Frisoli & Anor v Kourea & Ors; Frisoli & Anor v Kourea & Ors

(1) Extension of Time and Apportionment of the Estate & Notional Estate 6The parties ultimately agreed upon the form of orders 1, 2 and 3, which are set out at the end of these reasons. These orders give effect to the Court's orders to extend time for the bringing of Natasha's cross-claim for provision out of Albert's estate and notional estate, and to give effect to the Court's apportionment of the deceased's estate and notional estate. The Court awarded apportionments were expressed as percentages of the total net estate and net notional estate, after the deduction of expenses. This judgment chiefly deals with various contests as to which of those expenses should be deducted before the estate and notional estate are divided into the portions the Court fixed.

(2) Administration of the Goodsir Trust and the Sale of the Rozelle Property 7Holden and Atlanta proposed in argument on 7 February the making of orders: (1) appointing Holden as trustee of the Goodsir Trust; (2) directing Natasha and Tashnat to execute documents to transfer her trusteeship of the Goodsir Trust to Holden; and (3) for Natasha to deliver up possession of the Rozelle property for sale within a limited time. 8In support of these proposed orders Mr McGrath submits on behalf of Holden and Atlanta that the most efficient way to complete administration of both the estate and the Goodsir Trust is now to appoint Holden as trustee of the trust. Natasha is the current trustee of the Goodsir Trust. Mr McGrath further submits that Holden would easily be able to expedite the realisation of estate assets, when acting both as administrator of the estate and trustee of the trust. Holden's main objective is to advance the sale of the Rozelle property, which the Goodsir Trust holds. Mr Ellison SC on behalf of Natasha, resisted an order that Natasha be replaced. She sought in her competing orders a right of residence in the Rozelle property until completion of its sale. 9The competing submissions illustrate the parties' mutual mistrust about the future sale of the Rozelle property. Natasha has previously expressed a desire to live in the Rozelle property for the rest of her life. Holden and Atlanta fear that if Natasha as trustee of the Goodsir Trust is left in control of the sale process, she will delay sale so that she can reside in the property for as long as possible. 10But in the course of submissions the parties recognised that the Rozelle property should be sold sooner rather than later in the currently buoyant Sydney property market. They agreed that the property should be prepared for auction as soon as reasonably practicable. Mr Ellison SC indicated that, whatever had previously been the position, Natasha was not now seeking to buy the Rozelle property when it goes to auction. She appears to have given up her desire to live in it. 11The reasons for the parties' mutual mistrust on this issue can be reduced. The Court will require the parties to engage in a sale process within a set timeframe. Of course that cannot guarantee a sale of the Rozelle property by a certain date. But the parties seem principally concerned that the sale process begins. Both parties ultimately foresaw a similar time frame for presenting the property for sale. The issue remaining between them was that they each still wanted control of the sale. But Holden and Atlanta's concerns about Natasha's broad discretion as trustee of the discretionary trust can now be overcome using their broadly agreed timetable, and which involves the property being made ready for presentation for sale by 1 May 2014. 12Holden and Atlanta expressed other fears about Natasha's administration of the Goodsir Trust: that if, as trustee, she sells the Rozelle property, she may make unauthorised deductions from those proceeds, before she remits the proceeds of sale to the estate. 13But the Court can alleviate these fears. The Court's orders will ensure that the sale proceeds of the Rozelle property (net of sale expenses) are paid to the estate in full, and that the only other deductions from those proceeds that will be permitted will be those clearly identified deductions to be made under the authority of the Court's present orders. 14The Court raised with the parties whether or not trustees for sale could be appointed to the Rozelle property as a default position, in the event that the property were not sold by a particular time. But Mr Ellison SC pointed out, with some force, that this would be an unnecessarily expensive solution, involving coming back to Court to appoint trustees for sale. 15I accept that the simplest course, and one now without great risk to Holden and Atlanta, is to leave Natasha as trustee of the Goodsir Trust and allow her to manage the sale of the property. Her declared lack of interest in purchasing the property or living in it in the future and her 50 per cent interest in the estate and notional estate should motivate her to get the best price for the property through a sale in the near term. The Court will make machinery orders for the disclosure of information between Natasha and Holden and Atlanta, and for the timetabling of the sale and the control of the proceeds. These orders should minimise the opportunities for allegations of maladministration in relation to the sale of this trust asset. 16The Court will grant liberty to apply in relation to the implementation of these orders. If there is any default in preparing the Rozelle property for sale, or in providing information about the reserve price, or if some other concern arises about the auction, then the parties will be at liberty to bring the matter back for urgent resolution either before myself, or if I am not available, before the duty judge.

