Galea v Camilleri; The Estate of Patricia Camilleri - [2023] NSWSC 206 - NSWSC 2023 case summary — Zoe

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Galea v Camilleri; The Estate of Patricia Camilleri

[2023] NSWSC 206

Supreme Court of NSW|2023-02-24|Before: Meek J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2023-02-24

Before

Meek J

Source

Original judgment source is linked above.

Judgment (154 paragraphs)

[1]

non-party interests to be protected - Juul v Northey [2010] NSWCA 211 applied WILLS, PROBATE and ADMINISTRATION - Executors - Claim for commission - Discussion of considerations regarding assessment of quantum - Principles applicable - Guideline rates - Standard of reasonableness WILLS, PROBATE and ADMINISTRATION - Executors - Claim for commission - Factors relevant to determining the amount (if any) of commission - Discussion of principles and circumstances in which commission might be denied Legislation Cited: A New Tax System (Goods and Services Tax) Act 1999 (Cth) Civil Procedure Act 2005 (NSW) Conveyancing Act 1919 (NSW) Duties Act 1997 (NSW) Environmental Planning and Assessment Act 1979 (NSW) Evidence Act 1995 (NSW) Evidence (Audio and Audio Visual Links) Act 1998 (NSW) Income Tax Assessment Act 1997 (Cth) Legal Profession Uniform Law Application Act 2014 (NSW) Legal Profession Uniform Law (NSW) Probate and Administration Act 1898 (NSW) Supreme Court Rules 1970 (NSW) Tax Agent Services Act 2009 (Cth) Tax Agent Services Regulations 2022 (Cth) Trustee Act 1925 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Atkins v Godfrey [2006] WASC 83 Attorney-General (Cth) v Breckler (1999) 197 CLR 83; [1999] HCA 28 Bartlett v Barclays Bank Trust Co Ltd (No 2) [1980] Ch 515 Beck v Henley [2014] NSWCA 201; (2014) 11 ASTLR 457 Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305 Bowering v Knox and Bowering (No 2) [2014] NSWSC 1749 Brooks v Young (2018) 131 SASR 365; [2018] SASCFC 81 Chiro v Linton (No 2) [2009] SASC 197 Clerical Administrative and Related Employees Superannuation Pty Ltd v Bishop [1997] FCA 714; (1997) 76 IR 139 Council of New South Wales Bar Association v Dwyer [2015] NSWCA 302 Council of the Law Society of New South Wales v Australian Injury Helpline Ltd (2008) 71 NSWLR 715; [2008] NSWSC 627 Delves v Gray [1902] 2 Ch D 606 Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 Ex parte Bennett (1805) 10 Ves Jun 381; 32 ER 893 Felman v Law Institute of Victoria [1998] 4 VR 324 Ford v Princehorn; Estate of Ford [2012] NSWSC 1165 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Galea v Camilleri [2019] NSWSC 167 Garthshore v Chalie (1804) 10 Ves Jun 1; 32 ER 743 Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 Gray v Guardian Trust Australia [2003] NSWSC 704 Howling v Kristofferson (Supreme Court (NSW), Cohen J, 14 October 1992, unrep) In re Ralphs (deceased); Ralphs v District Bank Ltd [1968] 1 WLR 1522 In re Speight; Speight v Gaunt (1883) 22 Ch D 727 In re Tankard; Tankard v Midland Bank Executor and Trustee Co Ltd [1942] Ch 69 In the matter of Hoju Jobs Pty Ltd [2021] NSWSC 302 In the Will of Henry Sherringham (1901) 1 SR (NSW) 48 In the Will of James Greer (1911) 11 SR (NSW) 21 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Jones v Estate of Farley (Supreme Court (NSW), Santow J, 10 October 1997, unrep) Juul v Northey [2010] NSWCA 211 Karger v Paul [1984] VR 161 Kekatos v The Council of the Law Society of New South Wales [1999] NSWCA 288 Manfred v Maddrell (1950) 51 SR (NSW) 95 Mavrideros v Mack (1998) 45 NSWLR 80; [1998] NSWCA 286 Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146; [2002] NSWCA 22 Mordecai v Mordecai (1988) 12 NSWLR 58 Ollis v Melissari [2005] NSWSC 1016 Overdean Developments Pty Ltd v Garslev Holdings Pty Ltd (No 3) [2021] NSWSC 1482 R v Ahmed [2001] NSWCCA 450 Re Badstuebner (deceased) (2020) 4 Qd R 490; [2020] QSC 144 Re Buckingham (2016) 51 VR 453; [2016] VSC 757 Re Estate Ford; Application for Executor's Commission [2016] NSWSC 6 Re Estate Gowing (2014) 17 BPR 32,763; [2014] NSWSC 247 Re Hillsea Pty Ltd [2019] NSWSC 1152 Re Tebbs (deceased); Redfern v Tebbs [1976] 1 WLR 924 Vaughan v Legal Services Board [2008] VSC 200 Walker v Walker [2022] NSWSC 1104 Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd (1998) 79 FCR 469; [1998] FCA 51 Williams v Scott [1900] AC 499 Xia v Santah Pty Ltd [2003] NSWSC 807 Texts Cited: Dal Pont GE, Law of Executors and Administrators (2022, LexisNexis) Dal Pont GE, Law of Succession (3rd ed, 2021, LexisNexis) Heydon JD and MJ Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis) Janes Stephen, David Liebhold and Paul Studdert, Wills, Probate and Administration Law in New South Wales (2nd ed, 2020, Thomson Reuters) Young, Newton and Cahill, Conveyancing Service NSW (LexisNexis, online) Category: Principal judgment Parties: Carol Galea (First Plaintiff) Reno Camilleri (Second Plaintiff) Peter Camilleri (Third Plaintiff) John Camilleri (Defendant) Representation: Counsel: A Crossland and A Rao (Plaintiffs) L Ellison SC (Defendant)

[4]

The parties

The deceased was married to Reno (Reno Senior) who predeceased her on 28 March 2007. Reno Senior was born in Malta and was a labourer. He was 5 years older than the deceased. The deceased was born in Leeton. They married in February 1962: CB 1224.
The deceased died on 21 October 2014 aged 72. She resided at a property in Shanes Park (Lot 77): CB 448. Reno Senior and the deceased (parents) prospered, amassing very significant property holdings in Western Sydney at Shanes Park, Arndell Park and Londonderry. In addition to owning land, they ran a poultry farm business from Lot 77: CB 122 [7]-[8].
The deceased and Reno Senior had six children being in age order Peter, John, David, Reno, Carol and Martin. Peter is also referred to in the evidence as Pio: CB 448.
John was born in February 1963 and was almost 60 at the time of the hearing: CB 1224. John is a turf farmer: CB 130, 268. Martin was born in September 1978 and is 15 years younger than John: CB 1229.
John indicated that his father, three days prior to his death in 2007, instructed John to "[l]ook after mummy and look after Martin", which he did and took seriously in doing so: T 90.8-9, 92.45-93.14. John accepted that he and Martin are "[v]ery close": T 157.27-28.
John described Martin as being "very close" with his parents being their "right-hand man" who "took care of all aspects of the running of their business and properties": CB 246 [5].
In about 2000, Martin started to assist the parents in carrying on the poultry business: CB 122 [8].
John denied that from the time of his mother's death, he was in conflict with Carol and Reno. However, he accepted that there was conflict between Martin and Reno, there being a fight between them at the deceased's hospital bed in the last days of her life: T 89.4-16. John has not spoken with Carol since about 2013, nor with Reno since about 2015, and John claimed that the last time he had spoken with Peter was before the auction of Property 430 (21 June 2018): T 120.23-42.
Sadly, since early 2014, about seven months prior to the deceased's death, the family have engaged in various pieces of litigation impacting upon the deceased's estate.
The litigation has included: 1. Proceedings commenced on or about 25 March 2014 in the District Court by Martin pursuant to a power of attorney on behalf of the deceased against Reno to recover a total of approximately $388,000 being the sum of $320,000 lent under a loan agreement between the deceased and Reno (loan agreement) plus $68,000 of interest (debt proceedings); 2. Proceedings commenced in the Supreme Court by John seeking probate of the deceased's Will and Codicil (probate proceedings) (The date of commencement of the proceedings is not clearly revealed by the evidence. By reference to the proceedings file number the commencement was possibly in 2014. The POS suggest a date being in 2015, namely, 3 July 2015: POS [16]); 3. Proceedings commenced on 20 October 2015 in the Supreme Court by Carol seeking rectification of the deceased's Will and in the alternative a family provision order (rectification and family provision proceedings); 4. Proceedings commenced on 7 August 2017 in the Supreme Court by Carol seeking revocation of the deceased's Will (revocation proceedings); 5. These proceedings commenced on 3 September 2019 by Carol, Reno and Peter alleged maladministration of the deceased's estate by John (administration proceedings); 6. An application by notice of motion dated 3 March 2021 and filed on 8 March 2021 in the probate proceedings by John seeking an order passing accounts of the administration of the deceased's estate from 21 October 2014 to 31 March 2022 and allowing commission (commission proceedings).
Because various proceedings have been commenced by and against various family members, terminology of "plaintiff" and "defendant" is not entirely apt to identify the moving or defending party in any given proceedings.
For convenience, I will refer to the plaintiffs in the administration proceedings (being Carol, Reno and Peter) as collectively "the plaintiffs". I will otherwise refer to the parties by their given names.
Four of the six proceedings have been finalised.
The two outstanding proceedings are the administration proceedings and the commission proceedings. Orders were made that both those proceedings be listed for hearing together, before me, and that evidence in one proceeding was to be evidence in the other, subject to relevance and any just objection by any party to either proceedings.
It is evident within the family, that is, between the six siblings, that the plaintiffs are aligned on the one hand and John and Martin (possibly with David) are aligned on the other.

[5]

Other relevant persons including various professionals

Repat Pty Ltd (Repat) is the trustee of the Camilleri Superannuation Fund. John and Martin were in 2015 directors of Repat: CB 510. Thereafter, or at least in 2017, Martin was a director of Repat: CB 530.
Apart from the family members, various other professional persons were involved in the proceedings either by providing services in respect of the estate, giving evidence or otherwise being referred to in evidence. Those persons included: 1. John Mann (Mr Mann) - a solicitor who acted for the deceased at least from the time of the making of the 2010 Will. Mr Mann initially practised at a firm Roberts Mann Solicitors and then at Turner Freeman Lawyers (Turner Freeman). Mr Mann also acted for Martin in 2014 in relation to the debt proceedings and was engaged by John to act on behalf of the estate and continued to act for John up to and including this hearing; 2. Kyle McCabe (Mr McCabe) - a solicitor who assisted Mr Mann whilst he was in the employ of Turner Freeman. Mr McCabe ceased to be an employee of Turner Freeman sometime during 2022 (T 63). 3. Chris Gough (Mr Gough) - a solicitor of the firm Storey & Gough who acted for Carol at least from June 2015 (CB 417) until about November 2016 (CB 595). 4. Rodney Lewis (Mr Lewis), William Geddes (Mr Geddes), Jacob Carswell-Doherty (Mr Carswell-Doherty) and Priscilla Sidey (Ms Sidey) - all solicitors with the firm Elderlaw Legal Services who commenced to act for Carol from approximately 20 October 2016 (CB 555) up to and including the hearing (as well as acting for Peter and Reno). 5. Chris Bryatt (Mr Bryatt) - a solicitor from the firm AR Walmsley & Co who acted for Reno in relation to the debt proceedings (CB 408). 6. Amanda Fisher (Ms Fisher) - an accountant of the firm of The Numbers Matter who acted for the deceased prior to her death, and for the estate after the deceased's death. 7. Christopher Batten (Mr Batten) - a director and principal of MGS Private Pty Ltd (MGS) and an accountant/chartered tax advisor/registered tax agent (T 243) who gave "revenue" advice in relation to the deceased's estate and John. 8. Ivan Semciw (Mr Semciw) - a retired real estate agent of the firm Best Commercial and Industrial Properties who marketed and facilitated the sale of what is described below as the Arndell Park property. 9. Paul Cutcliffe (Mr Cutcliffe) - a real estate agent with Jandamurra Pty Ltd t/a Cutcliffe Properties. 10. Mark Ellis (Mr Ellis) - a registered valuer of the company Independent Property Valuations Pty Ltd who prepared the valuation reports in respect of the Arndell Park property and what is described below as being Property 430.
Although Carol bears the surname Galea, in evidence Carol indicated that she was taking on her prior name of Camilleri: T 43.
John is married to Maryanne. Peter is married to Josephine. Reno is married to Cheryl (which appears to be a second marriage).

[11]

Executorial powers

The deceased by clause 11 of her Will gave the executor various powers as follows: My executor may in his discretion: (a) exercise any powers given to him by law; (b) exercise the powers of a trustee for sale in respect of any assets in my estate and my executor may:- (i) without being liable for any loss (including liability for taxation on capital gain) caused by so doing, postpone sale; (ii) without being liable for any loss (including liability for taxation on capital gain) caused by so doing, retain in its form of investment at my death any part of my estate, even though it is wasting, hazardous or reversionary; (iii) sell, by public auction or private sale, and for that purpose may extend credit; … (g) make loans to beneficiaries: (i). secured or unsecured; (ii). on interest or interest free; and (iii). on whatever terms; (h) acquire or lease assets for occupation, use or enjoyment by a beneficiary (whether alone or with some other person or persons); … (I) lease any part of my estate: (i). for the periods and upon and subject to the covenants and conditions which my executor thinks fit; and (ii). either with or without provisions for renewal or otherwise; and accept surrenders of leases or tenancies of my estate or any part of it; (m) maintain, repair, improve, develop, alter, renovate, pull down, erect or re-erect any part of my estate; … (o) without the consent of any beneficiary, partition or appropriate any asset of the estate in or towards the satisfaction of a legacy or a share of any person or persons in my estate, and in doing so the following provisions apply: (i). the value of any such asset is that agreed by those of my beneficiaries affected or, if my executor is satisfied that no value can be agreed in this way, the value is determined by an independent valuer appointed by my executor for the purpose; (ii). my executor need not take into account any differences in value of particular assets to particular beneficiaries other than the value of the asset as decided subparagraph (i); … (r) my executor may for any reason, for instance to allow an early distribution of residue, set aside out of my estate a fund sufficient to meet all debts, charges and other liabilities of my estate. If, having discharged all such debts, charges and other liabilities a balance remains, that balance does not form part of the residue of my estate, but is to be distributed as if it were.

[12]

Ultimate relief sought by plaintiffs after refinement and abandonment of claims for relief

The relief sought by the plaintiffs evolved over time.
Whilst I describe below the various issues litigated, it is important to understand the nature of the relief that was initially sought by the plaintiffs but later abandoned on the one hand and relief that was ultimately sought on the hearing on the other.
The plaintiffs had initially filed a Statement of Claim in which the substantive relief sought was: 1. revocation of the grant of probate and administration of the estate of the deceased with Will annexed being granted to Carol or in the alternative Reno, without being precluded by obligations to give notice of the application or provide an affidavit in relation to search for the Will of the deceased as required by s 42(2)-(3) Probate and Administration Act 1898 (NSW) (PA Act) (revocation relief); 2. orders pursuant to r 54.3(4) of Uniform Civil Procedure Rules 2005 (NSW) (UCPR) directing the defendant to: 1. distribute to the beneficiaries of the estate the (net) proceeds of the sale of Property 430 (net proceeds relief); and 2. to instruct and provide with all relevant material a qualified accountant other than Mr Batten to make applications to Revenue NSW for concessional duty in relation to the transfer of Lot 111 to Peter and David and Lot 112 to Carol and Reno with the original signed transfers in relation to those lots being provided to those beneficiaries (duty relief); 1. declarations that John's failure on the settlement of the contract for the sale of Property 430 to require Martin or his nominee to pay interest constituted a wilful default and an order for account on the basis of such wilful default, alternatively an order for verification of accounts of the estate (Property 430 wilful default relief); 2. orders pursuant to r 54.3(4) UCPR or alternatively general law requiring John to make available for inspection books and records of the estate as specified; 3. damages in devastavit; and 4. interest and costs: CB 34-36.
By the time of the hearing, the plaintiffs had amended the Statement of Claim a number of times and the then current form of Statement of Claim was a Third Further Amended Statement of Claim: CB 54. Relevantly: 1. the revocation relief had been abandoned; 2. the net proceeds relief and duty relief had been omitted and replaced by directions pursuant to r 54.3(4) UCPR that John distribute the residue of the estate (distribution of residue relief); 3. the Property 430 wilful default relief had been replaced by a broader claim for relief declaring that John had engaged in wilful default in his administration of the estate and an order for account on the basis of wilful default (general wilful default relief); and 4. relief of equitable compensation was sought as an alternative to damages in devastavit: CB 55.
Included within the Court Book was a form of a Fourth Further Amended Statement of Claim. On the first day of the hearing, Mr Crossland sought leave for the plaintiffs to file the Fourth Further Amended Statement of Claim in the form that is behind Tab 10 of the Court Book. The relief sought was not opposed. Subject to the document being signed by the legal representative on record and verified by the plaintiffs (which occurred) I granted such leave: T 1. That document formed the plaintiffs' final claim for relief (final claim).
Importantly, for the purposes of the hearing: 1. the distribution of residue relief was abandoned; 2. the general wilful default relief was revised such that the plaintiffs: 1. still sought a declaration that John had engaged in a wilful default in his administration of the estate (wilful default declaratory relief); and 2. whilst formally seeking an account on the basis of wilful default (wilful default account relief), abandoned that relief on day 1 of the hearing - T 14); 1. the relief regarding damages in devastavit and equitable compensation was revised such that equitable compensation was no longer sought as being an alternative to damages in devastavit but rather as additional relief: CB 101.

[13]

A belated defence

I raised with counsel for the parties whether there was any defence to the plaintiffs' claim based on the terms of the Will: T 3.
A defendant must specifically plead any matter that (a) if not pleaded specifically, may take the opposite party by surprise, or (b) the defendant alleges makes any claim, defence or other case of the opposite party not maintainable: r 14.14(2)(a),(b) UCPR.
John had, in prior defences, denied that he engaged in any wilful default. However, he had not previously pleaded any provision of the Will as an answer to the claims that he has committed a wilful default in his administration of the estate.
None of the issues in the Agreed Statement of Issues suggest that any provision of the Will was raised by John as an answer to the claims that he has committed a wilful default in his administration of the estate.
John had not raised in the JOS any provision of the Will as an answer to the claims that he has committed a wilful default in his administration of the estate.
However, John's Defence to the final claim was amended to relevantly assert that: 1. he exercised the powers given to him under the Will - specifically referring to subclauses 11 (a), (b), (d), (h), (l) and (m) and additionally referring to s 154(1)(c) Conveyancing Act 1919 (NSW) (Conveyancing Act); 2. his conduct was at all times reasonable; 3. his conduct was at all times bona fide; and 4. at all times his exercise of discretion as executor was within the powers provided to him.
I note that s 154(1)(c) Conveyancing Act provides that an executor shall have and shall be deemed to have had power without the leave of a Court to lease the real estate of the deceased in possession for any term not exceeding three years.
On the second day of the hearing, Mr Ellison SC informed me that John had executed a Defence to the final claim and that he had provided Mr Crossland with an unexecuted copy: T 55. Eventually, it was filed without objection on the fourth day of the hearing: T 294.

[14]

The revised statement of issues

Pursuant to directions the parties produced an Agreed Statement of Issues in Dispute. This document was revised at the time of the hearing (Revised Statement of Issues).
The Revised Statement of Issues combined issues across the commission proceedings and administration proceedings.
There were 35 issues identified, with some of the issues additionally identifying various sub issues.
The issues were categorised under four headings: 1. A - issues arising from the administration proceedings; 2. B - matters to be addressed on a wilful default accounting; 3. C - other minor objections in relation to the passing of accounts; and 4. D - matters arising from the commission claim.
Generally speaking, the plaintiffs' claims against John arise out of allegations that he has by delay and other actions caused waste to the estate with the result that the estate and the beneficiaries (or at least the plaintiffs) have suffered loss.
It is convenient to broadly describe the issues as follows on the understanding that on the plaintiffs' case, in the event that it is found that John failed to act in accordance with his administration duties, it is alleged that there is a loss to the estate in many cases amounting to a wilful default.
Various issues were raised in relation to the engagement by John of Mr Batten.
Those issues were incorporated in a table of objections which had been directed to be provided by Hallen J, which table was amended: Tab 4, CB 72A-72C.
Further particularisation in relation to these items was set out in a separate table focussing upon two invoices issued by Mr Batten being invoices 1620 and 1720: CB 72D-72J.
In relation to the claim for commission, particular details of this appeared from a Points of Claim document filed on John's behalf setting out reasons as to why it was said John should receive commission and calculations in respect of the quantum of such commission: CB 73-77.
A response to John's Points of Claim was made on behalf of the plaintiffs by way of Points of Defence (CB 78-84) which Points of Defence were amended on the fourth day of the hearing to include particulars in relation to allegations that John breached fiduciary duties in relation to the purchase of Property 430 and otherwise abused his power as executor in respect of that.
It is not seriously in contest that the estate administration has not been completed. Mr Ellison SC submitted (at JOS [43]) that: 1. the estate has not been fully distributed; 2. the final distribution awaits the determination by [Revenue NSW] as to final financial stamp duty adjustment with regard to properties being received in specie by some beneficiaries pursuant to s 46 PA Act and in lieu of the entitlement to some or whole of residue; and 3. there is a minimum amount of cash currently held in the estate.

