Ms J Needham SC and Mr I Duane (8 September 2022) (Plaintiff)
Mr M Kearney SC with Mr A R Langshaw (Defendant)
Judgment (21 paragraphs)
[1]
FLC 92-555
In the Marriage of Yunghanns (1999) 149 FLR 247
Iphostrou & Iphostrou [2011] FamCA 20
Karlsson v Griffith University (2020) 103 NSWLR 131; [2020] NSWCA 176
Kyriacou v Raphis Securities Pty Ltd [2022] NSWSC 196
Leventis & Leventis [2021] FedCFamC1F 46
Lovine & Connor (2012) FLC 93-515; [2012] FamCFAFC 168
Macrina & Macrina [2021] FedCFamC2F 287
Mallet & Mallet (1984) 156 CLR 605; [1984] HCA 21
Marshall & Marshall [2015] FamCA 712
Marzol v Joubert; Marzol v Killen [2018] NSWSC 586
May & May [2022] FedCFamC1F 227
Medlow & Medlow (2016) 306 FLR 183; [2016] FamCAFC 34
Morris Finance Ltd v Brown (2016) 93 NSWLR 551; [2016] NSWCA 343
Mulford & Mulford [2019] FamCA 843
Novakovic & Novakovic [2012] FamCA 809
Osferatu & Osferatu [2012] FamCA 408
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578
Salvage & Fosse (2020) 61 FamLR 45; [2020] FamCAFC 144
Sirola & Sirola [2018] FamCA 1011
Skinner v Shine Pty Ltd [2019] NSWSC 1709
Smith v Jones (No. 3) [2022] NSWSC 1448
Sresbodan & Sresbodan [2013] FamCA 480
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Strahan & Strahan (Interim Property Orders) (2009) 241 FLR 1; [2009] FamCAFC 166
Sully & Sully (No 2) [2016] FamCA 706
Swift & Swift [2020] FamCA 991
Tasmanian Trustee Ltd v Gleeson (1990) 14 FamLR 189.
Valceski v Valceski (2007) 70 NSWLR 36
Verdon & Verdon (2020) 62 FamLR 573
Wilson v Minister for Land and Water Conservation for NSW (2003) 126 FCR 500; [2003] FCA 307
Xie v Li [2019] NSWSC 808
Zha & Wun (No 2) [2022] FedCFamC1F 576
Zschokke & Zschokke (1996) 133 FLR 375
Category: Principal judgment
Parties: Donna-May Bolinger (Plaintiff)
Ned Bell (Defendant)
Representation: Counsel:
Mr R Wilson SC; Mr J E F Brown (29 June 2022); Ms J Needham SC and Mr I Duane (8 September 2022) (Plaintiff)
Mr M Kearney SC with Mr A R Langshaw (Defendant)
[2]
Solicitors:
Ryan Walker Legal (Plaintiff)
Speed and Stracey Lawyers (Defendant)
File Number(s): 2022/163059
2022/92169
Publication restriction: Nil
[3]
Introduction
This judgment concerns different proceedings involving the estate of Colin Morton Bell (the deceased) who died testate, on 14 March 2022, leaving property in New South Wales.
As will be read, what the Court is asked to do, in the substantive, albeit different proceedings, is to determine what is the last valid testamentary instrument of the deceased; to determine whether there should be an alteration of property interests in favour of the deceased's wife in family law proceedings commenced whilst the deceased was alive, and which have been continued since his death by the parties in these proceedings, which have been cross-vested to this Court; and then, to determine a claim sought by the wife, and, separately, by a minor child of the deceased, each for a family provision order out of the estate of the deceased.
A significant amount of Court time has already been spent, no doubt at significant cost to the parties, in determining various, long running, interlocutory, and bitterly contested, disputes that have not finally determined the legal issues that exist between them. Both Lindsay J, and Slattery J, of this Court, have had to deal with different aspects of litigation involving the deceased and the parties in these proceedings.
These reasons, as will be read, deal with a further interlocutory dispute which simply highlights the level of dispute between the parties. Urging both sides to engage in discussions which would avoid further interlocutory argument and enable focus on, and consideration of, the substantive proceedings, fell on deaf ears. The legal contests have continued, and are continuing, with no quarter sought, or given, by either party.
An issue, raised by the Court, during the hearing, which also will be dealt with, relates to how to best case manage the different proceedings going forward.
Regrettably, it is necessary, first, to set out details of the various proceedings that have been brought by one, or other, of the parties, and the tortuous path that has led to these reasons for judgment.
[4]
The parties
I have considered s 121 of the Family Law Act 1975 (Cth) which makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses, involved in family law proceedings.
Although there was some discussion about s 121 and the possible anonymisation of the names of parties (Tcpt, 29 June 2022, p 3-4), neither party made any application for an order that the parties, in what I shall describe as the family law proceedings, cross-vested to this Court, should each be referred to by pseudonym or otherwise. Nor was it suggested, as it has been recently, in Smith v Jones (No. 3) [2022] NSWSC 1448 at [10] (Lonergan J), that "the making of orders protecting the identity of the parties by way of a pseudonym would protect the proper administration of justice in this case by ensuring comity with the scheme of anonymity mandated by s 121 of the Family Law Act."
It seems to me, bearing in mind the matters to which reference will be made, there is no choice but to identify the persons in the proceedings. As will be read, another judgment of the Supreme Court has already done so.
Donna-May Bolinger, the wife of the deceased (although they had separated), is one of the parties in the proceedings. Ned Bell, a now adult child of the deceased from a previous marriage, is the other party. For the avoidance of confusion, and because the parties appear in different capacities in the different proceedings, I shall refer to each, and other family members, after introduction, by his, or her, first name, respectively. I do not intend any undue familiarity.
[5]
The history of the different proceedings
On 10 November 2020, following the breakdown of their marriage, Donna-May initiated proceedings against the deceased in the Family Court of Australia (as it was then known) (SYCXXXX/2020) with respect to the property of the parties to the marriage, or either of them, altering the interests of the parties to the marriage in the property under s 79 of the Family Law Act. In those proceedings, she sought, amongst other things, an order that she receive 50% of the net property and superannuation entitlements belonging to her and the deceased, as well as the transfer to her, absolutely, of certain real estate in Woollahra ("the Woollahra property"), which was solely owned by the deceased.
Doing the best I can from the evidence read in these proceedings, directions hearings, in the Family Court, were held in these proceedings on 15 December 2020, 18 March 2021, 15 April 2021, 3 May 2021, 17 May 2021, 10 August 2021, 16 August 2021, 22 September 2021, 6 December 2021, 14 December 2021, and 6 May 2022.
Applications in a case were, apparently, filed in the Family Court:
1. On behalf of the deceased, on 12 March 2021, for the appointment of a case guardian (which application was determined on 29 March 2021).
2. By Donna-May, on 1 April 2021, for a review of the Registrar's decision appointing a case guardian (which application was withdrawn and dismissed on 22 September 2021).
3. On behalf of the deceased, on 14 April 2021, for leave to provide documents to the NSW Police (which application was determined on 20 April 2021).
4. On behalf of the deceased, on 4 May 2021, for the collection of personal property (which application was determined in Chambers on 31 May 2021).
5. By Donna-May on 8 November 2021, to have the proceedings cross-vested to the Supreme Court of New South Wales (to which I shall refer below); and
6. On behalf of the deceased, on 13 December 2021 for the appointment of a litigation guardian and an application for divorce (which application was determined, in part, on 20 December 2021).
Where, before property settlement proceedings are completed, a party to the marriage dies, the proceedings may be continued by, or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings: s 79(8) of the Family Law Act.
[6]
The relevant notices of motion
Although there appear to be a number of different notices of motion that have been filed and served, I shall refer, hereafter, principally, to the notices of motion which were the subject of the hearing before me and which are the subject of these reasons.
On 3 May 2022, Donna-May filed an amended notice of motion seeking several different orders, to which it is no longer necessary to refer.
On 9 June 2022, I made a number of directions and orders in relation to Donna-May's amended notice of motion, including:
"Directs the Defendant/Cross-Claimant to inform the Plaintiff/Cross-Defendant of the bases upon which any claim for interim relief will be sought by 10:00 a.m. on Thursday, 16 June 2022.
Directs each party to provide to the other an index of documents (notice of motion and any affidavits) upon which it is intended to rely in support of any claim for interim relief by 10:00 a.m. on Thursday, 16 June 2022.
Stands the matter over before Hallen J at 2:00 p.m. on Friday, 17 June 2022.
Orders that the matter be listed before Hallen J at 10:00 a.m. on Wednesday, 29 June 2022 with an estimated duration of one half day."
On 16 June 2022, Donna-May filed another notice of motion (incorrectly shown thereon as having been filed on 15 June 2022), this time in the family law proceedings, in which she sought, as against Ned (in his capacity as special administrator of the deceased's estate):
"1 An order that the Defendant pay to the Plaintiff a monthly sum of $40,000 or such other sum as the court deems fit from the Estate of [the deceased].
2 An order that the payments referred to in the previous order be made from the date of these orders until the final resolution of the proceedings.
3 Further, an order that the Defendant pay a lump sum in the amount of $2,000,000 or such other sum as the court deems fit, from the Estate of [the deceased] to the plaintiff.
In the alternative:
4 An order that the Defendant loan to the plaintiff a monthly sum of $40,000 or such other sum as the court deems fit from the Estate of [the deceased].
5 An order that the monthly loan referred to in the previous order be made from the date of these orders until the final resolution of the proceedings.
6 Further, an order that the Defendant loan to the Plaintiff a sum of $2,000,000 or such other sum as the court deems fit from the Estate of [the deceased] to the plaintiff."
With respect to each of the orders:
7 The Court notes it power to make these orders pursuant to ss 79(1), 80(1)(a), 80(1)(b), 80(1)(h), 80(1)(k) and 117(2) of the Family Law Act 1975 (Cth), s 92A of the Probate and Administration Act 1898 (NSW) and s 62 of the Succession Act 2006 (NSW).
8 The Court orders that the way in which payments made pursuant to these orders are to be characterised is a matter for the trial judge to determine pending final resolution of these proceedings."
[7]
Some brief relevant background facts
I pause here to observe that in dealing with the notices of motion, this Court, at this time, is not the appropriate forum to resolve factual disputes. Apart from everything else, the evidence read, at this stage, has not been tested. Much more work will have to be done to enable the Court to come to a concluded view about the facts that are in dispute (of which there are likely to be many).
However, it seems to me, that there is no real dispute about the facts referred to in this part of the reasons and they may be stated without provoking controversy.
The deceased was born in December 1941, and died in March 2022, aged 80 years. He left property, both real and personal, in New South Wales.
The deceased commenced a romantic relationship with Donna-May in 2010. In 2011, they commenced living together, and they were married in December 2014. There were no children of their marriage.
The deceased had three wives prior to Donna-May, being Louise Bell, Caroline Bell, and Emlen Gaudino, respectively. Louise and Caroline both predeceased the deceased. Emlen is still alive and is referred to by Ned as an "eligible person" within the meaning of that term in s 57(1)(d) of the Succession Act (a former spouse of the deceased).
The deceased and Louise had one child, Kate Perkins (nee Bell). The deceased and Caroline had one child, Ned, and Caroline also had a child from a previous marriage, who is a stepchild of the deceased, being Sophie Balderstone. Those three persons are the sole residuary beneficiaries named in the 2015 Will.
The deceased, as stated, also had a relationship with Gina Agathopoulos between 2008 and 2010. William was born in April 2010 and is named as an object of a testamentary discretionary trust which is formed under the 2015 Will (to which reference will be made).
On 22 November 2016, the deceased appointed Donna-May as his enduring guardian.
On 8 March 2018, the deceased suffered an arterial blockage and clot in the brain, or a 'stroke' and presented at St Vincent's Hospital.
In July 2018, the deceased was diagnosed with aortic valve endocarditis following which he had an Aortic Valve Replacement at the Mayo Clinic in the United States of America.
On 11 February 2019, the deceased appointed Donna-May and Ned to be his attorneys under an Enduring Power of Attorney.
[8]
The deceased's testamentary intentions
As stated, the deceased's last Will was the 2015 Will. It was duly executed.
In the 2015 Will, the deceased relevantly:
1. Appointed Grae Stewart McKenzie, David Alastair Provan (named in the Will as Alastair Provan), and Ned, as the executors;
2. Gave his former wife, Emlen, $1,000,000, in full discharge and settlement, pursuant to Clause 10 of the Financial Agreement made between them, provided that she survived him for 180 days and the Maintenance Guarantee had not ceased to have effect.
3. Devised to Donna-May, the Woollahra Property, free from all duties and taxes, and gave all his household goods, excluding the 'Excluded Items' which term was defined in the Schedule 4 to her.
4. Directed his Trustees to obtain a Valuation of the Woollahra Property, and that a sum equal to the 'Excess Amount' from the Valuation, as calculated in accordance with the Will, be divided between Ned and Sophie, conditional on them signing all the necessary documents to enable Donna-May to become the sole registered proprietor of the Woollahra Property.
5. Gave a gift of $1,000,000 to his long-time secretary, Kim Maree Garrow.
6. Gave William, $2,000,000 in the event that he had attained 25 years at the date of his death; or in the event that he had not yet attained 25 years, created a testamentary trust for the benefit of his son, to hold $2,000,000 on his behalf, until he attains the age of 25 years.
7. Divided the residue of his estate:
1. As to 40% to Kate;
2. As to 40% to Ned;
3. As to 20% to Sophie.
1. Released Ned and Kate from any amount to which each remained indebted to him.
At the hearing of the notices of motion, Mr Langshaw, junior counsel for Ned, confirmed, without demur from counsel for Donna-May, that there was no longer any dispute about the validity of the 2015 Will: Tcpt, 28 September 2022, p 13(33-42).
The statement made by Mr Langshaw, is now supported by Paragraph 6 of the amended Defence and Paragraphs 4, 5 and 6 of the further amended Cross-Claim which were filed on 27 September 2022, which stated:
"4. A declaration the Codicil dated 3 November 2020 is not a valid testamentary instrument of the deceased.
5. Order for a grant of letters of administration with the will dated 18 May 2015 annexed in solemn form of the Estate of [the deceased] be granted to an independent administrator.
Alternatively,
6. Order for a grant of letters of administration with the will dated 18 May 2015 annexed in solemn form of the Estate of [the deceased] be granted to the Cross Claimant."
[9]
The nature and value of the deceased's estate
The case is a significant one in terms of value.
