Bassett v Bassett - [2021] NSWCA 320 - NSWCA 2021 case summary — Zoe

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Bassett v Bassett

[2021] NSWCA 320

Court of Appeal (NSW)|2021-10-25|Before: Bell P, Leeming JA, Payne JA

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At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2021-10-25

Before

Bell P, Leeming JA, Payne JA

Catchwords

[2012] NSWCA 308 Be Financial Pty Ltd as trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 Bienstein v Bienstein (2003) 195 ALR 225
[1980] HCA 31 Hampson v Hampson [2010] NSWCA 359
(2010) 5 ASTLR 116 Harris v Harris [2018] NSWCA 334 House v The King (1936) 55 CLR 499
[1936] HCA 40 Housman v Camuglia (2021) 104 NSWLR 615

Source

Original judgment source is linked above.

Catchwords

[2012] NSWCA 308 Be Financial Pty Ltd as trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 Bienstein v Bienstein (2003) 195 ALR 225[1980] HCA 31 Hampson v Hampson [2010] NSWCA 359(2010) 5 ASTLR 116 Harris v Harris [2018] NSWCA 334 House v The King (1936) 55 CLR 499[1936] HCA 40 Housman v Camuglia (2021) 104 NSWLR 615[1957] HCA 82 Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541[1915] HCA 14 Poche v Poche [2020] NSWSC 835 Re Allen [1922] NZLR 218[1921] GLR 613 Re Luck (2003) 78 ALJR 177[2003] HCA 70 Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597[2017] NSWCA 206 Sgro v Thompson [2017] NSWCA 326 Singer v Berghouse (1994) 181 CLR 201[1994] HCA 40 Slack v RoganPalffy v Rogan (2013) 85 NSWLR 253[2013] NSWSC 522 Starr v Miller [2021] NSWSC 426 Steinmetz v Shannon (2019) 99 NSWLR 687[2019] NSWCA 114 Strang v Steiner [2019] NSWCA 14319 ASTLR 330 Sung v Malaxos (No 2) [2015] NSWSC 290 The Age Co Ltd v Liu (2013) 82 NSWLR 268

Judgment (31 paragraphs)

[1]

DJ Singh v DH Singh [2018] NSWCA 30 Drummond v Drummond [1999] NSWSC 923 Eatts v Dawson (1990) 21 FCR 166 Goodman v Windeyer (1980) 144 CLR 490; [1980] HCA 31 Hampson v Hampson [2010] NSWCA 359; (2010) 5 ASTLR 116 Harris v Harris [2018] NSWCA 334 House v The King (1936) 55 CLR 499; [1936] HCA 40 Housman v Camuglia (2021) 104 NSWLR 615; [2021] NSWCA 106 Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Katramados v Hasapis (No 2) [2018] NSWSC 1604 Keynes Capital Global Limited v Guo (No 2) [2020] NSWCA 336 Lewis v Lewis [2001] NSWSC 321 Limberger v Limberger [2021] NSWSC 474 McCosker v McCosker (1957) 97 CLR 566; [1957] HCA 82 Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 Muriniti v Mercia Financial Solutions Pty Ltd [2021] NSWCA 180 Neale v Neale [2015] NSWCA 206 Olsen v Olsen [2019] NSWSC 217 Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 Plunkett v Bull (1915) 19 CLR 544; [1915] HCA 14 Poche v Poche [2020] NSWSC 835 Re Allen [1922] NZLR 218; [1921] GLR 613 Re Luck (2003) 78 ALJR 177; [2003] HCA 70 Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 Sgro v Thompson [2017] NSWCA 326 Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 Starr v Miller [2021] NSWSC 426 Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 Strang v Steiner [2019] NSWCA 143; 19 ASTLR 330 Sung v Malaxos (No 2) [2015] NSWSC 290 The Age Co Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 The Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19 Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 Waller v Waller [2009] WASCA 61 Warren v McKnight (1996) 40 NSWLR 390 White v Barron (1980) 144 CLR 431; [1980] HCA 14 Texts Cited: G C Lindsay, "The Family Provision Jurisdiction in Historical Perspective" (Lecture, Macquarie Law School, 3 June 2020) Category: Principal judgment Parties: Bruce Edward Bassett (First Appellant/First Cross-Respondent) Merilyn Jill Ryan (Second Appellant/Second Cross-Respondent) Geoffrey William Bassett (First Respondent) Susan Narelle Cameron (Second Respondent/Cross-Appellant) Representation: Counsel:

[2]

R D Wilson SC with M McGirr (Appellants/Cross-Respondents) M Hodge QC with J R Willis (First Respondent) P H Blackburn-Hart SC with M J Dawson (Second Respondent/Cross-Appellant)

[3]

Keypoint Law (Appellants/Cross-Respondents) Martin Legal (First Respondent) Wordsworth Lawyers (Second Respondent/Cross-Appellant) File Number(s): 2021/00094946 Publication restriction: N/A Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Citation: [2021] NSWSC 207; [2021] NSWSC 419 Date of Decision: 12 March 2021; 27 April 2021 Before: Ward CJ in Eq File Number(s): 2015/00019536

[4]

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

[5]

HEADNOTE [This headnote is not to be read as part of the judgment] An appeal and application for leave to cross-appeal were brought in relation to proceedings heard by the Chief Judge in Equity (the primary judge) in relation to the Estates of the late William Edward Bassett (Bill) who died on 22 January 2014, aged 85, and the late Elaine Jill Bassett (Jill) who predeceased Bill, having died on 21 March 2007. Bill and Jill had four children - Merilyn, Sue, Geoff and Bruce. Bill and Jill, who married in 1953, were farmers and conducted their farming business through a series of rural partnerships. Of the four children, Geoff was the only child to take up a career as a farmer and worked alongside his parents in varying ways over the years. At the time of his death, Bill had a 50% share in a rural property near Inverell, known as "The Springs", with Geoff owning the other 50% interest in that property. Bill's Estate for probate purposes at the time of his death had a gross value of $3,474,518.83, however, a 2018 desktop valuation of The Springs, that was in evidence before the primary judge, implied that by the time of that valuation at least, the overall value of Bill's Estate had increased to $4,274,518.00. In 1998, Geoff had largely been gifted a rural property known as "Pindaroi" by his parents. He sold it in 2009 for approximately $4.2 million. It was referred to amongst family members as his "early inheritance". Under Bill's Will, Geoff received a bequest comprising Bill's share in any farming plant and equipment machinery, implements and livestock, but which expressly excluded any real estate which Bill may have owned with Geoff at the date of Bill's death. The interest bequeathed to Geoff was valued for probate purposes at approximately $233,835. Merilyn, Sue and Bruce were residuary beneficiaries under Bill's Will, and had also been residuary beneficiaries under Jill's Will. Shortly after the grant of probate of Bill's Estate, in 2015, Geoff filed a Statement of Claim naming Sue as defendant, in her capacity as executrix of Bill's Estate. Geoff claimed to be entitled to Bill's 50% interest in The Springs, based upon principles of proprietary estoppel (the estoppel claim). In the alternative, Geoff sought provision or further provision from Bill's Will under the Succession Act 2006 (NSW) (the family provision claim). In February 2017, Merilyn and Bruce filed the First Cross-Claim, naming Geoff and Sue as first and second cross-defendants, and seeking relief on behalf of Jill's Estate by reference to some 10 discrete claims relating to its administration by Bill and Geoff. Sue was sued in her capacity as executrix of Bill's Estate. The essence of claim 6 of the First Cross-Claim was that certain discrete assets were, following Jill's death, treated by Bill and Geoff (as executors of Jill's Estate) as passing by way of survivorship to Bill, when it was claimed that Jill held those assets as tenant-in-common with Bill, with the consequence that they should have passed to the residuary beneficiaries of Jill's Estate, namely Merilyn, Bruce and Sue. In August 2018, Geoff filed a further claim (the Second Cross-Claim) by which he sought contribution from Bill's Estate for any liability (including any costs liability) he may be found to have under the First Cross-Claim, relating to his administration of Jill's Estate. Sue, as executrix of Bill's Estate, was named as the defendant to the Second Cross-Claim. On 27 May 2019, Pembroke J made orders, pursuant to a Notice of Motion dated 14 May 2019 and filed on behalf of Merilyn and Bruce, joining Bruce and Merilyn as defendants to the amended Statement of Claim and as cross-defendants to the Second Cross-Claim, and appointing them to represent Bill's Estate in defending Geoff's amended Statement of Claim and the Second Cross-Claim. His Honour also ordered Sue to pay Merilyn and Bruce's costs of the Notice of Motion, reserving the question as to whether Sue was entitled to be indemnified from Bill's Estate in respect of those costs (the reserved costs question). At first instance, Merilyn and Bruce were wholly unsuccessful in their various challenges to the administration of Jill's Estate, which were pursued in the First Cross-Claim. The primary judge ordered that Merilyn and Bruce pay Geoff's costs up to 31 May 2019 on the ordinary basis, and from and including 1 June 2019 on the indemnity basis, in view of Merilyn and Bruce's rejection of Offers of Compromise made on behalf of Geoff on 31 May 2019 (the Offers of Compromise). Geoff was unsuccessful in the estoppel claim against Bill's Estate for a 50% interest in The Springs. However, whilst unsuccessful in his estoppel claim, Geoff, whose net assets were valued at $2,924,240 at the time of the hearing at first instance, was successful in his family provision claim. The primary judge found that there was not adequate or proper provision made for Geoff under Bill's Will and that he was at risk that he would be unable to remain on and continue to farm The Springs because, as a practical matter, he would presumably have needed to buy out his siblings' share in The Springs if he wished to remain farming on that land or, if unable to procure finance for that purpose, would presumably need to sell The Springs. As a result of orders made by the primary judge with respect to his family provision claim, Geoff was left with a 75% interest in The Springs, and Merilyn, Sue and Bruce with a 25% interest between them (together with a one-third share each of the balance of Bill's Estate, other than the specific bequest to Geoff). Merilyn and Bruce were ordered to pay Geoff's costs of Geoff's estoppel and family provision claims from 1 July 2019 (other than costs assessed as being unnecessarily or unreasonable incurred or duplicated) on the indemnity basis. This was accompanied by an order that they be indemnified out of Bill's Estate after 1 June 2019, but only as assessed on the ordinary basis, with the intent that they bear personally the difference between the indemnity costs ordered and costs on the ordinary basis. The reason for this order again related to their rejection of the Offers of Compromise on 31 May 2019. On the reserved costs question, relating to Sue's prima facie entitlement to be indemnified out of Bill's Estate for her costs of having opposed Merilyn and Bruce's appointment to represent Bill's Estate in defending Geoff's estoppel and family provision claims, the primary judge held that Sue was not so entitled, because her resistance to the Notice of Motion dated 14 May 2019 caused costs unnecessarily to have been incurred. Merilyn and Bruce appealed against the primary judge's award of provision to Geoff, the rejection of claim 6 of the First Cross-Claim and her Honour's costs orders. Sue also sought to appeal from the primary judge's decision on the reserved costs question. The principal issues on appeal were: 1. Whether the primary judge erred by ordering provision in favour of Geoff pursuant to s 59 of the Succession Act. 2. Whether the primary judge erred in dismissing claim 6 of the First Cross-Claim, in relation to the administration of Jill's Estate by Bill and Geoff. 3. Whether the primary judge erred in finding that the Offers of Compromise complied with the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). 4. Whether the primary judge erred in holding that Sue was not entitled to be indemnified out of Bill's Estate in respect of her costs of resisting Merilyn and Bruce's application to be appointed as representatives of Bill's Estate for the purposes of defending Geoff's estoppel and family provision claims. 5. The costs consequences that would follow depending on the outcome of the preceding issues, both in respect of the proceedings at first instance and on appeal. The Court held (Bell P, Leeming and Payne JJA): 1. The primary judge erred in her conclusion that adequate provision had not been made for Geoff's proper maintenance and advancement in life, insofar as he would not be able to retain and continue to farm The Springs. There was no basis in the evidence for concluding that the contingency about which her Honour was evidently concerned would arise. Further, as Geoff candidly conceded in cross-examination, his material needs were being met, and the primary judge erred by failing to take into account Geoff's "early inheritance" of a significant asset earlier gifted to him when concluding that what she proposed to award Geoff was "proper" and "ought to be made": [98]-[113]. 2. On the re-exercise of the discretion pursuant to s 59 of the Succession Act, no order for provision should have been made: [169]-[203]. 3. The primary judge was correct to dismiss the First Cross-Claim brought by Merilyn and Bruce: [139]-[166]. 4. The primary judge was correct in her analysis that the Offers of Compromise were capable of acceptance, and that they did represent a genuine element of compromise. However, in light of the re-exercise of the discretion and the complicated nature of the Offers, the Court held that this was a case where it was appropriate that, even though Geoff could be said to have obtained a judgment no less favourable than the terms of his offer within the meaning of UCPR r 42.14(2), the Court should "otherwise order" within the meaning of that sub-rule. The costs orders to be made would reflect, however, the genuine attempt by Geoff to compromise the proceedings: [249]-[254]. 5. The primary judge's decision in relation to the question of Sue's liability for costs in relation to the Notice of Motion dated 14 March 2019 involved an exercise of discretion which was open to the primary judge, and was not vitiated by error: [204]-[226]. 6. Observations by the Court as to: 1. How claims on the bounty of a deceased parent by adult siblings can be ruinous in a host of ways, with potentially adverse financial, relational and health consequences: [32]-[33]. Neale v Neale [2015] NSWCA 206; Harris v Harris [2018] NSWCA 334; Sung v Malaxos (No 2) [2015] NSWSC 290; Olsen v Olsen [2019] NSWSC 217; Katramados v Hasapis (No 2) [2018] NSWSC 1604; Clarke v Croucher [2015] NSWSC 230; Poche v Poche [2020] NSWSC 835, considered. 1. The disproportionate costs in relation to family provision cases, and the importance of parties in such cases not proceeding on the assumption that their costs will necessarily be indemnified out of the estate: [34]. 2. The importance of legal practitioners emphasising at the outset of such proceedings, and parties appreciating, the desirability of early mediation and compromise: [34]-[35]. 3. The relevance or otherwise of costs expended in making family provision and related claims, on the very claim for provision: [198]-[202].

