//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2012] NSWSC 193
plaintiff. Court certified the principal amounts mathematically agreed for each Plaintiff and entered judgment for each Plaintiff against the Defendant. Interest on the Kanwal share accrues from 17 October...
Plaintiffs (Ukraine beneficiaries) alleged they had not received the shares of their relative's estate. The executor said he sold property, converted proceeds to US cash and delivered shares in Ukraine in 1996 and 1999. He produced no receipts, destroyed records and gave implausible explanations. The Court found he failed to prove he made the distributions, certified amounts payable to Plaintiffs, fixed interest start dates and rates, entered judgment for Plaintiffs and ordered costs against the Defendant.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
1,729 words · generated 29/07/2026
Michael Stefan Holovka died in April 1994 leaving a will (dated 17 February 1993) that vested his residuary estate half to his de facto partner Ruby O'Neil and half to be split equally between his brother George (resident in the Ukraine) and the children of his deceased brother Dimitri (paras 5, 9, 11). Probate was granted to John Pesor (the Defendant) in October 1994 (para 5). The defendant sold two properties belonging to the estate: the Kanwal property (transfer dated 9 October 1994) and the Flagstaff Hill property (transfer dated 16 October 1998) (para 14). Net proceeds were agreed at hearing: Kanwal net $152,500; Flagstaff Hill net $37,500 (para 16).
No linked legislation citations have been extracted yet.
The defendant asserted he paid Ruby O'Neil her half and then converted the balance of the Kanwal proceeds into US$100 notes over a period ending April 1996, carried those notes to the Ukraine disguised as gifts and delivered the Ukrainian beneficiaries' shares in May 1996 and again (for later distributions) in May 1999 (paras 13-19, 104-106). He admitted he did not obtain receipts, had not provided the will or probate parchment to beneficiaries, and later destroyed estate documents in about 2008–2009 (paras 36, 61, 123(q)).
The Plaintiffs (the daughter of George and the two children of Dimitri) swore that they each received limited cash gifts (the first Plaintiff said she received US$200 in 1996 and US$1,200 in 1999; the second Plaintiff said his wife received US$1,200 in 1999) and denied that they received the full amounts the defendant alleged he distributed (paras 82-95). The third Plaintiff did not file evidence (para 95).
The Plaintiffs applied in the Supreme Court (Summons filed 10 June 2011) for an order for a proper account and for payment of monies due (para 1). After directions and affidavit disclosure from the defendant, the parties agreed a formal taking of accounts was unnecessary and the real issue at trial was whether the executor had in fact fully distributed the estate in the Ukraine (paras 2, 53-58). Hallen AsJ heard the matter and, not being satisfied the defendant had made the distributions he asserted, certified the plaintiffs' entitlements, fixed interest from reasonable dates after sale proceeds were available, entered judgment for the plaintiffs and ordered costs against the defendant (paras 127, 144-147, 148).
Onus of proof and nature of the proceeding
Civil standard of proof shaped by Briginshaw
Absence of contemporaneous evidence and destruction of documents
Implausibility of the asserted method of distribution
Plaintiffs' sworn evidence and lack of contrary documentary proof
Remedy and practicality
Before: The principles governing accounts in administration proceedings and the onus allocation were well established: beneficiaries are entitled to an account in common form; where falsification is alleged the accounting party must justify the accounts (Glazier, Chong, Meehan cited at paras 49-52). Executors are expected to keep records and obtain receipts when distributing estate assets.
This case: Bilyak v Pesor demonstrates the application of those principles to international distributions. It underscores that oral assertions and after-the-event explanations are generally insufficient where contemporaneous records are absent and large cash movements are alleged. The judgment reiterates the court's readiness to certify amounts where disclosure has rendered a formal account unnecessary, balancing procedural fairness and cost-efficiency (paras 53-58, 147).
After: Practitioners handling estates with overseas beneficiaries should note:
"There can be no doubt that the legal personal representative, on payment or distribution to a beneficiary, is entitled to a receipt." (para 60)
"In all the circumstances, I am of the view that the Defendant has not satisfied the burden of proving, on the balance of probabilities, that he made the distributions..." (para 127)
"Rather, it seems to me that the date from which interest should be calculated should be a reasonable time after the Defendant received the proceeds of sale." (para 142)
Quoting Glazier: "An order for an account of administration is made for the taking of accounts of money received and disbursed..." (para 49)
This decision is a trial-level Supreme Court judgment applying established authorities (Briginshaw, Glazier, Chong, Meehan, Ho v Powell) to the specific facts. It reinforces the established proposition that the evidential burden lies with an accounting party who asserts distributions in the face of falsification allegations, and emphasises proper record-keeping. Any later court referring to Bilyak would likely treat it as an instance of applying conventional account and evidentiary principles to an international cash-delivery claim rather than as a new principle of law.
The judgment quotes and applies prior authorities rather than announcing novel legal doctrine; its precedential weight will be persuasive in similar fact patterns about destroyed records, cross-border cash carriage and the adequacy of evidence for distributions.
Extent of adverse inference from destroyed documents
Proof sufficiency where partial admissions exist
Interaction with foreign law on currency importation
Practical safeguards for executors with overseas beneficiaries
Takeaway for practitioners: maintain contemporaneous records, seek receipts or written acknowledgements (even from overseas beneficiaries), consider documented transfer methods, and retain estate records. If records are lost or destroyed, early, detailed affidavit evidence explaining precisely why and what was destroyed, and independent supporting proofs, will be essential to preserving an executor's defence.
John Zenowij Pesor (Defendant) Representation: Mr N Bilinsky (first, second & third Plaintiffs) Defendant appeared in person Horowitz & Bilinsky Pty Ltd (first, second & third Plaintiffs) Defendant not legally represented File Number(s): 2011/190969
The Application 1HIS HONOUR: By a Summons filed on 10 June 2011, the Plaintiffs, Olena Yuriyivna Bilyak, Vasyl Dmytrovych Holovka and Olena Dmytrivna Harasym, to whom I shall refer as the first, second and third Plaintiffs, respectively, seek an order that the Defendant, John Zenowij Pesor, the executor and trustee of the estate of Michael Stefan Holovka ("the deceased"), provide a proper account in respect of his administration of the estate of the deceased, as well as an order that he pay to each of them all monies found to be due to her, or him, upon the taking of such an account, together with interest thereon. 2At the commencement of the hearing, for reasons to which I shall come, the parties agreed that an account was no longer necessary and that the real issue for determination was whether, as alleged by the Defendant, the estate had been fully distributed by him, by the end of 1999, to the beneficiaries, in accordance with the terms of the deceased's Will. 3To reduce the risk of identity theft, the precise address and/or title details of property of the deceased, or in which a party lives, to which reference will be made in these reasons, is not reproduced.