On 16 June 2022, in the family law proceedings commenced by Donna-May, Ned filed an administrator's affidavit to which he annexed a copy of the inventory of property of the estate. The total value of the estate was said to be $128,780,459. (I shall omit, and shall continue to omit, any reference to cents. This will explain any apparent arithmetical miscalculation.) The estate was said to comprise:
Asset Value
Bank account with NAB ending #0267 $ 658,608 (as at 13 April 2022)
Bank account with NAB ending #9759 $ 26,600 (as at 13 April 2022)
Funds held by Public Trustee $ 929,318 (as at 14 April 2022)
Mini Cooper motor vehicle, S Chilli Hatchback 2011 $ 42,000 (E)
Tesla motor vehicle, Model S 100D Hatchback (2017) $ 165,000 (E)
Loan owing from Colin Bell Pty Ltd $ 5,300,000 (E)
1 ordinary share in Colin Bell (No. 3) Pty Ltd (ACN 624 65 994) $ 1
24,000 ordinary shares in Bell Asset Management (Holdings) Pty Ltd (ACN 078 023 248) $ 804,268 (E)
141,326,193 ordinary shares in Bell Group Holdings Pty Ltd (ACN 004 845 710) $84,555,707 (E)
17,333 ordinary shares in Carstairs Pastoral Pty Ltd (ACN 004 835 590) $ 7,949,248
1 ordinary share in Baratta Superannuation Fund Pty Ltd $ 1
The Woollahra Property $17,500,000 (E)
Bell Potter Securities trading account $10,849,708 (as at 20 April 2022)
Household contents Unknown
TOTAL $128,780,460
[10]
Furthermore, there was evidence, filed in the protective proceedings, suggesting that the deceased owned a 1/3rd share in a luxury sailing yacht, "The Southern Cloud". Whether the deceased owned this 1/3rd share as tenants in common, or as joint tenants, is not the subject of evidence. This asset was not included in the inventory of property. Counsel for Donna-May submitted, during the first day of the hearing: "I don't think there's any dispute, your Honour, that they owned a very valuable multi-million dollar yacht, which they used extensively, as well": Tcpt, 29 June 2022, p 45(12-13).
Apart from the issue of the yacht, Donna-May disputed the value of the estate, saying that its true value could not be determined until valuation evidence was obtained. Her then solicitor, Mr R C Walker, in an affidavit sworn 12 April 2022, asserted that the deceased's estate "is worth at least $180,000,000".
The parties agree that it will be necessary to obtain valuation evidence in the family law proceedings (which will also be relevant in respect of each of the family provision claims).
In any event, it is unnecessary to express a view as to which estimate of value is more correct. On either estimate, the deceased's estate is quite complex, and also, very large.
The Woollahra property is not generating any income for the estate as Donna-May lives there, rent free. A claim for mesne profits, in the event that she is ultimately found not to be entitled to have remained in occupation has been foreshadowed, by Ned.
[11]
Donna-May's financial situation
It is next necessary to write something about the financial and material circumstances of Donna-May.
I set out her evidence on this topic. I shall use the contents of her affidavit evidence as it was not suggested that I should not do so for the purposes of her application for an interim order. It is to be remembered that, at the present time, it remains untested.
As at the date of her affidavit, Donna-May's assets and liabilities were as follows:
Asset Value
Redfern Property $4,000,000
Darlinghurst Property $2,500,000
Superannuation $ 8,500
Monies in a Canadian Bank Account $ 181
Monies from her Mother's Estate (anticipated) $ 52,000 CAD (approx AUD$59,976)
Monies in Westpac Bank $ 16,516
TOTAL $ 6,583,886
Liabilities
Outstanding Legal Fees $ 355,520
Credit Card Debts $ 30,249
Mortgage on Darlinghurst Property with La Trobe Finance $ 473,095
Land Tax Liabilities $ 8,627
Debt to Sydney City Council $ 3,997
Debt to the Australian Taxation Office $ 36,903
TOTAL $ 908,391
[12]
It should be noted that Donna-May asserts that there is a charge on the Redfern Property so that if the property were sold, a lump sum of $2,000,000 will be required to be deposited into the New Benton Trust, of which Benton is the sole beneficiary. (Although it was asserted by counsel for Donna-May that there was documentation of this trust, that documentation does not form part of the evidence referred to at the hearing: Tcpt, 8 September 2022, p 45(39)-46(4).)
Donna-May receives weekly income of $1,145 consisting of rental income from a section of the Darlinghurst property, although she claims that the rent does not cover the outgoing and expenses for the properties she owns, including the mortgage repayments.
On 25 August 2021, Donna-May refinanced the mortgage registered on the property that she owns in Darlinghurst, which allowed her to transfer an additional $137,491 into one of her Westpac accounts.
As mentioned previously, pursuant to orders made by Lindsay J, between December 2021 and February 2022, deposits totalling $240,000 were made by the NSWTG. Donna-May asserted that these amounts have since been spent, in part payment of the legal fees ($591,318) that she has paid.
Donna-May disclosed that her average weekly expenditure was $10,435, although in her submissions this was increased to $10,915: Tcpt, 29 June 2022, p 78(13).
I am unable to place much weight on her evidence of the quantum of her expenditure as her senior counsel conceded that, other than the bank statements which show withdrawals, there was no evidence of how her weekly expenditure was calculated: Tcpt, 29 June 2022, p 79(8-50).
As stated, Donna-May, at least, indirectly, seeks a sum to pay off her debts, and to fund the costs of the Probate, family law and family provision proceedings, and to enable renovations to the Woollahra Property. She gives evidence of having been informed, by her solicitor, Mr R C Walker, that the likely costs, will be in the order of $1,860,000, including GST: Affidavit, Donna-May Bolinger, 16 June 2022 at pars 61-62.
It was not made clear why her legal costs could not, otherwise, be funded by, for example, her legal representatives taking a charge on one, or both, of her properties, or from the proceeds of sale of one, or other, of the properties that she currently owns: Tcpt, 29 June 2022, p 58(11-24); 67(38-42); 68(37-41).
[13]
Additional fact relied upon
One of the documents relied upon by Donna-May, in support of her amended notice of motion for an interim property order, was the Response, dated 3 May 2021, which had been filed on behalf of the deceased, in the family law proceedings. A copy of the Response, which was tendered on the first day of the hearing and marked Ex NMA1, includes, as part of the orders then sought by the deceased:
"Within 90 days of the making of these orders, the husband shall do all acts and things and sign all documents necessary to pay or cause to be paid to the wife, or as she directs in writing, the sum of $2,000,000."
As a term of any payment, an order was sought that Donna-May "do all acts and things and sign all documents presented to her by the husband as are necessary to assign to the husband, the whole of her right, title and interest and liability (if any) in any loan account (credit or debit) and/or unpaid distributions" in a number of entities defined in Paragraph 1.1 of the notations.
The Statement of Truth of the Contents of the Response appears to have been signed by Aaron Randell, "as Case Guardian for" the deceased.
(At the time of the Response, it appears that the Woollahra property was owned by the deceased and his brother Lewis Morton Bell, "as joint tenants in ½ share and by the husband…in ½ share as tenants in common": Paragraph 1.4 of the notations.)
There was no evidence of any loan account (credit or debit) and/or unpaid distributions, in any of the entities referred to, relied upon by either party in support, or in defence, of any notice of motion.
Donna-May submitted, in writing, that the contents of the order sought demonstrated "the deceased accepted Ms Bollinger would at a final hearing be entitled to at least $2,000,000".
I mention that on 28 June 2022, Ned had filed an "Amended Response to Initiating Application" in the family law proceedings, in which the principal order sought was that: "The wife's application for orders pursuant to s 79 of the Family Law Act 1975 is dismissed".
[14]
The Submissions - Donna-May
Counsel for Donna-May caused four sets of written submissions to be delivered.
I have earlier referred to the bases on which reliance for the orders that she sought was initially placed. In the first written outline of submissions, Donna-May's counsel submitted that the notice of motion did not tie the orders to any specific source of power, but rather that the orders could be made noting the various sources of power and leaving the precise characterisation of the orders to be determined by the trial judge.
In the event that the Court was not minded to take such a flexible approach, they submitted that any monthly payments should be characterised as interim family provision orders under s 62 of the Succession Act, and any lump sum payment as an interim costs order under ss 80(1)(h) or 117(2) of the Family Law Act.
However, in her second written outline of submissions, counsel submitted that as there was no agreement to leave the categorisation of the basis for the order until the final hearing, it was necessary for the Court to identify the source of the power for making any order, as it is the source of power that determines the necessary pre-conditions and relevant considerations for making the order: Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 at [30] (Brereton J), Strahan at [84].
Counsel made plain the basis of the claim for interim provision, noting:
"4. Whilst orders for interim provision and orders for payments for past and future costs are uncommon or exceptional in Probate and Family Provision matters, they are very common in Family Law cases."
Counsel for Donna-May submitted that the relevant power was to make a partial interim property order pursuant to the Family Law Act. They referred to s 80 of the Family Law Act which provides that the Court may make an order for payment in a lump sum (s 80(1)(a)) or by periodic payment (s 80(1)(b)) and may make such orders on an interim basis pending disposal of the proceedings (s 80(1)(h)). It was submitted that this power is a broad power, and that there is no justification for imposing limits on its ordinary meaning and operation in its application to s 79: Zschokke & Zschokke (1996) 133 FLR 375; Strahan at [122].
They went on to submit that there are two steps to enable an exercise of power to make an interim order pursuant to s 80(1)(h): Strahan at [118]. The first step was jurisdictional, to determine whether to exercise the power before a final hearing. This would depend on whether it was an appropriate case in order to do justice: Strahan at [127]. Three matters may be relevant to that determination, namely, a position of relative strength on the part of the respondent, a capacity on the part of the respondent to meet his, or her, own litigation costs, and an inability on the part of the applicant to meet her, or his, own litigation costs: Strahan at [90]; Zschokke at 392.
[15]
Submissions in respect of the hearing
On 14 October 2022, counsel for Donna-May provided a third outline of written submissions relating to the way in which the hearing of the various proceedings should continue.
They submitted that there appeared to be, potentially, three options being:
1. Option 1 - a large, approximately one-month long trial, with the Probate proceedings being heard first over the course of 10 days, the family law proceedings then being determined following the conclusion of the Probate proceedings (with evidence in the Probate proceedings being evidence in the family law proceedings), followed by a hearing of the family provision proceedings (with evidence in the Probate and family law proceedings being evidence in the family provision proceedings).
2. Option 2 - a 10-day hearing of the Probate proceedings with a break following the conclusion of that hearing. The purpose of the break would be to facilitate an opportunity for the parties to reconsider their appetite for further litigation, possibly with a requirement that the parties mediate. If the proceedings then continued, the family law and family provision proceedings could be heard consecutively, with the evidence in each of the former being evidence in the latter.
3. Option 3 - a 10-day hearing of the Probate proceedings in the Supreme Court, with the family law proceedings being transferred back to the Federal Circuit and Family Court of Australia. Any family provision proceedings involving Donna-May, or any other applicant, would be heard in the Supreme Court, after the family law proceedings are concluded.
Counsel for Donna-May submitted that the hearing should proceed in accordance with Option 1, or alternatively, Option 2.
It was submitted that Option 3 was the least convenient for many reasons, not least of which being the significant cross-over between the evidence in each of the proceedings.
The primary basis for this submission was that it is generally undesirable for cross-vesting transfers to go back and forth between courts. There is likely to be a long delay if the family law proceedings are heard in the Federal Circuit and Family Court of Australia. However, given the size of the asset pool and complexity of the family law proceedings, the matter could be heard in a pilot program known as the Major Complex Financial proceedings list pursuant to a Practice Direction dated 30 September 2021.
[16]
The Submissions - Ned
Counsel for Ned, initially, submitted that Donna-May's notice of motion should be dismissed on the grounds that Donna-May had failed to identify precisely upon which of the legal bases her application should proceed. It was submitted that Donna-May was simply asking the Court to order that she be paid the significant sum whilst deferring any question concerning the Court's power to do so.
Counsel relied upon several authorities which emphasised the importance in identifying the relevant source of power for any proposed order in this context: Paris King Investments at [30]; Strahan at [84]. It was submitted that the principles governing the Court's exercise of each of the powers relied upon by Donna-May were distinct, and, therefore, it was necessary for her to properly identify the precise power of the Court sought to be invoked, as well as establishing that it ought to be exercised. (Strictly speaking, these submissions are now, partly, irrelevant in view of the way in which the second outline of written submissions stated the power upon which Donna-May relied and the basis of her claim for an interim property order. I mention them for completeness.)
Counsel for Ned described Donna-May's financial disclosure as opaque and submitted that her application was brought because she does not wish to utilise her own assets to meet her personal expenses, including her past and future litigation expenses, instead seeking an order that those expenses should be borne by the estate of the deceased. It was put that Donna-May held substantial personal assets, namely, the Redfern property valued at about $4,000,000 and the Darlinghurst property valued at about $2,500,000 and that despite the loan over the Darlinghurst property, securing $473,095, she still had more than $2,000,000 equity in the Darlinghurst property alone.
It was submitted that Donna-May's contentions were no more than bare assertions, particularly that there was an equitable charge over the Redfern property in favour of her son in the amount of $2,000,000. Even if that assertion were accepted at face value, counsel noted that there remained about $2,000,000 in equity in the Redfern property.
In addition, senior counsel reminded the Court that after what was said to be the separation from the deceased in September 2020, Donna-May had received payments, or funds withdrawn from bank accounts, of about $1,020,000, comprising the amount of $480,000, which she had transferred from the joint bank account in October 2020; the sum of $200,000 that she had received in September 2021 as a lump sum payment on account of her expected future entitlement to spousal maintenance; the sum of $100,000 on account of her costs of the protective proceedings; and the sum of $240,000 (being the total of six monthly maintenance payments of $40,000 made by the NSWTG in accordance with the orders of Lindsay J).
[17]
Submissions in respect of the hearing
Counsel for Ned submitted that, in substance, the appropriate orders for the future conduct of the proceedings were as follows:
1. First, that the Probate proceedings be listed for hearing at the Court's earliest convenience in 2023, with an estimated length of seven days. By determining the issues in the Probate proceedings first, the Court would determine the entitlements of all beneficiaries to any property forming part of the estate of the deceased, particularly any entitlement of Donna-May to the Woollahra property. This would enable the family law proceedings to proceed, as the extant assets of both Donna-May, and the estate, would then be known. Additionally, it was said to be necessary to ascertain the size of the estate to determine all the family provision claims.
2. Secondly, that the family law proceedings be transferred back to the Federal Circuit and Family Court of Australia (Division 1), to be case managed and eventually determined by that Court.
3. Thirdly, that any family provision proceedings against the estate, be subject to a regime where each Plaintiff is to file any outstanding affidavits, and then be stood over until a date after the conclusion of the hearing of the Probate proceedings.
It was submitted that this "sequential hearing approach" was a logical and preferable course, compared to hearing the Probate, family law, and family provision proceedings by way of a single joint or concurrent hearing (the "joint hearing approach") for a number of reasons. First, the sequential hearing approach would avoid the procedural difficulties (both foreseeable and unforeseeable) that may arise from a joint, or concurrent, hearing of the proceedings, which would call for an exercise of both state jurisdiction (for the Probate and family provision proceedings), and cross-vested Federal jurisdiction (for the family law proceedings).