[15]

Summary of wilful default issues

For the purposes of addressing the claims in the proceedings I have grouped a number of the particular issues in the Revised Statement of Issues under a number of headings and I set out below a list of 15 issues which I have at least in part reordered to accord with a chronological flow of dealing with the issues.
The issues are: 1. Whether John's failure to apply for probate before 3 July 2015 was an unreasonable delay: Issues 5, 32 (Delay in obtaining probate issue)? 2. Whether John failed to account for 83 IAG shares out of a total of 3459 IAG shares: Issue 19A, Item 422 at CB 72C (Missing IAG shares issue)? 3. Whether John had a duty to obtain market rent for the Arndell Park property between 11 September 2015 and 30 May 2018 with the consequence that the estate has suffered loss equal to market rent less an amount of $40,000 which John obtained for rent: Issues 1, 2, 3, 21 (Failure to rent Arndell Park property issue)? 4. Whether John's failure to start transferring the seven properties the subject of specific gifts prior to November 2016 and failure to effect the last of the transfers until May 2017 were unreasonable delays: Issues 26, 32 (Delay in specific gift transfers issue)? 5. Whether John's failure to appoint a selling agent for the Arndell Park property until January 2017 was an unreasonable delay prejudicing the beneficiaries: Issues 27, 32 (Delay in appointing a selling agent issue)? 6. Whether John and Martin were the ultimate purchasers of Property 430 at the time of the exchange of contracts or thereafter: Issues 5, 21 (Was John an ultimate purchaser of Property 430 issue)? 7. Whether John either by varying the contract for the sale of Property 430, or by other inaction, failed to ensure that the deposit payable in accordance with the contract was invested such that the estate suffered loss: Issues 6b, 11A, 21 (No deposit and failure to invest issue)? 8. Whether prior to completion of the sale of Property 430, John and Martin took possession of Property 430 and used it for commercial purposes without paying such funds to the estate: Issue 7, 21 (Commercial use by John and Martin issue)? 9. Whether John and Martin agreed between themselves for the completion to occur after 2 August 2018 at a "mutually convenient" time, and by delaying in serving a notice to complete in completion of the sale of Property 430 the estate has suffered loss: Issues 4, 6a, 8-11, 21, 28, 29 and 32 (Delay in completion of sale issue)? 10. Whether on the settlement of the sale of Property 430 John failed to secure proper adjustments for council and water rates and vendors fees: Issue 19A, Item 413 at CB 72B (Lack of proper settlement adjustments issue)? 11. Whether John failed to realise Telstra shares as an asset of the estate: Issues 12, 13 and 21 (Failure to realise Telstra shares issue)? 12. Whether John used estate funds to pay for renovation of David's property: Issues 14, 15 and 21 (Use of funds to renovate David's property issue)? 13. Whether John used estate funds to pay Mr Batten for work for John and/or Martin rather than the estate, and specifically whether Mr Batten carried out or purported to carry out legal work for the estate contrary to legislative provisions (Issues 18-19) and whether payments in relation to the following services were for John and Martin's benefit: 1. advice in relation to the provisions or wording of a deed dated 8 November 2018 (November 2018 Deed) which was signed by the residuary beneficiaries (allegedly purely for John and Martin's personal interest): 2. taxation advice allegedly to John and Martin in respect of the purchase of Property 430; 3. work and advice allegedly related to John and Martin in their attempts to obtain a duty exemption for the appropriation by them of Lot 8: Issues 17, 22, Amended Table-Item 749, 787, 788 and 789 relating to invoices 1620 and 1720 at CB 72A-72B, 72D-72J (Use of funds for personal interests issue)? 1. Whether John has failed to seek reimbursement from Mr Batten: Issues 18-20, 22 (Failure to seek reimbursement from Mr Batten issue)? 2. Whether John failed to take reasonable steps to ensure that Mr Batten made an application to Revenue NSW for an exemption of any duty payable by Carol and Reno in respect of the appropriation by them of Lot 111: Issues 30-32 (Failures to ensure application for duty exemption issue)?

[16]

Practical consequences of relief sought by the plaintiffs

I sought to clarify, in particular, the consequences of the nature of the revised relief bearing upon wilful default. Mr Crossland expressly indicated that the plaintiffs did not seek the wilful default account relief but did seek wilful default declaratory relief for the purposes of the Court ordering a monetary sum being damages and equitable compensation for whatever matters are found to be the subject of wilful default: T 14.4-37.
Mr Crossland did not seek any orders on behalf of the plaintiffs that the purchase of Property 430 (which was completed, but title for which has not been registered) should be set aside on any basis that John impermissibly as an executor purchased the property: T 316.
The conduct alleged against John (summarised above under the 15 issues) on the plaintiffs' case, is said to have the cumulative effect that John either by delay or maladministration breached his duties as executor such that John ought to be denied his claim for commission.
Practically speaking, the plaintiffs' claims of delay and maladministration are, on the plaintiffs' case as I understood it, said to have the following general effects: 1. to justify a declaration that John has engaged in a wilful default in the administration of the estate; and 2. to justify an order for a monetary judgment against John; and 3. to defeat entirely or in part John's claim for commission.
The 15 issues referable to the plaintiffs' claims in the proceedings have different consequences in terms of declaratory relief and defeating John's commission claim on the one hand and entitling a monetary order in favour of the estate on the other.
Seemingly, six of the issues were relied upon by the plaintiffs as having no specific monetary outcome but rather were relied upon as evidencing wilful default so as to ground declaratory relief and defeat John's commission claim. These were: Issue 1 (Delay in obtaining probate issue), Issue 4 (Delay in specific gift transfers issue), Issue 5 (Delay in appointing a selling agent issue), Issue 6 (Was John an ultimate purchaser of Property 430 issue), Issue 9 (Delay in completion of sale issue) and Issue 15 (Failures to ensure timely application for duty exemption issue).
Potentially, the remaining nine issues also have monetary consequences.
I was presented with figures and or calculations by the plaintiffs in respect of only three of those issues namely, Issue 3 (Failure to rent Arndell Park property issue), Issue 7 (No deposit and failure to invest issue) and Issue 12 (Use of funds to renovate David's property issue).
In relation to two of those issues, whilst I was not presented with specific calculations by the plaintiffs to support claims for damages, potentially from the evidentiary materials I could establish the monetary consequences namely, Issue 13 (Use of funds for personal interests issue) and Issue 14 (Failure to seek reimbursement from Mr Batten issue).
In relation to the remaining four issues, I was not provided with any calculations and the evidentiary material was not in any state that would enable me to make a calculation of a monetary consequence to the estate namely, Issue 2 (Missing IAG shares issue), Issue 8 (Commercial use by John and Martin issue), Issue 10 (Lack of proper settlement adjustments issue) and Issue 11 (Failure to realise Telstra shares issue).
That lack of material in relation to those issues has particular consequences in light of the relief sought. If the claim for wilful default account relief had not been abandoned potentially, I could have directed enquiry in relation to the financial consequences of breaches in respect of those items. However, in light of the abandonment of the wilful default account relief, I do not consider that I can direct such an account.

[20]

Documentary evidence

Each party, apart from affidavit evidence, adduced documentary material.
The documentary evidence is extensive extending to almost 1,670 pages. It includes Wills, bank account records, correspondence between the parties and their respective legal advisers and other professionals, transactional documents such as contracts for sale of properties, title searches, invoices for various matters including professional services and estate account materials prepared by Ms Fisher and John.
The following accounting materials were adduced disclosing the financial dealings of the estate: 1. financial statements of account prepared by Ms Fisher for the estate for the financial years from the date of death to 30 June 2015 (CB 419-426), 30 June 2016 (CB 472-480), 30 June 2017 (CB 660-668), 30 June 2018 (CB 1068-1076), 30 June 2019 (CB 1235-1243), for the six months ended 31 December 2019 (CB 1417-1425); 2. trust tax returns for the financial years ended 2017, 2018 and 2019: CB 1244-1281; 3. an account summary for the period from date of death to 8 August 2020 (listing assets - realised, transferred, realised and subsequently reinvested and unrealised; reconciliation of funds held, and listing of receipts and payments: CB 1510-1525; and 4. NAB account for the estate for the period from 26 February 2016 to 30 November 2022: CB 1644-1704.
The financial accounts (as distinct from the trust tax returns) for the estate for the years ended 30 June 2015 to 30 June 2019, whilst disclosing receipt of rental income, do not provide any breakdown as to which of the properties provided such rental income.
There were no trust tax returns adduced in evidence for the financial years for 2015 and 2016.
The trust tax returns for the financial years ended 30 June 2017 to 30 June 2019 contain rental schedules for various of the properties.
The account summary for the period from date of death to 8 August 2020 noted above included: 1. a detailed statement of receipts of the estate from the period of the date of the deceased's death to 29 October 2021 listing 486 line items (which appears at CB 1515-1520A); and 2. a detailed statement of payments made in respect of the estate from the date of death until 6 August 2020 listing approximately 310 items (501- 810) (which appears at CB 1521-1525).
Ultimately, on the hearing, a revised form of account summary was provided which became Exhibit D1 comprising two volumes both of summary and supporting documentation.

[22]

Mode of giving evidence in the proceedings

Proceedings in the Supreme Court of New South Wales are generally held in person: see e.g. Xia v Santah Pty Ltd [2003] NSWSC 807 at [9] per Palmer J. In proceedings commenced by statement of claim, subject to the rules of Court and the Evidence Act 1995 (NSW) (Evidence Act), evidence must be given orally at Court: r 31.1(2) UCPR. The Court may direct that all or any of a witness' evidence in such a trial be given by affidavit: r 31.1(3) UCPR.
However, the Court may permit parties or witnesses to the proceedings to give evidence and make submissions by telephone, video link or other form of communication: r 31.3(1) UCPR.
Such a decision, as to whether to permit the giving of evidence and making of submissions by telephone, video link or other form of communication, is "for the management of proceedings" within the meaning of s 58 Civil Procedure Act 2005 (NSW) (CPA).
The Court, in deciding whether to make any order for the management of the proceedings, must seek to act in accordance with the dictates of justice: s 58(1) CPA.
For the purposes of determining what the dictates of justice are in a particular case, the Court must have regard to the provisions in ss 56 and 57 CPA and may have regard to the matters set out in s 58(2)(b) CPA to the extent which the Court considers them relevant.
Mr McCabe was overseas in Fiji and unable to attend the hearing in person. Mr Semciw was travelling between Melbourne and Sydney and likewise unable to attend the hearing in person. I indicated at the time that I would make an order formalising the giving of evidence by audio visual link.
That could be done by an order under r 31.3(1) UCPR or possibly by an order for the hearing of evidence pursuant to the provisions of s 5B Evidence (Audio and Audio Visual Links) Act 1998 (NSW) (Audio Visual Links Act).
No submissions were addressed to whether Fiji is or is not a "participating State" for the purposes of Pt 1A of the Audio Visual Links Act. I doubt that Fiji is such a "participating State" for the purposes of Pt 1A of the Audio Visual Links Act. However, for more abundant caution, I order nunc pro tunc simply pursuant to r 31.3 UCPR, that the oral evidence of Mr McCabe and Mr Semciw at the trial be by Audio Visual Link provided by the Court.

[23]

Informing witnesses of rights

The Evidence Act requires that if it appears to the Court that a witness or a party may have grounds for making an application or objection under a provision of Pt 3.10, the Court must satisfy itself that the witness or party is aware of the effect of that provision: s 132.
Section 132 imposes an obligation on a trial judge to inform a witness or party that he or she may have grounds for making an objection to giving evidence. This provision operates to ensure fairness to the witness or party who has a basis for making an objection: R v Ahmed [2001] NSWCCA 450 at [37] per Bell J (Heydon JA and Dowd J at [1], [2] agreeing).
The provisions of Pt 3.10 encompass various privileges including legal advice privilege (s 118), litigation privilege (s 119) as well as privilege in respect of self-incrimination: s 128.
Consistent with the obligation, notwithstanding that Mr Batten was represented by Senior Counsel, who made a preliminary objection to Mr Batten giving evidence, I independently had an obligation to address the issue.
I gave "information" to Mr Batten.
There was some debate as to whether there was necessity for Mr Batten to object to each and every question or whether a more global objection could be made.
Ms Seiden SC, who appeared for Mr Batten, submitted that the expression in s 128 "if a witness objects to giving particular evidence, or evidence on a particular matter" indicated that objection could be taken by a witness to evidence on a particular topic as distinct from evidence on a particular question. I accept that submission.
I note that there is support for that approach in Ollis v Melissari [2005] NSWSC 1016. Campbell J (as his Honour then was) addressed the then form of s 128 Evidence Act. His Honour expressed the view that the "particular evidence" which is referred to is not confined to particular questions as they are asked one by one. Rather, it is capable of extending to a witness expressing an unwillingness to giving evidence on particular topics: at [5]-[9].

[24]

Credit and reliability of the plaintiffs and their other witnesses

Carol was briefly cross-examined for about 20 minutes. She was questioned regarding her dissatisfaction with the terms of the deceased's Will as regards Lot 280 and the various proceedings brought by her. She initially did not have recollection regarding the precise nature of the rectification and family provision proceedings: T 44-45. But, nonetheless, she was able to identify what she thought was the inadequacy regarding the Will: T 45.
She stated that she believed when her mother died that she was a co-executrix: T 45. Nonetheless, she said she took no steps herself to formalise her role as executrix and appears to have left that task to John on the basis that "John was normally in control of everything and if you went and involved yourself too much John would get very dis-happy with you": T 48.
Carol indicated that she did not see the Codicil until the middle of 2015 and until that time did not know that she was not an executrix: T 48.20-49.12.
Carol was cross-examined regarding the reason for her delaying for a period of approximately two years from the time that she saw the Codicil and approximately 51 weeks between 15 August 2016 and 7 August 2017 before filing the revocation claim. Essentially, her explanation for the delay was that she had "read up a little bit more about dementia patients and understanding it": T 49.
There was no significant challenge to Carol's credit. I accept Carol attempted to give her evidence as best she could recall it.
None of Reno, Peter nor Josephine were required for cross-examination: T 50. None of the plaintiffs' solicitors were required for cross-examination.
Mr Ellis, despite being a joint expert, was effectively called in the plaintiffs' case.
He gave evidence and was cross-examined on the third day: T 188-218.
Subject to a number of amendments which he identified in relation to his report regarding the Arndell Park property, he verified the contents of both reports relating to the Arndell Park property and Property 430: T 189.
I was impressed by Mr Ellis as he presented as an honest witness. He appeared to me to make appropriate concessions. I address more particularly the effect of his evidence below.

[26]

John

John sought to give the impression that he was a simple man. On several occasions, he described himself as "just a turf farmer" distinguishing his occupation and expertise from that of a lawyer (T 143.40, 149.16) and a brain surgeon: T 149.16-20.
I pause to observe that the issue regarding John's credit and reliability has nothing to do with academic or professional expertise and everything to do with honesty and reliability.
The main events which the case addresses date back over 8 years to October 2014.
One might expect John to have some (though not perfect) recollection of the main events bearing upon administration. Further, given the claims made against John, one might have expected him to have had at least some recollection regarding events of administration of the estate and, additionally, to have made some effort to familiarise himself with the history of what occurred during the administration of the estate.
John was not an impressive witness. This was evidenced in his poor recollection, his lack of willingness to accept certain matters put to him which he later essentially accepted, his reluctance to respond to some questions without first saying what he wished to say and his evasive answers.
Examples of John's poor recollection included: 1. His failure to recollect when he made an application for probate of the deceased's Will: T 101.12-19. 2. His failure to recall reasons why it took him eight months to apply for probate only initially offering that it was because of the dispute with Carol until it was pointed out to him that there were no such proceedings until after probate: T 102.11-103.33. 3. His failure to recall what happened in the eight-month period between his mother's death and probate - several times essentially asserting that if something is in his affidavit then that is what happened: T 103.17-104.12; see also 111.7, 111.34-37, 118.8-36, 286.
Examples of John's failure to initially acknowledge matters in cross-examination which he later acknowledged (or vice versa) included: 1. Initially, he denied relying upon Martin at different points in the task of administering, looking after and managing the estate: T 90.40. However, it became obvious that Martin has assisted in providing, for example, funding for estate expenses initially (a fact which John had acknowledged in his affidavit evidence) and further that he had received assistance from Martin in providing information in respect of the objection to land tax assessment: T 90.44-92.38. 2. Initially, John denied that when he became executor that Reno was relying upon the distribution of the estate's assets to repay the loan from the estate (T 93.45-49). After some questioning on this topic, John accepted that he knew that the longer it took to distribute the specific land from the estate the more it would hurt Reno because he would have to continue paying interest on the loan: T 96.1-6. 3. His initial denial that there was family conflict from the date of his mother's death (T 89.4-6) but then asserting that there was family conflict as a reason in response to assertion that there was nothing stopping him from October 2014 from engaging a valuer to do valuations: T 103.7-9. 4. His initial response to a question that, having received valuations in March 2015, he agreed he "must've sat on them" for more than two months before he made the probate application (T 105.31-33) then later denying that he had given evidence to that effect: T 110.5-42. 5. His initial acceptance that requests by Carol's solicitor as early as 11 August 2015 for provision of documents establishing the values of real estate were never fulfilled followed by his immediate assertion that he never refused "nobody nothing" and, when pressed on it, his simple assertion "[w]ell, something's happened": T 113.14-45.
Examples of John's reluctance to respond to some questions without first saying what he wished to say appeared early on in his cross-examination: T 107.39-42, 108.29-31.
Examples of John's evasive answers included: 1. His responses in relation to provision of copies of valuations (T 115.8-11): Q. Is that a practice you often engaged in when dealing with your solicitors, you'd receive correspondence from the other side and you'd just refuse to give or fail to give instructions about what to do? A. I don't have much to do with solicitors. 1. His begrudging responses (see more below with respect to commission) in relation to questioning about the delay for a period of about six years in providing information to the other side regarding rental of the deceased's properties (particularly the Arndell Park property) including (T 116.37-116.45): Q. Do you accept that you withheld the information in relation to what you'd done in relation to renting out that property until you swore your affidavit on 18 June 2021? A. That property was rented since mum and dad had it. It just kept going. Q. Do you accept that you deliberately withheld that information until you swore your affidavit? A. No.
I address more specifically aspects of John's evidence which I found unsatisfactory further below, particularly in relation to the purchase of Property 430.

[29]

What inference arises from the absence of evidence from Martin

On the second day of the hearing, in response to a question from myself, Mr Ellison SC confirmed that there were no affidavits in the proceedings from Martin: T 78.25.
I asked whether anything was going to be made of that to which Mr Crossland indicated that it was likely that it would, but he would need to consider his position: T 78.
John spoke with Martin on the telephone overnight between the second and third day of the hearing indicating that Martin called him and he took the call but did not speak with him about the case: T 157.8-22, T 157.39-40.
Ultimately, Mr Crossland submitted that a Jones v Dunkel inference should be drawn from the failure of Martin to give evidence in relation to the purchase of Property 430: PCS [21].
Mr Ellison SC submitted that the principle was not operative on the facts: T 335.3-10.
The rule in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 is one of commonsense reasoning. It provides that an unexplained failure by a party to call a witness may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted the case of the party who might be expected to call the witness: e.g. Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 (Ghazal) at 343C per Kirby P (Mahoney and Clarke JJA agreeing).
The rule has no application if the failure to call the witness is satisfactorily explained or readily understood. Usual explanations include the absence of a witness from Court and a reasonable explanation for not compelling the witness' attendance by subpoena. However, the failure by a party to call a witness likely to be friendly to the interests of the other party has been held sufficient to entitle a Court not to draw an adverse interest from such failure: Ghazal at 343D.
It is clear in the proceedings that there were critical issues as to what arrangements there were between John and Martin as to the purchase of Property 430 and the payment of the deposit. It was obvious from the tenor of John's affidavit evidence that Martin was a witness more likely to be friendly to the interests of John than to the interests of the plaintiffs.
It seems to me that evidence from Martin would be able to shed light on various issues in the proceedings including when he and John discussed that John would have an interest in purchasing or taking an interest in Property 430 and the terms regarding payment of the deposit in respect of that property.
In light of John's lack of detail and clarity regarding what occurred in respect of his arrangements with Martin it seems to me that, potentially, Martin would have been able to shed light on those issues.
It is clear that John and Martin are close. Martin lives in Sydney (T 157.8) and as noted above, they spoke during the hearing. Further, no explanation was given by John or indeed any person in John's case as to why Martin was not called. A comment made by Mr McCabe, that Martin had recently separated from his partner and was quite concerned that there would be any trace of the money attributed to him (T 83.32-38), was not made in any context providing an explanation for Martin not giving evidence in the proceedings.
Mr Batten was subpoenaed to give evidence in John's case. It seems to me, similarly, that Martin could have been subpoenaed to give evidence.
I consider that Martin's evidence would not have assisted John, particularly in relation to the purchase of Property 430.
However, I make it clear that irrespective of whatever inference might be drawn from the failure to call Martin as a witness, the findings I have made regarding John's evidence as noted below are made without reference to any Jones v Dunkel inference.

