Annette Carol Gillett v Virginia Nelson

Supreme Court of NSW|2014-02-25|Before: Darke J, Mr J, Mr P

Introduction 1This case concerns the estate of Arthur Vincent Nelson, who died on 14 June 2010 at the age of 85. Mr Nelson was a very successful businessman who amassed, during his life, what could only be described as a fortune. However, as a result of various transactions effected by Mr Nelson, including the making of substantial gifts to his wife and to the trustee of a family trust, the Arthur Vincent Nelson Family Trust ("the AVN Trust"), the net value of his deceased estate was only about $1.2 million. 2The plaintiff, Annette Gillett, is the third child of Mr Nelson's first marriage. She was born in 1952. By her Amended Summons, she seeks orders that certain shares are held on trust for her late father's estate, and, further, seeks a family provision order under Chapter 3 of the Succession Act 2006 (NSW) ("the Act") out of the estate, or notional estate, of her late father. 3The first defendant ("Mrs Nelson") is Mr Nelson's widow. She was his second wife. They were married in 1970. She is an executor of her late husband's estate, along with the second defendant, Mr Peter Stiles, and the third defendant, Mr Bryan Mellon. Mr Stiles is a solicitor and Mr Mellon is an accountant. Each has provided professional advice to Mr Nelson and his companies over many years. The fourth defendant, Naringtan Pty Ltd (Naringtan), is the trustee of the AVN Trust which was established in March 2005. The first three defendants are its directors. 4Mr Nelson had three other children. Two of those children were from his first marriage, namely, Cheryl Karoll (born in 1947) and Paul Nelson (born in 1950), and one was from his second marriage, namely, Emelia Nelson (born in 1974). All of the children survived their father. So too did his first wife, Jessie Nelson. 5Probate was granted to the executors in respect of a will made by Mr Nelson on 25 May 2009. The will provides for a legacy of $250,000 to Emelia Nelson, and a life interest in a capital sum of $400,000 to Jessie Nelson. The will further provides that upon Jessie Nelson's death, that capital sum will fall into the residuary estate. Under clause 5 of the will, the residuary estate is held by the executors upon trust for Mrs Nelson. She became entitled to the residue of the estate because she survived Mr Nelson by more than one month. The will made no provision for any of Mr Nelson's children, save for the legacy in favour of Emelia Nelson. 6Clause 3 of the will is in the following terms: "I have been advised by my solicitor the said Peter Andrew Stiles that my children, Paul Stephen Nelson, Cheryl Deanne Karoll, Annette Carol Gillette and Emelia Claire Nelson are "eligible persons" under the provisions of the NSW Family Provision Laws including the Succession Act 2006 as amended by the Succession Amendment (Family Provision) Act 2008 and as such are entitled to make a claim on my estate. All of my said children have been provided for by me during my lifetime for their proper maintenance, support, education and advancement in life and it is my belief that none of my said children have needs which need to be satisfied from my estate. Further, my said children are and have been beneficiaries of trusts established by me during my lifetime including the Arthur Vincent Nelson Family Trust (the AVN trust) with each of them having already received distributions of capital and income from the AVN trust and other trusts. The AVN trust will continue to benefit all of my children following my death." 7Notices to eligible persons were sent to Mrs Nelson, Jessie Nelson, the four children and to ten grandchildren. Paul Nelson and Cheryl Karoll also made claims under the Act. Paul Nelson's claim was discontinued by consent in February 2012. Cheryl Karoll's claim was settled in June 2012, and orders were made to give effect to the settlement. 8The plaintiff, who is an eligible person to seek a family provision order, contends that adequate provision for her proper maintenance, education or advancement in life has not been made by her father's will (see s 59(1)(c) of the Act). In circumstances where the will makes no provision in her favour, the issue is whether that lack of provision is nonetheless adequate for her proper maintenance, education or advancement in life. The plaintiff contends that, having regard to her current financial circumstances, as well as to her age and employment prospects, adequate provision has not been made. 9It is then submitted on her behalf that the Court should make an order under s 59(2) of the Act which would have the effect of enabling the plaintiff to purchase a three-bedroom residential property in the eastern suburbs of Sydney, purchase an annuity to provide her with a stable income, and set aside a fund for contingencies. Clearly, such an order could only be made if the estate was held to have a net value greatly in excess of the current estimate of $1.2 million. In that regard, the plaintiff's primary submission is that the failure during Mr Nelson's lifetime to pay stamp duty on a transfer of shares from Mr Nelson to Mrs Nelson which took place in May 2009 has the consequence that the beneficial ownership of those shares remained with Mr Nelson and became part of his estate upon his death. If that submission is correct, the size of the estate would be dramatically increased. The executors estimate that the shares the subject of the May 2009 transfer, being shares in A.V.N. Investments Pty Limited ("Investments") have a value of almost $34 million. 10In the alternative, the plaintiff submits that two transactions are relevant property transactions within the meaning of Part 3.3 of the Act. These transactions were identified as the transfer of the shares in Investments in May 2009, and the transfer from Mr Nelson to Naringtan in December 2008 of certain shares in Nelson Group Holdings Pty Ltd ("Holdings") which the executors estimate have a value of almost $24 million. It is submitted that the provisions of s 80(2)(a) of the Act apply to those transactions. That is, it is contended that those transactions, which took effect in the last three years of Mr Nelson's life, were entered into with the intention, wholly or partly, of denying or limiting provision being made out of Mr Nelson's estate for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order. If that is correct, the Court is empowered under s 80(1) of the Act to make a notional estate order, in accordance with Part 3.3 of the Act, designating property specified in the order as notional estate of a deceased person. Where property is designated as notional estate of a deceased person under Part 3.3 of the Act, a family provision order may be made in relation to such property (see s 63(5) of the Act). 11Mr Nelson's estate essentially comprised ten ordinary shares in Naringtan which were valued at almost $300,000 (after taking into account a tax liability which would be incurred if the company was wound up or a distribution made), cash of almost $700,000, a boat valued at $75,000, long service leave owed by Holdings in the sum of about $120,000, and miscellaneous debts and chattels with an estimated value in excess of $60,000. The estate had liabilities of approximately $54,000. The net assets of the estate were therefore valued at approximately $1.2 million. The estate has been largely, but not entirely, distributed in accordance with the will of 25 May 2009. 12Before dealing with the details of the property transactions entered into by Mr Nelson in the last three years of his life, it is desirable to deal with the evidence relevant to the plaintiff's case that inadequate provision has been made for her maintenance, education and advancement in life.

The plaintiff's circumstances 13The plaintiff is now 62 years of age. She attended school at SCEGGS Redlands. She grew up in the family home of Mr Nelson and Jessie Nelson in Fisher Road, Dee Why, until, after the separation of her parents, a property was purchased in Gilles Crescent, Beacon Hill for Jessie Nelson and the three children to live. The plaintiff continued her schooling until the end of year ten. She then undertook a secretarial course for twelve months at Narrabeen Business College. She obtained employment as a secretary between 1970 and 1972. 14In 1972, after returning from five months of travelling overseas, the plaintiff obtained employment with her sister, Cheryl, who operated a children's retail store in Beecroft. In November 1973, the plaintiff married Christopher Gillett. She remained in her employment in her sister's business until 1977, just prior to the birth of her first child. The plaintiff had a second child in 1979. 15In 1983, the plaintiff opened her own children's retail store in Chatswood. She continued to operate that business until she sold it in 1987. By that time, the plaintiff had a third child. A fourth child was born in 1990. 16The plaintiff returned to the workforce in 2002, following her separation from her husband. At that time, she obtained employment as a retail fashion manager. In 2007, the plaintiff commenced another business of her own. This business was a fashion shop in Double Bay known as "Paris Couture". The business was initially operated by a company that was controlled by the plaintiff known as See-net Pty Ltd. Since 2010 the business has been operated by the plaintiff personally. 17Shortly after they were married, the plaintiff and her husband purchased a home in Beecroft. The purchase was partly funded from dividends or distributions which had been received by the plaintiff from Nelson family-owned companies. The plaintiff and her husband subsequently purchased some land at North Wahroonga and built a house there, which they moved into in about 1978. 18In 1981, the plaintiff and her husband borrowed $150,000 from Mr Nelson to assist with the purchase of a home on a large block in Pymble. In about 1985, the proceeds of sale of a sub-divided lot of the property at Pymble enabled that loan to be repaid. However, the further development of the property was not successful, and when the property was sold in 1990, there were no proceeds left after payment of the mortgagee. 19In 1991, the plaintiff borrowed $400,000 from her father to enable the purchase in her name of a property at Turramurra. At about the same time, she borrowed a further $150,000 from her father, at least part of which was used to repay some debts. The plaintiff and her husband lived at the Turramurra property until they separated in 2001. 20In 2002, the plaintiff and her husband entered into a property settlement whereby the plaintiff was obliged to pay her husband $240,000. The Turramurra property was sold, later in 2002, for $1,225,000. The plaintiff repaid the debts owing to her father out of the proceeds of the sale. After that repayment, proceeds of approximately $650,000 remained. At the instigation of Mr Nelson, $150,000 was placed on deposit to provide a fund for the educational expenses of her children. I infer that the plaintiff paid her husband $240,000 out of the proceeds of the sale of the Turramurra property. 21In 2003, the plaintiff purchased a home unit in Cremorne for $560,000. Her father provided $150,000 to assist with that purchase. This sum may have been advanced as an interest free loan, but the evidence is not clear. The sum has not been included as an asset of the estate, and no demand appears to have been made upon the plaintiff to repay it. The plaintiff granted a mortgage over the Cremorne property to Permanent Custodians Limited to secure a sum of about $190,000. In 2005, that mortgage was discharged and replaced by a mortgage granted to St George Bank. 22The plaintiff continued to reside in the Cremorne property with her two youngest children until 2008 when they all moved into a rented property in Double Bay. They lived there for about two years, before moving back to Cremorne. In May 2012, the Cremorne property was sold for $720,000. By that time, the debt owed to St George Bank was almost $430,000. That amount included the amount outstanding on a $100,000 portfolio loan entered into for the purpose of the plaintiff's business. After the payment of sale costs, the plaintiff was left with net proceeds of approximately $275,000. Since that time, the plaintiff has spent virtually all of that amount. 23The plaintiff currently lives in a rented home unit in Darling Point with her youngest child, who is now 23. The rent is more than $5,800 per month. Her youngest child, who is employed, does not pay board or contribute to the rent. The plaintiff continues to provide some financial support to her daughter (for example, by providing a Holden Commodore motor vehicle for her use). The plaintiff says that she occasionally provides some financial support to her elderly mother (Jessie Nelson), who is now about 88 years of age. The plaintiff still operates the Paris Couture shop in Double Bay, but is thinking of closing the shop and selling the stock. There is no evidence that the plaintiff receives financial support from others, apart from regular distributions received from the AVN Trust. 24The present financial position of the plaintiff may be summarised as follows. Apart from her business which she estimates is worth the value of its stock at about $30,000, the plaintiff owns two motor vehicles (a Mercedes-Benz 2000 model and a Holden Commodore which is used by her daughter) together estimated to be worth around $15,000, and about $115,000 in the bank. Of that amount, approximately $100,000 consists of the proceeds of a distribution received by the plaintiff from the AVN Trust in October 2013. The plaintiff has almost $20,000 in superannuation accounts. The plaintiff is the owner of 50,000 B class convertible preference shares in Investments. There was no valuation evidence given as to the value of those shares. However, I note that as part of the settlement of her sister's claim, an identical parcel of shares held by her was acquired by Mrs Nelson for $100,000, and on the fourth day of the hearing, Senior Counsel for the defendants made an open offer on behalf of Mrs Nelson to acquire the plaintiff's shares for $100,000. 25The plaintiff also owns the shares in See-net Pty Ltd and Angette Pty Ltd, a company which was established to be the trustee of a family trust. There is no evidence that these companies (and hence the shares in them) have any significant value. 26The plaintiff's liabilities essentially consist of credit card debts of about $30,000, a personal liability to pay GST in respect of the Paris Couture business in an amount of approximately $27,000, and possible additional taxation liabilities of about $94,000. There was also some evidence adduced to the effect that See-net Pty Ltd may also have a taxation liability of approximately $100,000 for GST and company tax in respect of the period when that company was operating the business. Finally, the plaintiff estimated that she had a liability of about $14,000 to a firm of accountants which has prepared overdue income tax returns and provided other accounting services to the plaintiff. 27There was very little evidence concerning the financial performance of the Paris Couture business. Such evidence as there was largely consisted of a spreadsheet which contained some figures for business income and business expenses for the financial years ended 2011, 2012 and 2013, which show that the business made only very modest profits in those years, and an estimate by the plaintiff that the business was in a "break-even" situation. There is no reason to think that the business has generated any significant profits in recent years. The defendants did not contend to the contrary. 28The plaintiff's evidence concerning her expenditure is somewhat vague. She estimates her usual monthly expenditure (including expenditure on business items such as rent for the shop in Double Bay) as being in excess of $18,000. The plaintiff was cross-examined in an attempt to show that certain items of expenditure, notably the rent on the Darling Point unit, was extravagant, and that even taking into account the regular distributions from the AVN Trust (which are dealt with below), the plaintiff has been living well beyond her means. 29There seems little doubt that the plaintiff has struggled financially since the failure of her marriage. She obtains no financial support from her former husband. She has, as contended by the defendants, lived well beyond her means for at least the past decade, and her financial position has consequently deteriorated. It seems to be the case that the plaintiff is either unwilling or unable to order her affairs so as to live within her available means. Moreover, the evidence establishes that the plaintiff has not managed to meet her taxation obligations. It is clear that over a considerable period, Business Activity Statements in respect of the business were not being lodged and, accordingly, the GST collected from customers of the business was not being paid to the revenue. The plaintiff's explanation for this situation was that she was not financially able to make those payments. In recent times, the plaintiff has taken steps to lodge outstanding personal taxation returns, and Business Activity Statements in relation to the period when she was personally operating the business. It appears to be the case, however, that Business Activity Statements and company taxation returns are still outstanding in respect of the period when the business was being conducted by See-net Pty Ltd.