Background Facts not in Issue or Established 4I shall now turn to the background facts of this dispute, which are either not in dispute, or which I am satisfied, on the evidence, have been established. 5The deceased died on 16 April 1994. He left a Will made on 17 February 1993, probate of which was granted by this court, on 6 October 1994, to the Defendant. 6In his Will, the deceased referred to the Defendant as "my friend". The Defendant says that the deceased was also his godfather. 7At the date of the deceased's death, the Defendant was employed with Flinders University as a technical officer managing an electronic workshop. When he retired, he had been working at the University for over twenty years. 8Relevantly, the deceased's Will provided for the whole of the deceased's estate to pass to the Defendant, upon trust, for sale, calling in, or conversion, with power to postpone same for so long as he thought fit, notwithstanding that it may be "of terminable or wearing out nature or may consist of hazardous investment". 9The Will provided for the payment of "all just debts funeral and testamentary expenses, probate, estate, death and succession duties and taxes". The residuary estate was then to pass, as to one half, to Ruby Emma O'Neil, who was the de facto wife of the deceased at the date of his death, and as to the remaining half, as to 50%, to the deceased's brother, George Holovka ("George") "who lives in the Ukraine", and as to the balance "to such [of] the children of my deceased brother, Dimitri Holovka ("Dimitri"), "who also lived in the Ukraine as shall be living at the date of my death, and if more than one, in equal shares absolutely". In the event that George predeceased the deceased, "then the share my brother would have taken shall be held for such of them the children of my brother George ... who shall be living at the date of distribution, and if more than one, in equal shares absolutely". (However, George survived the deceased. Dimitri had two children, the second and third Plaintiffs.) 10The deceased's Will also provided that Ms O'Neil should be permitted "to continue to reside in the property which I own at ... Kanwal for so long as she desires subject to her paying all rates on the property maintaining adequate insurance in respect of the property and keeping the property in good condition and repair having regard to its condition at the date of my death". 11In the Inventory of Property, a copy of which was placed inside, and attached to, the Probate parchment, the deceased's estate, at the date of death, was disclosed as having an estimated, or known, value of $218,611. The only liability disclosed was a funeral account ($2,710). The estate was said to consist of real estate, being real property at Flagstaff Hill, in South Australia ($40,000), the real property at Kanwal, in New South Wales, to which reference has been made ($165,000), money on deposit in a bank ($7,411), a car ($6,000), and personal possessions ($200). (I have omitted a reference to the cents and shall continue to do so.) 12The Defendant's evidence is that the money on deposit in a bank was held in the name of the deceased, with Ms O'Neil, and that it passed to her by survivorship. Although, at the hearing, the Plaintiffs did not know and, therefore, could not concede, this fact, there is no reason to disbelieve the Defendant's evidence on this topic. In particular, he said that he had nothing to do with the closing of the relevant bank account, which step was taken by Ms O'Neil, who was then living in New South Wales. This piece of evidence supports his assertion that she was a joint account holder with the deceased. I accept the Defendant's evidence in this regard. 13In addition, the Defendant says that it was Ms O'Neil who sold the deceased's car for $2,000, which amount she also retained. Although, at the hearing, the Plaintiffs did not know, and, therefore, could not concede this fact, again there is no reason to disbelieve the Defendant's evidence on this topic. Bearing in mind Ms O'Neil's relationship with the deceased, the Defendant's evidence on this topic seems plausible. Accordingly, I accept his evidence in this regard also. (I note that each party's calculations on the entitlement of the Plaintiffs, in the event that they were successful, omit the amount in the bank account and the proceeds of sale of the car.) 14The Defendant sold the Kanwal property, by Transfer dated 9 October 1994, for $157,000. He sold the Flagstaff Hill property by Transfer dated 16 October 1998, for $40,000. (The Probate, apparently, was resealed on 29 May 1997 in South Australia to enable the property to be sold by the Defendant.) 15George died on 29 November 1999, some four and one half years after the deceased. Ms O'Neil died on 26 May 2004. Accordingly, the relevant interest of each, under the deceased's Will, was vested at the date of his, and her, death in each of them respectively. 16During the course of the hearing, as there were no contemporaneous documents, the parties agreed that the costs and expenses of the sale of the Kanwal property would have been about $4,500, leaving the net proceeds of sale of $152,500. They agreed, also for the same reason, that the costs and expenses of the sale of the Flagstaff Hill property would have been about $2,500, leaving the net proceeds of sale of $37,500. 17According to the deceased's Will, George was entitled to one quarter of the value of the residuary estate. In view of the agreement reached, during the hearing, on the estimate of the costs and expenses of the sale of the real estate, on sale of the Kanwal property the amount to be distributed to George would have been about AU$38,125, whilst the share to be distributed to each of the children of Dimitri, would have been about AU$19,063. On sale of the Flagstaff Hill property, George would have been entitled to receive an additional $9,375, whilst each of Dimitri's children, would have been entitled to receive about $4,688 (calculated on the estimated net proceeds of sale). 18The first Plaintiff is George's daughter. Her claim, in the present proceedings, arises as a result of her being the sole beneficiary of her father's estate. The Defendant did not submit that she was not the appropriate Plaintiff, or that it was not to her that George's share should be paid. There is, in evidence, a copy of George's Will as well as "a Certificate of Right to Inherit" issued in respect of his estate, which confirms the entitlement of the first Plaintiff to inherit the whole of George's estate. Each document is in the Ukrainian language with a translation into the English language. 19George had a son, Vasyl Yurivovych Holovka, who has sworn an affidavit that was read in the proceedings, but who is not entitled to any share of the deceased's estate. I shall return to his evidence later in these reasons. 20The second and third Plaintiffs are the only children of Dimitri. As is obvious from the terms of the deceased's Will, Dimitri had died before the date the deceased's Will was made. The interest under the deceased's Will vested in him and her. 21Prior to the death of the deceased, the Defendant did not know any of the family of the deceased living in the Ukraine. He was able to ascertain that the deceased had family there from having translated correspondence to the deceased provided to him by Ms O'Neil. Between the date of death of the deceased and May 1996, his contact with a number of them was only by letters passing between them. 22Following the death of the deceased, the Defendant wrote a letter, dated 31 October 1994, addressed to "the Holovka family" in the Ukraine. The letter, which was sent to George and to the second and third Plaintiffs, was in the following terms: "Dear Sir/Madam I regret to inform you that Michael Stefan Holovka died on 16/4/1994 of liver complications. He left behind a wife, Ruby, but was without children. His only other family is his brother George Holovka and his children, and the children of his deceased brother Dimitri Holovka. I am seeking George Holovka and the children of Dimitri Holovka. If you have information about these people, please write to me and give me their addresses. My connection with Michael Holovka is that I was his God son and he was a friend of mine for more than forty years. He left me as the executor of his estate and some of that estate is bequeathed to his family in the Ukraine. You may write to me in Ukrainian, I will have it translated (my mother is Ukrainian)." 23Each of the Plaintiffs acknowledges that she and he read the letter from the Defendant. 24Following the receipt of that letter, the third Plaintiff wrote to the Defendant in the following terms: "Good day Mr John! We have received your letter for which we thank you nicely. This tragic news about the death of our uncle, Holovka Michael, conveyed to us by his friend and countryman of the town of Toronto (USA) for us was very painful. This letter is being written by the daughter of his deceased's brother Holovka, Dimitri. You wrote to us that you need the addresses of George Holovka and the children of his deceased's brother, Dimitri Holovka. We are sending them to you. The children of Holovka, Dimitri and their addresses: xxxxxxx Harasym Olena Dmytrivna xxxxx Holovka Vasyl Dmytrovych Address of his brother Holovka George xxxxx We ask you to send us photographs with Uncle Holovka Michael made during his stay in Zakarpatska with us as a guest if this is not needed by you. And all that our Uncle willed us, we ask that you send us in USA dollars. If you wish to correspond with us we would be very happy to maintain contact with you. We welcome you with the New Year and with the Christian Christmas. We wish you and your family all the best in the New Year." 25(A matter I considered to be of some importance in this letter, to which I shall return, is the sentence: "And all that our Uncle willed us, we ask that you send us in USA dollars." (my emphasis) ) 26Following the receipt of the Defendant's letter of 31 October 1994, the first Plaintiff wrote a letter, dated 23 December 1994, to the Defendant in the following terms: "Greetings from Horinchove! Respected John! I received your letter, for which I am very grateful, I grieve greatly that my cousin, as they say here, that is my Uncle who died. He was the blood brother of my father George. We were informed about the death of Uncle Michael by his friend Duvalko from Canada. They studied together and together emigrated in the beginning to Czechoslovakia and then after that to Australia and Duvalko migrated to Canada and remained living there. Michael when he came to us told us that he was leaving us half of the Estate, his house and assets, I did not expect that he would die so quickly, he could have lived at least another 10 years. You ask about our family in the Ukraine. I know who lives where those of the family of Holovka. The eldest of the brothers died. Holovka Dimitri Stepanovych born in 1911 died in 1989. His eldest son lives in the eastern part of the Ukraine, I will write the address for you, I don't guarantee the preciseness. ... Holovka Vasyl Dmytrovych. 41 years old. The daughter of Dimitri lives in .... Harasym Olena DM 1950 year of birth. The second brother is my father, George Holovka, 1981 (sic) year of birth. He also lives at this address: ..... Holovka George Stepanovych. I, the eldest daughter of George Holovka married into the neighbouring village and carry the family name of my husband, address ..... Bilyak Olena Yuriyivna. 1953 year of birth. My brother also lives in the eastern part of the Ukraine. ........ Holovka Vasyl Yuriyovych born 1957. This is the whole family which is the closest to Michael Holovka. You can write to us, if you so wish. I would very much like to know where your mother was born - Ukrainian. At this point I will conclude. All the best to you! Wishes Olena" 27The Defendant's evidence was that he thought that he had received the letter from the third Plaintiff before he received the letter from the first Plaintiff. 28The Defendant wrote a letter, dated 1 September 1995, to the first Plaintiff, in which he informed her that "I am in the process of selling the remaining property"; confirmed the information that he then had about the family of the deceased in the Ukraine; and stated that he was planning to visit the Ukraine to visit her. In the letter, he provided no reasons why he proposed to visit the Ukraine. 29The Defendant travelled to the Ukraine in May 1996. He was absent from Australia between 11 and 30 May 1996. I shall return to the evidence of what occurred whilst he was there later in these reasons. 30The Defendant wrote a letter dated 26 February 1999, to the first Plaintiff, in which he informed her that he would be visiting the Ukraine in May 1999, and what he intended to do whilst he was there. In the letter, he provided no reasons why he proposed to visit the Ukraine. 31The Defendant travelled to the Ukraine, again, in May 1999. He was absent from Australia between 5 and 20 May 1999. 32Whilst in the Ukraine, on this occasion, the Defendant gave the deceased's ashes to the second Plaintiff. Steps were taken for those ashes to be buried next to Dimitri's grave. I shall return to the evidence of what occurred, otherwise, whilst he was there later in these reasons. 33In 2000, the second Plaintiff wrote to the Defendant in the following terms: ".... Good day John and your family, wife and children, We welcome you with the 2000 New Year and wish you all the very best, most importantly good health. I ask you, to write to us and tell us how you got back. I wrote a letter to you but I haven't had any reply. I am concerned that everything should be right. We pass onto you a Ukrainian heartfelt welcome:- Vasyl Finoia, Mekola, Halya, Viktor, Valia, all of us who saw you. Here with us at the present time everything is alright. Kolia has already obtained his dwelling in Lutsk. On this I finish. I await your reply. Goodbye. With respect Vasyl." 34Unfortunately, the letter referred to in the letter quoted immediately above does not form part of the evidence. 35There is no evidence of any reply from the Defendant to either of the letters to which I have just referred. 36The Defendant did not show, or provide, a copy of the deceased's Will, the Probate parchment, or the inventory of property, to George, or to any of the Plaintiffs, on either occasion that he visited the Ukraine. He did not provide them with a copy of any of those documents otherwise. Nor did he disclose, in writing, to any of those persons, at any time, the entitlement to which he was, or they were, entitled, under the terms of the deceased's Will. He did not provide any explanation of the nature, or value, of the deceased's estate, or how the entitlement of George or the second and third Plaintiffs would be calculated. He said nothing about the debts, funeral, or testamentary, expenses of the estate, or about the moneys he had received from the sale of estate property. 37There is no documentary evidence to support the Defendant's assertions that he withdrew amounts from an estate bank account in Australia, exchanged the amounts withdrawn into US dollars, and that he distributed the amounts to George and to the Plaintiffs as he alleges. Nor is there any receipt, signed by George, or any of the Plaintiffs, acknowledging the receipt of any amount alleged by the Defendant to have been distributed to him or her. I shall return, in more detail, to this aspect of the evidence as the Defendant says that there is a rational explanation for the destruction of documents, which explanation I should accept. 38No person made any claim for a family provision order in respect of the estate, or notional estate, of the deceased.
