Bollinger v Bell; The Estate of the Late Colin Bell

The Separate Question

1. The Court offered the parties the opportunity to resolve the question of the presently binding nature of Lindsay J's 15 December 2021 orders as a separate question under UCPR, r 28.2. Resolution of that question is likely to reduce future contests between the parties. Any special administrator the Court appointed would have to face and decide this claim by Ms Bolinger. It is convenient that the issue be resolved in advance of the appointment of a special administrator. This will enable all parties to understand whether it is necessary for Ms Bolinger to bring an application for interim maintenance either under the Family Law Act 1975 (Cth), or under the Succession Act 2005. If Ms Bolinger is not entitled to continuing maintenance under the orders in the protective proceedings, then she may be more likely to be able to maintain an application for interim maintenance.
2. Both parties indicated that they were a position to put full argument in relation to the binding nature of Lindsay J's 15 December 2021 orders, even though the matter was being heard in the duty list. They elected to have the issue determined on a final basis. The Court indicated it would make an order for separate decision of the issue under UCPR, r 28.2.
3. Ms Bolinger contended that Lindsay J's orders on 15 December had a continuing effect after the death of the deceased and were binding upon his estate. She submitted that the Court did not expressly identify the power it was exercising in the protective proceedings on 17 September 2021 and 15 December 2021. But she submitted that the Court was either exercising power under TAG Act, ss 64 or 65 or Family Law Act, ss 77 or s 80. She submits that order 2(c) made on 17 September 2021 and order 4 made on 15 December 2021 were orders in proceedings which did not abate upon the death of the deceased. Ms Bolinger submits that the orders in question were framed as being against the estate rather than as directions to the TAG. And although they were made in relation to the TAG as receiver and manager of the estate, they were nevertheless made against the estate being managed by TAG. Alternatively, Ms Bolinger submitted the orders were made in the exercise of jurisdiction in the Family Court proceedings.
4. Mr Bell's answers to these submissions are persuasive. The Court accepts the following reasoning based upon his submissions. At the time of the orders in the protective proceedings, the Court had appointed the TAG as the receiver and manager of the Deceased's living estate under TAG Act, s 41(1) and the deceased was thereby a "managed person" under the TAG Act.
5. The order on 17 September 2021 requiring the making of those payments should be understood as a direction of the Court made under TAG Act, s 61(1), which provides as follows: "The Supreme Court may give to the NSW Trustee such directions as the Court thinks necessary with respect to the exercise by the NSW Trustee of its functions in its protective capacities."
6. The form of the Court's order confirms it was a direction under TAG Act, s 61(1). The order states that the TAG "shall be at liberty… to pay or allow to the plaintiff a reasonable living allowance (of not less than $40,000 per month…)", thereby preserving the TAG's discretion.
7. But the TAG' s appointment as receiver and manager of the deceased's living estate was automatically terminated upon his death by operation of TAG Act, s 93. Any directions to the TAG in respect of the management of the deceased's living estate can have no continuing operation after his death.
8. A residual obligation of the TAG arises under TAG Act, s 94(1). This is an obligation to transfer property within the deceased's estate to the estate's legal personal representative. The TAG also has residual discretionary power under TAG Act, s 95(1) to make payments out of the estate of a managed person who has died. But that is not Ms Bolinger's application in the present case and its application here is doubtful because Ms Bolinger does not have an entitlement to distribution from the residuary estate under the 2015 Will.
9. It is true, as Ms Bolinger submits, that the 15 December 2021 orders are expressed in the form of orders to the TAG rather than in the form of as guidance in the exercise of the TAG's discretion. But the Court's relevant power to control decisions of the TAG in respect of a managed person is through s 61. That is the source of the Court's jurisdiction in proceedings where the estate of a managed person has been committed to the management of the TAG under TAG Act, Part 4.5, Division 1.
10. Ms Bolinger posited other sources of power for the Court's 15 December 2021 orders outside TAG Act, s 61, namely s 64 and s 65. But none of those provisions are applicable. TAG Act, s 65 is in TAG Act, Part 4.5 Division 2, which relates to the management of estates by persons other than TAG. And on 15 December 2021 the Court was not exercising any power under the Family Law Act. The Family Court proceedings had not been cross vested into this Court at that time.
11. The operation of TAG Act, s 93 automatically terminates the TAG's functions with respect to a managed person. Supplemented by TAG Act, s 93, it reflects an important legal transformation in relation to the estate of a managed person that occurs upon that person's death. The financial arrangements made by or on behalf of a managed person with respect to maintaining other family members are displaced upon death by the intentions expressed in the managed person's will. In this case that appears to be the deceased's 2015 Will. Any harshness that might arise from this shift in focus can be alleviated to a degree under TAG Act, s 95 or by applications for interim maintenance under the Succession Act.
12. Ms Bolinger is not entitled to continuing maintenance based upon the orders in the protective proceedings. If she wishes to have further maintenance from the estate pending the resolution of the present proceedings, her way forward is now clearer. She will have to make an application for interim maintenance under the Succession Act or the Family Law Act.