[6]

Judgment

THE COURT: The appeal and application for leave to cross-appeal before the Court are in from a decision of the Chief Judge in Equity (the primary judge) in relation to the Estates of the late William Edward Bassett (Bill) who died on 22 January 2014, aged 85, and the late Elaine Jill Bassett (Jill) who predeceased Bill, having died on 21 March 2007: see Bassett v Cameron [2021] NSWSC 207 (the principal judgment or PJ); Bassett v Cameron (No 2) [2021] NSWSC 419 (the costs judgment or CJ). In these reasons, we refer to all family members by their first names, without intending any disrespect.
Bill and Jill, who married in 1953, were farmers and conducted their farming business through a series of rural partnerships which will be considered in further detail later in these reasons. Bill and Jill had four children, Merilyn born in 1955, Susan (Sue) born in 1957, Geoffrey (Geoff) born in 1960 and Bruce born in 1965. Of the four children, Geoff was the only child to take up a career as a farmer and worked alongside his parents in varying ways over the years.
At the time of his death, Bill had a 50% share in a rural property near Inverell, known as "The Springs". Geoff owned the other 50% interest in that property.
At the time of his death, Bill's Estate for probate purposes had a gross value of $3,474,518.83. A 2018 desktop valuation of The Springs that was in evidence before the primary judge implied that by the time of that valuation at least, the overall value of Bill's Estate had increased to $4,274,518.00, as was noted at CJ [291].
Under Bill's Will, Geoff received a bequest comprising Bill's: "share of interest in any farming plant and equipment machinery and implements and livestock together with [Bill's] interest in any farming and grazing Partnership of which the said Geoffrey William Bassett is also a Partner BUT EXPRESSLY EXCLUDING any real estate which [Bill] may own with the said Geoffrey William Bassett at the date of [Bill's] death". (emphasis in original) The interest bequeathed to Geoff was valued for probate purposes at approximately $233,835.
Merilyn, Sue and Bruce were residuary beneficiaries under Bill's Will. They had also been the residuary beneficiaries under Jill's Will.
Bill and Geoff were the executors of Jill's Estate. Sue was and is the executrix of Bill's Estate. Probate of Bill's Estate was granted on 18 December 2014. It has been partly distributed to the residuary beneficiaries: PJ [265].

[7]

Procedural background

On 21 January 2015, shortly after the grant of probate of Bill's Estate, Geoff filed a Statement of Claim naming Sue as defendant in her capacity as executrix of Bill's Estate. In this relatively simple Statement of Claim, Geoff articulated his claim to be entitled to Bill's 50% interest in The Springs based upon principles of proprietary estoppel (the estoppel claim). As originally formulated and up until immediately before commencement of the trial, the estoppel claim was based upon a series of representations, the initial one of which was said to have been made by Bill to Geoff in 1984. At trial, the estoppel claim was principally founded upon a representation said to have been made in 2009.
In his Statement of Claim, Geoff alternatively sought provision or further provision from Bill's Will under the Succession Act 2006 (NSW) (the family provision claim) but the Statement of Claim did not particularise what provision was sought. Sue denied Geoff's entitlement to the relief claimed in the Statement of Claim in an Amended Defence filed on 22 July 2015.
In November 2016, Merilyn and Bruce filed a Notice of Motion which led to their appointment to represent Jill's Estate in the proceedings, pursuant to consent orders made on 3 February 2017. The orders made on that occasion by Stevenson J were as follows: "1. The applicants have leave to file the cross-claim in the form of the draft attached to the applicant's submissions of 24 November 2016. 2. The applicants shall represent the estate of the Late Jill Bassett upon the cross-claim and in the proceedings generally, but their standing shall be only as representative of Jill Bassett's estate. 3. The applicants do not file any defence to the existing statement of claim."
Merilyn and Bruce filed the First Cross-Claim on 16 February 2017, naming Geoff and Sue as first and second cross-defendants. The First Cross-Claim sought relief on behalf of Jill's Estate by reference to some 10 discrete claims relating to its administration by Bill and Geoff. Sue was sued in her capacity as executrix of Bill's Estate. Geoff filed a detailed Defence to the First Cross-Claim. Sue filed a far less detailed Defence which either denied or did not admit particular claims.
On 31 August 2018, Geoff filed a further claim (the Second Cross-Claim) by which he sought contribution from Bill's Estate for any liability (including any costs liability) he may be found to have under the First Cross-Claim relating to his administration of Jill's Estate. Sue, as executrix of Bill's Estate, was named as the defendant to the Second Cross-Claim.

[8]

Outcomes at first instance and issues on appeal

At first instance, Geoff was unsuccessful in the estoppel claim against Bill's Estate for a 50% interest in The Springs, and Merilyn and Bruce were wholly unsuccessful in their various challenges to the administration of Jill's Estate which were pursued in the First Cross-Claim. If successful in the estoppel claim, Geoff would have secured 100% ownership of The Springs which was valued for probate purposes at $1.9 million (extrapolating a 50% valuation of $950,000) but to which a 2018 desktop valuation, in evidence at first instance, assigned an estimated value of $3.5 million.
Geoff was successful, however, in the family provision claim made under s 59 of the Succession Act. In this respect, the primary judge ordered that, in addition to the bequest referred to in [5] above, there be further provision out of Bill's Estate in favour of Geoff: "in the form of a one-half share of the deceased's 50% share of the land known as The Springs, and that the burden of that bequest should be charged equally over the interests left to the plaintiff's siblings in respect of the land; to the effect that the siblings' interest in The Springs, as part of the residue of the deceased's estate, is reduced to a 25% share of the land, to be held as between them in equal shares".
This order left Geoff with a 75% interest in The Springs and Merilyn, Sue and Bruce with a 25% interest between them (together with a one-third share each of the balance of Bill's Estate other than the specific bequest to Geoff).
There is no appeal by Geoff from the primary judge's rejection of his estoppel claim. To the extent that it has continuing relevance to the proceedings before this Court, such relevance lies in the costs that were involved in its prosecution and the impact of those costs on the various parties and on Bill's Estate.
In the costs judgment, notwithstanding his failure on the estoppel claim, Merilyn and Bruce were ordered to pay Geoff's costs of this claim from 1 July 2019 (other than costs assessed as being unnecessarily or unreasonably incurred or duplicated) on the indemnity basis. This was accompanied by an order that they be indemnified out of Bill's Estate after 1 June 2019 "but only as assessed on the ordinary basis (with the intent that they bear personally the difference between the indemnity costs ordered and costs on the ordinary basis)". The reason for this order related to Merilyn and Bruce's rejection of Offers of Compromise made on behalf of Geoff on 31 May 2019 (the Offers of Compromise). The primary judge's finding that the Offers of Compromise complied with the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) was challenged on appeal. That issue has significant financial consequences for Merilyn, Bruce and Geoff.

[9]

Costs of the proceedings and their significance

Before turning to consider the background to the proceedings in more detail, it is necessary to note at the outset that one matter that loomed large over the hearings both at first instance and on appeal was the very significant costs which had been incurred by the parties, even prior to the commencement of the seven-day hearing before the primary judge.
On 4 August 2020, approximately a fortnight prior to the commencement of the hearing, Geoff filed an updating Affidavit which deposed to the fact that his costs to date were in the sum of $1,201,658.28. The primary judge recorded that Merilyn and Bruce's costs, whilst not as great, were still very substantial. It is to be emphasised that these estimates did not include the costs of the seven-day trial or of the immediate pre-trial preparation. In this context, senior counsel for Geoff observed in the opening paragraph of his opening submissions before the primary judge that "the costs are on any view extraordinary".
Following delivery of the principal judgment, the primary judge noted that the total costs of the respective parties were in the order of $2.5-3 million: CJ [291]. Her Honour rightly observed that that was to be deplored. She went on to observe, however, that "in the present case, it seems to me that the fault lies on all sides". At CJ [294], the primary judge also made the sobering observation that: "The unfortunate position seems to be that now the dust of the litigation has settled, so to speak, the parties must reckon with the reality that the costs of that dispute will impact adversely on all of them."
As will be seen, the impact or potential impact of these extraordinary costs on both the size of Bill's Estate and the financial position and needs of the parties in their personal (as opposed to representative) capacities played a role in the primary judge's assessment of the family provision claim and also featured in a number of the arguments advanced on appeal.
The costs at first instance impacted Geoff's claim for family provision in two ways. First, the likely adverse costs consequences of Geoff's failure in his estoppel claim, assessed as the time of the making of the order for family provision, strongly influenced the primary judge's assessment of whether adequate provision had been made in Bill's Will for Geoff's proper maintenance and advancement. Secondly, as the primary judge observed to senior counsel for Merilyn and Bruce in the course of closing submissions: "HER HONOUR: The reality is, isn't it, that The Springs will have to be sold, isn't it? NEEDHAM: Yes. HER HONOUR: Come what may. NEEDHAM: Come what may. HER HONOUR: Come what may, I would have thought the reality is. NEEDHAM: Yes. HER HONOUR: I would have thought we're back in the unusual [scil. usual], unfortunate situation where, come what may, it's likely that the asset will have to be sold - NEEDHAM: That's right. HER HONOUR: - if, at the very least, to pay the costs."