Legislative Framework re Accounts 39In 1994, s 85(1AA) of the Wills, Probate & Administration Act 1898 (now the Probate and Administration Act ), relevantly provided, in relation to a person who died on or after 31 December 1981, that every person to whom probate and administration had been granted and who was a person required to do so by the Court, shall verify and file or verify, file and pass the person's accounts relating to the estate within such time, and from time to time, and in such manner as may be fixed by the rules, or as the Court may order. 40The Registrar, who was then exercising the powers of the court (Supreme Court Rules 1970, Part 78 rule 5(h)), made the decision whether accounts were required to be filed. 41I do not know when the application for probate was filed, but if it was filed on, or after, 19 August 1994, the same rule applied. Furthermore, the affidavit of the executor (then, Prescribed Form 97), contained a paragraph in which the executor undertook to file and pass his, or her, accounts, if the court so required. 42Section 85(1AA)(d) of the Wills, Probate & Administration Act , relevantly, provided that a personal representative who was not a substantial beneficiary may be required, on random selection by the court, to verify and file, or verify, file and pass, the accounts relating to the estate. If accounts were required, a notice to that effect was forwarded, with the Probate parchment, after the grant had been made. 43Where the personal representative was required by the Court to verify and file, or verify, file and pass, the accounts, he, or she, could obtain the consent of the beneficiaries to dispense with the requirement to pass the accounts. 44There is no suggestion, in this case, that notice was given, or that the Defendant had obtained the consent of any beneficiary to dispense with the accounts. 45Part 78 rule 71(2) of the Supreme Court Rules, required a person required to comply with s 85(1AA) to verify and file, or to verify, file and pass, the accounts within 12 months after grant or resealing. 46In the present case, there is nothing on the copy of the Probate parchment, which is annexed to an affidavit of the Plaintiffs' solicitor, Mr Claudius Bilinsky, to demonstrate that the Defendant, who was not a beneficiary, had been selected, at random, by the Court, to verify and file, or verify, file and pass, the accounts. Nor is there any other evidence to lead to the conclusion that, after obtaining the grant of Probate, the Defendant had been notified by the court to do so.
Plaintiffs' Entitlement to Relief 47Rule 46.2 of the Uniform Civil Procedure Rules 2005, provides: "46.2 Account: summary order (1) If a party claims an account, or makes a claim which involves taking an account, the court may, on application by that party at any stage of the proceedings: (a) order that an account be taken, and (b) order that any amount certified on taking the account to be due to any party be paid to him or her. (2) The court may not make an order under subrule (1) (a): (a) against a defendant who has not filed an appearance, unless he or she is in default of appearance, or (b) if it appears that there is some preliminary question to be determined." 48In Nevill and Ashe, Equity Proceedings with Precedents (NSW) (Butterworths, Sydney, 1981), at [301], the learned authors write: "In Equity it is often the case that the proceedings cannot be completely disposed of or finally determined until certain accounts or inquiries have been taken or made. They are usually alternative remedies although an inquiry is often necessary in an administration proceeding for account. The need for accounts arises where between the parties there is a liability to account. After the account or enquiry is concluded further considerations may be given in the proceedings. An order for account or enquiry is therefore a necessary preliminary before the rights and interests of the parties can be ascertained with any accuracy in respect of the subject property. Usually the account is a procedure to ascertain the monetary dealings of the parties in respect of the subject property and to determine with precision the balance due between them. After the balance is ascertained orders are made as to the rights of the parties to that balance." 49In Glazier Holdings Pty Ltd v Australian Men's Health Pty Ltd (No 2) [2001] NSWSC 6, Austin J set out the general principles, which the Court should follow when making an order for an account for administration. At [37] - [42], his Honour said: "Order for an account of administration 37 An order for an account of administration is made for the taking of accounts of money received and disbursed by the person who is responsible for the administration of a business enterprise or fund or other property, and for payment of any amount found to be due by that person upon the taking of the accounts. For example, the Court routinely orders the taking of accounts of the administration of an estate by an executor, or upon the dissolution of a partnership, or of the administration of property by a mortgagee in possession, or of a trust fund such as a solicitor's trust account. In such a case the making of the order need not imply any wrongdoing by the defendant. Order for an account of administration in common form 38 The usual form of order, referred to as an order in common form or for common accounts, requires the defendant to account only for what he or she has actually received, and his or her disbursement and distribution of it. The defendant prepares accounts and it is open to the other parties to surcharge or falsify items in those accounts. A surcharge is the showing of an omission for which credit ought to have been given, while a falsification is the showing of a charge which has been wrongly inserted, the falsifying party alleging that money shown in the account as paid was either not paid or improperly paid: Parker's Practice in Equity (New South Wales) (2nd ed by GP Stuckey and CD Irwin, 1949), p 269. Part 48 Rule 6 of the Supreme Court Rules preserves these procedures for challenging the account, while abandoning the arcane terminology of the Chancery Practice. Order for an account of administration on basis of wilful default ... 42 ... On a falsification, the onus is on the accounting party to justify the account, unless the account is a settled account (not relevant in the present case): Parker , p 269; Daniell's Practice of the High Court of Chancery (5th ed, 1871), p 1120ff, p 575ff; Seton's Forms of Judgment and Orders (6th ed, 1901), Vol II, p 1356ff, p 1382ff; and note the forms of falsification and surcharge in Miller and Horsell's Equity Forms and Precedents (1934), p 195-196; and as to settled accounts, see Pit v Cholmondeley (1754) 2 Ves 565, 28 ER 360. An accounting on the footing of wilful default leads to an order requiring the defendant to replenish funds wrongfully depleted by him or her and in that sense to make restitution for the benefit of the plaintiff." 50In Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146, at [13], Giles JA said that under an order for taking accounts in common form: "... the accounting party accounts only for what has actually been received and disposed of. The other party to the accounting can challenge the accounting party's account by asserting that more was received (in the old terminology, surcharging) or by asserting that less was disposed of (in the old terminology, falsifying)." 51In Chong v Chanell [2009] NSWSC 765, Brereton J noted at [7]: "A trustee is accountable for the funds it receives and holds, which constitute the trust property. What that means is that a beneficiary of the trust is entitled as a matter of right to have the trustee account in common form for the trust assets. In order to obtain an account in common form, the beneficiary does not have to prove any breach of trust; it is an entitlement as of right arising from the relationship of trust. The account is required to list the trustee's receipts and expenditures. When the trustee provides an account in common form, the beneficiary is entitled to object to any of the entries in that account. If the beneficiary wishes to assert that the trustee has in fact received more than is shown in the accounts, the objection is traditionally called a surcharge; the beneficiary bears the onus of proof on a surcharge. But if the beneficiary alleges that an expense has not been incurred, or has improperly been incurred, that is traditionally called a falsification and in a general taking of accounts, the accounting party - relevantly, the trustee - bears the onus of proof in respect of falsifications [Parker's Practice in Equity (NSW), 2nd edn, Law Book Company; Ritchie's Uniform Civil Procedure, [46.75]], although the case usually cited for this proposition, Pit v Cholmondeley (1754) 2 Ves Sen 565, (1754) 28 ER 360, deals rather with the exception (where there are already settled accounts) than with the general rule where there are not already settled accounts. It follows from this analysis, and from the very principle that the trustee is accountable for the trust assets in its possession, that the trustee - here, the first defendant - must bear the onus of proof where authority for a disbursement by the trustee is put in issue." 52In Juul v Northey [2010] NSWCA 211, McColl JA (with whom Basten and Campbell JJA agreed) said at [194]: "An order that an account be taken and that the defendant pay the amount found to be due on the taking of such accounts, particularly one which has been entered, will constitute a final order which cannot thereafter be varied: Meehan (at [23], [34], [45]). However an order merely for the taking of accounts, under which the proceedings are adjourned for further consideration will not determine the plaintiff's claim for relief and is characterised as an interlocutory order - it will not be a "perfect judgment" until an order that money be paid: Meehan (at [33]); see also Carantinos v Magafas [2008] NSWCA 304 (at [145]) per Campbell JA." 53The matter was listed before me, initially, for directions on 30 November 2011, when I directed, without opposition, the Defendant to file and serve an affidavit setting out all the property of the deceased's estate that he had received; what had been done with that property; and how distribution of any proceeds of sale of that property, or any part of it, had been disbursed, when, and to whom, and in what circumstances. 