(3)The Costs of the Completed Administration and Trust Proceedings 17The parties sought special costs orders in relation to the two completed administration proceedings and the completed trust proceedings, which were described in general terms in the principal judgment: [2013] NSWSC 1166 at [4] and [5]. Holden sought that all of his costs of these proceedings be paid out of the estate and the notional estate on an indemnity basis. Natasha seeks to deduct her and Tashnat's costs of these proceedings from the sale proceeds of the Rozelle property before they are remitted to the estate. 18The efficient administration of this estate suggests that the Court should not only: (1) decide whether Holden's costs of these three proceedings should come out of the estate; and (2) decide whether Natasha's costs of these proceedings should come out of the Goodsir Trust before the Rozelle property sale proceeds are remitted to the estate; but also (3) decide what are the precise amounts of costs, if any, that the parties are authorised to treat as liabilities of the estate and the Goodsir Trust in respect of these three proceedings. 19The 2009 Administration proceedings. There were two sets of administration proceedings (2009/318691-2). The first was Holden's application for administration of Albert's estate, which was lodged in the registry in the usual course. Natasha made a counter application for administration. 20The other administration proceedings were contentious proceedings between Holden and Natasha, each seeking administration. The issue in the contentious proceedings was whether Natasha was a de facto spouse for more than two years prior to Albert's death. If she were, then she would be entitled to a substantial part of the estate on intestacy and therefore would have a pre-eminent claim to administer the estate. 21These contentious administration proceedings settled in September 2010 on the basis that Natasha consented to Holden being appointed administrator of the estate and her application for administration was discontinued. But despite this settlement the Court for other reasons has had to decide in the principal judgment the same de facto spouse issue that arose in those settled administration proceedings. And it has done so in Natasha's favour. 22No attempt was made in the present proceedings to re-open the final agreed orders in those administration proceedings. Neither side now seeks an order for costs against the other in those concluded proceedings. The only questions that arose in argument on 7 February 2014 were whether: (a) Holden, the administrator, could be reimbursed for his costs of those proceedings out of the estate or the notional estate; and (b) whether Natasha could treat her costs of those proceedings as a liability of the Goodsir Trust, for which she should be reimbursed, before distribution of the estate. 23Examination of the pleadings in the contentious administration proceedings shows that the question of Natasha's status as a de facto spouse of the deceased of more than two years was a central issue dividing the parties. When those proceedings settled in September 2010, the parties anticipated that the Court would still be deciding Natasha's status as a de facto spouse both under Probate and Administration Act 1898, s 61B, to determine the parties' respective entitlements on intestacy, and for the purposes of deciding whether she was an eligible person under Succession Act, s 57. 24Holden's costs of this litigation were not large. His costs of the two 2009 administration proceedings amounted to $15,000. Natasha estimates that her costs of the 2009 proceedings are minimal, namely $3,409.84, being $11,613.04 less Tashnat's costs of $8,203.20 for the 2010 trust proceedings. 25Although the parties themselves bore their costs of the administration proceedings, in substance what they now ask the Court to do is to allocate those costs in the family provision proceedings as if the Court had been asked to make a costs order on the settlement of those proceedings. The only difference here is that rather than re-opening the administration proceedings and making costs orders in those proceedings, the parties asked the Court to adjust the burden of costs in these proceedings. 26The exercise of discretion required in this situation is analogous to that when the Court is asked to make costs orders after the parties have settled proceedings but for the question of costs: Re Minister for Immigration and Ethnic Affairs (Ex Parte) v Lai Qin [1997] HCA 6; (1997) 186 CLR 622 ("Lai Qin"), at 624-5, per McHugh J. 27Applying McHugh J's principles in Lai Qin produces a clear result in respect of the parties' costs of the administration proceedings. Because of the Court's decision in the principal judgment, it can be said with confidence that although both parties appear to have acted reasonably by taking the positions that they did in the administration proceedings, it is almost certain that had the proceedings gone to a final contest, Natasha would have succeeded in establishing her status as Albert's de facto spouse for in excess of two years before his death and that as a result she would have had pre-eminent claim to administration of his intestate estate. She would have, in my view, been highly likely to have won those proceedings and should now be reimbursed her costs of those proceedings. 28But her costs of those proceedings should not be paid by Holden and Atlanta. They may be paid out of the joint estate and notional estate before it is apportioned among herself, Holden and Atlanta. If that is done, she will still indirectly bear 50 per cent of the burden of reimbursing herself for these costs. 29But that is a fair result. It means she does not bear all these costs herself but gets some of them back. And I will allow Holden to have some of his costs of these proceedings. He correctly submits he should be reimbursed for applying for administration. He should be allowed only $5,000 (for what should have been an uncontentious application for administration), not the total sum of $18,000, which was spent on his side on these two administration proceedings. 30The 2010 Trust Proceedings. Tashnat bought limited trust proceedings in relation to the Goodsir Trust in 2010 - being proceedings (2010/133144). These proceedings settled before Bergin CJ in Eq in July that year. These trust proceedings are referred to throughout these reasons as the "2010 trust proceedings" to distinguish them from the 2011 trust proceedings, which were before the Court at the same time as the family provision proceedings. 31Tashnat sought declarations in the 2010 trust proceedings so as to bind the defendants to those proceedings, Earthloop and Holden: that the Rozelle property is an asset of the trust; that Tashnat is the trustee of the trust; and orders, vesting the Rozelle property in Tashnat. The proceedings were necessary to validate steps Natasha had taken in her role as Nominator under the Trust Deed to appoint Tashnat as trustee in place of Earthloop in July 2009, the validity of which actions Holden disputed as an applicant for administration of the estate. 32Tashnat also seeks to treat its costs of the 2010 trust proceedings as a liability of the trust which should be brought to account in the calculation of the net notional estate. Tashnat incurred $8,203.20 in costs in the trust proceedings. Holden's costs of the 2010 trust proceedings up until July 2010 were said to be no more than $3,000. 33Both Natasha and Tashnat should have their costs of these proceedings paid out of the estate/notional estate. Tashnat needed to bring these proceedings to ensure that there was no doubt about whether the Rozelle property was part of the estate or the Goodsir trust. Holden was only made a defendant to these proceedings because he claimed administration of the estate. It seems to me that there was a degree of necessity on both sides to these proceedings. They were to provide some legal clarity to the ownership if the Rozelle property. And Holden was only joined and incurred costs in them as a potential administrator of the estate. 34Both sides should have their costs of these proceedings taken out of the estate/notional estate. But both sides are out of pocket to a degree and neither side in my view should be able to claim interest against the trust or the estate in respect of the costs they have incurred in the 2011 trust proceedings, notwithstanding, for example, the interest agreement made between Natasha and the Goodsir Trust.