[10]

Further Background

It is necessary to provide some further background before considering the primary judge's decision and dealing with the issues noted in [25] above.
The Springs was purchased by Bill and Jill (as to two 25% shares) and by Geoff (as to a 50% share) on 29 November 1984. At the time of his death, Bill had a 50% interest in The Springs as well as in "Hurricane Hill", which was farmland contiguous to The Springs. Geoff owned the other 50% interest in Hurricane Hill. Bill acquired his second 25% share in the Springs, taking his ownership up to 50%, following Jill's death in circumstances explained more fully below.
Another nearby property, "Pindaroi", was acquired by Geoff and his ex-wife Kaye from Bill and Jill in or around 1998, with a contract for sale signed by the parties on 17 June 1998. The circumstances of this acquisition are relevant to arguments which were made in the proceedings and indeed which had been made amongst the siblings themselves prior to Bill and Jill's deaths. In short, the evidence suggested that, but for a contribution of $200,000 paid over some 10 years from around 1998 (see PJ [82]), Pindaroi was effectively gifted to Geoff by his parents and was referred to by various family members as Geoff's "early inheritance". Geoff sold Pindaroi for $4,200,000 in 2009. Geoff and Kaye separated in or around 2008 and the sale of Pindaroi was bound up in that separation.
Subsequent to his divorce from Kaye, Geoff commenced a relationship with Fiona and the couple moved to Dorrigo, approximately 200 kilometres from The Springs, in October 2015 (after Bill's death), having jointly purchased "Fernbrook", a farming property of approximately 114 hectares, for $1.5 million. Geoff and Fiona's relationship apparently ended in mid-2020, shortly before the hearing of the proceedings at first instance.
The notion that Pindaroi represented Geoff's "early inheritance" was supported by Merilyn's evidence, as referred to at PJ [85], to the effect that: "in early 1998, [Bill and Jill] said that '[w]e've decided to sell Pindaroi to Geoff on very favourable terms and conditions' and that '[w]e are making new wills. We will leave Pindaroi, all stock and equipment to Geoff, with most of the remainder of the estate to be divided equally between the rest of you' (see Merilyn's affidavit sworn 28 September 2015 at [17])."

[11]

Jill's Will

Jill executed her last Will on 17 June 1998, the same day that Pindaroi was transferred to Geoff and Kaye. Under that Will, Geoff was bequeathed Jill's share or interest in all farming plant and equipment, machinery and implements situated on and used in connection with the running of Pindaroi and a "one quarter share of my share in the remaining part of the real estate purchased by me and my said husband from the Estate of the late James Lauder comprising 18.69 hectares or thereabouts and being Lots 1 to 32 inclusive (excluding Lot 8) in Deposited Plan 876448". Further, in the event that Bill predeceased her, Jill released and forgave Geoff in respect of "any monies owing [by Geoff or Kaye] jointly or severally to [Jill] … at the date of [her] death". This effectively entailed the forgiveness of Geoff's indebtedness to his mother in relation to his "purchase" of Pindaroi. On 28 December 2007, Merilyn, Sue and Bruce, as residuary beneficiaries of Jill's Estate, executed a Deed of Release in relation to Geoff's debt to the Estate in the sum of $69,500.00.
Most significantly for present purposes, by cl 7 of her Will, Jill gave, devised and bequeathed to Merilyn, Sue and Bruce (but not Geoff) the residue of her property in equal shares and as tenants-in-common. A significant component of that property was Jill's 25% interest in The Springs. Following Jill's death, Bill indicated to Merilyn, Sue and Bruce that he wished to buy them out of the shares in The Springs that they had inherited from Jill. This 25% interest was transferred to Bill for consideration of $250,000, although Merilyn and Bruce claimed in the proceedings that only $200,000 was paid to Jill's Estate.
Each of Merilyn, Sue and Bruce ultimately received a sum of $595,000 from Jill's Estate, whilst Geoff received $214,554.68.

[12]

Bill's Will

In March 2009, Bill revised his Will as made on 17 June 1998, making the bequest to Geoff as set out in [5] above and nominating Merilyn, Sue and Bruce as residuary beneficiaries. The key difference for present purposes between the two wills is that, in the former (as with Jill's mirror will), Geoff was bequeathed Bill's "share or interest in all farming plant and equipment machinery and implements" specifically situated on and used in connection with "the running of the property 'Pindaroi Station'", in addition to a one-quarter share in "the remaining part of the real estate purchased by [Bill] and [Jill] from the Estate of the late James Lauder". The 2009 Will, on the other hand, omitted reference to any real estate and expressly excluded from the bequest to Geoff "any real estate which I may own with [Geoff] as at the date of my death".
The structure of each of Bill's 1998 and 2009 Wills was consistent with the notion that Geoff had received his early inheritance via Pindaroi. This was powerfully reinforced by the plain and express statement that the bequest to Geoff of any partnership assets excluded any real estate that Bill owned with Geoff.
The primary judge referred to a number of discussions between family members, in the period following Jill's death in 2007 and leading up to Bill's (unexpected) death in January 2014, regarding Bill's testamentary intentions. In particular, the primary judge referred to a family meeting at Sue's home in Tamworth at Christmas in 2012, and, at PJ [154], her Honour set out the following conversation as deposed to by Bruce: "Bruce: Dad, we are worried that Geoff will try to get you to change your Will. And after all he has been given over his life that would be very unfair to the rest of us. Bill: I haven't changed my Will, and I'm not planning to. I just don't know whether he's [Geoff] got enough money to stay farming after I'm gone. [Sue]: We don't think he has any intention of farming on The Springs after you die. We think he's just conning you, Dad, and he'll sell up. Bruce: We think if you give him The Springs, Dad, he'll sell it, just like he did with Pindaroi."
The primary judge also set out the following passage from the cross-examination of Sue in relation to this discussion, at PJ [156], as follows: "Sue admitted in cross-examination that she told Bill during this discussion in late 2012 that Geoff was 'conning him', and that she had sought to persuade Bill not to change his Will as Geoff had 'had enough' (at T 187.30-188.17): Q. In paragraph 30 of your affidavit of 31 May [2018], you say that there was a time in late 2012 when, 'Bruce and Edwina had provided a lot of figures and reasons to me to support their view that Dad and Mum had favoured Geoff.' Do you recall giving that evidence? A. Yes. Q. In fact you were part of a conversation with Bruce and Edwina with your father, were you not? A. That's correct. Q. You took the view at that time that there had been a significant favouring of Geoff by your father? A. That's correct. Q. I'm talking about around Christmas 2013 [sic: this must be a reference to the 2012 discussion]. A. Yes, yes. Q. In fact, you were a party to a discussion with your father and Bruce and Edwina raising that very issue, remember that? A. Yes. Q. Did you say to your father that Geoff was, 'Conning you'? A. Yes. Q. 'You' as in your father? A. Yes. Q. To be fair to you, you later changed your view on that? A. Yes. Q. But your affidavit in paragraph 30 doesn't say that you were a part of this process in trying to persuade your father not to change his will? A. Well, it was an oversight or - Q. But certainly at the time you took the view that he shouldn't change his will because you felt that at that time that Geoff had had enough. Is that correct? A. That's correct at the time."

[13]

The primary judge's reasoning on the family provision claim

Much of the primary judge's lengthy principal judgment was directed to Geoff's unsuccessful estoppel claim, although the factual matters considered by her Honour in relation to that claim were not wholly divorced from matters relevant to the family provision claim. Having said that, her Honour estimated that, as between the estoppel and family provision claims, the costs relativity was approximately 60:40: CJ [300]. The parties did not take issue with this estimate.
At PJ [932]-[934], the primary judge made reference to relevant case law and principles as follows: "932 … in Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40, when considering the predecessor legislation to the Succession Act, the majority of the High Court said that the words 'adequate' and 'proper' are relative and require the formation of opinions upon the basis of its own general knowledge and experience of current social conditions and standards (see at 211 per Mason CJ, Deane and McHugh JJ). More recently, in Sgro v Thompson [2017] NSWCA 326 (Sgro v Thompson), White JA (with whom McColl and Payne JJA agreed) said (at [86]): ... The most important word in s 59(1)(c) is 'proper'. Until the court has identified what is proper maintenance, education and advancement in life for an applicant, it cannot assess whether the provision made, if any, is adequate. What is proper requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties' financial circumstances. Whilst the court will know the latter, it will only have an incomplete picture of the former. Of course, the court's assessment of what is proper maintenance, education and advancement in life must be made when the court is considering the application. That does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate. 933 It is also relevant here to note (since Geoff is an adult child) that there are no special rules or principles applicable to claims of adult children (nor any presumption for or against there being a moral obligation to make provision for an adult child), as Hallen J recognised in Towson v Francis [2017] NSWSC 1034 (see at [70]-[80], his Honour there citing Burke v Burke (2015) 13 ASTLR 313; [2015] NSWCA 195; Nicholas v Tubb [2016] TASSC 53; Toscano v Toscano [2017] NSWSC 419; and Underwood v Gaudron [2014] NSWSC 1055). Each case must be considered by reference to its particular facts and circumstances (though see the summary of principles in Camernik v Reholc [2012] NSWSC 1537 at [159] per Hallen J). 934 As noted, the determinations required to be made by the statutory provisions outlined above are to be made with regard to the circumstances as they exist as at the time the application is being considered (see also Ellem v Webber [2020] NSWSC 910 (Ellem v Webber) at [215] per Robb J). Relevantly, therefore, one would here take into account the position of Geoff having regard to the dismissal of his proprietary estoppel and the dismissal of the first cross-claim; and a relevant factor in that regard would be to take into account the potential costs consequences of those determinations."

[14]

Grounds of appeal in relation to family provision order

Merilyn and Bruce's Notice of Appeal contained several grounds of appeal in relation to the family provision order made.
Although the appeal is by way of rehearing pursuant to s 75A(5) of the Supreme Court Act, this Court is constrained by the applicable standard of appellate review. While the making of a determination that adequate provision has or has not been made for the proper maintenance, education or advancement in life of a claimant, under s 59(1)(c) of the Succession Act (the jurisdictional question), involves an evaluative as opposed to a truly discretionary decision (which is what is involved in an assessment of what provision should actually be ordered under s 59(2)), authority dictates and, in the present case, the parties accepted that the proper standard of review is by reference to the principles set out in House v The King (1936) 55 CLR 499; [1936] HCA 40.
In Strang v Steiner [2019] NSWCA 143; 19 ASTLR 330 at [76] (Strang), Macfarlan JA observed that: "A precondition to the making of an order under sub-s 59(2) is satisfaction of s 59(1)(c) which requires that the court conclude that adequate provision for the proper maintenance, education or advancement in life of the claimant has not been made by the will of the deceased (assuming the deceased dies testate). This conclusion constitutes a finding of fact, albeit one that is, in light of the subjective character of the matter to be decided, evaluative. Nevertheless, making the finding involves a binary choice - either adequate provision has been made, or it has not. A finding on the issue does not therefore involve an exercise of discretion, with the result that, prima facie, the correctness standard of review, rather than the House v The King standard, should apply. If the former standard is applicable, the appellate court will intervene if, having given due weight to the decision below, it considers it to be erroneous (see Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9)."
Macfarlan JA went on to cite the statement by Gageler J in Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [49] explaining the difference between the two standards and his Honour's conclusion that "[t]he resultant line is not bright; but it is tolerably clear and workable."
Notwithstanding what he described as "the logic of Gageler J's reasoning", to the effect that the correctness standard would ordinarily apply to a finding such as that under s 59(1)(c), Macfarlan JA took the view in Strang (at [79]) that the course of authority, including the view of the majority in Singer v Berghouse (1994) 181 CLR 201 at 212; [1994] HCA 40 (Singer), was that the House v The King standard of appellate review continued to apply, citing in this regard Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [6], [42] and [99]-[100]; DJ Singh v DH Singh [2018] NSWCA 30 at [277] (DJ Singh); and Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 at [14]. See also the judgments of White JA and McCallum JA in Strang.