[33]

Land tax issues (December 2015-July 2015)

On 17 December 2015, the Office of State Revenue (OSR) issued a land tax assessment for the deceased in respect of the 2011-2015 tax years in the total sum of $334,442.75, which assessment was duly paid on 27 January 2016: CB 449.
The assessment details relevantly listed eleven of the twelve properties for the assessment for the 2012 tax year. The one property that was not listed was Lot 1 (the property gifted to Martin and the subject of contention by Carol). The assessment noted, at least at that stage, that three of the properties, namely, the Arndell Park property, Property 430 and Lot 77, were exempt: CB 451-452.
It seems that the Arndell Park property and Property 430 were exempt because the land was zoned rural or nonurban use for primary production: CB 452.
Lot 77 was also characterised in this way. However, one additional reason why it might be exempt is that it was the lot on which the deceased resided.
In January 2016, the deceased's share of the Camilleri superannuation fund was redeemed, and the proceeds paid into the deceased's bank account: MFI-2; CB 133 [24].
On 29 January 2016, Ms Fisher lodged a land tax questionnaire, advising that "all properties" were used in primary production activities and, as such, were said to be exempt from land tax: CB 640.
On 5 February 2016, Ms Fisher provided further information regarding land tax claiming exemption: CB 640.
On 26 February 2016, an NAB bank account for the estate of the deceased was opened: MFI-2; CB 133 [22]. From this time, all transactions for income and payments were, according to Ms Fisher, processed through that account: CB 640.
On 13 March 2016, construction work was carried out on David's property being work renovating the laundry, painting the inside of the house and sanding and recoating all interior timber floors.
On 5 April 2016, Ms Fisher lodged a formal objection to the amended land tax assessment: CB 641.
On 11 July 2016, Ms Fisher provided further information to the OSR regarding land tax: CB 641.
On 5 April 2016, Carol filed a statement of claim in the rectification and family provision proceedings: CB 461.
On 2 May 2016, John as executor reached a settlement with Reno in relation to the debt proceedings. The settlement was formalised in a form of deed of settlement and release: see CB 471A.
On or about 26 June 2016, there was an unsuccessful mediation of the rectification and family provision proceedings: CB 132 [17].
On 30 June 2016, the estate paid the invoice from Mielen Enterprises Pty Ltd for work done on David's property: CB 460A.
On or after 30 June 2016, Ms Fisher prepared estate accounts: CB 472.
On 27 July 2016, the OSR issued a revised land tax assessment notice for the land tax years 2011-2016 in which land tax was assessed at nil: CB 547-552.

[35]

Correspondence about the estate and transmission of properties (August-December 2016)

On 28 August 2016, Turner Freeman corresponded with Fairfax Lawyers (the latter acting for Reno) providing a copy of the grant of probate and noted that they had been instructed to prepare necessary transmission applications. The letter also noted that litigation commenced by one of the beneficiaries (Carol) had resolved and that the estate was not subject to nor on notice of any further litigation: CB 553.
On 28 September 2016, Turner Freeman wrote to Storey & Gough enclosing a trust account cheque in the sum of $40,000 in respect of Carol's legal costs as agreed: CB 554. The cheque for $40,000 was signed by Maryanne, John's wife: CB 554, 556.
On 20 October 2016, Mr Lewis wrote to Turner Freeman raising questions regarding the estate's assets (NAB term deposit and WAL): CB 554.
In or around November 2016, transmission applications and accompanying purchaser declarations were sent to beneficiaries for executions without transmission of the properties which were the subject of specific gifts: CB 133 [27].
On 25 November 2016, Turner Freeman wrote to Mr Lewis enclosing a transmission application in respect of Carol's property and addressing the issues regarding the interest-bearing term deposit, the WAL and management of the estate assets: CB 595. The letter provided an explanation regarding the signing of the cheque signed by Maryanne and noted that no further transactions would be authorised by Maryanne: CB 595.
On 29 November 2016, Fairfax Lawyers wrote to Turner Freeman enclosing a copy of a transmission application signed by Reno in respect of Lot 128 raising other questions regarding matters in respect of the WAL, leasing of a number of the estate properties and issues arising in respect of the deed of settlement and release between Reno and the estate: CB 597.
On 8 December 2016, the title to the Arndell Park property was registered in John's name: CB 707.
On or prior to 13 December 2016, John signed a transmission application in respect of the residuary properties which was lodged with the Office of the Registrar General: CB 600.

[37]

Agent engaged/marketing of Arndell Park property (February 2017)

On 1 February 2017, Mr Semciw wrote to John thanking him for the opportunity to discuss the prospective sale of the Arndell Park property and outlining a number of matters including his proposed marketing strategy and in respect of advertising. He requested (in as many words) a copy of the proposed contract for sale: CB 607.
On or about 2 February 2017, Mr Semciw prepared a form of Agency Agreement which was seemingly provided to John: CB 633-634.
On 15 February 2017, Mr Lewis wrote to Turner Freeman reiterating his request as to whether the Arndell Park property would be sold at auction and also addressing a number of matters in respect of water rights, estate accounts and medical records for the deceased: CB 16.
On 28 February 2017, John signed the Exclusive Selling Agency Agreement in respect of the Arndell Park property with Mr Semciw: CB 633-634.
The Agency Agreement notes the agent's estimate of the selling price as being above $16 million plus GST. The exclusive agency period was under the agreement to commence on 1 February 2017 and end at midnight on 30 November 2017: CB 633-634.
Shortly after John signed the Agency Agreement, Mr Semciw provided him with a form of information memorandum regarding the Arndell Park property: CB 613-632.
On 29 March 2017, Ms Fisher provided to the attention of the beneficiaries of the estate a report regarding financial transactions of the estate from the date of death to 31 December 2016: CB 640.
On 22 May 2017, Mr Lewis wrote to Turner Freeman requesting an opportunity to inspect the estate accounts: CB 642.
On 1 June 2017, Cutcliffe Properties provided to John an appraisal in respect of the four Londonderry residuary properties suggesting they be auctioned: CB 643.
On 2 June 2017, Martin signed a declaration in his capacity as a director of Repat in respect of the Camilleri Superannuation Fund: CB 530.
On or prior to 9 June 2017, Reno was registered as proprietor of Reno's property (Lot 128) and the title search disclosed a mortgage to the ANZ Bank: CB 671.
On or about 22 June 2017, Mr Semciw provided material in respect of certain of the lots for the Arndell Park property which material, it seems, was listed either on Domain or an Allhomes website: CB 644-658.
On 22 June 2017, Carol emailed Blacktown Council seeking to be informed as to whether the Arndell Park property was able to be subdivided: CB 659.
On or after 30 June 2017, Ms Fisher provided estate accounts for the year ended 30 June 2017: CB 660.
On 7 July 2017, the town planner at Blacktown City Council responded to Carol informing her that the Arndell Park property had not been the subject of any approved subdivision application (yet): CB 669.
On 11 July 2017, Turner Freeman provided Elderlaw with "all documents held in relation to the above-mentioned estate and its accounts": CB 670.
On or about 31 July 2017, Revenue NSW came into effect following a name change or rebranding from the OSR and State Debt Recovery Office.

[38]

Revocation proceedings (August 2017)

On 7 August 2017, Carol commenced the revocation proceedings: Galea v Camilleri at [5], [40].
On 7 September 2017, Turner Freeman sent a letter to Fairfax Lawyers: 1. referring to the revocation proceedings and the potential of such proceedings to create additional delays in the administration of the estate; 2. noting that the Arndell Park property was in the process of being marketed for sale; 3. noting that the beneficiaries should have received an information memorandum from Mr Semciw; and 4. indicated that John had requested the beneficiaries' views as to his performance as administrator of the estate: CB 671.
On 11 September 2017, Carol filed a statement of claim in the revocation proceedings: CB 672A. The statement of claim: 1. sought a declaration that John in his role as executor had failed in the due and proper administration of the estate and for a revocation of probate to John with Carol being granted administration of the estate with the Will annexed: CB 672B. 2. recited details of the deceased's estate (which, I note, included reference to 2,760 (sic) Telstra shares, but no reference to any IAG shares: CB 672C-672D; 3. asserted that despite two years having passed since the grant of probate, John had taken no steps or no reasonable steps to distribute the residue of the estate in accordance with the Will: CB 672E [9]; and 4. claimed that the Codicil was invalid by reason of the deceased's alleged incapacity: CB 672E-672F.
On 19 September 2017, an unidentified developer sent a letter to John expressing interest in purchasing the four Londonderry properties for a price of $27.75 million (apparently on the basis that the properties would be rezoned): CB 673.
On 27 September 2017, Cutcliffe Properties sent a letter to John providing revised estimates for the four Londonderry properties. Three of the four properties were valued at $4 million each and Property 430 was valued at $3 million. There was a recommendation that the properties should be auctioned: CB 675.
On a date not particularly identified but somewhere between the end of February 2017 until September 2017, an offer made by a prospective purchaser of $16 million for the Arndell Park property was conveyed to John by Mr Semciw, who advised him to decline the offer: CB 135 [43].
In or around September 2017, Mr Semciw advised John that he wished to modify the selling arrangements to enable the Arndell Park property to be marketed and sold in conjunction with another real estate agency being Ray White City South: CB 135 [44].
On or about 28 September 2017, John signed a new exclusive selling agency document being a joint agreement between Best Commercial and Industrial Properties and Ray White City South: CB 684. The agent's opinion of estimated selling price was $25 million-$28 million with a notation that the property should be listed at that price range: CB 684.
Further, on or about 28 September 2017, Mr Semciw provided John with a form of "sales report": CB 676-683.
On 8 November 2017, Turner Freeman wrote to Carol care of Elderlaw: 1. addressing aspects of the present state of the administration of the estate; 2. addressing what was happening in relation to the Londonderry properties and referring to offers from a developer; 3. noting the Arndell Park property was now listed for sale with two agents and referring to the view of the agents as to the listing price; 4. noting that John intended to leave the property on the market bearing in mind that the prior sale estimates had been of a much lesser order ($14-$16 million); 5. referring to the revocation proceedings and the fact that there was an allegation that John had not administered the estate properly, indicating that, until the Supreme Court ordered otherwise, John intended to continue administration of the estate: CB 692-693.
On 1 December 2017, Elderlaw wrote to Turner Freeman addressing issues in respect of the Londonderry properties and the Arndell Park property: CB 694. The letter: 1. indicated that the Londonderry properties should be sold as soon as possible and that their clients (who by that stage included Carol and Reno) did not wish the properties to be transferred to the beneficiaries in specie. Elderlaw asserted that there had been unacceptable delays in relation to sale of the Londonderry properties; and 2. asserted that their clients were of the opinion that John should sell the Arndell Park property as soon as practicable at the highest price that the market would be willing to pay describing this as being "his duty": CB 694.
On 18 December 2017, Turner Freeman wrote to the beneficiaries providing an update as to the status of the sale of the residuary properties: CB 696. The letter noted in relation to the Arndell Park property that: 1. John had received five offers between the ranges of $12.5 million-$17.5 million; and 2. John believed that a figure of $20 million was obtainable on sale but nonetheless sought views as to whether the beneficiaries would be "happy" for John to accept an amount of $17.5 million if he and the selling agents were unable to achieve a sale price of $20 million in the New Year: CB 696.
On 20 December 2017, an amended statement of claim was filed in the revocation proceedings which, inter alia, added Reno as a second plaintiff: CB 697A. The amended claim included an amendment asserting that it was in excess of two years since the grant of probate and that John had not sold any of the residuary properties or taken reasonable or substantial steps to sell those properties: CB 697F. I note that the amended claim did not contain any allegation that there was a failure of John to rent the properties.

[39]

Sale of Arndell Park property (February 2018)

On 20 February 2018, John as executor exchanged contracts for the sale of the Arndell Park property to Holbeche Road Pty Ltd for a price of $20 million with a 10% deposit ($2 million): CB 698. The contract provided regarding completion: 1. for the property to be with vacant possession on or before 30 June 2018, the time of which was not of the essence: CB 698; 2. if the parties did not complete by 30 June 2018, a party could serve a notice to complete if the party was otherwise entitled to: clause 15 at CB 733; and 3. the agreement of the parties that a 14-day period was a reasonable and proper period to specify in any notice to complete: CB 700.
On 7 March 2018, the parties to the revocation proceedings held a mediation before Mr Paul Studdert and reached an agreement regarding the revocation proceedings which was embodied in a draft form of consent order (CB 742) and heads of agreement: CB 743-746.
The heads of agreement relevantly provided that John as executor would undertake to Carol and Reno as plaintiffs to: 1. within 14 days of the completion of the sale of the Arndell Park property distribute not less than $15 million out of the proceeds of sale (together with any additional money that is not required to be retained for the payment of capital gains tax (CGT)) to the residuary beneficiaries equally; 2. accept any offer above $14 million for the sale to one purchaser of the Londonderry properties; 3. not to sell any of the Londonderry properties unless to a single purchaser or a public auction the details of which auction would be notified to all beneficiaries one month before it takes place; 4. (if the Londonderry properties are not the subject of an exchanged contract for sale to one purchaser on or before 30 April 2018) submit the Londonderry properties to public auctions by 31 July 2018 or on such later date as the plaintiffs may agree to.
On 14 March 2018, Cutcliffe Properties provided a sales inspection report to John in respect of one of the Londonderry properties (Lot 111) with a recommendation for sale by public auction and an opinion as to the estimated selling price of $3.64 million-$4 million, with a proposed auction date of 20 June 2018: CB 747-748.
On 3 April 2018, John signed the agency agreement for the sale of Lot 111: CB 751.
Similar agency sales inspection reports and auction agency agreements were provided by Cutcliffe Properties and entered into by John in respect of the other Londonderry properties: CB 754, 760-767.
The prices for Lots 111, 112 and 8 were all stated to be $3.64 million-$4 million. The agent's estimate as to the selling price of Property 430 was $2.75 million-$3 million: CB 754.
Some of the details describing the lot numbers on those agency agreements do not precisely accord with the lot and address details otherwise disclosed in the evidence for the Londonderry properties.
On or about 9 April 2018, various bank cheques were made out in amounts to the beneficiaries (or at least a number of them): CB 1345-1350.

[40]

Engagement of Mr Batten (April 2018)

On 10 April 2018, Mr Batten met with Ms Fisher in relation to the estate: CB 819.
On 11 April 2018, Mr Batten, on behalf of MGS, provided John as executor with a form of engagement agreement engaging the services of both Mr Batten and MGS: CB 774. The engagement letter does not clearly set out the terms of the services to be provided. I note that the hourly charge rate of Mr Batten is noted as being $900 exclusive of GST although the engagement letter stated (at CB 775) that: In appropriate cases, having regard to urgency, responsibility, special expertise or care and skill and other similar factors, I may charge fees at a higher rate not exceeding 150% of the rates quoted above.
On 18 April 2018, Turner Freeman wrote to the residuary beneficiaries noting that the four Londonderry properties would be offered for sale by public auction on 20 June 2018: CB 784.
On 23 April 2018, Turner Freeman wrote to Elderlaw referring to a letter to them dated 18 April 2018 and noting that one of the family members had, through their solicitor, asked whether some or all of the unsold properties might be retained within the family and noted that should Elderlaw's clients be interested, it was open to them to submit an offer for John's consideration or, alternatively, it was open to them to bid at the auction: CB 786 (I note the letter indicated that John would be proceeding with the auction on 19 June 2018 - which appears to be a mistaken date).
On 2 May 2018, Elderlaw wrote to Turner Freeman indicating that some of the beneficiaries had met to discuss an idea of transferring three of the Londonderry properties (Lots 8, 111 and 112) to certain of the beneficiaries in specie. The letter: 1. requested whether that proposition may be considered and agreed to in principle by John as executor and whether John was of the view, on advice, that that could occur without the beneficiaries incurring stamp duty and the estate incurring CGT and land tax which would otherwise be payable should the properties be sold at auction; 2. importantly, noted that if an agreement could be reached their clients would consider a mutually agreed variation to the terms of the undertakings provided by John on 7 March 2018; and 3. requested advice received from Ms Fisher regarding stamp duty, CGT and land tax as a matter of urgency: CB 787-788.
On 11 May 2018, Turner Freeman wrote to Elderlaw providing a counterproposal in relation to the Londonderry properties: CB 789.
On 12 May 2018, there was correspondence between Ms Fisher and Mr Batten regarding tax and duty issues: CB 791.
On 17 May 2018, Elderlaw wrote to Turner Freeman requesting to be provided with written advice received from Ms Fisher regarding stamp duty, CGT and land tax issues: CB 792.
On 19 May 2018, Mr Batten provided advice in relation to CGT gains arising from the sale of the Arndell Park property and the Londonderry properties or transfer of the Londonderry properties to the beneficiaries (in specie) and the consequences of any duty under the Duties Act 1997 (NSW) (Duties Act) if the Londonderry properties were transferred to the beneficiaries in specie: CB 795-818.
On 19 May 2018, MGS sent an invoice to John for work done totalling $34,155: CB 819. The invoice from MGS recorded charges in excess of $30,000 for preparation, review and finalisation of Mr Batten's advice over three days on 12, 13 and 19 May 2018: CB 819. The charge out rates by Mr Batten appeared to reflect a charge out rate of $1,350 per hour rather than $900.
On 21 May 2018, Mr Batten sent an email to Ms Fisher listing a number of amendments to his advice and providing a revised form of document: CB 820-821.
On 21 May 2018, Turner Freeman sent a without prejudice letter to Elderlaw: 1. noting that the revocation proceedings were still on foot and John was still awaiting accounting advice; and 2. addressing the fact that John was awaiting updated valuations in respect of the Londonderry properties, noting that John had raised the possibility of an in specie distribution of the Londonderry properties as early as 18 November 2017 and indicating that if their clients (Carol and Reno) wished to continue negotiations in respect of an in specie distribution they should agree to cancellation of the scheduled auctions and a postponement of the timetable agreed to with the mediation: CB 822.
On 23 May 2018, Turner Freeman wrote to Di Veroli Property Group Pty Ltd (DVPG) requesting it to provide valuations in respect of the four Londonderry properties noting prior advice that the cost of the valuations would be $15,000 plus GST: see e.g. CB 969.
On 29 May 2018, DVPG (Michael Di Veroli (Mr Di Veroli)) provided a valuation of 3 of the Londonderry properties being: 1. Lot 8 at $1.9 million: (CB 825-877); 2. Lot 111 at $2.28 million (CB 927-973); and 3. Lot 112 at $2.2 million (CB 878-926).
On 30 May 2018, Elderlaw sent a without prejudice letter to Turner Freeman noting that their clients were not prepared to vary the terms of the mediation agreement unless an agreement for transfer of the properties in specie could be arrived at prior to the auction and requested a copy of advice received from Ms Fisher: CB 974.
On 31 May 2018, Ms Fisher provided a letter to all beneficiaries regarding CGT and related advice noting advice had been received from Mr Batten: CB 976. The letter indicated that Mr Batten had advised that there was an opportunity to structure the transfer of the properties to beneficiaries to minimise CGT liabilities indicating that that could be achieved by sale of the four Londonderry properties into separate unit trusts: CB 976.
On 31 May 2018, MGS provided to John as executor what appears to be an updated or revised form of his advice on CGT and related revenue issues: CB 977-1001.
On 4 June 2018, Turner Freeman wrote to Elderlaw: noting that their clients would not agree to an extension of time for the auctions beyond 20 June 2018; that valuations for the Londonderry properties would be provided when to hand; enclosing a copy of the MGS taxation advice; and rejecting any contention that the "current set of events" had been brought about by John's letter to family members of 23 April 2018: CB 1002.
The date for the auction of the Londonderry properties was at some point of time (not readily disclosed in the evidence) changed to the evening of 21 June 2018: CB 1018.

