Aussie Home Loans” but, on the face of the mortgage, the mortgagee was Perpetual Trustees Ltd).

26. According to its terms, the deed dated 11 July 1996 made by the deceased and the defendant recorded, inter alia, that:

1. the parties had agreed that the defendant would cause to be constructed on the Simpson Street property an “extension” to the residence erected on the property.

2. the purposes to which the loan funds of $105,000 were intended to be applied were: (i) as to the sum of $55,000, or such additional sum as may be necessary, to complete construction of the proposed extension to the Simpson Street property; (ii) as to the sum of $26,000, in consolidation of the defendant’s other debts; (iii) as to the sum of approximately $16,000, to the purchase (by the defendant) of a motor vehicle; and (iv) as to the sum of $8,000, to payment of costs.

3. the defendant agreed to construct an extension to the property for the purpose of providing residential accommodation for herself as well as for the deceased.

4. the defendant acknowledged that she was solely responsible for repayment of the principal sum of $105,000 and all interest, penalties, costs and stamp duty referable to the mortgage.

5. the deceased acknowledged that, upon completion of the extension, she would hold the property upon trust for herself as to 86.5% and for the defendant as to 13.5%.

6. in the event that circumstances arose whereby the deceased wished to sell the property, the defendant would be entitled to 13.5% of the net proceeds of sale, subject to her repayment of the mortgage debt in full.

7. the defendant was declared not entitled to transfer her interest in the property.

27. The defendant’s “extension” to the Simpson Street property, by way of addition of a self-contained apartment above the deceased’s living area, was completed in or about 1997. The renovation enabled the defendant to live in the upstairs accommodation and the deceased to live in separate, but connected, accommodation downstairs.

28. The mortgage was varied twice in 1997, on both occasions to supplement the defendant’s borrowings (she says, to fund costs of the upstairs renovation) on the security of the Simpson Street property:

1. A variation of mortgage dated 26 February 1997 (registered as dealing number 2960997) secured a further advance of $20,000; and

2. a variation of mortgage dated 14 October 1997 (registered as dealing number 3514141) secured a further advance of $15,000.

29. In or about late November 2004 the mortgage in favour of Perpetual Trustees Australia Ltd was re-financed. By a memorandum of mortgage apparently signed by both the defendant and the deceased on 21 August 2002, but not stamped until 23 November 2004 and only subsequently registered (as dealing number AB128392), the Simpson Street property was mortgaged in favour of Aussie Mortgages Ltd for $300,000.

30. About $120,000 of the refinanced loan was applied to pay out the mortgage in favour of Perpetual Trustees Australia Ltd and the balance was a fresh loan. The defendant admits that she used $10,000 of the fresh loan for herself but she says that the rest was applied in effecting renovations to the Simpson Street property.

31. In or about December 2004 the deceased transferred to the defendant (pursuant to a Memorandum of Transfer registered as dealing number AB 128391) a one-sixth share in the fee simple to the Simpson Street property.

32. The Transfer was registered as the dealing immediately preceding registration of the mortgage in favour of Aussie Mortgages Ltd, the two instruments bearing consecutive dealing numbers and the “mortgagor” in favour of Aussie Mortgages Ltd was recorded as both the deceased and the defendant.

33. The Memorandum of Transfer records an acknowledgement by the deceased of her receipt of consideration of $158,333.33, an amount which was not in fact paid, or expected to be paid. It represented a one-sixth of the value of the property according to a formal valuation obtained by the parties’ solicitor, Mr Peter Wise, for stamp duty purposes and to record the value of the property transferred as a precaution against a future assessment of a capital gains tax.

34. The plaintiff does not challenge the validity of the transfer (which was duly registered under the Real Property Act 1900 NSW) but, on a strained reading of her Amended Statement of Claim, she may be taken to have called upon the defendant to pay the sum of $158,333.33 described in the Memorandum of Transfer as consideration for what the plaintiff characterises as a “purchase” by the defendant of an interest in the Simpson Street property.

35. The short point is that there is no basis upon which the Court can relevantly go behind the deceased’s formal acknowledgement of receipt in the Memorandum of Transfer. On an exercise of equitable jurisdiction, the Court might certainly do so, giving effect to the substance of a transaction; but, here, neither party to the transfer expected the receipted sum to be paid by the defendant and there is no ground for equitable intervention. There is no basis upon which the Court can hold that the deceased lacked the mental capacity necessary to give effect to the transaction, which was effected through the agency of a solicitor (Mr Wise) who discerned no incapacity. Nor is there any allegation that the defendant acted unconscionably in taking the benefit of the transfer without payment of the “consideration” formally recorded in the Memorandum of Transfer.

36. On one view, the transfer may be characterised as a “gift”, but to adopt that characterisation would be to ignore the context in which the transfer was effected, going back to the agreement of the parties recorded in the Deed dated 11 July 1996 and its implementation. It is not necessary for the purpose of these proceedings to characterise the nature of the transfer beyond a determination that it did not give rise to a liability in the defendant to pay money to the deceased.

37. The transfer of a one-sixth share in the Simpson Street property to the defendant in or about December 2004 superseded an earlier proposal for the deceased to transfer a 20% share to the defendant. In evidence is an unregistered Memorandum of Transfer dated 5 October 2002, executed by the deceased as transferor and by the defendant as transferee, which omits any reference to such, if any, sum as may have been in contemplation as consideration. A solicitor other than Mr Wise acted on this transaction, which came to nothing.

38. In conveyancing terms, nothing turns on the existence of the incomplete Memorandum of Transfer. In a broader context, its significance is that the deceased had in mind (but resiled from) a proposal to transfer a 20% share, later reduced to a one-sixth share, to the defendant. The defendant’s explanation of the unexecuted transaction is that her mother proposed to transfer a 20% share of the property to her, to protect her personal investment in the upstairs apartment, but that proposal was abandoned when opposed by the plaintiff; without reference to the plaintiff, the deceased renewed the proposal, limited to a one-sixth share, in 2004.

39. A curious feature of the transfer of a one-sixth share is that the solicitor Mr Wise witnessed the deceased’s signature on the Memorandum of Transfer and signed the document as solicitor for the defendant, apparently without any formal reference to the Deed dated 11 July 1996 or the deceased’s Will dated 25 July 1996, both of which on their face testify to his involvement in their preparation.

40. An even more curious feature of the proceedings is that on 20 July 2005 Mr Wise acted as solicitor for the deceased in her execution of the following documents, each dated 20 July 2005 without, it seems, any formal documentation bearing upon the operation of the Deed dated 11 July 1996, the Will dated 25 July 1996, the transfer of the one-sixth share of the Simpson Street property to the defendant, or their relationship with the new Will and each other:

1. the disputed Will subsequently admitted to probate;

2. an enduring power of attorney in favour of the defendant; and

3. an enduring guardian appointment in favour of the defendant.

41. How all these documents executed by the deceased hang together is a central puzzle in the determination of these proceedings, not assisted by the absence of contemporaneous records of Mr Wise or his imperfect memory of distant events.

42. I infer that the intention of the deceased (acquiesced in by the defendant) was that the deceased’s transfer of a one-sixth share of the Simpson Street property to the defendant in December 2004 was in satisfaction of any entitlement she had to a lesser share of the property (upon completion of building work in or about 1997) under the Deed dated 11 July 1996.

43. The deceased became a resident in a nursing home in January 2016, after which time the defendant effected renovations to the Simpson Street property and (from September 2016) rented out the downstairs portion of the property, continuing herself to live in the upstairs residence.

44. On or about 27 April 2016 the defendant, on her own behalf and as the deceased’s attorney, engaged Keyturn Projects Pty Ltd (the building company of her former husband, Michael Franck) to undertake renovation work on the Simpson Street property, mostly (but not entirely) focussed on the downstairs apartment that had been occupied by the deceased as her home before she moved to a nursing home.

45. The contract for the building work apparently took the form of (or at least included) a document styled “Mortgage Linked Loan Agreement”, supported by an unregistered memorandum of mortgage in respect of which Keyturn Projects Pty Ltd lodged a caveat (registered dealing AM785659). The “Mortgage Linked Loan Agreement” described as “the principal sum” the subject of the loan “the amount payable by the mortgagor (the deceased and the defendant) to the mortgagee (the building company) for building works undertaken to the mortgaged property by the mortgagee”. It was further described, in another part of the document, as being “estimated at $160,000”.

46. The evident intent of the parties was that the company would perform agreed building works (on a do-and-charge basis) without requiring any remuneration before practical completion of the works, four months after which the whole amount payable for the works would become due, with provision for the payment of interest in the event of any delay in payment.

