The estate of the late Sharrin Laura Rees

[2019] NSWSC 859

Supreme Court

New South Wales

Medium Neutral Citation:

The estate of the late Sharrin Laura Rees [2019] NSWSC 859

Hearing dates:

10 July 2019

Decision date:

10 July 2019

Before:

Gleeson J

Decision:

(1)   The Court notes the agreement between the parties to settle these proceedings on the following terms:

 

(a)   The defendant, in his personal capacity, agrees to pay the plaintiff the sum of $35,000.00 in full and final satisfaction of the claims brought by the plaintiff in these proceedings, including the plaintiff’s claim for his costs of the proceedings;
(b)   The said sum of $35,000.00 is to be paid in 2 instalments:

 

(i)   $15,000.00 on or before 5.00 pm 4 August 2019; and
(ii)   the balance of $20,000 on or before 5.00 pm 4 January 2020.
(c) In consideration of the agreement by the defendant to pay the said sum the plaintiff agrees to release the defendant and the estate of the late Sharrin Laura Rees generally from all and any claims the plaintiff has or may have against the estate including any claims under the Succession Act 2006 (NSW).

 

(2)   These proceeding be dismissed with no order as to the plaintiff’s costs to the intent that the plaintiff pay his own costs of the proceedings.

 

(3)   The defendant’s costs of these proceedings be paid out of the estate of the late Sharrin Laura Rees on the indemnity basis.

 

(4)   All previous costs orders made in these proceedings prior to orders 2 and 3 above be vacated.

 

(5)   The cross-claim filed 5 December 2017 be dismissed with no order as to costs.

 

(6)   The Court notes the release of his rights, given by the plaintiff, to apply for a further family provision order out of the whole, or any part, of the estate or notional estate of the deceased.

(7) The Court orders that the release given by the plaintiff of his rights to apply for a further family provision order out of the whole, or any part, of the estate or notional estate of the deceased, be approved pursuant to s 95 of the Succession Act 2006 (NSW).

Catchwords:

SUCCESSION – family provision claim – approval of settlement and release of rights to bring further claim – where estate is most likely insolvent – Probate and Administration Act 1898 (NSW), s 46C

Legislation Cited:

Probate and Administration Act 1898 (NSW), s 46C
Succession Act 2006 (NSW), ss 57, 59, 95

Cases Cited:

In re Pink; Elvin v Nightingale [1927] 1 Ch 237

Category:

Principal judgment

Parties:

Thomas Simon Parker (Plaintiff / Cross-defendant)
Kristopher Rees (Defendant / Cross-claimant)

Representation:

Counsel:
Mr J Kosmin (solicitor) (Plaintiff / Cross-defendant)
Mr M B Evans (Defendant / Cross-claimant)

  Solicitors:
Kosmin & Associates (Plaintiff / Cross-defendant)
ELG Legal (Defendant / Cross-claimant)

File Number(s):

2017/62993

Judgment

1. GLEESON J: By summons filed on 28 February 2017, the plaintiff Thomas Simon Parker sought a family provision order pursuant to s 59 of the Succession Act 2006 (NSW) out of the estate and/or notional estate of the late Sharrin Laura Rees. The proceedings were fixed for hearing to commence on 10 July 2019. Shortly prior to that date, the parties asked the Court to make orders by consent as follows:

1.   The Court notes the agreement between the parties to settle these proceedings on the following terms:

(a)   The defendant, in his personal capacity, agrees to pay the plaintiff the sum of $35,000.00 in full and final satisfaction of the claims brought by the plaintiff in these proceedings, including the plaintiff’s claim for his costs of the proceedings;

(b)   The said sum of $35,000.00 is to be paid in 2 instalments:

(i)   $15,000.00 on or before 5.00 pm 4 August 2019; and

(ii)   the balance of $20,000 on or before 5.00 pm 4 January 2020.

(c)   In consideration of the agreement by the defendant to pay the said sum the plaintiff agrees to release the defendant and the estate of the late Sharrin Rees generally from all and any claims the plaintiff has or may have against the estate including any claims under the Succession Act 2006.

2.   These proceeding be dismissed with no order as to the plaintiff’s costs to the intent that the plaintiff pay his own costs of the proceedings.

3.   The defendant’s costs of these proceedings be paid out of the Estate of the late Sharrin Rees on the indemnity basis.

4.   All previous costs orders made in these proceedings prior to orders 2 and 3 above be vacated.

5. The Court approves that the release given by the plaintiff of his rights to bring any further claim for family provision in the agreement noted above under s 95 of the Succession Act 2006.

6.   The hearing date of 10 July 2019 be vacated.

2. Subsequently, the parties asked the Court to make a further order as follows:

The Cross-Claim filed 5 December 2017 be dismissed with no order as to costs.

3. The one matter requiring consideration by the Court is the release referred to in the agreement between the parties noted in par 1(c) of the Consent Orders. In this regard, the parties have clarified that the agreement to release the plaintiff’s rights under the Succession Act 2006 includes his rights to apply for a further family provision order out of the whole, or any part, of the estate or the notional estate of the deceased.