(4) Non-litigation expenses of the Estate and the Goodsir Trust 35The parties were also at issue about Natasha's claim to be reimbursed with interest from the Goodsir Trust for certain non-litigation expenses, which she has paid. She seeks to have these treated as liabilities of the Goodsir Trust before the parties' shares of the estate are calculated. Natasha claims that through these payments she has funded various liabilities of the Goodsir Trust and the estate. 36Natasha's Goodsir Trust deductions. Natasha claimed a total of $369,905.73 that she submits should be recognised as non-litigation liabilities of the Goodsir Trust before the proceeds of sale for the Rozelle property are transmitted to the estate and then apportioned for distribution to the parties. The liabilities were mainly her outlays in respect of Goodsir Trust assets and are as follows: (a) On account of Land Tax on Goodsir Street and Smith Street (1/3rd share); she paid - $31,172.00; (b) On account of Council and Water Rates on Goodsir Street; she paid - $11,702.16; (c) On account of other individual payments; she paid - $30,455.74; (d) On account of mortgage payments she made in respect of Smith Street - $7,712.00; and (e) On account of moneys she paid to discharge mortgage on Goodsir Street - $288,863.83. TOTAL: $369,905.73 37It was not in dispute that Natasha has paid these sums by advancing monies to the Goodsir Trust. The question was whether they should be reimbursed to her and brought to account in the calculation of the deceased's net notional estate. It is convenient to analyse these payments by reference to each of the sub-paragraphs above. 38As to sub-paragraph (e), Natasha paid out the sum of $288,863.83 to the Rozelle property mortgagee to discharge its mortgage. Holden and Atlanta concede that this money should be deducted from the Rozelle property sale proceeds in the Goodsir Trust and paid to Natasha before these proceeds are distributed to the estate. If Natasha had not paid out the Rozelle property mortgagee, the Goodsir Trust would itself have to pay this sum to the mortgagee on sale of the property. So I will order that $288,863.83 may be deducted from the proceeds of the sale of the Rozelle property and paid to Natasha before those proceeds are distributed from the Goodsir Trust to the estate. This result also follows from the Court's findings in the principal judgment, at [153] and [154]. Natasha's other claimed liabilities of the Goodsir Trust were more contentious. 39As to sub-paragraph (b), Holden and Atlanta submitted that Natasha should not be allowed to bring to account the council and water rates paid on the Rozelle property in the sum of $11,702.16, calculated from Albert's death up until approximately the time that she will give up her occupation. They submitted that Natasha should bear the cost of those rates and taxes as contributions towards her occupation of the property. Holden and Atlanta submit that this is fair as they are not seeking occupation rent from her for the period since Albert's death. 40This part of Mr McGrath's submissions is persuasive. In the Court's principal judgment, the Court has not expressly brought to account Natasha's occupation of the Rozelle property up until the time of its sale. It is a benefit she is receiving that she must acknowledge. It is fair in my view that she purchase that benefit at the expense of her paying all the Rozelle property outgoings, such as rates and taxes. She will not be allowed to deduct this sum from the sale proceeds of the Rozelle property. 41By the same logic as has been applied to the expenses in sub-paragraph (b), Natasha should not be allowed to bring to account land tax she has paid in respect of the Rozelle property, which is part of the total of $31,172.00 in land tax referred to in sub-paragraph (a). 42As to the balance of sub-paragraph (a) and sub-paragraph (d), which relate to land tax and mortgage payments in relation to the Smith Street property, Natasha is on stronger ground. The Goodsir Trust holds one-third of the units in the unit trust holding the Smith Street property. Since Albert's death she has made mortgage repayments of $7,712 in respect of the Goodsir Trust's proportionate one-third share of the Smith Street property and has paid its share of land tax for Smith Street (being the Smith Street-related portion of the $31,172 in expenses in sub-paragraph (a)). These amounts should be brought to account, on the basis that she has made payments which were necessary to maintain this asset, held by the Goodsir Trust, for the ultimate benefit of the estate. 43Finally, as to sub-paragraph (c), Natasha made various other payments for general expenses in the sum of $30,455.74. These can only be analysed by looking at the invoices Natasha tendered in support of her claim to bring them to account. Natasha is entitled to bring most of these to account. 44The sum of $30,455.74 is made up of two classes of payments. The first class are expenses associated with restoring parts of the Rozelle property, making it good after the murder of Albert and his brother, and improving the capital asset of the residence. The other class of expenses are routine maintenance expenses associated with the general upkeep of the Rozelle property to make it continuously fit for Natasha's occupation since Albert's death. Natasha should be reimbursed for the former class of expenses. But in relation to the latter class, they should be treated like the other rates, taxes and outgoings in respect of the Rozelle property. Natasha should bear these as part of the price of her occupation of the property since Albert's death. 