47. Mr Wise witnessed the defendant’s execution of this documentation on behalf of herself and the deceased. I infer she acted with the benefit of his advice. The evidence of neither party explored the circumstances in which the documentation came about. Mr Wise gave no evidence on the topic and he was not cross examined about it.

48. The builder’s estimate of $160,000 was apparently exceeded because of complications encountered in the undertaking of renovations. Upon sale of the Simpson Street property, the company was paid out of the proceeds of sale the sum of $262,000, which included legal fees incurred by the company and an interest component.

49. The plaintiff complains about the blowout in the amount paid to the company, but there is no basis upon which the blowout can be attributed to the defendant. She engaged the company with the benefit of legal advice and there is no basis upon which it can be said (or is said) that she colluded with her former husband in effecting the renovations.

50. After the death of the deceased, shortly after probate of the deceased’s Will dated 20 July 2005 was granted to her on 9 January 2018, the defendant effected a sale of the property. As evidenced by the front page of the contract dated 13 March 2018, the property was sold for $2 million. That price was agreed by both the plaintiff and the defendant. Upon settlement of the sale on 10 May 2018, the net sale proceeds were accounted for on a basis which recognised that the defendant was entitled to a one-sixth share of the net proceeds and the estate of the deceased was entitled to a five-fifths share, subject to adjustments.

51. The parties are in dispute principally, it seems, about who should bear the burden of two deductions made from the proceeds of sale on settlement of the Simpson Street property; namely:

1. the sum of $304,590.71 paid to Columbus Capital P/L Triton Trust No. 2 (an entity related to Aussie Mortgages Ltd) on discharge of the mortgage in favour of Aussie Mortgages Pty Ltd.

2. the sum of $262,000 paid to Keyturn Projects Pty Ltd for work done in renovation of the property in mid 2016.

52. The defendant lived in the upstairs apartment on the Simpson Street property from the time of its construction in or about 1997 until completion of the property’s sale on 10 May 2018. Throughout that time she alone serviced the Perpetual Trustees Australia Ltd mortgage, and the Aussie Mortgages Ltd mortgage, until discharge of the latter mortgage upon sale of the property.

PROCEDURAL MATTERS

53. These proceedings were commenced by a statement of claim (which included the plaintiff’s claim for family provision relief) filed on 11 May 2018 (a day after settlement of the sale of the Simpson Street property), within the time prescribed by section 58 of the Succession Act 2006 for the making of an application for a family provision order. The claim for family provision relief is maintained in the plaintiff’s current pleading, an amended statement of claim filed on 27 April 2021.

54. As a daughter of the deceased, the plaintiff has standing as an “eligible person” (pursuant to section 57 of the Succession Act) to make an application for a family provision order. The questions for determination upon her application are whether she can be said to have been left without adequate provision for her maintenance, education and advancement in life (Succession Act, section 59(1)(c)) and, if so, whether any (and, if so, what) provision ought to be made for her from the estate of the deceased (Succession Act, section 59(2)).

55. The only interests in competition on the plaintiff’s application for a family provision order are those of the plaintiff and the defendant. The only other “eligible person” whose interests might have required consideration (the daughter of the deceased’s de facto partner, the recipient of a $2,000 legacy under the Will dated 20 July 2005) has disclaimed any intention to make a greater claim against the estate of the deceased. The plaintiff does not seek to disturb the $2,000 legacy.

56. Before taking leave of the plaintiff’s amended statement of claim, notice needs to be taken of her refinement of her case at the commencement of the final hearing of these proceedings. At that time:

1. the plaintiff confined her challenge to the validity of the Will dated 20 July 2005 to an allegation of testamentary incapacity. She expressly abandoned: (i) an allegation that the deceased did not know and approve the contents of the Will; and (ii) an allegation that the deceased’s execution of the Will was procured by “unconscionable conduct” on the part of the defendant.

2. the plaintiff disclaimed any claim for an order that property be designated as “notional estate” of the deceased save, possibly, for such an order in respect of interim distributions made from the estate of the deceased.

57. By 26 April 2021 (the day before the final hearing commenced) the plaintiff had received a total of $200,000, and the defendant had received the sum of $45,000, by way of an interim distribution from the estate of the deceased.

58. At the commencement of the hearing the defendant, for her part, made the following formal concessions:

1. The grant of probate made in favour of the defendant on 9 January 2014 was a revokable grant in common form.

2. By adducing expert evidence from Dr Tuly Rosenfeld (a Consultant Geriatrician), the plaintiff had established a triable issue as to the testamentary capacity of the deceased at the time she executed the Will dated 20 July 2005.

3. That issue having been established, the defendant bears the onus of proving that the Will dated 20 July 2005 was the last will of a free and capable testatrix.

59. The parties approached the question of testamentary capacity by reference to the criteria identified in Banks v Goodfellow (1870) LR 5 QB 549 at 565. The plaintiff’s contention of incapacity was expressly limited to the proposition that the deceased lacked capacity because, it was said, she did not understand the extent of the property of which she was disposing at the time she executed the will dated 20 July 2005.

VALIDITY OF THE WILL DATED 20 JULY 2005

60. The deceased suffered from vascular dementia for some years prior to her death. She suffered a stroke in 1995, from which she appears largely to have recovered but for the progressive development of her dementia and expressive dysphasia.

61. After her stroke in 1995, and until she was injured in a motor accident in late October 2007 (when she was knocked down by a motorised scooter), the deceased continued part-time work selling sweets from a stall at Paddy’s Markets and another suburban market.

62. The 2007 accident appears to have accelerated the deceased’s decline, in confidence if not also in general health. Ultimately, by about 2014 her expressive dysphasia had developed to the point that she lost her ability to speak altogether.

63. Having moved in with her mother at the Simpson Street property following the break down of her marriage in 1995, the defendant drew ever closer to the deceased. In late 2008 she became her mother’s full time carer, a function she performed until the deceased entered a nursing home at Maroubra in January 2016. After the deceased’s entry into the nursing home, she continued to provide supplementary care for the deceased.

64. The deceased remained in the nursing home until her death in August 2017.

65. Leaving aside tensions between siblings that occurred from time to time, there appear generally to have been cordial relationships between the deceased and her two daughters, both of whom consistently showed respect for their mother.

66. From the time of the deceased’s stroke, the major responsibility for social contact (and, ultimately, care) for the deceased fell upon the defendant. She was close at hand and, following her marriage break up, herself in need of companionship and support. Although the plaintiff was an attentive daughter, she moved to the United Kingdom in 1984. She continues to live there with her husband, with whom she has two adult daughters. She is a published author. Her contact with the deceased after her move to the UK was limited to (regular) telephone calls and occasional trips.

67. In challenging the validity of the deceased’s Will dated 20 July 2005, the plaintiff contends that at the time the deceased executed the Will she was not aware of the nature and value of her estate and, in particular, she did not recall that she had already gifted one-sixth of the Simpson Street property to the defendant.

68. That contention is to be assessed in the context of the deceased’s dementia and experience of memory loss. As an illustration of the deceased’s memory loss, the plaintiff relies upon what she perceives to have been a lack of memory on the part of the deceased, from one week to the next, as to whether she had read instalments of the plaintiff’s first novel sent to her each week from about 2004.

69. In medical terms, the plaintiff relies upon the evidence of Associate Professor Tuly Rosenfeld, a Consultant Geriatrician. Dr Rosenfeld was not a treating doctor of the deceased and never met her. He provided an expert medico-legal report which concentrated upon damage to the deceased’s brain, including damage to her temporal lobe (where memory, speech and cognition are situated) and her occipital lobe (where vision and association areas are situated) consequent upon the stroke suffered in 1995.

70. On page 5 of his report dated 27 February 2020 Dr Rosenfeld opined as follows:

“The nature and severity of the stroke that [the deceased] suffered, and the effects on her brain function would, from my experience and knowledge, have affected more of her cognitive functions than the speech problems which would have been the more easily observed and identifiable symptoms and signs. Stroke and underlying vascular disease of this extent would invariably also affect frontal lobe dysfunction. Frontal lobe dysfunction is not readily identified without assessment and diagnosis by trained clinicians.

71. In paragraph 8, on pages 16-18, of that report, under the heading “OPINIONS”, Dr Rosenfeld responded as follows (with editorial adaptation) to the question whether, in his opinion, the deceased had testamentary capacity as at the date of the making of the Will on 20 July 2005:

“8.1   Mrs Charell [the deceased] was, in July 2005, a 77 year old woman who suffered from brain vascular disease and a previous large vessel stroke. She suffered from risk factors from vascular brain disease the extent of which is was [sic] evident on brain scan reports.