[42]

Auction of Property 430 and settlement (June-July 2018)

On 21 June 2018, the auction for Property 430 was scheduled to proceed in the evening: CB 1018.
On 21 June 2018, Lot 430 were sold at auction for a price of $3 million to "Martin Adam Camilleri or Nominee": CB 1019. The contract for sale discloses that a deposit of $300,000 was to be paid with the contract due for completion 42 days after the date of the contract. Turner Freeman is recorded as being the solicitors for both the vendor and purchaser, with Mr McCabe recorded as being the reference for the purchaser's solicitor: CB 1019.
There are several forms of the contract, including a form that "materialised" on 27 March 2019. I will address this later. However, the form signed by only Martin as purchaser was witnessed by a person not ultimately identified in the evidence: CB 1019.
The contract provided that: 1. the property was to be sold with vacant possession noting improvements being an old chicken farm: front page: CB 1019. 2. the deposit was to be paid to the "depositholder" (being the vendor's agent) which was Cutcliffe Properties: CB 1019, 1050; 3. normally, the purchaser must pay the deposit on the making of the contract and this time is essential: clause 2.2 CB 1050; 4. if each party tells the deposit holder that the deposit is to be invested the deposit holder is to invest the deposit with a bank in an interest-bearing account in NSW: clause 2.9 CB 1050; 5. the parties must complete by the date for completion and, if they did not, a party could serve a notice to complete if that party was otherwise entitled to do so: clause 15 CB 1054; 6. if a party was entitled to serve a notice to complete then the parties agreed that 14 days was a reasonable and proper period to specify in any such notice: clause 34.2 CB 1021; and 7. in the event that completion did not take place for any reason (other than the vendor's default) the purchaser must pay to the vendor on completion interest calculated daily at the rate of 10% per annum on the balance of the purchase price payable under the contract in respect of the period commencing the day following the date for the completion date and ending on the date completion takes place: clause 35.1 CB 1021.
On 29 June 2018, Mr McCabe of Turner Freeman wrote to each of John and Martin in respect of the sale of the property.
The letter to John (omitting formal parts) was in the following terms (at CB 1063): We refer to the above matter, and to the Public Auction held on 21 June 2018. We note that the property was sold for a purchase price of $3,000,000.00. We also note that this amount is significantly greater than the amount as contained in the Valuation Report dated 29 May 2018 of $1,725,000.00. The identity of the purchaser has been described as "Martin Camilleri or Nominee" on the exchanged contract. We understand that Martin will confirm the identity of the Purchaser in due course, and will provide our office with a cheque in respect of the deposit shortly.
The letter to Martin (omitting formal parts) was in the following terms (at CB 1064): We refer to the above matter. We note that contracts for sale have been exchanged in your purchase of the abovementioned property at a price of $3,000,000.00. The identity of the purchaser has been described as "Martin Camilleri or Nominee". Please provide clarification of the identity of the purchaser in due course once you have received separate advice in this regard. We understand that you wish to retain Turner Freeman in respect of this purchase. As you are aware, this firm is also retained by the estate. In order for us to act both parties in respect of the purchase and sale of this property, we will require of both yourself and John Camilleri ( as executor of the estate) to sign Acknowledgments to the effect that you each understand the effect of Turner Freeman acting for both parties.
On or approximate to 30 June 2018, Ms Fisher prepared financial statements for the estate for the year ended 30 June 2018: CB 1068.
On 3 July 2018, John signed an acknowledgement consenting to Turner Freeman acting for the parties in respect of the sale/purchase of Lot 430: CB 1077.
On 5 July 2018, the contract for the sale of Arndell Park was due to be settled: CB 1078.
The solicitors for the purchaser prepared a form of settlement adjustment sheet which included three items in which the vendor allowed adjustments for council rates, water rates and water usage and one item in which the purchaser allowed vendor agency fees: CB 1078.
The balance due to the vendor in accordance with the settlement adjustment sheet was stated to be $17,998,832.14: CB 1078.

[43]

Post-settlement events (From July 2018)

On 10 July 2018 (following receipt on 6 July 2018 of $17,981,984), there was a withdrawal out of the NAB estate account in the sum of $15 million: CB 1669. That sum was used to facilitate interim distributions. Bank cheques were made out in the name of each of the residuary beneficiaries in the amounts of $2.5 million: CB 1351-1354.
On 11 July 2018, Turner Freeman wrote to Carol (at her residential address) confirming settlement of the sale of the Arndell Park property and noting that there would be a distribution totalling $15 million made by John to the beneficiaries being an amount of $2.5 million to each of the six beneficiaries and (at CB 1079) that: Cheques will be available for collection from the Penrith office of Turner Freeman from Friday, 13 July 2018…
On 11 July 2018, Turner Freeman provided to Elderlaw a form of acknowledgement signed by Martin in respect of the purchase of Lot 430 indicating that he consented to Turner Freeman acting notwithstanding he was aware that they were acting for other parties to the transaction: CB 1080-1089.
On 16 July 2018, Turner Freeman wrote to John confirming that they had received an acknowledgement from each of himself and Martin in respect of the firm acting on behalf of both parties to the transaction and relevantly stating: We confirm that we have received from Martin a bank cheque in the sum of $2.5 million which serves as a deposit towards the purchase of the property: CB 1082.
On 18 July 2018, Turner Freeman wrote to Carol and separately to Reno enclosing the bank cheques in the sum of $2.5 million by way of distribution to them: CB 1352-1353.
In particular, between 26 July 2018 and 12 August 2018, there was correspondence involving Mr Batten which I refer to specifically in dealing with Issue 13.
Between 23-28 August 2018, there was further correspondence regarding the deed: CB 1156-1161.
On 30 August 2018, Mr McCabe sent an email to Mr Batten: CB 1162.
On 23 August 2018, Elderlaw sent a letter to Turner Freeman making complaints about a number of matters: CB 1156. The letter in part noted that the front page of the contract for the purchase by Martin of Property 430 required a deposit of $300,000 and requested evidence that such deposit had been paid: CB 1157, 1158.
On 29 August 2018, Turner Freeman responded to Elderlaw attaching a revised draft agreement that had been executed by John and noted a proposal that a market valuation of the properties be obtained and provided to the beneficiaries. The letter also attached a form of transfer of Lot 112 to Carol and Reno: CB 1164-1165.
The form of letter dated 29 August 2018 contains no formal letterhead.
On 13 September 2018, a letter was sent by Turner Freeman to Elderlaw. I address this letter and an email sent on 14 September 2018 by Mr Batten to Ms Fisher and John below in dealing with Issue 13.
What happened between 14 September 2018 and 24 September 2018 is unclear.
On 24 September 2018, Mr Batten sent an email addressed to Martin. I refer to this below in relation to the issue regarding item 13.

[44]

Agreement regarding Lots 8, 111 and 112 (November 2018)

On 8 November 2018, as noted above, the parties executed the November 2018 Deed: CB 1194-1205.
Agreement regarding in specie transfer of Lots 8, 111 and 112 was reached as follows: 1. Lot 111 be transferred to David and Peter as tenants in common in equal shares; 2. Lot 112 be transferred to Carol and Reno as tenants in common in equal shares; 3. Lot 8 be transferred to John and Martin as tenants in common in equal shares; and 4. In consideration of David and Peter receiving Lot 111 they agreed to pay to John and Martin the sum of $250,000 by way of adjustment of value.
Clauses 7-11 of the Deed provided as follows: 7. John, in his capacity as executor of the Deceased's estate agrees to provide instructions forthwith upon the making of this Deed to Christopher Batten to make applications to Revenue NSW for an exemption of any Stamp Duty payable in relation to the transfer of the in specie Properties under the Duties Act 1997 (NSW) and also to take any reasonable step or make any reasonable application he has power or authority to make where that step or application might assist in reducing the burden of the beneficiaries or the estate in relation to capital gains tax and he agrees to implement the professional advice he receives, provided the parties hereto who are affected approve. 8. John, in his capacity as executor of the deceased's estate, agrees to provide to the other Residuary Beneficiaries on their request (where the request identifies a document or category of documents) any advice and information that is in the estate's possession or control and which is relevant to any Capital Gains Tax or stamp duty obligations that exist or might exist in relation to that in specie Property which those Residuary Beneficiaries making the request are to receive (in accordance with clauses 3, 4 or 5). 9. The Residuary Beneficiaries shall be liable to pay and agree to pay any stamp duty which is deemed payable in respect of the transfer of the in specie Properties they have agreed to take, and each Residuary Beneficiary jointly and severally indemnifies the Deceased's estate in respect of any stamp duty payable by the estate in respect of any property transferred to them. 10. The Residuary Beneficiaries acknowledge that 430 Londonderry Road was sold on 21 June 2018 for $3,000,000 to Martin. 11. The Residuary Beneficiaries acknowledge that in making the transfers referred to in clauses 3, 4 or 5, the executor is making appropriations under the power given to him by law pursuant to s.46 of the Trustee Act 1925 (NSW) and the Residuary Beneficiaries consent to those appropriations.

[45]

Advice and applications regarding transfer duty and CGT (From November 2018)

On 26 November 2018, Mr Batten provided Mr McCabe with further advice in respect of transfer duty: CB 1206. I address this below in relation to Issue 13.
On 4 December 2018, Mr McCabe emailed Mr Batten noting that Turner Freeman had received a request from Elderlaw enquiring about Mr Batten providing a brief outline of the work to be done and breakdown of his costs seemingly in the context of making a submission to the OSR: CB 1208.
Later in the morning on 4 December 2018, Mr Batten replied to the email indicating that he was more than happy for Elderlaw to draft and lodge the submission. Unhelpfully he added "I don't do quotes or "cost breakdowns". I keep my hours and charge my hourly rate": CB 1208.
On 10 December 2018, Turner Freeman wrote to the residuary beneficiaries other than Peter noting that John had provided instructions to Mr Batten to proceed with the foreshadowed applications in relation to concessional stamp duty on the transfer of the three in specie Londonderry properties: CB 1209.
On 18 December 2018, a form of transfer of Lot 112 to Carol and Reno was signed and dated by their respective solicitors: CB 1210.
On 18 December 2018, Elderlaw wrote directly to Mr Batten referencing the Turner Freeman letter dated 10 December 2018 and attaching the signed transfer "…to allow you to finalise and make the necessary application to Revenue NSW": CB 1211.
On 17 January 2019, the Commonwealth Bank issued a term deposit notice in respect of the amount of $2.5 million in the name "Turner Freeman CMA OBO Martin Adam Camilleri". The investment term was for one month: CB 1214.
On 19 January 2019, John swore an affidavit stating that the sum of $2.5 million, which was to be distributed to Martin, was being held in trust for the completion of the sale to Martin of Property 430: CB 1232. The affidavit is not in evidence although it is described in a letter from Elderlaw. The letter indicates the affidavit stated the completion was awaiting Martin's establishment of a unit trust: CB 1232.
On 29 January 2019, the revocation proceedings were listed for hearing before Robb J for three days. On the first day of the hearing, the plaintiffs (Carol and Reno) sought and were given leave to file a notice of motion seeking leave to discontinue the proceedings on the basis that there be no order that the plaintiffs pay (the defendant's cost): Galea v Camilleri at [7].
There was no issue that the proceedings be discontinued, and the only remaining issue for the Court to decide was what order would be made in respect of the defendant's costs of the proceedings: Galea v Camilleri at [10].
On 14 February 2019, Mr McCabe sent an email to Mr Batten updating regarding the revocation proceedings and addressing questions regarding Lot 8 and Property 430. The letter stated in part: I understand that you are in the process of establishing a unit trust for Martin/John which will be the entity that Lot 8 … and [Property] 430… will ultimately be transferred to: CB 1212.
On 17 February 2019, Turner Freeman received into its Premium Business Cheque Account, which was a controlled monies account in the name of Turner Freeman CMA OBO Martin Adam Camilleri, the sum of $2,503,821.92: CB 1628.
The funds in the controlled monies account then continued to earn interest up to and including 22 August 2019.
On 21 February 2019, Mr Batten responded to Mr McCabe's email (explaining part of his delay in responding) and providing some advice in relation to transfer duty and in respect of purchasing through a unit trust: CB 1217.

[46]

Dismissal of revocation proceedings (March 2019)

On 1 March 2019, Robb J delivered reasons for judgment (in Galea v Camilleri) and made orders dismissing the revocation proceedings and ordering the plaintiffs to pay John's costs of the proceedings and, to the extent that his indemnity costs were not otherwise satisfied by that order, further ordering that his costs were to be paid out of the estate of the deceased: CB 1217A.
On 2 March 2019, John signed a form of purchaser/transferee declaration to be lodged with Revenue NSW in respect of purchase of Property 430: CB 1219. Martin signed a similar declaration: CB 1225.
On or about 7 March 2019, MGS on behalf of John and Martin lodged an application for registration of a company Renopat Pty Ltd (Renopat) with John and Martin being the proposed directors and shareholders: CB 1217B-1217E.
On 8 March 2019, Ms Fisher emailed Mr Batten noting that Martin had asked whether the farming stamp duty could apply stating "[i]f it only applies to transfers in personal names then we can buy in Johnnand [sic] Martin's name and do the declaration the same as the others": CB 1218. Later in the afternoon of 8 March 2019, Mr Batten replied to Ms Fisher noting that s 274 (Duties Act) may apply noting that the land "has to be transferred to individuals. The main issue is that the land was used for primary production by the transferee or assignee immediately prior to the transfer and will be carried on after the transfer": CB 1218.
On 27 March 2019, Turner Freeman sent to Mr Batten the declarations as well as what was described as the "[o]riginally executed Transfer in respect of [Property 430]" and "[o]riginally executed contract for the sale and purchase of land": CB 1230-1232.
It is evident from the form of contract that was attached that it is different from the form of contract that was apparently signed by Martin on 21 June 2018 at the auction.
Relevantly, the form of contract signed by Martin on 21 June 2018 on the front page contained the following handwriting and signatures (the following extract is taken from CB 1019):
The handwriting and signatures on the document described in the Turner Freeman letter of 27 March 2019 as "originally executed contract for the sale and purchase of land" (CB 1231AAA) and appearing at CB 1231R (altered vendor counterpart) are extracted below:
On 3 June 2019, Elderlaw wrote to Turner Freeman regarding various matters under the headings "[f]urther failure to administer the estate" and "[p]roduction of books of the estate": CB 1232, 1233. The letter from Elderlaw: 1. noted that seven months had elapsed since the execution of the November 2018 Deed and that the transfer of Lot 112 to Carol was yet to occur: CB 1232. (I pause to note that the transfer had been signed. The issue at that stage appeared to be receiving advice from Mr Batten as to whether any exemption or concessional duty was available in respect of the transfer); 2. sought an explanation regarding a number of matters including whether the sum of $2.5 million remained in trust, what was to be done regarding the transfer of Lot 112 and sought an estimate for finalisation of the administration of the estate: CB 1232; 3. noted that the Arndell Park property was, prior to its sale, rented for horticultural purposes and requested provision of documents accounting for that rent: CB 1233. (The letter did not in its terms make any complaint regarding failure to rent the Arndell Park property. As far as I can tell the letter was in fact the only correspondence from Elderlaw, to that point of time, which addressed or made any comment about renting of the Arndell Park property); and 4. noted that accounts of the estate had shown income from IAG shares observing that the shares were not listed in the inventory of probate nor was there any record of their distribution or disposal. It requested provision of documentation accounting for their distribution or disposal.
On or approximate to 30 June 2019, Ms Fisher provided financial statements for the estate for the year ended 30 June 2019: CB 1235.
Between 4-12 July and 2-15 August 2019, there was correspondence which bore upon Mr Batten's involvement regarding duty applications: CB 1282-1325. I address this below in relation to Issue 13.

[47]

Settlement of sale of Property 430 (August 2019)

On 21 August 2019, Ms Fisher wrote to Mr Batten in relation to the issue regarding penalty interest to be paid by Martin on the unpaid portion of the funds for settlement of Property 430: CB 1326.
On 22 August 2019, Maryanne (John's wife) provided Turner Freeman with funds by direct deposit in the sum of $552,739.73 (with reference to facilitating settlement of the sale of Property 430): CB 1328.
On 22 August 2019, the controlled monies account was closed with a balance of $2,520,813.98: CB 1640.
On 23 August 2019, settlement of Property 430 occurred. The details regarding the settlement amounts are as follows (at CB 1332): Purchase Price: $3,000.000.00 Interest accrued on deposit of $2,500,000.00 $20,813.98 Interest payable on unpaid balance of purchase price ($500,000.00) at 10% in accordance with contract from date of exchange to settlement; 385 days @ 0.0274% interest per day $52,739.73 SUB TOTAL: $3,073,553.71 Less: Deposit paid: 2,500,000.00 $2,500,000.00 BALANCE: $573,553.71
On 23 August 2019, at 4:58 PM, Mr McCabe emailed Mr Carswell-Doherty confirming settlement of the sale of Property 430 and noting the amount which had been received on behalf of the estate (representing the sale price of $3 million plus interest of $73,553.71 accrued on monies paid by the purchaser prior to settlement and on the unpaid balance of $500,000 in accordance with clause 35.1 of the contract): CB 1333.
Further, on 23 August 2019, Turner Freeman wrote to Martin and John confirming settlement and providing a copy of the settlement sheet.
The letter stated (at CB 1334): An adjustment in respect of council and water rates will also take place following completion of the estate accounts. Any adjustment will be applied to all set off against your entitlements in the estate on an equal basis.
On 28 August 2019, Turner Freeman caused a trust account cheque to be issued payable to the estate in the sum of the amount paid on settlement ($3,073,553.71): CB 1339.
On 29 August 2019, Elderlaw sent an email to Mr McCabe taking issue with the calculation of interest due to be paid on settlement of the purchase of Property 430. The email is consistent with their understanding at that stage that Martin was the purchaser under the contract. Reference was made to an affidavit that had been sworn by John - apparently on 24 June 2018 - in which he stated that Martin would pay $2.5 million on settlement and noting that they had had no notice of a change from that position: CB 1340.
On 29 August 2019, the settlement cheque for the purchase of Property 430 was deposited to the estate account in the sum of $3,073,553.71: CB 1678.