For example, counsel referred to s 7(5) of the Cross-Vesting Act, which would have the effect that the NSW Court of Appeal would not have any jurisdiction to determine an appeal from any matter arising under the Family Law Act, irrespective of any other matters raised in such an appeal: Boensch v Pascoe (2016) 349 ALR 193; [2016] NSWCA 191; Morris Finance Ltd v Brown (2016) 93 NSWLR 551; [2016] NSWCA 343 at [21]-[44]; Karlsson v Griffith University (2020) 103 NSWLR 131; [2020] NSWCA 176. Rather, the only Court empowered to determine any such appeal would be the Full Court of the Family Court. Thus, the Full Court of the Family Court would have to deal with the entire appeal, including any further issues relating to the Probate proceeding, and the family provision proceedings which otherwise would be outside the scope of that Court's regular jurisdiction.
[18]
Determination - the further conduct of the proceedings
I shall deal with this issue first as it is relevant to what follows.
Rule 28.5 of the UCPR provides:
"If several proceedings are pending in the court and it appears to the court:
(a) that they involve a common question, or
(b) that the rights to relief claimed in them are in respect of, or arise out of, the same transaction or series of transactions, or
(c) that for some other reason it is desirable to make an order under this rule,
the court may order those proceedings to be consolidated, or to be tried at the same time or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.
In Ghose v CX Reinsurance Company Ltd [2010] NSWSC 110 at [26]-[32], Austin J identified the factors that a court is likely to take into account in the exercise of its discretion on an application for consolidation or joint hearing. His Honour cited some nine matters referred to by Besanko J to be considered, in the course of determining whether it was appropriate that eight proceedings be tried together in Humphries v Newport Quays Stage 2A Pty Ltd [2009] FCA 699 at [11]:
"1. Are the proceedings broadly of a similar nature?
2. Are there issues of fact and law common to each proceeding?
3. Will witnesses (lay and expert) in one proceeding be witnesses in one or more of the other proceedings?
4. Has there been an alternative proposal put forward that there be a test case and have the parties agreed to abide the outcome, or, at least, the determination of common issues of fact and law?
5. Is there a prospect of multiple appeals with substantial delays if the proceedings are not tried at the same time?
6. Will there be a substantial saving of time if the proceedings are tried at the same time, compared with each proceeding being tried separately?
7. Will an order that the proceedings be tried at the same time create difficulties in terms of trial management, complexity of procedural issues and difficulties in determining cross-admissibility of evidence?
8. Is one proceeding further advanced in terms of preparation for trial than the others?
9. Are there parties to one or some only of the proceedings who will be inconvenienced if all of the proceedings are tried at the same time?"
In Marzol v Joubert; Marzol v Killen [2018] NSWSC 586 at [9], Harrison J wrote:
"It is highly desirable but also 'desirable' within UCPR r 28.5, and in the interests of the parties and also the public interest, in 'having all matters in controversy arising out of related facts determined at the one time': Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 294 at [7]: Southwest Helicopters Pty Ltd v Country Energy [2009] NSWSC 1376 at [8]-[9] and [11]. The desirability stems, at least in part, from the need to avoid conflicting results if the proceedings are heard separately by different judges, but also to fulfil the objectives in s 56(1) of the Civil Procedure Act 2005."
[19]
The legal framework for the interim application
I shall now deal with the family law aspects as Donna-May's current application is one pursuant to the Family Law Act and now only seeks an interim, or partial, property order from the estate of the deceased.
There was really no dispute that the proceedings, having been commenced by Donna-May in the Family Court before the death of the deceased, did not abate after his death.
Part VIII of the Family Law Act carries the heading "Property, spousal maintenance and maintenance agreements". It governs the scope of the Court's power with respect to property and financial matters. There is no further definition of "property" or any expressions which, of themselves, amplify, extend or, for that matter, limit the definition appearing in s 4.
The Part includes, relevantly, ss 79 and 80. These sections are clearly with respect to "proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings ... arising out of the marital relationship".
Section 79 of the Family Law Act, relevantly, provides:
"(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them-altering the interests of the parties to the marriage in the property; or
(b) …
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(1A) An order made under subsection (1) in property settlement proceedings may, after the death of a party to the marriage, be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(…)
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order."
The claim made by Donna-May in the family law proceedings is one based upon a statutory right to make a claim as a party to the marriage with the deceased, under s 79(1) of the Family Law Act. That right is to obtain an order altering the interests of the parties to a marriage in all property to which either, or both, of them are entitled, if the Court "is satisfied that, in all the circumstances, it is just and equitable to make the order" under s 79(2), taking into account the matters referred to in s 79(4). Those matters extend beyond financial, or other, contributions, which either of the parties may have made to the acquisition, conservation, or improvement, of property, and include, amongst other things, the contribution made by each to the welfare of the family as well as the matters referred to in s 75(2) so far as they are relevant: s 79(4).
[20]
Determination
I have made clear that the various proceedings involving Donna-May and Ned are hard-fought and likely to be somewhat complex. Their disputes have already continued for almost 3 years.
Also, as this is an interlocutory application, I am unable to determine issues of fact or what, if any order, would be made in one, or other, of the different proceedings: Iphostrou & Iphostrou [2011] FamCA 20 at [44] (Cronin J); Edgar & Strofield [2016] FamCAFC 93 at [15].
I also bear in mind that applications for property adjustment should not be commenced with the assumption "that one or other party has the right to have the property of the parties divided between them": Sirola & Sirola [2018] FamCA 1011 at [34] (McClelland J), citing Stanford at [40]. It should also be noted that since an interim order is likely to be "a somewhat imprecise exercise", the Court's discretion "must be exercised conservatively": Harris at 480. Ultimately, what is required is that, in the circumstances, it is appropriate to exercise the power, there being evidence to satisfy the necessary requirements of s 79 of the Act. That section is the source of power, while s 80 enables the making of the order.
Having considered all of the evidence to which I have previously adverted, and also the detailed submissions of each of the protagonists, I am satisfied that, in all the circumstances, it is appropriate to exercise the power to make an interim property order, as it is in the interests of justice to do so in favour of Donna-May, but not in the terms that she seeks.
Whilst not productive of children, the relationship and marriage of Donna-May and the deceased was of reasonable duration; no doubt, there were varied contributions by each of the parties to the marriage and other matters will have to be considered in determining, on a final basis, orders that are just and equitable. Donna-May, for example, asserts that she gave up her own business, thereby becoming financially dependent upon the deceased. She also asserts that she cared for him when he became unwell. He had generously provided for her during the marriage. Spousal maintenance is not currently available to her.
There can be no doubt that the deceased's estate is in a position of relative financial strength compared with Donna-May, and that she is not in a position to meet her day to day expenses, including litigation costs, without selling, or otherwise diminishing, her own property, by sale or mortgage. Having regard to the value of the deceased's property, the potential impact of any orders made upon parties, or beneficiaries, at this point in time: Sully & Sully (No 2) [2016] FamCA 706 at [33]-[36], will be negligible bearing in mind the security which is to be provided to ensure repayment if that becomes necessary.
[21]
Amendments
08 February 2023 - [89] - amendment to monetary amounts.
[171] - amendment to monetary amounts.
[287] - amendment to monetary amounts.
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Decision last updated: 08 February 2023
On 8 November 2021, as stated, an application was made by Donna-May to cross-vest the family law proceedings to this Court. As the application was opposed by Ned, it came to be listed for a contested hearing on 25 March 2022 in the Federal Circuit and Family Court of Australia.
On 16 March 2022, due to the deceased's death a short time earlier, the hearing date was vacated. The proceedings were listed, for a procedural directions hearing, before a Judicial Registrar on 8 April 2022. It appears that no directions hearing occurred on that date, although the reasons for this change are unclear.
On 6 May 2022, following receipt of Consent Orders sent by the parties, the Family Court (Judicial Registrar Bardetta) made orders, one of which substituted Ned as the respondent to Donna-May's substantive application. In this way, any property adjustment order, if made, could be enforced by, or against, the deceased's estate: ss 79(1A), 79(8)(c) of the Family Law Act.
In addition, the Registrar transferred the proceedings to the Supreme Court of New South Wales pursuant to s 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) ("the Cross-Vesting Act") and removed the case from the Family Court's list of active cases.
So far as I can tell, there was no evidence that, at that time the learned Judicial Registrar made the orders transferring the proceedings to this Court, she was fully appraised of the nature of the proceedings in the Supreme Court; that she had considered whether the family law proceeding arose out of, or were related to, the proceedings in the Supreme Court; and that it was "more appropriate that the family law proceedings should be determined by the Supreme Court, or it was otherwise in the interests of justice that the family law proceedings be determined" by this Court. (I do not mention this as a criticism but simply as stating what is revealed by the evidence read before me.)
In this Court, the proceedings, when cross-vested, are numbered 2022/163059. I shall refer to these proceedings as "the family law proceedings".
On 30 July 2021, Donna-May commenced proceedings in the Protective List of this Court, against the deceased, Ned, and Kate Perkins, another, now adult, child of the deceased, challenging the validity of various instruments relating to the deceased's enduring guardianship and a power of attorney over the deceased's affairs. In the alternative she sought to be appointed as manager of the deceased's affairs. I shall refer to these proceedings as "the protective proceedings".
Doing the best I can, there were hearings held before Registrar Walton, as the Protective List Registrar on 16 August 2021, and then before Lindsay J, the Protective List Judge, on 6 September 2021, 14 September 2021, 16 September 2021, 17 September 2021, 6 October 2021, 12 October 2021, 5 November 2021, 29 November 2021, 16 December 2021, 2 February 2022, 3 March 2022 and 30 March 2022.
In the protective proceedings, a notice of motion was filed:
1. By Donna-May, on 1 November 2021, for an order that the deceased be medically examined and an order granting access to documents produced under subpoenas (which was determined on 2 December 2021).
2. By Donna-May, on 4 November 2021, for an order for the payment of costs, the delivery of personal property and the provision of other information.
3. By Donna-May, on 15 December 2021, for an order restraining the continuation of the application for the divorce on behalf of the deceased (which was determined on 16 December 2021).
4. By the deceased's brother, Lewis Bell, on 3 March 2022, seeking leave to apply, on behalf of the deceased, for a divorce order.
On 16 September 2021, Lindsay J made an order appointing the NSW Trustee and Guardian (the NSWTG) as receiver and manager of the deceased's affairs under s 41 of the NSW Trustee and Guardian Act 2009 (NSW).
On 17 September 2021, his Honour made the following orders in the protective proceedings:
"2. … (without prejudice to the generality of order 3 of orders earlier made on 16 September 2021), but subject to further orders of the Court that, as receiver and manager of the estate of the first defendant, the NSW Trustee shall be at liberty (subject to compliance with sections 72 and 73 of the NSW Trustee and Guardian Act 2009):
…
(c) to pay or allow to the plaintiff a reasonable living allowance (not less than $40,000 per month or such other amount as may be determined by the Court) pending the determination of the Summons and the Cross Summons or further order;"
The orders made by Lindsay J on 17 September 2021 also included a lump sum provision for Donna-May's costs of the protective proceedings ($100,000) and an amount on account of her claims for a living allowance ($200,000).
A dispute arose, subsequently, concerning whether the NSWTG had complied with the orders made by Lindsay J, and on 14 December 2021, Donna-May filed a notice of motion, in the protective proceedings, seeking orders to resolve the various disputes between her and NSWTG.
Donna-May's notice of motion came on for hearing, in the protective proceedings, on 15 December 2021. At that hearing, Lindsay J indicated that the order referred to in Paragraph 2(c) above would be amended and he ordered funds to be paid to her. His Honour ordered:
"4. … subject to further order, that the NSW Trustee, as receiver and manager of the estate of the first defendant, pay or allow to the plaintiff a reasonable living allowance (not less than $40,000 per month) pending the determination of the summons or cross summons or further order, such allowance to be credited from 17 September 2021".
Subsequently, the NSWTG paid the following amounts into Donna-May's bank account:
1. $160,000, on 16 December 2021.
2. $40,000, on 17 January 2022.
3. $40,000, on 16 February 2022.
On 30 March 2022, Lindsay J ordered that the proceedings be taken out of the Protective List on 13 and 31 May 2022 and that the proceedings be listed, before him, on 14 November 2022, at 9:00 a.m., for directions. His Honour also reserved to any interested person, liberty to apply on three days' notice and he reserved all questions of costs.
It is not entirely clear what directions, or orders, the parties will seek in the protective proceedings when the matter is next before the Protective List Judge on 14 November 2022.
On 26 November 2021, Donna-May filed a further Summons (proceedings number 2021/336985), seeking orders for a statutory will to be made for the deceased. The matter was managed with the protective proceedings. I shall refer to those proceedings as "the statutory will proceedings".
A search of JusticeLink reveals that in the statutory will proceedings, orders and notations were last made by Lindsay J on 30 March 2022. His Honour noted that the deceased had died, reserved the question of costs, and stood over the proceedings, for further directions, on 14 November 2022.
As earlier stated, the deceased died on 14 March 2022. On 12 April 2022, Donna-May filed a Statement of Claim and a notice of motion in the Equity Duty List, seeking the appointment of a special administrator of the deceased's estate: Probate and Administration Act 1898 (NSW), ss 73 and 74. Ned opposed this application.
The notice of motion came before Slattery J, as Duty Judge, on 12 April 2022, 14 April 2022, and 20 April 2022. On 21 April 2022, his Honour made a number of orders, including, relevantly:
"(2) Mr (Ned) Bell is until final judgment in these proceedings appointed as the special administrator of the estate to exercise the following functions and only the following functions in relation to the estate ("the special administrator functions"):
(a) opening a bank account in the name of the estate;
(b) collecting the deceased's funds into that bank account and closing any other existing bank accounts in the name of the deceased.
(c) paying the liabilities of the deceased's estate arising in the ordinary course of the administration of the affairs of the estate or that are otherwise necessary to preserve the assets the [sic] estate;
(d) defending the Family Court proceedings and these proceedings (insofar as they involve any claim under Chapter 3 of the Succession Act 2006) on behalf of the estate; and
(e) giving instructions to Bell Potter Securities Ltd in relation to dealings with the investments and securities in the deceased's Bell Potter Securities Ltd trading account;
(…)
(4) As a condition of his continuing exercise of the special administrator functions, Mr Bell will provide at the end of each calendar month to the beneficiaries named in the will a concise written report of the payments and transactions he has made as special administrator during that calendar month;
(5) If Ms Bolinger proposes to apply for interim maintenance under the Succession Act 2006, Division 3 in these proceedings and to make a similar application in the Family Court proceedings with both applications being based upon her current financial needs, then the following directions apply.