8.2   Mrs Charell lived in an accommodation setting where she was increasingly supported in an informal manner by her daughter [the defendant] with evidence in the documents I have reviewed that she was increasingly supported by her daughter. Mrs Charell was likely increasingly dependent on the input, support, supervision and prompting from her daughter and found by her GP, in October 2002, after formal testing, to suffer from cognitive testing indicating, on the background of increasing reliance on her daughter, to suffer from dementia at that time.

8.3   By the time, in February 2006, that Mrs Charell was commenced on specific treatment with medications for dementia, she was suffering from dementia and cognitive impairment that was, in my experience, at least moderately severe with impairments in her ability to undertake the more complex tasks and undertaking complex decision making tasks.

8.4   In order to properly recall, consider, evaluate and compare conflicting information and ideas, weigh conflicting arguments for and against various options, and to be able to resolve and decide on those considerations, it is necessary for preserved frontal lobe and memory functions to be present. Working memory, a key function of the frontal lobes of the brain (effectively the Random Access Memory – RAM) enables diffing or conflicting facts and memories to be held and compared. Impairment in this function of the frontal and temporal lobes impairs one’s ability to undertake these tasks.

8.5   The cognitive impairments and the effects of brain disease and her previous stroke on her cognitive abilities are more likely than not to have been present through the middle of 2005 and July 2005 when she made her will. The specific circumstances around the making of the will of 20 July 2005 have not been provided to me other than in the affidavit of [the defendant].

8.6   The greatest and most significant aspect of Mrs Charell’s estate comprised her interest in and the value of the [Simpson Street] property.

8.7   The will of 20 July 2005 is relatively simple in its format and expression. That simplicity however, belies the inherent complexity in that will.

8.8   The apportionment of her estate was a relatively complex matter by the time that Mrs Charell undertook the new will. She would have needed to recall and consider the impact, on the benefit to her children:

A.   the change from the original will of 1994 [sic], when the estate was divided equally, to 2/3 and 1/3 taking into account.

B.   the direct impact, on the value of her estate and property, of the changes to the title to the property when she had transferred 1/6 of the property to the daughter that was to receive 2/3 of the property and

C.   the impact, on the residual value of her estate, of the mortgages/loans that had been made, and would have benefitted the daughter who was to receive 2/3 of the estate.

8.9   Mrs Charell would, in my opinion, as a result of brain disease and her cognitive impairments, not have been able to properly recall the significant and dual changes that impacted on the value, details and extent of the estate she was to leave to her daughters.

8.10   Mrs Charell would not, in my opinion, have been able to understand and properly consider, in relation to her wishes to apportion her estate to her daughters, the dual impact of the change in the title to the property and the effect of the mortgage/loans.

8.11   Mrs Charell would not, in my opinion, have been able, as a result of cognitive impairment and the presence of dementia, to properly recall and consider the impact that those factors would have made on the value of the property and her estate, and the significant impact on the benefit that she anticipated would be provided to her daughters in the proportions she intended in the ‘simple’ will she made.

SUMMARY OF MY OPINIONS

8.12   A)   Mrs Charell would more likely than not have known and understood the nature and effect of a will.

8.13   B)   Mrs Charell would not, in my opinion and as indicated above, have been able to recall, consider and understand the implications of the nature and extent of her estate and property that resulted from the changes to the title, the mortgage/loans and the way those changes interacted and impacted on the change in her will.

8.14   C)   Mrs Charell knew of the beneficiaries of her will although there is no indication of her knowledge or consideration for her grandchildren in the will.

8.15   D)   Mrs Charell was not in my view likely to have recognised and properly considered, in the view of her long standing view, expressed in the previous will of 1994 [sic], the view that both daughters would share equally in her estate. That those views may have changed in the light of changing circumstances and living arrangements is not clear in my view. However, even accepting that that [sic] change in her overall view, the change in proportionality would have been confounded by her dependency on and the influence of, superimposed on dementia and frontal lobe disease, those on whom she was dependent, in addition to the task of understanding and accounting for the relative complexity of the will of 2005.

It is unlikely that Mrs Charell’s failing memory and her recall of the relationship with her daughter Deborah [the plaintiff] coupled with the presence, care and influence of Wendy’s [that is, the defendant’s] presence and support, would have altered her decision making in her 2005 will, not as a result of her changing wishes and consideration, but as a result of the effect and impaired cognitive ability due to brain disease and dementia.

8.16   E)   There is no indication that hallucinations or delusions poisoned her affections or otherwise impacted on Mrs Charell’s decision making.”

72. Dr Rosenfeld adhered to these opinions in a supplementary report dated 16 August 2020 (responsive to evidence adduced on behalf of the defendant) and in his oral evidence.

73. Against Dr Rosenfeld’s opinion, the defendant adduced evidence of contemporaneous medical reports and from the deceased’s general medical practitioner, as well as lay evidence.

74. Of the lay evidence, particular importance attaches to the evidence of Mr Wise, the solicitor who prepared the Will dated 20 July 2005 and supervised its execution. This is despite the fact that he has not retained contemporaneous records beyond the Will and copies of the power of attorney and guardianship appointment executed at the same time as the Will. His memory is imperfect. His evidence in support of a finding of testamentary capacity is based squarely upon detailed evidence of his long standing usual practice in the preparation and execution of wills, coupled with evidence that, had he had any doubts about the deceased’s testamentary capacity, he would have insisted that an up-to-date medical report as to her capacity be obtained, which he evidently did not do. The admissibility of such evidence was confirmed in Drivas v Jakopovic (2019) 100 NSWLR 505.

75. Evidence of the defendant corroborates the evidence of Mr Wise about his usual practice insofar as she recalls that, although she accompanied the deceased to Mr Wise’s office, he had her remain outside while he took instructions from the deceased alone.

76. Mr Wise first met the deceased in 1989 shortly after the death of her de facto husband, a client of his. He has a record that the deceased made a will at that time, but he has no record of it apart from a file listing, and he has no recollection of the contents of the document.

77. In 1996 Mr Wise prepared the Deed dated 11 July 1996 and the deceased’s Will dated 25 July 1996, documents retained by him in a Deed Packet held in safe custody without any other records. He has no independent memory of any discussions or instructions concerning the Deed or Will; but he is generally aware that the deceased wanted the defendant to have a share of the Simpson Street property as the defendant was adding the upstairs section of the house on the property. He has no recollection of the origins of a discrepancy between the Deed and the Will in reference to the share of the Simpson Street property to accrue to the defendant upon completion of the upstairs addition. The Deed refers to 13.5%. The Will refers to 13.4%. As Mr Wise posits, one of those numbers is likely to be a typographical error.

78. Mr Wise did not act on the proposed transfer in 2002 of a 20% interest in the Simpson Street property to the defendant or the mortgage in favour of Aussie Mortgages Ltd signed at that time. He says that he first knew of the proposed transfer only after the death of the deceased.

79. As far as Mr Wise can recall, he did no legal work for either the deceased or the defendant in the period between 1996 and 2004. He has no record of having done so.

80. He did, however, act on the transfer of the one-sixth share of the Simpson Street property to the defendant in 2004, and he liaised with Aussie Mortgages Ltd in securing its consent to registration of the Memorandum of Transfer. He did not act for either the deceased or the defendant in relation to the mortgage registered immediately after the Transfer. He no longer has a physical file relating to the Transfer, but he does have a computer record of a valuation of the property at $950,000, correspondence with Aussie Home Loans seeking their consent to the transfer and a copy of the Memorandum of Transfer.

81. He has no independent recollection of this matter, discussions or instructions. However, he deposes that he was aware that the earlier 13.5% or 13.4% share for the defendant was to be formalised with the defendant going on title as to a one-sixth share. He does not recall how or why the share was increased from 13.5% or 13.4% to a one-sixth share (16.67%). He does, however, have a recollection of attending upon the deceased and the defendant at the Simpson Street property in connection with the Transfer, and a vague recollection of a discussion to the effect that the defendant was to pay all the costs and stamp duty associated with the Transfer.

82. Mr Wise records that, if he had any doubts about the mental capacity of the deceased at the time of receiving instructions for the transfer of the one-sixth share, he would have, as was his general practice with wills and powers of attorney, requested she obtain a medical certificate before proceeding, and he would have placed any such certificate in the Deed Packet, or Packets, which contained the 1996 Deed, the 1996 Will, the 2004 Valuation and the 2005 Will. As there is no such medical report in any Deed Packet, he presumes that none was requested.