Benefits provided by Mr Nelson to the plaintiff 30The evidence establishes that the plaintiff and the other children have been the recipients over the years of very substantial largesse from their father. As noted earlier, he was a successful businessman. He was initially involved in tobacco distribution, but later expanded his business interests to include vending machines, sporting goods (through Mick Simmons Sports stores) and dry cleaning (through Lawrence Dry Cleaners Pty Ltd ("Lawrence")). The wealth he accumulated was mainly held through various companies he controlled, notably, Investments (which was incorporated in 1960) and Holdings (which was incorporated in 1961 when it was known as Nelson Tobacco Co Pty Ltd). 31Each of the children was brought up in circumstances of material abundance. Moreover, from the early 1970s, Mr Nelson caused distributions to be made to the children on an annual basis. It appears that in the period from 1971 to 1993, the plaintiff received distributions which totalled in excess of $800,000. Initially, the distributions appear to have been made by way of dividends declared on redeemable preference shares in Investments. Those shares were redeemed in about 1978 when the Nelson Family Trust was established, with AVN Nominees Pty Limited as trustee. From 1978 until 1993, the annual distributions made to family members were effected by way of distributions by AVN Nominees Pty Limited. The evidence is not clear concerning the means by which the annual distributions were made in the period from 1994 to 2005. It is likely, however, that such distributions were effected by way of dividends declared by Investments. Mrs Nelson and each of Mr Nelson's children were the holders of shares (B class convertible preference shares) in Investments. 32Since the establishment of the AVN Trust in 2005, regular distributions of income have been made by Naringtan, as trustee of that trust. The plaintiff has received the following distributions of income from the AVN Trust:

2006 - $80,000 (approximate)
2007 - $81,000
2008 - $77,000 (approximate)
2009 - $80,000
2010 - $100,000
2011 - $100,000
2012 - $100,000
2013 - $100,000 33From 2010, the distributions have been fully franked, and thus not taxable. 34In about September 2006, Mr Nelson caused gifts of $250,000 to be made to each of his children. The gifts were of capital and made by the trustee of the AVN Trust. They may have been prompted by a suggestion from the plaintiff to the effect that it would be preferable to have some capital "instead of having mortgages". There was evidence that Mr Nelson, who had recently brought about the creation of the AVN Trust, had a preference for providing assistance by way of regular income rather than by the provision of lump sums. 35After making the $250,000 gifts to the children (which were in addition to the $80,000 distributions of income made in 2006), Mr Nelson told Mrs Nelson that he was quite comfortable about making such large gifts. In relation to the plaintiff, Mr Nelson stated that at least he now knew that she no longer had much mortgage to pay off. 36Mr Nelson advanced considerable sums to the plaintiff over the years when she needed particular assistance. These advances are described in the previous section of these reasons. The plaintiff also received considerable assistance from her father to pay for the educational expenses of her four children. Mr Nelson also took the plaintiff and her family on a number of overseas holidays. These involved first class air travel and five star accommodation, and all expenses were met by Mr Nelson. Numerous holidays were enjoyed at Mr Nelson's properties at Patonga Beach and Palm Beach. 37The above summary of the financial assistance provided to the plaintiff by her father is not intended to be exhaustive. The evidence disclosed that there were numerous other instances of generosity towards the plaintiff, including the payment of rent on a property in North Sydney which the plaintiff lived in for a while following the sale of the Turramurra property, and the payment of some medical expenses and legal fees. It is sufficient to note that, as the plaintiff herself accepts, right up until his death Mr Nelson displayed great generosity towards his children. 38It should also be noted that the evidence disclosed close and loving relationships between Mr and Mrs Nelson, the children and their families. Large family gatherings and family holidays occurred regularly.

The gifts effected by Mr Nelson in December 2008 and May 2009 39I turn now to the two transactions (being the gifts of shares effected in December 2008 and May 2009) which are the basis of the plaintiff's claims that certain property should be designated as notional estate. It is convenient to summarise the position as it was at the time of the transactions, and the transactions themselves, before dealing in some detail with the events leading up to the transactions. 40As at December 2008, Mr Nelson owned 4,999 out of the 5,000 ordinary shares which had been issued in Investments. Mrs Nelson held the remaining ordinary share. Mr Nelson also owned 100 A class ordinary, 191,000 C class convertible preference, 176,500 convertible preference, and 43,000 Z class preference shares in Investments. 41Mr Nelson owned 48% of the ordinary shares in Holdings. The other ordinary shares in Holdings were held by Investments (46.12%) and Mrs Nelson (5.88%). Mr Nelson also owned 100 class A and 267,000 convertible preference shares in Holdings. 42On 23 December 2008, Mr Nelson entered into a number of Deeds of Gift. These were: (a)Deed of Gift in favour of Naringtan in respect of various shares in Holdings, being 51,000 ordinary shares (48% of the total), 100 class A shares, and 267,000 convertible preference shares; (b)Deed of Gift in favour of Jessie Nelson in respect of a property in Stanley Close, St Ives; and (c)Deed of Gift in favour of Emelia Nelson in respect of a one-half share as tenant in common with Emelia Nelson in a property at Alan Street, Cammeray, and in respect of a BMW motor vehicle. 43On 6 May 2009, Mr Nelson entered into the following Deeds of Gift: (a)Deed of Gift in favour of Mrs Nelson in respect of various shares in Investments being 4,999 ordinary shares, 100 A class ordinary shares, 191,000 C class convertible preference shares, 176,500 convertible preference shares, and 43,000 Z class preference shares; and (d)Deed of Gift in favour of Mrs Nelson in respect of three Rolls Royce motor vehicles. 44The transactions which the plaintiff relies upon are the gifts of the various shares in Holdings to Naringtan in December 2008, and the gifts of the various shares in Investments to Mrs Nelson in May 2009. The executors estimate, based on draft company accounts for the year ending 30 June 2013, that the Holdings shares given to Naringtan have a current value of almost $23.9 million, and that the Investments shares given to Mrs Nelson have a current value of a little over $34 million.

The events leading up to the transactions 45Mr Nelson made numerous wills over the years. As at 2008, his most recent will was the will made on 2 September 2003. In summary, that will provided for:

a life interest to Jessie Nelson in a unit in St Ives (which had been purchased by Mr Nelson for her to live in), and on her death the unit to go to Paul Nelson, Cheryl Karoll and the plaintiff equally as tenants in common;
$400,000 to be held on trust with the income to be paid to Jessie Nelson in her lifetime, and after her death to Paul Nelson, Cheryl Karoll and the plaintiff equally;
a legacy of $500,000 to Emelia Nelson;
Mr Nelson's various shareholdings and unitholdings (not including his shares in Investments) were to be held on discretionary trust for Mrs Nelson and the four children, and their children and descendants; and
the residue of the estate (which included the shares in Investments) to be given to Mrs Nelson.