[15]

Applicable legal principles

Before an order for provision can be made in favour of a child of the deceased (who is an "eligible person" within the meaning of s 59 of the Succession Act), the Court must be satisfied that "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person": Succession Act, s 59(1)(c).
Satisfaction in this regard is "jurisdictional" insofar as it is a prerequisite to the Court exercising its discretionary power to make an order for provision pursuant to s 59(2): see, for example, as to the use of the description "jurisdictional", White v Barron (1980) 144 CLR 431 at 456; [1980] HCA 14; Singer at 208-210; Hampson v Hampson [2010] NSWCA 359; (2010) 5 ASTLR 116 at [69]-[72]. Care must, however, be taken when answering this jurisdictional question not to confine the relevant consideration to an applicant's financial or material needs; the language of "proper maintenance, education or advancement" involves more than simply a question of financial needs: see Sgro v Thompson [2017] NSWCA 326 at [68]-[74] (Sgro).
Once the level of satisfaction referred to in [78] has been reached, the Court has a broad discretion, "having regard to the facts known to the Court at the time the order is made" (emphasis added), to make such order for provision out of the estate as ought to be made "for the maintenance, education or advancement in life of the eligible person": Succession Act, s 59(2).
In considering both whether to make a family provision order and the nature of any such order if the threshold required by s 59(1)(c) is satisfied, the Court is entitled to consider the broad range of matters specified in s 60(2) of the Succession Act. The breadth of the matters that may be considered under s 60(2) does not, however, authorise the making of an order which is for a purpose other than "the maintenance, education or advancement in life of the eligible person". Nor does it relieve the Court of the need to make the order "having regard to the facts known to the Court at the time the order is made" (emphasis added).
The primary judge's summary of relevant principles, as noted at [59] above, was not challenged. It is convenient to add a reference to McCosker v McCosker (1957) 97 CLR 566 at 571-572; [1957] HCA 82 (McCosker), in which Dixon CJ and Williams J observed that: "The question is whether, in all the circumstances of the case, it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v. Perpetual Trustee Co. (Ltd.) [1938] NSWStRp 3; [1938] AC 463; (1938) 38 SR (NSW) 176 the word 'proper' in this collocation of words is of considerable importance. It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."

[16]

Merilyn and Bruce's contentions

Merilyn and Bruce contended that the primary judge exercised her power to make a family provision order contrary to s 59(2) by having regard to facts not known to her Honour, namely whether it was in fact Geoff's intention to continue to farm The Springs and whether this depended upon his ability to buy out his siblings' inherited 50% interest in that property as a result of their status as residuary beneficiaries under Bill's Will. Whilst the facts "known to the Court" within the meaning of s 59(2) of the Succession Act no doubt may include the fact of an intention as to the future, Merilyn and Bruce's point was that there was simply no evidence that it was ever Geoff's intention to continue to farm The Springs.
Indeed, Merilyn and Bruce went further and contended that the primary judge appreciated, as reflected in her Honour's exchange with senior counsel then appearing for Merilyn and Bruce extracted at [30] above, that The Springs would in fact need to be sold in any event (and thus could not continue to be farmed by Geoff, even if he intended and was able to do so) because of the costs that had been incurred by all parties to the proceedings (including what her Honour considered would be Geoff's costs liability in respect of his unsuccessful estoppel claim).
In consequence of this appreciation, they contended that the primary judge's conclusion at PJ [1001] that "adequate and proper provision was not left for Geoff (insofar as he may now be left unable to retain and continue to farm The Springs)" (emphasis added) was essentially based upon a number of false or unestablished predicates or assumptions, namely that: 1. Geoff intended to retain and continue to farm The Springs; 2. Geoff could afford to do so only if awarded a 25% share in The Springs from Bill's Estate; and 3. The Springs would not need to be sold "come what may", to use the primary judge's expression noted in her exchange with Ms Needham SC at [30] above.
This led to the submission, as part of Ground 7, that what the primary judge had in substance done by making the family provision order in favour of Geoff was not fairly to be characterised as for the purposes of making adequate provision for his proper maintenance and advancement in life but, rather, to give effect to Bill's "testamentary" wishes as expressed in the Coffs Harbour conversation, as detailed at [54] above, a matter upon which the primary judge placed "considerable weight": PJ [995]. Although not precisely put in this way, this was akin to a submission that the power to make provision for Geoff was not exercised for the purpose authorised by s 59 of the Succession Act. If Geoff did not in fact intend to continue to farm The Springs (or if he had not established that), the order for further provision to facilitate his doing so cannot have been because of any need on his part for such provision. That pointed to the order being made for some other purpose, viz. the fulfilment of Bill's testamentary intention expressed orally shortly before his death.

[17]

What was the primary judge's conclusion as to the lack of adequate provision for Geoff's proper maintenance or advancement in life?

One curious aspect of the proceedings at first instance in relation to the family provision claim is that, although written submissions that provision ought to be made for Geoff were raised in the alternative to the estoppel claim, those submissions did not identify what provision should be made or what specific order was sought. Nor were any oral submissions made as to the quantum or value of the provision which it was said ought be made in Geoff's favour and, consistent with this, the principal judgment does not record any submission as to what was in fact sought.
In Vigolo at [124], in dismissing an appeal by an unsuccessful claimant for provision, Callinan and Heydon JJ observed that "[n]o evidence was adduced at trial of the amount of money required (or desired) by the appellant for his 'proper maintenance, support, education or advancement in life'".
In a recent decision, Hallen J has emphasised the importance of counsel for the claimant in a family provision case being in a position to assist the Court with an identification of what provision is being sought: Limberger v Limberger [2021] NSWSC 474 at [66] (Limberger). This is a matter to which legal practitioners conducting family provision claims should have given consideration even before proceedings have commenced, and a meaningful response (even if expressed approximately or within a range) is important not only to assist the Court in its determination but also as a matter of fairness to other parties whose own interests could be affected by the making of an order in a particular amount, or an order structured in a particular way. As Hallen J explained in Limberger at [66(d)-(e)]: "(d) The Court is able to then enquire how the estimate of quantum of the provision stated has been reached, and ventilate the features identified that are relied upon in reaching that quantum. In so doing, the Court is able to consider different processes of reasoning and come to properly understand the true force of the submissions on how the case should be decided. In addition, the Court may avoid what may be a wrong method of approach in determining what result should follow from the application of the provisions of the Act to the facts of the case. (e) Whilst the range suggested by counsel does not bind any of the parties, or the Court, it enables the Court to consider whether any preliminary evaluative assessment of the nature and quantum of provision, is within, or outside, the parameters of the professional opinion of experienced counsel. It also enables the Court to consider whether, in reaching any preliminary assessment, there has been some misapplication of facts or of principle. It enables counsel to make submissions that will lead to the correction, or modification, of any preliminary assessment and enable the other party or other parties, during final submissions, to be heard in response to the submission on quantum".

[18]

By way of contrast, on the basis that Geoff contributed $200,000 equity to the acquisition of Pindaroi and noting that it was sold in 2009 for $4.2 million, on a gross basis, the sum of what Geoff received from his parents, by their wills and during their lifetimes, and the value of the provision ordered by the primary judge was as follows: Bill's Estate $ 233,835 Jill's Estate $ 214,554 Further provision ordered by primary judge (based on 2018 desktop value of The Springs) $ 875,000 Pindaroi (net of Geoff's contribution) $4,000,000 Total $5,323,389

[19]

The purpose of this exercise is not to suggest that rough equivalence between siblings is or should always be a relevant consideration in making a family provision order, even as a cross-check, but it is to illustrate that, taking into account the gift of Pindaroi to Geoff as a form of "pre-inheritance", her Honour's conclusion that there was no marked disproportion between the siblings' inheritances was not accurate. This is so even allowing for the undoubtedly correct fact that Geoff, through his farming of and improvements to Pindaroi over the years prior to its sale, no doubt contributed to its ultimate value.
Further, her Honour's calculation did not allow for any impact on Merilyn and Bruce's financial positions as a result of their lack of success in the First Cross-Claim, and the adverse costs orders that they were likely to bear personally in this respect (which orders were subsequently made). That was in marked contrast to her Honour's consideration of this as a relevant factor in the context of Geoff's family provision claim.
These were in our view material errors which resulted in excessive provision being made in favour of Geoff and supplied additional reasons for upholding Merilyn and Bruce's appeal.

[20]

Other grounds of appeal in relation to the family provision order

Before turning to the s 75A exercise, it should be noted that Grounds 8, 9 and 10 all related to the primary judge's order that the burden of the additional provision made for Geoff should fall equally on the residuary beneficiaries (Sue, Merilyn and Bruce). It was said, in particular, that Sue did not raise her financial circumstances "in competition" to the family provision claim and that the primary judge, in making a family provision order in Geoff's favour, should have differentiated between the residuary beneficiaries by reference to their individual positions.
Given the conclusions reached as to error in the ordering of further provision for Geoff, it is not necessary to consider these grounds although it may be noted that they directly affected Sue, who incurred some costs in meeting them and advanced submissions that Merilyn and Bruce ought not to be permitted to seek orders against her given that they were appointed to resist the family provision claim in the interests of all beneficiaries. Sue also contended that these grounds would have failed in any event because, contrary to Merilyn and Bruce's submission that Sue "chose" not to lead evidence as to her financial circumstances, such evidence was read and referred to by the primary judge (see PJ [953]).
As we have indicated, however, it is not necessary to deal with these grounds and they did not occupy any significant time in the hearing of the appeal.
There were also grounds of appeal relating to aspects of the primary judge's costs orders. As explained above at [21], these orders depended in part upon her Honour's conclusion, contrary to the submissions of Merilyn and Bruce, that the Offers of Compromise contained genuine elements of compromise and were reasonably capable of acceptance.
The effect of the primary judge's family provision order in favour of Geoff, coupled with his success in defeating the First Cross-Claim, led to the primary judge's conclusion that Geoff had bettered the Offers of Compromise with the costs consequences set out in r 42.14 of the UCPR following from these twin conclusions.
Merilyn and Bruce submitted that the primary judge erred in treating the Offers of Compromise as having properly been made under the UCPR and noted that, to the extent that they were relied upon as Calderbank offers, Merilyn and Bruce had not acted unreasonably in not accepting them: see CJ [317].

[21]

Appeal in relation to Jill's Estate (First Cross-Claim)

By Ground 11, Merilyn and Bruce challenge the primary judge's rejection of claim 6 in the First Cross-Claim by her Honour's failure to find that what were described in the trial as the "Monowai Investment assets" were assets of the Monowai Partnership (see PJ [825]), in addition to a conclusion that the claim was otherwise statute-barred (PJ [579] and [823]).
Some further background is necessary to consider this aspect of the primary judge's reasoning and the basis for the challenge sought to be advanced on appeal.
The starting point is that, from the time of Bill and Jill's wedding in 1953 until Jill's death, Bill and Jill each held a 50% interest in the partnership known as "W E Bassett & E J Bassett trading as Monowai Pastoral Co" (the Monowai Partnership): PJ [16].
The essence of claim 6 was that certain discrete assets were, following Jill's death, treated by Bill and Geoff (as executors of Jill's Estate) as passing by way of survivorship to Bill when it was claimed that Jill held those assets as tenant-in-common with Bill, with the consequence that they should have passed to the residuary beneficiaries of Jill's Estate, namely Merilyn and Bruce as well as Sue.
As noted above, Bruce and Merilyn were representing Jill's deceased estate pursuant to orders made by Stevenson J on 3 February 2017. The claim giving rise to ground 11 related to the ownership of shares and investments which had been treated as assets of the Monowai Partnership. The assets and the parties' claims were described at length in the principal judgment at [801]-[821]. They included three accounts held with Colonial First State, three parcels of shares held in special purpose vehicles which were capital guaranteed by Westpac, various parcels of shares including some listed public companies and interests in two time-share schemes. Some of the assets were, at the time of the trial, worthless (for example, one of the companies in which shares were held had been deregistered). There was conflicting valuation evidence which need not be summarised.
The basis of the claim advanced by Bruce and Merilyn was that the assets had been held by Bill and Jill as tenants-in-common, and after Jill's death they had wrongly been treated as owned by Bill, rather than one half being distributed as part of Jill's deceased estate. Because of the time that had passed since Jill's death, the claim was confined to one for the recovery of trust property against a trustee falling within s 47(1)(c) of the Limitation Act 1969 (NSW). That section is applicable to an action on a "cause of action ... to recover trust property, or property into which trust property can be traced, against a trustee or against any other person".