4. The relevant circumstances in which the Court is asked to approve the release are as follows. The plaintiff is an eligible person as he was living in a de facto relationship with the deceased at the time of her death: Succession Act, s 57(1)(b). Probate of the deceased’s will dated 22 February 2006 (the 2006 will) was granted to the defendant Kristopher Rees on 16 December 2016. At that time, the inventory of property, together with an affidavit of assets and liabilities, indicated that the estate had a gross value of $1,964,830.36 and a net value of $1,535,776. By her will, the deceased appointed the defendant, her son, as executor and trustee and after payment of her debts gave the whole of her estate, both real and personal, to the defendant.

5. By a cross-claim filed on 5 December 2017, the defendant in his capacity as executor of the estate, contended that shortly after the date at which the plaintiff moved in to live with the deceased in 2005, the plaintiff and the deceased agreed or formed a common intention to the effect that the property of each of them remained their separate property and would pass, in the event of the death of either of them, to the children of the deceased party; they would each make wills leaving their property, in the case of the deceased to the defendant, and in the case of the plaintiff to his two sons; and neither of them would have or would bring a claim on the estate of the other. The defendant sought damages against the plaintiff for alleged breach of this agreement.

6. Since the commencement of the proceedings, it has emerged that the estate is most likely insolvent. Section 46C(3) of the Probate and Administration Act 1898 (NSW) defines “insolvent” as insufficient for the payment in full of the debts and liabilities of the deceased person. Whether an estate is insolvent is a question of fact: In re Pink; Elvin v Nightingale [1927] 1 Ch 237 at 241. It is necessary to deduct funeral, testamentary and administration expenses and debts from the assets of the estate.

7. An affidavit sworn by the defendant on 20 June 2019 deposed that there is no estimated distributable estate; the current estimate of the net value of the estate is negative $217,479.32. It is not necessary to explain the detail of the changes to the original estimate at the time of the grant of probate. It is sufficient to record that the value of a unit at Bondi Beach owned by the estate has decreased from an estimated $1,800,000 to $1,400,000, and the quantum of liabilities of the estate has significantly increased. In particular, the mortgage debt secured over the Bondi Beach unit is presently $394,956.12 and there is a substantial unpaid tax liability of the deceased, including interest thereon, totalling an estimated $960,751.84, plus likely penalties of $15,750.

8. Having read the affidavit evidence relating to the plaintiff’s claims and the current financial position of the estate, I am satisfied that I should approve a s 95 release in consideration of settlement upon the terms set out above. I take into account that the release is given as part of an overall compromise of the litigation with the consequence that all parties avoid three hearing days in court and the further costs of litigation, and note that the payment to the plaintiff is to be made by the defendant in his personal capacity and not out of the estate.

9. I am satisfied that at the time the agreement to make the release was made, being on 5 July 2019, it is to the advantage of the plaintiff as the releasing party to make the release. The financial advantage is that the plaintiff will receive a modest amount which provides a contribution to his costs in circumstances where he could not expect to succeed with his claim given the most likely finding would be that the estate is insolvent. The release is otherwise to the plaintiff’s advantage because it will avoid incurring further costs of the proceedings, including the hearing.

10. I am satisfied that it is prudent for the plaintiff as the releasing party to make the release and that the release is fair and reasonable given the estimated negative net value of the estate.

11. Finally, I am satisfied that the plaintiff as the releasing party has taken independent legal advice in relation to the release and has given due consideration to that advice and understands what is being released.

12. For these reasons I will make orders as sought, taking into account the clarification referred to in [3] above, and omitting par 6 which is now otiose.

13. The Court makes the following notations and orders:

1. The Court notes the agreement between the parties to settle these proceedings on the following terms:

1. The defendant, in his personal capacity, agrees to pay the plaintiff the sum of $35,000.00 in full and final satisfaction of the claims brought by the plaintiff in these proceedings, including the plaintiff’s claim for his costs of the proceedings;

2. The said sum of $35,000.00 is to be paid in 2 instalments:

1. $15,000.00 on or before 5.00 pm 4 August 2019; and

2. the balance of $20,000 on or before 5.00 pm 4 January 2020.

3. In consideration of the agreement by the defendant to pay the said sum the plaintiff agrees to release the defendant and the estate of the late Sharrin Laura Rees generally from all and any claims the plaintiff has or may have against the estate including any claims under the Succession Act 2006 (NSW).

2. These proceeding be dismissed with no order as to the plaintiff’s costs to the intent that the plaintiff pay his own costs of the proceedings.

3. The defendant’s costs of these proceedings be paid out of the estate of the late Sharrin Laura Rees on the indemnity basis.

4. All previous costs orders made in these proceedings prior to orders 2 and 3 above be vacated.

5. The cross-claim filed 5 December 2017 be dismissed with no order as to costs.

6. The Court notes the release of his rights, given by the plaintiff, to apply for a further family provision order out of the whole, or any part, of the estate or notional estate of the deceased.

7. The Court orders that the release given by the plaintiff of his rights to apply for a further family provision order out of the whole, or any part, of the estate or notional estate of the deceased, be approved pursuant to s 95 of the Succession Act 2006 (NSW).

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Decision last updated: 10 July 2019