46Mrs Nelson, Mr Stiles and Mr Mellon were named as executors and trustees under the will. 47One way that will differed from earlier wills was that it no longer provided for all of Mr Nelson's shares and units to be given directly to Mrs Nelson and the children. Previous wills had provided for that property to be given as to 60% to Mrs Nelson and 10% to each of the children. 48At the time when the AVN Trust was established, a codicil to the 2003 will was made to ensure that, in the event of Mr Nelson's death, a retail property in George St, Sydney would be sold and the proceeds become held by Naringtan as trustee of the AVN Trust. 49In September 2006, 6,250 ordinary shares in Holdings were issued to Mrs Nelson. It is apparent that this occurred because Mr Nelson wanted to ensure that, after his death, Mrs Nelson would have a majority of the shares in, and thus be able to control, Holdings. 50Shortly thereafter, Mr Nelson instructed Mr Stiles to obtain an opinion from counsel in relation to his estate, and particularly in relation to the possibility of claims being made under the (now repealed) Family Provision Act 1982 (NSW). Mr Robert Colquhoun of counsel was briefed, and he provided a Memorandum of Advice on 16 October 2006. After advising that Jessie Nelson, Mrs Nelson and the four children all had standing to bring a claim under the Family Provision Act, Mr Colquhoun went on to emphasize the importance to the success of any such claim of demonstrating that the claimant had needs which need to be satisfied. He noted that a claimant does not have to show that they are on the breadline or facing huge debts and the Court will take into account the socio-economic circumstances of the family's lifestyle. The Memorandum of Advice went on to state: "11. The fact that Arthur has provided for each of his children and his former wife during his lifetime is a significant factor in preventing a successful claim. On the instructions I have, Arthur has been most generous and the Court will take that into account. The fact that everyone is provided for in some way in the Will is also a factor the Court will take into account in considering whether to reject a claim. 12. Virginia seems to be well provided for in the Will. The claims of Cheryl, Paul, Annette and Emelia would need to be weighed in accordance with what financial difficulties they may have or financial needs they may have now or in the future. As things stand and as they have had provision made for them in the past as well, they would have to carefully consider whether to make a claim in view of the penalties in relation to having to pay costs of the estate in an unmeritorious claim. If they in fact have a house and no mortgage and are not otherwise in poor health, they would have to be taking a gamble in making a claim. 13. This then brings into consideration Jessie's position. On the facts that I have and as I understand matters a claim in the name of Jessie would be the most complex. I use the expression "in the name of Jessie" on purpose as it would not appear to be Jessie who would be the driving force in a claim in her own name but possibly her children. ... 15. If Jessie was 61 and not about 81 then she would have a very good claim for the St Ives property outright. However, as time advances the Courts become less inclined to award property outright. There is a discretion involved. Nevertheless, it is realistic to assume that if Jessie brought a claim she would at least get what is provided for her in the Will plus a reasonably substantial lump sum for herself. 16. The other weakness in the bequest of a life interest in the St Ives property to Jessie is that it does not give her the right as such to move to another property should she so wish. ... 17. The other aspect the Court may consider in relation to Jessie is that living at the St Ives unit there is the requirement for her to pay the rates, taxes, levies, insurance, repairs and other outgoings and maintain the property in good and substantial repair when she is receiving perhaps about $20,000 a year. In the circumstances of an estate worth around $80 million, the Court may consider that the $20,000 when there is the requirement of the rates, etc, is somewhat "light on" and would probably increase that sum." 51Mr Stiles sent a copy of Mr Colquhoun's advice to Mr and Mrs Nelson in November 2006. In his covering email, Mr Stiles said: "In summary, AVN's Will of 2 September 2003 seems sound and should withstand any claims under the Family Provision Act except, possibly, of a claim by Jessie relative to St Ives for the reasons set out in the advice." 52Mrs Nelson evidently read the advice and had some discussion about it with Mr Nelson. She made a handwritten note on page 5 of the advice in the following terms: "After this advice: St Ives property in Jessie's name plus $400,000 providing interest in her lifetime to maintain it. What about strata levy of AVN." 53The strata levies on the property at St Ives were at that time being met by Mr Nelson. 54On about 30 April 2007, a property at Alan Street, Cammeray was transferred by David and Vanda Rossiter to Mr Nelson and Emelia Nelson as tenants in common in equal shares. The consideration for the purchase was $2,400,000. The only direct evidence as to the source of the purchase money was a debit entry in Mr Nelson's loan account with Holdings in the sum of about $1.642 million on 30 April 2007, which bears the description "David and Vanda Rossiter". There is also a debit entry in the account in the sum of $117,494 on 20 April 2007, described as Office of State Revenue. It is likely that this relates to the stamp duty payable on the contract of sale. There was evidence that Mr Nelson stated that he wanted to help Emelia Nelson purchase a house. I conclude that Mr Nelson provided the funds for the acquisition of the Cammeray property to at least the extent of the $1.642 million. On 15 June 2007, Naringtan as trustee of the AVN Trust resolved to make a tax free capital distribution to Mr Nelson in the sum of $2,350,000. That distribution appears to have been credited to Mr Nelson's loan account with Holdings on 15 June 2007, thereby placing the account into credit in the amount of about $33,000. 55Immediately following the acquisition of the Cammeray property, Mr Nelson made a second codicil to his 2003 will. By this codicil, the $500,000 legacy which was to be paid to Emelia Nelson was replaced with a legacy of $250,000 together with Mr Nelson's interest in that property. Further, in recognition of the fact that the proceeds of the retail property in George Street had now been taken into the AVN Trust, clauses 1 and 2 of the earlier codicil were revoked. 56In early 2008, Mr Nelson sought the advice of Mr Stiles and Mr Mellon in relation to the winding up of Holdings. It is apparent that Mr Nelson wanted to simplify his affairs so as to make things easier for Mrs Nelson after his death. In that context, Mr Nelson told Mr Mellon that he was considering putting all of the money into the AVN Trust so that distributions could be made to the family. 57On 4 February 2008, Mr Mellon provided advice to Mr and Mrs Nelson in relation to the proposed winding up of Holdings. The advice referred to the objective of winding up the company and distributing the after tax proceeds to the holders of the ordinary shares in Holdings (Mr Nelson as to 48%, Mrs Nelson as to 5.88% and Investments as to 46.12%). After noting that there were taxation consequences which would need to be considered by a taxation lawyer, Mr Mellon set out the steps required to be taken in order to effect the winding up, including action to strike-off or liquidate various subsidiary companies. Mr Mellon expressed the view that if those steps were carried out, the winding up and distribution to shareholders should be able to be effected by June 2009. The advice continued: "I understand that Arthur wishes to give his share of the "after tax" distribution to the Arthur Vincent Nelson Family Trust to provide a larger capital base in which investment income is able to be regularly earned for distribution to the discretionary beneficiaries of that trust. Although I acknowledge the views of all present at our meeting in relation to the "capital and income" versus "income only" distribution debate, I personally remain firmly in support of the "income only" methodology. The ultimate decision, of course, rests with the trustees of this trust. The matter of ensuring that Arthur's will contains clauses that will ensure finalisation of the above, in the unfortunate event that he dies prior to its completion, being of a legal nature, should be addressed by Peter. There is one, somewhat unrelated, matter that I feel should be addressed when circumstances permit, being the redemption or corporate buy back of all non ordinary shares in AVN Investments Pty Limited. This action will remove any threats, perceived or real, from the ordinary shareholders right of ownership of the assets of that company, being Neutral Bay, Palm Beach (and after receipt of the distribution from Nelson Group Holdings Pty Limited) "Emma" and the cash reserves. This can only be effected after receipt of the aforementioned distribution as, at present, the company has insufficient cash to effect settlement." 58The references in the above to "Neutral Bay" and "Palm Beach" are references to the family home and holiday home which were held in Investments. The reference to "Emma" is a reference to a motor cruiser which had been used by the Nelson family over many years. A copy of Mr Mellon's advice was provided to Mr Stiles. 59On 13 February 2008, Mr Stiles provided a memorandum of advice to Mr and Mrs Nelson and Mr Mellon. Mr Stiles noted, in the memorandum, that he agreed in principle with Mr Mellon's comments regarding the winding up process. He also stated that consideration should be given to "tidying up" the various "non-ordinary" shareholdings in Investments so that the company would be left with only 5,000 ordinary shares (4,999 owned by Mr Nelson and 1 owned by Mrs Nelson). In relation to this recommendation, Mr Stiles stated: "... particularly in the light of the fact that the original share issues/ acquisitions for [Paul Nelson, Cheryl Karoll and Annette Gillett] were funded by AVN out of his own pocket and in the case of [Emelia Nelson] out of the Arthur Vincent Nelson Family Trust, further ground is given to resist any prospective claim being made against AVN's Estate under the Family Provision Act by any of [Paul Nelson, Cheryl Karoll, Annette Gillett and Emelia Nelson] and obviates any consideration being as to whether any further capital distributions should be made from the Arthur Vincent Nelson Family Trust. It may be desirable to convene a meeting of the Directors of AVN Investments Pty Limited to pass a resolution to this effect, subject to AVN Investments Pty Limited being in receipt of funds as a consequence of the winding up exercise ... " 60Mr Stiles further recommended that consideration be given to a new will being made by Mr Nelson which would provide that, instead of the bequest of shares going into the discretionary trust established under the will, the shares would go into the AVN Trust, the objective being to ensure that following Mr Nelson's death, only one trust would be in existence rather than two. Mr Stiles described that suggested change as one which was not essential but rather "a tidy up exercise". 61The memorandum also contained some discussion concerning the option of changing Mr Nelson's will so that instead of his shares in Acran Pty Ltd (the holding company of Lawrence) passing into the discretionary trust created under the will, those shares would pass to Mrs Nelson. A handwritten note made by Mrs Nelson next to that item reads: " AVN would be responsible for the $3.5 mill?" 62Although the matter was not explored in the course of the hearing, it is likely that Mrs Nelson's reference to the figure of $3.5 million is a reference to the amount which Lawrence was required to set aside in relation to the remediation of a site which it had leased in Waterloo. The site had become contaminated due, at least in part, to the use by Lawrence of chemicals. Further reference is made to that issue of contamination, and in particular to its significance in relation to Mr Nelson's intentions, later in these reasons. 63On 28 February 2008, the directors of Holdings met to discuss the proposed winding up. No resolution was passed in relation to the proposal. 64Deloitte was retained to provide taxation advice concerning the proposed winding up. Advice was provided in writing on 5 May 2008 and 30 July 2008. The 5 May 2008 advice, which was stated to be based upon written information and verbal instructions provided in conference on 26 March 2008 and subsequent telephone conversations, included the following: "Investments is wholly owned by Mr AV Nelson. Mr Nelson would like to liquidate Holdings and most of its subsidiaries, subject to the tax and other costs involved. We understand that he would like to transfer a substantial portion of the funds in Investments to a family trust in connection with his estate planning." 65The advice noted that the liquidation of Holdings would result in Mr Nelson acquiring a tax liability of about $4.382 million and Investments acquiring a tax liability in the order of $2.295 million. On the assumption that such liabilities would not be acceptable, Deloitte considered other alternatives. Deloitte concluded that there was no tax effective way for Mr Nelson to shift existing retained profits from Holdings. However, Deloitte stated that future profits could be effectively transferred to a discretionary trust by means of an interest free loan from Holdings to a company owned by the trustee of such trust. 66The Deloitte advice of 30 July 2008 dealt with a request from Mr Stiles that consideration be given to the question of the issuing of "dividend access shares" in Holdings to Naringtan as trustee of the AVN Trust. Deloitte advised that such course would carry serious taxation risks. 67After the receipt of the advice from Deloitte, Mr Nelson told both Mr Stiles and Mr Mellon that he did not want to go ahead with the proposed winding up. Mr Nelson stated, in effect, that he did not want to pay the taxation costs involved. 68On 26 August 2008, Mr Nelson made a third codicil to his 2003 will. This codicil added Mr Nelson's interest in a BMW motor vehicle to the gifts made in favour of Emelia Nelson. 69At about this time there was discussion concerning the contamination issue which is referred to earlier in these reasons. Before dealing with the detail of the discussions, it is desirable to briefly describe the nature of the issue. 70Lawrence had for many years been the lessee of a property in Waterloo where it conducted a wholesale dry cleaning business. Mr Nelson had executed personal guarantees in respect of at least some of the leases over the Waterloo premises, including in respect of a lease for the period 1 January 2007 to 31 December 2011. By clause 19.2 of that lease, Mr Nelson guaranteed to the lessor (Jeffman Pty Ltd) the due and punctual performance by the lessee of its several obligations and duties pursuant to the terms of the lease. By clause 21 of the lease, the parties acknowledged that the Remediation Works as set out in the Remediation Agreement (which was a schedule to the lease) were to be carried out during the term of the lease and, if necessary, the term of any lease entered into following the exercise of an option to renew. By clause 22.2 of the lease, a breach under the Remediation Agreement by the lessee was a breach under the lease entitling the lessor to terminate the lease pursuant to clause 10 of the lease. 71Clause 23 of the lease provided: "23.1 Despite any other clause in this Lease (but subject to the Remediation Agreement) the Lessee is only responsible for contamination occurring on or after the Commencing Date and only to the extent that the Contamination has been caused or contributed to by the Lessee. 