6 At one time it was contended in the appeal that the orders for costs were beyond the Master's powers, the principal ground being that the order in the Probate proceedings referring the question of costs to the Master related only to the first Notice of Motion and not to the cross-motion. This contention was abandoned during the hearing of the appeal. It was further contended that Order 2 of the Master's orders which related to the remuneration and the costs to the administrator was beyond the powers of the Court (and this contention did not relate only to powers of Masters).
7 There may be different considerations relating to different parts of the moneys ordered to be paid by the Master's Order 2. The remuneration of Mr Shirlaw, administrator of the estate, could at least in concept be divided (although it has not been divided) into remuneration for administration of the estate in the ordinary course, and remuneration for preparation of reports on estate affairs, including legal costs.
8 By 24 May 2004 Mr Shirlaw's remuneration amounted to $90,613.43 (with GST) and his legal costs amounted to $27,835.92 (plus GST); there may have been some increase since then. We were told that the total costs and expenses payable under the Master's orders have been estimated at $278,400.00; but the figures have not been finally established.
9 The principal asset in the deceased's estate was all the shares in Holyhead Pty Ltd, which was no longer active at the time of her death. The company's principal asset according to its own records was cash at bank, which at 25 March 2002 was $269,651. The company was the registered proprietor of the house at 49A Kyle Parade, Blakehurst, New South Wales, which was the deceased's home for many years. At various points parties to this litigation asserted, and all acted on the basis that the company held the house on behalf of the deceased in some way; although it does not appear in what way that was, the end result has never been disputed.
10 The deceased owned a number of accounts at banks and two deposit accounts, one styled "Holyhead Family Trust" (which was later renamed as "Brock Family Trust (AG)"), and the other "Brock, Holyhead Pty Ltd", with Deloitte Touche Tohmatsu (referred to as Deloittes), the accountancy firm of which Mr Brock is a partner. She also owned some shares of small value. There is no provision in the will authorising the continuance of existing forms of investment, or otherwise dealing with management of estate affairs (apart from provisions which did not take effect). In principle administration of the deceased's estate should not have been difficult; the main tasks were to sell the house, collect the bank accounts and deposits, and wind-up the affairs of Holyhead Pty Ltd, which involved the need to obtain assessments of land tax. In fact however the difficulties have been great. The history of estate administration and of the litigation in the large volume of affidavits in evidence before the Master is festooned with narrations of relatively small matters, incidental accusations, pejorations and colour. Where it falls to the Court to decide questions of costs for proceedings which were not carried to adjudication, it is not appropriate to hold a trial of the facts and issues and come to conclusions on the merits in the way which would be appropriate if final orders were required; and the parties did not ask the Court to do this. I will however give an account of the events when disposing of issues in the appeal. My account of the events may disregard a number of matters which parties regard as important; I am observing the limitation that contested facts need not be pursued to findings resolving the contest; and the appeal was not conducted in a way which would have made that possible.
11 A grant of Administration of the deceased's estate was not obtained until on 22 April 2002. Before Administration was granted there were a number of events in which estate assets were not dealt with in proper ways. Mr Shirlaw reported his investigations into the deposit account styled Brock Family Trust (AG) in his report of 3 October 2002 (Blue 2/366). The deceased placed an initial deposit of $54,402 on short-term deposit with Deloittes in mid-1997, and this amount was transferred to Brock Family Trust (AG) in May 1998. During the deceased's lifetime funds apparently under the control of Mr Brock belonging to members of the Brock family and not to the deceased passed in and out of this account from time to time and there were five occasions, listed in a table by Mr Shirlaw (Blue 2/366), when the total funds in the account were less than the deceased's entitlement for varying periods, the maximum duration of deficit being thirty-eight days. Counsel for the appellant put these dealings forward as a matter of complaint, but in the absence of evidence that the deceased did not authorise her money to be dealt with in this way there is no reason to treat the conduct of the account as unsatisfactory.
12 After the deceased's death Brock Family Trust (AG) continued to exist. The account continued to contain and be the vehicle for dealings with funds other than funds of the deceased and her estate. Mr Shirlaw's report identifies periods when there were deficits in the account so that there was not sufficient money in it to meet all estate claims; if the estate claims were to be paid in full out of the account the estate would have had to establish some priority over other claims. It seems that there were sufficient funds in the account to repay the initial deposit of $54,402, not necessarily the accrued interest, at all times, but the estate was not fully protected in the sense that if there had been competition with other claims the estate might have been entitled only to a rateable part of the fund or to a balance after satisfaction of other claims.
13 A drawing of $20,000 from the account on 2 February 2001, not for estate purposes, produced a situation where there was a deficit of $8,273 between the amount in the account and all claims on it. Parts of this deficit continued for 67 days. It was reduced to $7,373 on 25 February 2001 when interest was credited, and increased to $9,145 on 30 March 2001 when $1,397, not for estate purposes, was debited. Then the deficit ended on 10 April 2001 when $190,000 to which Mrs Brock was entitled was deposited in the account; and Mr Shirlaw's report seems to show or assume that the drawings which caused the deficit were chargeable against that deposit. In the course of his administration Mr Shirlaw collected $74,473 from Brock Family Trust (AG) being the initial deposit of $54,402 with accrued interest.
14 In retrospect I am unable to attribute much importance to the deficits, which were not large in relation to the size of the estate and were overcome in about two months in a flow of transactions including a large credit; there should never have been any deficit, but there is no reason to think that there was any intended misapplication of funds. From the time the deficit was eliminated there was no loss for which Mr Brock could be called on to account or to pay compensation. However the estate asset was not dealt with in the correct manner, for several reasons. A deposit of money at interest with a firm of which Mr Brock was a partner was an unsuitable investment in which to keep estate assets. As Probate was not obtained with reasonable promptness no one had lawful authority to deal with the Brock Family Trust (AG) or see to the protection of the interests of the estate. The deposit account was not brought under the control of the four executors but remained under the control of Mr Brock alone. The funds were not invested in a way which was clearly identified or earmarked as an estate asset. The estate asset was mixed with funds held with other interests, with the result that, in theory, although there was no adverse outcome, it was not clearly identifiable and free from risks of shared losses. Mr Shirlaw was able to sort out what had happened and establish entitlements, but until he did so there were no records establishing clearly what the entitlements were.