Ancillary Issues

1. The parties contested several other baskets of issues which it is not necessary to set out in much detail in these reasons. The outcomes of the contest concerning those issues are incorporated in the Court's final orders and directions below.
2. Apart from the separate question two other baskets of issues arose. The first basket was whether an independent professional person with experience in estate administration should be appointed as a special administrator of the deceased's estate under Probate and Administration Act 1898, s 73 or s 74 pending resolution of these proceedings. The second basket of issues was who should be the plaintiff in these proceedings.
3. Ms Bolinger claimed that an independent professional person with experience in estate administration should be appointed as a special administrator of the deceased's estate. In reply, Mr Bell submitted that he should be appointed as special administrator of the estate. Ms Bolinger wanted the appointment made on an urgent basis in the Equity duty list, claiming that it is the usual appointment made where there is a hostile intra family-contest as to the probate of a will. And she submitted, it is the appropriate course where she is seeking the continuation of a contested $40,000 per month maintenance payment to her.
4. It will take approximately 4 to 6 weeks to ready these proceedings for a contest between these two opposed positions. The real question presently facing the Court in this Equity duty list is what should happen during that 4-to-6-week period. I see no reason to appoint an independent administrator during that period, when all that is required to be done in the meantime is to ensure that the estate's liabilities are met. There seems to be little demonstrable jeopardy to estate assets. And despite the issue being clearly flagged, Ms Bolinger has not advanced evidence on this application that unless she receives the $40,000 per month ordered by Lindsay J that she will be unable to meet her own pressing liabilities. But the estate's liabilities will need to be met on a regular basis, and someone should take control of the deceased's bank accounts and financial affairs to preserve estate assets.
5. Ms Bolinger submits that anomalies in the financial position of the estate have emerged since the death of the deceased. She points to various movements in the deceased's accounts which might perhaps indicate the removal of funds from the estate. But in the limited time available after these issues were raised Mr Bell endeavoured to explain these transactions and none of them represent a particularly compelling case for the Court to intervene in the next 4 to 6 weeks before each side has had an opportunity to adequately prepare and present his and her case for special administration of the estate.
6. Moreover, Mr Bell has given a reasonably comprehensive and transparent account of estate assets to the Court in the time that was available to prepare this matter for hearing in the duty list. Mr Bell has commenced preparing an inventory of the estate. That inventory does not bear out some of the criticisms Ms Bolinger has made of anomalies in transactions concerning the estate's assets. The main assets of the estate comprise the following: minority shareholdings in private companies collectively estimated at a value of just under $100 million; the Woollahra property, in which Ms Bolinger presently lives rent-free, said to be worth approximately $17.5 million; a trading account with Bell Potter Securities with a value of just over $7 million; a loan owing from Colin Bell Pty Ltd (of which Mr Bell is sole director), which has a likely realisable value of approximately $6 million; and, two bank accounts held with the National Australia Bank.
7. If Mr Bell succeeds in proving the 2015 Will both he and his siblings will share the substantial portion of the residue of the estate, subject to any family provision claim or Family Court claim to be brought by Ms Bolinger. Mr Bell has a strong incentive to maintain and preserve the estate for his siblings and for himself.
8. I see no reason why the estate should be put to the expense of an independent special administrator in that 4-to-6-week period, when not much needs to be done. The Court will therefore temporarily appoint Mr Bell as a special administrator with limited powers to meet estate liabilities pending the outcome of the foreshadowed contest about who should be the special administrator of the estate. That contest should take place before the Succession List judge. The proceedings will be adjourned into the Succession List.
9. The question of the proper plaintiff in these proceedings is readily resolved. Mr Bell complained that as he had advertised that he was seeking probate of the 2015 Will and the 2020 Codicil, he was the proper plaintiff. But Ms Bolinger had already commenced these proceedings and she wished to retain her role as plaintiff.
10. Mr Bell is the logical plaintiff in these proceedings. He is propounding the 2015 Will and the 2020 Codicil. Ms Bolinger challenges the second of these instruments on the grounds that the deceased lacked testamentary capacity at the time he executed it. She also brings a challenge to the 2015 Will on similar grounds, claiming that upon an intestacy, as the deceased's widow she is entitled to the statutory legacy and half of the residue of the estate. She is the logical defendant in these proceedings
11. It would occasion unnecessary expense for Mr Bell to commence separate proceedings. The best course is for Ms Bolinger's existing statement of claim to become a cross-claim against Mr Bell in these proceedings. The directions made below achieve that intent.