45The apportionment within these two classes of the $30,455.74 in general expenses is not easy. Upon review of the invoices and supporting materials, in my view approximately 60 per cent of them fall into the category of routine maintenance expenses, for which Natasha should not be reimbursed. There should be brought to account in Natasha's favour the other 40 per cent of these $30,455.74 in general expenses, namely the sum of $12,182.30. 46Natasha's estate deductions. Natasha claims another expense not included in the five items making up $369,905.73 above. She met the deceased's funeral and wake expenses, which totalled $23,197.80. She submits that these were estate liabilities. She advanced money to the trust, which paid them. The estate must bear Albert's funeral and testamentary expenses. Natasha has so far relieved the estate of this obligation. In my view it is beyond argument that these are estate expenses, and should now be reimbursed to Natasha. Funeral and like expenses "according to the degree and quality of the deceased" (as the expression in the cases goes) are allowed out of the estate of the deceased before any debt or duty whatsoever: R v Wade (1818) 5 Prince 621 and see Re M'Myn (1886) 33 Ch. D. 575. And even in an insolvent estate, the payment of funeral, testamentary and administration expenses has priority: Probate and Administration Act 1898, s 46C and Schedule 3. The Court's orders will therefore provide for the deduction of these expenses from the proceeds of sale of the Rozelle property and their reimbursement to Natasha before the proceeds of sale are transmitted to the estate. 47The Claim for Interest. Natasha seeks to recover interest on all these non-litigation expenses, from the date of payment, up to the date of repayment in accordance with a deed made between her and Tashnat dated 3 July 2010. Natasha agreed with Tashnat as trustee of the Goodsir Trust in the July 2010 deed that she would advance this money to the trust on condition that the trust would pay her interest. In my view Natasha should have interest for some of her advances but not in each case at the rate she agreed with the Goodsir Trust. Her agreement with the trust, for the payment of interest at a flat rate of 10 per cent, was not an arms length transaction. 48But she should be compensated in interest at a fair and objective rate for those expenses. As part of its armoury of powers under the Succession Act, Part 3.2, the Court may make orders adjusting the interest of any person affected by a family provision order, as will be "just and equitable" for all persons affected by the order: Succession Act, s 66(2). 49Mr McGrath submitted that the Court should not make any adjustments in relation to interest, because the Court would be "descending to the minutiae" and thereby changing the overall valuation of the parties' proportionate shares. 50But there are two answers to this. Some adjustment would always be needed in respect of monies paid on behalf of the trust and the estate. The principal judgment did not deal with such matters. Moreover, parties would be left with a sense of unfairness if some interest were not awarded in respect of substantial monies advanced to the estate. 51The interest result in respect of the non-litigation expenses in sub-paragraphs (a) to (d) is clear. In respect of sub-paragraph (b) and the part of sub-paragraph (a) relating to land tax for the Rozelle property, the Court has not allowed Natasha to bring any of these sums to account because of her occupation of the Rozelle property. Therefore she cannot claim interest in respect of any of them. The same logic applies to sub-paragraph (c), where she has not been permitted to bring to account 60 per cent of the $30,455.74 in expenses that she has claimed, on the basis that they too were related to her continuing occupation of the property. She may not recover any interest on that 60 per cent. 52But she can claim Civil Procedure Act, s 99 interest in respect of her Smith Street-related outlays: the portion of sub-paragraph (a) related to Smith Street land tax, and the Smith Street mortgage payments made under sub-paragraph (d). 53That leaves sub-paragraph (e), the largest sum. A component of the interest that would otherwise accrue on the capital sum she paid to the mortgagee of the Rozelle property should be offset against the benefits she has received from occupation of the property. If she had not occupied the property and it had been tenanted by a third party, the mortgage payments could have been partly met from these rent receipts. So I would allow her simple interest only at the rate of 4 per cent since she paid out the $288,863.83 to the mortgagee of the Rozelle property, calculated up to the date of her repayment. The parties should endeavour to agree upon this calculation. 54I will direct the parties to bring in a calculation of interest at Court rates up until judgment under s 99 of the Civil Procedure Act, in accordance with these findings.