23.2 The Lessee indemnifies the Lessor for any Environmental Liability to the extent arising out of the Contamination for which the Lessee is responsible under clause 23.1. 23.2A Despite any other provision in this Lease, it is the intention of the parties that the Remediation Agreement and this clause 23 constitute an exclusive regime in relation to the Lessee's liability for Contamination, and that the Remediation Agreement and this clause 23 override and exclude the operation of all other provisions of this Lease in respect of the matters to which they relate ..." 72The Remediation Agreement itself provided for both the lessee and the lessor to carry out the Remediation Works. It is apparent that the lessor occupied the site from 1973 to 1994 and that since that time the lessee occupied the site. Both conducted dry cleaning operations on the site. In 2003, the Environment Protection Authority determined that contamination at the site presented a significant risk of harm. The contamination was associated with a chemical called perchlorethylene (or "perc") which is involved in dry cleaning operations. In November 2005, a notice had been issued in relation to the site pursuant to s 21 of the Contaminated Land Management Act 1997 (NSW). In essence, the Remediation Agreement provided for Jeffman Pty Ltd and Lawrence to share equally the costs of the Remediation Works and any other liabilities arising from claims made in respect of the contamination. Each party was obliged to provide a bank guarantee in the sum of $3,500,000 in favour of the other in respect of its obligations under the Remediation Agreement. Such guarantees were to be reviewed annually and were to be reduced or increased so that it was for an amount equivalent to the aggregate of Remediation Costs incurred but unpaid and Remediation Costs yet to be incurred. In about mid-2008, the amount of the guarantee was reduced to $2,000,000. 73There was evidence that many of Lawrence's retail stores were "wet stores" where dry cleaning took place on the site using chemicals including perc. There was also evidence that Mr Nelson had given guarantees in respect of at least some leases over such sites, and that contamination had in fact been discovered in relation to a site occupied by Lawrence in Belrose. 74On 28 August 2008, Mr Stiles sent an email to Mr and Mrs Nelson, Paul Nelson and Mr Mellon. At that time, Paul Nelson was involved in the management of Lawrence. The email included the following: "I understand that Paul is to see a government department in relation to Waterloo site next week in the light of which the meeting for Wednesday at 12:00 noon at Neutral Bay should be deferred until, say, Friday next week ... Paul, I have now read the draft advice of Henry Davis York. For the benefit of the meeting now proposed for Friday of next week, subject to confirmation of everyone's availabilities, it would be helpful if you could arrange for HDY to provide before our meeting a supplementary advice specifically addressing the perc issue and any other relevant issues in relation to: 1. AVN's personal liability (quantified as best as can be done) [and that of AVN's estate] as guarantor of the Waterloo leases (past and current), the Belrose lease and all other retail leases personally guaranteed by AVN; and 2. the personal liability of all Directors (past and present) of Lawrence and Akran. Even though Lawrence's holding company is Akran and both Lawrence and Akran sit outside the Nelson Group structure, could a liability extend outside LDC, Akran and their Directors to any other corporations in the Nelson Group and their Directors? In addition, could you please confirm to us the quantum of the guarantee provided which guarantees Lawrence's clean up obligations and advise the entity which provided it ... I would like to know how much the cleanup exercise has actually cost to date ... as well as an estimate of the future costs of clean up ..." 75In a follow-up email sent by Mr Stiles later that day, he referred to discussion of "the asset protection issues" to take place at a meeting to be held a week or so later. Mr Stiles and Mr Mellon gave evidence that on 5 September 2008, they attended a meeting at the Nelson home in Neutral Bay which was attended by Mr and Mrs Nelson, Paul Nelson and three lawyers from Henry Davis York. It appears that Henry Davis York were then acting for Lawrence and Jeffman Pty Ltd. Mrs Nelson gave evidence of a meeting held on that day but makes no mention of any attendance by lawyers from Henry Davis York. This discrepancy was not explored in cross-examination, and no notes of the meeting were adduced in evidence. I am prepared to accept the evidence of Mr Stiles and Mr Mellon to the effect that lawyers from Henry Davis York were in attendance at Neutral Bay on that occasion. It appears that the meeting with those lawyers may have concluded before Mr Stiles and Mr Mellon proceeded to have discussions with members of the Nelson family only. That might explain Mrs Nelson's failure to mention the presence of the lawyers. 76Mr Stiles gave evidence that in discussions which he and Mr Mellon had with Mr and Mrs Nelson on that day, he said that he was worried that any personal guarantees given by Mr Nelson could make Mr Nelson or his estate liable for Lawrence's obligations under the Remediation Agreement or for any liability in relation to possible problems at other wet stores. Mr Stiles said that he suggested that some advice be obtained in relation to Mr Nelson's possible liabilities, and that Mr Nelson agreed with that course. Mr Mellon gave evidence to the effect that Mr Stiles suggested that some legal advice be obtained, but he did not recall Mr Nelson agreeing, at that meeting, that such advice be obtained. Rather, he stated that Mr Nelson subsequently agreed that legal advice be obtained. Mrs Nelson, for her part, stated that she had no recollection of the discussions held on that day. 77Mr Stiles prepared an email following the meeting on 5 September 2008. It seems that the email was not successfully sent on that day and had to be re-sent on 15 September 2008. The email, which was addressed to Mr Mellon and Mr and Mrs Nelson and headed "AVN Estate Planning", requested information concerning Mr Nelson's shareholdings and other assets owned by him. The email contained the following: "I would like AVN's and VN's authority to obtain valuations for stamp duty purposes on Neutral Bay, Palm Beach, Cammeray and St Ives, at earliest. I can then advise on the stamp duty liability to effect the transfers. I would recommend that, subject to [Mr Mellon's] advice on taxation liabilities, the following transfers be effected: 1. AVN's 50% share in Cammeray to Emelia; 2. AVN's 100% ownership of St Ives to Jessie; 3. AVN's ownership of a BMW motorcar to Emelia and a cash component if decided upon; 4. shares, basically pursuant to AVN's Will and Codicils - i.e. shares in AVN Investments Pty Ltd to VN etc; 5. other shares, also pursuant to AVN's Will and Codicils to the Arthur Vincent Family Trust (Naringtan Pty Ltd); 6. we will need to discuss the need or not to transfer AVN's shares in Naringtan Pty Ltd to Naringtan in its capacity as trustee - my initial thoughts are yes do so. As a matter of abundant precaution I would also recommend that VN resign forthwith as a director of Lawrence Dry Cleaners Pty Ltd and Akran Pty Ltd in just the same way as Trent [Trent Karoll, Cheryl Karoll's son] resigned in the last year or two. I assume that apart from the insolvent trading issue there are no other Directorial risks which apply to VN remaining as a Director of any other Companies in the Nelson Group. We should discuss as to whether any other resignations should apply to VN. AVN should prepare a new Will leaving all his Estate, which would comprise AVN's superannuation after the above transfers have been made, to VN." 78Mrs Nelson gave evidence that later in September 2008, following the meeting on 5 September 2008, Mr Nelson said to her words to the following effect: "You know about this Lawrence mess? Now Peter and Bryan want me to hand everything over to you. They think that my guarantee of the lease might make me responsible for the remediation costs of Waterloo. They think that is the best way to protect everything I've built up." 79Mrs Nelson also gave evidence that at about that time, Mr Stiles recommended to her that she resign as a director of Lawrence. 80On 17 September 2008, Mr Stiles sent an email to Messrs Velez and Watson of Watson Mangioni Lawyers. By this email, Mr Stiles sought to arrange a meeting with the lawyers which would be attended by Mr Mellon and himself. The email included: "Essentially, we are seeking advice (tax and corporate) on a strategy which would involve a share buy-back by Nelson Group Holdings Pty Ltd of shares held by AVN with a view to releasing funds into the hands of AVN who would then gift those monies to VN to enable VN to purchase AVN's shares in AVN Investments Pty Ltd (owning a Palm Beach and a Neutral Bay property) with a subsequent gifting by AVN of cash to a family trust and VN." 81On 24 September 2008, Mr Stiles made arrangements with a real estate valuer to obtain valuations for the properties at Neutral Bay, Palm Beach, Cammeray and St Ives. 82On 3 October 2008, Mr Stiles and Mr Mellon and, it seems, Mr and Mrs Nelson, attended a meeting with Messrs Velez and Watson of Watson Mangioni Lawyers. No evidence was given by affidavit concerning the details of what was discussed at that meeting, save that Mr Mellon deposed that a number of issues regarding Mr Nelson's assets, including the matters raised in Mr Stiles' email of 17 September 2008, were discussed. 83Mr Stiles gave evidence that, after the meeting at Watson Mangioni Lawyers, he had a conversation with Mr Nelson to the following effect: Mr Stiles: "Arthur, there is a significant risk that, as guarantor of the Waterloo lease, you have an exposure to the contamination liability. Watson Mangioni Lawyers agree. They recommend that you get some accounting advice about the consequences of transferring assets to protect yourself from this exposure." Mr Nelson: "OK. That sounds very serious. Well, I suppose we better get that accounting advice." 84PKF Chartered Accountants ("PKF") were instructed to provide advice. On 18 November 2008, PKF produced a draft discussion paper which was headed "Succession Planning". The document contained three proposals, each of which involved Mr Nelson divesting himself of his shareholdings in Holdings and Investments. 85On 27 November 2008, Mr Stiles met with Mr Nelson (at Mr Nelson's office in Bankstown) to discuss the advice received from PKF. Mr Stiles' file note of the meeting makes reference to various assets owned by Mr Nelson and also refers to the fact that Mr Nelson was going to undergo an operation in the not too distant future. 86In about early December 2008, Mr Stiles and Mr Mellon met with representatives of Watson Mangioni Lawyers and PKF to discuss the options as set forth by PKF. Mr Stiles gave evidence that after that meeting, he had a conversation with Mr Nelson in words to the following effect: Mr Stiles: "Here is the accountant's advice. It is complicated, but you can protect yourself by transferring assets. There will be stamp duty consequences however." Mr Nelson: "Alright, I will need to think about it." Mr Stiles: "That makes sense. But we can't delay too long. It would be good to get this tidied up sooner rather than later, certainly before I go overseas after Christmas." 87Mr Stiles gave further evidence to the effect that he had a number of subsequent discussions with Mr Nelson concerning the proposed transfer of his assets and that during one such discussion, Mr Nelson said words to the following effect: "Let's go ahead with it. I don't like having to pay stamp duty, but I don't think I have any choice given the advice from the lawyers." 88Mr Stiles says that Mr Nelson expressed some reluctance in relation to the proposed transfer of assets. He says, for example, that Mr Nelson said to him: "Peter, it is still very difficult. I have worked a lifetime to have what I have now." 89Mr Stiles says that, in response, he told Mr Nelson that, due to the "Lawrence issue" and the potential consequences to his estate, "I don't think you have any option". 90On 17 December 2008, Watson Mangioni Lawyers prepared draft Deeds of Gift, share transfer forms, and minutes of directors meetings, in relation to Mr Nelson's shares in both Investments and Holdings. Draft Deeds of Gifts were also prepared in relation to other assets owned by Mr Nelson, including the St Ives property, his interest in the Cammeray property, and three Rolls Royce motor vehicles. 91On 23 December 2008, Mr Nelson entered into Deeds of Gift in relation to some, but not all, of those assets. Mr Mellon was present when the deeds were executed. He gave evidence that shortly prior to the execution of the deeds, Mr Nelson asked Mr Mellon whether he had to sign the documents (and give away "a lifetime's work"), and whether he could "keep some" of his assets. Mr Mellon says that he rebuffed that suggestion, telling Mr Nelson that whatever he kept would be exposed if he had a liability under the lease or Remediation Agreement. Mrs Nelson gave evidence of a conversation between her husband and Mr Mellon which was in similar terms. She said that the conversation took place at about the time the gifts were made in December 2008. 92On 24 December 2008, Mr Nelson made a new will. The first three defendants were again named as executors and trustees. The will provided for a legacy of $250,000 to Emelia Nelson, $400,000 to be held on trust to pay the income therefrom to Jessie Nelson during her lifetime and after her death to be held by the trustees as part of the residuary estate. The residue of the estate was given to Mrs Nelson, provided that she did not predecease Mr Nelson or fail to survive him by one month. 93On 28 December 2008, Mrs Nelson handwrote for her husband a letter to be sent to Mr Stiles. The letter contained the following: "Thank you for handling this matter for me. I have been thinking along these lines for some time and my upcoming back operation has just brought it to a head. They tell me a hospital procedure at my age is no piece of cake. Just between us - handing over a lifetime's work was quite a struggle, but this way I get to see things unfold exactly as I would like. Virginia and I have always enjoyed being in a position to help the family financially." 94On 29 January 2009, Mr Nelson made a further will. This will appears to be in the same terms as the will of 24 December 2008, save that in clause 3, an apparently erroneous reference to clause 6 has been corrected to read clause 4. 95There was virtually no evidence adduced concerning the period from January 2009 up to May 2009, when Mr Nelson made the gifts of shares in Investments, and the Rolls Royce motor vehicles, to Mrs Nelson. 96Following the making of those gifts on 6 May 2009, Mr Nelson made his last will on 25 May 2009. The terms of that will are summarised earlier in these reasons. That will is the first will which contains any statement concerning claims being made against the estate by members of Mr Nelson's family. The statement which is contained in the will dated 25 May 2009 refers to certain advice given to Mr Nelson by Mr Stiles on that topic. No attempt was made to cross-examine Mr Stiles about the advice. 97Significant amounts of stamp duty were payable in respect of the gifts made in December 2008 and May 2009. The total amount of duty paid exceeded $1,056,000. More than $728,000 was payable as "land rich" duty in relation to the gift of shares in Investments to Mrs Nelson in May 2009. As the duty payable in respect of the gifts of shares in Investments was not finally paid until 6 September 2011, being a date after Mr Nelson's death, the plaintiff contends that the beneficial ownership of those shares remained with Mr Nelson and became part of his estate upon his death.