83. Mr Wise no longer retains a file relating to preparation of the Will, Power of Attorney and Enduring Guardianship Appointment signed by the deceased in his office on 20 July 2005. The file was probably destroyed, in the ordinary course of his practice, after seven years. His computer records enable him to say that a file was opened and documents prepared between 12.15pm and 1.32pm on 20 July 2005. He is also aware from the Will’s witness details that the attesting witnesses were a paralegal and a solicitor in his office.

84. He has no record or recollection of what was discussed with the deceased on 20 July 2005. However, he says that he would have acted in accordance with his “usual practice” in that, if he had any suspicions as to the deceased’s capacity to make a will, a power of attorney or enduring guardianship appointment, he would have sent her to her GP for a letter of confirmation that she was competent to make a will.

85. On 20 July 2005, he posted to the deceased a letter of the same date in which he recorded that they had discussed her Will “at length” and set out in summary form the terms of the Will and the nature of a Power of Attorney and Guardianship Appointment. The letter recorded its inclusion of a tax invoice, a copy of which is not in evidence. The deceased appears to have arranged for a timely payment of the invoice by cheque. That is an inference to be drawn from her handwriting on an envelope (bearing the name of Mr Wise’s firm and a post office stamp dated 20 July 2005) recording the fact of payment. Nothing in the letter, and nothing in the process of payment of Mr Wise’s tax invoice, reflects adversely on the deceased’s testamentary capacity.

86. In the affidavit in which Mr Wise records his dealings with the deceased, he explains his “usual practice” relating to the preparation of a Will by reference to “a series of questions / discussion points” that he has long used as a template for taking instructions from a will-maker. They include interrogation about the client’s property holdings. In the same affidavit he also sets out precautionary steps routinely taken by him in dealing with a client in respect of whom he apprehends that there is some doubt as to mental capacity.

87. In his cross examination Mr Wise was not challenged on his evidence about his “usual practice”. Nor was it put to him that the deceased lacked capacity to give instructions for a one-sixth share in the Simpson Street property to be transferred to the defendant in 2004 or capacity to execute the Will, Power of Attorney and Enduring Guardianship Appointment dated 10 July 2005.

88. In the absence of an attack on his evidence about usual practice, I accept that evidence, the tenor of which implicitly supports a finding that the deceased had the mental capacity requisite to sign the Memorandum of Transfer of a one-sixth share and each of the documents (including the deceased’s Will) dated 20 July 2005.

89. Affidavits from attesting witnesses to the deceased’s execution of the Will prove execution of the Will without deposing to facts beyond execution. Neither witness has independent recollections of the event.

90. Evidence of the deceased’s general practitioner, Dr Robert Muller, is more expansive. His records reveal that the deceased was seen by his medical practice (nearly always by him) 89 times between 2001-2008, including 13 visits in 2004, 10 visits in 2005 and 16 visits in 2006. He was familiar with her social circumstances as well as her health.

91. That is apparent from the following extract from an affidavit affirmed by him on 5 July 2020:

“42.   I make the following observations about Mrs Charell based on my medical records for the period 2001 to 2005, my observations and interactions I had with her during our long term relationship doctor/patient relationship:

(a)   Mrs Charell was an intelligent, independent woman who loved communicating.

(b)   She kept active by working a part time job at the markets and was able to travel to and from work on her own by public transport and did her own shopping.

(c)   She told me that part of her enjoyment about working part time was the opportunity it gave her to meet and communicate with people.

(d)   She loved her dog who she cared for and walked about 3 times a day she said. I do not recall the year in which her dog died, but do recall that this was a very distressing event for her. I was told that she got a new dog and continued with her caring and dog walking routine for some years after 2008.

(e)   We had many conversations over the years, often lengthy, which were punctuated by her frustration with word finding difficulties. She however retained complete understanding of her expressive dysphasia and with a pause and a few deep breaths conversation would continue.

(f)   During our consultations she would frequently ask how I was, how my children were and what they were doing. This seemed to be in keeping with what I observed to be her general and genuine interest in people.

(g)   She was an avid reader, listened to music, told me about concerts she attended.

(h)   By about 2007, Mrs Charell complained that her concentration in reading and listening to music was deteriorating and I suggested to her that she get hold of some Andre Rieu DVDs as he played the classics but elderly people especially seemed to enjoy him.

(i)   She usually came to see me on her own and on occasion with her daughter Wendy (who was not a patient of mine).

(J)   Apart from the daughter Wendy, I was aware from Mrs Charell that she had another daughter who had been living in England for many years. I also recall that Mrs Charell had visited her daughter in England where she stayed for a few months.

43.   Throughout the time that I treated Mrs Charell from the 1980s until at least 2007 [sic], had I been requested for a report or opinion as to whether Mrs Charell was of sound mind, memory, cognition I would have certainly had no doubt that Mrs Charell was of sound mind. I form this opinion based:

(a)   my medical records for the period 2001 to 2005; and

(b)   my observations and interactions

I had with Mrs Charell during our long term relationship doctor/patient relationship.

44.   By sound mind I mean that Mrs Charell was able to take into account considerations including:

(a)   Whether she knew what her assets and liabilities were.

(b)   who could be her executors.

(c)   who should benefit from her estate and to what extent; and

(d)   understanding what a Will does.

45.   Based on my own observations of Mrs Charell as well as the report of Associate Professor Garrick, I believe that Mrs Charell was of sound mind when making her Will in July 2005.”

92. Dr Muller’s reference to a report of Associate Professor Garrick is a reference to a report dated 3 February 2005 addressed by Dr Raymond Garrick (a Neurologist) to Dr Muller.

93. Omitting formal parts, that report is in the following terms (with emphasis added):

“Many thanks for giving me the opportunity of seeing Mrs Charell again on the 1^st February 2005. Since I originally saw her 9 ½ years ago when she had a minor stroke with expressive dysphasia and again 16 months ago there has been little change in her residual word finding difficulty.

There have been no further cerebral vascular episodes and her general health has been quite good. She remains independent with the confidence that her supportive daughter lives in the apartment above her. She is very attached to her 15 year old dog and exercises a couple of times a day with him.

She also keeps active with a one day a week part time job which gives her the opportunity of meeting many people.

She confines driving to familiar territory that has no difficulty with orientation.

At present, blood pressure was 140/80 there are no extra cranial bruits. Optic fundi show grade 1 arteriosclerotic changes. There are no focal deficits and gait is brisk.

On MMSE she has excellent orientation and registration and her general judgment and cognitive function remains intake. Her assessment is hampered by the residual mild word finding difficulty that she has had since the stroke. This is readily perceived as a mild memory disturbance but it does not indicate a cognitive decline.

I think that it is important for Mrs Charell to continue with her usual medication with low dose aspirin and blood pressure control with Norvasc and Dichlonde. She follows an excellent diet but her last cholesterol was borderline high at 6.5.

If this is any higher on her forthcoming assessment then the addition of a small dose of slatin would be appropriate.

She continues on a tiny dose of Sinequan at night which is probably helpful in maintaining a good sleep pattern and there is no need to change this.

I strongly encourage Mrs Charell to continue with a regular walking exercise programme and there is no need for her to consider any change in her driving routine. The last thing she should do is give up her Thursday job. I would be happy to review her in 1 – 2 years.”

94. In view of Dr Rosenfeld’s characterisation of the deceased’s 1995 stroke as a major stroke, reference should also be made to Dr Garrick’s report dated 13 April 2003 (addressed to Dr Muller) in which he made the following observations (with emphasis added):

“Many thanks for giving me the opportunity of reviewing Mrs Charell together with her daughter on 4 April, 2003. I originally saw her in August 1995 in St Vincent’s Hospital when she had a minor dysphasic stroke. She has recovered extremely well with very little residual word finding difficulty. She has not experienced any motor deficit and has been able to manage all normal activities. She lives alone, although her daughter has a flat above and sees her daily. She continues to drive and does all her own shopping.

General health has been quite good. She does have some minor neck pain and stiffness which is not being helped substantially by her regular low dose Sinequan. Hypercholesterolaemia has been controlled with diet and hypertension with Norvasc and Dichlotride. She has been diligent with regular Aspirin since her minor stroke.

Currently, she is aware of some mild word finding difficulties when she is tired. There has been no visual disturbance and her only sensory symptom has been some recent tingling in the left arm which does not relate to her previous episode.