(a) Ms Bolinger must by Friday, 29 April 2022:
(i) file and serve any amendments to the Bolinger motion in these proceedings to seek interim maintenance;
(ii) make any co-ordinate application in the Family Court proceedings seeking interim maintenance; and
(iii) apply to cross vest the Family Court proceedings into this Court; and
(b) the special administrator is directed by Tuesday, 3 May 2022 to consent to the making of orders in the Family Court proceedings cross vesting the Family Court proceedings into this Court to the intent that both Ms Bolinger's applications for interim maintenance will be dealt with in both proceedings jointly in the one court at the same time;
(6) Order that the question, whether the estate is presently bound by the orders made by Lindsay J in the protective proceedings on 16 or 17 September or on 15 December 2021 for the NSWTG to pay the sum of $40,000 per month to the plaintiff, shall be determined separately from all other issues in these proceedings ("the separate question");
(7) The separate question is determined as follows: the estate is not presently bound by any of the orders made by Lindsay J in the protective proceedings on 16 or 17 September or on 15 December 2021 for the NSWTG to pay the sum of $40,000 per month to Ms Bolinger;
(8) The Court notes that Mr Bell proposes to propound the will and the codicil as valid testamentary instruments and to apply for probate of them in these proceedings and the Court further notes that Ms Bolinger has already filed a statement of claim in these proceedings ("the existing statement of claim but in the Court's opinion the existing statement of claim should be more aptly filed and deployed as a cross-claim in these proceedings and to achieve that result without the need for either party to commence fresh proceedings the Court makes the following further directions:
(a) Mr Bell may file a statement of claim as plaintiff in these proceedings propounding the will and the codicil and applying for probate of both instruments and must do so by Friday, 22 April 2022;
(b) upon Mr Bell filing a statement of claim in accordance with subparagraph (a), Ms Bolinger's existing statement of claim will be struck out and Ms Bolinger shall refile her existing statement of claim by Friday, 29 April 2022, but entitled and in the form of a cross-claim in these proceedings and thereafter Mr Bell will be known in these proceedings as the "plaintiff/cross-defendant" and Ms Bolinger will be known as the "defendant/cross claimant"; and
(c) defences to Mr Bell's statement of claim filed in accordance with sub-paragraph (a) and to Ms Bolinger's cross-claim filed in accordance with paragraph (b) shall be filed by 6 May 2022 within 28 days of each claim to which the defence responds;
(…)
(11) Transfer these proceedings to the Succession List and refer the proceedings to the Succession List Judge for the allocation of a hearing date for the Bell Motion and the Bolinger Motion on a date convenient to the Court after 13 May 2022, which date should be fixed to reflect the urgency of the matter based upon the evidence filed in support of the application for interim maintenance in the Bolinger motion;
(12) Reserve the costs of the contests between the parties on the Bolinger motion, the separate question and the several other matters contested on 14 April 2022 and 20 April 2022."
On 26 April 2022, his Honour delivered his reasons for making the orders, which bear the medium neutral citation Bollinger v Bell; The Estate of the Late Colin Bell [2022] NSWSC 486.
In accordance with the orders made by Slattery J, proceedings were commenced in the Succession List by Ned, who filed a Statement of Claim on 22 April 2022 (proceedings number 2022/92169). Ned sought an order that Probate of the Will dated 18 May 2015, and the Codicil dated 3 November 2020, of the deceased, be granted to him.
(I shall refer to the Will, as "the 2015 Will" and the Codicil, as "the 2020 Codicil" respectively, for convenience, and without any prejudgment as to validity.)
(The deceased had also made a Will dated 24 March 2009 (to which I shall refer as "the 2009 Will"), but neither party propounds this Will, as it was revoked, by operation of law, as a result of the deceased's marriage to Donna-May on 11 December 2014: s 12(1) of the Succession Act 2006 (NSW).)
On 31 March 2022, Ned had published on the Courts' Online Registry, notice of intended application for Probate of the 2015 Will and the 2020 Codicil.
The Defendant named in the proceedings was, of course, Donna-May. On 2 June 2022, she filed a Defence in which she stated that she "did not know if the deceased knew and approved the contents of the 2015 Will"; admitted that the 2015 Will "appears to bear the deceased's signature"; admitted that the deceased had testamentary capacity to execute the 2015 Will; and did not otherwise admit the validity of the 2015 Will. She denied the validity of the 2020 Codicil upon the basis that the deceased's lacked testamentary capacity and asserted that "there are suspicious circumstances regarding the making of the Will and the Codicil".
On 2 May 2022, Donna-May filed a Cross-Claim. On 4 May 2022, she filed an amended Cross-Claim in which, she sought a declaration that the deceased died intestate; and an order that letters of administration on intestacy be granted to her. She also sought a number of other orders, in the alternative, including, relevantly, an order pursuant to s 59 of the Succession Act, that provision, or further provision, be made for her out of the estate of the deceased.
I shall refer to these proceedings as "the Probate proceedings" so far as they relate to the 2015 Will and the 2020 Codicil. I shall refer to Donna-May's claim for a family provision order as "the family provision proceedings".
None of the substantive proceedings involving Donna-May and Ned are ready to be determined. Indeed, the parties are currently in the process of completing some of the evidence. There has also been significant debate as to when, and how, the family law proceedings should be heard and determined, particularly in circumstances where Donna-May confirmed she would continue with the family law proceedings, even if she is successful in the Probate proceedings: Tcpt, 29 June 2022, p 7(33)-8(2).
I should mention, in order to complete the litigation landscape, that on 29 June 2022, separate proceedings for a family provision order, were commenced, in this Court, by Gina Agathopoulos, as tutor for William Agathopoulos, (proceedings number 2022/189398). I shall refer to these proceedings as "William's proceedings". They are not relevant to the interlocutory proceedings with which I am presently concerned as all parties, in these, and the associated proceedings, agree that the Probate proceedings and the family law proceedings must be dealt with before the family provision proceedings, or William's proceedings, can be heard and determined.
In addition, Donna-May has a now adult, child, from a previous relationship, Benton Hershel Dunagen. In her evidence, she deposed that Benton does not work or receive any income from the government. There was a statement made at the hearing, that he may commence proceedings seeking a family provision order: Tcpt, 8 September 2021, p 3(23-40).
The prescribed period for making an application for a family provision order (not later than 12 months after the date of the death of the deceased) has not yet expired. Any such proceedings, if commenced, before the expiration of that time, will have to await the determination of the Probate proceedings and the family law proceedings also.
At the time of these reasons being completed, the Court has not been informed, specifically, that any such proceedings have been commenced and a search of JusticeLink does not reveal any such proceedings.
Subsequently, it appeared that it was this notice of motion, rather than the amended notice of motion, filed by Donna-May on 3 May 2022, which she wished the Court to deal with at the hearing. In the circumstances, it will be necessary to dismiss the notice of motion of 3 May 2022.
In relation to the notice of motion filed 16 June 2022, Donna-May, initially, relied upon the following bases for relief, namely:
1. An order under s 92A of the Probate Administration Act, in the event that the deceased died intestate.
2. As an applicant for property settlement orders under s 79 of the Family Law Act, that she be paid a lump sum (s 80(1)(a)) or receive a periodic payment (s 80(1)(b)) pending the disposal of the proceedings (s 80(1)(h)). The Court has a broad discretion to make "such order as it considers appropriate" (s 79(1)), so long as the Court is "satisfied that, in all the circumstances, it is just and equitable to do so" (s 79(2)).
3. As an applicant for property settlement orders under s 79 of the Family Law Act, an order for funds to conduct the litigation under ss 80(1)(h), 80(1)(k) or 117(2).
4. As an applicant for a family provision order under s 59 of the Succession Act, an order that she be paid a lump sum by way of an interim family provision order before the Court has fully considered her application for a family provision order, upon the basis that the Court would be of the opinion that no less provision than that proposed in the interim order would be made in her favour in the final order. If such an interim family provision order were made, the Court must proceed to finally determine the application for a family provision order by confirming, revoking or varying the interim order: see s 62 of the Succession Act.
5. A loan against her final entitlement under the Will (secured over the matrimonial home devised to her in the 2015 Will worth at least $17,500,000.
By the date of the hearing, Donna-May refined, significantly, the basis of her claim for interim relief to solely rely upon ss 79 and 80 of the Family Law Act (Tcpt, 29 June 2022, p 6(31-50); 21(36-50)). She sought orders for:
1. A lump sum of $2,000,000 for, outstanding liabilities and expenses, and for past and future legal costs; and
2. A monthly payment $40,000 in lieu of spousal maintenance.
Counsel for Donna-May specifically disclaimed reliance "on the costs power under s 117 as the source of power", thereby avoiding the need "for an assessment to be made of the amount that is required": Donna-May's second written outline of submissions dated 6 September 2022 at [55].
Counsel submitted that the reasons for the interim order were (a) to pay costs both incurred, and to be incurred; (b) to pay outstanding liabilities; (c) to pay on account of living, or other, reasonable, expenses; and (d) to provide a buffer in relation to expenses.
"Interim" orders for settlement of property are expressly referred to in the Family Law Act: see ss 79(6) and 80(1)(h); Strahan & Strahan (Interim Property Orders) (2009) 241 FLR 1; [2009] FamCAFC 166 at [113]-[114]. Donna-May specifically relies upon these sections as the source of power to make the interim property order. She also stated, perhaps in aid of any subsequent application, that an earlier order made under s 80(1)(h) is capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power: Gabel & Yardley (2008) 221 FLR 270; [2008] FamCAFC 162 at [69]-[73] (Bryant CJ and Coleman J).
Although the claims made do not specifically provide for the payment of legal costs, in the second written outline of submissions, counsel maintained, at [4]-[5], that:
"Whilst orders for interim provision and orders for payments for past and future costs are uncommon or exceptional in Probate and Family Provision matters, they are very common in Family Law cases.
The need for provision of funds to enable payment of the costs of participating in Family Law proceedings has been recognised for many years and is a reflection of an important matter which distinguishes FLA litigation from other civil litigation, namely that very often the wealth of both of the parties is controlled by only one of them. See Blue Seas Investments Pty Ltd v Mitchell [1999] FamCA 745 (1999) FLC 92-856 at [86],[128], Strahan & Strahan [2009] FamCAFC 166 at [79]."
Unsurprisingly, Ned opposed Donna-May's application for interim relief even on the limited ground. He sought an order that the notice of motion be dismissed with costs.
On 31 May 2022, Ned filed a notice of motion seeking:
1. orders granting him additional power as special administrator to establish a testamentary trust for the deceased's son, William, in accordance with the Clauses of the 2015 Will, and to make modest distributions for his maintenance, and judicial advice as to the exercise of that power;
2. orders granting him additional powers as special administrator to pay funeral and memorial costs of the estate, and to sell certain wasting assets of the estate; and
3. an order fixing for the separate and preliminary determination those questions whose determination is necessary for the Court to grant Probate or letters of administration, pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).
Ned's notice of motion was not the subject of substantial debate. On 1 July 2022, without opposition, the Court dealt with the first two orders that had been sought as follows:
"1. Orders that, in addition to the powers granted by the order in Paragraph 2 of the orders made on 21 April 2022 ("the 21 April Order"), the Plaintiff, in his capacity as special administrator, be granted the following additional powers in relation to the estate:
a. To pay all funeral and memorial costs of the estate; and
b. To sell either or both of the two motor vehicles owned by the estate, on the condition that the net proceeds of sale of any such vehicles are to be deposited into the estate bank account.
2. Notes that:
a. William Agathopoulos, by his mother and tutor, Gina Agathopoulos, has commenced proceedings seeking a family provision order (2022/189398).
b. Upon the grant of Probate or letters of administration that William Agathopoulos, a minor, will become entitled to receive either:
i. a share in the estate due to him on intestacy as a natural child of the deceased; or
ii. the sole beneficial interest in a testamentary trust in the sum of $2,000,000.
c. The deceased was, prior to his death, making regular payments for the maintenance, support or education of William Agathopoulos as follows:
i. paying all school fees payable for the schooling of William Agathopoulos;
ii. paying the sum of $1,800 per fortnight to the tenancy manager for the home of William Agathopoulos; and
iii. paying the sum of $1,230.76 per fortnight to the guardian of William Agathopoulos for the maintenance and support of William Agathopoulos.
3. Orders, until further order, or until the grant of Probate or administration, and by consent of the parties in these proceedings, that, in addition to the powers granted by the 21 April Order and the order in Paragraph 1 above, the Plaintiff, in his capacity as special administrator, be granted power to make distributions to, or for the benefit of William Agathopoulos, under s 92A(2) of the Probate and Administration Act 1898 (NSW), which are no more than the payments made by the deceased as recorded in Paragraph 2 above.
4. Grants liberty to the Plaintiff to apply in these proceedings, for consequential and ancillary orders for the purpose of, or with respect to, giving effect to, and implementing, these orders."
Originally, in listing the notices of motion for hearing, the legal representatives had stated that hearing would be concluded within one-half day. Making every allowance for the vagaries of litigation, including the possibility of pre-reading, that the hearing, comprising the two contested applications, could be heard within a one-half day, was wildly optimistic. That this is so, is demonstrated by the fact that shortly, prior to the hearing, a Court Book, comprising 2 folders (1026 pages and 780 pages respectively) was delivered to the Court. At the hearing, the Court Book was marked as Ex JE1.
In addition, during the hearing, additional documents were tendered. It will be necessary to refer to only some of these documents in these reasons.
On 29 June 2022, the first day of the hearing, Mr R Wilson SC, with Mr J Brown and Mr R Size, both of counsel, appeared for Donna-May whilst Mr M Kearney SC, with Mr A Langshaw of counsel appeared for Ned. There was also short appearance by Mr P Livingston of counsel, for Gina Agathopoulos, the tutor for William, in respect of his claim for a family provision order. He was excused from continuing to appear upon the basis that, if required, he would be requested to return.
On 8 September 2022, the second day of the hearing, Ms J Needham SC with Mr I Duane of counsel appeared for Donna-May, whilst Mr Kearney SC and Mr Langshaw, appeared again, for Ned. Whilst counsel for Donna-May narrowed, significantly, the basis of the claim for an interim order, a significant amount of time, on each day, was spent debating how the substantive proceedings should be dealt with. It will be necessary to return to this topic later in the reasons.
On the first day of the hearing, the Court had suggested that if the evidence in the Probate proceedings were completed promptly, dates for a hearing of 5 days duration might be able to be given this year or early in 2023. This could avoid the necessity for the determination of the application for interim relief and save the parties further delay, time and costs. The suggestion made by the Court was rejected on that occasion: Tcpt, 29 June 2022, p 16(50)-18(4).
On the second day of the hearing, further time was spent debating how long the hearing of all matters would take and the parties agreed that no less than 20 days of Court time would be required, if the matters were heard consecutively, with the evidence in one being evidence in the other.
During the debate, however, counsel for the parties all appeared to be somewhat reticent about having all of the evidence in the family law proceedings being filed and served at, or about, the same time as the evidence in the Probate proceedings. It was postulated that the Probate proceedings should be heard and determined first; only after that, would the parties complete the evidence in the family law proceedings; and only then, after the family law proceedings were determined, all of the family provision claims would be dealt with.
All counsel agreed, however, that the family provision proceedings, William's family provision proceedings, and if commenced, Benton's family provision proceedings, could not be dealt with until the Probate proceedings and the family law proceedings were determined as the nature and value of the deceased's estate would not be known.
In response to the suggestion made, the Court pointed to the obvious delay, and the risk of even further delay, in the event of an appeal in either the Probate proceedings and/or the family law proceedings, and the inconvenience of one judge being required to hear the different, but what were said to be associated, matters, in this piecemeal way.