(5) Two Estate Chattels 55Mr Ellison SC pressed for the inclusion of a note in the Court's orders that Holden be entitled to retain out of the estate, on account of his entitlement to provision of a 25 per cent share of the estate and notional estate, the deceased's Honda 5600 motor vehicle (with an agreed value of $10,000), and musical instruments and equipment (with an agreed value of $6,515). 56Mr Ellison SC submits that there is no dispute that Holden took possession of these items after Albert's death. But he seeks inclusion of this note in the orders so that when Holden's 25 per cent of the net estate and notional estate is calculated, the value of these two items (totalling $16,515), will be deducted from his 25 per cent share. 57Holden's enjoyment of these chattels since Albert's death raises issues somewhat similar to Natasha's occupation of the Rozelle property, but on a smaller scale. The Court has already decided that Natasha's benefit from occupying the Rozelle property rent-free is more or less satisfied by her bearing the costs of its maintenance and upkeep during the period she has been in occupation. And as with Natasha's occupation of the Rozelle property, the principal judgment did not consider the legal effect of Holden's possession and use of these chattels. 58Holden had the benefit of the deceased's motor vehicle after his death. It was prudent that the vehicle, a depreciating asset, be kept functional during the period of the estate's administration and the current litigation; just as it was for Natasha to use the Rozelle property. But whilst Holden obtained the benefit of the vehicle, he no doubt expended funds on its maintenance and registration, thereby maintaining its value. He also incurred operating expenses. If Holden had not used the vehicle, the estate would no doubt have had to bear at least some of these expenses to maintain its value. Holden's use has saved the estate the expense of maintaining value in a depreciating asset before its sale. 59The Court can require Holden to sell the vehicle now. But the administration of such an order is likely to be more costly than what will be realised from the sale of the vehicle, after such a long time. So I will not require it to be sold. Nor is it appropriate for the full probate value of the motor vehicle to be brought to account in reduction of Holden's share, as Holden has had possession but not ownership of the vehicle. In my view the better course now is not to reduce Holden's share on account of this benefit. To provide some simplicity of administration, Holden can take ownership of this vehicle, without any further payment to the estate. 60Nor is it appropriate for the value of the musical instruments to be brought to account in calculating Holden's proportionate share. Such relatively small items of sentimental value should not be the subject of any additional adjustment. No doubt similar arguments could be deployed against Natasha in respect of some of the furniture and other contents of the Rozelle property. 61The Court's orders will note Holden's right to retain and take title to these assets without further payment to the estate. As these matters remain in dispute until now, these orders are justified under Succession Act, s 66(2).

(6) The Earthloop Superannuation Money 62Mr Ellison SC seeks orders that the superannuation monies now held by Earthloop be paid to Natasha, Albert's de facto spouse, on account of her entitlement to 50 per cent of the net estate and net notional estate. It is not in issue that Natasha is entitled to these monies. She has been found to be Albert's de facto spouse for more than two years before his death. 63Mr McGrath opposes this order on the basis that it would threaten the present liquidity of the estate. He submits that as the sale of the Rozelle property will probably not take place until at least May of this year, with completion of that sale ordinarily not occurring for another four to six weeks, the estate will remain illiquid until then. Mr McGrath's point was well made in the earlier environment of uncertainty about how and when the Rozelle property would be sold. But the Court has now cured that uncertainty and granted the parties liberty to apply should any problem arise with the sale of the Rozelle property. 64But there may yet be temporary illiquidity in the estate until about June this year. Mr McGrath submits, with a practical and effective appeal, that "liquidity is always a short term issue but can still be fatal". 65The hazard of the estate's short-term illiquidity can be overcome; even allowing an order of the kind that Mr Ellison SC seeks. The Court's orders will provide that Natasha will be restrained from dealing with $150,000 of those superannuation monies until the Goodsir Trust pays the proceeds of sale of the Rozelle property to the estate. As a result of these orders, there will be a quarantined fund of $150,000 available to the estate should it have any pressing short term liabilities. After all, the estate has been illiquid for some time without evidence of any consequent financial crisis.