54I formed the view, then, that by adopting, in effect, a summary procedure, the monetary dealings of the parties would be made clearer and that I would then be able to determine the amount, if any, due to the Plaintiffs, or any of them, from the Defendant. Such an affidavit was also likely to shorten the duration of the hearing and then enable a "perfect judgment". 55The Defendant did not dispute that an order of the type that I made could, or should, be made. I also took this course in order to keep costs to a minimum and in accordance with s 56 of the Civil Procedure Act 2005. 56I am satisfied that the Defendant has attempted to comply with the direction that I made. He filed and served an affidavit sworn 20 January 2012. In addition, for reasons to which I shall come, he says that he has produced all documents that he has in his possession. It was not put to him that he had other documents that had not been produced (although the evidence that he gave regarding the destruction of documents was the subject of challenge). 57In the circumstances, I cannot see any utility in making a further order for an account to be taken. Having received the Defendant's affidavit, the Plaintiffs accepted that this was so. 58In accordance with another direction made on the same day, the first and second Plaintiffs served one affidavit each going to what she and he had received from the Defendant. A copy of each affidavit was read in the proceedings. There was no evidence filed, or served, by or on behalf of, the third Plaintiff. 59In this case, the Plaintiffs are, in effect, alleging a falsification. Accordingly, the onus is on the accounting party (in this case, the Defendant) to prove what was distributed to George and to the second and third Plaintiffs.
Entitlement to a Receipt 60There can be no doubt that the legal personal representative, on payment or distribution to a beneficiary, is entitled to a receipt. It is said in Williams, Mortimer & Sunnucks' "Executors, Administrators and Probate" (1982), at 921 that: "To obtain an effective discharge [a personal representative] is, therefore, concerned to obtain a valid receipt from the proper recipient of the legacy or interest in question. The receipt of residuary legatees will normally be given by signing the residuary accounts." 61The fact that the residuary beneficiaries were of foreign domicile did not prevent the Defendant from obtaining a valid receipt: In Re Hellmann's Will (1866) L.R. 2 Eq. 363; Re Schnapper [1928] Ch. 420. 62In this case, the Defendant admits that he did not request either George or Dimitri's children to give him a receipt for any money distributed to each of them. Nor did he confirm with each, in writing, that he and she had received all to which he and she was entitled out of the deceased's estate.
The Hearing 63The Defendant appeared in person, although, at his request, and without opposition from counsel for the Plaintiffs, I permitted his daughter, Ms Nadine Pesor, who also acknowledged that she had no legal training, to act as a "McKenzie" friend (see McKenzie v McKenzie [1971] P33). Thereafter, she sat at the bar table, with the Defendant, taking notes, quietly making suggestions to him, guiding him, generally, in relation to the conduct of the proceedings and providing other assistance. She did not seek to address the court or otherwise take an active part in the proceedings. 64Even though the evidence of the first and second Plaintiffs was, in part, disputed, no notice to attend for cross-examination was given to any of the deponents whose affidavit was read and neither of those Plaintiffs was cross-examined. Each of the Plaintiffs currently lives in the Ukraine, in each case, in a somewhat remote area. There may have been some difficulty in arranging for either to be cross-examined had notice been given. 65In Seymour v Australian Broadcasting Commission [1977] 19 NSWLR 219, at 236, Mahoney JA said: " Browne v Dunn provides an illustration of one of the ways in which a trial may miscarry. Where, in a civil case, a witness is not cross-examined, it may normally be assumed that the evidence of that witness is not in contest. Therefore, as was there decided, in such a case a party who has not cross-examined a witness will not normally be entitled to submit in address that the witness's evidence should not be accepted. But the circumstances of the particular case may negative such an assumption. Whether it is right to make such an assumption will depend upon, for example, whether counsel has at the time, given an adequate reason for not cross-examining the witness or otherwise made it clear that it is not a proper case in which to make that assumption; ibid at 71 per Lord Herschell LC. It may be that the witness's evidence is fanciful or such as not to warrant cross-examination; ibid at 79 per Lord Morris; or that cross-examination is foregone for other adequate reasons, for example, delicacy; see Phipson on Evidence, 12th ed, (1976) par 1543 at 618 - 619 and Halsbury's Laws of England, 4th ed, vol 17, par 278 at 194. Similarly, failure to cross-examine a witness may not found such an assumption or render the course of the trial unfair if it is clear from the manner in which generally the case has been conducted that his evidence will be contested. This was pointed out by Lord Herschell (at 71). The nature of the defendant's case and the particulars given, and otherwise the conduct of it make it sufficiently clear that such an assumption is unwarranted and there has been no surprise or prejudice concerning the matter." 66In the circumstances, and in light of the evidence of the Defendant, I do not take his failure to cross-examine the first and second Plaintiff as acceptance of the Plaintiffs' case. 67Mr Claudius Bilinsky, who had sworn two affidavits, made himself available for cross-examination, and was cross-examined, by the Defendant. 68Notice was given for the Defendant to attend for cross-examination and he was cross-examined by counsel for the Plaintiffs. Before the cross-examination, I gave him an opportunity to give oral evidence of "any other matters ... you forgot to put in your affidavit, or [that] you remember since your affidavit was sworn, or which you wish to say in reply to the affidavits that you have read on the other side". He took up this opportunity. 69At the conclusion of the cross-examination, I invited the Defendant to give evidence about any matters arising out of the evidence given by him in cross-examination. I also asked him some questions about aspects of his evidence. 70I shall next deal with the evidence of the witnesses in more detail.
The Plaintiffs' Evidence 71The first affidavit relied upon by the Plaintiffs was an affidavit of Claudius Bilinsky, sworn on 8 June 2011, which was, essentially, a formal affidavit. 72Mr Bilinsky swore another affidavit on 31 January 2012 to which he annexed some copy documents. The first was a copy letter, dated 17 August 2004, from Ukriniurkoleguia, to his firm, Horowitz & Bilinsky (in the Ukrainian language). The second was an English translation of that letter which, broadly speaking, refers to the death of the deceased, to the Defendant, and instructions for "the conduct of this matter" and advice "of the result of your investigations of the deceased's assets". (It appears not to be in dispute that Ukriniurkoleguia is a statutory association of lawyers and that it represents the foreign interests of some Ukrainian citizens in various parts of the world, including Australia.) 73The next document is a copy of a letter, dated 18 August 2004, sent by facsimile transmission to Ukriniurkoleguia from Mr Bilinsky, which was in the following terms: "Further to your fax of the 17 th of August we advise that we have spoken to John Pesor from Adelaide who advised us as follows:-
The Plaintiffs' Evidence that was rejected 99The final affidavit upon which the Plaintiffs sought to rely was an affidavit of Danylo Kurdelchuk sworn on 26 January 2012. He is an Attorney at Law practicing in the Ukraine. He has been in practice for 45 years and is the President of the Ukriniurkoleguia. He said that he "is familiar with the laws of the Ukraine and the rules regarding the importation and export of monies into and out of the Ukraine". It is clear from what follows that the deponent was seeking to give expert evidence. 100There was no compliance with Uniform Civil Procedure Rules, rule 31.19(1), which provides that any party (a) intending to adduce expert evidence at trial, or (b) to whom it becomes apparent that he, or she, or any other party, may adduce expert evidence at trial, must promptly seek directions from the court in that regard. 101Accordingly, pursuant to rule 31.19(3) unless the court otherwise orders, the expert evidence may not be adduced at trial. 102When I raised this matter with the Plaintiffs' counsel, he submitted that the matters stated in the affidavit were non-controversial. The Defendant stated that he did not know whether the matters stated were accurate and that he had only recently received a copy of the affidavit. I confirmed with the Defendant that he had not asserted in his affidavit that he had complied with any laws regulating foreign currency being brought into the Ukraine, or that he had followed procedures to bring foreign currency into the Ukraine, either in 1996 or in 1999. 103In view of the date of the swearing of the affidavit, the date when a copy of the affidavit was likely to have been served, and for the other reasons referred to above, I did not "otherwise order" and the evidence was not permitted to be adduced.