Indeed, during debate, the Court suggested that the family law proceedings could be remitted to be dealt with in the Federal Circuit and Family Court of Australia, as it is now called, as those proceedings had been commenced prior to 1 September 2021. (On that date, the federal court known immediately before 1 September 2021 as the Family Court of Australia had been continued in existence and became known as the Family Court and the Federal Circuit Court Division 1 Court.) The Probate proceedings would be determined, whilst the parties were preparing for the family law matter, with the family provision proceedings, including the claim by William, being dealt with after the conclusion of the family law matter.
At the end of the second day, I adjourned the proceedings until 28 September 2022, to allow the Plaintiff time so that she could decide how she wished to proceed. At the hearing on 28 September 2022, unsurprisingly, the debate continued, with both parties unable to agree as to the way forward.
Ultimately, on that occasion, the Court directed:
"… each party is to deliver to the Chambers of Hallen J in hard and soft copy an outline of submissions which is to include the precise orders sought in regard to how the Probate, family law and family provision proceedings should be dealt with by 4:00 p.m. on 14 October 2022.
… each party to deliver to the Chambers of Hallen J in hard and soft copy any submission in reply by 4:00 p.m. on 24 October 2022."
As there was no agreement between the parties, it will be necessary to return to the submissions that were made by counsel on this topic later in these reasons, so that the way forward in this litigation is clearly established.
On 4 August 2019, the deceased had a serious seizure, from which time he required regular assistance with his activities of daily living.
Ned alleges that on 25 September 2020, Donna-May and the deceased separated. Although the date and the circumstances of the separation are contested, with Donna-May claiming that they did not separate until 7 December 2020; in the initial written submissions filed and served on her behalf, at [3] it was written that they "had lived together from about 2010 until 25 September 2020". Probably, nothing much will turn on the dispute of fact.
Ned alleged that Donna-May had transferred two amounts of $175,000 from the NAB Joint Account to one of her Westpac accounts on or about 28 September 2020, totalling $350,000. Ned also asserted that on 8 October 2020, she had transferred an amount of $480,035 (including the $350,000 earlier transferred) from the NAB Joint Account, held with the deceased, to one of her own Westpac accounts. (It appears that the $35 was an overseas bank transaction fee.) The total of the amount transferred was $480,035.
It appears from other evidence that there is no dispute about the transfer of the funds on or about 28 September 2020 and on 8 October 2020. However, there remains a dispute about whether the deceased had consented to Donna-May withdrawing each from the joint accounts and transferring those funds to herself: see Ex JE1/193 and Ex JE1/209. The issue of consent will be determined at the hearing. The withdrawal of funds is referred to in order to demonstrate amounts that Donna-May has received, at or about the time, or following, separation.
On 13 October 2020, the deceased executed a document that revoked the appointment of Donna-May and Ned as his enduring Attorneys. On 3 November 2020, he executed a document which appointed Kate and Ned as his enduring guardians, and another document, which appointed Ned, alone, as his enduring Attorney. As earlier stated, Donna-May has disputed the validity of all of these documents.
In March 2021, the NSW Police sought, and obtained, an interim apprehended domestic violence order against Donna-May, the consequence of which was that she was prevented from taking certain actions in relation to the deceased, including approaching, or contacting, him.
It follows that unless Ned establishes the validity of the 2020 Codicil, Donna-May will be entitled to a devise of the Woollahra property, free from all duties and taxes, and all of the deceased's household goods, excluding the "Excluded Items" defined in Schedule 4. As will be read, the value of the Woollahra property, alone, is substantial.
The 2020 Codicil provided:
"THIS CODICIL is made by me COLIN MORTON BELL of … and sometime resident of … Woollahra, New South Wales.
1. This is a Codicil to my Will dated 18 May 2015 ("my Will").
2. I make this Codicil having regard to my recent separation from my wife Donna May Bolinger (my 'Wife') and my wish to reach a financial settlement with her.
3. To ensure that my Wife is not a beneficiary under my Will, I hereby vary my Will by causing all such changes to delete all gifts to my Wife.
4. In all other respects I confirm my Will."
There remains a substantial dispute about the validity of the 2020 Codicil, although, ironically, Donna-May relied upon Clause 2 thereof, stating that the deceased's wish to reach "a financial settlement" with her was relevant to the determination of her claim for an interim order in the family law proceedings: Tcpt, 8 September 2022, p 47(47)-48(4).
The 2009 Will is irrelevant, other than as demonstrating the deceased's testamentary intention at that time. In the 2009 Will, the deceased relevantly:
1. Appointed Grae Stewart McKenzie, David Alastair Provan, and Ned as the executors;
2. Gave his former wife, Emlen, $1,000,000, in full discharge and settlement, pursuant to Clause 10 of the Financial Agreement, provided that she survived the deceased for 180 days and the Maintenance Guarantee has not ceased to have effect.
3. Directed his Trustees to sell his Woollahra Property, and that the excess amount from the proceeds of sale be divided between Ned and Sophie.
4. Divided the residue of his estate:
1. As to 40%, to Kate;
2. As to 40%, to Ned;
3. As to 20%, to Sophie.
(I mention that it is unsurprising that Donna-May is not a beneficiary named in the 2009 Will as their romantic relationship did not begin until 2010.)
In addition, why renovation costs would need to be incurred by her at a time when the validity of the 2020 Codicil was the subject of challenge was also not made clear. After all, she might not receive the Woollahra property if the 2020 Codicil is found to be a valid testamentary document. Alternatively, if Ned is unsuccessful, she will receive it with the consequence that maintenance and repairs will be her responsibility.
Senior counsel submitted that Donna-May had no earning capacity as she was unable to recommence work as an international designer, having lost all of her business contacts as a result of caring for the deceased: Tcpt, 29 June 2022, p 66(6-16). In response to this aspect of her claim, on Ned's side, there was tendered as part of Ex NMR1, a copy of an Application for Mortgage Finance, dated 17 May 2021, signed by Donna-May, which included the assertion that she was self-employed as a sole trader in fashion design, although the income details, next to the heading "Gross taxable income (self-employed)" was left blank.
In addition, in that Application, the Redfern property was said to have a value of $4.8 million and the Darlinghurst property was said to have a value of $3.8 million (with an amount owing on the Darlinghurst property of $329,700).
Complexity in the financial affairs of the deceased was an additional factor which would add considerable weight in the making of an order of this type: Strahan at [90].
Counsel submitted that it was appropriate to exercise jurisdiction to make an interim order in this case, for several reasons including, Donna-May's need for support, the care she provided to the deceased during his lifetime, the ability of the deceased's estate to provide some financial support pending the final hearing, and the unavailability of spousal maintenance by virtue of s 82 of the Family Law Act, combined with the ability to make orders for property alteration effectively in lieu of spousal maintenance.
It was also submitted that an interim property order for Donna-May's costs already incurred, and her future costs, would "level the playing field" and provide her with an equal, or near equal, opportunity of presenting her case: In the Marriage of Poletti (1990) 105 FLR 312 at 314, 317-318 (Ellis, Strauss and Butler JJ); Novakovic & Novakovic [2012] FamCA 809 at [23] (Collier J).
Ultimately, counsel submitted that since the power sought to be exercised was one seeking an adjustment of property interests under s 79, rather than seeking an order for her costs (cf. s 117 of the Family Law Act), an overly detailed assessment of costs was not required, but rather an overall impressionistic assessment should be given on the need for an advance for costs: Strahan at [97].
For similar reasons, they stated that the estimate of costs should not be limited to those incurred in the family law proceedings, but should include those costs incurred in the Probate, the family provision, and the protective proceedings.
It was put that if the Court accepted that it was appropriate to exercise jurisdiction to make an interim property order, then the second stage involved the considerations under ss 79(2), 79(4) and 75(2), relevant to how the nature and quantum of such an order ought to be determined: Strahan at [115], [118]. Counsel submitted that it would be appropriate to follow the process of reasoning outlined in Bevan & Bevan (2013) 279 FLR 1; [2013] FamCAFC 116.
It was submitted that the ultimate touchstone for the exercise of the Court's discretionary power under the Family Law Act was whether the Court "is satisfied that, in all the circumstances, it is just and equitable…": s 79(2); Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52.
Counsel for Donna-May also raised that even on a conservative estimate of the size of the estate, assuming the proceedings continued for 5 years, the amount sought by Donna-May would total $4.4 million, equating to approximately 3.6% of the estimated net estate, which was well within a conservative ambit as suggested in In the Marriage of Harris (1993) 113 FLR 472 at 479-480; Strahan at [99]-[100].
Counsel submitted that in the unlikely event that she was unsuccessful in the Probate, family law and family provision proceedings, there was no credible submission that the orders sought would not be reversible, as Donna-May had offered security over her property at Darlinghurst and the property at Redfern (Tcpt, 29 June 2022, p 53(13-15)); Cao & Trong (No. 2) [2019] FamCA 941 at [34]; Zschokke; Gabel & Yardley at [69], [72] and [126]; Strahan at [136].
It was submitted that it would be "preposterous" to suggest that Donna-May would be unsuccessful in all three proceedings: Tcpt, 8 September 2022, p 52(26-34). (In her second written outline of submissions, counsel for Donna-May had limited the description "preposterous" to the proposition that she would "not receive any property settlement notwithstanding the length of the relationship, the importance of her contributions, the significance of her needs, and the size of the Estate".)
Counsel emphasised that in accordance with s 79(4)(a), (b) and (c), matters which the court would take into account, included Donna-May's financial and non-financial contributions to the marriage with the deceased. Her financial contributions were said to include, an initial contribution of the real estate and other assets owned by her at the commencement of the relationship, along with some earnings over the course of the relationship. Equally as important, Donna-May had made significant non-financial contributions to the matrimonial pool in her capacity as a homemaker, which should be given full value: Mallet & Mallet (1984) 156 CLR 605; [1984] HCA 21; Fields & Smith (2015) FLC 93-638; [2015] FamCAFC 57. However, counsel conceded that the deceased had made significantly greater financial contributions to the parties during the marriage.
Considering the "future needs" factors in ss 75(2) and 79(4), counsel for Donna-May submitted that the following factors are favourable to Donna-May, including:
1. The effect of any proposed order upon the earning capacity of Donna-May (s 79(4)(d));
2. The age and state of health of Donna-May (s 75(2)(a));
3. The income, property and financial resources of each of the parties and the physical and mental capacity of Donna-May for appropriate gainful employment (s 75(2)(b));
4. The responsibilities of either party to support any other person (s 75(2)(d));
5. Where the parties had separated, a standard of living that in all of the circumstances was reasonable (s 75(2)(g));
6. The extent to which the payment of maintenance to the party whose maintenance was under consideration would increase the earning capacity of that party by enabling that party to undertake a course of educational training or to establish himself or herself in a business or otherwise obtain adequate income (s 75(2)(h));
7. The extent to which the party whose maintenance is under consideration had contributed to the income, earning capacity, property and financial resources of the other party (s 75(2)(j));
8. The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration (s 75(2)(k)).
9. Donna-May was not cohabiting with another person - the financial circumstances relating to the cohabitation (s 75(2)(m));
10. The terms of any order made or proposed to be made under s 79 in relation to the property of the parties (s 75(2)(n)(i));
11. Any fact or circumstance which, in the opinion of the Court, the interest of justice requires to be taken into account, including in this case the care of Benton, the deceased's stepson: (s 75(2)(o)); In the Marriage of Robb (1994) 18 Fam LR 489; (1995) FLC 92-555).
It was submitted that whether s 75(2)(k) applied is contentious given this is not an application for maintenance: see Tcpt, 29 June 2022, p 82(1-18).
Counsel for Donna-May also submitted that the Court should be satisfied that the deceased no longer had any needs-based considerations, which were now matters solely relevant to Donna-May: Tasmanian Trustee Ltd v Gleeson (1990) 14 FamLR 189.
As earlier stated, during the course of her oral submissions, senior counsel referred to the 2020 Codicil, which Ned was propounding, and the deceased's wish to enter into a property arrangement with Donna-May. She said that this supported her submission that he expected orders to be made under s 79 of the Family Law Act: Tcpt, 8 September 2022, p 48(6-15).
In light of the 12-month time limit for bringing family provision claims, which in this matter expires on 14 March 2023, and the likelihood that there will be other applications for provision, it was submitted that the Probate and family provision proceedings ought ordinarily be determined without undue delay.
It was submitted that if the family law proceedings were transferred back to the Federal Circuit and Family Court of Australia, the Supreme Court would lose the opportunity to control the prompt resolution of the Probate and family provision aspects of the proceedings.
Turning to the issue of the factual overlap between each of the proceedings, counsel for Donna-May submitted that it was clear from the submissions in the application for interim property orders that other applications, which spanned more than one of the proceedings, may be necessary, and that there was a significant degree of convenience in the Court having all disputes before it so that applications and timetables can be set with the overriding purpose of the Civil Procedure Act 2005 (NSW) in mind.
In relation to Option 3, it was written, at [39]:
"Clearly the third option is the least convenient for many reasons, not the least of which is the significant crossover of evidence between the Family Law claim and the other two claims. In particular, the role of Ms Bolinger in her support of her husband, their life together, his support of her, and the circumstances surrounding their separation (which are contested to say the least) are relevant for the Probate claim and her proposed claim for family provision orders, and orders can properly be made that, as least so far as the Probate and Family Law claims are concerned, as they involve the same parties, evidence in one be evidence in the other."
Ultimately, it was submitted that the interests of justice require the need for the evidence and controversies which overlap in the proceedings to be determined once, rather than repetitively in different courts. The basis for that submission was that, notwithstanding the fact the family law proceedings have the most factual overlap with the family provision proceedings (in particular the identification and valuation of the estate), there is considerable overlap of significant and hard-fought contests of fact regarding matters such as the identification and circumstances of, and the weight to be accorded to, certain contributions.
Additionally, counsel pointed to the circumstances of separation, which they submitted were contested, and relevant to the Probate proceedings, with respect to the circumstances surrounding the preparation of the 2020 Codicil, the family provision proceedings, in addition to the issue of whether the separation was voluntary, and the family law proceedings, with respect to Donna-May's assertion that her contributions to the deceased's welfare were halted at the time of physical separation, but not at the behest of the deceased.
As to the need for the family provision proceedings, counsel submitted that, although it seems unlikely, should Donna-May be unsuccessful in each of the Probate and family law proceedings, it is likely that she, a widow of some number of years, with little cash flow and needs arising out of her properties, each of which require renovation to provide a reasonable income, there is at least an arguable case for her to succeed in her claim for family provision orders.
Counsel for Donna-May submitted that, notwithstanding that the Federal Circuit and Family Court of Australia has the advantage of being a specialist court, the overriding purpose referred to in s 56 of the Civil Procedure Act and similar considerations in the Federal Circuit and Family Court of Australia Act 2021 (Cth) support the submission that the proceedings should remain in the Supreme Court and be determined either in one large consecutive trial, or in two discrete, but not significantly disconnected, trials.