Conclusions and Orders

1. For these reasons Court will make the following orders and directions:
2. The Court makes the following orders and directions: 1. In these orders the following expressions have the following meanings: 1. "The deceased" is the late Colin Bell who died on 22 March 2022; 2. "The estate" refers to the estate of the deceased; 3. "The will" refers to the testamentary instrument dated 18 May 2015 executed by the deceased which is the subject of contest in these proceedings; 4. "The codicil" refers to the testamentary document dated 3 November 2020 executed by the deceased which is the subject of contest in these proceedings; 5. "Ms Bolinger" refers to Ms Donna-May Bolinger, the present plaintiff in these proceedings; 6. "Mr Bell" refers to Mr Ned Bell, the present defendant in these proceedings; 7. "The Family Court proceedings" means proceedings commenced by Ms Bolinger against the deceased and numbered SYC8045/2020 in the Family Court of Australia, Sydney Registry; 8. "The protective proceedings" means proceedings numbered 2021/00217593 in the Supreme Court of New South Wales, Protective List, which Ms Bolinger commenced against Mr Bell and Ms Kate Perkins, a daughter of the deceased; 9. "The NSWTG" refers to the NSW Trustee and Guardian, who was appointed on 16 September 2021 in the protective proceedings to act as receiver and manager of the deceased's living estate under NSW Trustee and Guardian Act 2009, s 41; and 10. "The Bolinger motion" refers to the notice of motion filed on behalf of Ms Bolinger on 12 April 2022; 1. Mr 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"): 1. opening a bank account in the name of the estate; 2. collecting the deceased's funds into that bank account and closing any other existing bank accounts in the name of the deceased; 3. 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 estate; 4. 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 5. 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; 1. Any requirement for: 1. publication of notice of intention to apply for this interim grant of administration; 2. an administration bond and sureties; or 3. further compliance with the Probate Rules be dispensed with. 1. 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; 2. 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; 1. Ms Bolinger must by Friday, 29 April 2022: 1. file and serve any amendments to the Bolinger motion in these proceedings to seek interim maintenance; 2. make any coordinate application in the Family Court proceedings seeking interim maintenance; and 3. apply to cross vest the Family Court proceedings into this Court; and 1. 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; 1. 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"); 2. 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; 3. 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: 1. 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; 2. upon Mr Bell filing a statement of claim in accordance with sub-paragraph (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 3. 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; 1. Mr Bell shall file and serve any evidence upon which he proposes to rely in respect of the Bolinger motion by 13 May 2022; 2. If Mr Bell proposes to apply for a grant of greater powers as special administrator of the estate than the powers that are conferred upon him by these orders, then he should apply by motion for such a grant of additional powers on or before 6 May 2022 and upon the filing of such motion ("the Bell motion") the following directions will apply: 1. Mr Bell shall file and serve any evidence in support of the Bell motion by Friday, 6 May 2022; 2. Ms Bolinger shall file and serve any evidence in respect of the Bell Motion by Friday, 13 May 2022; 1. 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; 2. 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. 3. Note that Ms Bolinger has sought, but the Court has not yet been able to afford her an opportunity, to argue that the words in Order 2 above "until final judgement in these proceedings" should be varied and the Court reserves her right to put submissions and to apply to vary those words when these proceedings are next before the Succession List Judge.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 April 2022