The Defendant's Evidence 104The Defendant said that as he was residing in Adelaide at the time, Ms O'Neil arranged the sale of the Kanwal property and that she engaged the real estate agent and the lawyer who acted on the sale. He also said that following the sale of that property, "I opened an account in the name of 'Trustee Estate M Holovka" with the Flinders Credit Union into which the estate funds were paid". 105The Defendant annexed to his affidavit a copy of a letter, dated 11 July 2011, from Australian Central Savings & Loan, which he said was the successor of the Flinders Credit Union. The letter referred to contact having been made, to being "unable to get in touch with you using the details provided", and to the author having contacted "the archiving department who have advised we don't keep records of closed memberships that are over 7 years old". 106After referring to the sale of the Kanwal property, the Defendant swore: "13. I paid Ruby O'Neill 50% of this amount, less her share of the selling costs. 14. Subsequently over a number of months ending in April of 1996 I converted the balance into American dollars in denominations of US$100, as this amount was least likely to draw attention by others in the Ukrainian village and was not too bulky to carry. Now produced and shown to me and marked "JP6" is a true copy of the Ozforex historical yearly average exchange rate for 1990-2012 for the exchange of Australian dollars into US dollars. I note that the yearly average rate in 1996 was 0.782833 ... 16. The way in which I transported the money was to place it in each case inside the gift packages my wife had prepared for the members of the Holovka family. She had painted them some silk scarves and added other trinkets like Australian Tea towels. These were placed in cardboard tubes and wrapped in gift wrap. I used a hand carry bag as carry on luggage on the plane trip to Prague. This made me look like a local. I am of Ukrainian parentage and so looked no different from others in that region of the Ukraine, being able to speak and read Ukrainian was an added benefit. 17. In April to May of 1996 I travelled to the Ukraine via Prague and then by train to Uzhhorod (on the Ukrainian border). I then changed trains to travel to Khust and then travelled by bus from Khust to Horinchevo Village. There I met with Olena Bilyak and from there travelled to Monastyrets Village (a short distance away) and met with Olena Harasym (the daughter of the late Dimitri Holovka) and with George Holovka who was living next door to Olena Harasym. 18. I was told by Olena Harasym that her Brother Vasyl Holovka was coming to visit me at Monastyrets Village as I was unable to travel to his house in Dubyshche Village at that time. However he had not arrived by the time I had to leave. 19. I gave George Holovka his share of the proceeds of sale of the said property and I gave her share to Olena Harasym. I left Vasyl Holovka's share with his sister Olena Harasym. These payments were all in American Dollars (one hundred dollar notes). ... 21. Having met various family members I then travelled by bus to Livov and then returned by train to Prague and from there home to Australia. 22. In 1998 I sold the Deceased's property at xx xxxxx Flagstaff Hill South Australia for an amount of $40,000.00 and again in this regard I rely on the instrument of transfer being Exhibit G referred to in the Affidavit of Claudius Bilinsky sworn the 8 th day of June 2011 filed in the proceeding as I do not have any documents relating to the said sale or the costs incurred. The conveyancer, Oakridge Landbrokers acted for me. 23. I paid Ruby O'Neill 50% of the consideration being $20,000.00 less her share of the selling costs. 24. Prior to travelling again to the Ukraine in 1999 I again converted the balance remaining into American Dollars of $US 100 denomination. Once again the moneys were transported in a similar fashion to that described in the preceding paragraph 16 of this my affidavit, within gifts prepared for the members of the Holovka family. ... 26. I then in May travelled to the Ukraine via Prague and train to Livov. 27. I then sent Vasyl Holovka a telegram and met him at the Hotel Livov in the city centre a day or so later. He told me at that time he did receive the money I had left with his sister Olena Harasym in 1996. ... 31. In 2008-2009 I disposed of all papers relating to the estate." 107The Defendant also stated in his affidavit that it was the deceased who gave him "detailed instructions on how to travel to [the Ukraine] in the event of his death and was adamant that I take the inheritance to his Ukraine family in hard currency as nobody there used banks and the banks were corrupt". 108The Defendant says, under oath, that he no longer has any documents that are relevant to the distribution of the estate. It will be necessary to refer to his oral evidence on this topic shortly. 109Thus, I must now adjudicate whether the payments alleged to have been made by the Defendant to each of the Plaintiffs were, in fact, made, and where two of them have denied receiving all that is said by the Defendant to have been paid, in circumstances where there is inadequate recording of the transactions (or at least the Court is not presented with an accurate recording of the transactions).
Factual Dispute - Determination 110In considering the Defendant's evidence, it is important to remember what Hodgson JA said in Ho v Powell [2001] NSWCA 168; (2001) 51 NSWLR 572, at 576: "14. There is a long-standing controversy whether the civil standard of proof requires a numerical probability in excess of 50 per cent (see Davies v Taylor [1974] AC 207 at 219), or belief amounting to reasonable satisfaction (see Briginshaw v Briginshaw (1938) 169 CLR 638 at 642-3). My own opinion is that the resolution of the controversy involves recognition that, in deciding facts according to the civil standard of proof, the court is dealing with two questions: not just what are the probabilities on the limited material which the court has, but also whether that limited material is an appropriate basis on which to reach a reasonable decision. I discussed this in some detail in an article published at (1995) 69 ALJ 731 (D H Hodgson: "The Scales of Justice: Probability and Proof in Legal Fact Finding"). 15 In considering the second question, it is important to have regard to the ability of parties, particularly parties bearing the onus of proof, to lead evidence on a particular matter, and the extent to which they have in fact done so: cf 69 ALJ at 732-733, 736, 740. As stated by Lord Mansfield in Blatch v Archer (1774) 1 Cowp 63 at 65; 9 8 ER 969 at 970:) "... [A]ll evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted". See also Azzopardi v The Queen (2000) 75 ALJ 931 at 935 [10]; 179 ALR 349 at 353 [10]." 111I also remember the oft-quoted passage of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336, at 361-362: "The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality ... it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences." 112Finally, I refer to s 140 of the Evidence Act 1995, and in particular to s 140(2) which imports the principles in Briginshaw v Briginshaw in requiring a court, when considering whether it is satisfied on the balance of probabilities, to take into account the gravity of the matters alleged in relation to the question: MM Constructions (Aust) Pty Ltd and Anor v Port Stephens Council (No 6) [2011] NSWSC 1613 at [262] - [264]. 113The principal factual dispute relates to what amounts the Defendant distributed to each of the persons in the Ukraine entitled to share the deceased's estate. This requires me to assess the credit of the witnesses. 114There is no reason not to accept the evidence of Mr Bilinsky. No submission to the contrary was made. It follows that I am able to accept the contents of the letter of August 2004 that he wrote, in which he outlined what he had been told by the Defendant, as accurately recording that conversation. 115I have earlier referred to parts of what Mr Bilinsky was told and to the acknowledgement of the Defendant, that those parts would then have been wrong. In this regard, I do not accept the submission made by the Defendant that he did not know who Mr Bilinsky was, and that he was concerned whether any information provided would put the Plaintiffs in jeopardy. Such an explanation does not find its way into the affidavit of the Defendant and it was not suggested to Mr Bilinsky that he had not identified himself, sufficiently, to enable the Defendant to know his identity and the purpose of his telephone call. 116Furthermore, part of what was recorded as having been said by the Defendant, seems to accord with the version of what the first and second Plaintiffs say occurred when the Defendant went to the Ukraine and what he did whilst there in making gifts to members of the deceased's family and, in this way, "to look after the family in the Ukraine if he could". 117No reason why the first Plaintiff would assert, under oath, that she received two amounts, being US$200 and US$1,200 respectively, from the Defendant was advanced during submissions. Bearing in mind she acknowledged that she was not a beneficiary, to make that assertion did not advance the case that an account was required and/or that there had not been a full distribution of the estate to which her father, George, was entitled. 118Furthermore, it was not suggested on behalf of the first Plaintiff that all of the amounts that the first Plaintiff acknowledges having received herself, or that George received, should not be taken into account in determining the entitlement of the first Plaintiff. Asserting that some amounts had been distributed, would reduce the amount to which she is now entitled. 119Nor was any reason advanced why the second Plaintiff would assert, under oath, that the two amounts distributed by the Defendant (one of which was given to him by his sister) were received by his wife, if that were not true. It has not been suggested that there was any reason for the Defendant to make a gift of each amount to her. 120Furthermore, it was not suggested on behalf of the second Plaintiff that all of the amounts that his wife received from the Defendant, should not be taken into account in determining the entitlement of the second Plaintiff. Again, to accept this, would reduce the amount to which he is now entitled. 121In the circumstances, I consider that there is no reason to reject, as implausible, the evidence of the first and second Plaintiffs. 