Did the shares in Investments become part of Mr Nelson's estate upon his death? 98The shares owned by Mr Nelson in Investments were the subject of a Deed of Gift made on 6 May 2009 between Mr Nelson as Donor and Mrs Nelson as Donee. The recitals to the Deed provided: A On the date of this Deed, the Donor gifted the property described in the Schedule (Gift) to the Donee. B The Parties are entering into this Deed to document the terms of the Gift. 99The operative part of the Deed provided: 1 Gift The Parties acknowledge that on the date of this Deed, the Donor assigned to the Donee absolutely the Donor's title and interest in the Gift. 2 Further Assurances The Parties must do all such things and execute all documents as may be necessary or desirable to give effect to the provisions of this Deed and the transactions contemplated by it. 3 Governing Law (a) This Deed is governed by the laws of the State of New South Wales. (b) Each Party irrevocably submits to the non-exclusive jurisdiction of the courts of the State of New South Wales. 100The Deed was executed by both Mr and Mrs Nelson. The Schedule describes the various types of shares in Investments owned by Mr Nelson. 101Also on 6 May 2009, transfer forms were executed by Mr Nelson as transferor/ seller and Mrs Nelson as transferee/ buyer. The transfer forms are in a standard form and contain a declaration to the effect that the registered holder of the shares transfers the shares to the transferee/ buyer subject to the conditions on which the shares were held at the time of execution of the transfer. 102The minutes of a meeting of the directors of Investments held on 6 May 2009 (attended by Mr and Mrs Nelson and Mr Stiles) record that the company had received a copy of the Deed of Gift dated that day, as well as the share transfer forms. The meeting passed a resolution which was in the following terms: "It was resolved that subject only to receipt of Share Transfers stamped in accordance with the Duties Act: (a) the Share Transfers be approved; (b) duly executed share certificates be issued to Virginia Nelson; and (c) the Company Secretary be directed to amend the corporate records of the Company to reflect the Share Transfers and to make the necessary notifications to the ASIC." 103Investments lodged a change to company details form with ASIC on 15 October 2009 which records changes in the register of members to the effect that the shares formerly registered in the name of Mr Nelson were now registered in the name of Mrs Nelson. The earliest date on which the said changes occurred is stated to be 6 May 2009. 104Given that the share transfers were not stamped until 6 September 2011, it appears that the changes to Investments' register of members occurred despite the terms of the resolution passed by the directors to the effect that such changes would be subject to the receipt of share transfers stamped in accordance with the Duties Act 1997 (NSW). 105The plaintiff points to s 301 of the Duties Act which is in the following terms: "301(1) A person must not register in a register of legal or beneficial interests in dutiable property a dutiable transaction, an instrument that effects a dutiable transaction or an instrument chargeable with duty unless: (a) it is duly stamped; or (b) it is stamped by the Chief Commissioner or in a manner approved by the Chief Commissioner; or (c) it bears an endorsement, or is otherwise effected, in accordance with an approval under s 37 of the Taxation Administration Act 1996. Maximum penalty: 100 penalty units." 106The plaintiff submitted that there was no evidence of when the transfers of the shares were registered in the records of Investments. It was submitted that, in any event, there was a failure to comply with s 301 of the Duties Act, and a consequence of that was that Mr Nelson must be taken to have retained both legal and beneficial ownership of the shares the subject of the Deed of Gift as at the date of his death. It was put that there was no transfer of either the legal or beneficial interest in the shares the subject of the transaction until the relevant transfers had been duly stamped. As to the effect of s 301 of the Duties Act, I was referred to Cooke v Fairbairn [2003] NSWSC 232 at [1] and Nabeth Taleb v National Australia Bank Ltd [2011] NSWSC 1562 at [41]-[42]. 107A further submission made in this context by the plaintiff, based upon s 1071B(3) of the Corporations Act 2001(Cth) and Part 7.11 of the Corporations Regulations, seems to me to be misconceived. Those provisions do not impose any obligations in relation to the payment of stamp duty, and the relevant instruments of transfer seem to show the details, specified in the regulations, as required by s 1071B(3) (see Corporations Regulations Part 7.11.06 and Part 7.11.22). 108The defendants submitted that the change to company details form was evidence that the transfers of the shares were registered on 6 May 2009 and that legal title in the shares passed upon such registration (see Sydney Futures Exchange Ltd v Australian Stock Exchange Ltd (1995) 56 FCR 236 at 256 per Lockhart J). The defendants further submitted that a failure to comply with s 301 of the Duties Act does not invalidate a registration made in contravention of the section and that even if it did, it did not follow that the shares the subject of the Deed of Gift became part of Mr Nelson's estate. This was because the beneficial interest in those shares passed to Mrs Nelson on the date of the transfer, even if the legal title did not. It was put that this was a case where a donor of property did all things necessary on his or her part to effect the transfer of the legal title so that the intended done is regarded in equity as the owner of the property (see Corin v Patton [1990] HCA 12; (1990)169 CLR 540 at 550 and 560 per Mason CJ and McHugh J). It was submitted that the plaintiff had not shown that Mr Nelson had not delivered the relevant share certificates with the executed transfers, or indeed that delivery of share certificates was necessary in order for Mrs Nelson to become registered as the owner of the shares. It was further submitted that in any case it was not open to the plaintiff to run such an argument given the manner in which this aspect of the plaintiff's case was raised and conducted. 109There is much to be said for the view that, due to the manner in which this aspect of the case was opened by the plaintiff and responded to by the defendants on the first day of the hearing, the plaintiff ought not be permitted to rely on any argument that is based on matters other than the failure to effect the stamping of the transfers until after Mr Nelson's death. In particular, I think it would be unfair for the plaintiff to seek to rely upon any lack of evidence of Mr Nelson delivering the share certificates to his wife, when that argument was not identified until final submissions. 110In any event, I have concluded that Mrs Nelson became, on 6 May 2009, the beneficial owner of the shares the subject of the Deed of Gift. The terms of the deed and the share transfer forms provide for an absolute assignment of Mr Nelson's interest in the shares, subject to the conditions on which Mr Nelson held the shares at the time of their transfer. 111The evident intention was that Mr Nelson's interest as owner of the shares was to immediately pass to Mrs Nelson. Mr Nelson, who was obliged by clause 2 of the Deed to do all things necessary to give effect to its provisions, then participated, in his capacity as a director of Investments, in the passing of a resolution of the directors of Investments which approved the transfers of the shares and the issuing of share certificates to Mrs Nelson subject only to receipt by the company of duly stamped Share Transfers. To the extent that there was any requirement for the production of share certificates in order for Mrs Nelson to become registered as the owner of the shares (see article 29 of Investments' Articles of Association), the requirement was dispensed with by the directors. 112In these circumstances, it is my view that Mr Nelson as the donor had done everything which was necessary for him to have done to effect a transfer of the legal title in the shares to his wife. That is sufficient for Mrs Nelson to be regarded in equity as the owner of a beneficial interest in the shares. 113In Corin v Patton (supra), Mason CJ and McHugh J, after considering the leading authorities in this area including Milroy v Lord [1861] All ER Rep 783; (1862) 4 De GF & J 264 and the early decision of the High Court in Anning v Anning [1907] HCA 13; (1907) 4 CLR 1049 stated at 559: "Accordingly, we conclude it is desirable to state that the principle is that, if an intending donor of property has done everything which it is necessary for him to have done to effect a transfer of legal title, then equity will recognize the gift. So long as the donee has been equipped to achieve the transfer of legal ownership, the gift is complete in equity. 'Necessary' used in this sense means necessary to effect a transfer. From the viewpoint of the intending donor, the question is whether what he has done is sufficient to enable the legal transfer to be effected without further action on his part. Although Griffith CJ [in Anning v Anning] did not explicitly say so, his proposition implicitly recognises that the donee acquires an equitable estate or interest in the subject matter of the gift once the transaction is complete so far as the donor is concerned. So much was acknowledged by the English Court of Appeal in In Re Rose. There the Court concluded that the donor had executed and delivered transfers and share certificates to the donee with the intention of transferring title to the shares to him and had placed him in a position to secure the legal title to the shares by registration subject to an exercise by the directors of their discretion to register the transfers. In this situation the donor could not recall the gift or invoke the aid of the court to prevent registration. The Court held that the donor had parted with his beneficial interest and had become a constructive trustee for the donee." 114That principle applies here. Once the resolution of the directors of Investments was passed on 6 May 2009, all that was required to be done in order for Mrs Nelson to be registered as the owner of the shares was that Share Transfers stamped in accordance with the Duties Act be provided to the company. That was not something which was necessary for Mr Nelson to do. 115That conclusion is not affected, in my view, by any failure on the part of Investments to comply with s 301 of the Duties Act. I would infer, from the change to company details form and the historical extract in relation to Investments, that Mrs Nelson was registered as the owner of the shares on about 6 May 2009, and certainly by no later than 15 October 2009. It may be assumed for the purposes of argument that such registration occurred in contravention of s 301 of the Duties Act. In my view, that circumstance does not have the effect of displacing Mrs Nelson's beneficial interest in the shares. Indeed, the plaintiff's submission was, rather, that unless and until the transfers were stamped in accordance with the Duties Act, no legal or beneficial interest in the shares passed to Mrs Nelson, and Mr Nelson therefore remained the owner of the shares when he died. 116For the reasons given above, I do not accept that submission. The assignment itself was not made conditional upon the transfers being duly stamped. The fact that the parties to the assignment may have contemplated that such stamping would occur does not mean that it was intended that no transfer of property would occur unless and until the stamping took place. The terms of the Deed of Gift (and the transfer forms themselves) do not support the existence of any such intention. 117Accordingly, I do not think that the shares in Investments the subject of the Deed of Gift made on 6 May 2009 became part of Mr Nelson's estate upon his death.