On 24 October 2022, counsel for Donna-May provided the fourth outline of written submissions in reply to the submissions of Ned dated 14 October 2022. The primary contention in these submissions was that most of the advantages of the "successive hearing approach" were still possible under the approach sought by Donna-May, as she would also prefer each set of proceedings to be heard consecutively, perhaps with a short intermission between each one. Additionally, to the extent that there was any complexity or uncertainty, it was submitted that the Court would be able to find pragmatic solutions to such matters: see Estate Hemmes; Cameron v Mead [2018] NSWSC 85 at [15].
In these submissions, counsel for Donna-May also noted that Lindsay J had made notations inviting the Defendants to apply for the family law proceedings to be cross-vested back in September 2021, and submitted that the cross-vesting of the family law proceedings had been an issue for some time, and hence was not limited to the premise suggested by counsel for Ned.
Counsel for Ned submitted that it was difficult to understand, without a more fulsome explanation, how Donna-May could have, reasonably, incurred legal fees of almost $1,000,000 in proceedings which had not yet reached a final hearing.
With respect to Donna-May's various, more modest, liabilities to public authorities, totalling just over $40,000, it was submitted that all of those were foreseeable expenses, and the funds received ought to have been set aside to meet those liabilities.
With respect to Donna-May's alleged expenses and future needs, it was submitted that her evidence rose no higher than a bare statement that she expected her weekly expenditure, excluding her legal fees, to be approximately $10,435. Notwithstanding the onus upon her to adduce sufficient evidence of such expenditure and the Court's directions, Donna-May had made no attempt to explain the nature of any of those expenses: In the Marriage of Mee and Ferguson (1986) 84 FLR 179; Hall v Hall (2016) 257 CLR 490; [2016] HCA 23.
In circumstances where she was not paying any accommodation expenses, absent some clear and detailed explanation of how her expenses could possibly be so significant (almost $550,000 per year), the Court should approach that bare assertion with a high degree of scepticism.
Furthermore, Donna-May had only provided bare statements of her estimated future legal costs of all proceedings, claiming her solicitor had estimated those costs would ultimately total $1,700,000. No explanation of, or underlying basis for, the estimate had been given to the Court. Nor had any explanation been given of the assumptions which informed that estimate, or how those costs would be affected by the different potential outcomes that may arise at different stages of these proceedings.
Counsel for Ned submitted that Donna-May had demonstrated no entitlement to any interim, or partial, order under s 79 of the Family Law Act. They agreed that the application involved two steps: first, whether it is appropriate to exercise the power under s 79 of the Family Law Act before a final hearing, and second, if so, to determine how that power ought to be exercised: Strahan at [118].
It was submitted that, with respect to the first step, the ordinary course is there would be only one exercise of the Court's power under s 79. She was required to demonstrate matters sufficient to outweigh the benefits of that ordinary course such as to warrant an interim order: Strahan at [223]-[225].
It was next submitted that the specific matters relied upon by Donna-May to justify such a departure from the ordinary course were unclear. The lack of clarity provided as to how, precisely, she intended to apply any funds received by way of an interim order weighed against the Court exercising its power at a preliminary stage.
Donna-May's principal debts are past legal fees incurred by her. She had not provided any invoice or described the work for which those fees had been incurred. In addition, she had already received significant payments from the estate of the deceased on account of her expected legal fees in earlier proceedings. She has a significant pool of assets to draw upon to pay her debts.
Counsel for Ned accepted that the power under s 79 of the Family Law Act could be employed to provide a party with litigation funding for family law proceedings, but submitted that there were three difficulties with Donna-May's contention that she had an immediate need of funding for the present proceedings, being:
1. She had a substantial pool of assets to draw upon to provide litigation funding, with the consequence that this was not a case where the Court could be satisfied that she will be unable to obtain any representation in these proceedings in the event she does not receive a distribution. The fact that she preferred to not to draw upon her own assets, but rather seek funding from the estate, was not a sufficient reason to warrant the making of an interim order.
2. Donna-May had provided only a bare assertion (on information and belief from her solicitor) that her legal costs of the family law proceedings and the Probate proceedings would be $1,700,000, not including GST. She had failed to provide sufficient evidence of estimated legal costs which was capable of proper scrutiny by Ned: Strahan at [138], [141]. Without more, the Court could not be satisfied that an application for litigation funding in that amount was genuine: Strahan at [227].
3. The appropriate course of case management for these proceedings was for the Court to determine the Probate proceedings as a preliminary matter and defer the determination of the family law and family provision proceedings to a subsequent hearing or hearings. If the Court acceded to that course, it could only be appropriate to exercise that power after the determination of the Probate proceedings.
With respect to Donna-May's claim that she required funding to undertake renovations to the Woollahra property, it was submitted that Donna-May had not obtained any consent to undertake any work to be done to the Woollahra property, and that she ought not carry out any such works, much less receive funding for those works.
It was submitted that Donna-May had not met the threshold requirement in the first stage as she had failed to demonstrate the existence of any circumstances warranting the Court's exercise of its power under s 79.
Then, it was submitted that even if the Court did conclude that it was appropriate to exercise that power at an interim stage, the Court should not exercise that power in the manner sought by Donna-May, and should decline to make any interim order on the current state of the untested evidence.
Counsel for Ned submitted that there are two considerations of particular importance when considering how to exercise the power under s 79 on an interim basis: first, the power must be exercised within the parameters of s 79 subject to the fact it is an interim exercise of the power, and second, the Court must exercise the power conservatively and be satisfied that the order is capable of being reversed or adjusted later: Harris; Strahan at [134]-[137].
It was submitted that the matters that weighed against the Court exercising any power under s 79 to make an interim property order were:
1. She had not demonstrated any prima facie case for a property adjustment order under s 79 of the Family Law Act. Before an order is made in Donna-May's favour, the Court would have to be satisfied both that:
1. It was just and equitable to do so. (Noting that the High Court has observed this issue must be approached in a principled fashion rather than by unguided judicial discretion: Stanford at [36]-[40]); and
2. The Court would have made an order with respect to property if the deceased had not died and that is still appropriate to do so: s 79(8)(b).
Donna-May had failed to put forward any evidence of her application capable of satisfying the Court of the above matters, nor as to any likely entitlement having regard to the factors in s 79(4) of the Family Law Act. She had, therefore, failed to discharge her onus to establish the threshold requirements for an interim order on the balance of probabilities: Hall at [8]. That was so even before accounting for the fact that one possible outcome of the Probate proceedings will be that Donna-May receives the Woollahra property absolutely.
Furthermore, the Court could not be satisfied that Donna-May could, or would, be able to repay any lump sum she received over and above any amount to which she is found to be entitled on a final order.
Secondly, it was submitted that the sequential hearing approach will avoid the significant detrimental impact, that would otherwise arise for the individual claimants in the family provision proceedings who are not parties to either the Probate or family law proceedings. Under the joint hearing approach, these parties would have to be dealt with as part of that single hearing, or potentially, be stood over until after the determination of Donna-May's claims, including any appeals.
In the first instance, the claimants would have to participate in a lengthy hearing that would only in small part directly concern their interests, a result that is not in the interests of justice: Skinner v Shine Pty Ltd [2019] NSWSC 1709 at [22], citing Wilson v Minister for Land and Water Conservation for NSW (2003) 126 FCR 500; [2003] FCA 307 at [46]. Additionally, counsel suggested that there would also be various complexities as to trial management, procedural matters, and the cross-admissibility of evidence between each of the proceedings.
In the second instance, there would be a significant further delay in the hearing and determination of the family provision proceedings pursued by the other claimants, whose claims would unfairly take priority over the claims advanced by other claimants on the estate.
However, counsel accepted that under the sequential hearing approach, there may remain some delay, as the hearing of other family provision claims may need to be listed after the determination of the family law proceedings, given the potential for that proceeding to affect the size of the estate.
Thirdly, counsel for the Plaintiff submitted that the sequential hearing approach, will avoid unnecessary duplication and complexity that would arise under the joint hearing approach. In the event there was a joint hearing, the claimants in the other family provision proceedings would need to call evidence and make submissions in respect of each claim that addresses each of the possible permutations of outcomes that may arise from each of the Probate and family law claims which are logically anterior, resulting in cumulative complexity and uncertainty, in working through the logical sequencing of the various claims.
Relatedly, it was submitted that because of this complexity, there is a real prospect that the total hearing time required under the joint hearing approach would exceed the cumulative hearing time required under the sequential hearing approach. Counsel currently estimated that using the sequential hearing approach, no more than 14 days of total hearing time would be required to determine all claims. It was estimated that any hearing of the Probate proceedings would take seven days, the hearing of the family law proceedings would take four days, and the hearing of any family provision proceedings, would collectively take three days. Conversely, counsel estimated that using the joint hearing approach, the hearing would take at least 20 days.
Fourthly, counsel claimed that the sequential hearing approach would more readily accommodate the possibility of reaching a settlement of those claims which logically follow the Probate proceedings. It was submitted that the outcome of the Probate proceedings is both binary and of high significance, that is whether the 2020 Codicil is valid, renders it difficult for the parties to engage in negotiations as to any potential settlement of the family law proceedings.
Once the Probate proceedings are determined, and Donna-May's entitlement under the testamentary documents is clear, counsel believed that the parties would be in a position to engage in more constructive negotiations. Furthermore, the uncertainty as to the size of the estate, makes it more difficult for the parties in the other family provision proceedings to discuss the settlement of their claims. Indeed, it was submitted that there is a possibility that adopting the sequential hearing approach will ultimately render some of the later proceedings unnecessary, in contrast to the joint hearing approach.
Fifthly, the joint hearing approach will almost certainly mean a significant delay in any grant of Probate when compared to the sequential hearing approach, due to both the additional preparatory steps involved, and the likely availability of the Court for a single hearing for all of the claims. Consequently, this will extend the period in which the estate is subject to management by a special administrator with powers limited to those expressly granted by the Court, preventing the realisation of the estate assets, and any partial distributions.
Specifically, regarding the return of the family law proceedings to the Federal Circuit and Family Court of Australia, counsel for Ned, highlighted that the family law proceedings were initially cross-vested to this Court for a limited, and, now, an unnecessary purpose. Having regard to the wording of the orders made by Slattery J on 21 April 2022, counsel submitted that the premise of the cross-vesting application by Donna-May, was on the basis that she intended to apply for interim maintenance under both the Succession Act and Family Law Act. However, Donna-May had abandoned her application under the Succession Act, and only pressed her application for orders under s 79 of the Family Law Act, with the result that there was no need to have the family law proceedings transferred to this Court. Thus, there now remained no logical, or compelling, reason for the family law proceedings to remain case managed, and heard, by this Court, particularly in circumstances where Division 1 of the the Federal Circuit and Family Court of Australia is a specialist court and has its own bespoke procedures for case management and hearing of such proceedings, and where any appeal from the family law proceedings would in any event lie to the Full Court of the Federal Circuit and Family Court of Australia.
In Ned's written outline of submissions in reply dated 24 October 2022, it was submitted that there was no "significant crossover in evidence" between the Probate and the family law proceedings, where the Probate proceedings are principally focused on the testamentary capacity of the deceased, whilst the family law proceedings are focused on identifying assets and considering in all the circumstances, whether it is just and equitable to make a property adjustment order.
Counsel for Ned submitted that the circumstances of separation would be unlikely to play a meaningful role in the Probate proceedings, but would merely be a contextual matter. Consequently, there was no risk of inconsistent findings on the same issues: cf. Valceski v Valceski (2007) 70 NSWLR 36 at [62]-[63].
This passage was quoted, with approval, in Kyriacou v Raphis Securities Pty Ltd [2022] NSWSC 196 at [42], by Ward CJ in Eq (as the President then was).
More recently, Meek J, in Aviani v Loh (No 2) [2022] NSWSC 1148 at [267]-[269] wrote:
"It is ordinarily undesirable for Court to only determine a portion of a dispute (assuming there is power to do so): e.g. Fencott v Muller (1983) 152 CLR 570 at 608; [1983] HCA 12 per Mason, Murphy, Brennan and Deane JJ:
"A judicial power which is not exercised to determine the whole of a controversy is, generally speaking, not appropriately and conveniently exercised. Not appropriately, because the controversy is not quelled; not conveniently, because the parties - the principal beneficiaries of the exercise of judicial power - must litigate anew to have the outstanding questions and issues determined."
Likewise, Murphy J explained in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd at 519:
"[I]t is highly inconvenient and an ineffective use of judicial power to fragment the case by determining different issues in different courts."
The essential idea of avoiding a multiplicity of suits has entrenched statutory endorsement: s 63 Supreme Court Act 1970 (NSW); ss 43 & 139 FCFCA."
Without expressing any view as to what the learned Registrar of the then Family Court of Australia ought to have done in relation to the family law proceedings, I am of the view, those proceedings having now been cross-vested to this Court, that this Court should now deal with the proceedings, as well as dealing with the Probate claim and the family provision claims. The cross-vesting order is conclusive: Elias & Elias Pty Ltd atf the Elias Family Trust v Chidiac [2010] NSWSC 1364 at [39] (Brereton J). Indeed, s 13(a) of the Cross-Vesting Act, contains an outright prohibition on any appeal from a decision in relation to the transfer of a proceeding under that Act: Gomez v Carrafa [2021] VSCA 37 at [12].
Whilst there is a real degree of attraction in returning the family law proceedings to the Federal Circuit and Family Court of Australia, the Division 1 Court (a superior court of record and a court of law and equity), as the issues in the family law proceedings are of a type heard daily in that Court, the jurisdiction to hear the family law proceedings is now one in which both courts have jurisdiction.
Ultimately, as was noted by Rein J in Xie v Li [2019] NSWSC 808 at [22]:
"…All matters can be heard in the one Court, there is no reason to think that the proceedings will not be heard in a timely fashion in this Court and there is no disadvantage relating to locality or representation. Nor do the issues raised by sections 78 and 79(4) and, a fortiori, Mr Xie's claim, involve questions as to the application of complex or specialist statutory or other legal principles developed in the Family Court. The phrase 'just and equitable' is a standard with which this Court is not unfamiliar. The fact that any appeal from the decision at first instance would have to be heard by the Full Court of the Family Court, whilst to be taken into accfount, does not, it appears to me, present a significant obstacle or difficulty, since that is what, on the basis of Eberstaller, is required by the legislature and it seems to be designed to ensure that there is consistency in approach of the various Courts (Federal and State) with jurisdiction at first instance. I do not think in these circumstances it is more appropriate or in the interests of justice that the proceedings be transferred to the Family Court."
Ned cannot now complain of the family law matter remaining in this Court because it appears that the learned Registrar made the order sought with the consent of both parties. The concerns expressed in the written submissions ought to have been considered before the consent order was delivered to the Registrar of the then Family Court and before any order was made. (However, Ned's second outline of written submissions dated 14 October 2022 at [36]-[38] may be relevant on the issue of costs.)
The family law proceedings and the Probate proceedings will only involve Donna-May and Ned as parties now that the only issue is the validity of the 2020 Codicil. It may be necessary to make credit findings, and remitting the family law proceedings back to the Federal Circuit and Family Court of Australia, even if that were possible, may present problems with the possibility of inconsistent findings.