Her last blood chemistries of about a year ago showed normal renal and liver function, normal full blood count and C-reactive protein.

Her current neurological examination is intact except for minor dysphasia which is brought out on naming. She does have a very slight reduction of pinprick in left median distribution with a slightly positive Tinel sign at the left carpal tunnel. There was no cervical movement restriction. Blood pressure was 130/80. There was no extracranial bruits and cardiac examination was normal.

I have asked for a progress assessment with a carotid duplex scan and a check on blood lipid levels. Mrs Charell’s current medication is quite satisfactory, but I doubt that the Sinequan is contributing much.

I have encouraged her to maintain all her normal activities and reassured her that her new sensory symptoms are probably of minor carpal tunnel syndrome character. No active treatment is required for this, but if she develops any night discomfort, then a nerve conduction study would be useful to direct management. I would be happy to see Mrs Charell in the future should problems arise.”

95. This medical evidence should be read in the context of the following evidence of Dr Rosenfeld elicited in cross examination:

1. The character of the deceased’s dementia was such that her mental capacity was likely to have varied, with good days and bad days, and her capacity to deal with problems would have depended upon the existence, nature and extent of assistance available to her to perform particular tasks.

2. The facts that throughout 2005 the deceased continued working in a lolly shop in Paddy’s Market, dealing with money and people; she regularly caught a bus between her home and Paddy’s Market; and she attended shops to purchase items, are all indicative of an ability on the part of the deceased to perform “instrumental activities of daily living (IADLs)”, higher level activities than “activities of daily living (ADLs)” such as attending to personal care, getting into the shower, washing teeth, going to the bathroom.

3. Evidence not available to Dr Rosenfeld at the time he prepared his reports included evidence that the deceased was able to perform “cognitive tasks, greater than IADL tasks”: the deceased wrote notes about: an appointment (on 6 February 2004); a reminder to pay a utility bill (November 2004); a record of payment by a cheque sent by post (on 29 August 2005) in payment, I infer, of a tax invoice sent by Mr Wise to the deceased under cover of the letter dated 20 July 2005 in which he reported upon their conference that day; a reminder to ring a person about activities at a day care centre with which the deceased was involved (October 2006); and annotations about particular entries in a bank statement relating to the deceased’s account (June – July 2007).

96. I accept Dr Rosenfeld’s evidence that, because these “cognitive tasks” may have been of a routine nature for the deceased, they do not of themselves necessarily ground a finding that the deceased had capacity to execute legal documents in 2004 or 2005. Nevertheless, they do, in combination with the evidence of Mr Wise, the evidence of Dr Muller and the reports of Dr Garrick, support a finding of capacity. There is no evidence, and no submission has been made, that they are anything other than evidence of the deceased’s independent conduct. In particular, there is nothing to suggest that they were written at the prompting of the defendant.

97. Dr Rosenfeld’s opinion that the deceased lacked capacity to make the Will dated 20 July 2005 is, at least in part, predicated upon an opinion that the deceased would not have been able to understand the complexity of transactions relating to her ownership of the Simpson Street property following execution of her Will dated 25 July 1996. That opinion is open to challenge by reference to factors extrinsic to the apparently inconsistent legal documents executed by the deceased in 1996 and 2004/5.

98. The complexity of the deceased’s transactions arises, in part, from the unavailability of full contemporaneous documentation. Without the benefit of Mr Wise’s files it is difficult, on the face of the documents, to see how they all fit together. Viewed in the context of the personal circumstances of the deceased and her daughters, the complexity dissipates.

99. As an adult, the defendant began living with the deceased at the Simpson Street property at about the time, in 1995, that her marriage broke up and she found herself without a place to live and without any substantial assets, though she was employed with a reasonable income.

100. Responding to her plight, the deceased invited the defendant to live with her. Recognising what would be cramped conditions in the deceased’s house, the defendant proposed that she build a self-contained apartment above the deceased’s living area with funds borrowed on the security of the Simpson Street property. The deceased agreed, provided that the defendant assumed personal responsibility for repayment, and servicing, of the mortgage debt. At this time, until she was retrenched in 2008, the defendant enjoyed what seemed to be secure employment whereas the deceased was a pensioner, with part time (one day a week) employment.

101. $105,000 was borrowed upon security of the Simpson Street property in 1996. As evidenced by the Deed dated 11 July 1996, the loan funds were to be applied in part for construction of the self-contained apartment and in part for purely personal purposes of the defendant. Whatever the application of the loan funds in fact, the arrangement between the defendant and the deceased was that the defendant would be responsible for repayment of the mortgage debt and servicing the mortgage in the meantime.

102. As envisaged by the Deed dated 11 July 1996, upon completion of the upstairs apartment, the defendant acquired a beneficial interest in the Simpson Street property. For present purposes, nothing turns on whether her share of the property was 13.5% or 13.4%. As events transpired, when the time came for conversion of the defendant’s beneficial interest into a legal interest, the share of the fee simple transferred to the defendant in 2004 was a one-sixth (16.67%).

103. As in the nature of building renovations, the funds borrowed for construction of the upstairs apartment in 1996 were inadequate for the purpose. Accordingly, the 1996 mortgage was twice varied in 1997 to provide an additional $35,000 to complete the construction.

104. In the course of living at close quarters in the Simpson Street property, the deceased and the defendant drew closer. Their affairs were, to some extent, intermingled as they enjoyed a shared life and had a common interest in maintenance, if not development, of the property. The deceased became increasingly dependent upon the defendant for companionship and care. The defendant depended on her mother, and a carer’s pension, no less.

105. The deceased was concerned in 2002 to protect the defendant’s interest in the Simpson Street property. At about the same time, the parties, I infer, had in mind the possibility of raising additional funds on a fresh mortgage for reasons largely unexplored in the evidence but which, I infer, may have related to a desire to undertake further renovations. Any such plans were displaced by friction between the deceased and the defendant (on the one hand) and the plaintiff (on the other hand), the plaintiff resentful that she might not be being treated on equal terms vis-a-vis the defendant.

106. It was not until 2004 that the deceased and the defendant brought to fruition their plans for refinancing the mortgage of 1996 as varied in 1997. It was in conjunction with the process of refinancing that a one-sixth share of the legal title to the Simpson Street property was conferred on the defendant. This was thought to be less provocative to the plaintiff than the 2002 proposal for transfer of a 20% share.

107. In closing submissions, counsel for the plaintiff informed the Court that her client did not consider that it was unreasonable for the defendant to have acquired a one sixth share in the property.

108. After the refinanced mortgage in 2004, and until completion of the sale of the Simpson Street property in 2018, the defendant continued to service the mortgage debt on the property. This I take to be confirmation of the parties’ original arrangement that the defendant would be responsible for repayment of the debt and, to protect the defendant’s investment, she would be given a share in the legal title to the property.

109. Having been frustrated in her 2002 proposal to transfer a 20% share in the property to the defendant, the deceased topped up the defendant’s notional interest in the property by changing her Will on 20 July 2005, prospectively giving the defendant a two-thirds share (rather than a one-half share) of her residuary estate.

110. At the same time (on 20 July 2005), the deceased formalised the defendant’s role as her companion and carer by appointing the defendant as her enduring attorney and guardian.

111. A turning point in the deceased’s life came in October 2007 when she was knocked down by a motorised scooter, an event reported in the local newspaper. Before that time, she was better able to fend for herself than she was after that time.

112. As fate would have it, in the year following the deceased’s 2007 injury, the defendant was unexpectedly retrenched. That put her in funds, she says, to pay down $100,000 of the mortgage debt, but it left her without substantial prospects of re-employment. After a failed attempt to establish an independent business, she found that increasing amounts of time and attention were taken up with caring for the deceased.

113. An elaboration of subsequent events may be necessary in dealing with accounting questions, but enough has been said to place in perspective the property dealings of which the deceased would have been aware at the time she made the Will dated 10 July 2005. Subsequent events do not bear upon the validity of the Will.

114. Any complexity implicit in the Will, in my opinion, arises from a failure to locate in their social setting legal documents which do not, on their face, fit well together: in particular, the Deed and the Mortgage dated 11 July 1996, the Will dated 25 July 1996, the mortgage variations of 1997, the draft Memorandum of Transfer dated 5 October 2002, the mortgage dated 21 August 2002 registered only in December 2004 after registration of the Memorandum of Transfer providing for transfer of a one-sixth share of the property to the defendant, and the Will, Power of Attorney and Guardianship Appointment all dated 20 July 2005.