[22]

Costs issues in relation to the First Cross-Claim - Appeal Grounds 14 and 15

Relevant to Merilyn and Bruce's appeal in relation to claim 6 of the First Cross-Claim is Ground 14 of the appeal, which asserted that "[t]he primary judge erred in declining to order that Bruce and Merilyn's costs of the First Cross-Claim be paid out of [Bill's] estate on the indemnity basis."
It is to be recalled that the First Cross-Claim was brought by Merilyn and Bruce, as representatives of Jill's Estate, against Bill's Estate and Geoff as executors of Jill's Estate. Jill's Estate had been fully administered well before the commencement of these proceedings and it was from Bill's Estate that Merilyn and Bruce sought indemnity.
The primary judge's reasoning in this respect (at CJ [333]) was as follows: "the first cross-claim was a claim to recover moneys or assets said to have been the subject of maladministration of Jill's estate. It was not a devastavit claim per se. Moreover, and relevantly for present purposes, though brought (with leave) by Bruce and Merilyn as representatives of Jill's estate, it was a claim the benefit of which would to a very large extent have enured to Bruce and Merilyn as residuary beneficiaries of her estate (although Sue would also have shared in that benefit, she did not seek to join in any such claim). This seems to be an attempt to trawl through accounting documents (many years after Jill's death) in order to see what could be recovered for their ultimate benefit."
We see no reason to interfere with the primary judge's reasoning on this question and consider it to be correct. The correctness was reflected in the exiguous nature of Merilyn and Bruce's written submissions on appeal in relation to this ground.
We note, for completeness, that the primary judge ordered not only that Merilyn and Bruce were not entitled to indemnity out of Bill's Estate in respect of Geoff's (or their own) costs of the First Cross-Claim, but that her Honour went on to order that they pay Geoff's costs on an indemnity basis from 1 June 2019. These orders followed from and were dictated by the effect of the Offers of Compromise and Geoff's success at first instance in bettering those offers by the results he achieved in the final orders, notwithstanding his failure in the estoppel claim. This aspect of her Honour's orders is the subject of separate grounds of appeal dealt with at [227]-[254] below.

[23]

Re-exercise of power under s 59 of Succession Act

Section 75A(10) of the Supreme Court Act provides that this Court "may make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires". In exercising this power, the Court may receive further evidence and "special grounds" are not required to be shown for the receipt of such evidence concerning matters occurring after the trial or hearing: s 75A(7)-(9).
In approaching the re-assessment of Geoff's family provision claim, we note the principles referred to at [78]-[89] above, to which may be added reference to Blendell v Blendell [2020] NSWCA 154 at [7]-[8], where Meagher JA (with whom Gleeson and Leeming JJA agreed) observed that the "proper" level of maintenance and "adequate" provision, as referred to in s 59 of the Succession Act, are "relative concepts" requiring regard to the matters in s 60(2) of that Act.
We also note the following useful summary of approach articulated by Lindsay J in his extra-judicial paper "The Family Provision Jurisdiction in Historical Perspective" (Lecture, Macquarie Law School, 3 June 2020) at [94]: "In the exercise of its statutory powers in the determination of an application for a family provision order (in particular, sections 59(1)(c) and 59(2) of the Succession Act), the Court must generally endeavour to place itself in the position of the deceased, and to consider what he or she ought to have done in all the circumstances of the case, in light of facts now known, treating him or her as wise and just rather than fond and foolish (In re Allen [1922] NZLR 218 at 220-221; Bosch v Perpetual Trustee Co Ltd [1938] AC 463 at 478-479; Scales Case (1962) 1[0]7 CLR 9 at 19-20), making due allowance for current social conditions and standards (Goodman v Windeyer (1980) 144 CLR 490 at 502; Andrew v Andrew (2012) 81 NSWLR 656) and, generally consulting specific statutory criteria referred to in section 60(2) of the Act so far as they may be material."
An Affidavit sworn by Bruce on 12 October 2021 was read on the appeal and noted that The Springs had been listed for sale on 10 November 2021 with a price estimate of $6-6.5 million.
The parties accepted that, as The Springs was set to be sold at auction shortly following the hearing of the appeal, the Court should be informed of any sale price net of selling costs. This is because the sale price would affect the overall value of Bill's Estate and also impact upon Geoff's financial position and needs, given his 50% interest in The Springs.

[24]

Re-assessment

The Inventory of Property annexed to the Grant of Probate of Bill's Will valued his assets at $3,474,518, with that amount attributing a value of his 50% interest in The Springs at $950,000. Adjusting that value to take into account the net value of a 50% interest in The Springs following its sale, the size of Bill's Estate becomes $5,474,429.
The net value of each of Sue, Merilyn and Bruce's shares as residuary beneficiaries under Bill's Will, following the sale of The Springs, having regard to the bequest to Geoff valued at $233,835 and without taking into account any depletion of the Estate by costs, becomes $1,824,810 each, subject to Geoff's claim for provision.
The financial positions and needs of Merilyn, Bruce and Sue, based upon the evidence before the primary judge and without taking into account any costs liabilities each may have personally as a result of the proceedings, were set out by the primary judge as follows (PJ [952]-[963]): "Sue 952 Sue was born in 1957 and is married. Sue is a registered nurse but does not presently work and her husband is employed as a storeman. Sue and her husband have three adult children (Sue's affidavit sworn 22 July 2015 at [46]). 953 Sue and her husband have assets with an estimated value of $2,071,700 and do not have any liabilities other than regular household expenses and costs of maintaining their properties and cars (Sue's affidavit sworn 22 July 2015 at [47]-[48]). 954 Bill and Jill gave Sue a gift of about $10,000 in 1989 and a further $50,000 sometime after 1989 (Sue's affidavit sworn 22 July 2015 at [45]; Edwina's affidavit sworn 28 September 2015 at [18]). Merilyn 955 Merilyn was born in April 1955. 956 In 2015, Merilyn gave evidence that she was then retired and her then current income from superannuation was $55,000 per annum, and she estimated that the total value of her assets was $1,263,800 and that her liabilities were nil (Merilyn's affidavit sworn 28 September 2015 at [4]). Merilyn more recently gave evidence that her income has increased to $62,500 per annum and she estimates that the total of her assets has marginally decreased to $1,239,590 (but that she now makes a contribution to her daughter's rent which amounts to an annual liability of $7,800 per annum) (Merilyn's affidavit sworn 5 August 2020 at [10]). 957 Merilyn's husband, Mr Robert Jaensch is a qualified carpenter and licensed builder. In 2015, Mr Jaensch had an income of $75,000 per annum, had total assets with an estimated value of $625,000 and liabilities of $3,000 (Merilyn's affidavit sworn 28 September 2015 at [4], [6]). Merilyn's evidence is that Mr Jaensch's income has now increased to $89,000 per annum and the estimated value of his total assets has increased significantly since 2015 and are now valued at approximately $1,032,150. Mr Jaensch has estimated liabilities of $5,000 per month (being a monthly trade account at Bunnings) (Merilyn's affidavit sworn 5 August 2020 at [11]). 958 Merilyn's evidence is that the only inter vivos gift she received from her parents was a payment of $10,000 in the 1980s (Merilyn's affidavit sworn 28 September 2015 at [14]). Bruce 959 Bruce was born in February 1965. 960 Bruce completed a Bachelor of Arts degree. Bruce is presently employed by the government 'in a temporary position' (Bruce's affidavit sworn 6 August 2020 at [8]). Bruce presently earns a net income of $56,002 per annum (Bruce's affidavit sworn 6 August 2020 at [14]). Edwina presently earns a net income of $7,190 per annum, but the source of her income is not disclosed in evidence (Bruce's affidavit sworn 6 August 2020 at [14]). 961 Bruce gives evidence that he and Edwina have total net assets with an estimated value of $370,525.92 (Bruce's affidavit sworn 6 August 2020 at [14]). However, this amount appears to exclude superannuation entitlements which are, for Bruce and Edwina in aggregate, $211,753.33 (Bruce's affidavit sworn 6 August 2020 at [14]). Therefore, it is said by Geoff that Bruce and Edwina appear to have net assets of $582,279.25. 962 Geoff points to the evidence that Bill and Jill gifted Bruce and Edwina: (i) $6,000 in 1991 (Bruce's affidavit sworn 28 September 2015 at [20]; (ii) $5,000 in the mid 1990's to buy a car (Edwina's affidavit sworn 28 September 2015 at [16])); (iii) a further $50,000 in about 2005 when Bruce and Edwina bought their first home (Edwina's affidavit sworn 28 September 2015 at [17])); and (iv) a further $20,000 in June 2013 (Edwina's affidavit sworn 28 September 2015 at [19]; Bruce's affidavit sworn 28 September 2015 at [21]). 963 Bruce suffers from a number of medical ailments (being broad-based disc herniation, depression, Profound Hashimoto's Thyroiditis and Eosinophilic Oesophagitis) (Bruce's affidavit sworn 28 September 2015 at [17]; Bruce's affidavit sworn 6 August 2020 at [9]-[12]). Bruce gave evidence in 2015 (some five years ago) that he and Edwina were considering starting a business and that he and Edwina estimated that their costs of doing so would be at least $140,000 in the first year of operation (Bruce's affidavit sworn 28 September 2015 at [18]); Edwina's affidavit sworn 28 September 2015 at [104]). Bruce has not provided any evidence concerning this proposed business in his more recent 6 August 2020 affidavit."

[25]

Both Geoff and Bruce have health-related needs, Bruce's being described in the extract from the primary judgment set out at [180] above and Geoff's referred to in [63] above.
Geoff is in a far superior financial position than Bruce and has an established source of income from his consulting business: see [61]-[62] and [113] above. He was also candid in his evidence as to his financial needs: see [99] above.
One of the most significant matters relied upon by Geoff (and the primary judge) in considering Geoff's family provision claim was Bill's testamentary intention, as reflected in his discussion with Sue in Coffs Harbour in December 2013 but on which Bill had not acted by mid-January 2014 when he died: see [54] above where the Coffs Harbour conversation is set out.
Section 60(2)(j) of the Succession Act permits "any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person" to be considered by the Court. Where a deceased person has made a will, that will be the obvious place where his or her testamentary intention is to be found. Section 60(2)(j) recognises, however, that a person's "testamentary intentions" may also be evidenced in statements made by that person outside of his or her will. Such statements will most often assume significance in cases where an application for family provision is made in respect of an intestate estate. But there may be other cases, of which the present is an example, where the deceased person has made a will but subsequently expressed or contemplated a different testamentary intention. That is evidently what the primary judge considered had occurred in the course of the Coffs Harbour conversation between Sue and Bill in December 2013.
A number of points may be made about that conversation.
First, on one view, Bill's language was not definitive, including a statement to Sue that "I'm still thinking about it" and "I'm still thinking about the best way to do it".
Secondly, although he said in this conversation "I have to leave Geoff more", this was on the basis of Bill's expectation that Geoff would continue to farm The Springs but could not afford to do so. As has already been observed, there was no evidence that this was in fact Geoff's intention and there was some evidence to the contrary. Bill's perception of the need to leave Geoff "more" was based on Bill's assumption in that regard. On the other hand, Bill told Sue, in this conversation, that "I want to be fair and there should be enough for everyone".

