Re Miglic

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2022 01370

LISA MIGLIC and ANDREA ESNOUF	Plaintiffs/ Defendants by counterclaim
v
INES KALLWEIT (in her capacity as the Administrator of the deceased Estate of the late MARILYN MIGLIC) & ORS according to the attached Schedule	Defendants/ Plaintiffs by counterclaim

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JUDGE:	Gorton J
WHERE HELD:	Melbourne
DATE OF HEARING:	4-6, 11-13, 16-19 October and 8, 9 November 2023
DATE OF JUDGMENT:	8 February 2024 (First Revision 9 February 2024)
CASE MAY BE CITED AS:	Re Miglic
MEDIUM NEUTRAL CITATION:	[2024] VSC 20

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WILLS AND ESTATES – Mutual wills agreements – Where husband's and second wife’s wills left assets to each other or, if the other died first, to the husband’s children with his first wife – Where after husband’s death second wife changed will to benefit her brother’s children – Whether husband and second wife had bound themselves not to change their wills without the other’s consent – Difficulties in proof where both parties to an oral agreement are deceased – Inherent problems with memory over time – Whether recollection of substance of communications rather than precise words used is sufficient to establish an oral agreement – Constructive trust to be imposed to give effect to earlier will – Birmingham v Renfrew (1937) 57 CLR 666 – Baird v Smee [2000] NSWCA 253 – Osborne v Osborne [2001] VSCA 228.

TRUSTS – Where second wife received life interest in a sum of moneys under her mother’s will with remainder to her brother’s children – Where no evidence as to how that sum was treated – Whether inference may be drawn that the sum was invested in growth assets when testator also held non-growth assets – Defendants entitled to declaration only that initial sum held on trust for them.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P Collinson KC with Mr A Verspaandonk	Rigby Cooke
For the First Defendant	Ms U Stanisich	KHQ Lawyers
For the Second, Third and Fourth Defendants	Mr S Wilson KC with Ms E Coates	WJ Gilbert & Co Lawyers

TABLE OF CONTENTS

A. Introduction.................................................................................................................................. 1

B. The two issues in the case........................................................................................................... 2

C. Did Kurt and Marilyn enter into a binding agreement in 1993 not to change their wills without the consent of the other?............................................................................................................. 3

C.1Difficulties with proof in a case such as this..................................................................... 3
C.2Andrea’s and Lisa’s evidence in overview........................................................................ 5
C.3The objective surrounding events or circumstances........................................................ 6
C.3.1The relationship, Kate’s lack of assets, their relative ages and Marilyn’s not having children..................................................................................................................... 7
C.3.2Kurt was the primary breadwinner....................................................................... 8
C.3.3Kurt’s 1993 will represented a change in approach and likely made Lisa and Andrea dependent on Marilyn for any inheritance.......................................................... 8
C.3.4The failure to mention any agreement to Mr Chamberlin................................ 10
C.3.5The August 1993 family meeting to discuss the 1993 wills.............................. 10
C.3.6Kurt’s subsequent discussions about his children’s inheritance..................... 11
C.3.6.1With Kate in the dental surgery........................................................... 11
C.3.6.2With Kate and Andrea at the Red Emperor restaurant.................... 12
C.3.6.3With Kate a few years later at Albany Road...................................... 13
C.3.6.4In 1998 with Stuart Esnouf and Andrea at their house..................... 13
C.3.6.5In 1998 after Marilyn injured herself in a fall..................................... 15

C.3.7Kurt’s illness and Marilyn’s 20 December 2001 will......................................... 15
C.3.8Marilyn’s 2005 will and severing of the joint tenancy....................................... 18
C.3.9Kurt’s death in 2007 and the passing of his estate to Marilyn......................... 18
C.3.10Andrea’s discussions with Marilyn in and after 2009..................................... 19
C.3.10.1Andrea’s 13 September 2009 file note................................................ 19
C.3.10.2The discussion about a pre-nuptial agreement................................ 20

C.3.11Marilyn’s later wills.............................................................................................. 20
C.3.12Discussions following Gavin’s death in October 2018.................................... 20
C.3.13Initial focus on testamentary capacity and Lisa and Andrea’s initial statements to their lawyers........................................................................................................... 22

C.4The ‘caveat’ for the Cottrell assets.................................................................................... 24
C.5Lisa and Andrea as witnesses............................................................................................ 27
C.5.1Preliminary observations....................................................................................... 27
C.5.2Variations in detail................................................................................................. 29
C.5.2.1‘Albany Road’ or ‘the estate’................................................................. 29
C.5.2.2The handling of paper at the Red Emperor Restaurant.................... 30
C.5.2.3The use of the phrase ‘mutual wills agreement’................................ 32
C.5.2.4The type of language used.................................................................... 32

C.5.3Andrea’s error of timing in her first statement.................................................. 33
C.5.4Lisa and Andrea’s behaviour after Marilyn’s death and ill-feeling to the Cottrells.................................................................................................................................. 34
C.5.4.1 What was or was not said...................................................................... 34
C.5.4.2 Entitled behaviour and ill feeling.......................................................... 36
C.5.4.3 A sense of paranoia................................................................................. 38

C.5.5Lisa and Andrea’s honesty as witnesses............................................................. 38

C.6A failure of consideration?................................................................................................. 39
C.7Conclusion – there was such an agreement.................................................................... 39

D. Did Marilyn hold any, and if so what, part of her property on trust for Stephen, Victoria and Louise?.......................................................................................................................................... 43

E. Disposition................................................................................................................................... 50

HIS HONOUR:

A. Introduction

Lisa Miglic and Andrea Esnouf, the first and second plaintiffs, are the adult daughters of Kurt and Kate Miglic. Their parents separated in about 1966 when they were very young and their father, Kurt Miglic, re-partnered with Marilyn Cottrell. I will hereafter use first names, without meaning any disrespect, to refer to the various family members involved in this proceeding.[1] Kurt and Marilyn later married and Marilyn changed her surname to Miglic. Kurt and Marilyn did not have any children together and Marilyn did not otherwise have any children of her own. Her brother, Gavin Cottrell, had a son Stephen Cottrell, and two daughters, Victoria Hardy and Louise Austin, the second to fourth defendants. Lisa and Andrea maintained good relationships with Kurt and Marilyn while they were growing up and they described Marilyn as like a second mother to them. Both Kurt and Marilyn have now died. The first defendant, Ines Kallweit, is the administrator of Marilyn’s estate and did not actively participate in the proceeding. When I refer below to ‘the defendants’ or ‘the Cottrells’, I am referring to Stephen, Victoria and Louise. Below is a diagram summarising the key family relationships in this matter:

[1]As was done by all parties throughout the trial.

In 1993, Kurt and Marilyn made wills that were in substantially similar form. Kurt left his estate to Marilyn absolutely or, should she fail to survive him or die within 30 days of his death, to Lisa and Andrea. Marilyn left her estate to Kurt absolutely or, should he fail to survive her or die within 30 days of her death, $20,000 to Stephen, Victoria and Louise (as tenants in common) and the balance to Lisa and Andrea. The effect of those wills was that, after both Kurt and Marilyn had died, with the exception of a relatively modest bequest to Stephen, Victoria and Louise in the event that Kurt died first, all their assets would go to Lisa and Andrea.

Lisa and Andrea contend, and Stephen, Victoria and Louise deny, that Kurt and Marilyn made a binding agreement at that time that they would not change their wills without the other’s consent.

Kurt died in 2007 after some years of senility and Marilyn inherited his entire estate pursuant to his 1993 will. She also took by right of survivorship full ownership of their matrimonial home in Albany Road, Toorak that had been registered in their joint names. Marilyn made subsequent wills in 2001, 2005, 2011, 2014 and 2018. It is common ground that Kurt’s mental state was such that he was unable to provide consent to any new will by Marilyn at least by 2005. The situation in 2001 is disputed.

Marilyn died in June 2020. Under Marilyn’s 2018 (and final) will, the property in Albany Road was left to her executors and trustees to be sold with one-fifth of the proceeds to go to each of Stephen, Louise, Victoria, Andrea and Lisa. That property was later sold for $11.5 million and was by far Marilyn’s major asset. Some gold items were left to Andrea, and she also received assets in a superannuation fund for which she was the nominated beneficiary. The balance of Marilyn’s estate was to be divided between Andrea, Victoria and Louise.[2]

B. The two issues in the case

[2]The will also indicated that Marilyn was planning to indicate people to whom she wished some personal chattels to go and that she wished the executors and beneficiaries’ to ‘respect’ that list.

As noted above, Lisa and Andrea contend, and Stephen, Victoria and Louise deny, that Kurt and Marilyn made a binding agreement in 1993 that they would not change their wills without the other’s consent. An agreement of this type, if binding, is often referred to as a ‘mutual wills agreement’.[3] The first issue in this case concerns whether they made such an agreement. If they did, then, although Marilyn’s 2018 will remains valid, her estate is impressed with a trust reflecting the terms of her 1993 will, with the result that her estate, or the vast bulk of her estate, will go to Andrea and Lisa.[4]
[3]Despite the name, there is in fact no requirement that the wills be in the same form.
[4]See, eg, Birmingham v Renfrew (1937) 57 CLR 666, 682-691 (Dixon J): Baird v Smee [2000] NSWCA 253, [65] (Giles JA).

Marilyn’s mother was Gertrude Cottrell. She died in 1977. The second issue in this case arises out of the fact that under Gertrude’s will, Marilyn and her brother, Gavin, were appointed trustees of Gertrude’s estate and in that capacity held the income of that estate for themselves for life and then wholly for Gertrude’s grandchildren (Stephen, Victoria and Louise). Stephen, Victoria and Louise contend, and Lisa and Andrea deny, that a significant part of Marilyn’s estate was in fact moneys inherited from Gertrude that Marilyn held on trust for them. If so, then their equitable interest would take in priority to any trust imposed by reason of any mutual wills agreement. In their counterclaim, introduced in the course of the hearing, the defendants sought a declaration that $4.25 million, or such other sum as the Court finds just and equitable, is not part of Marilyn’s estate and is instead held on trust for them. The administrator of Marilyn’s estate was aware that this argument was being presented but did not make submissions and indicated that she would abide the Court’s decision.

C. Did Kurt and Marilyn enter into a binding agreement in 1993 not to change their wills without the consent of the other?
C.1 Difficulties with proof in a case such as this

It is tolerably clear, for reasons that will emerge from the circumstances discussed below, that Kurt and Marilyn had, in 1993, at least an expectation that neither would alter their will without the other’s consent. The central issue in this case is whether this was merely an expectation on their part or whether they reached an agreement that was intended to be legally binding on each of them.

The fact that a couple make wills in corresponding form that ultimately leave their estates to the same beneficiaries is not, of itself, sufficient reason to conclude an associated intention that neither is able to make a new will in the absence of the other’s consent.[5] Oftentimes, as the defendants point out, a couple may make wills that leave everything to the other and then, on the death of both of them, to identified persons in the expectation that the surviving partner will honour that arrangement without there being an intention to make that arrangement legally binding. It may be that they instead rely on each other’s good sense and on the trust they have for each other to make good and fair decisions in any subsequent wills. This is because a legally binding agreement would, among other things, preclude a surviving partner from making a different will in the event that there were a change of circumstances such as, for example, a person unexpectedly dying or suffering some misfortune, or the asset pool changing substantially. It is no small thing to conclude that a person has promised not to make a new will without the consent of the promisee which, if the promisee were to die or to become incapacitated, cannot ever be obtained. These are matters of commonsense and have repeatedly been noted in the decisions of courts that have had to deal with this question.[6]
[5]Birmingham v Renfrew (1937) 57 CLR 666, 674-675 (Latham CJ).
[6]See, eg, Birmingham v Renfrew (1937) 57 CLR 666, 674-675 (Latham CJ); Baird v Smee [2000] NSWCA 253 [67] (Giles JA); Osborne v Osborne [2001] VSCA 228, [29] (Buchanan JA).