122In relation to the Defendant's evidence, I allowed him an opportunity, before cross-examination, to respond to any parts of the Plaintiffs' affidavits that had been read which he had not had an opportunity to respond to in writing. In substance, the matters that he responded to related to denying that he had paid only the amounts that each of the first and second Plaintiffs had said he had distributed. He also denied that he had said to the second Plaintiff anything about having an envelope for the relatives that he had left in Australia. 123The following features are important in considering whether I should accept his evidence on the issue of the distribution of the deceased's estate to the beneficiaries in the Ukraine: (a) There is no evidence that the Defendant published notices in, or to the effect of, the form then prescribed by the rules of Court requiring the claims of beneficiaries, creditors and other persons in respect of the assets of the estate of the deceased, to be submitted to the executor, at the expiration of which period for submitting those claims, the executor could distribute the assets, or any part of the assets of the estate: s 92 of the Wills, Probate & Administration Act . (b) The Defendant did not provide any detailed information to any of the Ukrainian beneficiaries about the nature and value of the deceased's estate. He did not even provide a copy of the deceased's Will. His first letter to them, in October 1994, was vague in the extreme, although it did identify some of the beneficiaries named in the Will. (c) Although he said that he discussed the estate with the Plaintiffs when he was in the Ukraine, the Defendant did not include any of the conversations in his affidavit. (d) His evidence about his reason for using a number of different Australian financial institutions to convert the Australian dollars into American dollars was implausible and demonstrates, to my mind, that if he did this, his real reason was that he did not wish to inform one bank that such a large amount was being converted into cash and to American dollars. It was not, as he alleged, that it took time to obtain those dollars from one bank. His evidence was as follows: '"Q. When you converted that money from Australian dollars to American dollars, I take it that money had to have been ordered in by the bank? A. It would have been a number of different institutions. Q. You bought American dollars from a number of different Australian institutions? A. Yes. ... Q. On the currency conversion you mentioned that you used different institutions for that? A. Yes, I did. Q. Why? A. I just didn't want to make it obvious from one institution a large amount of withdrawals, they only hold so much American dollars at one time, so you have to order it in. Q. I am having some difficulty understanding. You didn't want to disclose what? A. I didn't want to make it a big lump sum withdrawal from one institution. I actually did it over a few different institutions. Q. Why? A. Because they didn't have a whole lot of currency sitting, they have to get it in, it is not always available." ... "Q. In your affidavit, however, you say that you undertook the process of converting this money over the course of a number of months, ending in April 1996? A. That could have been a couple of months, I am not sure. Q. If it was over a number of months why did you need to visit more than one bank? A. It was just a convenient thing at the time. Q. Wouldn't it be more convenient to change the money with one financial institution, particularly if you have given yourself a number of months to get the $75,000? A. It was something I did as I went along, I wanted to make sure I had the cash before I left. If you order the money in there is no guarantee you will get it in. Q. You are giving yourself a number of months? A. That is not always enough. Q. You knew that before you visited the bank? A. No, I didn't know but they told me when I went to the first bank it sometimes takes time to get the money in. They do it according to the money they collect. Q. Did they tell you? A. Sometimes it takes months. Q. You allowed yourself a number of months to convert it? A. I went sometimes back to the same institution again. Q. You don't say that? A. It was detail I had not considered to be relevant. ..." (e) The Defendant gave evidence about his awareness of restrictions on taking cash currency out of Australia on each occasion that he did. In this regard, I point to the following evidence: "Q. You told Mr Bilinsky that you were aware that there was some restriction on taking money overseas? A. Yes. Q. Is that a fair way --? A. -- Of looking at it, yes. Q. You knew that before you went overseas with the money? A. I did. ... Q. Taking it in cash knowing what you knew previously, namely, that there were currency restrictions? A. Yes, yes, yes." (f) It is clear that, whatever the currency regulations then (in 1996 and in 1999) were in Australia, or in the Ukraine, the Defendant did not seek to ascertain, or to comply, with them. This suggests some dishonesty on his part. (g) He accepted that if he had taken $75,000 in US$100 notes, as he asserted in his affidavit, that would have meant that there were 750 notes that would have been included with the silk scarves and other trinkets in "cardboard tubes and wrapped in gift wrap". He said he "used a hand carry bag as carry on luggage" on the first trip. On the second trip, "the moneys were transported in a similar fashion to that [previously] described". He said: "Q. In any event on your evidence is this right: that in May 1996 the amount that you would have taken with you was about US$75,000? A. Yes, it would have been May 2006? Q. 1996, that was your first visit? A. Yes, that would be about the right amount. Q. You have told me that it was carried on your person in luggage? A. Yes. Q. And it was disbursed through various items of your hand luggage? A. That is correct. Q. Have I understood you correctly? A. Yes. Q. Can you remember what dominations the U.S. dollars were? A. I specifically remember them, it was $100 notes. Q. So if it had been $75,000 or thereabouts, that would mean, would it not, that there would have been 750 notes? A. Yes. Q. It is a lot of notes? A. Yes, they roll up very small. Q. That is a lot of notes? A. Yes. Q. And you say you carried that on your person? A. I did, I had it in tubes like, not post it tubes, but gift tubes but it was inserted in those tubes." (h) In relation to each trip, he travelled by plane, train and automobile. He acknowledged the personal danger that faced him in carrying large amounts of cash overseas. In this regard, his evidence was: "Q. So roughly US dollars equals $76,000 in cash? A. Correct or thereabouts, yes. Q. You would agree that is a significant sum of money? A. It is a significant sum of money. Q. Particularly to take on your person in cash? A. It is indeed. ... Q. It did not even occur to you that going through any countries en route that would be a problem? A. I was more concerned about my personal safety to be clear. ... Q. You were aware of the dangers physically to your person for carrying that money out with you? A. I was very aware of that, yes. That was my primary concern." (i) He also acknowledged the risk, although he denied appreciating the severity of that risk, in taking cash, in each case, of more than $10,000, out of Australia and into the Ukraine. His evidence was as follows: "Q. It take it it follows from that acknowledgment and from the secretive manner if I could put it that way in which you took the money out of Australia and brought into the Ukraine that you did not make a declaration of such a large sum to the authorities? A. No I didn't. Q. And the reason you didn't do that was because you were aware that it would have been unlawful to transport large amounts of foreign currency to the Ukraine? A. No that is not the exact reason. ... Q. In leaving Australia with such a large amount of cash on you you were aware, I put it to you, by your manner in furtively taking that money out with you, you were aware that you needed to not make that come to light to the Australian authorities because of the severe consequences that could come to you if you were caught? A. No, actually my concern was more about the safety of myself at the time, not letting people know that I had that sort of cash on me. That was my prime concern. ... Q. In not declaring it you knew that you were doing something that was not legal, didn't you? A. Well I didn't know what the law related to that was. Q. You have just said that you were aware when you left Australia that you had to declare such sums and if you didn't there would be consequences. You knew that much, didn't you? A. Yeah well I was not aware of what the consequences would be. All I knew that there were some consequences related to not declaring it. Q. You must have known those consequences would be serious? A. I was not aware that they would be serious, no. Q. Are you saying that formal warning on a sign at a point of departure leaving the country is not something that ought concern you or give you much cause for though? A. Well I didn't know what the seriousness of that was, let's put it that way. Q. I put it to you that you were aware broadly that there would be serious consequences if you were caught and that is exactly why you secreted the money or claim to have secreted the money in the furtive manner in which you describe in your affidavit. What do you say to that? A. Well I did that more as a personal safety issue more than, there was no issue about taking the money out of the country in the sense it was destined to people in the Ukraine so that was not an issue. It was more an issue of personal safety for me. I felt that if there was information about me carrying money it would be dangerous for me to have money on me and my reason in carrying money is people did not know that I had that money on me." (j) Before taking any of those risks, he said that he made no enquiries at all about whether there were alternative, safer, methods of distributing the share of the deceased's estate to the Ukrainian beneficiaries. For example, he never made any enquiries of George, or of the second and third Plaintiffs, whether each had a bank account so that he could electronically transfer the money to each of them. He never thought to inquire of any Australian bank about the safest way in which he could transfer that money to the beneficiaries overseas. In such circumstances, it is hard to accept his assertion that he did not have any faith in the Ukrainian banking system and that he was not aware of any other means of transferring the funds. (k) The risks that he was prepared to take were grave ones considering that he had never met any of the beneficiaries and had no relationship with any of them. (l) There is no evidence that George or either of the second or third Plaintiffs had requested the