I have borne in mind that the financial and non-financial contributions of both Donna-May and the deceased, and that the valuation of the assets of the parties will be an important matter in each of the family law proceedings and the family provision proceedings. Whilst the contributions may be the subject of dispute, one would expect that in order to avoid cost and delay, in respect of the value of the property of each of the parties, and the value of the estate, to the extent, it is not agreed, a single expert, or experts, will be appointed. (Indeed, at [15] of Donna-May's third written outline of submissions dated 14 October 2022, she states that a single expert had been appointed in December 2020 in the family law proceedings when in the Family Court.)
Whilst it is regrettable that there will be delay in having Probate granted, that delay is ameliorated, to the extent possible, by the special grant of administration to Ned that has already been made.
Any other Plaintiff in the family provision proceedings will not have to attend the whole hearing. It will not be beyond the ingenuity of the legal representatives of each of the parties, and the trial Judge, to determine when the family provision proceedings will be heard. Similarly, it will be for the parties to co-operate in ensuring a hearing which is conducted with s 56 of the Civil Procedure Act in mind.
In considering the question, I have also borne in mind that a flexible approach having regard to the particular circumstances of the cases and their history should be adopted. The orders to be made must have in mind the objectives prescribed by s 56 of the Civil Procedure Act. There are no hard and fast rules which establish that simply because parties are identical and there are some common questions of fact, or law, it would be expedient and proper to order that the matters be heard together with the evidence in one being evidence in the other. However, where there is an overlapping of issues and parties, and where issues of credit may arise, it is desirable to resolve the disputes in the different actions on one occasion by the same judge. Ultimately, the question is answered from a case management perspective, rather than by the application of principles of law. The court approaches the question in a practical and common-sense way, to meet the justice of the situation.
It is important to the orderly conduct of public justice that there be only one set of proceedings going forward, at any one time, between the same parties involving overlapping subject matters.
I am not satisfied that having the cases heard separately will save much time. It will certainly not save the time the trial judge must spend preparing for the hearing and writing reasons for judgment if the proceedings are heard separately.
Having had careful regard to the untested evidence, as well as the written and oral submissions, and having given careful consideration to the options to which reference has been made, with some hesitation, I have been driven to the view that I should follow, in broad terms, the course identified as "Option 1". By ordering that the proceedings be heard together consecutively, and perhaps also that the evidence in one be received as evidence in the other, there should be a saving of cost and time, without creating the procedural complexities that arise when formal consolidation is ordered.
This is not to say that the sequence of the hearing will not be as submitted by Ned. Although the hearing will be for all of the claims, logically and factually, the evidence in the Probate proceedings should be dealt with first, followed by the evidence in the family law proceedings, and then the evidence in the family provision proceedings. It will be for the trial judge to determine whether there should be a break between the hearing of each of the separate proceedings and for the parties to determine the order of witnesses and the like. No doubt there will be pre-trial directions, and, as I am conscious of the different stages of the different proceedings, no doubt, whoever hears the proceedings will also.
I make clear to the parties and the legal representatives that the evidence in all proceedings referred to will need to be completed before the matters are set down for hearing. This may require effort by the parties, their legal representatives, and, perhaps, others, to ensure that the preparation of the evidence in the family law proceedings does not delay the hearing of the other proceedings. (In regard to this matter, the expert evidence of value of the property of both Donna-May and the estate will have to be resolved before the matters are set down for hearing.)
By the date of the commencement of the hearing, agreement should be reached on the value of the property of Donna-May or the deceased that is in dispute.
In relation to Ned's submissions regarding resolution, it often happens that cases resolve during a hearing. Whilst, on present indications, settlement seems unlikely, it could occur at any time. One would have thought that before the matters are set down for hearing, an opportunity to engage in some alternative dispute resolution will be given. There would be no reason why one, or other of the different proceedings could not be resolved if the parties wish to do so.
I shall case manage the Probate proceedings and the family law proceedings until they are ready to be listed for hearing, after which I shall refer the matter to Hammerschlag CJ in Eq, or as he directs, to appoint a hearing in a manner that best suits the Court.
In light of my determination, that the Probate proceedings, family law proceedings, and any family provisions should remain in this Court and be heard together consecutively; order 5 sought by Ned's notice of motion filed 31 May 2022, seeking an order under r 28.2 of the UCPR that the Probate proceedings be determined separately, has now effectively been determined. The remainder of Ned's notice of motion was addressed by the Court's orders made on 1 July 2022, as I have outlined earlier.
Whilst it has been written that an order pursuant to s 79 is a "once and for all order" (see Strahan at [132]) it is also clear that the power in s 79 may be exercised by a succession of orders until the power is exhausted by final orders dealing with all known property. Brereton J in Paris King Investments referred to the Full Court's decision in Zschokke, noting, at [33], that
"…while the requirements of s 79(2) and (4) must be observed in the same manner as for any interim property order, if it appeared that the applicant would likely receive by way of property settlement a sum sufficient to cover the advance, then an interim order may be made [Zschokke, 780-781; see also In the Marriage of Harris (1993) 16 Fam LR 579 at 586]."
Section 80 of the Family Law Act, relevantly, provides:
"(1) The court, in exercising its powers under this Part, may do any or all of the following:
(a) order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic sum;
(…)
(h) make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;"
It was not in dispute that together, ss 79 and 80 confer power on the Court to make an order by way of interim property settlement. Section 80 alone is not a source of jurisdiction for such an order. Rather, s 80 is what has been described as an "enabling provision" that provides various ways in which the general power in s 79 may be exercised in individual cases.
In Harris at 477, the Full Court observed:
"[t]here is nothing in s 79 which the legislature intended to exclude it from the operation of s 80 in an appropriate case and there is no valid reason why the court should read into s 79 any such limitation. Section 80 is intended to be a wide, enabling provision and there is no justification for imposing limitations upon its normal or ordinary meaning and operation when applied to s 79".
In In the Marriage of Davidson (1994) 117 FLR 335 at 347, the Full Court wrote:
"Section 80(1) is limited by its introductory words, namely that "The court, in exercising its powers under this Part, may do any or all of the following ...". That is, s. 80(1) is activated by the exercise by the court of some other of the powers in Part VIII."
(See also the comments of the Full Court in In the Marriage of Yunghanns (1999) 149 FLR 247 at 281)
Therefore, in exercising the power under s 79 of the Family Law Act, the Court may make an order of the type described in s 80(1)(h): Strahan at [122], [213].
Even after the death of a party to the marriage, an interim order, under s 80(1)(h), is permissible, so long as the requirements of s 79(8) are satisfied.
Section 79(8) provides:
"Where, before property settlement proceedings are completed, a party to the marriage dies:
(a) the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;
(b) if the court is of the opinion:
(i) that it would have made an order with respect to property if the deceased party had not died; and
(ii) that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii) any of the property of the parties to the marriage or either of them; or
(iv) any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and
(c) an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party."
The power under s 79(8) has been considered by the High Court, in a number of cases. Essentially, the provision is designed to satisfy the moral obligations arising from a marriage, which the death of a spouse may have otherwise defeated. The sub-section has been upheld as constitutionally valid.
In very broad terms, Ned, in conducting these proceedings in substitution for the deceased, stands in the same position as the deceased would have stood but for his death.
In In the Marriage of Fisher (1986) 161 CLR 438 at 457-458; [1986] HCA 61, Brennan J wrote:
"Section 79(8) does not confer jurisdiction on the Family Court to entertain proceedings commenced after the death of one of the parties to the marriage. The proceedings to which it relates are proceedings commenced between the parties to a marriage with respect to the property of those parties or either of them arising out of the marital relationship or otherwise falling within par. (ca) of the definition of 'matrimonial cause' in s. 4(1) of the Act. The proceedings must have been a matrimonial cause commenced pursuant to s. 79(1). The death of a spouse will not always extinguish or satisfy the moral claims of the surviving spouse and children to which effect would have been given if the proceedings had been completed. Section 79(8) empowers the Family Court to give effect to the moral claims in respect of the property of the spouses which was made available to answer those claims by the commencement of the proceedings, provided 'it is still appropriate to make an order with respect to property': s. 79(8)(b)(ii). That qualification on the power, coupled with par. (ca)(i) of the definition of 'matrimonial cause', ensure that the jurisdiction is exercised only in cases where the moral obligations arising out of the marriage remain unsatisfied.
Section 79(8) provides machinery for the discharge of those moral obligations in priority to any rights in the property of a party to a marriage which arise by testamentary disposition of that party's property or by any other devolution of that property on that party's death."
Gibbs CJ (with whom Wilson J agreed) wrote at 448:
"It is true that s. 79(8) provides for the creation of new proprietary rights after a marriage has been terminated by death. However, those rights may be created only if proceedings with respect to the property of the parties to the marriage or either of them had been commenced while the marriage was subsisting and only if the proceedings are continued by or against the legal personal representative of the deceased spouse; further we are concerned only with the case in which the proceedings arose out of the marital relationship. An order may be made under the subsection only if the Family Court is of the opinion that it would have made an order with respect to property if the deceased party had not died and that it is still appropriate to make an order with respect to property. We are not concerned to consider in what circumstances it would be appropriate to make an order that would benefit complete strangers, but clearly the discretionary power to make an order under s. 79(8)(b) should not be exercised lightly."
In Stanford, at [24], s 79(8)(b) was analysed as follows:
"Section 79(8)(b) thus requires a court considering an application for a property settlement order which is continued by or against the legal personal representative of a deceased party to determine first, whether it would have made an order with respect to property if the deceased party had not died and second, whether, despite the death, it is still appropriate to make an order. Both of those inquiries require consideration of section 79(2) and its direction that the court not make an order unless 'satisfied that, in all the circumstances, it is just and equitable' to do so. It follows that, in cases where section 79(8)(b) applies, a court must consider whether, had the party not died, it would have been just and equitable to make an order and whether, the party having died, it is still just and equitable to make an order."
In Grace v Grace [2012] NSWSC 976, Brereton J after referring to the two necessary conditions, added at [242]-[243]:
"…As to the first of those conditions, the court is required to consider and decide whether, if the deceased spouse had not died, the court would have made an order in the proceedings, and in considering that question the court has regard to the substantive circumstances relevant to the exercise of the jurisdiction invoked by the initiating application which existed immediately before the death of the deceased spouse. In short, the court must be satisfied that at the time of the death one or other party had a good cause of action for an order under s 79 in respect of which the court's jurisdiction had been regularly invoked. The court is not required to work out the precise order it would have made had the deceased not died.
As to the second condition, relevant factors include the consequences of the death of the deceased spouse on the financial position of the surviving spouse. For example, the surviving spouse may benefit from the deceased's estate in such a way that any further property adjustment is unnecessary. Another common consideration is that the deceased spouse has no continuing maintenance needs: this will often have a marked impact on the balance of the s 75(2) factors. Otherwise, the court takes into account the considerations relevant on an application under s 79, including in particular the contribution based factors specified in s 79(4)(a), (b) and (c), and the means and needs factors referred to in s 75(2) and incorporated by s 79(4)(e). The court does not take into account the claims or financial circumstances of the beneficiaries of the deceased spouse's estate. This means that the claim of or against the surviving spouse is to be considered essentially as between husband and wife before the claims of other beneficiaries are taken into account." (Omitting citations)
Turning next to the way in which s 79 and s 80 operate, in Marshall & Marshall [2015] FamCA 712 at [33] McClelland J wrote:
"(i) Together, s 79 and s 80(1)(h) of the Family Law Act confer a power on the Court to make orders for interim property settlement.
(ii) Section 79 confers a discrete power to make orders for property settlement and the Court may exercise the power conferred by s 79 through 'a succession of orders until the power … is exhausted' or a final order dealing with all the known property of the parties is made.
(iii) Section 80 is not in itself a source of jurisdiction for such an order to be made. Rather, the section is an 'enabling provision' that provides various ways in which the general power in s 79 may be exercised in individual cases. This includes, by s 80(1)(h) making 'a permanent order, an order pending the disposal of proceedings, or an order for a fixed term, or for a life or during joint lives, or until further order.'
(iv) There are two stages to the hearing of an application for property orders.
(v) There is no barrier or threshold requiring an applicant to establish 'compelling circumstances' at either the first or second stages of the Court's consideration.
(vi) Given that the parties are effectively seeking access to their own funds, it is unnecessary for there to be 'any detailed enquiry as to the purpose for which funds are to be used'.
(vii) Sufficient particulars must nonetheless be provided to enable the Court to determine;
(i) That the application is 'genuine'.
(ii) To identify 'the circumstances that make it appropriate to give consideration to exercising its power'.
(iii) To sufficiently weigh the identified need 'against the benefit of having only one exercise of a s 79A power'.
(viii) While the usual s 79 considerations apply to the second stage of the process, a detailed analysis of those considerations is not required in any interim hearing.
(ix) Nevertheless, because the very nature of an interim hearing is such that the Court is not in a position to properly evaluation the evidence, the Court should take a conservative approach including in respect of determining whether there are likely to be sufficient resources of the parties available at final hearing to accommodate any 'adjustment issue'.
(x) After completion of the first two stages, it is then necessary to focus on that 'adjustment issue'. In terms of quantum, it is necessary to consider whether an interim property order would give a party so much that it could not be adjusted on the final hearing.
(xi) In terms of form, such an order must be of a nature that it is 'capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power.
(xii) In that respect, the interim order 'must be capable of variation or reversal without resort to s 79A of the Act or appeal'.
(xiii) An applicant is required to show more 'than the mere fact that upon final hearing the applicant would receive the property being sought' or an amount in excess of the funds being sort' from the other party.
(xiv) The exercise of the jurisdiction should be conducted in the context of and with an appreciation that 'as a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.
(xv) The overriding consideration at all stages of the process is that the Court is satisfied that it is 'just and equitable' to make the order in circumstances before the Court.
(xvi) In evaluating the competing contentions, it is necessary to have some regard to the fact that, in family law proceedings, one party may have the predominance of resources.
(xvii) Perhaps the most common situation in which the Court would be prepared to entertain an application for interim property orders, is when the party with access to the least resources requires funds to conduct their own litigation, that is, to effectively even out the legal playing field.
(xviii) While the majority of cases in which interim property orders have been made relate to applications to obtain funds to conduct litigation, that is by no means the only instance where such orders have been made. Other instances include;
(i) Situations where parties may need access to resources 'to meet debts which may result in the party being pursued by creditors'.
(ii) The need for a party to make payments to the benefit of the children.
(iii) To take advantage of other financial opportunities.
(iv) Where the parties consent.
(v) Where there are urgent situations such as:
(i) Where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period.
(ii) Cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children."