(7) The Costs of the Family Provision Claims and the 2011 Trust proceedings 66The parties are at issue about the burden of costs in the current proceedings, which involve: (1) Holden and Atlanta's family provision claims; (2) Natasha's family provision cross-claim; and (3) Holden and Atlanta's current trust proceedings, also called the "2011 trust proceedings". It is convenient first to deal with the 2011 trust proceedings. 67The material before the Court is not sufficient to decide all costs issues. So this section of these reasons merely sets out the competing arguments and decides some procedural questions that are preliminary to the final decision on costs, which will be dealt with in a supplementary judgment. 68Costs of the 2011 Trust Proceedings. The parties joined issue about the costs of the 2011 trust proceedings, in which Holden and Atlanta made allegations of breach of trust against Natasha and Tashnat and about Natasha's alleged misuse of her power as Nominator under the Goodsir Trust Deed. The nature of, and relief sought in these proceedings are sufficiently described in the principal judgment: Frisoli v Kourea [2013] NSWSC 1166 at [6] and [7]. Natasha submitted: that Holden and Atlanta never abandoned the 2011 trust proceedings; that the statement of claim in those proceedings was amended close to trial and written submissions were advanced in support of it at the trial; that it was a live issue right through the present proceedings; that in the end Holden and Atlanta were unsuccessful; and, that they should not have their costs of prosecuting an unsuccessful claim. Natasha says that the fair result in those circumstances is for the Court to use its power under Civil Procedure Act, s 98 to allow each party to be responsible for his or her own costs of the trust proceedings. 69Mr McGrath countered these submissions. He said that Holden and Atlanta had achieved practical success in the trust proceedings. He pointed out that Natasha fully controlled the assets of the Goodsir Trust at the commencement of the proceedings, both the Rozelle property and the units in the ADR unit trust. He points out that now Natasha only has half of those assets, so that Holden and Atlanta have had practical success, albeit through the Court's family provision orders in the proceedings under the Succession Act. 70The Court's principal judgment did not make any findings as to whether or not Natasha misused her position as trustee of the Goodsir Trust. The Court did not have to consider the grant of relief in the 2011 trust proceedings, as family provision orders were made. Both parties invited the Court to take this course if family provision orders were made, as the principal judgment explained: Frisoli v Kourea [2013] NSWSC 1166 at [8]. 71Mr Ellison SC responded to Mr McGrath's submission by further pointing out that the Court did not make the declarations and other relief sought in the statement of claim in the 2011 trust proceedings; Holden and Atlanta obtained the relief in other ways, through the exercise of the Court's powers under Succession Act, Part 3.2. 72A separate order for costs should not be made in the trust proceedings. Those proceedings generated a minor portion of the parties' total costs. For example, of Natasha's total costs since May 2009 of $232,261 she attributes only 5 percent or $11,613.04 to the 2011 trust claim (although Holden and Atlanta dispute this costs apportionment). As the proponents of the trust claim, Holden and Atlanta's costs were higher. They put them at $31,586. Whilst Natasha claims that this is disproportionate for that claim, it reflects the burden of costs that would undoubtedly be incurred by a plaintiff in preparing for such an action. 73The disadvantages in making a separate costs order in the 2011 trust claim compel the conclusion that a single order for costs should be made in both the family provision and 2011 trust proceedings. Any order for costs separating out the 2011 Trust proceedings from the family provision proceedings will over-complicate the assessment process by requiring the parties to try and separate out costs expenditure on the 2011 Trust proceedings from expenditure on the family provision proceedings. It is better that a single order covers all the parties' costs. 74But when that single order is made it can now be decided how the costs of the 2011 Trust proceedings will be treated, even though more precise orders in relation to the burden of those costs will await until the next judgment. 75Final costs orders will be approached on the basis that Holden and Atlanta, and Natasha, should all have their respective costs of the 2011 trust proceedings out of the estate and notional estate. The situation is analogous to that which applies when a plaintiff pleads several causes of action but has success on only one cause of action. So far as Holden and Atlanta's costs are concerned, the plaintiff in those circumstances will often get all those costs upon success, because the costs have all been reasonably incurred so as to achieve a successful outcome: Waters v P C Henderson (Australia) Pty Limited [1994] NSWCA 338, (1994) 254 ALR 328, at 330-331. Holden and Atlanta have been successful in their family provision claim. Pursuing their 2011 trust case was an alternative way of seeking to achieve the same result, which in the end they did not have to deploy. 76So far as Natasha's costs of the 2011 Trust proceedings are concerned, no findings of misuse of her position as trustee were made against her. And like Holden and Atlanta she was successful in her family provision claim. Given her overall success I do not see why she should be deprived of her costs of this subsidiary action out of the estate/notional estate. 77The Costs of the Family Provision Proceedings. In his proposed short minutes of order Mr McGrath sought: that Holden's costs as administrator of the estate in resisting Natasha's family provision cross-claim be paid out of the estate and the notional estate on the indemnity basis; and that Holden and Atlanta's costs of their family provision claims be paid out of the estate and notional estate on the ordinary basis. Mr McGrath submits that these are the usual orders that would result from the outcome of family provision proceedings such as these. 