Are the gifts of shares in Holdings (in December 2008) and Investments (in May 2009) relevant property transactions to which s 80(2)(a) of the Act applies? 118The defendants accepted that those transactions are relevant property transactions within the meaning of Part 3.3 of the Act. As a result of Mr Nelson entering into each Deed of Gift, property became held by Naringtan and Mrs Nelson, and full valuable consideration was not given to Mr Nelson for entering into each Deed of Gift. The transactions thus fall within s 75(1) of the Act. 119Section 80 of the Act relevantly provides: "(1) The Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies. (2) This section applies to the following relevant property transactions: (a) a transaction that took effect within 3 years before the date of the death of the deceased person and was entered into with the intention, wholly or partly, of denying or limiting provision being made out of the estate of the deceased person for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order, ..." 120The defendants also accepted that the transactions took effect within three years of Mr Nelson's death (that is, within three years of 14 June 2010). That seems to be correct. The property concerned in each transaction became held (at least beneficially) by the donee within that period. It follows that the central issue is whether either or both of the transactions were entered into by Mr Nelson with the intention, wholly or partly, of denying or limiting provision being made out of his estate for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order. 121I was referred in submissions to Kastrounis v Foundouradakis [2012] NSWSC 264. In that case, Hallen AsJ (as his Honour then was) stated at [108] that whilst the section does not identify whose intention is relevant, it is the deceased's intention that is to be proved. His Honour continued at [111]-[112]: "Whether the deceased has the necessary intention is a question of fact to be decided upon consideration of all the circumstances. One might expect there to be some language, written or oral, used, or adopted, by the deceased, from which the court is able to find, as a fact, the necessary intention prior to, or at, the time of, the relevant property transaction. It is the intention with which the transaction was entered into, rather than the effect of that transaction, which is important. If that intention cannot be established, that the effect of the transaction is to wholly or partly, deny, or limit, provision, does not matter. It is not enough that the relevant property transaction has that particular result. In other words, what the subsection requires is not cause and effect, but intention and effect: Wilson v Wright (NSWSC, 25 February 1992, unreported), per Windeyer J." 122I was also referred to a more recent decision of Hallen J in Aubrey v Kain [2014] NSWSC 15 at [149]-[151] which is to the same effect. 123The plaintiff submitted that the evidence establishes that the transactions were entered into, at least in part, with the intention required by s 80(1)(a) of the Act. It was put that as from October 2006, when the advice of Mr Colquhoun of counsel was obtained, Mr Nelson was considering estate planning or succession planning. Reference was made to the heading of the email of 5 September 2008 sent by Mr Stiles - "AVN Estate Planning"; and to the heading of the PKF discussion paper of 18 November 2008 - "Succession Planning". It was submitted that on 27 November 2008, Mr Stiles took instructions from Mr Nelson for a new will, and that those instructions were in accord with the gifts of 23 December 2008 and the will executed the following day. 124It was further pointed out that there was very little documentary evidence to corroborate the evidence given by the defendants as to the concerns and discussions held in 2008 about Mr Nelson's potential liability in respect of contaminated land, and that the Court should approach such evidence with caution. 125The plaintiff submitted that it was significant that Mr Nelson only gave away a portion of his assets on 23 December 2008. First, it was said that this demonstrated that even if he had been advised to dispose of all, or virtually all, of his assets due to concerns about personal liability, Mr Nelson did not accept such advice. Secondly, it was said that it cast doubt on the reliability of the evidence that Mr Nelson expressed reluctance about giving his assets away, but went ahead due to the advice he was given about the potential for personal liability. 126The plaintiff further submitted that there was no evidence of any different view being taken by Mr Nelson in the period leading up to the May 2009 transaction. In addition, it was put that the terms of clause 3 of the will of 25 May 2009 suggested that the May 2009 transaction was entered into by Mr Nelson at least partly with the intention of limiting provision being made out of his estate for persons (including the plaintiff) entitled to apply for a family provision order. 127The defendants cited Hildebrandt v Soncini [2007] NSWSC 1227 at [25]-[26] for the proposition that the relevant intention must be one to deny or limit the provision that might be ordered in a claim brought by an eligible person. It was submitted that an intention to benefit one eligible person does not amount to an intention to deny or limit provision being made for another. 128It was submitted that there was no direct evidence that Mr Nelson held the requisite intention, and there was ample evidence to the contrary. It was put that the gifts were wholly explicable by reason of Mr Nelson's potential personal exposure to the liabilities of Lawrence for land contamination, about which both Messrs Stiles and Mellon gave advice. It was pointed out that much of the evidence given as to conversations with Mr Nelson about his exposure was not challenged. 129The defendants also submitted that when regard is had to the good relations Mr Nelson had with his family over many years, and his history of generosity to them all, his actions should be seen as putting in place a regime which would continue to provide substantial financial benefits to all members of the family (including the plaintiff). Mr Nelson's letter to Mr Stiles dated 28 December 2008 is said to illustrate this. 130For the following reasons I have come to the conclusion that neither of the gifts of shares made by Mr Nelson was entered into with the intention, wholly or partly, of denying or limiting provision being made out of his estate for the maintenance, education or advancement in life of any person entitled to apply for a family provision order. 131When the AVN Trust was established in 2005, Mr Nelson was about 80 years of age. Mrs Nelson gave evidence that whilst her husband continued to be involved in his businesses, he had become less energetic and had said that he wanted to get out of trading operations and instead use his companies as investment vehicles. 132There was evidence that Mr Nelson was pleased to continue to provide substantial financial assistance to members of his family, including his four adult children, through the AVN Trust. He expressed a preference for provision by way of regular income, rather than large amounts of capital, but, as noted earlier, significant capital distributions were also made in 2006. 133It is apparent that in 2006, Mr Nelson was giving some thought to his death, and what needed to be done in advance of that event. In September 2006, there was an issue of ordinary shares in Holdings to Mrs Nelson so that she would hold a majority of the shares in that company after her husband's death. At about the same time, the advice of counsel about possible claims under the Family Provision Act was obtained. That advice, which must be viewed in the context of Mr Nelson's then current testamentary arrangements (the 2003 will and March 2005 codicil) did not suggest that any of his children would likely have good claims, but noted that any claims by children "would need to be weighed according with what financial difficulties they may have or financial needs they may have now or in the future". The advice noted that Mr Nelson's former wife may have a good claim, particularly in view of the fact that she would only receive a life interest in the St Ives property in which she lived. 134The seeking of advice in early 2008 about the winding up of Holdings should be seen, in my view, as a further step taken by Mr Nelson towards having his affairs suitably arranged before he died. It is clear that Mr Nelson had in mind placing his share of the proceeds of the winding up into the AVN Trust so as to facilitate distributions to family members. 135In the course of the provision of advice about the winding up, questions arose about the position, post-winding up, of Investments, which held 46.12% of the ordinary shares in Holdings. There was discussion about a "tidying up" of the issued shares in Investments so that only ordinary shares would remain. In that context, Mr Stiles noted that a return to non-ordinary shareholders (which included Mr Nelson's four children) would give a further ground to resist any prospective claim under the Family Provision Act by any of the children. Mr Stiles also suggested some changes to Mr Nelson's will, including that the shares the subject of the bequest to the discretionary testamentary trust be instead given to the trustee of the AVN Trust. Again, this was advanced as "a tidy[ing] up exercise". 136It appears to be the case that both Mr Nelson and Mr Stiles were conscious in 2008 of the possibility of claims being made by Mr Nelson's children after his death. However, the evidence does not suggest that any such claims were considered by Mr Nelson (or by Mr Stiles) to be well-founded or substantial. 137It seems that Mr Nelson remained keen to provide for his family through the medium of the AVN Trust. He evidently informed Deloitte that he would like to transfer "a substantial portion of the funds in Investments" to that trust in connection with his estate planning. 138By about August 2008, the proposed winding up of Holdings had been abandoned, due, it seems, to the high taxation which it would involve. At about that time, discussions were taking place about the contamination issue in relation to the Waterloo site. I do not think there is any doubt that in the course of those discussions, the potential personal liability of Mr Nelson, not only in relation to the Waterloo site, but also in relation to other sites, was discussed, as was the related issue of "asset protection". The terms of Mr Stiles' emails of 28 August 2008 make that clear. It is also clear that on 5 September 2008, Mr Stiles, following a meeting held at the Nelson home in Neutral Bay, recommended (subject to obtaining Mr Mellon's advice on taxation liabilities) that Mr Nelson dispose of his assets so that he would be left with only his superannuation fund which, Mr Stiles noted, was protected against a trustee in bankruptcy. Mr Stiles also recommended "as a matter of abundant precaution" that Mrs Nelson resign as a director of Lawrence. 139Mr Stiles' evidence concerning what he told Mr Nelson on 5 September 2008 was challenged in cross-examination and was demonstrated to be somewhat confused. For example, his evidence about whether he had seen the lease of the Waterloo site by 5 September 2008 was contradictory. Nevertheless, I accept Mr Stiles' evidence that he told Mr Nelson on that day that he was worried that personal guarantees given by Mr Nelson could make him liable for Lawrences' obligations in relation to the Waterloo site, or other sites where Lawrence had used chemicals. Moreover, I infer that it was this concern about Mr Nelson's potential liability which led Mr Stiles to make his recommendation about disposal of assets. This concern is not mentioned in Mr Stiles' email of 5 September 2008, but the purpose of the email is not so much to provide an explanation of the reasons for the proposed transfers as to seek information to facilitate the transfers. 140By mid-September 2008, Mr Stiles had made contact with Watson Mangioni Lawyers, and on 17 September 2008 a request was made for them to advise on a strategy which, as described by Mr Stiles, would ultimately involve Mr Nelson making gifts to the AVN Trust and to Mrs Nelson. 141It does not seem that Watson Mangioni Lawyers were ever requested in writing to advise as to Mr Nelson's potential liability under guarantees given by him. However, Mr Stiles stated that he sought and obtained verbal advice from Watson Mangioni Lawyers on that issue. There was some cross-examination on the topic of what advice was given by Watson Mangioni Lawyers, particularly at a meeting held on 3 October 2008. There is some divergence between Mr Stiles and Mr Mellon on that matter. Mr Stiles said that the advice given on that occasion was not limited to the matters referred to in his email of 17 September 2008, whereas Mr Mellon said that it was so limited. Mr Stiles' recollection of the meeting was poor, and he was not able to recall whether any advice was given on that occasion about Mr Nelson's liability under any guarantee. I think it is likely that, as Mr Mellon said, the advice given on that occasion was limited to the matters referred to in the 17 September 2008 email. 