It is also necessary to bear in mind that the plaintiffs are seeking to establish an oral agreement that was reached in 1993 between two people who have since died. The agreement was not recorded in writing and so must be proved by hearsay evidence of prior representations made by Kurt and Marilyn up to 30 years ago.[7] The defendants are unable to cross-examine the persons who made those representations, and it is well recognised that, with the best will in the world, honest people’s memories can with time become unreliable and that the risk of that happening is very real in the context of litigation where people have a lot to lose or gain by their evidence.[8]
[7]The hearsay evidence was admissible because Kurt and Marilyn had died – see Evidence Act 2008 (Vic) s 63(2).
[8]See, eg, Watson v Foxman (1995) 49 NSWLR 315, 319 (McLelland CJ in Eq); Roberts-Smith v Fairfax Media Publications Pty Ltd (No 41) [2023] FCA 555, [162]-[166] (Besanko J).

For both these reasons, it is necessary to scrutinise carefully the evidence relied on by the plaintiffs. It has been suggested that a mutual wills agreement must be established by ‘clear and satisfactory evidence’[9] and that ‘those who undertake to establish such an agreement assume a heavy burden of proof’.[10] Notwithstanding those observations, the standard remains that of the balance of probabilities: the plaintiffs must establish to my satisfaction that, on the balance of probabilities, Kurt and Marilyn in 1993 reached an agreement, that they intended to be legally binding, that neither would make a new will without the other’s consent.[11] In deciding whether that has been established, I am to take into account the nature of the claims that are made and the gravity of such a finding.[12]

C.2 Andrea’s and Lisa’s evidence in overview

[9]Birmingham v Renfrew (1937) 57 CLR 666, 681 (Latham CJ).

[10]Ibid 674 (Latham CJ).

[11]Evidence Act 2008 (Vic) s 140(1). See also NOM v Director of Public Prosecutions (2012) 38 VR 618, 653 [112] (Redlich and Harper JJA and Curtain AJA).

[12]Evidence Act 2008 (Vic) s 140(2); see Osborne v Osborne [2001] VSCA 228, [29] (Buchanan JA).

Speaking generally, Andrea and Lisa said that Kurt and Marilyn conveyed to them that:

(a) Kurt had wanted to put his assets into a trust in order to ensure that they went ultimately to Andrea and Lisa, but Marilyn was not prepared to agree to that because she wanted control of all their assets for so long as she was alive;

(b) they had reached an agreement that Kurt would instead leave all his assets to Marilyn, and that Marilyn would leave all her assets to him, save for some assets that Marilyn was free to leave to the defendants, and after both had died their assets would go to Andrea and Lisa; and

(c) they had executed wills to that effect, and had agreed that they could not change them without the other’s consent.

The defendants were, as noted above, not able to lead evidence that contradicted this evidence. However, the defendants cross-examined Andrea and Lisa extensively on different versions, as they would have it, that Andrea and Lisa gave of the various discussions reflected in a draft statement of claim, a mediation position paper, the finalised statement of claim, their outlines of evidence and their oral evidence.[13] The defendants contended that when these matters were looked at as a whole, together with the inherent unlikelihood that Marilyn would commit herself not to change her will, and the lack of any contemporaneous written records by Kurt, Marilyn, the plaintiffs or the lawyer who drew the wills, the proper conclusion was that the agreement was not proved. The defendants submitted in the alternative, as I understood it, that if there were such an agreement then it did not apply to restrict Marilyn from changing her will to leave to the defendants that component of her assets that derived from what she herself had inherited from her mother, and that it was not shown that the changes to her will went beyond doing this.

C.3 The objective surrounding events or circumstances

[13]In the circumstances of this case, I granted leave to cross-examine on the witness outlines that had been exchanged.

Much of the defendants’ challenge to Lisa’s and Andrea’s evidence focused on distinctions in language used by them on different occasions. This was understandable in the circumstances of this case where it might rise or fall on whether, for example, Kurt conveyed that they ‘would not’ change their wills or whether he conveyed that they ‘could not’ change their wills: the former might indicate an arrangement or expectation that fell short of a legally-binding agreement and the latter might indicate a legally-binding agreement. That said, it is somewhat artificial, it seems to me, to expect anyone to recall the precise language used to this level of specificity after all these years and it would be artificial for Lisa or Andrea to purport to do so. An inability to recall the actual words used is not necessarily fatal to their case. I return to this issue in Part C.5 and following below.

However, because of both the inherent problems with memory over time and the risk of misinterpretation of communications even at the time they were made, Lisa’s and Andrea’s evidence as to the substance of what was said by Kurt and Marilyn should be evaluated in the context of surrounding events or circumstances that are either agreed to have occurred or that I conclude probably did occur. These events or circumstances provide a framework in which the inherent likelihood or unlikelihood of their evidence being accurate may better be assessed. For this reason it is convenient, it seems to me, first to set out and to make findings where appropriate on these other events or circumstances.

C.3.1 The relationship, Kate’s lack of assets, their relative ages and Marilyn’s not having children

Kurt and Marilyn commenced their relationship in or around 1966 when Kurt was 36 or 37 years old[14] and Marilyn was 28 or 29 years old.[15] At this time, Lisa was about six years old and Andrea was about four years old. Kurt and Kate separated shortly thereafter. Kate, Kurt and Marilyn maintained civil relationships and all of them attended many family functions together, including Christmases and significant family milestones over the following years. Kurt continued on as Kate’s dentist. Lisa and Andrea maintained a close relationship with their father and spent time with him on weekends. They said, and I accept, that they also got on (for the most part) well with Marilyn and the dynamic was such that they were part of her family and she was part of theirs.
[14]Kurt was born on 20 July 1929.
[15]Marilyn was born on 4 November 1937.

Kurt was born in 1929 and Marilyn was born in 1937 and so, in the usual course, it would be expected that Kurt would die before Marilyn (as happened).

Kurt did not provide Andrea and Lisa’s mother, Kate, with substantial assets when they separated that would likely give rise to a significant inheritance to Andrea and Lisa from her and Kate had no substantial assets of her own.[16] Kate did not re-partner. Following their separation, any family wealth that might be expected to find its way to Andrea and Lisa, as Kurt and Kate’s children, was held by Kurt.
[16]Kate received £11,000, which was half the net proceeds from the sale of their then home, and thereafter received $50 a week on an infrequent basis. Kurt, however, paid school fees and provided for certain expenses when Kate would ask him to do so.

Kurt and Marilyn did not have any children together, despite trying to do so, and, by 1993, Marilyn was approximately 55 years old and unlikely ever to have any children of her own, even if she were to re-partner after Kurt’s death.

C.3.2 Kurt was the primary breadwinner

Kurt worked as a dentist in Chapel Street and then in Collins Street. I accept that he worked hard for several decades and that his work was well remunerated. Marilyn had an arts degree and had worked in public relations but stopped that work after she began the relationship with Kurt. Marilyn performed some work in Kurt’s practice as a bookkeeper, the extent of which was not clear, but was not otherwise employed. When Albany Road was purchased in 1976, her occupation was recorded as ‘home duties’. In the 1993 wills, Kurt was described as a ‘dental surgeon’ and Marilyn was described as a ‘married woman’. She was similarly described in her 2001 and 2005 wills. As noted above, they did not have children together. Whatever be the case with money that Marilyn had inherited, which I deal with in Part D below, I conclude that in their domestic circumstances Kurt was the principal breadwinner, and by his labours contributed very substantially to their ability to accumulate assets.

C.3.3 Kurt’s 1993 will represented a change in approach and likely made Lisa and Andrea dependent on Marilyn for any inheritance

In 1981, Kurt made a will that, for the most part, provided for some assets to go immediately to Lisa and Andrea and other assets to be held for on trust for Marilyn for her life and then for Lisa and Andrea.[17] That is, his 1981 will provided that, one way or another, all his assets would find their way in due course to Lisa and Andrea.
[17]Real estate held in his own name fell into the first category. Real estate held in common with Marilyn fell into the second category. Proceeds of any life insurance policy were split between the two.

In 1988:

(a) Kurt made a will that left $150,000 to his daughters Lisa and Andrea and the balance of his estate for life to Marilyn and then to Lisa and Andrea. As with his 1981 will, it provided that, one way or another, all his assets would find their way in due course to Lisa and Andrea; and

(b) Marilyn made a will that left jewellery she had inherited from her mother, Gertrude, (over which she had only a life interest) to Louise and Victoria, furniture and household items she had inherited from her mother Gertrude to Kurt for life and then to Stephen, Victoria and Louise, $60,000 ‘as repayment of the debt owing’ to Gertrude’s estate, $40,000 to Kurt for life and then to Stephen, Victoria and Louise, her own jewellery and clothing to Lisa and Andrea, and the residue of her estate to Kurt or, should he predecease her, to Lisa and Andrea. It is noteworthy that Marilyn had assets that were identified as having come from her mother that were to go back to the Cottrell family members. It is not immediately apparent whether the $40,000 left to Kurt for life and then to Stephen, Victoria and Louise was thought by her to reflect money that she had inherited from her mother or was money that was otherwise part of her and Kurt’s joint funds.

Then, in March 1993, Kurt and Marilyn made simple wills in very similar forms. These wills represented, conceptually, a significant departure by both of them from their earlier wills. If he were to die first, Kurt had previously left his children an immediate and substantial legacy[18] and Marilyn only a life interest in the balance of his estate with the remainder to go to his children. His children would, therefore, ultimately obtain all his estate. Under his 1993 will, if he were to die first, he instead left his entire estate to Marilyn absolutely. Not only would Lisa and Andrea receive nothing on his death, but Lisa and Andrea could now only inherit anything at all if Marilyn were to bequeath what had become her assets, or what was left of her assets, to them.
[18]$150,000 in 1988.

Equally, if Marilyn were to die first, Marilyn had previously made specific provision for certain assets to go to Stephen, Victoria and Louise and to Lisa and Andrea, but had otherwise left the balance of her estate to Kurt absolutely. Under her 1993 will, if she were to die first, Stephen, Victoria and Louise would not receive anything at all. If Kurt were to die first, then Stephen, Louise and Victoria would share in a relatively modest legacy. Otherwise, her entire estate would go to Lisa and Andrea.

Looked at together, in the event that Kurt were to die first, the 1993 wills represented both a significant increase in the assets that would be left absolutely to Marilyn, and a significant decrease in the assets that would go to Stephen, Victoria and Louise.

C.3.4 The failure to mention any agreement to Mr Chamberlin

The 1993 wills were drawn up by a solicitor, Mr John Chamberlin. Mr Chamberlin was not their solicitor prior to 1993, although he remained their solicitor from 1993. Mr Chamberlin said, and I accept, that neither Kurt nor Marilyn indicated to him that they had reached an agreement that neither could change their will without the other’s consent.[19] If there were such an agreement, the failure to mention it to Mr Chamberlin is, of course, somewhat surprising and a significant factor in the defendant’s favour, although it is not fatal to the plaintiffs’ case.[20]

C.3.5 The August 1993 family meeting to discuss the 1993 wills

[19]He had no independent memory of the attendance, but his file remained in existence and he said, and I accept, that if they had mentioned such a thing to him he would have made a note in his file, and there is no such note.

[20]I note, for example, that a failure to mention such an agreement to the solicitor who prepared the wills was not a barrier to the finding of a mutual wills agreement in Renfrew v Birmingham [1937] VLR 180, 184-186.

In August 1993, there was a ‘family meeting’ between Kurt, Marilyn, Lisa and Andrea at which the 1993 wills were discussed. The meeting was held in August because Lisa had been overseas earlier that year and had only just returned to Melbourne. Lisa and Andrea were adults aged approximately 33 and 31 respectively. The words that were used at this meeting were very much the subject of dispute, but I accept that the meeting took place and that at that meeting Andrea and Lisa were informed by Kurt, in Marilyn’s presence, that he had changed his will to leave everything to Marilyn and that there was a discussion relating to that decision. I accept that Andrea and Lisa were told that Kurt had wanted to put his assets into a trust for Marilyn for life on the basis that his assets would thereafter go to them (as had been the case under his 1981 and 1988 wills), but that Marilyn had opposed that being done because she wanted to have control of their assets after Kurt’s death, and that, as a compromise, they had made the wills where everything, except some assets of Marilyn’s, would go to each other absolutely and, if the other were to predecease them, then to Lisa and Andrea.