115. From beginning to end, the purpose of this documentation was to facilitate development of the Simpson Street property so as to enable the defendant to live with, or at least close to, the deceased and to have the defendant’s investment in the property protected by both conferral of a property interest on the defendant and recognition of her investment with an increased share of the deceased’s residuary estate. It was not beyond the deceased’s comprehension.

116. Although I appreciate the importance to the plaintiff of her literary efforts and the importance to her of having those efforts recognised by a much-loved mother, I do not regard any hesitancy on the part of the deceased in being able to report upon weekly instalments of the plaintiff’s novel as indicative of a form of mental incapacity. An author’s preoccupation with an anticipated publication is not necessarily shared even by empathetic relatives.

117. In my assessment, the deceased had testamentary capacity at the time she executed her Will dated 20 July 2005 and, in making that Will, she acted in a manner consistent with events that post-dated her execution of the Will dated 25 July 1996. The Will dated 20 July 2005 was duly executed, rational on its face and responsive to the deceased’s personal circumstances at that time. The plaintiff concedes that the deceased knew and approved its contents. It was not vitiated by a want of testamentary capacity. I do not accept the plaintiff’s contention that the deceased did not understand the nature or extent of property available for her disposition. She appears to have evaluated, with care, the competing claims of her daughters on her bounty. The daughter with whom she lived, and upon whose companionship she depended, had an ongoing financial investment in the Simpson Street property. Her other daughter (no less loved but, by choice, living at a distance) did not. Testamentary provision was made for them both, not in an arithmetically equal measure but with an apparently rational purpose. In my assessment, the Will dated 20 July 2005 was the last Will of a free and capable testatrix.

118. Accordingly, the plaintiff’s application for an order that the grant of probate of the deceased’s Will dated 20 July 2005 made to the defendant on 9 January 2018 be revoked is to be dismissed. The application having been heard on its merits in a contested proceeding, on notice to all persons interested in the estate of the deceased, I propose to make an order that the Will dated 20 July 2005 be admitted to probate in solemn form and that the grant made on 9 January 2018 be endorsed as a grant in solemn form.

ACCOUNTING FOR THE DECEASED’S ESTATE

Mortgage Discharge on Sale of the Simpson Street Property

119. The question whether the defendant or the estate of the deceased should bear the burden of the payment of $304,590.71 paid out of the proceeds of sale of the Simpson Street property on 10 May 2018 is to be determined by reference to the agreement of the parties, initially recorded in the Deed dated 11 July 1996, that the defendant would be responsible for mortgage debt charged against the Simpson Street property with the consent of the deceased.

120. That agreement was implicitly confirmed, across transactions associated with two variations and a refinancing of the original mortgage debt, by: (a) the defendant’s assumption of ongoing responsibility for servicing the debt; and (b)her acceptance of a one-sixth interest in the legal title to the Simpson Street property subject to the mortgage registered in conjunction with the Memorandum of Transfer in her favour.

121. The defendant’s acceptance of responsibility for the original mortgage debt, as varied from time to time or refinanced, was the “price” she paid for the deceased’s permission to construct and occupy the upstairs apartment on the Simpson Street property and for conferral upon her of an ownership interest in the property. Having accepted the benefit of the transactions in which she joined with the deceased, she is bound to bear the associated burden.

122. Subject to allowing the parties an opportunity to be heard as to the form of orders to be made in disposition of these proceedings, I propose to make a declaration that the defendant is liable to reimburse the estate of the deceased for the sum of $253,825.59 paid out of the proceeds of sale of the Simpson Street property on 10 May 2018, on the account of the estate, to obtain a discharge of the mortgage then registered on the title to the property.

Other Disputed Amounts

123. Introduction. A determination of responsibility for other items of expenditure referable to the estate of the deceased requires that closer attention be given to the relationship between the defendant and the deceased after the deceased, on 20 July 2005, appointed the defendant as her enduring attorney and guardian.

124. The transactions for which the plaintiff seeks to hold the defendant accountable to the estate of the deceased all occurred after a sharp decline in the deceased’s health following injuries suffered in late October 2007. It is not necessary to be precise about a specific time at which the deceased became mentally incapacitated or, more generally, incapable of managing her affairs, but a reliable indicator of an incapacity for self-management, in the absence of any need to be more precise, might be the time in late 2008 when the defendant assumed the role of the deceased’s full time carer.

125. During the period in which impugned transactions took place the relationship between the deceased and the defendant falls to be considered in the following context:

1. The parties were each registered as a tenant in common on the title to the Simpson Street property.

2. The defendant was the enduring attorney and guardian of the deceased in circumstances in which the deceased was unable to manage her affairs, person or property.

3. The defendant was required to provide, and did provide, companionship and care for the deceased (including, after the deceased’s admission to a nursing home, secondary care).

4. Although (until the deceased’s entry into the nursing home) they occupied different parts of the residence on the Simpson Street property, their apartments were connected and the defendant was, with the acquiescence of the deceased, as much at home in the deceased’s downstairs apartment as she was in her upstairs apartment.

5. The deceased and (soon after her retrenchment in 2008) the defendant were pensioners who customarily shared resources in meeting their ordinary living expenses.

126. Entitlements attaching to Co-ownership of Property. Insofar as the defendant effected improvements to the Simpson Street property and rented out the deceased’s downstairs apartment during the deceased’s residency at a nursing home, her entitlement to do so and any obligation she may have to account to the estate of the deceased require an acknowledgement of her co-ownership of the property (Dunkel v Izsak (1984) 3 BPR 966) and the nature of any accounting obligations owed by co-owners (Ryan v Dries (2002) 10 BPR 19, 497; Forgeard v Shanahan (1994) 35 NSWLR 206).

127. Leaving to one side for the moment fact that at the time the defendant effected improvements to the Simpson Street property in 2016 (a) the deceased was incapable of managing her own affairs; and (b) the defendant held, and purported to exercise, authority as the deceased’s enduring attorney and guardian, her status as a tenant in common (with a one sixth share in the title to the property) entitled the defendant to an “undivided” (that is, a physically undivided) share of the property with a right (in the absence of any agreement to the contrary) to occupy the whole property in common with her co-owner, the deceased. Tenants in common enjoy “unity of possession”. They do not, by virtue only of their co-ownership, owe fiduciary obligations one to the other. They can generally deal with their share of the property in co-ownership as they see fit, provided that they do not exclude a co-owner: B.A. Helmore, The Law of Real Property in NSW (Law Book Co, 2^nd ed 1966), pages 274-276.

128. In an administration suit, or like proceedings, a co-owner who has excluded another co-owner from possession of a co-owned property may be liable to account for exclusive occupation or enjoyment of the property by an allowance in favour of the excluded co-owner, or by a payment to the excluded co-owner, of an occupation fee or a proportion of rents received. Likewise, in such proceedings, a co-owner who seeks an allowance for the value of improvements effected to a co-owned property may be liable to account to a co-owner for rents received in respect of the property. Upon an exercise of equitable jurisdiction the maxim that he who seeks equity must do equity applies.

129. In the province of property law, the deceased’s entry into a nursing home may not, of itself, be characterised as an act by which the defendant “excluded” her from the Simpson Street property; but in an administration suit, or the like, notice needs to be taken of the circumstances in which the deceased was unable personally to occupy, or to enjoy, the property.

130. The Defendant’s Assumption of the Obligations of a Fiduciary. The deceased’s placement in a nursing home occurred in circumstances in which the defendant exercised her authority as the deceased’s enduring guardian, and attorney, to decide where the deceased lived. The deceased was a person in need of protection. The defendant had, and exercised, authority to manage her affairs, her person and her property. By reason of that fact, she assumed the obligations of a fiduciary attaching (to paraphrase Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420) to the office of a person entrusted with a fund (the Simpson Street property and the deceased’s pension) to be applied in or towards the maintenance and support of a person (the deceased) under her care.

131. As between the deceased and the defendant (respectively, a principal of the first part and an enduring attorney/guardian of the other part), the defendant was a fiduciary, and, speaking generally, bound to serve the interests of the deceased and required not to place herself in a position of conflict, nor to obtain a profit or benefit from her position without first obtaining the deceased’s fully informed consent (or, in the absence of capacity in the deceased to give such consent, authorisation from the Court): Taheri v Vitek (2014) 87 NSWLR 402 at 427 [115].