142Mr Stiles maintained that he received advice from Mr Watson of Watson Mangioni Lawyers on the question of Mr Nelson's personal liability, and that this probably occurred during discussions he had with Mr Watson which, he said, were occurring on a daily basis. Mr Stiles further stated that he gave verbal advice to Mr Nelson, including advice to the effect that there was a significant risk that as a guarantor of the Waterloo lease he had an exposure to the contamination liability, that Watson Mangioni Lawyers had agreed with that, and that Watson Mangioni Lawyers had further recommended that accounting advice be obtained. 143Mr Stiles' evidence about the circumstances in which Watson Mangioni Lawyers were asked to advise on Mr Nelson's potential liability under his guarantee of the Waterloo lease was very vague. Nonetheless, in the absence of a direct challenge to the veracity of this aspect of his evidence, I am prepared to accept that Mr Stiles received some verbal advice from Mr Watson on that issue, and that such advice was not inconsistent with Mr Stiles' view of the matter. I note also, in this context, that Mrs Nelson gave evidence (which was not challenged and which I accept) that she had attended a meeting at Watson Mangioni Lawyers with her husband where there was a discussion about the extent of his liability under the guarantee. 144The plaintiff, by reference to the terms of the Waterloo lease (which includes Mr Nelson's guarantee) and the Remediation Agreement, suggested to Mr Stiles that there was no real basis for the conclusion that Mr Nelson could have a liability under that guarantee in respect of the Remediation Agreement (which covered contamination occurring before 1 January 2007). To that, Mr Stiles pointed to clause 22.2 of the lease which provided that a breach by Lawrence under the Remediation Agreement was a breach under the lease. Mr Stiles' interpretation may not be correct (and it is not necessary for me to determine that question) but it is a position which can I think be said to be arguable. Mr Stiles appears to have been taking a very cautious approach to the question of Mr Nelson's potential exposure. This was reinforced by the fact that Mr Stiles did not have a complete understanding of the possible extent of any such liability. He knew that Mr Nelson had given guarantees of other leases over the years, and that at least some of those leases were of "wet sites" where Lawrence had used chemicals. There was plainly a great deal of uncertainty about the extent of Mr Nelson's potential exposure, and I do not think it would have been unreasonable for a lawyer to provide cautious advice to the effect that there was a potential for a significant personal liability to exist. I accept that Mr Stiles had formed such a view, and that he conveyed that to Mr Nelson during his discussions with him. I further accept that he told Mr Nelson, in effect, that Watson Mangioni Lawyers agreed with his view. 145As noted earlier, accounting advice was obtained from PKF. Their discussion paper dated 18 November 2008 contained three proposals, each of which involved Mr Nelson divesting himself of his shareholdings in Holdings and Investments. I do not think that the fact that this discussion paper was headed "Succession Planning" (or that Mr Stiles' email of 5 September 2008 was headed "AVN Estate Planning") is of much significance. Clearly, the subject matter of those documents involved the disposal by Mr Nelson (then aged 83) of virtually all of his assets. The effect that would have upon his estate was obvious. However, the concepts of "Succession Planning" and "Estate Planning" do not, in themselves, say anything about Mr Nelson's intentions, motives or purposes in undertaking the disposal of assets. 146Mr Stiles gave evidence (which was not challenged) that on 18 November 2008, after meeting with PKF, he told Mr Nelson about the PKF advice and told him that he could protect himself by transferring assets, but that there would be stamp duty consequences. Mr Nelson is said to have replied that he would have to think about it. I accept that evidence. 147Mr Stiles had a lengthy meeting with Mr Nelson on 27 November 2008. It is true, as pointed out by counsel for the plaintiff, that Mr Stiles' file note includes at least one entry (concerning Mr Nelson's furniture) that is consistent with Mr Stiles taking instructions in relation to a new will. It seems to me, however, that the note concerns Mr Nelson's property generally, and is not necessarily only concerned with a new will. It is likely, in my view, that the discussion, as reflected in the file note, concerned both the proposed transfers of assets, and a new will which, following such transfers, would be appropriate. 148Mr Stiles gave evidence (which, again, was not challenged) that following that meeting he met with Mr Nelson on a number of occasions to discuss the proposed transfer of assets, and that during one such meeting, Mr Nelson said, in effect, that the transfer should go ahead despite the stamp duty which would be payable. I also accept that evidence. 149I further accept the unchallenged evidence of Mr Stiles to the effect that in December 2008, during a meeting with Mr and Mrs Nelson, Mr Nelson told him that it was very difficult for him "to give away what I have", and that in response, Mr Stiles said that due to "the Lawrence issue and the potential consequences to your estate, I don't think you have any option". 150By 17 December 2008, Watson Mangioni Lawyers had prepared draft documents, including for the transfers of Mr Nelson's shares in both Holdings and Investments. It is curious that not all of the proposed transfers occurred on 23 December 2008. The reason for that was not explained in the evidence. The suggestion made by Mr Stiles to the effect that it may have been due to a lack of available cash to pay the "land rich" stamp duty on the transfer of the shares in Investments is plausible, but the factual basis for it was not demonstrated. In any event, I do not think it follows, from the fact that only a portion (less than half) of Mr Nelson's assets was transferred on 23 December 2008, that such transfers were not undertaken as part of the proposal which was first recommended by Mr Stiles in September 2008 and in respect of which advice was subsequently obtained from Watson Mangioni Lawyers and PKF. In particular, I do not accept the plaintiff's submission that it should be concluded, from the partial transfer of assets, that Mr Nelson had rejected the advice he had received concerning his potential liability. Proceeding with some of the transfers on 23 December 2008 is consistent with Mr Nelson effecting the transfers in accordance with the advice he received, albeit not all at the same time. 151Moreover, I accept the evidence given by Mr Mellon that just prior to the execution of the Deeds of Gift on 23 December 2008, Mr Nelson queried whether it was necessary for him to give away "a lifetime's work" and whether it was possible for him to keep some of his assets, to which Mr Mellon responded by saying that whatever he kept would be at risk. Mrs Nelson gave evidence of a similar conversation. She was vague about when it occurred. However, it is likely in my view that, as recalled by Mr Mellon, the conversation in fact took place on 23 December 2008. 152That conversation is consistent with a conclusion that when Mr Nelson executed the Deeds of Gift on 23 December 2008, he understood that he was in the process of disposing of practically everything he owned. It is likely that Mr Nelson was well aware that some of his property (in particular, his shareholding in Investments) was not the subject of a Deed of Gift executed on that day. In these circumstances, I think that Mr Nelson should be taken to have understood that what he was doing on 23 December 2008 was part of a general disposition of all, or virtually all, of his assets. 153Mr Nelson's letter to Mr Stiles dated 28 December 2008 refers, in the past tense, to "handing over a lifetime's work". However, as Mr Nelson would have appreciated that much of his property had not yet been given away, the statement should be read, in my view, as a reference to his decision to proceed to give away his assets. I have little doubt that Mr Nelson, who was evidently proud of his substantial achievements in life, did indeed find it "quite a struggle" to make that decision. 154It is likely, in my view, that Mr Nelson came to that decision as a result of the advice he had received, primarily from Mr Stiles, but also from Mr Mellon, concerning the potential liabilities he (and his estate) faced in relation to land contamination. Both Mr Stiles and Mr Mellon were trusted advisers of Mr Nelson, and had been for many years. Mrs Nelson said that her husband was a strong willed and forceful man, but one who would not make a large decision without carefully considering the consequences, as pointed out by Mr Stiles and Mr Mellon. 155One of the consequences of the making of the Deeds of Gift was a significant imposition of stamp duty. There was evidence that Mr Nelson was reluctant to incur such obligations unless it was necessary to do so. I infer that the potential scope for his personal liability, as described to him by Messrs Stiles and Mellon, was regarded by Mr Nelson as sufficiently serious to overcome that reluctance and take the difficult decision to give away the bulk of his assets. 156It is also likely that the making of the decision was made easier by the fact that the gifts were seen by Mr Nelson as consistent with his desire to provide financially for family members. Substantial benefits were given on 23 December 2008 to his former wife, Jessie Nelson, to Emelia Nelson, and to the trustee of the AVN Trust. As Mr Nelson stated in his letter of 28 December 2008, he had been "thinking along these lines for some time" and he and Mrs Nelson had "always enjoyed being in a position to help the family financially". 157There is no evidence that in December 2008 or in May 2009 Mr Nelson held any particular concerns about possible claims against his estate by family members. To the extent that Mr Colquhoun's advice suggested that Jessie Nelson might have a claim, the gift of the St Ives property to her and the provision in her favour in the 24 December 2008 will of a life interest in a capital sum of $400,000, would apparently remove the essential basis for any such claim. Moreover, there was no evidence that Mr Nelson was aware that any of his children had significant financial needs. In particular, there was no evidence that Mr Nelson was aware, either in December 2008 or May 2009, that, despite the making of the gift of capital to the plaintiff in 2006, there was now a substantial debt secured over her Cremorne property. 158It should also be noted that each of Mrs Nelson, Mr Stiles and Mr Mellon deposed that at no time did Mr Nelson say anything to the effect that he made the gifts of December 2008 and May 2009 wholly or partly to limit or restrict any entitlement or benefit any of his children would have in his estate. Mrs Nelson further deposed that, on the contrary, Mr Nelson said on a number of occasions that he wanted to leave a legacy for the family. 159I accept that Mr Nelson must have known that once all the gifts had been effected, there would, relatively speaking, be little left to fall into his estate once he died. He would have realised, had he turned his mind to it, that any substantial claims against his estate might therefore be limited. However, there is no evidence that at the time the gifts of the shares were made, Mr Nelson believed that any substantial claims were likely or in the offing. I do not think that there is any basis to conclude that the statement, made by Mr Nelson in his will of 25 May 2009, that it was his belief that none of his children had needs which need to be satisfied from his estate, was not a reasonably accurate statement of his belief. The statement may well reflect an appreciation of the possibility of claims being made, but it does not suggest that Mr Nelson believed that any substantial claims were in prospect. 160In these circumstances, I am not satisfied that either the gift of shares in Holdings made in December 2008, or the gift of shares in Investments made in May 2009, was entered into by Mr Nelson wholly or partly with the intention of denying or limiting provision being made out of his estate for the maintenance, education or advancement in life of any person entitled to apply for a family provision order. Accordingly, the suggested basis for the Court making a notional estate order under Part 3.3 of the Act has not been made out by the plaintiff.