I accept that the Albany Road property, the matrimonial home, was also a subject of discussion, and that Kurt indicated to Lisa and Andrea that they should assist Marilyn to remain in that property for as long as she wished to do so. This, possibly, had a dual purpose. Obviously, step-children assisting a step-mother to remain in her long-term home as she ages, if she wishes to do so, would be a nice thing to do. But also, even if there were an agreement that Kurt and Marilyn not change their wills without the other’s consent, there was no restriction on the power of the survivor to dispose of assets while still alive. Accordingly, it was always possible that if Marilyn survived Kurt, she might dispose of her assets while still alive and in that way reduce what Lisa and Andrea would inherit even if she did not change her will. As Andrea put it, there was no inhibition on Marilyn selling up and moving to Thailand. It was apparent by this time that the Albany Road property was Kurt and Marilyn’s main asset. It was held in joint names so on Kurt’s death Marilyn would become its sole owner. If it remained with Marilyn at her death, it would, under her 1993 will, pass to Lisa and Andrea but if it were sold during her lifetime and the proceeds spent or given away, Lisa and Andrea would miss out on that asset.

I will return later to the central question as to whether Kurt and Marilyn also conveyed in this discussion that they had bound themselves not to change their wills without the other’s consent.

C.3.6 Kurt’s subsequent discussions about his children’s inheritance
C.3.6.1 With Kate in the dental surgery

Kate, Kurt’s first wife and Lisa and Andrea’s mother, said that Kurt specifically raised his will with her on an occasion when she was attending him for dental treatment. She thought that this was in or about 1993 and that Kurt said at the time that he had already discussed his will with Lisa and Andrea. I accept that Kate and Kurt had a conversation concerning his will and I conclude that it was after, but not long after, the August 1993 meeting referred to above. Kate’s evidence was that Kurt told her that their ‘girls’ would be looked after, that he and Marilyn had willed their assets to each other, and that the wills ‘can’t be changed’ without the other’s permission or consent. Kate later clarified that Kurt also said that he would probably die first, and that after Marilyn died ‘the whole estate would go to [their] children equally.’ Although not expressly said by Kate, it was implicit, in my view, in Kate’s evidence that Kurt also conveyed that he and Marilyn left their estates to Lisa and Andrea if the other were to predecease them: otherwise, the ‘girls’ would not be ‘looked after’ and Marilyn’s estate would not go equally to Lisa and Andrea. Kate also acknowledged that Kurt told her that Marilyn also intended to leave a ‘small amount’ to ‘her niece and nephew.’

C.3.6.2 With Kate and Andrea at the Red Emperor restaurant

In July 1994, there was a family gathering at the Red Emperor restaurant to celebrate the christening of one of Andrea’s children. Kate was present, as might be expected. At that meeting, before they sat down to lunch, Kurt approached Kate and asked her to sign over to him the benefit of a life insurance policy and presented a piece of paper for her to sign. I am satisfied that, in general terms, Kurt told Kate that she was the beneficiary under a life insurance policy, which had been in place since before their separation, but that he was meant to be the beneficiary and that he wanted her to sign the benefit of it over to him. Kate signed the document. Kate was not particularly well-off, and by doing this she assigned a valuable asset in her name to her ex-husband many years after their separation.

Kate said that Kurt had told her prior to the day of the lunch that he had cancelled the wrong policy and wanted her to sign the one in her name over to him, and she told him that she had to ‘think about it’. Her mother and Andrea both advised her not to do so. But then, at the restaurant, Kurt, with Marilyn alongside, produced a document for her to sign. Kate said in evidence in chief that before she signed it, she asked Kurt for, and Kurt gave, his assurance that the money from the policy would go to their children and that both Kurt and Marilyn told her not to worry and that under their wills it would all eventually go to Lisa and Andrea after they passed away. In cross-examination, she said that Kurt told her that Marilyn would probably out-live him, he was leaving the house and his estate to Marilyn, and that he and Marilyn had ‘agreed’ that Marilyn would ‘leave everything to the girls’. She also said that she had asked Kurt in this conversation why the agreement was not in writing, and he had replied, in Marilyn’s presence, that they had ‘both agreed’ and that there was ‘no need’ to write it down.

The evidence was at least uncertain and to some extent in conflict as to whether at the restaurant the papers were produced by Marilyn and then handed by Kurt to Kate or produced by Kurt himself. It was also pointed out by the defendants that Kate and Andrea said that Kurt told Kate that there were two insurance policies and that he had cancelled the wrong one, when in truth it seems that there was only one policy that was in joint names: a letter was produced dated 24 June 1994 from The Colonial Mutual Life Assurance Society Ltd to ‘Mr and Mrs Miglic’ at 24A Albany Road that indicates that policy number 1094272 with a maturity date of 20 July 1994 was ‘jointly owned’. The policy itself was not produced. I consider these divergences to be of little consequence, save to the extent that they might reveal what the defendants characterised was a willingness by Andrea to ‘reconstruct’ her memories and give evidence in a certain manner of matters on which her memory was in fact unreliable, to which I will return later.

C.3.6.3 With Kate a few years later at Albany Road

Kate also said that she asked Kurt again on Christmas Eve a few years afterwards at Albany Road whether the situation with the wills was still the same, and he said that ‘of course’ it was.

C.3.6.4 In 1998 with Stuart Esnouf and Andrea at their house

In 1998, Andrea was married to Stuart Esnouf. They are no longer married. She and Stuart both said, and I accept, that Kurt came to their house in 1998 to discuss concerns he had that Marilyn was drinking and lending money to her brother Gavin and the implications that this had for his children’s inheritance. Stuart said that Kurt explained that he was concerned that, if he were no longer there to ‘supervise’, then Gavin might ‘continue to get money from’ Marilyn. Stuart said he told Kurt that if he was worried that his intent was not going to be fulfilled – ‘if he was looking to protect his estate in regard to his daughters’ - then he should ‘look at a trust in order to be able to fully dictate his wishes in regard to his estate’. In response, Kurt ‘immediately dismissed’ this and said that that ‘wasn’t possible’ because Marilyn ‘wouldn’t agree to a trust’ and that he ‘can’t change the will without Marilyn’s permission’ and that ‘she certainly won’t give it’. Andrea gave evidence that was consistent with this. She also said that Marilyn rang her later that day, having been informed by Kurt of the visit, and, after criticising her for ‘interfering’, reiterated that ‘the wills are not changing’ and that she would ‘never betray your father’. Stuart confirmed that Andrea had received such a call from Marilyn later that day.

There was evidence that was consistent with Kurt having a concern that Marilyn might give money to Gavin. Although Gavin was a successful surgeon with a private and public practice[21] and had also inherited money from Gertrude, and so one might expect that there would be no reason for which he would need to borrow money from Marilyn, he had, or had had, a gambling problem. His wife, Barbara Cottrell, accepted that she had left Gavin in the early 1990s because he then had a serious gambling problem, but they later reconciled and she thought that he had stopped gambling after that time. There was some evidence that suggested that his problems lasted longer than this. In 1994, Gavin and Barbara downsized and sold one house for $830,000 and purchased another for $350,000, yet required a mortgage that in 2002 had a balance of $293,000 and was later paid out by Louise and her husband. There was also in evidence a piece of paper on which Marilyn had recorded, in her handwriting, that Gavin borrowed $1,000 from her in 2000 and $3,000 in 2003, and made $500 repayments in 2009, 2010, 2011, 2012, 2013 and 2014, leaving a balance still owing to her after that time of $1,000. Gavin had initialled the repayments. Barbara was not aware that Gavin had ever borrowed any money from Marilyn but was seemingly unable to give details of their financial situation. She did not suggest that they had any other financial investments of note. Gavin died in 2018 and so was not able to give evidence.
[21]Gavin reduced his private practice and the number and type of operations he performed after 2000 as a result of health issues, but the discussion considered here was in 1998 at a time when he was working full time.

These matters, considered together, make it plausible that Gavin had ongoing issues and financial concerns that he told Marilyn about and that he asked her for financial support, and thus support the evidence given by Andrea and Stuart that Kurt spoke to them with concerns about Marilyn’s giving money to Gavin.

C.3.6.5 In 1998 after Marilyn injured herself in a fall

In 1998, Marilyn fell either off a ladder or off the roof and fractured her pelvis. Andrea said that she and Lisa (who was visiting from overseas) had another discussion with Kurt after they had visited Marilyn in hospital. Andrea said that Kurt expressed to them that he was still concerned that Marilyn would lend money to Gavin and that, if he died, the agreement between them did not prevent Marilyn from doing so, and he noted that the ‘best thing’ they could do would be to keep Marilyn in the Albany Road property so that they would ‘at least get the house’. Lisa gave consistent evidence. Notwithstanding the uncertainty as to how Marilyn had had her fall or had ended up in hospital, I accept that a conversation to that effect took place.

C.3.7 Kurt’s illness and Marilyn’s 20 December 2001 will

Marilyn executed a new will on 20 December 2001. This will increased the amount left to Stephen, Victoria and Louise from $20,000 between them to $20,000 each, but otherwise left her estate, as before, on trust for Kurt or, should he predecease her, for Andrea and Lisa. The 2001 will also appointed Kurt as a co-executor with Marilyn’s accountant. Lisa and Andrea contended that by 20 December 2001, Kurt’s dementia was such that he was incapable of consenting to Marilyn’s executing a new will.

Kurt started to develop dementia in the late 1990s. In 1998, Kurt’s general practitioner noted some memory problems and Marilyn’s concerns that Kurt had ‘changed completely’ and was becoming unpredictable and occasionally aggressive. In July 1999, a specialist physician treating his heart expressed ‘serious concerns now about [his] professional future’. In April 2000, his doctor noted a ‘marked deterioration in mental state’. Because of his deteriorating condition, Kurt had sold his practice by July 2000. On 12 June 2001, his doctor noted Kurt was ‘confused not making much sense’. On 13 November 2001, another doctor, treating his hips, noted ‘a moderate degree of dementia’.

The question of whether Kurt consented to Marilyn’s executing her 20 December 2001 will is, however, not of major significance. The agreement for which the plaintiffs contend is one that prevented Marilyn from changing her will without Kurt’s consent. The fact that Kurt might have consented to Marilyn’s execution of the 20 December 2001 will does not indicate that there cannot have been an agreement on the terms alleged by the plaintiffs, and any such agreement, if it existed, would survive the execution of this will with Kurt’s consent. Further, because the 20 December 2001 will still provided for Marilyn’s estate for the most part to go to Lisa and Andrea, with the increase in the bequest to Stephen, Victoria and Louise still quite modest, there is no reason to conclude that if Kurt had not objected to the 20 December 2001 will there must not have been an agreement between them of the type alleged. If it were established that Kurt consented to Marilyn executing her 20 December 2001 will, all that would follow is that Marilyn’s estate would be fixed with a trust in accordance with the terms of that will rather than the 1993 will. For present purposes, this means that, save for an increase of $40,000 in the amount that would go to Stephen, Victoria and Louise, Marilyn’s estate would still go to Lisa and Andrea.

Even so, it is necessary to determine whether Kurt did consent to Marilyn’s executing her 20 December 2001 will. The will was prepared and witnessed by Mr Chamberlin, who had also prepared Kurt and Marilyn’s 1993 wills and by this time was their long-term solicitor. Mr Chamberlin initially said he could recall attending at Albany Road to witness a subsequent will of Marilyn’s at a time when Kurt was present. This must have been her 20 December 2001 will as, by 2003, Kurt had moved in to care. Although his memory was understandably somewhat vague, Mr Chamberlin said that Kurt was in the house and in his vicinity when he attended and that he had no concerns with making Kurt an executor.

In order to put this evidence in context, however, it is necessary to consider what Mr Chamberlin’s file revealed about the events earlier that month and qualifications he made in cross-examination. On 3 December 2001, according to Mr Chamberlin’s file note, Marilyn called him and told him that ‘Kurt has gone downhill’ and that she wanted to give her nephew Stephen an enduring power of attorney and to appoint her accountant to be her executor. Kurt had previously held these positions. Marilyn called back the same day, gave Mr Chamberlin the name of her accountant, and Mr Chamberlin noted that he was ‘to be executor’. The following day, on 4 December 2001, according to another file note, Marilyn told Mr Chamberlin that Lisa had suggested that Marilyn should appoint another person as her attorney because Kurt was ‘incapable’. There is another file note of 4 December 2001 in which Mr Chamberlin recorded Marilyn’s instructions that all her assets were to go to Kurt but if she were to survive Kurt then each of Stephen, Victoria and Louise were to have a legacy of $20,000 each. Consistently with this, in Mr Chamberlin’s files was a revocation dated 4 December 2001 of Marilyn’s appointment of Kurt as her power of attorney, witnessed by Mr Chamberlin. Mr Chamberlin also prepared an enduring power of attorney in favour Stephen and Marilyn’s accountant.