[49]

Ongoing activity and correspondence regarding duty and tax issues (From September 2019)

On 27 and 30 September 2019, Mr Batten sent correspondence to Ms Fisher (CB 1360-1366) and to the Australian Taxation Office (ATO): CB 1367-1368. I deal with this below in relation to Issue 13.
On 9 October 2019, in these proceedings, the plaintiffs issued a notice to produce to John requiring production of communications between John and Martin concerning completion of the contract for sale to Martin or his nominee of Property 430, the amount of interest to be paid by Martin or his nominee pursuant to clause 35.1 of the contract, the deposit paid by Martin or his nominee and the terms on which any deposit was to be held: CB 1375-1376. The notice to produce also sought copies of any documentation in respect of communications between John and his solicitors and Mr Batten regarding the applications or proposed applications to Revenue NSW for concessional stamp duty in respect of Lots 111 and 112: CB 1376.
Between 11 October 2019 and 4 November 2019, Martin arranged for construction of a garage on Property 430: CB 1384-1398. I address this below in relation to Issue 8.
On 11 October 2019, Mr Spargo from the ATO responded by email to Mr Batten proposing that the ruling question be divided into two separate questions: CB 1379. The response was clearly a reference to the letter dated 30 September 2019 addressing Property 430. Of note is the fact that the email from Mr Spargo concluded stating (at CB 1379): [i]n relation to the Arndell Park property, I believe we have agreed that the concessions will not apply. Can you please confirm that you wish to withdraw the part of the ruling application that relates to the property?
On 18 October 2019, Mr Batten responded by email to Mr Spargo agreeing that his revised form of questions was correct and further stating that the question regarding the Arndell Park property needed to be withdrawn: CB 1380.
On 1 November 2019, Turner Freeman provided Mr Batten with a copy of the statement of claim filed on 4 September 2019 and John's defence filed on 29 October 2019 and requested an update as to the status of the applications to be made by Mr Batten in respect of stamp duty exemptions and CGT: CB 1381.
On 12 November 2019, the ATO wrote to the executor of the deceased's estate care of MGS providing notice of the private ruling in respect of the two posed questions. Specifically, the ATO indicated an affirmative answer to both questions namely (at CB 1399-1400): 1. Will the Commissioner exercise the discretion under s 152-80(3) Income Tax Assessment Act 1997 (Cth) (ITAA 1997) to extend the time limit to allow the small business 15 year exemption to be applied to the original 50% ownership interest; and 2. Will be Commissioner exercise the discretion under s 152-80(3) of the ITAA 1997 to extend the time limit to allow the small business 50% exemption and the retirement exemption to be applied to the 50% interest acquired in 2007?
On 13 November 2019, Mr Spargo emailed the private ruling to Mr Batten: CB 1410.
On 25 November 2019, Mr Batten (MGS) provided a letter of advice to John (CB 1412-1413) and on 30 November 2019, Mr Batten (MGS) issued invoice number 1720. I address this below in relation to Issue 13.
On 13 December 2019, Turner Freeman wrote directly to Carol enclosing a copy of the letter of advice from Mr Batten dated 25 November 2019: CB 1416.
On or approximate to 31 December 2019, Ms Fisher prepared financial statements for the estate for the six-month period to 31 December 2019: CB 1417.
On 8 January 2020, Elderlaw wrote to Mr McCabe requesting copies of enclosures in Mr Batten's letter and further requesting, on John's understanding, as to when the stamp duty application in relation to Elderlaw's clients' properties would be finalised: CB 1426.
On 10 February 2020, Mr Batten (MGS) wrote to Mr McCabe referencing his letter of 9 January 2020 and Elderlaw's letter dated 8 January 2020 and attached a copy of the requisition from Ms Lamont from Revenue NSW dated 26 September 2019 and the Notice of Private Ruling from Mr Spargo dated 12 November 2019. The letter noted that Mr Batten had spoken with Ms Lamont who advised that Revenue NSW would need to see the final distributions from the estate to determine the application of s 63(1)(a)(iii) Duties Act to the matter and that he was working with Ms Fisher to finalise the estate accounts which should be completed by the end of February 2020: CB 1429.
On 6 April 2020, Mr Batten (MGS) wrote to John as executor referencing his letter dated 25 November 2019 noting that he had not received responses to the information he required from the six residuary beneficiaries (which appeared to be a certified copy of a client ID for each of them and a purchaser declaration for each of them): CB 1460 when read with 1413.
Mr Batten's letter to John further addressed the assessment of income tax for the estate for the period up to 30 June 2018 in the context of more lengthy advice addressing appropriation of estate assets: CB 1461-1468.
On 21 April 2020, Turner Freeman wrote to Elderlaw referring to a notice to produce and producing copies of various documents: CB 1469. Turner Freeman also sent a separate letter on the same day to Elderlaw enclosing a letter addressed to each of its clients in relation to the estate and a copy of Mr Batten's advice of 6 April 2020: CB 1471.
On 7 May 2020, Turner Freeman wrote to Elderlaw addressing several issues. First, in relation to the advice of Mr Batten dated 6 April 2020, it indicated that it proposed to adjust the interests of the beneficiaries as set out on page 5 of his advice to effect an appropriation in respect of the transfer of the in specie properties which, in Turner Freeman's view, would allow the stamp duty exemption applications to successfully proceed "providing a significant advantage to all beneficiaries". Secondly, the letter addressed questions regarding production of a notice to produce: CB 1472-1473.
On 3 July 2020, Elderlaw responded to Turner Freeman regarding its letter dated 21 April 2020 and indicated that, in their view, the appropriate course to address the matters raised in Mr Batten's (6 April 2020) advice was for the parties to enter into a supplementary deed to record an adjustment to the cash entitlements of the beneficiaries consistent with valuation of the in specie properties. However, they expressed the view that the parties would risk failing to obtain a stamp duty exemption for the purposes of such a supplementary deed if they were to use the values reached in the valuation reports of DVPG prepared in May 2018: CB 1484. Assertions were made regarding what was said to be faulty reasoning of Mr Di Veroli in his valuation and three alternate valuers were proposed: CB 1484-1485.
On 14 July 2020, Elderlaw sent a letter to Turner Freeman regarding Court directions in respect of matters in the proceedings: CB 1487.
Between 16-27 July 2020, there was further correspondence regarding obtaining updated valuations: CB 1490-1494.
On 2 August 2020, Mr Batten (MGS) wrote to John as executor addressing the requirements of Revenue NSW but, in particular, noting that the 2018 valuations were not a problem in relation to the application of the Duties Act: CB 1495.
On 4 August 2020, Turner Freeman provided a copy of that letter to Elderlaw: CB 1503.
On or about 8 August 2020, John provided an accounts summary of assets (realised, transferred, realised and subsequently reinvested, unrealised), reconciliation of funds and statement of receipts and payments: CB 1510-1525.

[50]

Proposed supplementary deed (September 2020)

On 8 September 2020, Turner Freeman wrote to Elderlaw referencing the proposed supplementary deed to be executed by the beneficiaries to facilitate successful applications for duty exemptions in respect of the in specie transfers. The letter confirmed that John, Martin and David had executed the supplementary deed and requested Elderlaw to advise if their clients had executed the deed: CB 1530.
A form of draft of the supplementary deed (to the November 2018 Deed) was added to the Court Book. The dating of the document is unclear. The positioning in the Court Book suggests the document dates to in or about March-April 2022.
In any event, the draft proposed, in its operative parts, deletion of clause 6 of the November 2018 Deed and, in accordance with the acknowledgement of the residuary beneficiaries in the November 2018 Deed, proposed that the in-specie transfer represented the executor making appropriations pursuant to s 46 Trustee Act 1925 (NSW) (Trustee Act) with adjustments so that the appropriations would be made in accordance with the law and have the effect of an equalisation between the residuary beneficiaries. The agreed value of the in specie properties to be transferred was $1.9 million (Lot 8), $2.22 million (Lot 111) and $2.28 million (Lot 112). The deed proposed payments to be made by the executor to effect such equalisation out of residue with John and Martin to receive $190,000 each and Carol and Reno $30,000 each: CB 1622A, 1622E.
On 2 October 2020, Turner Freeman provided a trust statement for John in respect of the sale of Property 430: CB 1533.
On 7 October 2020, Elderlaw wrote to Turner Freeman indicating that their clients declined to execute the proposed supplementary deed and asserting that they considered that their clients were bound to perform the November 2018 Deed. The letter indicated that Elderlaw's clients would independently arrange for lodgement of stamp duty applications for transfer of their respective properties pursuant to the deed and went on to assert that if the November 2018 appropriations of the in specie properties had been performed in a timely manner by the estate, the administration of the estate would have been completed by now and asserted that the delay had been what had precipitated the current proceedings: CB 1534.
On 16 October 2020, Turner Freeman responded to the 7 October 2020 letter taking issue with and disputing the assertions in it: CB 1536.
On 16 October 2020, Elderlaw wrote to Turner Freeman responding to the 16 October letter asserting that no explanation had been given for why John was withholding what was asserted to be $3 million of "[o]ur clients [sic] money" and repeating that their clients declined to execute the proposed supplementary deed and did not wish to speak to Mr Batten about the matter and had received independent specialised advice: CB 1538.
On 30 November 2020, Elderlaw wrote to Turner Freeman referencing the 7 October letter and requesting provision of the transfers that had been signed for their clients to enable Elderlaw to independently arrange lodgement for stamp duty applications: CB 1539.
On 8 December 2020, Turner Freeman wrote to Elderlaw providing estimates of further expenditure and liabilities of the estate: CB 1540. Turner Freeman responded on the same date indicating that unless Elderlaw's clients indicated by 14 December 2020 an intention to sign a supplementary deed, Turner Freeman held instructions to seek judicial advice as to whether John as executor would be justified in adjusting the distribution of the residue pursuant to clause 4 of the supplementary deed at the time he delivers the stamped transfers to the beneficiaries: CB 1541.
On 7 December 2020, it appears there was a form of settlement conference: CB 1542.
On 9 December 2020, Elderlaw wrote to Turner Freeman requesting details and information in respect of the statement of receipts and disbursements of accounts in order to facilitate them being able to obtain instructions as to whether their clients would execute the supplementary deed: CB 1542.
On 10 December 2020, Mr Batten wrote to John as executor addressing the source of his information for providing his advice dated 6 April 2020: CB 1544-1546.
On 10 December 2020, Turner Freeman wrote to Elderlaw noting, inter alia, that they had referred correspondence in respect of the amount of the cash held in the estate accounts to Ms Fisher and Mr Batten for their comments and would provide a substantive response in due course regarding this: CB 1547.
Between 14 December 2020 and 20 April 2021, there was further correspondence between the parties in relation to various issues in the proceedings: CB 1551-1561.

[51]

More activity and correspondence regarding the in specie transfers, duty and tax issues (from April 2021)

On 20 April 2021, Turner Freeman wrote to the plaintiffs care of Elderlaw indicating, inter alia, that John as executor proposed to take steps to implement the November 2018 Deed: CB 1561. The letter from Turner Freeman proposed, in order to give effect to clause 6 of the November 2018 Deed, that the executor pay (from the shares of Peter and David each) the sum of $125,000 to John and Martin (totalling $250,000). It was intended to pay the $250,000 directly without depositing it into an estate sub-account or sub-accounts in their names for the purpose of satisfying the OSR that the transaction was bona fide: CB 1561.
On 23 April 2021, Elderlaw wrote to Turner Freeman. The letter noted that: John had neither sought judicial advice nor filed a cross-claim (which he had been given an opportunity to do); disputed that money should be paid into sub-accounts and asserted that available net funds should be paid to their clients; they were still taking instructions in relation to the payment of $250,000 to John and Martin and how that should occur; and asserted that the terms of the November 2018 Deed envisaged that the estate, through Mr Batten, would undertake the stamp duty exemption applications within a reasonable time which had not occurred: CB 1577-1578.
On 26 April 2021, Turner Freeman responded to Elderlaw noting: distributions in excess of $3.2 million had been made to each residual beneficiary totalling more than $19 million and that at present approximately $1.7 million was held by the estate; the preliminary advice received regarding the in specie transfers had contemplated payments to sub-accounts; asserting that Mr Batten had made applications to Revenue NSW; and addressing matters in relation to the proceedings: CB 1580-1581.
On 10 May 2021, Elderlaw replied to Turner Freeman revisiting the provisions of clause 6 of the November 2018 Deed asserting that the estate should pay (immediately) Reno and Carol $140,000 each, Peter and David $15,000 each, and Martin and John $140,000 each. It stated that Martin and John should only receive the further $250,000 when Lot 111 had been transferred to Peter and David: CB 1583.
On 26 April 2021, the Court noted that John was obtaining advice from the OSR which may resolve an issue in the proceedings: CB 1586.
On 1 June 2021, Ms Sidey emailed Mr McCabe seeking an urgent update of John's application to Revenue NSW: CB 1586.
On 6 June 2021, Mr McCabe responded to Ms Sidey (noting that he had been recently on leave) confirming that Mr Batten had been orally advised by Revenue NSW that they would not proceed to assess duty and stamp the in specie transfers until they received a copy of the final accounts of the estate. The email noted that John had sought further advice from Peter Bruckner of counsel (Mr Bruckner) as to the effect of the deed on the proposed in specie transfers and appropriations: CB 1587.
On 16 July 2021, Mr Bruckner provided a draft opinion. The opinion is not in evidence.
On 22 July 2021, Turner Freeman sent to Elderlaw a copy of the draft opinion.
On 23 July 2021, Christopher Catt of counsel (Mr Catt) provided a response to the opinion of Mr Bruckner dated 21 July 2021: CB 1589. It is not necessary to set out the details of Mr Catt's opinion. Nonetheless, I note that at least part of the advice was to the effect that if the executor and beneficiaries could not agree to obtaining updated independent valuations and using those as the basis for adjusting the final distributions of cash residue then he agreed with Mr Bruckner's opinion that consideration ought to be given to seeking advice from the Court: CB 1589 [4].
On 2 August 2021, Turner Freeman wrote to Elderlaw seeking concurrence from all beneficiaries to proceed with a course of obtaining updated and independent valuations which appeared to accord with both the opinions of Mr Bruckner and Mr Catt. The letter proposed Stuart Rowan of Diamonds Property Consultancy (Mr Rowan) to conduct a valuation for each of the three Londonderry properties distributed in specie as at 18 December 2018: CB 1593.
On 5 August 2021, Elderlaw wrote to Turner Freeman indicating that their clients did not wish to engage Mr Rowan and proposed that the valuer be selected from three alternative valuers who they nominated as being: Independent Property Valuations Pty Ltd; All Over Property Valuations and AVG Valuers. The letter noted an understanding that the basis for NSW Revenue accepting the 29 May 2018 valuations was that Mr Batten had advised Ms Lamont that the transfers were signed by the executor on 3 August 2018. The letter sought clarification as to whether John was proposing to seek valuations as at that date (3 August 2018) or as at 18 December 2018 as per Turner Freeman's letter of 2 August 2021: 1606-1607.
On 12 August 2021, Turner Freeman responded to Elderlaw indicating an intention to proceed to engage Mr Rowan (notwithstanding the comments of Elderlaw): CB 1609.
On 16 August 2021, Turner Freeman wrote a letter to Mr Rowan seeking to engage his services and requesting the market value of the properties be provided as at 3 August 2018 and as at 18 December 2018: CB 1610.
On 19 August 2021, Ms Sidey emailed Mr McCabe asserting that based on advice from Mr Catt, for the exemption application to be successful the valuations must be done as at 3 August 2018: CB 1612.
On 20 August 2021, Mr McCabe responded to Ms Sidey's email stating that the valuations were being sought as at 18 December 2018 in line with Mr Bruckner's opinion: CB 1615.
On 14 September 2021, Elderlaw wrote to Turner Freeman taking issue with the date of valuation proposed to be used for the purposes of the duty application and noted that, subject to any updating advice John might receive from Mr Bruckner, the plaintiffs were now considering making a voluntary disclosure to Revenue NSW about the date of the first execution of their transfers and what was described as being the "inappropriate" valuation (as at 18 December 2018): CB 1616-1617.
On 21 February 2022, Elderlaw wrote to Turner Freeman requesting that Turner Freeman (1) advise them as to who was holding the original transfer of the title to Lot 112; (2) arrange for that original transfer to be couriered to their office; and (3) forward a complete statement of appropriation of all estate assets at market value. The purpose of the request was to facilitate the plaintiffs' making a voluntary disclosure to Revenue NSW: CB 1618.
On 25 February 2022, Turner Freeman emailed a letter to Elderlaw. The letter noted that Mr Batten was holding the original transfers pending a reply to Revenue NSW's requisition and indicated that he had been unable to reply to the requisition until he received the final statement of appropriation. It noted that the original transfer could be delivered to their office or was available for collection. It indicated that a complete statement of appropriation would be forwarded at the earliest possible opportunity once prepared by Ms Fisher. It noted that Mr McCabe had had a telephone conversation with Mr Batten who advised that the submissions made to Revenue NSW in relation to the application of s 63 Duties Act would apply to each of the transfers including the transfer in respect of Lot 112 noting that one of the issues that had been identified by Revenue NSW was the inclusion of the $250,000 payment from David and Peter to John and Martin, observing that this had been dealt with in the opinion of Mr Bruckner who agreed with Mr Batten's interpretation of the payment and its inclusion in the November 2018 Deed. The letter requested Elderlaw seek instructions from Peter as to whether he wished for Mr Batten to proceed with responding to the Revenue NSW requisition on his behalf: CB 1619.
On 21 March 2022, Mr McCabe emailed Ms Sidey noting that, as a result of floods recently experienced in the Hawkesbury, the accounts for the estate had still not been verified although he was hopeful that that could be done later in the week after which time they would be filed and served. He enquired as to whether Carol and Reno had lodged their application with Revenue NSW at this stage and as to whether Peter had given any instructions as to concerns regarding Mr Batten furthering the application made on his and David's behalf by responding to the requisition. He finally noted that a draft statement of appropriation had been prepared by Ms Fisher: CB 1621.
On 21 March 2022, later that afternoon, Ms Sidey emailed Mr McCabe noting that Elderlaw had recently communicated with Ms Lamont/Revenue NSW and proposed to re-lodge the signed and dated transfer showing consideration of $2.2 million based on the 29 May 2018 valuation with the final statement of appropriation and other information requested by Revenue NSW. The email noted that they were still waiting to hear from Peter regarding whether he intended to follow the proposal that Mr Batten complete the application as commenced for him and David: CB 1622.
On 6 April 2022, Turner Freeman emailed Elderlaw enclosing a supplementary opinion and corrigendum dated 26 March 2022 of Mr Bruckner: CB 1623. The supplementary opinion and corrigendum is not in evidence. This appears to be the last correspondence from Mr McCabe.
On 4 November 2022, Ms Sidey emailed Mr Mann referring to previous correspondence with respect to Ms Fisher's finalised statement of appropriation and requesting that it be provided or the provision of an immediate update regarding it: CB 1624.
On 8 December 2022, Turner Freeman served on Elderlaw unredacted time record documents produced by Mr Batten: CB 1705-1715.

[57]

Supplementary evidence

It was suggested to Mr Ellis by Mr Crossland that the Arndell Park property (at least from the photograph at CB 635B) appeared to have a series of cultivated rows. Mr Ellis indicated that he did not think that it was cultivated (as appeared in that photograph) for probably a couple of years prior to the sale. He thought that was an older photograph: T 193-194.
When it was vacant land the Arndell Park property was surrounded by properties with substantial shed infrastructure being approved industrial premises: CB 635A-635C. At least one of the properties adjacent had a lot of trucks. Mr Ellis indicated that he knew the area quite well and that there was a mix of companies ranging from scaffolding, building companies and people that dealt in the sale of truck parts which was, according to him, one of the factors that made the property desirable for storage purposes as a lot of people and companies in the industrial precinct may have a requirement for storage of vehicles, scaffolding, building materials and the like: T 194.
Mr Crossland sought to compare the Arndell Park property with another property at Ingleburn contained in Exhibit P3 which was a lease of englobo land (Ingleburn lease): T 195. The purpose of Mr Crossland's questioning was to demonstrate that in commercial leases there were various types of arrangements that could be negotiated as between lessor and lessee which might require the lessee to improve the property for the limited extent of putting down a hardstand.
Indeed, the example that Mr Crossland referred to in Exhibit P3 was the Ingleburn lease. This was a lease for a term of four years for use of the premises for the purpose of truck storage and repair. The lessor was required to pay for the supply of road base/tar for the sealing of the property and install other things including sewer services, a concrete driveway, fencing and a gate. The lessee was required to obtain all necessary statutory approvals at its own cost and to clear and compact the land, lay the road base/tar and construct a workshop and office subject to the plans being approved by the lessor: Exhibit P3 21-25.
Mr Crossland questioned Mr Ellis to some degree regarding different possibilities relating to forms of hardstand on property: T 196-197. Leaving aside, at the moment, the question of Mr Ellis' expertise in that area, ultimately, Mr Crossland indicated to me that the purpose of the questioning was in essence to support a submission that the rental figures in Mr Ellis' report should be accepted by the Court irrespective of whether a hardstand was put in or not: T 198.42 -199.2.
Mr Ellis did not consider that the arrangements regarding the Ingleburn lease affected his assessment of market rental in respect of the Arndell Park property: T 199.39-200.18.
Most councils require a development application approval to create a hardstand. Some do not: T 200.45. Mr Ellis was uncertain as to whether the local council for the Arndell Park property would so require. He thought it might (T 200.48-50), having regard to the type of zoning for the Arndell Park property, especially if an impervious hardstand surface was proposed as the council would (likely) require proof that there was adequate stormwater drainage to dispose of run-off in wet weather: T 201. That would also apply in relation to hardstands deemed to be impervious: T 201.44.
It was otherwise outside Mr Ellis' scope of professional expertise to comment as to how a council such as the relevant council for Arndell Park council deals with approvals in relation to hardstands: T 201.1-7.