[26]

Sue's costs appeal in relation to her opposition to the Notice of Motion of 14 March 2019 (the Cross-Appeal)

As noted at [24] above, Sue, who was the Second Respondent to the appeal brought by Merilyn and Bruce, and who filed a submitting appearance in the primary proceedings brought by Geoff, brings a cross-appeal against order 6 made by the primary judge in the costs judgment (the Cross-Appeal). As will appear, leave was required to bring the Cross-Appeal.
By Order made by the primary judge, Sue was refused indemnity from Bill's Estate for costs she had incurred in defending a Notice of Motion in the primary proceedings which was brought by Merilyn and Bruce on 14 March 2019 and determined in their favour by Pembroke J on 27 May 2019: see [14]-[15] above. By that Notice of Motion, Merilyn and Bruce sought to be joined as defendants to Geoff's estoppel and family provision claims for the purposes of representing Bill's Estate, in lieu of Sue.
The crux of Merilyn and Bruce's argument in support of the Notice of Motion was that "[Sue] has acted in her own interests … and has made admissions or otherwise failed to plead matters against the interests of the estate". This argument was advanced in view of the principles stated in Plunkett v Bull (1915) 19 CLR 544 at 548-549; [1915] HCA 14 and in Warren v McKnight (1996) 40 NSWLR 390 at 395, where it was held that "it is the executor who takes an adversary role against the plaintiff, so as to uphold the will and support the interests of the beneficiaries", such that Sue was said to be under a positive duty to put Geoff to proof on his challenge to Bill's Will of 14 May 2009.
In their submissions on the Notice of Motion, Merilyn and Bruce raised the following "serious concerns about Su[e]'s conduct as the representative of Bill's estate against Geoff['s] estoppel and family provision claim", relying on correspondence annexed to affidavit evidence they had filed and served: "(a) Su[e] provided evidence in her affidavit sworn on 31 May 2018, which affidavit appears to support Geoff's claim, and to seek to malign the character of the residuary beneficiaries and impugn their evidence for the defence of Bill's estate; (b) Su[e] has not properly disclosed the accounts of Bill's estate, including loans and distributions she made to Geoff from Bill's estate, as well as contracting payments for his purported 'managing services' as an executor of Bill's estate. No application to the Court has been made for executor's commission; (c) Su[e] has not given evidence of material significan[ce] to the defence of Geoff's claim, and particularly two Statements that Su[e] received from Geoff in which Geoff made admissions in relation to property that is subject to his claim; (d) Su[e] has administered the estate favouring Geoff's interests over those of Bruce and Merilyn."

[27]

Further costs issues in relation to Merilyn and Bruce's appeal

Two aspects of Merilyn and Bruce's appeal in relation to costs have already been dealt with: see [163]-[168] above.
It remains to consider Grounds 12 and 13 which were as follows: "12 The primary judge erred in finding that the offer of compromise by Geoff dated 31 May 2019 was a genuine offer of compromise or that it could reasonably have been accepted. 13 The primary judge erred in failing to order that Merilyn and Bruce's costs of defending the proprietary estoppel claim and the Family provision claim be paid out of the estate of the Deceased on the indemnity basis."
The reason why the primary judge did not order that Merilyn and Bruce's costs of defending the estoppel and family provision claims be paid out of Bill's Estate on the indemnity basis was because of their failure to accept the Offers of Compromise, which have been referred to at [21] above, and her Honour's assessment that, notwithstanding his failure in the estoppel claim, Geoff ultimately secured a superior result in the proceedings overall than he would have received had the Offers of Compromise been accepted.
The primary judge's assessment that Geoff had bettered the Offers of Compromise was plainly informed by his success in the family provision claim. In view of the conclusion to which we have come, namely that the claim should have been rejected, the significance of the Offers of Compromise including whether they were capable of acceptance in accordance with the UCPR (the matter put in issue by Ground 12), fall to be considered.
It is first necessary to set out the terms in which the Offers of Compromise were made.

[28]

The Offers of Compromise and counter-offers

On 31 May 2019, Mr Martin, who acted as Geoff's solicitor in the proceedings, sent the following letter to Ms Ross-Maranik, the solicitor representing Merilyn and Bruce: "Dear Ms Ross-Maranik, Geoffrey William Bassett v Susan Narelle Cameron as executor of the estate of the late William Edward Bassett, Merilyn Jill Ryan & Bruce Edward Bassett Supreme Court of New South Wales No 2015/19536 We enclose by way of service: 1. Offer of Compromise to Merilyn Jill Ryan dated 31 May 2019; and 2. Offer of Compromise to Bruce Edward Bassett dated 31 May 2019. We confirm that these offers are open for acceptance for 28 days from the date of this letter. If your clients do not accept these offers, our client reserves his right to rely upon this letter and the Offers of Compromise, in due course, on the topic of costs. If, for any reason, either Offer of Compromise is not effective as an offer of compromise under the Uniform Civil Procedure Rules, 2005 (NSW), this letter and the offers contained herein are intended to have effect as an offer of settlement in accordance with the principles enunciated in Calderbank v Calderbank [1975] 3 All ER 333, and in the cases in which those principles were subsequently affirmed. We await your reply."
The Offers of Compromise enclosed in Mr Martin's letter were relevantly identical, substituting Merilyn for Bruce mutatis mutandis, and read as follows: "OFFER OF COMPROMISE Geoffrey William Bassett offers to compromise the whole of the claims made in proceedings number 2015/19536 which, for the avoidance of doubt, includes: (1) all of the claims made in the Amended Statement of Clam filed 26 February 2015; (2) all of the claims made in the First Cross Claim - Statement of Cross Claim filed 16 February 2017, and (3) all of the claims made in the Second Cross Claim - Statement of Cross Claim filed 31 August 2018, (together, the Proceedings) on the following basis: 1 The Proceedings be dismissed. 2 Each party pay its own costs of the Proceedings. 3 Geoffrey William Bassett transfer one third of his share of the real property known as 'The Springs' (including 'Hurricane Hill') on Nullamanna Road, Inverell (The Springs), to Bruce Edward Bassett and one third of his share in The Springs to Susan Narelle Cameron, as tenants in common. 4 Bruce Edward Bassett pay to Geoffrey William Bassett $450,000. 5 This offer is made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules, 2005 (NSW). 6 This offer is open for acceptance for 28 days."

[29]

The primary judge's view of the Offers of Compromise

The primary judge rejected Merilyn and Bruce's argument that the Offers of Compromise were not able to be accepted in the form in which they were made, expressing the conclusion that they complied with the formal requirements for a valid offer under r 20.26 of the UCPR. The Offers of Compromise made clear that they were issued under that rule and were expressed to be open for acceptance for the requisite time: CJ [304].
At CJ [305], which is referred to expressly in Ground 12, the primary judge observed: "They were not expressed to be conditional on acceptance by the other offeree (i.e., in their terms either one of the offerees, say, Merilyn, could have accepted the offer and the other, on this hypothesis, Bruce, not done so). Conceivably, that might be said to have led to the frustration of the agreement constituted by acceptance of the offer (if Geoff was not then in a position to fulfil the requirement to transfer a one-third share of his half share of The Springs to the offeree who had not accepted the offer); but in their terms they were offers capable of acceptance. Nor were the offers expressed to be conditional on Sue's acceptance of the one-third share contemplated by the offers to be transferred to her."
Her Honour noted that the terms of the counter-offer which have been set out above at [244] above strongly undermined the practical and logistical objections that had been made to the Offers of Compromise on behalf of Merilyn and Bruce. The primary judge was surely correct in her observation at CJ [307] that: "The practical and 'logistical' difficulties expressed by Bruce and Merilyn, through their without prejudice response to the offers, had nothing to do with whether the offers could have been accepted. Rather, those perceived difficulties were clearly concerned with whether Bruce and Merilyn considered the offers to be sufficiently attractive in their 'current form' to be accepted."
The primary judge also rejected the submission that the Offers of Compromise did not contain a genuine element of compromise of the issues in dispute. Indeed her Honour went so far as to describe them as representing a "capitulation" by Geoff in respect of his claims: CJ [314].
We agree with the primary judge's analysis that the Offers of Compromise were capable of acceptance. We are also of the view that they did represent a genuine element of compromise albeit that they were formulated in a complex way. This is not said necessarily by way of criticism; rather, it reflected the undoubted complexity of the proceedings as they had evolved. Those complexities existed by reason not only of the existence of the Cross-Claims and the myriad aspects of the First Cross-Claim, but also by reason of the fact that Bruce and Merilyn appeared in different capacities: as representatives of Bill's Estate in defending Geoff's claim and as representatives of Jill's Estate in bringing the First Cross-Claim against the executors of Jill's Estate. In the middle of this was Sue who at all times remained as executor of Bill's Estate, albeit not representing it in the proceedings as a result of the orders of Pembroke J.

[30]

Orders

It follows from the above that the following orders should be made: 1. Appeal allowed with costs other than with respect to Ground 11. 2. Merilyn and Bruce to pay Geoff's costs in relation to Ground 11. 3. Set aside order 3 made on 12 March 2021 and orders 1(ii), (iii) and (iv), 2(i) and (iii) and 3(i) and (iii) made on 27 April 2021 and, in lieu thereof, order that: 1. Geoff's family provision claim under s 59 of the Succession Act 2006 (NSW) be dismissed; 2. Geoff pay the Estate's costs of the family provision claim under s 59 of the Succession Act 2006 (NSW) and his estoppel claim up until and including 28 June 2019, but there be no order as to the parties' costs in respect of those claims thereafter; 3. Merilyn and Bruce be indemnified in respect of their costs of defending Geoff's family provision and estoppel claims, such indemnity to be met from their respective shares of the Estate (and not Sue's share); 4. Merilyn and Bruce pay Geoff's costs of the First Cross-Claim on the ordinary basis and not be entitled to indemnity out of the Estate in respect of their costs of the First Cross-Claim. 1. Application for leave to cross-appeal be dismissed with costs.

[31]

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: 16 December 2021

A snapshot of the position was conveyed in an email sent by Bruce to Sue on 3 October 2013 which was as follows: "Follow up from our talk. Bruce Bassett Thu 3/10/2013, 1:51 PM To: [email address] Hi Sue. I thought I would follow-up on a couple of points from our talk. Firstly, to clarify the farm income, dad told us that in 2009, he and Geoff had 500 cattle on the Springs (he said he bought half of these from Geoff for $250,000 and off-set Geoff's $160,000 loan owed over the Springs to do so). Dad said about 200 of those cattle were breeders (leaving 300 calves plus young cattle for sale). Recently dad said the stock levels were up to about 900 head of cattle on the Springs, about 400 of which were breeders (leaving 500 calves plus young cattle). The young cattle are sold to feedlots for final fattening - I think about 250 head per year, which is about $175,000 to $200,000 farm income per year (roughly $100,000 each). Over the last 4 years, however, dad and Geoff have re-invested much of the farm income into fencing, pasture improvement, etc - hence our estimate of Geoff drawing about $50,000 income per year from the Springs, rather than the $100,000 available to him. So our estimates are sometimes conservative, but we've tried to get them as accurate as possible. We've had to, because Geoff is saying a lot of things to dad suggesting he doesn't have enough money - like indicating to dad he was heavily in-debt when he sold Pindaroi, when he wasn't; and saying he doesn't have enough money to buy out dad's half of the Springs after he dies; or that he can't make enough money out of farming to survive in the future. And now the idea that he's not being compensated for his work on the Springs ... And dad seems to be finding it difficult to think rationally about these things, particularly without mum, and his memory is declining - as I said, he didn't even remember Geoff sold his sheep in the Pindaroi farm auction. I think it would help in the future to be specific about what is fair, rather than leaving it vague. According to dad, he and mum left their Will's the way they did because Geoff had more than us, and they wanted to prevent a situation like Uncle Barry's. Geoff and dad were farming on the Springs at that time, so that's not a new situation (in fact, Geoff has even more cash now, having sold Pindaroi and not passing the farm on). After mum died, dad continued this, and said he was only leaving Geoff the stock and equipment, which he said was about $250,000 (he doesn't seem to have factored in the farm account). So mum and dad obviously knew what was fair to all their kids for a long time, and that was for Geoff to get a 10% share or less. We've done nothing since mum died to deserve that being changed - far from it - and Geoff is being dishonest about his situation. So, in my view, mum was fair to us; dad should do the same. I hope this clarification helps. Think things over, and give us a call if you need. Be strong, have your say, and take heart from mum. Love, Bruce."