Mr Chamberlin acknowledged in cross-examination that it was possible that his memory that he had an attendance at Albany Road in December 2001 was incorrect. There is nothing in his will file that indicates either that he spoke to or saw Kurt, or that Marilyn told him that Kurt was aware of or otherwise involved in the process of her obtaining this new will. Further, based on the fact that the other witness to the will was an articled clerk at his firm, his evidence was, ultimately, that he believed that Marilyn executed the 20 December 2001 will at his office and not at Albany Road. I consider this more likely because, also, on 14 December 2001, Marilyn wrote to Mr Chamberlin approving the draft will that had been posted to her on 10 December 2001 and said that she would ‘make an appointment next week’. This is suggestive of her attending at Mr Chamberlin’s offices rather than Mr Chamberlin attending on her in Albany Road.

In these circumstances, I am not satisfied that Mr Chamberlin witnessed Marilyn’s 20 December 2001 will at Albany Road in the presence of Kurt, or that Kurt gave an informed consent to the execution of that will. It is, in my view, more likely that Marilyn simply made arrangements directly with Mr Chamberlin and executed the will at his office.

C.3.8 Marilyn’s 2005 will and severing of the joint tenancy

On 14 September 2005, Marilyn executed another will. Kurt’s dementia was well advanced by this time and there is no issue that he was unable to provide consent (if his consent were required). By this will, Marilyn provided legacies to Stephen and Louise of $350,000 each and to Victoria of $500,000. This was, obviously, a very significant increase from her previous wills. The balance of her estate was left to Kurt or, should he predecease her, to Lisa and Andrea.

At the same time, Marilyn severed the joint tenancy so that, as from 30 September 2005, Albany Road was held by her and Kurt as tenants in common.[22] There is no obvious reason for which she did this other than it ensured that, if she were to predecease Kurt, she would have sufficient assets in her estate to pay the legacies to Stephen, Louise and Victoria provided for in her will.

C.3.9 Kurt’s death in 2007 and the passing of his estate to Marilyn

[22]Marilyn executed the transfer on behalf of Kurt pursuant to a power of attorney held by her.

Kurt died in 2007 and Marilyn, as executrix, obtained probate of his 1993 will. Lisa and Andrea received nothing, and all of Kurt’s estate passed to Marilyn.

Neither Lisa nor Andrea made any application for provision out of the estate under the testator’s family maintenance provisions of the Administration and Probate Act 1958. This is consistent with their evidence that there was an agreement in place whereby Marilyn was to have the entire estate for her lifetime but would leave it to them in her will, although, of course, as adults who were able to support themselves, it might well be that they would not have been able to succeed in any such claim.

Andrea says that she asked Marilyn at this time whether she and Kurt had changed their wills to leave something to the grandchildren, and that Marilyn said no, but that she and Lisa would inherit in due course and that they could leave it to their children.

C.3.10 Andrea’s discussions with Marilyn in and after 2009
C.3.10.1 Andrea’s 13 September 2009 file note

Andrea produced a file note she made on 13 September 2009 following a discussion with Marilyn. The file note was in the following terms:

Met /c[23] Marilyn Sunday afternoon. Discussed the will she has made. She is leaving a small portion to her nieces + nephew /c Tor to received 150K more as she is a low income earner.
Marilyn stated in her will that Lisa + I receive equal amounts ie ½ each of Albany Rd + ½ of the superannuation and share portfolio.

[23]A ‘c’ with a line over it is a recognised shorthand for ‘with’, from the Latin word cum.

I accept that this file note is genuine. The will referred to must be Marilyn’s 2005 will. I accept that Andrea and Marilyn had a conversation about Marilyn’s will, that Andrea spoke to Lisa after this discussion, and that Lisa (who is a lawyer) suggested that Andrea make a note of it.[24] The making of this file note is supportive of Andrea’s evidence that she believed that there was an arrangement that limited Marilyn’s ability then to decide who should inherit her estate. If Marilyn were, in Andrea’s mind, free to dispose of her assets as she thought fit, there would be no reason for her to make a file note of this conversation.
[24]Andrea’s recollection of this discussion was that Marilyn said that she was thinking of making a will, rather than that she had made a will. She conceded that the file note was more likely to be accurate.

The question does arise, though, why Andrea, if she really thought that Marilyn had broken an agreement, did not take the matter further at the time. Andrea’s explanation was that Marilyn had been drinking when they spoke and that when Andrea sought to raise the issue again about a week later, Marilyn denied ever having had the discussion.

C.3.10.2 The discussion about a pre-nuptial agreement

From 2010, Andrea was in a relationship with and living with David Wells. Andrea said that Marilyn suggested to her and also to Mr Wells that they have a ‘prenup’ because Andrea would inherit half the house.

I do not consider this evidence to be of any real significance. Marilyn might well have given such advice to her step-daughter, who (based on the wills at that time) stood to inherit a significant sum, without Marilyn being subject to an agreement not to change her will in the future.

C.3.11 Marilyn’s later wills

I have already referred to Marilyn’s 2001 and 2005 wills. After Kurt’s death in 2007, Marilyn executed new wills in 2011, 2014 and 2018. These wills progressively increased the share of her estate that was to be left to Stephen, Victoria and Louise and reduced the share that was to be left to Lisa and Andrea. Her 2011 will, made four years after Kurt’s death, left Stephen, Victoria and Louise $700,000 each. Her 2014 will, made seven years after Kurt’s death, left Stephen, Victoria and Louise $1 million each. It also left Stephen, Victoria and Louise her personal chattels, and Andrea $1 million. In both wills, the residue was left to Lisa and Andrea. Marilyn’s 2018 will, as noted above, was made 11 years after Kurt’s death and left superannuation assets and some gold to Andrea, one-fifth of the sale proceeds of Albany Road to each of Stephen, Louise, Victoria, Lisa and Andrea, and the balance of her estate in equal shares to Andrea, Louise and Victoria.

The defendants contended, in broad terms, that the fact that Marilyn made these subsequent wills indicates that she felt herself under no obligation not to do so and so was inconsistent with her having agreed not to do so.

C.3.12 Discussions following Gavin’s death in October 2018

Andrea said that after Gavin died in October 2018, Marilyn told her that she was thinking of changing her will and dividing her assets five ways, Andrea said that she could not do that, and Marilyn asserted that she had done it and that she could do whatever she liked. Andrea saw the will, expressed her dissatisfaction, and immediately rang Lisa. Andrea said that Lisa called her back, told her that she had spoken to a lawyer, and that there was nothing that they could do until Marilyn died unless they could persuade her to change her will back. Andrea says she spoke again to Marilyn and reminded her of what she had said about the agreement she had reached with Kurt, and said that if she did not change the will back then Andrea would have to litigate after Marilyn’s death. It was known to Marilyn at this time that Andrea had suffered hardship: her son had died, and her partner was suffering with motor neurone disease. Andrea said that Marilyn appeared to understand and had said she would ‘get it sorted’, but she did not do so.

Lisa confirmed that she received such a call from Andrea. Lisa said that she then called on an old mentor of hers, Roger Jepson, who was a partner at Mills Oakley. Mr Jepson’s witness outline was tendered by consent. In it, Mr Jepson stated that in or around 2018, Lisa rang him and raised an issue about her step-mother changing her will ‘in some way that wasn’t supposed to happen’ that was a departure from ‘a family agreement between her father and stepmother about their wills’. Mr Jepson was not an expert in this area. He suggested that she get advice, but also said that ‘it might be an issue that couldn’t be dealt with until after the stepmother passed away.’ I accept that Andrea had a discussion with Marilyn at this time along the lines that she described.

On 3 December 2018, Mr Chamberlin called Andrea in relation to Marilyn’s execution of her power of attorney by which she appointed Andrea as her attorney. In that discussion, which took place while Andrea was driving, Andrea asked Mr Chamberlin whether Marilyn had made a new will not leaving her or Lisa anything and Mr Chamberlin said that Marilyn was ‘free to make her own will’. Andrea did not then assert, to Mr Chamberlin, the existence of the agreement asserted in this proceeding.

Andrea was asked why she had not mentioned anything about the mutual wills agreement to Mr Chamberlin. She believed that she had told him that ‘this shouldn’t have happened’, but Mr Chamberlin did not have a note of her having said this. Andrea did not have a previous relationship with Mr Chamberlin. I do not consider that any failure by to raise the wills agreement then with him, a person with whom she did not have a prior relationship, while driving, all is of any real consequence.

C.3.13 Initial focus on testamentary capacity and Lisa and Andrea’s initial statements to their lawyers

The defendants emphasised the fact that after Marilyn’s death, Andrea and Lisa, through their lawyers, did not initially assert the existence of the agreement between Marilyn and Kurt on which they now rely but instead asserted that Marilyn did not have testamentary capacity at the time of her 2018 will. The defendants submitted that this behaviour was inconsistent with Andrea and Lisa having a genuine belief in the existence of the agreement on which they now rely, and that they only turned to, or created in their minds, the argument that there was a mutual wills agreement after it became apparent that Marilyn did have testamentary capacity in 2018 or, if she didn’t, that still would not cause the 1993 will to take effect.

Lisa and Andrea said that they did mention the agreement from the beginning, but that they did not appreciate its legal significance until later, and also that their concern about Marilyn’s testamentary capacity arose from their belief that, were she in sound mind, she would not have acted in breach of that agreement.

Mr Chamberlin, Marilyn’s lawyer, read Marilyn’s 2018 will to the family on 15 June 2020. It seems that Lisa and Andrea expressed some dissatisfaction at the terms of the will, but the precise terms in which they did so was in dispute. On 7 July 2020, Lisa spoke to her current lawyer, Mr Christian Teese of Rigby Cooke, for the first time. Mr Teese gave evidence and his file notes of various conversations were tendered.[25] His 7 July 2020 file note states:
[25]The plaintiffs waived privilege over communications with their lawyers that took place prior to the mediation. The parties agreed that the file notes could be relied on to prove what was said to Mr Teese, but, pursuant to s 136 of the Evidence Act 2008 (Vic), were not to be used as independent proof of the truthfulness of what was said.

Lot of issues - Wills with Dad. Family agreement for girls.
-Marilyn left significant amount of estate to her family and not supposed to. Agreement.
-Change from earlier will and not supposed to.
-Terrible drinker. Query capacity.

Mr Teese confirmed, and I accept, that in this initial telephone call Lisa asserted that, in substance, there had been an agreement between Kurt and Marilyn that Marilyn had broken.

The next day, on 8 July 2020, there was a video conference between Mr Teese, Lisa and Andrea. Mr Teese’s file note contains the following:

Will not supposed to give away to Cottrell’s. Family agreement about how wills would operate. Dad and Marilyn told us. Agreement from early 90’s when wills made by them together. They told us they couldn’t change.

Two months later, on 17 September 2020, Mr Teese made another file note of a conversation he had with Lisa. That file note provides as follows:

- She had an agreement with Dad. Family Agreement about wills was well-known in family — for her to depart shows how addled she was.
- Who knew about agreement?
Lisa, Andy, Mum (Kate) – Also knew of it.
Stuart Esnouf – Andy’s ex-husband – also Kurt’s brother Dieter – but he very sick and COVID restricting complications.

…
- Was Agreement re Will-making? Yes - about how wills would be left and not supposed to change. They told us together after making them. That’s how we know. Unthinkable she would depart. She had insisted b/c Dad wanted a trust instead - shows how much she’d lost it.

Mr Teese said, and I accept, that he had little to no knowledge about the legal concept of a mutual wills agreement prior to a telephone conference he had with counsel on 25 September 2020 in which he was told that such an agreement could be enforced by the imposition of a trust. Lisa, although a lawyer herself, said that she, too, was not aware of that concept at the time. I accept this evidence.