78Mr Ellison SC submitted that the appropriate order in the family provision proceedings (and the 2011 trust proceedings) was that there should be no order for the recovery of costs by any party, so that all parties should bear their own costs of these proceedings. Mr Ellison SC submits that orders inclusive of costs are appropriate to reflect a degree of "quid pro quo" in the outcome of these various proceedings. But Mr Ellison SC put that precise submission at trial and it was rejected: Frisoli v Kourea [2013] NSWSC 1166 at [155]. The Court rejected what is a rather too simplistic approach to costs in this case, as these reasons reveal. 79Mr Ellison SC argued in the alternative that the administrator should not have all his costs in resisting the cross-claim out of the estate/notional estate on an indemnity basis, because most of those costs were incurred on the issue of whether or not Natasha was a de facto spouse of the deceased, an issue on which she was ultimately successful and on which Holden and Atlanta failed. And he points out that, as administrator, Holden was acting in self-interest on this issue and the Court therefore has discretion to deny him a costs indemnity: UCPR 42.25 (2). 80Mr Ellison SC also emphasises the extent to which Natasha has tried to curb the incurring of unnecessary legal costs, even proposing a settlement in which she, Holden and Atlanta would share the estate three ways. But it is doubtful that the Court can take into account evidence of such communications, not formalised either in offers of compromise or Calderbank letters. And Mr McGrath says that these offers never encompassed the whole of the estate and notional estate and are therefore not an adequate basis for comparison with the result of these proceedings. 81A principal driver of Natasha's submissions is the considerable disparity in costs of the family provision proceedings: between Holden and Atlanta's legal costs on the one side (said to be in the vicinity of $320,000) and Natasha's costs, on the other side, which are lower (and said in August 2012 to be in the vicinity of $160,000). In submissions after the hearing Natasha's legal fees are said now to have run out to approximately $232,000, although Natasha's break down of these costs is in dispute. 82But the Court cannot decide the issues of costs of the current proceedings that have been debated, without accurate and up to date information about the extent of the costs incurred by both sides up to the end of the hearing, and to date. That material has not yet been fully made available to the Court by both sides, partly because, it seems, each side takes a different view on whether or not the Court should make a gross sum costs determination. But as soon as all the necessary material is available the Court will decide all remaining questions of costs. 83Apart perhaps from the issue of a gross sum costs determination, further submissions should not be required, as the issues have been fully debated already. The orders below provide relevant directions. 84In the next judgment the Court will decide the remaining costs issues, namely issues of: (1) whether Holden should be deprived of any of his costs of the family provision proceedings on account of his acting in self interest; (2) whether Natasha's alleged efforts to settle the family provision proceedings can and should be taken into account in the final costs determination; (3) whether some adjustments should be made to the costs awarded on account of (i) Natasha's success on the issue of the existence of a de facto relationship with Albert, and (ii) the relatively larger size of Holden and Atlanta's costs of the proceedings in relation to Natasha's costs; and (4) any other costs issues raised in the parties' submissions. These issues will be dealt with at the same time as the Court makes a lump sum costs order.

(8) A Gross Sum Costs Determination 85Although Natasha objects to this course, the Court is minded to make a gross sum costs order under Civil Procedure Act, s 98(4)(c) in this case. There are overwhelming advantages to the parties in the making of such an order to save them the further expense and inconvenience of a costs assessment, when so many other expense and costs questions have been in issue - as this judgment so clearly demonstrates - and where the parties' submissions seek particular limitations on the recovery of costs that will excessively complicate any assessment. 86But material about the costs actually incurred, when they were incurred, the circumstances in which they were incurred, and issues of reasonableness must inform the making of any such orders: Sherborne Estate (No 2) Re; Vanvalen v Neaves; Gilroy v Neaves [2005] NSWSC 1003; (2005) 65 NSWLR 268, per Palmer J. Such material is still missing from what the parties have put before the Court. In my view, if the parties put before the Court their respective bills of costs in the family provision and the 2011 trust proceedings the Court should be sufficiently well equipped to make a gross sum costs orders. Of course the parties may want to put more before the Court, before the making of a gross sum costs determination and they will have the opportunity to do so, if they wish. 87Once such an order is made, the Court can decide what proportion of each party's gross costs will be ordered to be paid out of the estate/notional estate, in accordance with the submissions already made and identified in section (7) above. Then the parties should be able to more rapidly finalise the administration of this already contentious estate, without having more debates about costs assessments. 88For that purpose the parties will be directed to supply up-to-date costs figures and bills of costs to the Court, broken down if possible: (1) between the current trust proceedings and the family provision proceedings; and (2) between the period up to the end of the hearing and thereafter.