Should a family provision order be made in favour of the plaintiff? 161The conclusions I have made above effectively dispose of the principal bases upon which the plaintiff advanced her claim for a family provision order. Those bases were that the property comprising Mr Nelson's estate included shares in Investments valued at more than $34 million, or alternatively, there was property with a combined value of about $58 million which could be designated as notional estate of Mr Nelson. Instead, the plaintiff's claim must be considered on the basis that Mr Nelson left an estate with an estimated net value of approximately $1.2 million, and that such estate has been largely distributed. 162The plaintiff's written submissions did not specifically address this situation. Counsel for the plaintiff was given the opportunity during his address in reply to make submissions as to what relief was sought on that basis. However, no clear submission was made, other than to observe that if the costs of the parties were paid out of the estate, there would be very little remaining out of which to make any provision for the plaintiff. Nevertheless, I did not understand the plaintiff to be abandoning the claim for a family provision order in this situation, and I think that such claim must be dealt with. 163Affidavits as to costs, sworn by the solicitors for the plaintiffs and the defendants respectively, were read at the hearing. The affidavit sworn by the plaintiff's solicitor, Mr Hartmann, indicates that up to 12 February 2014 (five days before the hearing), professional costs of about $170,000 had been incurred by the plaintiff, and a further amount of almost $44,000 had been incurred in disbursements. Mr Hartmann estimated that the total costs (assuming a three day hearing) would be almost $370,000. If an allowance is made for the two additional days of hearing (at $15,000 per day), the total would increase to almost $400,000. Of course, considerably less than that amount would be recoverable if an order was made in the plaintiff's favour on the ordinary basis. 164The affidavit sworn by the defendants' solicitor, Mr Watson, indicates that up to 31 December 2013, the estate had incurred costs of approximately $751,000 in relation to the plaintiff's claim and the claims made by Cheryl Karoll and Paul Nelson. That amount of about $751,000 has been borne to date by Mrs Nelson personally. A further amount of approximately $120,000 was estimated to be incurred in respect of the hearing (assuming about three days of preparation and three days of hearing). If an allowance (of $20,000 per day) is made for the two additional days of hearing, the costs would come to a total of approximately $912,000. 165Mr Watson's affidavit does not differentiate between the defendants in relation to costs. Presumably, due to the similarity of interests between the defendants, which is reflected in their common legal representation, all the costs have been treated as costs of the estate. The submissions of both counsel apparently proceeded on a basis consistent with that approach. 166On that basis, the net value of the distributable estate which, prior to any distributions, was about $1.2 million, would be reduced to a bit less than $300,000 after allowance is made for the costs incurred by the defendants in all three proceedings. 167The Court may only make a family provision order in favour of the plaintiff in relation to her father's estate if it is satisfied of the matters set forth in s 59(1) of the Act. As the plaintiff is an eligible person as defined in s 57(1)(c) of the Act, only s 59(1)(c) of the Act remains to be considered. 168Section 59(1)(c) of the Act is satisfied in the present case if, at the time the Court is considering the plaintiff's application for a family provision order, adequate provision for the proper maintenance, education, or advancement in life of the plaintiff has not been made by the will of Mr Nelson. Under the terms of Mr Nelson's last will, the plaintiff (along with Mr Nelson's three other children), would have shared the residuary estate had Mrs Nelson not survived Mr Nelson by more than one month, but, as she did so survive him, the plaintiff receives nothing under her father's will. The question then becomes whether that provision is adequate for the proper maintenance, education or advancement in life of the plaintiff. 169As Barrett JA pointed out in Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [84], this question of adequacy is directed only to provision made by the will of the deceased person (or the operation of the laws of intestacy) and does not extend to provision made by the deceased person during his or her lifetime. 170In Alexander v Jansson [2010] NSWCA 176 Brereton J (with whom Basten JA and Handley AJA agreed) stated at [18] that the notion of "proper maintenance" is not limited to the bare sustenance of a claimant "but requires consideration of the totality of the claimant's position in life including age, status, relationship with the deceased, financial circumstances, the environs to which he or she is accustomed, and mobility". Moreover, the expression "advancement in life" is of wide import (see McCosker v McCosker [1957] HCA 82; (1957) 97 CLR 566 at 575). The assessment of what, in all the circumstances, is a proper level of maintenance, education or advancement in life must have regard, inter alia, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty (see Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 at 209-210). It is also relevant to note that the use of the word "proper" means that attention may be given, in deciding whether adequate provision has been made, to such matters as what used to be called "the station in life" of the parties and the expectations to which that has given rise, in other words reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future (see Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 at [114]). 171In my view, for the following reasons, the will of Mr Nelson does not make adequate provision for the proper maintenance, education, or advancement in life of the plaintiff. The plaintiff's current financial position which is summarised above at [24] to [28] can only be described as weak or tenuous for a single woman aged 62. She does not own her own home or any other real property. Her only substantial asset in the nature of an investment is her holding of 50,000 B class convertible preference shares in Investments. Those shares are worth about $100,000, although it must be recognised that there is no open market in which to sell them. Against that, the plaintiff has personal debts including taxation liabilities, in the order of $165,000. (The potential taxation liabilities of See-net Pty Ltd are excluded from this analysis). Her superannuation account is negligible. 172Added to this, the plaintiff's business, Paris Couture, appears to be incapable of generating anything other than very modest profits. In essence, the plaintiff must rely very heavily upon the distributions she receives from the AVN Trust for funds upon which to live. Those distributions have been made regularly for many years and have recently been made at the level of $100,000 (fully franked) each year. Annual distributions of that magnitude are no doubt of great benefit to the plaintiff. However, as was demonstrated during cross-examination, the making of such distributions depends upon the exercise of discretion on the part of the trustee of the AVN Trust. In addition, the ability of the AVN Trust to make such distributions depends in part on the declaration of dividends by Holdings. The continued making of sizable distributions by the AVN Trust to the plaintiff cannot be taken as a given. In short, the plaintiff faces much uncertainty concerning the availability of funds upon which to live. That, together with the plaintiff's asset and liability position as described above, demonstrates that she has considerable financial needs, both immediate and into the future. 173It is also relevant in this context to consider competing claims upon the bounty of the testator. The claims of the plaintiff's siblings which have already been determined may be put to one side, as may the interests of others (not being beneficiaries of the estate) who have been served with the prescribed notice but not made any claim (see s 61 of the Act). It remains necessary to consider the claims of the beneficiaries, Emelia Nelson, Jessie Nelson, and Mrs Nelson. 174The evidence clearly establishes that Mrs Nelson is very wealthy. Emelia and Jessie Nelson are the owners of residential properties at Cammeray and St Ives respectively. There was no evidence adduced as to their current financial positions. There is no reason to conclude that, leaving aside what they would receive under Mr Nelson's will, either are in particularly necessitous circumstances. 175Viewed overall, it seems to me that when further regard is had to the apparently good relationship which existed between the plaintiff and her father, his willingness to provide financial assistance to her when it was needed, and to the materially comfortable circumstances in which the plaintiff was brought up and has continued to enjoy, proper provision out of Mr Nelson's estate for her maintenance, education or advancement in life would require that at least some part of the estate be given to the plaintiff. Accordingly, the lack of any provision for the plaintiff under Mr Nelson's will must be regarded as inadequate for that purpose. I am therefore satisfied that all the matters set forth in s 59(1) of the Act have been met, and it is open to the Court to make a family provision order in favour of the plaintiff in relation to her father's estate pursuant to s 59(2) of the Act. 176I therefore turn to consider whether such an order should be made, and if so, the nature of such order. 177Section 60(2) of the Act sets out a number of matters which may be considered by the Court in determining those questions. Many but not all of those matters appear to me to be of some significance in the present case. They have been taken into account to the extent they are relevant, as have the matters referred to above in relation to the s 59(1) question. 178As has been mentioned, the plaintiff and her father had an apparently good relationship. It was a feature of that relationship that Mr Nelson was a great provider to her, not only when she was growing up, but also in her adult years. On numerous occasions Mr Nelson gave financial assistance to the plaintiff when she faced difficult circumstances, including, for example, the $550,000 lent to the plaintiff in 1991 and the $150,000 provided to her in 2003. Mr Nelson was happy to generously provide for his children throughout their lives. In more recent times, this was effected through distributions made by the AVN Trust. In 2006, following the capital distribution of $250,000 in favour of the plaintiff, Mr Nelson took comfort in the fact that this meant that the plaintiff no longer had much of a mortgage debt to repay. It is true that on occasions Mr Nelson expressed some exasperation at his children (and the plaintiff in particular) living beyond their means and being imprudent with money. However, Mr Nelson was evidently a generous rather than hard-hearted man. He would not be expected to turn away in the face of actual financial need being experienced by one of his children. 179There is no doubt that, at least since the failure of her marriage in 2001, the plaintiff has struggled financially. That is due in part to an inability to manage her finances, particularly her expenditure relative to her income. Nevertheless, it should be recognised that, despite the help she continued to receive from the AVN Trust, the plaintiff was not walking an easy road. She was not financially supported by her former husband. When she returned to the workforce in 2002, the plaintiff was caring for two school aged children. They remained dependent upon her for many years. In 2007, when the plaintiff started her own business she no doubt tried to make a success of it. Unfortunately, that has not come to pass. Although the two children are now no longer financially dependent to any significant extent, the plaintiff, at the age of 62, and with a very limited earning capacity, now finds herself in the financial position earlier described. No other person is liable to support her. 180Mr Nelson's estate, prior to the distributions made from it, had a net value of approximately $1.2 million. That amount, once the defendants' costs are accounted for, would be capable of supporting a modest order for provision in favour of the plaintiff. To the extent that distributions of property have been made out of the estate, notional estate orders should be made designating property held by the recipients as notional estate of Mr Nelson so that property with a net value of about $1.2 million remains available to be the subject of a family provision order (see ss 63(5) and 79 of the Act). In reaching that conclusion I have considered the matters referred to in s 87 of the Act. The recipients of distributions from the estate are Mrs Nelson and Emelia Nelson (who has received $250,000). In my view, despite the importance of not interfering with reasonable expectations in relation to property, it is just that notional estate orders be made in relation to the property of those recipients (or at least Mrs Nelson) so that an order for provision can be made in favour of the plaintiff. In the absence of such orders, the estate would not be sufficient for the making of any provision in the plaintiff's favour or to satisfy any order for costs in her favour (see s 88(b) of the Act). Even though the plaintiff has failed on her primary claims, she has obtained some success, and I think that a costs order should be made in her favour. 181The defendants submitted that having regard to the considerable support the plaintiff has already received (and which will likely continue), the strength of her claim for provision was weak, especially when viewed in the light of Jessie Nelson's position. That submission has some force. However, in all the circumstances, including the pressing nature of the plaintiff's immediate financial needs, I have concluded that it is appropriate for a family provision order to be made in her favour for her maintenance, education and advancement in life (see s 59(2) of the Act). 182In my view, the plaintiff should receive a lump sum legacy of $175,000. The estate or notional estate is of a sufficient size, after payment of the defendants' costs of the claims against the estate, to bear such a legacy. A legacy in that amount would at least provide liquid funds sufficient to enable the plaintiff to pay her existing debts (which are estimated to be about $165,000 in total). The legacy should be paid out of the portion of the estate which consists of cash on deposit. In addition, an order should be made that the plaintiff's costs be paid out of the balance of the estate or notional estate which remains after payment of the legacy of $175,000 and payment of the defendants' costs. 183Based on the costs estimates provided by the solicitors, the estate or notional estate will not be sufficient to meet the entirety of the plaintiff's costs (as assessed). The extent to which the plaintiff is left with a liability to her lawyers depends, of course, upon the terms of the arrangements she and they have made. 184I direct the parties to bring in Short Minutes to give effect to these reasons. I will, if necessary, hear further argument on the appropriate form of relief, including the notional estate orders to be made in respect of the distributions which have been made from Mr Nelson's estate. I expect, however, that the parties will make every effort to reach agreement on those matters.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 May 2014

repealed) Family Provision Act 1982(NSW)

Succession Act 2006(NSW)s 80(2)(a), ss 59, 60, 61, 63, 75, 79, 80, 87, 88

Corporations Act 2001(Cth)s 1071B(3)

Duties Act 1997(NSW)s 301

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Cases Cited (19)