In light of the file notes and Mr Teese’s oral evidence, I accept Andrea and Lisa’s explanations for why they initially focused on whether Marilyn had testamentary capacity rather than on the 1993 agreement. When the file notes are taken into account, it is apparent that Andrea and Lisa asserted to their lawyers, from the beginning, their belief that by not leaving her estate to them Marilyn had breached an agreement she had reached with Kurt. The fact that their lawyers did not prosecute that claim until later was, to my mind, adequately explained.

Some time was spent on an email that Lisa sent to Mr Teese on 15 February 2021 in which she referred to ‘blindsiding’ the defendants with the mutual wills agreement for the first time in the mediation position statement and her belief that that would cause the defendants to walk out of the mediation. In the same email, she stated that the Cottrells would need ‘a few rounds of bashing around the head’ in the sense that that would be necessary before they would appreciate their risks in the case. I accept Lisa’s explanation for, and interpretation of, this email, which was supported by Mr Teese, that she was not advocating a strategy of ‘blindsiding’ but was acknowledging the reality that the mutual wills agreement was now being raised for the first time and that this might cause difficulties at the mediation. The use of the violent imagery is, looking at this email in hindsight, unfortunate, but otherwise of no real significance in the context of a hard-fought piece of litigation concerning family assets and relationships about which all the parties feel very strongly.

C.4 The ‘caveat’ for the Cottrell assets

The defendants submitted that Lisa and Andrea’s acceptance that Marilyn was entitled to leave part of her estate to the defendants meant that the agreement has not been proved or proved to have been breached. The argument, which was persuasively presented, was that because it was accepted that Marilyn was able to leave ‘the Cottrell assets’ to the Cottrell family, it followed that she was able to change her will without Kurt’s permission in order to do so, and because it could not be established that the ‘Cottrell assets’ were not substantial, it could not be established that the 2018 will was in breach of the agreement.

Ultimately, however, I was not persuaded by this submission.

The background, as is apparent from Marilyn’s mother Gertrude’s 1978 will and Marilyn’s 1988 will, is that Marilyn had only a life interest in some moneys and other assets in her possession. Those assets were not hers to dispose of in any will. Accordingly, it is not at all surprising that Marilyn might have informed Lisa and Andrea, when advising them of the arrangements between her and Kurt that would result in Lisa and Andrea inheriting from Marilyn if Kurt were to die first, that they would not be entitled to ‘the Cottrell assets’. Equally, stating words to that effect would not be inconsistent with there being a binding agreement between Kurt and Marilyn that neither could change their will without the other’s consent. It is also consistent with both Lisa and Andrea’s understanding that certain chattels were known to be Cottrell assets and should, regardless of what any wills might say, go to Stephen, Victoria and Louise.

Also, it is not quite right that Lisa and Andrea accepted that under the agreement as communicated to them Marilyn was able to alter her will without Kurt’s consent in order to leave whatever constituted ‘the Cottrell assets’ to the defendants.

In the draft statement of claim, it was alleged that Kurt and Marilyn told Lisa and Andrea that the agreement ‘doesn’t apply to Cottrell heirlooms’ that Marilyn had received from her mother. In the plaintiffs’ mediation position paper, it was said that they were told the agreement ‘did not apply to the Cottrell money or jewellery or furniture Marilyn had received from her mother’. Their solicitors’ instructions to counsel were that ‘Marilyn’s inheritance from her mother could be left at her discretion’. In contrast to this, in the statement of claim itself it was alleged that Kurt told them that ‘Marilyn had left a small amount of money to the Cottrells’ and the alleged agreement did not otherwise include the ‘caveat’. These formulations were not adopted in the evidence. In evidence in chief, Andrea said that they were told that ‘Marilyn wanted to leave a small amount of money to the Cottrells’. In cross-examination, she said she could ‘always remember Marilyn talking about the Cottrell jewellery and furniture and heirlooms and she always wanted that to go back to her family’, and she could recall discussion about the Cottrell jewellery and furniture and family heirlooms but ‘not necessarily about the money’. Her evidence, ultimately, was that although Marilyn regularly referred to the Cottrell jewellery and furniture or heirlooms going to the Cottrells, she could not specifically recall that being said at this meeting, but she could recall Kurt saying that Marilyn wanted to leave ‘a small amount of money to the Cottrells’. This was all consistent with Marilyn’s 1993 will that left some money to Stephen, Victoria and Louise if Kurt were to die first, and with Marilyn possessing some chattels she had inherited from her mother in which she had only a life interest that would not go to Lisa and Andrea, and with there otherwise being an agreement that Marilyn was not able to alter her 1993 will without Kurt’s consent.

Lisa’s evidence was that Kurt said that Marilyn was leaving only a small amount of money to the defendants as a gift and that the mediation statement, to the extent that it suggested the contrary, was wrong (and had not been properly checked by her at the time).

Mr Teese, their lawyer, was cross-examined about the creation of the legal documents and in particular the memorandum to counsel and the mediation position paper. He was an impressive witness who, I conclude, gave truthful evidence. He said that the memorandum to counsel (which said that Marilyn’s inheritance from her mother could be ‘left at her discretion’) was no more than his attempt at summarising the statements that had been provided to him relating to Marilyn’s leaving of $20,000 to the defendants in her 1993 will and that his reference to Marilyn’s inheritance was a reference to that sum. He said the mediation position paper (which said that the agreement ‘did not apply to Cottrell money or jewellery or furniture Marilyn had received from her mother’) ‘may not necessarily accurately reflect instructions’ but was his ‘understanding’ or ‘interpretation’ of them. It was put to Mr Teese that the later omission of this broad ‘caveat’, as the defendants described it, from the case as put reflected a change in his instructions. He did not agree.

On balance, I do not accept that any agreement that was reached between Kurt and Marilyn included a ‘caveat’ whereby Marilyn was free to alter her will without Kurt’s consent in order to bequeath to whoever she wished, or to her nephew and nieces, moneys that could be attributed to moneys she inherited from Gertrude. I accept Mr Teese’s explanations of how the suggestions to the contrary found their way into the documents that he authored. I accept Andrea’s and Lisa’s denials that they changed their instructions as they appreciated the significance of this issue. I conclude, instead, that Kurt and Marilyn conveyed, at most, Marilyn’s wish that the chattels (or heirlooms) she had inherited from Gertrude should stay within the Cottrell family, and that, as a qualification to the statement that each was to leave their estate to Andrea and Lisa, Marilyn had in fact made a provision in her will for some money to go to Stephen, Victoria and Louise in the event that Kurt died first.[26]

C.5 Lisa and Andrea as witnesses
C.5.1 Preliminary observations

[26]It should be noted that under her 1993 will, if Marilyn were to die first, she left nothing to her nephews or nieces.

When a contract is written, the parties will, usually, have carefully considered the terms in which their agreement is to be recorded and so its intended meaning can be gleaned by considering the words used.[27] The situation is more complicated in the case of an oral agreement. Further, if there were an oral agreement of the type asserted by the plaintiffs, it was reached in private discussions between Kurt and Marilyn, and so has to be established from how they later described their dealings to others, which adds to the difficulty.
[27]The parties have agreed to be bound by its contents as properly interpreted – see, eg, Toll (FGCT) Pty Ltd v Alphaphram Pty Ltd (2004) 291 CLR 165, 180 [43] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ), quoting with approval from Wilton v Farnworth (1948) 76 CLR 646, 649 (Latham CJ).

Counsel for the defendants cross-examined Lisa and Andrea, particularly, at length about differences in the way they described the communications by Kurt and Marilyn to them about their arrangement in a draft statement of claim, the actual statement of claim, a mediation position paper, their outlines of evidence and in their oral evidence. This was done in an attempt to establish that Lisa’s and Andrea’s memories, to the extent that they recalled statements indicative of binding legal obligations made by Kurt and Marilyn, were not reliable; that, with time, Lisa and Andrea had come to believe things had been communicated to them that had not in fact been communicated. As noted above, it is well recognised that honest people’s memories can with time become unreliable and that the risk of that happening is very real in the context of litigation where people have a lot to lose or gain by their evidence.[28] Although this was the focus of the defendants’ submissions and it was not ultimately strongly contended that Lisa or Andrea were deliberately lying in their central propositions, that possibility was not, as I understand it, abandoned.
[28]See, eg: Watson v Foxman (1995) 49 NSWLR 315, 319 (McLelland CJ in Eq); Roberts-Smith v Fairfax Media Publications Pty Ltd (No 41) [2023] FCA 555, [162]-[166] (Besanko J).

As noted above, it is unrealistic to think that, in most circumstances, persons are able, after the passage of some time, to recall the exact words used in a previous discussion. For that reason, when an oral agreement is alleged, typically ‘there are no definitive words to interpret’[29] and it is ordinarily sufficient to plead the ‘purport’ of a conversation[30] or to particularise the ‘substance’ or ‘effect’ of what was said rather than to attempt to set out what was said verbatim.
[29]Realestate.com.au Pty Ltd v Hardingham (2022) 406 ALR 678, 688-689 [45] (Gordon J).
[30]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.03.

In these circumstances, Lisa’s and Andrea’s inability to recall the precise words used by Kurt and Marilyn when they were describing their arrangement to them is not fatal to their case. It is a matter of common experience that someone can remember the substance of a communication rather than its precise words. I consider the proper enquiry to be as to the substance of what was conveyed by Kurt and Marilyn to Lisa and Andrea notwithstanding that the precise words cannot now be recalled. It is sufficient if Lisa and Andrea can convincingly establish the substance, or import, of what was said by Kurt and Marilyn in a manner that establishes that Kurt and Marilyn made a binding commitment to each other not to change their wills without the other’s consent. That is not to say that variations in the way the communications are described by Lisa and Andrea on different occasions might not lead to a conclusion that they do not reliably recall the substance, or import, of what was said. But a change in language, or emphasis, without a change in the substance or import, will not necessarily establish that the substance or import has not been reliably recalled.

There is, of course, a risk that Lisa and Andrea may have misunderstood or misinterpreted the substance of what was conveyed to them by Kurt and Marilyn. This is an additional risk beyond the usual problems with memory referred to above, and has also to be accounted for.

Further, pleadings, outlines of evidence and position papers are prepared by lawyers and do not, for the most part, purport to be in the exact language of witnesses. This is so even though they are prepared on instructions. Discrepancies in language between these different forms of document do not, necessarily, mean that a person’s recall is defective.

C.5.2 Variations in detail
C.5.2.1 ‘Albany Road’ or ‘the estate’

One particular aspect of this challenge arose from the tendency of Lisa or Andrea to refer on some occasions to their receiving the house, or ‘Albany Road’, and on other occasions to receiving ‘the estate’, on Marilyn’s death.

The defendants pointed out that Albany Road was in Kurt and Marilyn’s joint names so would not form part of Kurt’s estate if he were to die first. I did not consider this point particularly relevant. Albany Road would form part of Marilyn’s estate if Kurt were to die first, and would form part of Kurt’s estate if Marilyn were to die first, so would, ultimately, be ‘covered’ by the alleged agreement on the death of the survivor.

The defendants also pointed out that if Kurt were to die first, Marilyn would be free, while still alive, to dispose of Albany Road. Accordingly, they submitted, it just did not make sense that Kurt and Marilyn would describe their agreement to Lisa and Andrea in terms of its ensuring that Lisa and Andrea would inherit Albany Road in due course. There is something, but not much, in this point. It could equally be said that if Kurt were to die first Marilyn would be free, while still alive, to dispose of all of her assets including those she inherited from Kurt, and so it would not make sense that Kurt and Marilyn would describe their agreement to Lisa and Andrea in terms of its ensuring that Lisa and Andrea would inherit anything of substance in due course. The position was that, in 1993, Kurt and Marilyn owned Albany Road and they owned other assets. The alleged agreement did not preclude the survivor from disposing of all any assets while still alive, but it did preclude the survivor from changing their will. In the event that Albany Road was still owned, it would be caught by the agreement in that sense. And, again, Albany Road was the matrimonial home, a valuable property, a place where Marilyn liked living, and there were then no plans to dispose of it. Consistently with this, Marilyn remained living there until her death. Describing the agreement as one that was designed to ensure that Albany Road went in due course to Lisa and Andrea, or any discussion about their wealth focusing on Albany Road, would, in my view, have been entirely consistent with ordinary human behaviour. Any uncertainty about whether the words ‘Albany Road’ or ‘our estate’ was used in the discussions with Lisa and Andrea does not cause me to doubt their evidence or the substance of what was conveyed or to conclude that their evidence as to the substance of what was conveyed was no more than reconstruction.