126. Speaking generally, two broad principles inform consideration of the defendant’s performance of her fiduciary obligations. First, the scope of her obligations as a fiduciary depended in large measure upon the terms of her appointments as an enduring attorney and guardian. Secondly, any liability she may have to account for her dealings with property of the deceased also depends upon an assessment of the purpose for which she was appointed as an enduring attorney and guardian and upon whether she acted in fulfilment of that purpose.

127. As to the first of these principles, upon an assessment of any fiduciary obligations owed by the defendant to the deceased, and upon an assessment of her authority vis-à-vis the deceased, regard has to be had to the terms and implicit limitations of the instruments dated 20 July 2005 pursuant to which the defendant was appointed as the deceased’s enduring attorney and guardian.

128. As to the second principle, in deciding whether (and, if so, to what extent) the defendant should be held liable to account to the estate of the deceased for dealings with property of the deceased, consideration needs to be given to the character of the liability to account attributed to an enduring attorney, enduring guardian or carer, not to be confused with the liability to account of a trustee: Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423; Clay v Clay (2001) 202 CLR 410 at 428-431.

129. The Enduring Power of Attorney dated 20 July 2005. The Enduring Power of Attorney executed by the deceased on 20 July 2005 in favour of the defendant was governed by Part 2 (incorporating Schedule 2) of the Powers of Attorney Act 2003 NSW as then in force. It was substantially in the form prescribed by section 8 and Schedule 2. It was duly executed in the presence of Mr Wise, who provided a certificate of independent advice in the form required by section 19 for the operation of an enduring power of attorney. By operation of section 9, and according to its terms, the instrument conferred on the defendant, as the deceased’s attorney, “the authority to do on behalf of the principal [the deceased] anything that the principal may lawfully authorise an attorney to do.”

130. Although the instrument recorded a statement that the defendant’s authority was “subject to any additional details specified in Part 2 of this document”, there was no “Part 2” of the document.

131. The instrument executed by the deceased did not expressly authorise the defendant to give gifts, to confer benefits on herself or to confer benefits on third parties as contemplated by sections 11, 12 and 13 (respectively) and Schedule 3. Accordingly, the instrument did not:

1. authorise the defendant to give a gift of all or any property of the deceased to any other person: section 11(1).

2. authorise the defendant to execute an assurance or other document, or to do any other act, as a result of which a benefit would be conferred on her: section 12(1).

3. authorise the defendant to execute an assurance or other document, or to do any other act, as a result of which a benefit would be conferred on a third party: section 13(1).

138. The Enduring Guardianship Appointment dated 20 July 2005. The instrument dated 20 July 2005 appointing the defendant as the deceased’s enduring guardian was governed by Part 2 of the Guardianship Act 1987 NSW, and Part 2 (incorporating Schedule 1) of the Guardianship Regulation 2000 NSW, as then in force.

139. The instrument was substantially in the form prescribed (by section 6C(1)(a) of the Act and Schedule 1 of the Regulation) for the appointment of an enduring guardian.

140. The functions conferred on the defendant as the deceased’s guardian followed the standard form, conferring authority to make decisions about where the deceased lived, what health care she received, what other kinds of personal services she received and to consent to the carrying out of medical or dental treatment.

141. Ancillary Features of the Defendant’s Appointment as Enduring Attorney and Guardian. Mr Wise formally witnessed the execution of the instruments of appointment by the deceased and certified that she appeared to understand the effect of the instruments.

142. The defendant formally accepted her appointments as the deceased’s attorney and guardian by her execution of the instruments of appointment contemporaneously with the deceased and Mr Wise. In due course, she exercised her authority as an enduring attorney and guardian in management of the deceased’s affairs. Her assumption of the obligations of a fiduciary derive from her acceptance of appointment to the offices of attorney and guardian and her exercise of the authority of those offices in combination. She accepted her appointment on the basis that she would act on them if and when the deceased lost capacity for self-management.

143. In the meantime, in the letter dated 20 July 2005 written by Mr Wise to the deceased following their conference, and their execution of the instruments, that day, he summarised the effect of the Will, the Power of Attorney and the Enduring Guardianship Appointment.

144. The letter explained the Power of Attorney and the Enduring Guardianship Appointment in the following terms:

“Power of Attorney

You [the deceased] have given a Power of Attorney to Wendy [the defendant] and she is effectively therefore in your shoes as to the making of any decision other than certain lifestyle choices. If there is any sale of [sic] purchase of property or mortgage of property, then the Power of Attorney can only be used if it is registered at the Land Titles Office (LPI). We agreed that at the moment it was wasteful to spend $77.25 in registering the Power of Attorney. Should it ever be needed, it can be registered at that time.

The Power of Attorney is to remain valid even if you become of unsound mind.

Please note, finally, that a Power of Attorney is only valid during your lifetime. It cannot be used after your death.

Enduring Guardianship

This document allows Wendy to make lifestyle decisions on your behalf and also to make inquiries during your lifetime of any hospital, doctors, dentists, etc….”

145. The “Building Contract” for Renovations, 2016. The Power of Attorney was registered as Book 4704 Number 921 on 6 April 2016, apparently in anticipation of execution on or about 27 April 2016 of the document styled “Mortgage Linked Loan Agreement” between Keyturn Pty Ltd (as “mortgagee”) and the deceased and the defendant (as “mortgagor”), and the accompanying Memorandum of Mortgage, which supported Keyturn Pty Ltd’s Caveat Number AM785659. The Caveat attributes the date 27 April 2016 to the primary documents, the copies of which in evidence are undated.

146. The defendant signed the primary documents on her own behalf and (pursuant to the registered power of attorney) on behalf on behalf of the deceased. Mr Wise witnessed each of the defendant’s signatures.

147. The building work undertaken by Keyturn Pty Ltd in mid-2016 in reliance upon this documentation related mainly to the downstairs apartment on the Simpson Street property; to a lesser extent, the upstairs apartment; and the garden area of the property at large. The evidence does not permit an apportionment of the costs of the work between those three parts of the property.

148. Accounting for the 2016 Renovations and Rent. As between the defendant and the estate of the deceased, competing claims about who should bear the burden of the cost of renovations (the sum of $262,000) and who should be entitled to rent (in the total sum of $72,272.44) are to be determined together. This is not a case of one co-owner (the defendant) simply excluding another (the deceased), but a case in which, the deceased having become incapable of managing her own affairs, the defendant acquiesced in the deceased’s placement in a nursing home and took it upon herself (in her personal capacity and as the deceased’s attorney) to renovate the Simpson Street property, and to lease out the downstairs apartment on the property which, by reason of her entry into a nursing home, the deceased was no longer herself able to occupy personally.

149. As the deceased’s guardian, the defendant was authorised to determine where the deceased lived. She determined, or acquiesced in a determination, that the deceased live at the nursing home, away from the property. She was, in that sense, privy to the deceased’s exclusion from the property.

150. There is no challenge to the validity of the transactions entered into by the defendant as the deceased’s attorney. In particular, there is no challenge to the validity of the defendant’s entry into contractual or security arrangements with Keyturn Pty Ltd to get work done, although the plaintiff complains about the interest component included in the amount of $262,000 paid to Keyturn Pty Ltd out of the proceeds of sale of the Simpson Street property. Nor is there any objection to the fact that the downstairs apartment was rented out, or to the amount of rent charged for the apartment, although the plaintiff complains that, whilst renting out the downstairs apartment, the plaintiff continued to occupy the upstairs apartment.

151. The fact that the defendant contracted for renovation work in her capacity as the deceased’s attorney, as well as in her own capacity, and that she leased the deceased’s apartment at a time when she was acting as the deceased’s enduring attorney and guardian, engages the process of accounting by a fiduciary, bearing in mind that the defendant (as a tenant in common as to a one sixth share in the property) was entitled to do what she did on her own account, but subject to a potential liability to account to the deceased as an “excluded” co-owner.

152. Had the defendant effected renovations in her own name alone, and without acting in her capacity as a fiduciary, her entitlement to recover from the estate of the deceased an allowance for the renovations may have been limited to an amount equal to the increase in the value of the property, if any, consequent upon the renovations. The defendant may have been liable alone for the cost of the renovation work, an amount not necessarily coincident with the amount of any increase in the value of the property consequent upon the work having been performed. In the circumstances of the present case, however, the defendant undertook the renovations on the account of the deceased and herself, relying upon her appointment as the deceased’s attorney. In effect, the defendant and the deceased jointly contracted for the renovation work to be done.

153. In my opinion, on an accounting between the defendant and the deceased the cost of the renovation work should be borne by the defendant as to one sixth and by the estate of the deceased by five sixths, reflecting their respective ownership interests in the property.