Defendant to personally deliver the amounts to which each was entitled. In fact, the first letter, from the third Plaintiff to the Defendant, specifically stated: "All that our uncle willed us, we ask that you send us in USA dollars. If you wish to correspond with us we would be very happy to maintain contact with you." (My emphasis) (m) On the evidence that has been agreed, the total amount to which the beneficiaries in the Ukraine would have been entitled and which the Defendant says that he distributed to them was almost $100,000. He did not ask any of the beneficiaries for a receipt for any amount that he paid to him or her, and did not take any step to confirm, in writing, that the share to which each was entitled had been paid in accordance with the terms of the Will. Commonsense suggests that, in circumstances where he did not know, and was not in any way related to, any of the beneficiaries, and where the amounts said to have been distributed were large, a receipt should have been sought from each of the persons to whom distributions were made. I cannot accept the reason given by the Defendant for not obtaining a receipt in each case, namely that "it just never occurred to me" or that "I never thought there would be any issue with it". In this regard, any concerns to protect those beneficiaries that he had could have been avoided by simply obtaining a receipt acknowledging that he, or she, had received his, or her, share of the estate (without stating the precise amount received) or a similar document providing a release. The receipt would have been for his purposes only and did not have to be disclosed to any third parties. Alternatively, he could have written to each, following his second trip, confirming that the estate had then been fully administered. A copy of the letters could have been retained. Yet he did none of these things: "Q. You told Mr Bilinsky you never asked for a receipt? A. No, I didn't think it was necessary. Q. There doesn't appear to be any letters or copy letters that you wrote to them confirming that you had paid them what they were entitled to under the will, or anything like that, is there? A. If there was I don't have any, I only have the letters I have here. Q. But you have not given evidence of writing to them? A. Only what I have here. I only was lucky to find what I did now. Q. Do you suggest by that answer that you did write to them? A. It may have been, I don't know. Q. Do you recollect it? A. I don't recollect it. Q. And then you went back three years later and you gave them a total of about $19,000? A. Correct. Q. On this occasion? A. Yes. Q. Again, without asking for a receipt? A. That is correct." (n) The Defendant accepted that he made no private record about having paid the Ukrainian beneficiaries either. He said: "Q. ... I am saying that at the time you did not make any private record, you did not ask for a receipt from the beneficiaries on either occasion? A. No." (o) Nowhere in the Defendant's affidavit did he state precisely the amount he paid to each of the beneficiaries in the Ukraine. (p) I have earlier referred to the contents of the letter dated 18 August 2004 from Mr Bilinsky and what the Defendant is recorded as having told him and the errors of fact in what he said to Mr Bilinsky. Importantly, he did not tell Mr Bilinsky that he had distributed to each beneficiary the amount to which he, or she, was entitled. (q) In relation to the destruction of documents in 2008 or 2009, it is important that I refer to his oral evidence. He gave the following evidence: "Q. Were these the documents that you destroyed in 2008 and 2009? A. In about that period. I can't recall the exact date because I am just estimating. ... Q. So you now say that you cannot recall when you destroyed the documents? A. I would have been 2008 or 2009 but I don't know the date if that is what you are asking. Q. In that period? A. In that period, yes. Q. Sorry to go back, why was it that you destroyed those documents? A. It was because at that stage I considered that there was no point in keeping the documents any more. The estate had been finalised. It was already - how many years after, it was something like from 1999 to 2009 so more than ten years so the ten year period roughly and it seemed unreasonable to keep them much longer. There was no need for me to keep that for any reason, your Honour. Even the Australian Tax Office does not require you to have documents for longer than six years I think it is. ... Q. You did not think it was appropriate for you to hold on to these records? A. No I thought if any action was to have been taken it would have been taken at that time and it would have been addressed at that time because I am meaning, I have just gone into semi-retirement at this stage and I was clearing out all my documents I had in my filing, old paperwork from way back and I was just clearing through all my stuff when I came across these papers. I considered it to be of no further use. There was nothing that came about from this further, from the previous actions and at this time I felt no need to keep those papers for any longer. There was nothing in process. There was no further communication and I therefore thought what is the point to keep the papers which have no use. There is no sentimental value with me to them. ... Q. You say that you just jettisoned all the essential records dealing with your disbursement of moneys to the beneficiaries because in your view it was all obsolete and over and done with? A. Yes. ... Q. But you just conveniently threw it out? A. Not conveniently. It was an issue of having kept them for a long time and there was no action. Ruby I knew was deceased. I heard no further action from the Ukraine. They seemed to be happy at the time. When I left everybody was quite happy. I didn't see any point in holding any stuff that had no relevance. ... Q. You said to Mr Bilinsky you had destroyed the documents? A. Yes. Q. At some time in 2008 or 2009, you couldn't remember when? A. It is in that period, yes. Q. But it was shortly after you retired and you were cleaning out things? A. That is right, yes. Q. But then you gave evidence that you were working at least half of the time? A. Yes. Q. With the same employer? A. Yes. Q. Until June of 2011? A. Yes, that is correct. Q. How do those two answers fit together? A. Which period are you talking about?. Q. What I am trying to understand was this: you said you destroyed documents, and placed the time of the destruction at the time you retired? A. Or just after. I took transition to retirement and what I done there, at the time I was supervisor of an electronic workshop and I stepped aside and my 2 IC took over the position, I only worked there half time. I spent every second week in Melbourne at my daughter's place. Although I was working there, I was running down, so, and then I had accumulated some leave time. Q. But that was in 2011? A. I finished earlier than June, although I was on the books until end of June, 1 July was my ending time. Q. I was focusing when you told Mr Bilinsky earlier that you had retired, that prompted my question? A. It was like a transition to retirement. I changed my role in Flinders and my on time had been reduced significantly." (r) When asked to identify the documents that had been destroyed that would have established that he had actually made the distributions that he asserted, he referred to bank records, documents showing the conversion into American dollars. The Defendant accepted that none of the documents that he had destroyed would demonstrate, on its face, that he had made the distributions that he asserted that he made. He said: "Q. You have mentioned you destroyed the documents, what documents do you say there were that would have demonstrated actual payment? A. It would have been all the documents relating to the financial information that would have demonstrated there was payments made. Q. What documents were they? A. The bank account statements. Q. The bank accounts might have shown withdrawals of the amounts, but what documents were there that you destroyed that you say would establish actual payment be made? A. The actual payment, I don't have documents showing actual payments because I never got receipts. Q. Just a minute -- you don't have documents showing actual payments, such as receipts? A. From the beneficiaries, but I did have documents that showed the currency transfers. Q. Do you mean the conversion, currency conversion? A. Yes." 124In relation to the destruction of the estate documents by the Defendant, I refer to Yates v Halliday [2006] NSWSC 1346, in which case it was said by Lloyd AJ: "58 The accounts produced thus far by Mr Halliday are insufficient. Under the customary practice the proper accounts must show all receipts as well as payments, which should be supported by vouchers; and the executor or trustee must also furnish information sufficient to verify the fact of any investment transaction: H A J Ford and W A Lee, Principles of the Law of Trusts, Lawbook Co (looseleaf subscription service), at par [9080]. Moreover, as stated further by the authors of Principles of the Law of Trusts at par [9080]: 'The accounts must show all receipts as well as all payments, which should be supported by vouchers: White v Lady Lincoln (1803) 8 Ves 363; 32 ER 395 per Lord Eldon at 369, (ER 397); although oral evidence of disbursements may be allowed in the absence of vouchers: Christensen v Christensen [1954] QWN 37. The trustee must also furnish information sufficient to verify the fact of any investment. The accounts kept by the trustees should not be destroyed at the termination of the trust, even although the beneficiaries have given the trustees a release ... They may be needed at a later date if some question arises, or if an allegation is made against a trustee: Payne v Evens (1874) LR 18 Eq 356 at 367. A trustee who has destroyed the trust accounts may be viewed unfavourably: Gray v Haig (1854) 20 Beav 219; 52 ER 587 at 238 (ER 594) and may lose costs: Payne v Evens (1874) LR 18 Eq 356. Where accounts have not been kept the court will allow bank books, cheque books, solicitors' accounts and other documents belonging to the trustee or the trustee's estate to be inspected: Stainton v Carron Co (1857) 21 Beav 346; 53 ER 391 at 361 (396); Furness v Public Trustee [1921] 40 NZLR 898 at 901-902.'" 125The Defendant, in my view, should not have destroyed any documents relating to the deceased's estate. As I suggested to him, an issue had been raised in 2004, and, perhaps, prior to that time, and nothing had been suggested, expressly, to him, that could reasonably have led him to the view that all questions that had been raised, by 2008 or 2009, had been answered.