As a particular example of how Albany Road as the most valuable asset by far might be conflated with the estate generally, it will be recalled that Kurt’s brother, Dieter, or Dr Wolf Dieter Miglic, was mentioned to Mr Teese as a person who knew about the agreement. Dieter, a retired doctor, provided a statutory declaration that was tendered by consent. In it, he stated:

It was always my understanding that there had been agreement that the proceeds of my brother’s main asset, being the house at 24a Albany Road, Toorak, were to be bequeathed in equal shares to Kurt’s two daughters by Marilyn after her death. This was very important to my brother and we all understood this agreement, including Marilyn.

C.5.2.2 The handling of paper at the Red Emperor Restaurant

Andrea was criticised for variously saying, or adopting a document that said, that Kurt handed Kate the papers for her to sign at the Red Emperor, and saying in her evidence in chief that Marilyn handed the paper to Kate for her to sign at the Red Emperor. She consistently said that both Kurt and Marilyn were present there with Kate. In cross-examination, she said she could recall Marilyn taking it out of her bag but that she couldn’t recall who actually handed it to Kate. When asked to ‘make up your mind who you are going to say for the purposes of the case’ handed the paperwork to Kate, Andrea answered: ‘Well, it was Marilyn because she took it out of her handbag and had the pen.’ There is nothing in this alleged discrepancy. Marilyn and Kurt, together, went over to Kate with a view to Kurt having Kate sign a document transferring an asset to him. Which of the two of them in fact handed the paper to Kate was entirely inconsequential. In the circumstances, I do not consider that Andrea’s describing this event in terms of Kurt handing the paper to Kate, when she cannot remember whether it was Kurt or Marilyn who handed the paper to Kate, indicates either dishonesty or some form of unreliable memory as to the substance of this interaction.

Andrea was also criticised for saying, or adopting documents that said, that there were two insurance policies, one in each name, but that after discovery had revealed that there was probably only one policy that was in joint names, Andrea started to describe the events instead in a way that referred to only one policy. I do not see this as a concern. People would be unlikely to recall whether there was one or two insurance policies, because that fact was of absolutely no consequence, and, even if there were only one, Kurt might have mistakenly said that there were two. I see nothing sinister in Andrea initially describing these events as, incidentally, involving two policies and then, when it was established that there was in fact only one, describing these events as, incidentally, involving one policy. I reject the suggestion put to her that this was an example of her being prepared to ’re-tailor’ her evidence. This matter does not cause me to doubt Andrea’s reliability as to the substance of events.

It was pointed out to Andrea in cross-examination that the statement of claim alleged that Kurt, at the Red Emperor restaurant, said words to the effect that his and Marilyn’s wills left their entire estates to each other, but Andrea did not volunteer this evidence when she was describing the events at the Red Emperor restaurant in her evidence in chief. In response, Andrea confirmed that Kurt did say words to that effect at the Red Emperor restaurant. This was put by counsel as an example of what ‘gets left in and left out’ when a witness ‘reconstructs’ things. I did not see it that way. Andrea’s failure to volunteer this aspect of the events at the restaurant in answer to open-ended questions in chief did not cause me to doubt the honesty and accuracy of her evidence given in cross-examination that she could recall a discussion to that effect taking place.

C.5.2.3 The use of the phrase ‘mutual wills agreement’

Andrea accepted that neither Kurt nor Marilyn, as far as she can remember, used the precise phrase ‘mutual wills agreement’. Among lawyers, the phrase ‘mutual wills agreement’ is a term of art that describes an agreement between the makers that they will not change their wills without the other’s agreement. When they first described the arrangement between Kurt and Marilyn, Lisa and Andrea referred to it simply as a ‘family agreement’ or a ‘family arrangement’. After they had received legal advice that such an agreement might be enforceable by way of trust and was known in law as a ‘mutual wills agreement’, they started to use that phrase to describe the arrangement. Lisa explicitly accepted that she started to use this term of art. The defendants submitted, in substance, that this ‘evolution’ in or ‘elevation’ of their evidence revealed, if not dishonesty, at least a process of reconstruction of memory over time that renders the evidence ultimately unreliable.

I do not consider that to be the case. It would be only natural, in my view, once informed of the legal phrase that captures an agreement of the type for which the plaintiffs contend, for the plaintiffs then to use that language as a shorthand. It might have been significant if either Lisa or Andrea had asserted that Marilyn or Kurt had used that language, but neither did.

C.5.2.4 The type of language used

Lisa and Andrea, on occasions, used language when describing what Kurt and Marilyn told them in August 1993 that suggested that they had an actual memory of words or phrases used. For example, the mediation position paper asserted that Marilyn had said words to the effect that she had made a ‘solemn promise’ to Kurt that she would ‘never betray’ and the statement of claim alleged that Kurt had said that the wills were ‘set in stone’. Andrea, in particular, had a tendency in her oral evidence to describe the events as if she had a memory of the actual words used – it sometimes sounded as if she were quoting direct phrases from what had been said. The cross-examination, however, revealed that neither Lisa nor Andrea could in fact recall the actual words used.

As noted above, this is to be expected. The defendants submitted, however, that the written material (in particular) carried an implicit false assertion that they could remember the actual words used or that they were prepared to assert that a statement was made when they did not have any actual reliable memory of that statement ever having been said. Either way, the defendants submitted, it should be concluded that their evidence could not be relied on to establish an agreement with the terms alleged.

Again, I do not consider that to be the case. The pleadings sometimes use the words ‘to the effect that’ and sometimes do not. I share the defendants concern that on some occasions the pleadings and other material suggest that the plaintiffs assert an actual memory of particular language used. But when the matter is looked at overall and in context, and their oral evidence is considered, I do not conclude that Lisa or Andrea falsely represented their memories or that their evidence is unreliable for this reason. As noted above, the issue is whether their memory of the substance of what was conveyed is reliable. When describing that substance, some form of words has to be selected. It is not unexpected that different words will be used on different occasions.

The defendants also point out that the plaintiffs referred, from time to time, to Marilyn agreeing to honour ‘Kurt’s wishes’, and suggested that this use of language was inconsistent with there being a binding agreement. I disagree. Kurt wanted his assets ultimately to go to Lisa and Andrea; that was his wish. The fact that he had this wish, or expressed it, does not mean that he and Marilyn had not entered into a binding agreement in order to ensure that his wishes were met.

C.5.3 Andrea’s error of timing in her first statement

The first statement that Andrea prepared for her lawyers reads as if Kurt’s discussion with Stuart Esnouf at their house in 1998 took place before the ‘family meeting’ that took place at Albany Road in August 1993. Andrea accepted that her initial statement was mistaken in this respect. She explained that she wrote it as a record of her ‘thoughts and feelings at a time when I was under a lot of stress and lack of sleep’ and that it was unlikely that she proofread it.

The fact that Andrea made this mistake in her initial statement is a matter of some concern and does raise the prospect that her memory generally is unreliable. If her memory is as she now says it is, it is surprising that she would make this mistake in the document she prepared for the purpose of instructing her solicitors. This is a factor of some significance to be weighed in determining whether the plaintiffs have discharged their onus.

C.5.4 Lisa and Andrea’s behaviour after Marilyn’s death and ill-feeling to the Cottrells

I have referred in Part C.3.12 above to the fact that Lisa and Andrea did not immediately raise the assertion that Marilyn’s 2018 will was in breach of an agreement made with Kurt in 1993 but instead focused on her testamentary capacity. For the reasons there set out, and in particular the content of Mr Teese’s file notes, I do not consider that this failure means that the evidence as to the existence of that agreement should be doubted. But the defendants also contend that their evidence as to the mutual wills agreement should be doubted because Lisa and Andrea:

(a) said things to them that were inconsistent with the case they were now putting;

(b) acted in their dealings with Stephen, Victoria and Louise in a way that revealed a sense of entitlement on their behalf and ill-feeling towards them; and

(c) developed a sense of paranoia.

C.5.4.1 What was or was not said

There was a lot of focus on the fact that Lisa and Andrea did not immediately inform Stephen, Victoria and Louise that they intended to challenge the will and, indeed, that Andrea was one of the applicants for the appointment of an administrator of the 2018 will at a time when she should have appreciated this created a conflict of interest. But the very real human dimension of what was happening must be considered. Their long-term step-mother had just died. She had left her assets split among them and their cousins (by marriage). Their cousins were, understandably, grateful and treated their inheritances as an ‘incredible gift’. Arrangements had to be made for Marilyn’s funeral and to empty and to prepare the home (in which their father had lived for almost all their lives) for sale. The persons appointed as executors under the will had declined that appointment. Lisa and Andrea would, inevitably, have wanted to avoid immediate conflict with their cousins. I am not surprised that they delayed the unpleasantness associated with attempting to deny them their inheritance for the period immediately following Marilyn’s death.

That is not to say, however, that they did not say things that let Stephen, Victoria and Louise know that they were unhappy. On 15 June 2020, after the will had been read, Victoria wrote in an email to Louise that that Lisa and Andrea had explained to her (Victoria) that it was ‘their fathers wish that they receive 50% of the properties to divide between them’ and that she believed that Lisa would contest the will. That led Louise to think ‘it was likely’ that Andrea and Lisa would challenge the will. Then, on 23 June 2020, Andrea called Louise and expressed a sense of unfairness. Louise, who was in quarantine at the time and keeping a journal, referred to the conversation in an entry she made the following day. Her entry suggests that Andrea said that she and Lisa thought it was their ‘right as Uncle Kurt’s daughters’ to (presumably) the Albany Road property. Louise also recorded her belief that this was going to be ‘a contentious situation’. In her oral evidence, Louise said that Andrea had also conveyed to her in the 23 June 2020 conversation that it was Kurt’s wishes that she and Lisa ‘would get 50% of the house split between them, 25% each.’

Louise’s journal entry does not expressly refer to her being told this by Andrea. Louise also relied, however, on an entry by her in separate notebook (not the journal) headed ‘6/23/20 Call’ that she said was made ‘after the fact, a few days later’. This entry said that Andrea had said that Kurt had ‘promised 50% of the house to them’. The plaintiffs contended that Louise had made the note in her notebook much later than she said she made it, and relied in support for that submission on the fact that the note was the only note made in that notebook on the left-hand side and that every other page was written on the right-hand side only. This fact means that the date of the entry cannot be ascertained only from where it appears in the notebook.

I do not accept that Lisa or Andrea ever conveyed to Victoria or Louise that it was their father’s wishes that they receive 50% of Albany Road to share between them. I accept Lisa’s and Andrea’s evidence to the effect that they always felt that they should get 50% of Albany Road each, rather than the 20% of Albany Road each they received under Marilyn’s 2018 will. I consider Victoria probably honestly misinterpreted in her 15 June 2020 email what Lisa said to her. I do not need to resolve the issue as to when Louise made the entry in her notebook, because, even assuming that the entry was made on 23 June 2020, I would still have concluded that when Louise made this note, and also when she told Mr Chamberlin that Lisa wanted 25% of the house, Louise was conflating the (mistaken) information she had received from Victoria’s email with the telephone discussion she had had with Andrea on 23 June 2020.

C.5.4.2 Entitled behaviour and ill feeling

I accept the criticisms made by the defendants that, after the will had been read, Andrea inappropriately attempted to control access to Albany Road. The defendants tendered screenshots of a series of text messages. Andrea had just asked one of her children to alter the alarm codes and Victoria had asked for the new code. Andrea then mistakenly sent a message to Victoria that said:

When she hassles me I’ll send her your number, don’t respond …. then I’ll meet her over there I’ll tell her I’m in theatre and you meetings

Andrea said that this message was meant for her husband in relation to a problem patient. The defendants dispute this and contend that it was meant for her son and reflected her attempt to limit their access to the house. They rely in support on other communications including an email from Lisa dated 22 January 2021 that complained about the Cottrells ‘going into the house’ and that suggested that she and Andrea were ‘not responding with the code’ because ‘there is no need [for them] to go inside’.