In Mulford & Mulford [2019] FamCA 843 at [16], and Cao & Trong (No. 2) at [34], Wilson J summarised the guiding principles for the determination of interim property orders, which was subsequently cited in Leventis & Leventis [2021] FedCFamC1F 46 at [15]; Verdon & Verdon (2020) 62 FamLR 573 at 585; and most recently in May & May [2022] FedCFamC1F 227 at [27]:
"In relation to interim property orders, certain guiding principles are applicable to the facts of this case. They include the following -
a) the majority of the court in Strahan held that when consideration is being given to the appropriateness of an order being made for an interim property settlement order, more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party;
b) balance must be given to the risks of unduly limiting the final orders that can be made against the circumstances said to show that it is just and equitable to make interim orders;
c) in Strahan it was held that the first stage of any consideration of an application for a partial property settlement order requires a determination of whether the interests of justice require the exercise of power under s 79 and s 80(1)(h) on an interim basis;
d) compelling circumstances need not be shown by an applicant for a partial property settlement order, as was held in Strahan;
e) ordinarily an order under s 79 is made once only after a final hearing, as was held in Strahan at [132];
f) consideration must be given to the reversibility of the order, as was held in In the Marriage of Zschokke and Gabel;
g) in addition, a court entertaining an application for a partial property settlement should consider the need for and effect of interim orders weighed against the risks that the exercise of the power on an interim basis will interfere with the power of the court to make just and equitable orders on a final basis;
h) further, a court entertaining an application for a partial property settlement order should consider whether the order is just and equitable according to at least a preliminary view of the likely range of outcomes;
i) further, a court entertaining an application for a partial property settlement order should balance the risks by considering not only the quantum of the orders but also the risk of unduly limiting the final orders that can be made or even potentially defeating parties' claims; and
j) a court entertaining an application for a partial property settlement should take into account that a party should not be denied the ability to liquidate assets where there are real needs for those resources such as meeting debts due to creditors."
There was really no dispute that it is for the applicant for an interim order, at a time prior to final hearing, to satisfy the Court of the reasons why it is in the interests of justice for such an order to be made, rather than for there to be a once and for all order made at final hearing.
In this regard, in Medlow & Medlow (2016) 306 FLR 183 at 199-200; [2016] FamCAFC 34, the Court wrote:
"The onus was clearly upon [the applicant] to establish that there were sufficient assets available for the interim distribution and that the effect of any interim order was capable of being reversed as part of the final hearing or at least would not defeat [the respondent]'s property claim. The onus was not on [the respondent] to adduce such evidence."
Any interim property order should not exhaust the discretion in s 79 of the Act. In Strahan, at [136], the Full Court wrote:
"As to the third matter identified at 79,930 by the Full Court in Harris, in discussion before us it was described as the 'adjustment issue' or 'claw-back issue'. It was submitted by senior counsel for the Wife that it is relevant to consider whether an order would give the applicant 'more than they would be indubitably entitled to on a final hearing' or alternatively 'would it give them so much that it could not be adjusted on a final hearing?'. As we have observed the Full Court in Zschokke at 83,220-221 stressed the importance of consideration of the 'adjustment issue' if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be 'capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power'."
In Osferatu & Osferatu [2012] FamCA 408 at [41], Watts J made clear a detailed inquiry is not required:
"As was discussed in Harris and confirmed in Strahan, the second step in making an interim property order is to have regard to the usual matters in a section 79 order (ss 79(2) and 79(4) FLA). A detailed inquiry is not required, but there must be some assessment of section 79 factors. Given it is an imprecise exercise, the interim property order has to be "conservative" so that the final outcome of property settlement will not be compromised by the interim property order. Either the remaining property needs to be sufficient to meet the legitimate expectations of both parties at the final hearing, or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so."
In Zha & Wun (No 2) [2022] FedCFamC1F 576 at [30], Schonell J after citing both Strahan and Medlow wrote:
"Therefore, the authorities establish that the Court should consider the following in making an interim property order:
(a) The Court should act conservatively.
(b) Is it in the interests of justice to make an order?
(c) Is a case established to make a s 79 order? A detailed assessment of the s 79 considerations is not required.
(d) Are there sufficient assets available for an interim distribution? However, it is not necessary to point to an immediate fund.
(e) The categories of cases in which an order will be made are not closed and are not limited solely to costs.
(f) Is the order capable of being reversed or taken into account at the final hearing?
(g) Albeit that the matter can be determined pursuant to a particular section of the Act, the ultimate categorisation of the amount to be paid can be left to the final trial judge."
Finally, in Bing & Bing (2007) FLC 93-318; [2007] FamCA 418 at [23], it was observed by the Full Court that:
"…The mere assertion that there are no immediately available funds to provide to the applicant to enable him or her to continue on with the proceedings cannot simply be accepted at face value. If it is apparent that one of the parties controls a vast pool of assets (irrespective of whether those assets are readily capable of liquidation) then the Court has a broad enough discretion to enable an order to be made for the provision of funds by the holder of those assets to enable the other party to continue on with litigation…"
As there are sufficient funds to enable the payment of interim order, and since the effect of any such order can be readily taken into account at a final hearing, it cannot be regarded as difficult for such an order to be made, particularly where a need is shown.
I accept that a mere preference to retain assets does not make a proposed order just and equitable, the question to be answered being whether the evidence established that Donna-May is unable to meet her expenses, (which would justify an interim property adjustment order). In this regard, it is relevant that her earning capacity appears to be somewhat limited. Yet, there could very well be potential injustice caused by an outcome of the notice of motion which has the consequence of her having to sell, or mortgage, her property to pay what could be paid, at least partially, by way of interim property adjustment order.
In particular, I am satisfied that the case raised by Donna-May is sufficient, in all of the circumstances, as to its nature and prospects, to justify an interim order: Salvage & Fosse (2020) 61 FamLR 45 at 49-50; [2020] FamCAFC 144 at [21]. However, in reaching the quantum of the interim order, amounts that she has already received must be taken into account.
Also, I have taken account of what was written in the 2020 Codicil (even though it is said by Donna-May to be one written when the deceased lacked testamentary capacity and also that he did not know and approve its contents). I have also considered the Initial Response filed in the family law proceedings, to which reference has been made, in which the litigation guardian of the deceased seemed to accept that she would receive $2 million. (I have earlier referred to the amended Response which seeks the dismissal of the family law proceedings). Finally, I have also considered her family provision claim, in the event that she was unsuccessful in the other proceedings. In this regard, the value of the deceased's estate, whether as asserted by Donna-May or Ned is extremely large.
As I have already identified, Ned has submitted that the Court will, ultimately, be satisfied that a property adjustment order ought not be made at all. However, as I have already said without reaching a definitive conclusion, I am satisfied, at this interim stage, that one, or other, of the proceedings brought by Donna-May has some prospects of success. Yet, bearing in mind the position of the estate and Donna-May's agreement to secure any amount awarded in case she does not succeed in all of her claims, this would provide a way of reversing any order now made. Thus, it is also just, in the circumstances, to make an order securing repayment of the amount provided to her. If an order is made in any of the three different proceedings, the fact of any interim property order and any litigation funding order can be appropriately adjusted.
I then turn to "if the power to make an interim property order is to be exercised, how should it be exercised". The second step requires that the provisions of s 79 be considered and applied, but with some limitations, given that the hearing is not final in nature: Strahan at [135].
The "overriding requirement" for the exercise of the Court's discretionary power under s 79 is that the Court "is satisfied that, in all the circumstances it is just and equitable": s 79(2) of the Family Law Act; Bevan at [70]; Mallet at 647 (Dawson J).
In Swift & Swift [2020] FamCA 991 at [26], Gill J acknowledged that due to the inherent limitations of interim proceedings, it may not be possible to identify definitively, or even approximately, the interests of the parties or the values to be attributed to such interests.
His Honour then continued at [29]-[30], saying:
"What is then required is that the legal and equitable interests on an interim application, are sufficiently identified to both answer the question of whether it is just and equitable to make any adjustment, and just and equitable to make the particular adjustment. At times, this will be answered by the concession made by a party that the other party will ultimately be entitled to such an adjustment. At other times, although parts of the pool are unidentified, the pool is sufficiently identified such that it is plainly apparent that such an adjustment will not prejudice the ultimate exercise, whether that be by virtue of reversibility, or otherwise.
Those matters are sufficiently addressed by the concession as to reversibility, that is, that an interim payment to the wife will not prejudice the ultimate adjustment pursuant to s 79. That is, the wife is anticipated by both parties to have an ultimate entitlement that will more than cover the partial distribution that she seeks. When combined with the impetus for such an order flowing from the complex litigation the wife faces, an order should be made for the sum sought by the wife, even though that falls short of the estimated amount required."
This is particularly the case where there are also probate proceedings that remain on foot.
Another complicating factor in these proceedings, is that while the estate remains unadministered, the beneficiaries have no legal or beneficial interest in assets comprising the estate, but only a right against the executors to have the estate properly administered: Commissioner of Stamp Duties v Livingston (1964) 112 CLR 12 at 17-18 (Privy Council).
However, Donna-May has adduced sufficient evidence, which, even though it is likely to be tested, is reasonably able to satisfy the Court, at this relatively early stage of the various proceedings, that this is a case in which justice and equity could require the making of an order. I make clear in stating this, I am doing no more than stating, in light of the circumstances, including the nature of the challenge to the validity of the 2020 Codicil, the duration of the marriage, her contributions thereto, the nature of the family provision proceedings, and the recoverability of any amount advanced, to which she has deposed, that each is, at least, arguable, on the current evidence, and none of which appears to be fanciful or misguided.
Secondly, the court must take into account the respective contributions of the parties referred to in paragraphs (a), (b) and (c) of s 79(4): Zschokke at 390.
It is well settled that the assessment of contributions is not a mathematical exercise, nor does there need to be a causal relationship between contributions and a financial product of contributions: Barnell & Barnell (2020) 60 Fam LR 377; [2020] FamCFAFC 102 at [30]-[31], citing Lovine & Connor (2012) FLC 93-515; [2012] FamCFAFC 168 at [40]-[42], and Dickons & Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154 at [14]-[21].
Relevantly, in Dickons at [19]-[21], the Full Court observed:
"That is true of assets or income generated within the relationship and it is equally true of assets or income coming from outside of the relationship (for example, as here, in the form of inheritances). In the same way, s 79(4) specifically requires the court to take into account contributions made to the welfare of the family (and substantively and 'not in any merely token way'; see, Mallett v Mallett (1984) 156 CLR 605 at 636; 52 ALR 193 at 218; 9 Fam LR 449 at 470; [1984] HCA 21 per Wilson J) notwithstanding that those contributions may not be, or cannot be seen to be, directly linked to the available property at trial, or any increase or decrease in the value of the property.
Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that 'trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment'. (In the Marriage of Aleksovski (1996) 20 Fam LR 894 at 903; (1996) FLC 92-705 at 83,437). In Aleksovski, Kay J outlined the well-known 'gold bar' analogy and said '[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship' (at 83,443).
Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79). That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage. Is it, for example, a relationship, as Deane J put it in Mallett at 640-1 'where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property' or is it, for example, a union where parties lived very separate domestic and financial lives?'
Thirdly, the Court is required to undertake consideration of the matters in s 79(4) of the Family Law Act including by reference to s 79(4)(e) the matters in s 75(2) so far as they are relevant.
However, consideration of such matters may be brief: Strahan at [137]; Osferatu at [41] (Watts J). If it is established that "it seems likely to the Court that … the applicant … will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made": Zschokke at 390; In the Marriage of Poletti.
I have also borne in mind that Donna-May remains in occupation of the Woollahra property and that she is paying no rent or occupation fee. Whether, ultimately, she will be required to do so will be determined at another time. In addition, the amounts withdrawn by her, whether with, or without consent, totalling $830,035, together with the amounts totalling $540,000 that she received pursuant to the orders made Lindsay J, should be taken into account as a contribution by the estate to her post-separation expenses: Grier & Malphas [2016] FamCAFC 84 at [57] (Bryant CJ, Murphy and Kent JJ agreeing at [141]).
I also note that Donna-May accepts that the deceased "made significantly greater financial contributions" during the marriage.
I do not accept, however, that Donna-May should receive the lump sum that she seeks, based upon what are said to be her weekly expenses, which have not been properly quantified, or that her legal costs are likely to be in the range of $1.8 million.
Naturally, I have borne in mind the submissions of Ned's counsel regarding what are said to be her "opaque financial disclosure": Ned's first outline of written submissions dated 26 June 2022, at [19]-[27], and [32]-[33]. However, Donna-May should take, at least, partial, responsibility, for her own expenditure, and also for the incurring of legal costs, as is demonstrated by the history of the various proceedings.
In Strahan at [138], the Full Court had accepted that an inability on the part of an applicant for an interim property order to defray the costs of litigation to meet his, or her, litigation costs would be a relevant matter to take into account at the procedural or first stage: Zschokke at 392. Given that Donna-May's application is one now for an interim property order and not a litigation funding order under s 117, she can use any amount received as she sees fit. The amount paid pursuant to the interim property order becomes her property. (In any event, there was no evidence that she could not obtain a litigation funding loan to meet, in whole or in part, such litigation costs.)
Any amount that Donna-May receives out of the deceased's estate should be characterised as an interim property settlement order. In addition, as she has offered, the lump sum to be paid to her should be secured over one, other, or both, of the parcels of real estate that she owns, or otherwise. In this way, since there appears to be reasonable equity, notwithstanding the existing mortgage on the Darlinghurst Property, or the alleged equitable charge over the Redfern Property, Ned, on behalf of the estate will be able to recover any overpayment. In this way, if the order is made and satisfied, it would not defeat Ned's legitimate claims, on behalf of the deceased's estate, at a final hearing.
I am also satisfied that there are sufficient funds in the deceased's estate to enable a payment of the amount the subject of an interim property order, and that the effect of any such order can be readily taken into account at a final hearing. On the other hand, I have not been persuaded that it is just to require Donna-May to sell one, or both, of the properties that she owns. The effect of the interim property order that I propose to make will not interfere with the power of the court to make just and equitable orders on a final basis. Nor will it defeat either party's claims or defences.
Weighing all of the factors, and doing the best I can on an interim hearing, I am of the view that Donna-May should receive, by way of an interim property order, the amount of $750,000. That, taken with the amounts she has received, would total slightly more than $1.7 million. As stated, the lump sum of $750,000, should be the subject of security so that, if necessary, it can be recovered. I shall leave it to Ned, initially, to determine the question of the source of the funds to meet such a payment and to the parties to agree upon the way in which the amount paid should be appropriately secured. It should be paid within 14 days of the security being provided.
I shall allow the parties to provide a form of orders that reflect the reasons and to work out the method by which Donna-May can secure the amount. The order should also include the dismissal of the notice of motion filed on 3 May 2022.
The matters are already returnable before me for directions on 16 November 2022, and I shall retain that date for the making of orders and give further directions for the further conduct of the proceedings. In regard to directions, the parties should discuss the evidence required to be obtained, including any joint expert evidence of valuations and, if at all possible, should have agreed short minutes dealing with the evidence.
Subject to any argument about costs, it seems to me that the costs of the various motions, determined by the orders to be made, should be costs in the proceedings to which they are specifically referable. In this way, the trial judge will, at the conclusion of the hearing be able to exercise jurisdiction bearing in mind the results of the different proceedings.