[58]

Challenges as to value

Mr Ellis was cross-examined by Mr Ellison SC. He agreed that under 3.6 Light Industrial zoning IN2, any use that turns that vacant land into anything to do with industrial land requires council approval and council involvement: T 208.31-34.
In particular, he agreed that in regards to the comment in his report (CB 289 [5.3]) that there would have been a substantial market for the property by adjoining businesses for storage and trucks, that even if that was to happen, that would require development application approval. Indeed, any use going from beyond the market garden would have required some form of development application: T 209.15-28.
Mr Ellis disagreed that the market rental values that he has placed on the property were based on valuing the property as vacant land but with a hardstand on it: T 210.45-211.4.
He suggested that his opinions as to value were based on just renting the Arndell Park property vacant land as a "paddock": T 211.4. However, when he was pressed on this, his evidence was as follows (at T 211.6-22): Q. But you're not renting it for agricultural purposes; for what purpose is it going to be used as a paddock? A. Well, it's for storage of building materials, scaffolding, trucks, any vehicles based on the surrounding uses. As I said before, if an adjoining business owner or a business owner from within the industrial estate requires storage area, that's what I valued it at; that's what they'd be willing to pay. Q. But it's the case that, even for storage, it needs a development application and approval of council? A. Yeah, I'm still a little bit unsure about that. But normally for a change of use, my understanding is they would require a development application for it. Q. A change of use for an agricultural property to a storage property requires the council to have some idea of the traffic that's coming into the area and crossing the footpaths, if nothing else; just a greater physical use of the land now, isn't it? A. Yes, it is. Yes.
He stated in response to another question (at T 212.22-25): Q. But whatever has to be done, if the property has not had its first lease, whatever has to be done in connection with a development application is normally done by the owner of the land? A. That's normally so, yes.
Later he responded (at T 214.32-46): Q. It's a very general question; when one lodges a DA with the council, at the start of the process you really don't know how long it's going to take to be approved do you? A. Councils do guarantee a, a turnaround timeframe, but a lot of the time these timeframes do get extended, especially if they require additional documentation for example. Q. I just want to make it clear, the value you have given for this period is basically, subject to a DA, you come in and use the land as it is, or yes as it was then, with no construction work done on it at all, is that right? A. That's right, yes, it's a paddock and it's up to council whether you need DA approval. Q. Well you've said once you start storing anything‑‑ A. Yes, it's quite likely.
Mr Ellis also agreed with the proposition that if there was change of use immediately after the land was used as a market garden then there would need to be some earthworks done on the property to smooth out the furrows for the gardening and to provide at least a hard dirt base that could presumably take some degree of heavy vehicle: T 215.6-21.
Whilst Mr Ellison SC suggested to Mr Ellis that his figures for rent for what was vacant land seemed higher than some of the comparable properties which he had referred to, Mr Ellis seem to indicate that essentially the value was supported by there being a market for available "blocks of dirt" in the Arndell Park industrial estate: T 216.27-217.8.

[59]

Finding as to rental value

Ultimately, there were two issues which arose from Mr Ellis' cross examination which impact upon his findings: 1. first - what use of the property Mr Ellis has assumed to underpin his findings regarding rental; and 2. secondly - assuming a use of storage whether his assessment was based on the property as englobo land (i.e. as is) or the property with a form of hardstand on it.
On the first issue, it appears to me having regard to both Mr Ellis' report and the cross-examination that he has assumed, for the purposes of his findings regarding rental, that the use would be for storage purposes: see CB 289 [5.3] and T 211.6-11.
On the second issue, it is clear that: 1. Mr Ellis' assessment of rental value proceeded on the basis that the property did not have any hardstand on it and that whoever it might be leased to would be willing to pay the rental he had allocated: T 215.31-40. 2. If a lessee wished to use the Arndell Park property for a purpose that required a hardstand, Mr Ellis expected there would normally be some sort of adjustment to the market rent he had proposed, by the parties: T 215.42-50.
In light of the above, it is also clear that irrespective of whether the land has a hardstand on it or not, use of the property for storage, even as a "block of dirt" without any hard stand would likely require a development application: T 209.15-28, 211.6-22, 214.32-46.
I accept the rental figures proposed by Mr Ellis for a use for storage even as a "block of dirt". However, as ultimately submitted by Mr Ellison SC (T 326.5-7) separately to the question of the rental figures, for such use, I accept that a development application would likely have been required.
Based on that, one would have to allow some degree of timing for a development application to be lodged for the Arndell Park property to be leased for its proposed use as contemplated by Mr Ellis, namely, storage.
The evidence regarding the Ingleburn lease does not suggest a different conclusion.

[63]

Rental value

Mr Ellis was of the opinion that the market rental values for the P430 relevant period, assuming a standard residential tenancy agreement were entered into, were as follows: 1. 21 June 2018 to 31 December 2018 - $350 per week gross; and 2. 1 January 2019 to 2 August 2019 - $350 per week gross: CB 320. Both figures excluded GST.
Mr Ellis' valuation methodology was by direct comparison with other reported market rents for leased premises: CB 323.
At the time of the relevant valuation dates, Mr Ellis assumed that the improvements constructed on the land comprised the following (at CB 328): • 3 poultry sheds measuring approximately 110 metres x 12 metres each. • A steel framed and clad 2 bay machinery shed measuring 8 metres by 12 meters. • A large green shed constructed toward the front of the site measuring 25.7 x 12.3 metres. I am advised this building contains 2 bedroom granny flat facilities with open plan kitchen/living/dining and separate bathroom/laundry. The rear of the shed is utilised for storage. • A portable building is positioned to the rear and offset from the large green shed which comprises 2 bedroom residential accommodation. Mr Camilleri advised that this shed was not on the site at the relevant valuation dates. This is confirmed by aerial imagery and has not been included in my assessments of market rent.
Mr Ellis assumed that the property was not subject to any formal leases during the P430 relevant period: CB 328.
Nonetheless, he expressed the opinion that there would have been rental income derived from what he describes as the granny flat accommodation within the large green shed at the front of the site and further assumed that a land curtilage of approximately 1 acre would be included in that: CB 328.
Mr Ellis considered that it would have been unlikely that the three poultry sheds would have been lettable at the relevant dates because, when he inspected the property, he noted that the poultry sheds were leased to the adjoining owner to the north and observed several upgrades to the sheds that had been undertaken which included, but were not limited to, new heavy duty curtains to each side of each of the sheds, new motors to the silos and electrical work. He was of the opinion that such work was undertaken in order to make the poultry sheds commercially viable and likely to have been undertaken at a substantial cost: CB 328.
For the purposes of his assessments, Mr Ellis assumed that the only source of rental income for the property was from the two-bedroom granny flat accommodation contained within the green shed at the front of the site (which shed appears at CB 354): CB 333.
He was unable to inspect the granny flat internally at the time of visiting but, nonetheless, assumed that the accommodation offered was in a reasonable condition, watertight and included space at the rear of the shed that could be used as garaging: CB 333.
Mr Ellis noted that he had regard to available leasing information relating to rural/residential accommodation on acreage. He observed that many such leasings generally occur in off market circumstances where property owners accept "cash in hand" rather than engage real estate agents for management. He indicated that, whilst there were no directly comparable properties that had been leased over the P430 relevant period, he was of the view that a weekly rental range for the property would be between $300-$350. Due to the paucity of directly comparable rental data, he adopted a rental value of $350 per week on a gross basis: CB 333.

[67]

Pre-probate period (October 2014 to August 2015)

On 21 October 2014, the deceased died.
At some stage prior to 26 March 2015, Mr Mann had corresponded with Kenny & Good Pty Ltd (Kenny & Good) valuers (to value certain of the estate properties).
On 26 March 2015, Mr Mann informed Kenny & Good that Turner Freeman held funds to pay for the valuations and authorised Kenny & Good to proceed with the valuations as per a quotation: CB 416ZC.
On 30 April 2015, Kenny & Good provided valuation reports in relation to the estate properties at least one of which (being in respect of David's property) is in evidence: CB 416A.
On 15 June 2015, Mr Gough wrote to Turner Freeman on behalf of Carol seeking certain information in relation to the estate and administration: CB 417. The letter expressed Carol's concerns regarding her entitlement under the deceased's Will including that: 1. each of the properties devised under the Will with the exception of the properties to Carol and to Martin contained an area of approximately 5 acres and a house with a value of approximately $800,000; 2. Carol was gifted Lot 280 which comprised only an area of 2.5 acres upon which there was a large dam; and 3. Martin received properties of considerably greater size and value than Carol: CB 417.
On or after 30 June 2015, Ms Fisher prepared financial statements for the estate for the period 21 October 2014 to 30 June 2015: CB 419.
On 6 July 2015, Mr Mann swore an affidavit which was lodged with the probate registry addressing the delay in applying for probate: CB 426A.
On 15 July 2015, Mr Gough wrote again to Turner Freeman noting that no response had been received to the letter of 16 [sic] June 2015 and requesting a copy of the application for the grant: CB 427.
On 11 August 2015, Mr Gough wrote again to Turner Freeman referring back to the letter of 16 June 2015: CB 428-429. It is evident that, by this time, Mr Gough had received a copy of the application for probate but had not received a response to other matters in the letter. The letter: 1. made various observations regarding values of estate assets; 2. identified a number of assets which did not appear to have been listed in the inventory of property; and 3. noted that a number of the deceased's properties were rented at the date of her death and requested details of the leases and the rental received since 21 October 2014: CB 428-429.

[68]

Determination

From the time of the deceased's death (21 October 2014) up until probate being granted (14 August 2015) (pre-probate period) there were not insignificant acts of administration carried out in relation to various aspects of the estate.
It appears that from the date of the deceased's death, the NAB bank accounts in her name were "frozen". Apparently, the only payments allowed to be made from the accounts were the registration of death and funeral costs: CB 640.
Martin offered to fund the estate to pay bills whilst the accounts were frozen and provided $110,000 to cover various bills required to be paid over the period until March 2016, when a new bank account for the estate was opened by John as executor: CB 640.
It is evident from the detail in the estate accounts of the payments made throughout the pre-probate period (leaving aside the proceeds of the deceased's NAB bank accounts and superannuation), that significant payments were received by the estate which related to rental of various of the properties: CB 1521-1522.
On 12 January 2015, there was a part payment received in respect of the deceased's member balance of the Camilleri super fund: CB 1515.
There were many administration payments.
On 22 October 2014, the day after the deceased's death, the registration fee was paid to the NSW Registry of Births Deaths and Marriages: CB 1521.
On 3 November 2014, funeral costs of $12,567.93 were paid to Guardian Funerals: CB 1521.
In early November 2014, various carers were paid (I assume in relation to their work in respect of the deceased).
In particular, over the period from approximately mid-November 2014 until the grant of probate, there were almost 70 payments made by the estate in respect of various matters including in respect of electricity, building insurance, repairs, council rates and water rates in respect of various of the properties.
From some stage prior to 26 March 2015, as noted above, Mr Mann had corresponded with Kenny & Good to value certain of the estate properties. On 30 April 2015, the valuations were provided.
John gave evidence that during the rectification and family provision proceedings administration was "paused" so that Carol's claim could be successfully resisted: CB 132 [18].
John acknowledged that Martin had provided the estate with funds to obtain the valuations of the properties and that that of itself would not be a matter which would delay the application for probate: CB 134 [35], 270-271 [37], 640; T 91.27-45.
It does not seem to me, in light of the activity which is evident from an examination of events up to March 2015, that there was undue delay in John arranging to obtain, via Mr Mann, valuations of the estate properties.
To the extent that I can tell from the evidence, the first correspondence from Carol's solicitors to Turner Freeman was the letter dated 15 June 2015, in which Mr Gough, on behalf of Carol, sought certain information in relation to the estate and administration: CB 417.
On or after 30 June 2015, Ms Fisher prepared financial statements for the estate for the period 21 October 2014 to 30 June 2015: CB 419.
On 6 July 2015, Mr Mann swore an affidavit which was lodged with the probate registry addressing the delay in applying for probate.
If an application for a grant of probate (or administration) is filed later than six months after the death of the deceased and is the first application for such a grant there must be an affidavit in support of the application including a statement explaining the delay: Pt 78 r 16 Supreme Court Rules 1970 (NSW) (SCR).
Mr Mann's explanation for the delay in the affidavit was as follows (at CB 426B [4]): The reason why the within application has not been filed within the required period of the date of the deceased's death, is that there a 12 parcels of real estate [sic] owned by the deceased which required valuations to be completed on each one. This has taken some months to complete and for this reason application for probate was not applied for within six (6) months of the date of death.. [sic]
The correspondence received from Mr Gough up until the time of the grant of probate did not specifically complain of delay, despite other complaints.
Overall, I am not persuaded that there was any significantly undue delay by John in applying for and obtaining the grant of probate.

[70]

IAG shares evidence

As best I can determine the following matters appear from the evidence regarding the shares: 1. In 2007, as at the date of his death, it appears that IAG had some record of Reno Senior holding IAG shares: CB 1374A. 2. As at 3 July 2015, John, in swearing the affidavit of executor for the purposes of the application for probate, did not list any IAG shares as an asset of the deceased's estate: CB 431-432; 3. On 4 August 2015, when probate issued, the inventory of property did not disclose any IAG shares as being an asset of the deceased's estate: CB 430-432. 4. On 1 April 2015, an IAG dividend in the sum of $449.67 was received by the estate: CB 1515. 5. On 7 October 2015, the estate received an IAG dividend in the sum of $553.44: CB 1516. 6. On 30 March 2016, the estate received an IAG dividend in the sum of $795.57: CB 1517. 7. Between March 2016 until August 2019, neither the accounts of the estate nor the financial statements prepared by Ms Fisher record any receipts in respect of any IAG shares. 8. As at 7 September 2016, there is a Computershare Investor Centre document for IAG in the names "Est Reno Camilleri Decd + Est Patricia Camilleri Decd" (parents' estates) recording, as at that date, that the holders held 3,459 shares: Exhibit D1 Vol 1, 419. 9. As at 1 March 2017, 21 February 2018 and 1 November 2018, similar Computershare documents issued disclosing the same amount (3,459) of shares held by the parents' estates: Exhibit D1 Vol 1, 420, 421 and 417. 10. On 1 November 2018, separately from the Computershare dividend and payment advice being Exhibit D1 417, Computershare issued a further dividend and payment advice document which differed from the other document it had issued on the same date in that the payment type is described as "capital payment" rather than "dividend". The capital payment was in the sum of $674.51: Exhibit D1 Vol 1, 425. 11. As at 13 February 2019, there is a Computershare Investor Centre document for IAG relating to the parents' estates disclosing that the holders held 3,376 shares: Exhibit D1 Vol 1, 418. 12. On or about 20 August 2019, IAG issued a statement addressed to the parents' estate care of John's address for the period 1 January 2019 to 30 June 2019, which statement disclosed that, as at 20 August 2019, 3376 shares were held. The statement drew to the recipient's (John's) attention that dividends amounting to $4,712.28 were owing to the joint estates that had not been paid as the registry had not received direct credit instructions by the record date (20 August 2019). The statement indicated that the dividend entitlement was being held in a deposit account and would not accrue interest. It requested completion of a direct credit form which was enclosed so it could be returned to the share registry in which event IAG would arrange prompt payment of the monies due to the holders: CB 1374A; Exhibit D1 Vol 1, 422. 13. On 3 October 2019, there were received into the estate bank account nine discrete payments totalling $4,712.28: CB 1680. The last of those nine payments is an amount of $674.51. 14. On 11 October 2019, Computershare sold (I assume pursuant to John's instructions) the remaining 3376 IAG shares at a price of $7.71 per share giving rise to gross proceeds of $26,030.23 which, after dealing and administration charges of $179.40, left net proceeds of $25,850.83: Exhibit D1 Vol 1, 426. 15. On 15 October 2019, the sale was settled (Exhibit D1 Vol 1, 426) and that net amount was paid directly to the estate bank account: CB 1680.

[71]

Determination

In light of the above, despite the absence of submissions on the matter, I infer the following events explain what occurred to the 83 shares.
At some point after 20 August 2019, when John received the notification from IAG that there were accruing dividends that had not been paid to him as executor for the joint estate's shares, John (or someone on his behalf) completed the necessary direct credit form and returned it to the share registry.
On or about 1 November 2018, the 83 shares were sold or redeemed by Computershare such sum due to be paid to the estate on 26 November 2018.
The reason for the delayed receipt by the estate of those monies is that John or someone on behalf of the estate had not provided Computershare with direct credit instructions, with the result that Computershare held all those monies in a deposit account which did not accrue interest: Exhibit D1 Vol 1, 422.
The amount referable to the redemption or sale of the 83 IAG shares (being $674.51) was paid to the estate bank account on 3 October 2019.
The statement of receipts and the accounts produced by John records as items 417-425 the nine discrete payments received on 3 October 2019 totalling $4,712.28. However, in relation to the ninth such payment (being item 425) rather than describing that payment of $674.51 as a dividend the accounts describe it as "IAG sale 83 shares - subject sale of shares". It is recorded as a capital item: CB 1344, 1520A.
The account of receipts prepared by John records as item 426 the receipt of that net amount ($25,850.83) as a capital sum referable to the sale of the 3376 IAG shares: CB 1344, 1520A.
On the above analysis, there is an explanation for what happened to the 83 shares and the estate has received a capital amount of $674.51 referable to those 83 shares.
Technically, by reason of the fact that no one on behalf of the estate had provided Computershare with direct credit details the estate appears to have lost the opportunity to invest the proceeds of $674.51 from the time that payment of that amount was due on 26 November 2018 (Exhibit D1 Vol 1, 425) until when the payment was actually made on 3 October 2019: CB 1680.
Whilst there is an explanation as to what occurred in relation to the IAG shares, there is, in my view, no satisfactory explanation for the delay by John of almost 5 years in arranging for sale of the IAG shares.
There was no submission that, at least in respect of this issue, John exercised any discretionary powers under the Will to delay the sale. His delay was not explained by him by reference to any discretionary power.

[77]

Rental - post the deceased's death

It appears that, at or around the time that John obtained probate, he had a discussion with Guan who informed John that he intended to leave the property soon as he was not making any money - John then asked him whether he would consider remaining at the property, stating (at CB 247 [11]): why don't you just stay on the property, we can keep rent at the same level, and we'll sort out payment at a later date.
John's reasons for his actions in relation to not renting the Arndell Park property were identified by him in his affidavit sworn 18 June 2021.
Essentially, the reasons were: 1. Having Guan remain as a tenant on the property - albeit paying nominal rent - kept the status quo and relieved the estate of a land tax bill (John asserts of approximately $170,000 for each year that Guan remained on the property); 2. Transmission of the property into John's name was delayed until late 2016 due to litigation commenced by Carol; 3. Thereafter, John engaged an estate agent to market and sell the property and contracts were exchanged in early 2018: CB 247 [12]-[13].
It became evident from John's response to Mr Ellis' report that there was some area of debate between the parties regarding use that could be made of what is described as vacant land. Mr Ellis' concluded use of the property would have been by adjoining businesses for storage and trucks: CB 289. This led to debate between the parties regarding whether the property during the APP relevant period was in a state in which it could be deployed to that use. It was accepted by Mr Ellis that during the APP relevant period there was no hardstand on the property: T 193.11.
Nonetheless, a number of the direct comparison properties he referred to in assessing market rental did have hardstand areas: CB 291-293.
Mr Ellis, in oral evidence, indicated that he had made adjustments for the rates that he applied to the property having regard to the fact that it contained no hardstand: T 193.
John, in his affidavit evidence, indicated that to have installed a hardstand would have involved "significant expenses and council red tape with the need for development applications": CB 247 [15]. John indicated that with all of the plaintiffs expressing a desire for the Arndell Park property to be sold he did not believe it would be in the best interests of the estate to incur significant expense, risk not receiving council approval, as well as losing land tax exemption in circumstances where the property was being marketed for sale: CB 247 [15].