154. Although a case might be made for imposing on the defendant the burden of the interest component of the amount paid to Keyturn Pty Ltd, in the absence of any challenge to the contractual arrangements made with the company I decline to take that course. There is no allegation that, in her entry into the contractual arrangements or in her delay in arranging for the company to be paid, the defendant acted in breach of her fiduciary obligations to the deceased.

155. As each party (the defendant and, on behalf of the estate of the deceased, the plaintiff) invites the Court to engage in a process of accounting, on an exercise of the Court’s equity jurisdiction, an order for apportionment of the costs of renovations should be accompanied by a comparable order for apportionment of rent receipts, net of ordinary expenses incurred in leasing out the property. An allowance should be made in favour of the plaintiff for one sixth of the net rents received and an allowance should be made in favour of the estate of the deceased for a five sixths share of the receipts.

156. It matters not that, at the time the downstairs apartment was rented out, the plaintiff continued to occupy the upstairs apartment. As a co-owner of the property she was entitled to remain in possession of the property.

157. Although, in the ordinary course, the deceased occupied the downstairs apartment and the defendant occupied the upstairs apartment, there was no agreement between co-owners that attributed to either of them an entitlement to occupy, or to enjoy the fruits of, a part of the Simpson Street property to the exclusion of the other.

158. The defendant’s obligation to account to the deceased for a share of rents received is not (as the defendant contends) limited to a period following the death of the deceased. The defendant owed the obligations of a fiduciary to the deceased before the death of the deceased, as well as after. The deceased’s placement in a nursing home, to the knowledge of the defendant, if not at her instigation, and the defendant’s letting out of the apartment formerly occupied by the deceased effectively excluded the deceased from personal occupation of the Simpson Street property. It would be an unconscientious exercise of her powers as an enduring attorney and guardian if the defendant were to keep the deceased in a nursing home without accounting to her for rent received by reason of her residence in the nursing home.

159. Just as the costs of the 2016 renovations are to be borne by the co-owners in proportions reflecting their ownership interests, so too must net rental receipts be apportioned. She who seeks equity must do equity.

160. In making this determination, I am conscious that the power of attorney dated 20 July 2005 did not authorise the defendant to confer a benefit on herself. Her authority as attorney did however extend to entry into a contract for renovation work and a contract of lease in conjunction with herself, acting in her personal capacity. On an accounting for the cost of the renovation work and for rent receipts, an apportionment of the burden of expenditure and the benefit of receipts reflective of ownership interests is consistent with both the rights and obligations of the defendant and the deceased as co-owners and a working out of the fiduciary obligations of the defendant as the deceased’s attorney.

161. Subject to allowing the parties an opportunity to be heard as to the form of orders to be made in disposition of these proceedings, I propose to make declarations to the effect that:

1. upon an assumption that the defendant has already accounted for her use of the $2,000 of the loan funds, liability for the sum $262,000 paid out of the proceeds of sale of the Simpson Street property to Keyturn Pty Ltd is to be borne by the defendant as to a one sixth share and by the estate of the estate of the deceased as to a five sixths share; and

2. the defendant is liable to pay to, or to allow in favour of, the estate of the deceased a five sixths share of net rentals received in respect of the Simpson Street property between September 2016 and 10 May 2018 or thereabouts.

162. As liability for the payment of $262,000 was apportioned (as here contemplated) at the time of sale of the Simpson Street property, no adjustment is now required in respect of it save to the extent that the defendant may not yet have accounted to the estate of the deceased for her personal use of $2,000 of the loan funds.

163. I am not confident that all rent received by the defendant has been accounted for, or that all expenses incurred by the defendant on the account of herself and her mother in earning that rent have been taken into account. These matters need the parties’ attention in light of my determination that, in principle, the benefits and burdens of rents received on the Simpson Street property are to be enjoyed, and borne, in accordance with the ownership interests of the deceased (five sixths) and the defendant (one sixth) both before and after the death of the deceased.

164. Receipt of Insurance Proceeds. In late 2015 the house on the Simpson Street property suffered storm damage. An insurer effected some repairs and, in 2016, made compensation payments totalling $27,160.29.

165. That sum was paid in three instalments: $3,065 was paid on 22 March 2016; $22,375 was paid on 12 April 2016; and $1,720.29 was paid on 8 June 2016. Each payment was made into the bank account of the deceased.

166. The insurance payout was disbursed in replacing things not covered by insurance and in meeting living expenses of the defendant and the deceased, in proportions not quantified by the evidence.

167. Prima facie, on an accounting for the insurance proceeds as between the defendant and the deceased, the sum of $27,160.29 should be apportioned:

1. as to a one sixth share ($4,526.72), to the defendant; and

2. as to a five sixths share ($22,633.57), to the estate of the deceased.

168. This apportionment reflects the ownership interests of the defendant and the deceased in the Simpson Street property and the fact that the compensation paid by the insurer was paid for damage to the property.

169. However, I do not propose to order that the defendant account for expenditure of the deceased’s share of the insurance proceeds. At the time those moneys were disbursed, the deceased was recently admitted to a nursing home and adjusting to her residence there; the defendant was actively engaged in providing secondary care for the deceased (and meeting some of her living expenses) and in effecting renovations to the Simpson Street property as a co-owned property; to the extent that the defendant enjoyed any benefit from the deceased’s share of the insurance money, it was a benefit incidental to her role as the deceased’s enduring attorney, guardian and carer, with an indeterminate amount of expenditure on household items replacing water damaged items; and, although the defendant no longer physically lived with the deceased, she continued to ensure that the deceased was cared for appropriately and regularly visited. In short, the deceased’s share of the insurance funds was, in effect, entrusted to the defendant to be applied in or towards the maintenance and support of the deceased (notwithstanding her residence in a nursing home) as a notionally continuing member as the same household as the defendant, who used the funds substantially in the interests of the deceased, albeit incidentally in her own favour as well. The defendant did not use the funds without regard to her continuing obligation to support her mother.

The Accounting Process

170. During the course of final submissions counsel for the plaintiff invited the Court to have the parties settle the detail of accounts after a determination by the Court of questions of principle which, by this judgment, I have done.

171. On reflection, I propose to act upon that invitation because I am not satisfied, on the current evidence and submissions, that I can quantify all adjustments that may be necessary to effect a proper accounting.

172. I very much doubt that a formal order that accounts be taken would result in anything more than unproductive expenditure on legal or accounting costs. In my opinion, the parties should be allowed an opportunity to see whether, questions of principle having been decided, they can achieve a practical outcome before the listing of the proceedings for further submissions.

THE PLAINTIFF’S FAMILY PROVISION APPLICATION

173. Although the parties seem to have imagined that I could make a determination on the plaintiff’s claim for a family provision order without clarity as to the size of the deceased’s estate, I am of the opinion that there is presently too much uncertainty about the size of the deceased’s estate to embark upon a conscientious consideration of the criteria for a family provision order mandated by the Succession Act 2006 NSW, sections 59(1)(c) and 59(2).

174. Apart from uncertainty attaching to estate accounts, a factor that may be necessary to take into account upon a consideration of the plaintiff’s application for a family provision order is the question of liability for costs attending a determination of other aspects of the proceedings. This, in itself, is a topic upon which I should allow the parties an opportunity to be heard if they cannot (as perhaps they will) settle their differences generally.

173. As presently advised, I am inclined to the view that there are at least three impediments to the plaintiff’s success on her application for a family provision order.

174. First, respect is due to the deceased’s deliberate division of her estate (after allowing a small legacy for a de facto step daughter), departing from an earlier testamentary arrangement which would have given her estate to her daughters equally. Secondly, under the deceased’s will the plaintiff receives a significant (one third) share of her residuary estate, an amount yet to be quantified. Thirdly, even with assistance received from the deceased during her lifetime, the defendant is in poor financial circumstances, ostensibly without family (other than the plaintiff) to whom she might look for support at a time when she is no longer young.

175. Even if (which I accept) the plaintiff was a loving and supportive daughter of the deceased (and noting that, at a time when her mother was in need, she gifted $3,000 to the deceased), these factors might weigh heavily against findings necessary for the making of a family provision order. If there is to be such an order, there needs to be an agreement or findings about the size of the deceased’s estate, and a discharge by the plaintiff of the forensic onus she bears upon a consideration of sections 59(1)(c) and 59(2).

CONCLUSION

178. Having published these reasons for judgment, I propose to list the proceedings for directions (or, if the parties can resolve their differences, for final orders) at a time to be appointed in consultation with counsel.

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Decision last updated: 26 May 2021