In a passage of some importance to the appeal, the primary judge recorded Geoff's submission, in relation to s 60(2)(d) of the Succession Act, that "if Merilyn and Bruce were successful in whole or in part in relation to the claims made in the first cross-claim (which they have not been as it transpires), Geoff could have a significant financial need at the time of judgment (the quantum of which necessarily could not be determined until the date of judgment)": PJ [951].
A further consideration of particular significance to the primary judge's ultimate disposition of the family provision claim (and to the appeal) was that which is referred to in s 60(2)(j) of the Succession Act, which relates to "any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person". In this context, reliance was placed by Geoff on Sue's evidence of what Bill said to her in the Coffs Harbour conversation in late 2013 (see [54] above), with Geoff submitting that it was apparent from this conversation that "Bill wanted to change his Will either to leave Geoff his interest in The Springs or 25% of his estate; and that Bill wanted Geoff to own the entirety of The Springs and had decided to leave it to him or leave him with sufficient funds to purchase it from his siblings": see PJ [979].
The primary judge summarised at PJ [981] that: "Geoff thus submits that if he is unsuccessful in his estoppel claim (as it turns out he has been) then further provision should be made for him out of Bill's estate and/or notional estate. The amounts distributed to residuary beneficiaries by way of partial distribution out of Bill's estate might have been available to be designated as notional estate but ultimately it is not necessary to consider any issue of notional estate as I consider that proper and adequate provision can be made out of Bill's share of The Springs".
The submissions recorded by the primary judge as having been made on behalf of Merilyn and Bruce were to the effect that Geoff had not demonstrated that he had been left without adequate provision for his proper maintenance and advancement in life, that his financial position both in terms of assets and income was strong (especially compared to his siblings) and that this was in part because of his early inheritance of Pindaroi and other benefits received during his lifetime. The primary judge also recorded Merilyn and Bruce's submission that, if Geoff's estoppel claim was dismissed with costs, then those costs should not be taken into account in determining his family provision claim: see PJ [991].
The primary judge's dispositive reasoning on the family provision claim was as follows: "993 Noting the principles set out above as to the evaluative process required by s 59 of the Succession Act, I have concluded that, considering the matter as at the time of the determination of Geoff's application, in light of the outcome of the first cross-claim there was not adequate or proper provision made for him under Bill's Will. 994 In this regard, while accepting that Geoff has had the benefit of substantial assistance during the course of Bill (and Jill)'s lifetime(s), in terms of both financial assistance in the form of loans and in the waiver of loans or debt forgiveness given over the years, and accepting that his acquisition of Pindaroi at an effective cost of around $200,000 was understood within the family to be his 'early' inheritance, the difficulty as I see it is that Geoff is now left in a position (particularly if ordered to pay costs of the primary claim on which he has not been successful) that he appears to be what may be described as asset rich but cash poor; and at risk that he will be unable to continue to farm The Springs. That is because he will, as a practical matter, presumably need to buy out his siblings' half share in The Springs if he wishes to remain farming on that land; and if unable to procure finance for that purpose would presumably need to sell The Springs. 995 Leaving aside the evidence of Edwina (about which I am cautious due to her obvious self-interest and apparent antipathy towards Geoff) as to the suggestion that Geoff may not intend to retain The Springs (such as her evidence about him looking at brochures for property in Noosa), I have no doubt that it was Bill's wish (consistent with his testamentary gift of the plant and equipment on The Springs to Geoff) that Geoff be able to continue to farm The Springs. I place considerable weight on the evidence of Sue as to her discussion with Bill in late 2013 (which I accept) as to Bill's concern that he may need to change his Will so as to enable Geoff to buy out his siblings' share of The Springs or to leave that share to Geoff. Similar concern was expressed to Bruce. 996 Balanced against this is the family understanding that Pindaroi was Geoff's early inheritance. However, the evidence of Sue leads me to conclude that this was not regarded by Bill as 'set in stone' so to speak. 997 I accept that the respective siblings have needs of their own and I have taken into account their competing claims on Bill's testamentary bounty (noting that they received a greater inheritance from Jill than did Geoff, no doubt because of his acquisition of Pindaroi but also that they received some, albeit less, financial assistance in their parents' lifetime in terms of gifts). 998 Also to be taken into account as a relevant factor are the costs that have been incurred in the course of the hearing on both the primary claim (which has been unsuccessful), and the family provision claim. Prior to the hearing Geoff put his costs 'to date in these proceedings' as $1,201,658.28, with a 'current trust account balance' with Geoff's solicitors of $265,921.69 (said to reflect the costs of the hearing and additional to the costs already incurred) (Geoff's affidavit sworn 4 August 202[0] at [58]-[59]). However, after the commencement of the hearing, a further costs affidavit of 17 August 2020 filed by Geoff deposed that, in addition to the costs previously deposed by his client (noted in the preceding paragraph), his solicitors had rendered a further tax invoice of $47,410 and his solicitor, Mr Martin, expected that Geoff would incur a further $180,000 for professional fees with Martin Legal for the period from 1 to 28 August 2020 (affidavit of Alexander Richard Martin sworn 17 August 2020). It is noted that an additional $104,985.70 had been paid to the Martin Legal trust account. 999 Merilyn and Bruce submit that the way in which the costs of the plaintiff should be dealt with, including, if Geoff is successful in any part of the amended statement of claim, is that his costs recoverable out of Bill's estate be capped by way of a fixed-sum costs order under s 98 of the Civil Procedure Act 2005 (NSW) (referring to Baychek v Baychek [2010] NSWSC 987 at [17] per Ball J). 1000 Without determining at this stage the final orders as to costs, it is relevant in my opinion to note that if costs follow the event as in the ordinary course then it might be expected that Geoff would bear Merilyn and Bruce's costs of the unsuccessful proprietary estoppel claim but that they (or the estate) would bear the costs of their unsuccessful cross-claim. Whether those would balance out is another matter. However, to the extent that Geoff may have incurred costs beyond that for which he might recover in the litigation, the potential of such an outcome is a relevant (though I do not suggest determinative) factor to be taken into account in the family provision claim. 1001 On the whole, having regard to the importance that Bill clearly placed on the continued farming by Geoff of The Springs, and Bill's acknowledgement to Sue that Geoff probably would have had an expectation that he would be left his father's interest in The Springs, together with the evidence that suggests that Bill may have assumed that Geoff would be in a position to buy out his siblings' interest in the land, and given that the family understanding as to Geoff's 'early inheritance' seems to have assumed an overall equivalence across both estates, I have concluded that adequate and proper provision was not left for Geoff (insofar as he may now be left unable to retain and continue to farm The Springs); and that the proper provision for Geoff is that, in addition to the interest in The Bassett Grazing Co Partnership, he be given a half share of Bill's 50% interest in The Springs, such that Geoff's overall ownership of The Springs (including his existing 50% interest) would be a 75% interest. The burden of that further provision should fall equally on the residuary beneficiaries such that each of the other siblings between them would have an equal share of a 25% interest in The Springs. On the rough figures referred to earlier in these reasons (and adopting the desktop valuation for this purpose), this would mean that the siblings' share of the residuary estate would be valued at around $1,055,227; and, again, albeit on my rough calculations, that would mean that, taking into account the amount inherited by the other siblings from Jill's estate and the provision made for Geoff in his lifetime, there would not in my opinion be a marked disproportion in the respective siblings' inheritances from their parents' estates. Moreover, this may facilitate Geoff's ability to retain and continue to farm The Springs, which would accord with what I understand to have been Bill's ultimate wishes as to the land and consistent with the bequest as to the farming equipment and the like."
In view of these reasons, the primary judge made the following order in the family provision claim: "(3) In addition to the bequest in [Geoff's] favour under [Bill's] Will, order that there be further provision out of the estate of the late William Bassett in favour of [Geoff], in the form of a one-half share of [Bill's] 50% share of the land known as The Springs, and that the burden of that bequest should be charged equally over the interests left to [Geoff's] siblings in respect of the land; to the effect that the siblings' interest in The Springs, as part of the residue of [Bill's] estate, is reduced to a 25% share of the land, to be held as between them in equal shares."

It is also relevant to note that in Sgro at [83], White JA (with whom McColl and Payne JJA agreed) repeated what he had earlier said in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [127] as follows: "In my view, respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate. That is not to deny that s 59 of the Succession Act interferes with the freedom of testamentary disposition. Plainly it does, and courts have a duty to interfere with the will if the provision made for an eligible applicant is less than adequate for his or her proper maintenance and advancement in life. But it must be acknowledged that the evidence that can be presented after the testator's death is necessarily inadequate. Typically, as in this case, there can be no or only limited contradiction of the applicant's evidence as to his or her relationship and dealings with the deceased. The deceased will have been in a better position to determine what provision for a claimant's maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased's death when the person best able to give evidence on that question is no longer alive. Accordingly, if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator's testamentary wishes in recognition of the better position in which the deceased was placed (Stott v Cook (1960) 33 ALJR 447 per Taylor J at 453-454 cited in Nowak v Beska [2013] NSWSC 166 at [136]). This is subject to the qualification that the court's determination under s 59(1)(c) and s 59(2) is to be made having regard to the circumstances at the time the court is considering the application, rather than at the time of the deceased's death or will." These observations bear a close affinity with those of Kitto J in McCosker, noted in [83] above. Sgro was a case where, as Payne JA explained at [3], one sister's claim "was founded upon what all members of the family understood as her claim to the Greystanes property upon her parents' death, Rosa [another sister] having earlier received the Merrylands property in a way all members of the family understood as comprising an early inheritance." At [76]-[78], White JA relevantly held that: "76 [T]he primary judge did err in principle in his assessment of the significance of Rosa's having been given the Merrylands property in 1985 as her early inheritance. There is no doubt that the primary judge took that transaction into account as one of the material considerations. His Honour did so in considering the provision made for the applicant by the deceased during the deceased's lifetime … and as evidence of the deceased's testamentary intentions … In the section of his reasons headed 'DETERMINATION' the primary judge referred to the deceased's having made generous provision for Rosa during her lifetime by, amongst other things, giving her an unencumbered house … His Honour then went on to say that the level of provision made during the lifetime of the deceased could not alone determine what was proper on the deceased's death, albeit it was one of the matters to be taken into account in determining what is 'proper'. 77 But in considering Carmela's competing claim on the estate, the primary judge said (at [133]) that: 'Her competing claim is not founded upon any competing financial need, but on her contributions to the deceased, both financially and in other ways, during the deceased's declining years.' 78 Carmela's competing claim was not founded only on her contributions to the deceased during the deceased's declining years. Fundamentally, it was founded upon what all members of the family recognised as her moral claim to the Greystanes property upon her parents' death because her sister had received an early inheritance of the Merrylands property."