[78]

Discretion regarding rental

The residuary estate was given to the deceased's children in equal shares: clause 10 at CB 372. The Will did not provide expressly for a trust for sale and conversion of the residuary estate. Thus, the possibilities were that in administering the residue, subject to the exercise of any power of sale to provide a fund for administration purposes, the residue was susceptible to being transferred either in specie or, having regard to practical considerations and convenience of division of property equally and risk of prejudice to beneficiaries in the process the property the subject of residue might to that extent be sold and divided equally: see Manfred v Maddrell (1950) 51 SR (NSW) 95 at 97 per Sugerman J; Beck v Henley [2014] NSWCA 201; (2014) 11 ASTLR 457 at [37] per Leeming JA, Beazley P (as her Excellency then was) at [1] and Sackville AJA at [97] agreeing.
John as executor in administering the estate (including the Arndell Park property) had powers of a trustee for sale including (1) the power to postpone sale without being liable for any loss; (2) a power to retain property in its form of investment as of the date of the deceased's death, even though it was wasting, without being liable for any loss; and (3) to sell by public auction or private sale: clause 11(b) at CB 372. Further, John had the power to lease any part of the deceased's estate for such periods upon and subject to the covenants and conditions which he as executor thought fit: clause 11(l)(i) at CB 374.
In his closing written submissions, Mr Crossland addressed the issue regarding the discretion given to John as executor, submitting that any such exercise of a discretion must be the subject of a real or genuine consideration based on relevant considerations citing Attorney-General (Cth) v Breckler (1999) 197 CLR 83; [1999] HCA 28 (Breckler) at [7] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ.
Mr Crossland noted that where a discretion is expressed to be absolute it may be that bad faith needs to be shown although disputed that the discretion given to John regarding leasing was absolute.
The passage from Breckler is a reference to the decision of Heerey J (Lockhart J agreeing) on appeal in Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd (1998) 79 FCR 469; [1998] FCA 51 (Wilkinson v Clerical Administrative) at 480 quoting a summary of the primary judge, Northrop J (see Clerical Administrative and Related Employees Superannuation Pty Ltd v Bishop [1997] FCA 714; (1997) 76 IR 139 at 152).
The passage from Wilkinson v Clerical Administrative is as follows: Where a trustee exercises a discretion, it may be impugned on a number of different bases such as that it was exercised in bad faith, arbitrarily, capriciously (Re Pauling's Settlement Trusts [1964] Ch 303 at 333), wantonly, irresponsibly (Lutheran Church of Australia South Australian District Inc v Farmers' Co-Operative Executor and Trustees Ltd (1970) 121 CLR 628 at 639), mischievously or irrelevantly to any sensible expectation of the settlor (Re Manisty's Settlement [1974] Ch 17), or without giving a real or genuine consideration to the exercise of the discretion (Karger v Paul [1984] VR 161, which includes a survey of the authorities). The exercise of a discretion by trustees cannot of course be impugned upon the basis that their decision was unfair or unreasonable (see Dundee General Hospital's Board of Management v Walker [1952] 1 All ER 896) or unwise (Gisborne v Gisborne (1877) 2 AC 300 at 307). Where a discretion is expressed to be absolute it may be that bad faith needs to be shown (Gisborne v Gisborne at 305). The soundness of the exercise of a discretion can be examined where reasons have been given, but the test is not fairness or reasonableness (see Re Londonderry's Settlement [1965] Ch 918 at 928-9; Karger v Paul at 165-6).

[79]

Parties' submissions

Mr Crossland submitted that an action for waste of assets or devastavit arises where an executor has failed to rent out property and that an executor should get a reasonable return by way of rent for assets when their sale is to be delayed citing Howling v Kristofferson (Supreme Court (NSW), Cohen J, 14 October 1992, unrep) (Howling v Kristofferson): POS [48].
In Howling v Kristofferson, the sale of the relevant property took place eight months after the grant of probate. Cohen J found that failing to lease the property for a period of six months after the grant of probate was a breach of the defendant's duty as executor of the estate.
Mr Crossland submitted that it is open to the Court to examine whether there is a failure by a trustee to exercise a discretion in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion is conferred citing Karger v Paul [1984] VR 161 at 164 per McGarvie J. Further, Mr Crossland submitted that a discretion may miscarry by reason of mala fides which includes a refusal to make an informed decision or a refusal to take relevant considerations into account citing Jacobs' Law of Trusts at 327.
Mr Crossland submitted that the following matters were material to assessing whether the failure to rent the Arndell Park property was the product of a miscarriage of John's discretion (at PCS [12]): (a) John knew that the Arndell Park property (a very substantial block in a busy industrial estate) was the most valuable asset in the estate (T219.20) - indeed "the cash cow" (his words); (b) given the location, the surrounding industry and its relative rarity in the Arndell Park industrial estate (the only spare block, or one of the only spare blocks), the Arndell Park property was not only a desirable property for leasing purposes (T194.7-50), but that desirability was for reasons that we apparent to John (hence the 'cash cow'); (c) the "nominal rent" that the estate received for the whole of the 3 years between August 2015 (when John became executor) and August 2018 (when the property sold, under a delayed settlement) was $15,000 per year, roughly 4 percent of the net benefit of leasing (taking into account land tax liabilities); (d) the total rent that he received for the property during the term of John's executorship was $45,000, received as a cash deposit in the estate's bank account on 26 March 2018 (CB 1519); (e) John's evidence-in-chief of his explanation of the fact that he did not take any taking steps to ensure that Arndell Park earned more than a "nominal" (his words) return at any time between August 2015 and August 2018 appears at CB 247 [12]. Essentially, he did not want the estate to incur a land tax liability. John agreed this was a "complete explanation" (T184.10) of that matter, but at the same also volunteered that another reason he did not lease the property because Guan (the tenant) "was Daddy's friend" and "was a battler when he went there." (T183.25) John was apparently motivated by the sense that he had "inherited Guan" (T184.29); (f) what appears at 247 [15] is not evidence of his explanation for not letting the property, but rather response to opinions and assumptions expressed to Mr Ellis's report (see also T184.45 and 185.35-45), though oddly he also gave evidence that he "probably didn't read it" (T185.10); (g) John did not know or even consider how long it might take to sell Arndell Park (T219.25) until about December 2018 (219.50-220.33); (h) John was unable to explain why he did not take any steps to sell the property (i.e., enter into a sale agreement) before February 2017, some 18 months after obtaining probate (T221.5-30); (i) there was nothing to stop John striking a lease which gave the lessee responsibility for erecting some form of hardstand and obtaining statutory approvals (CB 217.35-218.5) (see Ex P3 (valuer's extra bundle) at p.25).
Mr Crossland submitted that the above matters demonstrated that John's discretion to lease the Arndell Park property miscarried as being "irresponsible, capricious, irrational and/or involving no genuine consideration". In particular, he submitted that John had given no consideration to the benefits that would accrue to the estate if the property was leased; that such benefits would likely have been substantial; that there were financial consequences to the beneficiaries; that the position of Guan as "a battler" was irrelevant, and the potential benefit to the estate by retaining a rental to Guan was perversely minimal compared to the available commercial rental: PCS [12]-[16].
In particular, Mr Crossland submitted that failure to rent across a period of three years from August 2015 to July 2018 demonstrated a miscarriage of the discretion: PCS [14]-[15].
Mr Ellison SC, on the other hand, pointed to John's reasoning that he was not prepared to incur significant expense and deal with a development application to the council to improve the property and that all beneficiaries wished the property to be sold and he did not wish to lose the land tax exemption. Accordingly, so the submission went, John acted in the best interests of the estate by maintaining the property in the condition it was at the time of the deceased's death and not incurring land tax liability: JOS [32]-[33].
Mr Ellison SC submitted that assessing John's conduct in relation to the alleged rental failure breach by reference to hindsight cut both ways. He submitted that, with hindsight, it is known that John, by not leasing and holding out to get a better price for Arndell Park, achieved a better sale price "even though the agent would've been prepared to take a few million less": T 324.
In particular, he submitted that the period of the alleged breach - being 11 September 2015 to 30 May 2018 - needed to be broken down and it be borne in mind that the proposal for leasing involved the property being tied up for a year: T 324.47-325.27.
Further, he submitted that the context of the litigation by Carol - being the rectification and family provision proceedings - was significant, as was the fact that the agency agreement was entered into in February 2017: T 326.5-9. He submitted (rhetorically) to the following effect: "would you start leasing it at the same time that you are trying to sell it?" He noted that, for purposes of leasing, even as a "vacant block of dirt" there still had to be a development application, a tenant still had to be located, and there were risks associated with any such tenant which needed to be taken into account (including whether the tenant was paying rent and "look[ing] after the place"): T 326.10-18.

[80]

Determination

It is not clear to me that John's discretion regarding leasing is not an absolute power. Although the adjective "absolute" is not used in clause 11(l)(i), it seems to me that the discretion is in fact absolute or at least close to absolute insofar as a decision regarding leasing and the period and terms of leasing are as the executor "thinks fit".
On the basis that Mr Crossland suggests that the period from which John ought to have rented the Arndell Park property was from 11 September 2015, it seems to me important to bear in mind the fact that within about five weeks Carol had commenced the rectification and family provision proceedings.
There was, as recited above, a number of matters being addressed between 30 September 2015 and 20 October 2015. Even if John had made some preliminary enquiries in relation to listing the Arndell Park property for leasing, it seems to me that, in light of the evidence of Mr Ellis, it is proper to take into account that any leasing use beyond that of market gardening, such as a use for storage (as suggested by Mr Ellis), would have involved at least some consideration of time and expense associated with either the estate or a potential lessee making a development application to the local council for a change of use for storage.
Further, once Carol's proceedings were commenced on 20 October 2015, it seems to me that John or any executor would have been justified in being a degree more cautious as to steps being taken in relation to estate property at least insofar as the family provision claim, at least in its infancy, would not have been clearly defined.
In this regard I note that Robb J, in the decision concerning this estate regarding the costs of the revocation proceedings (Galea v Camilleri), made some comment as to how the family provision claim might impact upon administration. His Honour stated at [28]-[29] as follows: 28. I am not in a position to assert any general proposition, but I have discerned from experience that executors frequently do not administer the estates of deceased persons while an application for family provision relief is pending. It may be that the reasonableness of that course will depend upon the particular circumstances of the estate. Claimants for family provision relief almost invariably make a bare claim for relief, as the first plaintiff did in her first proceedings, without in any way identifying the nature and extent of the family provision order that would satisfy the claimant's claim. The executor will usually not know what family provision order will be made if the claimant succeeds. That often, and perhaps usually, causes executors to defer administering the estate until the outcome of the family provision claim is known. There may, however, be cases where the estate is sufficiently large in relation to the likely family provision orders that might be made, where there is in fact no particular reason why the executor should not administer the will in relation to some of the estate while the family provision claim is pending. Further, there may be no practical reason why the executor should not realise the estate, even if the pendency of a family provision claim is a reason for not distributing the estate. 29. It should also be borne in mind that where the executor is not a professional executor, the need for the executor to properly prepare the estate's defence to the family provision application will take up the executor's time and the resources of the estate, and the Court should not too readily assume that an executor who is distracted by the need to respond to a family provision application will be able to administer the estate with the same expedition as would be possible in the absence of the distraction.
Of further significance is the fact that, on 30 October 2015, Mr Gough wrote to Turner Freeman advising that his clients wished to have the opportunity to purchase the five residuary properties (CB 447) which properties, notably, included the Arndell Park property.
That request seemingly remained operative for at least some period of time into 2016.
Between December 2015 and 8 July 2016, there was a particular focus in the administration of the estate in relation to challenging (as it turned out, ultimately, successfully) the land tax assessment which relevantly included the Arndell Park property.
On 15 August 2016, the rectification and family provision proceedings were dismissed. It seems to me that that was at least an appropriate point of time at which consideration might properly have been given by John to renting the Arndell Park property.
In mid-December 2016, John had arranged for the residuary properties to be transmitted into his name.
On 19 December 2016, Turner Freeman wrote to the beneficiaries indicating John's intention to sell the Arndell Park property in priority to the other residual properties.
John's affidavit evidence indicated that, by letter dated 19 December 2016 from Turner Freeman to the beneficiaries or their legal representatives, he advised of his intention to sell the Arndell Park property in priority to the other residual properties. His stated purpose (as disclosed in his first and several subsequent affidavits) in so doing was to provide the residual beneficiaries with the necessary funds to then allow them to bid at auctions for the remaining residual properties if they so wished: CB 134 [31]-[32], 136 [48], 270 [34]-[35]; T 121.15-30.
John, during the hearing, described the property as a "cash cow" (T 125.29), essentially conveying the idea that once it was sold the other beneficiaries (including himself) would have money in order to pay for one of the Londonderry residual properties: T 140.20-141.3.
Of note is the fact that, as far as I can tell, following the dismissal of Carol's rectification and family provision proceedings in August 2016, no solicitors on her behalf at that stage asserted that the Arndell Park property ought to be rented.
On 11 January 2017, Mr Lewis wrote to Turner Freeman seeking clarification as to whether it was proposed that the Arndell Park property would be sold by public auction: CB 605. The letter did not assert that it ought to be rented pending any such sale.
The suggestion by the plaintiffs that the Arndell Park property ought to have been rented did not involve at least any express suggestion as to the term of such rental. The submissions were put on the basis that the proposal as outlined by Mr Ellis regarding rental was what ought to have happened.
That is significant in that Mr Ellis' proposal assumed a 12-month lease: CB 280.
Certainly, by 1 February 2017, John had had discussions with Mr Semciw regarding the prospective sale of the Arndell Park property.
It seems to me that there is force in Mr Ellison SC's submissions that, once the decision had been made in December 2016 to sell the Arndell Park property and once there were discussions with Mr Semciw on or prior to 1 February 2017 and an agency agreement entered on 28 February 2017, it was not unreasonable for John to progress sale of the property rather than attempt to lease. In this regard, I consider there is force in Mr Ellison SC's submissions.
The letter from Mr Lewis (on behalf of Carol) - dated 20 October 2016 - to Turner Freeman whilst addressing management of estate assets, did not assert that the Arndell Park property ought to be rented: CB 556-557.
The letter dated 29 November 2016 from Fairfax Lawyers (on behalf of Reno) to Turner Freeman sought details regarding current leasing of a number of the properties, including the Arndell Park property, but also sought details in relation to the current status of sale of each property: CB 598. The letter did not assert that the Arndell Park property was receiving inadequate rent and ought to be rented at a substantially increased commercial rate.
Overall, my sense of the matter is that any decision of John's regarding failing to terminate the arrangements with Guan and rent the Arndell Park property at a substantial commercial rent must be viewed in the context of the litigation by Carol and what the solicitors for the active beneficiaries (being Carol and Reno) were asserting regarding that property.
I can readily accept that John's consideration of keeping Guan on the property to avoid losing land tax exemption simply because he had been instituted by his parents on the property, at least per se, was not a relevant consideration. Further, to the extent that John considered it, it seems to me that some assessment ought to have been made by him as to the comparative financial benefit from not losing any land tax exemption on the property on the one hand and the financial benefit that would be obtained from leasing the property at a commercial rate (albeit with some loss of land tax exemption) on the other.
John does not appear to have ever considered that.
However, assuming for the moment that that would have been a relevant consideration and that John did not consider it, that does not seem to me to be conclusive to a finding that John must necessarily have defaulted in his duty in the way alleged by the plaintiffs.
Ultimately, having regard to the particular timeline of facts that I have recited above, I am not persuaded that there was a breach of John regarding rental of the Arndell Park property in the manner suggested by the plaintiffs.
However, I consider that for a period of about three months from 15 August 2016, when the rectification and family provision proceedings were dismissed, until 19 December 2016 (when Turner Freeman foreshadowed to the beneficiaries the John proposed to sell the Arndell Park Property) there was delay in John considering and taking any steps to obtain a market rate of rent for the Arndell Park property.
The difficulty that I have in finding that that was a delay sounding in damages for devastavit is twofold.
First, it is clear based on my findings earlier as to the rental value of the Arndell Park property that Mr Ellis proceeded on the basis that use would be for storage purposes. However, use of the property for storage, on Mr Ellis' evidence, likely required a development application. John adverted to this in his affidavit evidence as I have noted above. No expert or other persuasive evidence was directed to whether a development application would have been able to have been effectively made by John nor was there evidence as to the length of time that would have taken. In the absence of such evidence I cannot make any finding as to that time.
Secondly, the plaintiffs' submissions did not particularly address timing in terms of what would have been required as to the length of lease for any such property.
The evidence, at least of Mr Ellis, is that the appropriate length of any rental would have been a 12-month lease. I do not accept that, had it been suggested to John in August 2016 that the Arndell Park property be rented for 12 months, that in light of the matters raised by Mr Ellison SC regarding the requirement for a development application for any change of use beyond a market garden and the fact that within four months John had proposed sale of the property, it was unreasonable for John not to exercise a discretion to rent the property at that point.

[81]

Issue 4 - Delay in specific gift transfers issue

The plaintiffs complained that John's alleged delay to start transferring the seven properties the subject of specific gifts prior to November 2016 was unreasonable.
Mr Crossland noted that, in about November 2016, John arranged to send transmission applications and accompanying purchaser declarations to each of the beneficiaries in relation to the specific gifts of land and further noted that such transmission had been effected by the end of January 2017: POS [20].
The timing of November 2016 was about two and a half or three months after orders were made dismissing the rectification and family provision proceedings.
Potentially, transmission applications could have been sent by John or his solicitors earlier than November 2016.
However, the plaintiffs did not demonstrate, by reference to detailed evidence, what if any particular earlier timing was appropriate.
John's affidavit evidence was to the effect that he was advised by his solicitors that because of the nature of Carol's rectification and family provision claim, distribution of specifically devised properties would need to be placed on hold until her claim was resolved, as that resolution may have affected the manner in which the deceased's estate was to be distributed and/or administered: CB 132 [18], 133 [26].
John was cross-examined regarding this evidence. In particular, he was questioned as to whether he would have been administering the estate had Carol's proceedings not been on foot during that time. Essentially, he indicated he could not recall what was going on at that time: T 286.28-49.
Having regard to the fact that Carol's rectification and family provision proceedings specifically related to her claim that there was an error in the Will regarding the property that she was entitled to, it does not seem to me that it was unreasonable of John to have waited until the conclusion of those proceedings to transmit Carol's property to her.
Whilst, potentially, once those proceedings concluded in mid-August 2016, John and/or his solicitors could have started at that point to effect transmission of the specifically gifted properties, there is no particular evidence that any of the plaintiffs or their legal representatives were complaining about delay at that point.
Further, there is no evidence as to what if any loss might have been suffered by any of the plaintiffs as a result of any such delay.
In the above circumstances, I am not satisfied that it has been demonstrated that there is a wilful default by John in relation to not arranging for transfer of the specifically gifted properties earlier than he did.

[82]

Issue 5 - Delay in appointing a selling agent issue

The plaintiffs asserted that John's failure to appoint a selling agent for the Arndell Park property until January 2017 was unreasonable and prejudiced the beneficiaries.
John was cross-examined regarding the matter. John accepted that when he became executor, he did not have any particular thoughts about how long it might take for the marketing process in relation to a sale of the Arndell Park property: T 219.34-44.
John was questioned about the timing for engaging Mr Semciw and accepted that he had probably started discussions with Mr Semciw a couple of months before he signed the agency agreement (27 February 2017) - which timing would have been about December 2016: T 220.21-27.
John could not particularly recall what, if any, consideration he had given to how long it might take to sell the Arndell Park property until about December 2016: T 220.29-33.
Further, John accepted that he could have entered into an agency agreement (at least potentially) at any time after he became executor: T 221.4-6.
No particular evidence was adduced or submission made as to precisely what point of time was reasonable for John to have engaged the selling agent.
John's thought processes regarding not engaging a selling agent until February 2017 were probed in cross-examination. His thought processes lacked any particularity. As best as I could understand it, John asserted that, although he could not specifically recall, there were a number of "pieces to the pie", being matters that he needed to consider and potentially some of those "ingredients" (John's word) might have been a consideration that withheld him from listing earlier: T 222.5-31.
As I have noted with a number of the other issues, the context seems to me to be important.
I have already referred to the fact that Carol's rectification and family provision proceedings likely provided some degree of caution for John in carrying out administrative tasks during their pendency (20 October 2015 to 15 August 2016).
Whilst I do not suggest that the rectification and family provision proceedings would necessarily be a decisive answer to John giving consideration to appoint, at an early stage, an agent for the sale of the Arndell Park property, as I have said it likely did provide some degree of cause for pause in the steps that he was taking in administering the estate.
A more compelling consideration is the fact that there does not appear to have been, prior to John's announcement in December 2016 that he was proposing to sell the Arndell Park property, any suggestion by any of the plaintiffs or their solicitors that he ought to have appointed the selling agent earlier than he did or had delayed unreasonably in doing so.
In the absence of any particular submission as to precisely what earlier time John ought to have appointed an agent and in the absence of evidence as to what loss (if any) there might have been to the estate had an appointment been made earlier, I am not satisfied that this issue justifies a finding of wilful default by John. Even if one might say that John could have made an earlier appointment, I have no clear evidence of loss.