I accept that Lisa and Andrea believed that they had the greater connection to the property, that they may have well believed Stephen, Victoria and Louise were in a sense interlopers, and that Lisa and Andrea were discouraging of Stephen, Victoria and Louise’s involvement in the preparation of the house for sale. I also accept that this belief was unwarranted. It seems that both groups had spent significant amounts of time at the property over the years, but, for the most part, not together. For example, as I understand it, one group would be there for Christmas Eve, and the other for Christmas Day. It is understandable, then, particularly in moments of potential conflict, that each group would be unaccepting of the emotional connection felt by the other. Speaking more generally, however, the fact that Andrea and Lisa had that sense of entitlement does not weaken their case. Even accepting that Andrea in particular sought to assert control over access to the property, and even if she were untruthful in her explanation of her text message, that does not or would not cause me, in the circumstances of this case, to reject her evidence about the relevant communications made to her by Kurt and Marilyn. To the extent that she and Lisa felt a sense of entitlement to Albany Road, that arose from their belief that it should, under the arrangements made with their father, have been left only to them.

Equally, Lisa described the Cottrells to Mr Teese as ‘vultures’. On the evidence before me, there was no reason for anyone to have thought that of the Cottrells. Their aunt, of whom they were fond, left them substantial legacies in her will. They had every reason to take a keen interest in the Albany Road property after Marilyn’s death and to participate in the dealings that necessarily followed. Equally, they had every right to contest the plaintiffs’ assertion that the 2018 will was in breach of an earlier agreement, particularly given that there was no suggestion that they were previously aware of any prior agreement entered into between Kurt and Marilyn. However, in circumstances where, as noted above, the parties did not adequately recognise each other’s emotional connections to Marilyn and Albany Road, and there was a dispute or likely dispute that involved a substantial sum of money, and Lisa, I am satisfied, honestly believed herself to have been mistreated by Marilyn in her will to the advantage of the Cottrells, I do not consider that her sense of indignation has influenced her evidence or that her use of this language is a reason for which her evidence should not be accepted.

C.5.4.3 A sense of paranoia

Andrea and Lisa developed a concern that Mr Chamberlin could not be trusted and might alter his file notes because of a concern she had that Mr Chamberlin had been a friend of Gavin’s. There was no basis for this fear. Mr Teese, appropriately, put their concerns to bed. The strength with which these concerns were held was surprising. Ultimately, however, this fact is of little consequence.

I accept that Lisa, as a lawyer, albeit not one expert in this area, advised Andrea not to talk about the issues in front of the Cottrells. I accept that they wanted to obtain advice on their legal rights before engaging in relevant communications with the Cottrells. This was understandable when litigation was being contemplated.

Ultimately, I do not consider that Lisa’s and Andrea’s behaviour in the months following Marilyn’s death means that they were not doing their best to give honest evidence.

Lisa also said that Stephen had told her that Marilyn had been so difficult and demanding, belligerent and nasty that he had withdrawn from his relationship with her’ and that she was ‘a horrible woman’. Stephen denied having said this. I accept his denials. It follows that, in my view, Lisa’s evidence in this respect cannot be accepted. This causes me some concern, because it indicates either that Lisa’s memory of this conversation has been distorted, which raises doubts about her memory generally, or she was prepared to give false or exaggerated evidence.

C.5.5 Lisa and Andrea’s honesty as witnesses

In addition to the criticism based on variations in her evidence, such as those discussed in more detail above, Andrea was criticised for describing Marilyn as ‘like a second mother’, and yet also saying in an email that she, Andrea, was ‘Cinderella and treated like a slave’ who only did things for Marilyn because she ‘felt sorry’ for her. I do not consider this criticism powerful. Human relationships are complex and change. Marilyn and Andrea knew each other and were part of each other’s lives from when Andrea was four years old and needed looking after by Marilyn until Andrea was an adult with her own children and Marilyn needed looking after by her. It was an undisputed fact that Andrea, who was a trained nurse, spent a lot of time caring for Marilyn after Kurt’s death as Marilyn aged. Their relationship, no doubt, had its good and bad moments. But I formed the view that it was not only a long-lasting relationship, but was also strong and genuine. The fact that Andrea said critical things about Marilyn, from time to time, does not gainsay that.

Notwithstanding my concerns about Andrea’s evidence in relation to access to Albany Road after Marilyn’s death and her text messages and Lisa’s evidence about Stephen’s discussion with her about Marilyn, I formed the view that both Andrea and Lisa were doing their best to give honest answers to questions asked of them relating to the central issues in this case. The variations in their evidence from time to time relied on by the defendants, including those set out in detail above, did not, on balance, cause me to doubt this.

C.6 A failure of consideration?

The defendants contended, as I understood it, that there was no ‘consideration’ for any promise by Marilyn not to change her will without Kurt’s consent, because Albany Road was in their joint names and so she would receive it by right of survivorship on Kurt’s death. This argument, with respect, seems misconceived. If the plaintiff’s position is correct, the consideration for Marilyn’s promise not to change her will without Kurt’s consent was Kurt’s promise not to change his will without Marilyn’s consent. Kurt had other assets that, under his will, were to pass to Marilyn. It is as simple as that.

C.7 Conclusion – there was such an agreement

My conclusion that Andrea and Lisa were doing their best to give honest answers to questions asked of them relating to the central issues in this case is not sufficient for them to succeed. Their evidence must not just be honest, but must also be reliable. People may, as the defendants emphasised, develop honestly held but false, or falsely precise, memories. However, have considered the evidence as a whole, I am satisfied, on the balance of probabilities, that Kurt and Marilyn, as part of the process whereby they executed similar wills in 1993, agreed, in a way that was intended to be legally binding, that neither could change their wills without the consent of the other.

I have reached this conclusion because of a combination of the surrounding circumstances and the oral evidence. More particularly, and these are in no particular order:

(a) The making of such a commitment by Marilyn would not be disconcordant with ordinary human behaviour given:

(i) The nature of the relationship between Marilyn and Lisa and Andrea set out in Part C.3.1 above;

(ii) The fact that Marilyn had no children of her own and was, probably, unlikely ever to have children of her own;

(iii) The fact that her nephew and nieces might be expected to inherit from their father Gavin and thus were not expected to be dependent on any inheritance from her; and

(iv) Kurt, at the same time, altered his testamentary arrangements to leave nothing at all to his children and everything to Marilyn absolutely in the event that he died first, thereby making his children’s inheritance entirely dependent on Marilyn.

(b) I accept that there was a family meeting, referred to in Part C.3.5 above, to discuss the wills when Lisa returned to Australia in August 1993. It is, of course, possible that such a meeting was held to explain to Lisa and Andrea that they would not receive anything from Kurt on his death but that, unless Marilyn were to change her mind, she would leave everything to them when she died. But it seems more likely that such a meeting was held to explain to them that although Kurt was leaving nothing to them and everything to Marilyn, Marilyn had agreed to leave her estate to them on her death. In this respect, I accept the evidence that Kurt explained at this meeting that he had wanted to leave his estate on trust to Marilyn for life but that Marilyn had not been prepared to accept this, and that they reached this arrangement as a compromise.

(c) I accept Stuart Esnouf’s evidence, referred to in Part C.3.6.4 above, that he spoke to Kurt in 1998 at a time when Kurt was worried about Marilyn’s behaviour and Gavin, that he suggested to Kurt that he change his will, and that Kurt said that he could not change his will without Marilyn’s permission. Stuart gave his evidence in a straightforward and convincing manner. He had himself had issues with his father’s will so it would make sense that Kurt would come to speak to him if he were concerned about his own will. Stuart explained that the event ‘stuck in his mind’ because of Kurt’s obvious frustration. I formed the view that Stuart was giving honest evidence and that he had a good recollection of this event. This evidence was powerful and strongly supported the plaintiffs’ case; indeed, it may have been sufficient, in of itself, to make it.

(d) Kate, although now in her mid-80s, was also an impressive witness. She worked as a personal assistant until her 79^th birthday and she was, clearly, cognitively intact and, in my view, doing her best to give honest evidence. Her evidence was challenged at a level of detail. It was put to her, for example, that Kurt had told her that he was leaving Marilyn the house, when the true position is that the house was in joint names so it would pass by survivorship rather than under the will. It was also put to Kate that she had said in a statement that she had asked Kurt whether he could trust Marilyn but that she had not volunteered that when giving her evidence in chief. I do not consider these good reasons to doubt Kate’s evidence. It would not be at all surprising for Kurt, as a lay person, to use language indicating that he was leaving Marilyn the house in circumstances where Marilyn would obtain sole ownership of his death by survivorship. As an example, a statement that Marilyn would ‘get the house’ on his death might cause Kate to assume that the house would be passed by Kurt’s will. And I do not consider Kate’s failure to volunteer in evidence in chief the discussion about trust, that she agreed under cross-examination took place, means that the central parts of her evidence are unreliable. I accept Kate’s evidence, referred to in Part C.3.6.1 to C.3.6.3 above, that she obtained assurances from Kurt that his estate would end up with her children before she signed over an insurance policy to him. In the circumstances of this case, where Kate had an apparently wealthy ex-husband with a younger wife who might well survive him and Kate did not herself have substantial assets, it accords with ordinary human behaviour that Kate would be keenly interested in ascertaining whether her children (Lisa and Andrea) would inherit from their father and what arrangements had been made for their provision.

(e) As noted above, I consider that Lisa and Andrea were honest witnesses who did their best to give accurate evidence on the central issues in the case. The file notes of Mr Teese establish that, from the moment of Marilyn’s death, they took the view that her will was contrary to an agreement that had been described to them all those years before. Their belief in such an agreement was consistent with their not taking any proceedings to seek a share of Kurt’s estate when he died. The matters set out in Part C.5 above, did not cause me, having regard to the surrounding circumstances discussed in these reasons, to consider that their recollections that they had been informed, in substance, that Kurt and Marilyn had agreed not to change their wills without the other’s consent were unreliable. I accept their evidence, consistent as it is with the objective circumstances and Kate’s and Stuart Esnouf’s evidence, that Kurt and Marilyn conveyed to them, as a matter of substance, that they had agreed with each other that Kurt would not create a trust or leave anything to either of them but would instead leave everything to Marilyn absolutely, that Marilyn would leave everything to Lisa and Andrea save for a relatively small amount that would go to the Cottrells, that they had made wills that reflected this agreement, and that they had agreed that they could not change their wills in the future without the other’s consent;

(f) The fact that Marilyn was free to dispose of her assets, including Albany Road, while she was alive is no reason not to conclude that there was an agreement of the sort alleged; and

(g) Finally, I do not consider that Marilyn’s making of subsequent wills means that she had not made an earlier commitment not to change her will without Kurt’s consent. She, no doubt, wanted to change her will, and so did so. It is easy, when looking back, to forget the passage of time. The change whereby she substantially increased the provision for Stephen, Victoria and Louise commenced in 2005, which was 12 years after the 1993 wills were made. She might have mistakenly felt herself free to do so, or she might have deliberately acted contrary to what she understood was an agreement she had previously reached.

It remains odd that neither Kurt nor Marilyn mentioned their agreement to Mr Chamberlin in 1993 when they had him draw up their wills, but that oddity is, as referred to in Part C.3.4., insufficient reason, in my view, not to draw the conclusion that I have.

D. Did Marilyn hold any, and if so what, part of her property on trust for Stephen, Victoria and Louise?

As noted above, Gertrude, who died in 1977, left her estate to Gavin and Marilyn as trustees. The will required Gertrude’s assets to be sold and converted into money.[31] Gavin and Marilyn then had the income of those ‘net moneys’ for their lives and otherwise held them for Gertrude’s grandchildren (Stephen, Victoria and Louise). An inventory of assets filed in the probate jurisdiction of this Court when Gertrude’s will was proved identified assets totalling $143,988.89. This included a unit in St Georges Road, Toorak that was valued at $70,000. That property was sold in 1978 for $129,500. Assuming, as I do, that the inventory was accurate save where demonstrated otherwise, I conclude that Gertrude died with assets worth approximately $203,500.
[31]The will provided for some personal chattels to be disposed of separately. That may be ignored for present purposes.

Strictly, on Gavin’s death, Marilyn as the surviving trustee thereafter held the entire sum on trust. The defendants, sensibly, did not invite me to conclude that she had done so but instead asked me to assess their claim on the basis that Marilyn had received in 1977 and 1978 and retained approximately $100,000 on trust for them, that is, half of Gertrude’s estate, and that Gavin had received and retained the other half.