Conclusions and Orders 89In the result and for the reasons recorded above, most of the parties' disputes have been resolved: issues as to the form of final orders; as to the conduct of the sale of the Rozelle property by the trustee of the Goodsir Trust; issues as to the deduction of various litigation and other non-litigation costs before the apportionment of the net estate and notional estate; and issues as to the treatment of chattels and the payment of superannuation funds. But determination of final issues as to the quantum and burden of legal costs in the family provision and current 2011 trust proceedings, has been deferred for a short period to ensure the parties have supplied to the Court all relevant material such as their bills of costs, to enable the Court to make a gross sum costs determination at the same time. The Court will therefore make the following final orders in both matters. 90The orders in the 2011 trust proceedings are straightforward and are as follows: (1) statement of claim dismissed; and (2) note that there will be no separate order as to costs of these proceedings, which were heard together with the family provision proceedings. 91The orders in the family provision proceedings are as follows: (1) Extend time for the bringing of a claim by the cross-claimant ("Natasha" throughout these orders) for provision under the Succession Act 2006 up to and including 23 August 2011. (2) Designate as notional estate The Goodsir Discretionary Trust and the Earth Loop Superannuation Fund. (3) In lieu of the statutory provision on intestacy: (a) the first plaintiff ("Holden" throughout these orders) shall receive 25 per cent of the estate and notional estate after expenses; (b) the second plaintiff ("Atlanta" throughout these orders) shall receive 25 per cent of the estate and notional estate after expenses; and (c) Natasha shall receive 50 per cent of the estate and notional estate after expenses. (4) Order Natasha as trustee of the Goodsir Trust to take all necessary steps, including the instructing of lawyers and estate agents, to make the Rozelle property ready and fit by no later than 1 May 2014 to be first offered for sale, in anticipation of its being auctioned as soon as reasonably practicable thereafter. (5) Order Natasha as trustee of the Goodsir Trust to inform Holden and Atlanta: (a) of the appointment of real estate agents to conduct the sale of the Rozelle property within 48 hours of her engaging those agents; and (b) of the proposed reserve price for the auction of the Rozelle property, no later than 48 hours before the auction is scheduled to take place. (6) Once Natasha communicates the reserve price information contemplated by Order 5(b) to Holden and Atlanta, further order Holden and Atlanta to keep that information confidential until the successful exchange of contracts for the sale of the Rozelle property. (7) Once the settlement of any sale of the Rozelle property takes place, order Natasha to pay the sale proceeds to the estate net only of: (a) sale expenses; and (b) any other expenses expressly authorised by these orders to be deducted from the sale proceeds. (8) Direct that Natasha as trustee of the Goodsir Trust may deduct from the sale proceeds of the Rozelle property and pay to herself on Tashnat (without any additional allowance for interest) the sum of $11,613.04 on account of her and Tashnat's costs of the two administration proceedings, numbered 2009/318691-2 (referred to in these orders as "the administration proceedings") and the trust proceedings, numbered 2010/133144 (referred to in these orders as "the 2010 trust proceedings"). (9) Order that Holden be indemnified out of the estate or notional estate (without any additional allowance for interest) in respect of his costs (a) of the administration proceedings up to a maximum amount of $5,000, and (b) of the 2010 trust proceedings in full. (10) Direct that Natasha, as trustee of the Goodsir Trust, may deduct from the sale proceeds of the Rozelle property and pay to herself before remitting to the estate: (a) the sum of $288,863.83 on account of monies she has paid to discharge the mortgage on the Rozelle property together with simple interest up to the date of payment at the rate of 4 per cent; (b) land tax paid in respect of the Goodsir Trust's interest in the Smith Street property; (c) mortgage payments of $7,712 made in respect of the Goodsir Trust's interest in the Smith Street property; (d) the sum of $12,182.30 representing 40 per cent of general expenses of $30,455.74; (e) the sum of $23,197.80 on account of funeral and testamentary expenses she has paid to relieve the estate of that liability; and (f) a sum representing interest calculated in accordance with s 99 of the Civil Procedure Act the Goodsir Trust's expenses identified in (b), (c) and (d), and on the estate's funeral and wake expenses of $23,197.80 described in (e), which amount of interest the parties are to calculate and agree upon within fourteen days. (11) Order that in the further administration of Albert's estate that Holden is entitled to keep possession of and take title to Albert's Honda 5600 motor vehicle and Albert's musical instruments without making any further payment or allowance to the estate on account of his past use of these items or on account of the transfer of title in them to him. (12) Order that the superannuation monies in the sum of approximately $300,000 held by Earthloop Pty Limited be paid to Natasha, on account of her entitlement to 50 per cent of the net estate and notional estate of the deceased ("the superannuation monies"). (13) Order that once Natasha receives the superannuation monies from Earthloop Pty Limited pursuant to the previous order, Natasha will deposit $150,000 of those monies into a bank or financial institution licensed as an authorised deposit-taking institution (ADI) for the purposes of Part II, Division 1 of the Commonwealth Banking Act 1959, and is restrained from dealing with the funds so deposited until either: (a) Holden, as administrator of the deceased's estate, confirms to Natasha the receipt by the estate of the proceeds of sale of the Rozelle property; or (b) until further order of the Court. (14) Direct the parties each to: (a) provide to my Associate and serve by 4.00pm on Tuesday 4 March 2014 any bills of costs or supplementary evidence or material which they seek the Court to take into account on the making of a gross sum costs determination; and (b) serve by 4pm Monday, 10 March 2014 any supplementary submissions (of no more than three pages in length) as to the making of a gross sum costs determination. (15) Liberty to apply in relation to the implementation of these orders, including in relation to any dispute about the calculation of interest or other sum ordered to be paid under these orders.

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: 24 February 2014