Determination 126The immediate task for the court is to evaluate all of the evidence and determine what are the probabilities on the limited material that the court has, and also whether that limited material is an appropriate basis on which to reach a reasonable decision. 127Having carefully considered the evidence advanced by the Defendant and remembering that he appeared in person at the hearing, I am not satisfied that the Defendant made the distributions to each of the beneficiaries in the Ukraine as he asserts. That he would take such grave risks for people he did not know seems highly unlikely. That he would not seek a receipt for the amounts said to have been distributed, which in total was almost $100,000, from persons who were no more than acquaintances and none of whom he had previously met in May 1996, beggars belief, particularly in circumstances where there were no other records that would establish the payments said to have been made. That he would destroy documents, when he knew that an enquiry had been made in relation to the estate of the deceased, albeit four years or so previously, seems foolhardy, even if none of those documents demonstrated actual payments. There is no suggestion that the documents were voluminous or that they could not easily be retained. 128In all the circumstances, I am of the view that the Defendant has not satisfied the burden of proving, on the balance of probabilities, that he made the distributions that he alleges to George and to the second and third Plaintiffs. I am also of the view, as stated earlier, that the evidence relied upon by the Plaintiffs is more plausible.
Further Procedural Direction 129During submissions, the Plaintiffs' counsel provided, by way of an aide memoire, a document that calculated the amount owed to each of the Plaintiffs, together with interest until the date of the hearing. 130The Defendant did not submit that no interest ought to be payable in the event that I did not accept his version of the events. This is not surprising, as the Plaintiffs did not have the use of the money to which each was entitled. I accept it is appropriate that interest should be paid. 131However, since the Defendant did not have a reasonable opportunity to consider the Plaintiffs' calculations set out in that document, I directed the parties to either agree on the rate of interest that would be payable, if any, and from what date interest would be paid, remembering that the Kanwal property was sold in October 1994 and that the Flagstaff Hill property was sold in October 1998. If agreement was not reached, I directed the Defendant to provide a similar document to me setting out his calculations and the basis for them. 132The Defendant forwarded to my Associate, and to the Plaintiffs' solicitors, on, or about, 14 February 2012, a schedule of calculations he submitted was appropriate in the circumstances. 133Subsequently, the Plaintiffs' counsel informed my Associate, and the Defendant, in writing, that the Plaintiffs did not accept the calculations of the Defendant and relied upon the calculations in the aide memoire. 134In the circumstances, it is necessary for me to consider, and decide upon, the competing submissions. I do not, however, propose to do the mathematical calculations. 135The Plaintiffs submitted that interest should be paid at the rate of 8 per cent per annum on the share of the proceeds of sale of the Kanwal property from 17 April 1995 until the date of hearing. On this calculation, the amount of interest payable on the share of the proceeds of sale of the Kanwal property passing to the first Plaintiff was calculated to be $51,306.85, whilst the interest for the other Plaintiffs on her, and his, share was $25,654.10 each. 136The Defendant submitted that interest should be paid at the rate of 8 per cent per annum on the share of the proceeds of sale of the Kanwal property from 9 October 1995 until 1 August 1998, and thereafter, until the date of hearing at the rate of 6 per cent per annum. On this calculation, the amount of interest payable on the share of the proceeds of sale of the Kanwal property passing to the first Plaintiff was calculated to be $39,495.52, whilst the interest for each of the other Plaintiffs on her, and his, share was $ 19,747.56 each. 137The Plaintiffs submitted that interest should be paid at the rate of 6 per cent per annum on the share of the proceeds of sale of the Flagstaff Hill property from 17 February 1999 until the date of hearing. On this calculation, the amount of interest payable on the share of the proceeds of sale of the Flagstaff Hill property passing to the first Plaintiff was calculated to be $7,301.71, whilst the interest for the other Plaintiffs on her, and his, share was $3,651.25 each. 138The Defendant submitted that interest should be paid at the rate of 6 per cent per annum on the share of the proceeds of sale of the Flagstaff Hill property from 16 October 1999 until the date of hearing. On this calculation, the amount of interest payable on the share of the proceeds of sale of the Flagstaff Hill property passing to the first Plaintiff was calculated to be $6,925.56, whilst the interest for the other Plaintiffs on her, and his, share was $3,462.78 each. 139Until 1 September 1998, the prescribed rate of interest on a legacy was 8 per cent per annum (Wills, Probate and Administration Regulation 1993, reg 5). Since then, until 1 March 2010, it was 6 per cent per annum (Wills, Probate and Administration Regulation 1998 which was replaced by reg 6(2)of the Probate and Administration Regulation 2003). Thereafter, until the date of hearing, the rate is described as the "relevant rate" and is defined in s 84A(3) of the Probate and Administration Act 1898. 140However, I note both parties calculated interest at the rate of 6 per cent per annum until the date of hearing on the Flagstaff Hill proceeds. 141There is nothing in the deceased's Will that refers to interest payable on an amount payable to any beneficiary. However, as stated previously, the Will does provide a power to the executor to postpone the sale, calling in or conversion of any part of the deceased's property, for so long as he thought fit. Accordingly, it seems to me that what might be regarded as the general rule that interest is payable from the expiration of one year after the deceased's death until payment is not applicable. 142Rather, it seems to me that the date from which interest should be calculated should be a reasonable time after the Defendant received the proceeds of sale. 143There is no dispute that the sale of the Kanwal property was by Transfer dated 9 October 1994. The net proceeds of sale should have been available for distribution, within a reasonable period after the Defendant ensured that all claims against the estate were known. Those claims included a claim under the Family Provision Act 1982. Bearing in mind that the deceased died on 16 April 1994 and that the date of sale of the Kanwal property was October 1994, the Defendant should have been able to distribute the proceeds by about mid-October 1995. 144Accordingly, I am satisfied that the date from which interest should be calculated on the share of the proceeds of sale of the Kanwal property to which George and the second and third Plaintiffs were entitled, is 17 October 1995. 145Since there is no dispute between the parties about the rate of interest (8 per cent) until August 1998, the amount that I have found should have been paid is to bear interest as and from 17 October 1995 at the rate applicable to unpaid legacies until 31 August 1998 and, thereafter, at the rate of 6 per cent per annum until the date of judgment. 146There is no dispute that the sale of the Flagstaff Hill property was by Transfer dated 16 October 1998. The net proceeds of sale should have been available for distribution, taking into account that the Defendant was entitled to a reasonable period of time to allow him to wind up the estate, from mid-February 1999. In my view, the appropriate date from which interest should be calculated, is 17 February 1999. From that date, until the date of judgment, the rate of 6 per cent per annum should apply. 147In the circumstances, I am prepared to certify that each of the Plaintiffs is entitled to the amount upon which mathematical agreement has been reached and interest calculated for the periods and at the rates stated above. I am also prepared to enter judgment for each Plaintiff against the Defendant, including interest. 148I cannot see any basis for not making the usual order for costs, namely that the Defendant should pay the Plaintiffs' costs of the proceedings. I direct the Plaintiffs' counsel to bring in short minutes of order that give effect to my reasons. 149I order that the Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules and the Court Books may be returned. 150Finally, I should commend both the Defendant and Ms Pesor for his, and her, conduct, and demeanour, throughout the hearing.
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: 12 March 2012
Bilyak
Pesor
(1938) 60 CLR 336
(2001) 51 NSWLR 572
(1959) 101 CLR 298
(2002) 54 NSWLR 146
(1988) 48 SASR 536
(1938) 169 CLR 638
Court certified the principal amounts mathematically agreed for each Plaintiff and entered judgment for each Plaintiff against the Defendant. Interest on the Kanwal share accrues from 17 October 1995 at 8% p.a. until 31 August 1998 and at 6% p.a. thereafter until judgment; interest on Flagstaff Hill share accrues from 17 February 1999 at 6% p.a. Defendant ordered to pay Plaintiffs' costs. Defendant's account of distributions rejected (paras 144-147, 127-128, 148).