There was no evidence as to the level of tax payable on Gertrude’s estate, although it was accepted that death taxes were payable in 1977. When counsel for the defendants suggested to Lisa that Marilyn had received $100,000 from Gertrude, Lisa disputed this, and said that Marilyn had told her that she had inherited $60,000, and that Marilyn was ‘furious’ about the amount of ‘probate tax payable’.

In 1977, death duties were levied at the State level and an estate duty was levied at the federal level. The amounts levied could be significant. It seems that under the Probate Duty Act 1962 (Vic), a $200,000 estate attracted a duty of $48,790 together with 90 cents for each $2 by which the final balance exceeded $180,000.[32] Exceptions were introduced where the final balance passed to a widow or widower,[33] and then to children,[34] and then to grandchildren,[35] which may have applied.[36] Duties were also levied under the Estate Duty Act 1914 (Cth) and the Estate Duty Assessment Act 1914 (Cth), which at the time of Gertrude’s death would likely have been levied at a rate of 6% increasing by 0.02% for every complete $200 by which the value of her estate exceeded $40,000.[37] The duties levied at both the state and federal levels may have been subject to exemptions, pre-payments and other factors affecting the amount(s) payable.
[32]Probate Duty Act 1962 (Vic) sch 1.
[33]Probate Duty Act 1976 (Vic) s 2(i).
[34]Probate Duty Act 1977 (Vic) s 13(a).
[35]Probate Duty Act 1979 (Vic) s 4(f).
[36]Probate Duty Act 1976 (Vic); Probate Duty Act 1962 (Vic) sch 1 cl 1(aa).
[37]Where the value for duty of Gertrude’s estate exceeded $40,000 but did not exceed $240,000. See Estate Duty Act 1914-1966 (Cth) sch item (c).

In circumstances where duties were probably payable and potentially significant, but there was no evidence as to what they in fact were, I am unable simply to conclude, as the defendants ask me to, that Marilyn held $100,000 from 1977 or 1978 on trust for them.

However, as noted above, in her 1988 will, Marilyn ‘devised and bequeathed’ $60,000 to Stephen, Victoria and Louise ‘as repayment of the debt owing to the estate’ of Gertrude Cottrell. This is some confirmation that Marilyn received a sum of money from Gertrude’s estate that she, at least in 1988, appreciated was not a simple gift to her, although the reference to it as a ‘debt’ indicates that she did not properly appreciate that she in fact held the money on trust. In the absence of any better evidence, I consider this contemporaneous and otherwise inexplicable clause in her will, and the evidence given by Lisa as to what Marilyn said to her, to be the best evidence of the amount of capital that Marilyn received from Gertrude’s estate and held on trust for Stephen, Victoria and Louise. Accordingly, I conclude that, as at 1988, Marilyn held $60,000 on trust for Stephen, Victoria and Louise (subject to her right to the income on that sum for so long as she was alive).

Stephen, Victoria and Louise pointed out that Marilyn in her 1988 will also left $40,000 on trust for Kurt for his life and then to Stephen, Victoria and Louise. They submitted that this figure probably represented the balance of a sum of $100,000 and relied on this additional bequest in support of its submission that I should conclude Marilyn received $100,000, rather than only $60,000, from Gertrude. I do not accept this argument. Unlike the clause that gave $60,000 to Stephen, Victoria and Louise, the clause that left $40,000 on trust for Kurt did not make any reference to it being a sum associated with Gertrude’s estate. If the $40,000 was also part of the capital received from Gertrude, I would have expected a reference to that also in the clause that created that bequest. The distinction between the two clauses in that respect is, in my view, significant. Also, although perhaps of lesser weight, if the $40,000 was part of a sum in which Marilyn had only a life interest, she would not have been entitled to leave it to Kurt for the duration of his life.

If Marilyn invested the capital (in my assessment, $60,000) she received from Gertrude in a manner that caused it to increase in value, rather than simply to generate income for her, then she would hold that increased capital sum on trust. There was, however, no direct evidence as to whether or how this capital held by her was invested and if so whether it increased or reduced in value. Stephen, Victoria and Louise tendered a report by the actuary Mr Corey Plover from Cumpston Sarjeant. He was asked to assess the ‘accumulated capital-only sum of $100,000 from October 1978’.[38] Mr Plover concluded:

Based on a nominal investment of $100,000, invested in some combination of growth assets such as shares or property respectively, it is my opinion that the capital-only accumulation of such a sum would be between $1.8m and $2.2m on a gross basis, or about $1.5m net of taxation.
You have also asked for comment on what the capital-only accumulated value may be, under assumption of an investment portfolio comprising roughly equal portions of shares, property and term deposits/cash.
Again, such an accumulation may vary greatly in light of many factors, but for illustrative purposes I estimate that such a portfolio would have a capital-only accumulated value of between $625,000 (under the presumption of continuous rebalancing of the portfolio) and $1m (under no rebalancing).

[38]He had provided an earlier report that provided figures that assumed income had been reinvested. Given that Marilyn was herself entitled to any income from the funds held on trust, it is not necessary to consider that report.

Based on that report, Stephen, Victoria and Louise sought a declaration that $1.5 million of Marilyn’s estate was held on trust for Stephen, Victoria and Louise. Having regard to my conclusion that the amount initially received was $60,000 rather than $100,000, the claim would reduce to $900,000.[39]
[39]Being 60% of $1.5 million.

If Marilyn spent the capital on herself, then she did so in breach of trust. I am prepared to conclude, in the absence of any evidence to the contrary, that Marilyn did not breach the trust by dissipating the capital sum by spending it on herself or otherwise in breach of trust.

There was evidence that Marilyn had a share portfolio, held moneys in bank accounts including in fixed-term deposits, bought artworks and, with Kurt, invested in residential real estate, as well as, of course, purchasing the Albany Road property. The inventory of assets and liabilities prepared after her death indicates that in 2020 she held, as well as her car and the Albany Road property:

(a) One account with the Bank of Queensland with a balance of $150,000;

(b) Two bank accounts with National Australia Bank, with a balance of $100,000 in each account;

(c) Another bank account with ING Bank with a balance of $58,000;

(d) Two further bank accounts with National Australia Bank, with a combined balance of approximately $53,000; and

(e) A share portfolio worth approximately $496,000.

There was, however, no direct evidence as to what Marilyn in fact did with any cash moneys that she received under Gertrude’s will. Andrea recalled Marilyn making ‘vague comments’ about buying paintings or jewellery, and there were records of Marilyn purchasing artworks in November 1978 and October 1980 and jewellery in August 1981, but that evidence was itself vague and there is no real basis to conclude that the probable source of those funds was the moneys received from Gertrude. It was suggested that the money was probably put into the Albany Road property because Marilyn later claimed to have paid for half that property. The property was purchased in October 1976. There was no mortgage registered over the property. In April 1977, a permit was issued to build the house and in September 1977 a permit was issued to build the pool. Probate of Gertrude’s will was granted on 3 May 1978. A council record notes September 1978 as the ‘completion’, but Andrea and Lisa said, and I accept, that Marilyn and Kurt were residing there by the death of a relative that took place on 2 May 1978. The house being completed by this time is consistent with a photo album where photographs of the completed house are described in Marilyn’s handwriting as ‘Albany Rd - First Autumn in Residence 1978’. (It may well be that the pool was completed later.) Also, by June 1978 Marilyn was listing Albany Road as her address in title documents. I accept, therefore, that Marilyn could not have used the money she received from Gertrude to purchase Albany Road and it seems unlikely that she used it to pay for the construction of the house. It remains possible that she put the money towards a pool or maintenance of that property, although mixing trust moneys with her and Kurt’s own moneys in that way would have been surprising.

Kurt and Marilyn’s long-term accountant, Mr Ian Carswell, was called to give evidence. He had known them, and the firm where he worked had been their accountant, since the 1970s, but he did not take over their care until 1996. Neither side asked him any questions about the sum of money that Marilyn received on Gertrude’s death. He said, however, that Marilyn had her own money and that she ‘always retained some cash term deposits in her own right’ and that she ‘kept probably two or three term deposits rolling over about … $100,000’. This evidence was consistent with the inventory of assets prepared on her death, and I accept it.

In order to establish an entitlement to more than $60,000, Stephen, Victoria and Louise are required to prove, on the balance of probabilities, that the money received by Marilyn from Gertrude in 1978 was invested in a way that led to some ascertainable capital growth. There is no evidence that would justify a conclusion that the money was invested in any particular asset class or if so what particular capital gain (or, possibly, loss) was obtained. Stephen, Victoria and Louise sought to overcome this difficulty by asking me to infer that Marilyn invested the moneys she held on trust for them in broadly the same fashion that she held her assets generally - that is, that she spread the money across cash, property and shares - and that a broad increase in the capital may be assumed having regard to market movements in Victoria over the last decades in accordance with Mr Plover’s calculations.

One difficulty they face is that, as noted above, the evidence establishes that Marilyn held substantially more than $60,000 in fixed term deposits. If the money were placed in one of those accounts, the capital would have been protected and there would have been income for Marilyn to enjoy but not any capital growth. The existence of those accounts prevents any reasoning that the money must have been invested in shares or property. It should be recalled that the money was, it seems, initially received as cash and not in the form of shares.[40] Another difficulty is that Marilyn’s 1988 will indicates that she considered herself to be indebted to Gertrude’s estate still in the amount of $60,000 some ten years later and this is at least consistent with her not having invested the moneys in, for example, an identifiable parcel of shares that had appreciated in value over the previous decade.
[40]Gertrude’s will required that her assets be converted into cash, albeit that they also empowered Marilyn and Gavin as trustees to invest the sum held by them on trust. It was not submitted that there were any actual shares held by Marilyn at her death that had been held by Gertrude at her death.

Given the very real prospect that Marilyn placed the money she received from Gertrude in one of her term deposits, thereby removing any risk that the capital would be lost while giving her an income, I am not persuaded that I should infer that the money was instead placed or used wholly or in part to buy shares or property or was in some way admixed with her own funds and spread across all her investments. Stephen, Victoria and Louise are in substance asking me to trace the initial asset into other assets without there being any evidence as to how the initial asset was treated. This is, in the circumstances of this case, an observation rather than a criticism. However, in the circumstances of this case, to conclude that there was capital growth and to identify the dimension of any capital growth would involve, in my view, impermissible speculation. It follows that, in my view, Stephen, Victoria and Louise have not established that at the time of her death Marilyn held on trust any amount more than the $60,000 I have found that she received from Gertrude.

The plaintiffs submitted that there should be no declaration because the evidence did not establish that the ‘debt’ owned to Gertrude’s estate identified in Marilyn’s 1988 will had not been ‘repaid’ prior to Marilyn’s death. There is, equally, no evidence that it was ‘repaid’. As noted above, the use of the word ‘debt’ is inaccurate, and it would be surprising if Marilyn had ‘repaid’ that sum. Further, it if were to be ‘repaid’ to anyone, it would have been to Stephen, Victoria and Louise as the beneficiaries, and it was not suggested that they were ever given any moneys in purported satisfaction of Marilyn’s obligations as trustee. For these reasons, I am prepared to assume that Marilyn remained in possession of the trust moneys she received as at the time of her death.

Accordingly, Stephen, Victoria and Louise are entitled to a declaration that $60,000 of Marilyn’s estate was held on trust for them.

E. Disposition

The plaintiffs are entitled to a declaration that, subject to the declaration set out immediately below, Marilyn’s estate is held by the first defendant on trust to give effect to the form of the will she made in 1993.

The defendants are entitled to a declaration that Marilyn’s estate hold $60,000 on trust for them pursuant to the terms of Gertrude’s 1988 will.

I will hear the parties on the precise form of order, and on the question of costs.

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SCHEDULE OF PARTIES

S ECI 2022 01370

LISA MIGLIC	First Plaintiff
ANDREA ESNOUF	Second Plaintiff
-and-
INES KALLWEIT (in her capacity as the Administrator of the deceased Estate of the late Marilyn Miglic)	First Defendant
STEPHEN COTTRELL	Second Defendant
LOUISE AUSTIN	Third Defendant
VICTORIA HARDY	Fourth Defendant

[2024] VSC 20

8 February 2024 (First Revision 9 February 2024)