In relation to the approach to be taken to a claim for provision by an adult child, reliance was placed by Merilyn and Bruce upon the following summary of principles by Hallen AsJ (as his Honour then was) in Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [111] as follows: "(a) The relationship between parent and child changes when the child leaves home. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed. (b) It is impossible to describe in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise, and educate, their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life - such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his or her children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation: McGrath v Eves [2005] NSWSC 1006; Taylor v Farrugia [2009] NSWSC 801. (c) Generally, also, the community does not expect a parent to look after his, or her, child for the rest of the child's life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute: Taylor v Farrugia. (d) There is no need for an applicant adult child to show some special need or some special claim: McCosker v McCosker; Kleinig v Neal (No 2) [1981] 2 NSWLR 532; Bondelmonte v Blanckensee [1989] WAR 305; and Hawkins v Prestage (1989) 1 WAR 37 per Nicholson J at 45. (e) The applicant has the onus of satisfying the court, on the balance of probabilities, of the justification for the claim: Hughes v National Trustees, Executors and Agency Co of Australasia Ltd [1979] HCA 2; (1979) 143 CLR 134 at 149. (f) Although some may hold the view that equality between children does not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the Court's determination of an applicant's case."

As to the last matter, the following aspects of Geoff's evidence are relevant: 1. in his March 2015 Affidavit, he deposed to having "over 100 clients ranging from Ingham (Queensland) to Wilsons Promontory (Victoria) to Adelaide; ranging from grain cropping to pastures to livestock cell grazing to horses to orchards and sugar cane" and that "[s]ince starting my farming business I have developed an enviable reputation in the livestock industry for the quality of my livestock and the integrity and ingenuity with which I run my farming businesses. Increasingly, I am being recommended by word of mouth as an innovative soil consultant"; 2. in the same Affidavit he stated that, since early 2014, he had "been building up [his] consultancy work and [his] income has increased substantially even though we are currently experiencing one of the worst droughts in the last 100 years"; 3. his reference in the "Discussion Note" given to Bill in December 2013 (see [53] above) that "[i]t's a shame to sell The Springs but there are always other opportunities for me": see PJ [216]; 4. his statement in his June 2017 Affidavit that he "continue[d] to run a highly successful biological farming consultancy business and I now consult to over 150 farmers, who own over 250,000 acres"; and 5. his statements in his August 2020 Affidavit that: * "Since 2018, I have started providing my consultancy services to a number of clients, which operate very large farms (being farms that are operating on pastoral properties that I understand are worth $10 million to $40 million). In my experience, having these clients increases the profitability of my consultancy business, because the larger the property, the more time I spend providing my consultancy services to that client and the larger volume of products that client will purchase from me"; * "As at 30 June 2020, each of my 15 largest clients operate between 4,000 and 40,000 acres of farming land. The total area that my 15 largest clients farm is about 210,000 acres or 850km2. Based on my knowledge of my clients' land, I estimate the remaining 134 clients own about 200,000 acres or about 800km2, meaning I am currently consulting on a total of about 410,000 acres (1,650km2) of farming land"; and * he is "now also the chief soil consultant at 'The Carbon Farm', a local initiative with significant Government funding around carbon sequestration on farms".

The primary judge went on to identify the relevant principles in terms that were not the subject of any attack by Sue in the Cross-Appeal: "340 … I note that it is a well-established rule that a trustee who has acted properly in the exercise of their duties, whether by commencing or defending proceedings, is entitled to be indemnified out of the estate. As noted by Lord Justice Lindley in Re Beddoe: Downes v Cottam [1893] 1 Ch 547 (Re Beddoe) at 558: … a trustee is entitled as of right to full indemnity out of his trust estate against all his costs, charges, and expenses properly incurred … and in all cases of doubt, costs incurred by a trustee ought to be borne by the trust estate and not by him personally. 341 This rule extends to circumstances where the litigation is unsuccessful, the executor acted mistakenly and the other party to the litigation is found to be entitled to a costs order (see Drummond at [43] per Austin J; Bovaird v Frost [2009] NSWSC 917 (Bovaird) at [28] per Brereton J as his Honour then was). 342 There are two exceptions to this rule (as adverted to above). First, an executor will be deprived of indemnity costs out of the estate in cases of impropriety. In Re Beddoe (at 562), it was noted that 'mere errors in judgment which fall short of negligence or unreasonableness' do not meet the threshold of impropriety. Rather, it is necessary that the executor incurred the costs unreasonably, negligently or unnecessarily (Drummond at [45]; Mead v Watson (2005) 23 ACLC 718; [2005] NSWCA 133 (Mead) at [12]-[13] per Sheller, Ipp and Tobias JJA; Warton v Yeo [12], [72]). In Mead (at [14]), the Court of Appeal stated that a degree of personal misconduct or wilful recklessness is not required (see also Adsett v Berlouis (1992) 37 FCR 201; 109 ALR 100 at 111 per Northrop, Wilcox and Cooper JJ). 343 The second basis precluding an executor from indemnification out of the estate is where the executor has incurred costs in furtherance of a personal interest (Miller v Cameron at 578-579; Bovaird at [28])."

The summary in the Calderbank letter was in turn narrowed down to the following salient points for the purposes of explaining the Offers of Compromise: "1. There is about $3.3 million net 'lying around' ($3,600,000 + $960,000 - $900,000 - $350,000 = $3,310,000). 2. How the residuary beneficiaries divide that up is a matter for them. 3. At $1,100,000 to each, that looks like a lot of money to most people, especially on a tax free basis. 4. The deal Geoff is offering gives him nothing. 5. If your clients reject this offer: (a) they paint Geoff into a corner; (b) he has to spend another $700,000; (c) that money will come out of 'The Springs'; (d) Geoff's lawyers will get it, not Geoff; and (e) Geoff will be compelled to spend it, by your clients' rejection of his offer. 6. Presumably you have explained the intricacies of a Calderbank letter to your clients. 7. Even if your clients win at first instance, why would Geoff not appeal? 8. The judge might stay the execution of a judgment against Geoff, pending an appeal. 9. Even if the judge did not, a lot of things might occur, such as the sale, disposal or further encumbrance of his Dorrigo property. Presumably he would have to charge his equity in Dorrigo to conduct an appeal. That security would be sought and obtained well before a trustee in bankruptcy was appointed or an act of bankruptcy occurred. 10. There are a lot of risks at this point in time for a lot of people. From my perspective, I can see a fat bird, that is almost in their hand, worth about $1.1 million nett, for each residuary beneficiary, (even after their legal fees and the selling costs of 'The Springs' are paid), whereas the poultry in the bush is a lot skinnier. 11. How is that amount ever going to get bigger than it is right now? 12. What will be left if: (a) your side spends $600,000 from the residuary to run a 10 day hearing; (b) my client spends $700,000 from 'The Springs' and 'Hurricane Hill' to run a 10 day hearing; and (c) Geoff's liability, to pay for the 10 day hearing, is also secured against 'The Springs' and 'Hurricane Hill' and any shortfall is secured against Dorrigo, in addition to the equitable charge that already exists? 13. I am instructed that here is the practical way to solve things: ● Bill's Estate or the residuary beneficiaries pay $900,000 to Geoff's lawyers ● Geoff discharges the charge upon receipt of payment ● Geoff then transfers his share of 'The Springs' and 'Hurricane Hill' to Bruce, Merilyn and Sue ● your clients keep it or sell it - your choice - and Geoff drops out ● the proceedings get dismissed and everyone pays their own costs, via Consent Orders and a suitable Deed of Release, and ● Geoff undertakes not to secretly buy either property." (emphasis in original)

On 9 July 2019, Ms Ross-Maranik sent a letter to Mr Martin responding to the Offers of Compromise and the Calderbank letter, stating that her "clients are unable to accept this offer in its current form" for several reasons: 1. first, that Merilyn and Bruce considered Geoff's estimated costs of the litigation to that point in time (in the total sum of $900,000) "to be excessive and outside the normal range of what a court would consider reasonable or proportional", particularly in view of the parties' mutual obligation to disclose their costs to the court in the course of a claim for a family provision order; 2. secondly, it was said that Geoff had, by placing a charge over The Springs and Hurricane Hill in favour of Mr Martin as security for costs, "lost his half of the Springs Farm". In further support of this assertion, attention was drawn to Geoff's foreshadowed "costs exposure" in the sum of $1.6 million if the matter was to proceed to hearing; 3. thirdly, Ms Ross-Maranik raised a series of financial and logistical costs associated with Merilyn and/or Bruce's receipt of one-third of Geoff's 50% share in The Springs, which were said to make the offers of compromise "prohibitive in [their] current form". The financial costs included "agent, marketing and transfer fees and the possibility of significant capital gains tax" as well as the "capital costs to invest in farm improvements to achieve a sale". In addition to these discrete costs, Merilyn and Bruce considered that the value of the farm had depleted significantly in conjunction with the depletion of stock numbers as a result of persistent drought conditions. The logistical costs included the fact that The Springs is located in Northern New South Wales, near Inverell, whilst Bruce resided in Queensland and Merilyn in the Australian Capital Territory. Further, Ms Ross-Maranik was instructed that co-ownership of Geoff's 50% share of the property by each of Merilyn, Bruce and Sue was impractical given "the hostility [Sue] has shown towards [Merilyn and Bruce], some of which was the subject of her recent removal as contradictor in the proceedings"; 4. fourthly and finally, Ms Ross-Maranik itemised approximately $460,000 in payments and benefits that were said to have accrued to Geoff since 2014-15, in the course of his role as the executor of Bill's Estate, which were not referred to in the Calderbank letter.

The full terms of the counter-offer were as follows: "1. The proceedings be dismissed, including the Statement of Claim, the First Cross Claim, the Second Cross-Claim and any amended pleadings arising therefrom. 2. [Geoff] transfer all of his right, title and interest in the properties known as 'The Springs' and 'Hurricane Hill' ('the Properties') to Bruce Edward Bassett and Merilyn Jill Ryan in equal shares as tenants in common within 28 days of orders being made. For clarity, this refers to [Geoff's] half interest in the Properties which he owns legally and/or beneficially and does not refer to any interest he may have held in the land as co-executor of the estate of the late William Edward Bassett, such interest which he renounces pursuant to the paragraphs below. 3. The estate of the late William Edward Bassett pay to [Geoff] and/or to whom he may direct the sum of $400,000.00 within 28 days of orders being made ('the Legacy'), but such payment shall only be made simultaneously with the transfer of [Geoff's] share of the land referred to in paragraph 2 above. 4. No interest is to be paid on the Legacy referred to in paragraph 3 providing it is paid within 28 days of orders being made and following the transfer referred to in paragraph 2 above; and if the Legacy is not paid within those terms, interest shall accrue on any unpaid amount of the Legacy at the interest rate prescribed by s 84A of the Probate and Administration Act 1898 (NSW), commencing 29 days after orders are made by the Court and continuing until the date of payment in full. This is condition upon no delay in the transfer of land occasioned by [Geoff]. If the delated payment arises from delays in Geoff transferring the land then no interest is payable arising from such delay. 5. No order with respect to [Geoff's] costs, with the intention that he pay his own costs. 6. The costs of transferring the Properties (including stamp duty and registration fees) be paid from the estate of the late William Edward Bassett. 7. The costs of Bruce Edward Bassett and Merilyn Jill Ryan be paid out of the estate of the late William Edward Bassett on the indemnity basis. 8. [Geoff] otherwise renounces his role as executor of the estate of the late William Edward Bassett, noting that [Geoff] shall have no right or entitlement to make any claim for executor's commission for the estates of the late William Edward Bassett or Elaine Jill Bassett. 9. The grant of probate in the estate of the late William Edward Bassett in favour of [Geoff] be revoked. 10. The original grant of probate in the estate of the late William Edward Bassett be returned to the Supreme Court Registry within 14 days of the date of orders. This offer is made pursuant to the principles in Calderbank v Calderbank [1975] 3 All ER 333 and will be relied upon in any application for a special costs order. This offer is available for acceptance on or before 7 August 2019 and shall otherwise expire at 4pm on 7 August 2019 if not accepted prior."

Bassett v Bassett

At a glance

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Judgment (31 paragraphs)

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Legislation Cited (9)

Cases Cited (85)

Cited By (24)