[86]

John's non-disclosure in his affidavits of an interest in Property 430

A particularly significant part of the evidence in the proceedings was that John's affidavit evidence, whilst disclosing that by that stage Property 430 had been sold, gave no indication of his involvement in the purchase.
John, in swearing his second affidavit (24 January 2019), stated (CB 165-164 [15]-[20], 167 [37(a)]): 15. On 20 June 2018, a public auction was held in respect of the property known as 430 Londonderry Road, Londonderry ("430 Londonderry Road"). This property was sold for an amount of $3,000,000.00. 16. The purchaser of 430 Londonderry Road is 'Martin or his nominee'. 17. Settlement of the sale of 430 Londonderry Road has not as yet taken place. Martin is awaiting the creation of a unit trust which will act as the entity purchasing the property. 18. Each of myself and Martin have executed acknowledgements that Turner Freeman is acting for the other party. 19. I understand that Martin has directed Turner Freeman to hold the cheque payable to him in the amount of $2,500,000.00 pending settlement of the sale of 430 Londonderry Road. 20. I further understand that this amount is presently invested in a controlled monies account. … 37. … (a) Settlement of the sale of 430 Londonderry Road. I expect that settlement of the sale of this property will occur prior to 28 February 2019.
It is clear from other material in the proceedings particularly during the hearing that John, by 24 January 2019, considered himself to have an interest in the property as purchaser or in some other form.
The obligation of a witness is to tell the truth and the whole truth. That obligation applies equally to affidavit evidence. John's above-mentioned affidavit evidence constituted less than fully frank disclosure on his part, in that he did not disclose at that stage having an interest in the property whether as purchaser or otherwise.
Further, at that stage he anticipated that settlement of the sale of the property, which was within his control as executor-vendor would occur prior to 28 February 2019. In fact, settlement of Property 430 did not occur for another six months until 23 August 2019: CB 1332.
John, in swearing his third affidavit (28 February 2020), stated (CB 181-182 [8]-[11]): 8. Following the public auction held on or around 20 June 2018 where the Londonderry Road Property was sold for $3,000,000.00, my solicitors received from Martin Camilleri a cheque in the amount of $2,500,000.00 which was effectively paid as a deposit. Monies were then held in a controlled monies account pending settlement of the sale of the Londonderry Road Property. 9. Settlement of the sale of the Londonderry Road Property was initially due to occur on or around 2 August 2018. 10. As various applications were to be made by Mr Christopher Batten ("Mr Batten") and Ms Amanda Fisher ("Ms Fisher") (the professional advisors dealing with the accounts and taxation affairs of the estate), to both the Australian Tax Office ("the ATO") and the Office of State Revenue ("the OSR") settlement of the sale was postponed. 11. Settlement of the sale of the Londonderry Road Property took place on 23 August 2019. An amount of $3,073,553.71 was received into the estate account following settlement. This amount comprised of the purchase price plus interest payable on the unpaid balance of the purchase price from the proposed date of settlement to the actual date of settlement.
John's affidavit evidence further lacked fully frank disclosure on his part, in that he did not disclose at that stage having an interest in the property whether as purchaser or otherwise.
Additionally, a fair reading of [8] conveyed the impression that the amount of $2.5M was held from the time that the solicitors received the cheque from Martin in a controlled monies account pending settlement. That evidence was false. The monies were not held in a controlled monies account. The cheque was held by Turner Freeman in a locked cabinet on Martin's instructions (T 83.24-28) or perhaps kept in a drawer: T 84.44-45. The reason for that was, according to Mr McCabe, that Martin had recently separated from his partner and was quite concerned that there would be any trace of the money attributed to him (notwithstanding that Mr McCabe indicated that a subpoena of estate materials would effectively establish the source of any monies): T 83.32-38.
The cheque was not banked until about 14 January 2019 (Exhibit D4) some six months after settlement: T 84.49-85.5.
John's fourth affidavit (29 June 2020), fifth affidavit (5 February 2021) and sixth affidavit (2 March 2021) make no specific reference to his involvement regarding Property 430.
John's seventh affidavit reveals several matters regarding Property 430 but continues to exhibit less than fully frank disclosure on his part, in that he did not disclose at that stage having an interest in the property whether as purchaser or otherwise: CB 248 [16]-[19].
John's eighth affidavit (9 November 2021) makes no specific reference to his involvement regarding Property 430.
John's ninth (final) affidavit (7 February 2022) addressed Property 430. In some respects, the ninth affidavit appears to have been a type of compilation affidavit by John covering matters that had been outlined in his earlier affidavits. In any event, his evidence in his ninth affidavit in relation to Property 430 is precisely the same as [8] to [11] of his third affidavit: CB 273 [59]-[62].
This affidavit perpetuated incomplete disclosure on his part, in that he did not disclose at that stage having an interest in the property whether as purchaser or otherwise. Additionally, [59] of the affidavit, being in precisely the same terms as [8] of his third affidavit falsely conveyed the impression that the amount of $2.5M was held from the time that the solicitors received the cheque from Martin in a controlled monies account pending settlement.

[88]

Plaintiffs' submissions

Mr Crossland made detailed submissions regarding John being an ultimate purchaser.
There is no doubt in the proceedings that by the time of settlement of the purchase of Property 430, John and Mr McCabe regarded him as being a co-purchaser of, or at least a person having an interest in, the property: T 68.
Mr Crossland's submissions were addressed to several matters including: 1. the point of time at which John formed such an intention to be a co-purchaser; 2. John's motive for being a co-purchaser; and 3. John's conduct in relation to not disclosing his interest to the plaintiffs.
On the question of timing of such intention, Mr Crossland submitted that: 1. the Court should find that on the balance of probabilities at least by 20 June 2018 it must have been in John's mind for himself and Martin to become co-owners of Property 430 (whether or not via a unit trust structure): PCS [24]; 2. initially, John could not recall when he had formed such an intention but then thought it was sometime between the auction and Christmas or early in the New Year (T 133.5-17) and then thought that it was at a time between two to three months after the auction until Christmas or early in the New Year (T 132.19-20): PCS [25];
On the question of John's motive of such intention, Mr Crossland submitted that John sought to benefit from the fact that he and Martin were receiving Lot 8 which adjoins Property 430: PCS [22].
Mr Crossland noted that, even prior to the auction date, Turner Freeman's initial proposal for an in specie distribution dated 11 May 2018 (CB 789) involved the linking of Property 430 and Lot 8 being sold to one group of beneficiaries: PCS [29]-[30].
On the question of John's conduct in relation to not disclosing his interest to the plaintiffs, Mr Crossland submitted that it was revealing that the letter to Cutcliffe Properties dated the day of the auction (Exhibit P1) was only sent to Mr Cutcliffe and not to Elderlaw (acting in the interests of Carol and Reno) with whom Turner Freeman had been corresponding on almost a daily basis in the days leading up to the date of the auction: PCS [49].
John was cross-examined about that. He asserted that he had given instructions to Mr McCabe to "send an email to let the beneficiaries know that" (T 164.43-44) but later altered his position saying that he did not know who he told Mr McCabe to send it to: T 165.1-20.

[90]

Mr McCabe's evidence

Mr McCabe was cross-examined regarding aspects in respect of Property 430.
Mr McCabe accepted that, within the days following the auction of Property 430 on 21 June 2018 or within a week or so following, he knew the outcome of the auction and had the understanding that Martin was the successful bidder but did not at that point have any understanding that Martin's bid was partly, if not wholly, on behalf of John: T 64.20-66.10. John did not ever say to him that John was intending to bid at the auction: T 65.32-33.
On 30 August 2018, Mr McCabe sent an email to Mr Batten. The email suggests that Mr McCabe had instructions from John and describes Property 430 (at CB 1162) as: the chicken farm. Also the property that Martin purported to buy at auction.
Mr McCabe was cross-examined on his use of the word "purported".
Mr McCabe could not recall his exact reason for using the word "purported" suggesting (T 66): ... unless it was me trying to sound like a lawyer. I'm not quite sure.
A bit later, Mr McCabe agreed that something unusual had happened regarding the purchase which led him to use the word purported: T 67. Mr McCabe agreed that he understood that, at least at a later date, by 23 August 2019, John understood himself to be a purchaser of Property 430: T 68.11-37.
A little later Mr McCabe ventured that his reference to the use of the word "purported" was possibly associated with the fact that Martin had informed him that he would purchase the property in a unit trust or some other form of company instead of his personal name: T 68-69.
Mr Crossland put to Mr McCabe that his use of the word "purported" was actually a reference to the fact that he understood that John was at the time (30 August 2018) a purchaser of the property. Mr McCabe denied that. He reiterated his answer regarding the fact that Martin was getting advice as to whether to purchase the property in his name or a company name: T 69. I accept Mr McCabe's evidence.
Mr McCabe accepted that, at least by 23 August 2019, at the time of settlement of Property 430 John understood himself to be a purchaser of Property 430: T 68.11-37.
Mr McCabe was unable in cross-examination to indicate when he started to understand that John understood himself to be a purchaser of Property 430: T 68.39-43, 73.42-43. Mr McCabe has no recollection as to how he came to understand that John was the purchaser. He was unable to indicate whether it was Martin or John or "perhaps both" who told him: T 73.29-40, 75.32-34.
Mr McCabe was questioned about the altered vendor counterpart which deleted the words "or Nominee" and adds in its stead "and John Camilleri" as an additional "[p]urchaser": CB 1231R. He confirmed that the handwriting by which that was achieved was not his handwriting. He did not know whose handwriting that was although ventured that it is a possibility that it was the handwriting of Julie Gosden (the conveyancing paralegal at Turner Freeman's Windsor office T 70.46-71.8): T 72.32-50. I pause to observe that even a basic examination of the altered vendor counterpart would suggest that the signed name does not bear any remote resemblance to the name Julie Gosden: CB 1231R.
Mr McCabe, when pressed on the issue, initially gave evidence that he thought that he became aware that John was a purchaser in early 2019 (T 73.45-48, 75.27-30) and that it was connected with a discussion with John about setting up a unit trust for the purchase of the land: T 75.37-45, 78.44-50. Mr McCabe indicated that he did not distinguish in his mind between John being a purchaser of the property or being a nominee who was going to take a transfer of the property: T 79.7-10.
However, as the cross-examination of Mr McCabe proceeded, it became clear that at least by 2 August 2018, he accepted that he knew at that stage about John being a purchaser, based upon a draft version of the November 2018 Deed which had been sent to him by Mr Batten on that date (CB 1134) which draft included reference to John as executor providing John and/or Martin with information regarding Property 430 (CB 1142): T 79.1-80.3.
Mr McCabe stated that he could not recall whether he had taken steps after early 2019 to notify the other beneficiaries that John was one of the purchasers of Property 430: T 75.47-76.5. It seems to me somewhat curious that Mr McCabe did not recall whether he had advised the beneficiaries at any time after early 2019 of that fact. That is particularly so having regard to the fact that at least from 3 September 2019, when the plaintiffs filed a statement of claim raising various issues regarding Property 430, one might have thought that it might have been evident to Mr McCabe (who was still actively involved in the matter at that stage) that, having regard to the tenor of the pleading at CB 38-41), the plaintiffs were unaware that John had any involvement as a purchaser of Property 430. Nonetheless, Mr McCabe was not pressed on it and I do not make any finding that his lack of recollection was other than genuine frailty of mind.
On 29 June 2018, Mr McCabe sent a letter to John after the auction: CB 1063. This letter referred to the fact that Martin would identify the purchaser in due course and provide his office with a cheque in respect of the deposit shortly thereafter. He was unable to recall who gave him instructions that the deposit had not been paid at the time of the contract although accepted that, in a sense, the instructions must have come from both of John and Martin: T 80.11-48.
Mr McCabe accepted that at least a week after the auction Martin was not his client at that point (CB 1064): T 81.38-44.
To the extent that Mr McCabe's understanding is in any way relevant, he treated the cheque for $2.5M on behalf of Martin as being on account of the deposits of the purchase of Property 430: T 82.34-83.3.

[91]

John's cross-examination

John accepted in cross-examination that one of the reasons why he made the decision to sell the Londonderry residual properties after the sale of the Arndell Park property was, amongst other things, that he wanted personally to have an opportunity to buy one of the Londonderry properties and that that was a position taken in his own interests: T 130.9-.25, 141.5-142.12, 145.4-146.18.
However, John was unable to specify any other reasons when asked further about it, other than referring generally to discussions with his solicitors: T 142.12-144.37.
John accepted that in order to bid at the auction of the Londonderry residual properties he would need the money from the Arndell Park property, and that on 21 June 2018 (the date listed for auction of the residual properties including the Arndell Park property) he wanted to be able to bid at the auction if he could and that it was his intention to at the auction: T 130.33-50.
John asserted that when Property 430 was the only property left to be auctioned he had no intention of buying it: T 132.7-9. He denied that he bought it stating "I didn't buy it. Martin bought it": T 132.11-12.
His cross-examination regarding this included the following (T 132.17-48): Q. --you know that you are a purchaser of 430 Londonderry. A. I am now, but wasn't before at the purchase date. I can - I can swear on god right now. Q. At the auction, you were during the bidding process having discussions with Martin who was bidding? A. That's correct. Q. You've never disclosed to anybody, have you, what you were saying to Martin? A. No. Q. But one of the reasons you were speaking to Martin is that you considered that ultimately you wanted to be an owner of that property? A. No. Q. You were speaking to him about what price he should bid, is that correct? A. No. Q. When do you say that you made the leap into becoming a purchaser of 430 Londonderry? A. I can't remember, but it wasn't at the auction day and it wasn't for a few months. I can assure you of that. Q. Who came up with the idea of you being the purchaser? A. It's just something that just happened. Q. What do you mean it just happened? A. It just happened. Me and, me and Martin own the, we got given the property behind it from our parents, the one of, one of the in species property, it joins with it. Later on there's got to be some sort of deal between it, and that's how it came about. When it came about, I am not sure.
Whilst John accepted that he had spoken with Martin during the bidding process at the auction, he denied that he had the intention of becoming a co-owner prior to the auction and denied he had discussed with Martin, prior to the auction, an interest in becoming a co-owner with Martin of the property: T 135.40-50, 146.44-6. John denied that he spoke with Martin before the auction and agreed with Martin that Martin would make a bid and it would be on John's behalf or on their joint behalf: T 156.33-48.
John was questioned to the effect that there were three bidders noted by the agent or auctioneer as being bidding parties at the auction. He did not accept the proposition that there were three bidders at the auction. However, he did accept that both Josephine and Martin were bidders. He denied that he was a bidder or registered as a bidder: T 146.26-148.1, 156.35.
John, when asked when he had formed the intention that he wished to become an owner of Property 430, asserted "It's [sic] not an owner. Martin is the owner, I'm just a part owner of it" and indicated that he could not recall when he formed the intention to be a part owner: T 133.6-12, see also 156.30-31. Later in his evidence, John reasserted that he was only a "part, co-owner" of the property and then boldly stated "I have nothing else to do with it": T 175.4-6. Later still, John stated "I said I didn't buy it with him. I'm a co-owner, that's it": T 180.49.
I reject John's evidence that he has "nothing else to do with [the property]".
John was vague as to when he formed the intention of becoming a part owner, venturing a very broad period "[b]etween probably two, three months after the auction, till Christmas or early the next year": T 133.17-23.
John appeared to accept that he must have intended to become a purchaser of Property 430 by 2 August 2018 based upon a draft version of the November 2018 Deed (circulated by Mr Batten to Mr McCabe on that date: CB 1134) which draft included reference to John as executor providing John and/or Martin with information regarding Property 430 (CB 1142): T 133.25-134.50.
John was unable to indicate what inspired him to become an owner of Property 430 eventually asserting numerous times "[i]t just happened" and "I can't explain it". He denied that his evidence that it "just happened" was false (put in the sense of John actually knowing how it happened): T 135.1-38.
John claimed to be completely unable to recall what he had instructed Mr McCabe regarding payment of the deposit after the auction. His evidence included the following (T 157.30-45): Q. After the auction, you instructed Mr McCabe that Martin did not have to pay a deposit, do you agree with that? A. I can't recall what exactly happened; something happened there, all right. I knew Martin had put a $2.5 million cheque there; that was to go to that property; that's all I knew. We're talking family members here. Q. So you don't deny that you instructed Mr McCabe that Martin didn't have to pay deposit? A. I don't know what I said to Mr McCabe. I can't recall what I said to Mr McCabe. I don't even know what I said to Martin last night, but I know I told him I do not and do not want to talk about the case. Q. Did you have a conversation with Mr McCabe about what should happen to Martin's cheque after the beneficiaries all receive their $2.5 million cheques from Arndell Park? A. I don't, I don't, I don't recall what happened. I don't recall what happened.
John was cross-examined regarding instructions to Mr McCabe as to the payment of the deposit and the terms of the contract.
John accepted that Martin had told him that he had given the $2.5M cheque to Mr McCabe. However, John indicated that he did not ask Mr McCabe what he had done with the money (i.e. cheque), could not recall what happened and did not know anything about it: T 158.6-24.
I reject John's evidence. I do not accept that John did not know what Mr McCabe had done with the $2.5M cheque.
When it was put to John that normally where a purchaser purchases property they have to pay a deposit and that he knew that that was part of the contract that he had entered into on behalf of the estate he asserted that he "didn't even read the contract": T 158.6-35.
Later, when asked about the settlement date for the date of the contract, John asserted again that he did not read it: T 166.12.
Mr Crossland proceeded in the cross-examination at times on the premise that John had not read the contract: 159.27, 166.21. His cross-examination was to the effect that John knew what was in the contract or generally what the contract provided for.
When John was pressed on the matter he said (T 158.49-159.9): Q. I withdraw it. You knew that the contract probably said that the deposit had to be paid at the time the contract was made, and you just decided to ignore it; that's the position, isn't it? A. If, if I saw the contract, I would've made sure I put no deposit needed because if, if a family member bought it, it wasn't a problem; it was no problem. If one of the family members bought it, there was no problem; we're family; the money was in one circle. Q. You didn't give instructions to Mr McCabe, did you, to make changes to the written contract to reflect the fact that no deposit was required, did you? A. I did, I did.
I do not accept that John gave instructions to Mr McCabe to make changes to the written contract, as distinct from sending a letter to Mr Cutcliffe obviating the need for payment of the deposit.
At one point, John asserted that he sent a letter out that no deposit was needed to all beneficiaries: T 159.33. Eventually, when pressed on this, he accepted that he could not recall what happened and ventured that Mr Cutcliffe would have told the beneficiaries that they did not need to pay a deposit: T 161.46-48. John sought to distance himself from questions regarding the lateness of the hour of the letter being sent to Mr Cutcliffe asserting that, essentially, the adequacy of any notice was "up to the legal team" and "that wasn't my decision". He was evasive when asked whether he had an expectation that by reason of the lateness of the hour Carol and Reno would find out about not being required to pay any deposit: T 162.4-37.
John's evidence on the matter to my mind lacked transparency. At best, it demonstrated a complete indifference to whether the plaintiffs were adequately notified of the decision (which was not reflected in an amendment to the written form of contract) to not require the purchaser to pay a deposit.
John denied that he was motivated to reach an agreement with Martin in relation to Property 430 by reason of the fact that he knew the day prior to the auction that they were going to receive Lot 8: T 163.16-24.

[93]

Determination

I consider that this aspect of John's administration of the estate was less than transparent, and I expressly reject John's evidence in the respect that I have outlined above.
Mr Crossland cross-examined John to a significant degree regarding his intention to take an interest in the property.
As I have noted, John was unable to recall or was perhaps unwilling to answer the question of when he formed an intention to take an interest in Property 430 and what inspired him to become an owner: T 135.
In relation to such an important issue, I have serious doubt regarding John's evidence that he simply cannot recall what happened: T 135.
Ultimately, Mr Crossland submitted that the Court would find that it was at least in John's mind, as at 20 and 21 June 2018, that he and Martin might take an interest in Property 430: PCS [46]. In other words, he submitted that it was on John's mind just prior to, and at the time of, the auction.
It seems to me likely that John did have a discussion with Martin about Lot 8 prior to the sending of the 20 July 2018 email (CB 1012) although it is not necessary for me to make a firm finding to that effect.
What is curious is that when it was put to John that the proposal that he and Martin take Lot 8 was accepted by Carol and Reno's side, initially said he could not recall what happened. He ultimately agreed that there was a proposal to that effect albeit that he could not recall that it had occurred the day before the auction: T 153.38-154.12.
I also consider it is likely that John in fact knew that there had been an agreement that he and Martin would take Lot 8 prior to the commencement of the auction.
I consider that John's initial evidence that he told Mr McCabe to "send an email to let the beneficiaries know" (T 164.43-44) was false evidence.
I accept Mr Crossland's submission that no adequate explanation has been given for the timing of the apparently very late decision of John to waive the requirement for payment of a deposit: PCS [54].
John accepted that he did not know whether Carol and Reno would be attending the auction and, further, that he had no idea whether they would learn of his belated decision to waive the requirement of payment of a deposit: T 165.22-31.
I further accept his submission that John appeared in cross-examination to be indifferent as to whether Carol and Reno were advised of his belated decision to waive the requirement of payment of a deposit: PCS [53].
Prior to completion of the contract, John provided the balance of the funds for the purchase.
It is clear that, at least from the time that John provided the funds to complete the purchase of the property, the administration of the estate has proceeded on the basis that he has a relevant interest in the property.
None of John's affidavit evidence in the proceedings acknowledges that he was a purchaser of Property 430.
I do not accept that John did not know when he formed an intention to become an owner or part-owner of Property 430.
Although John attempted in cross-examination to minimise the extent of his interest, it is, nonetheless, an interest.
There is no doubt that neither Carol nor Reno were aware of any proposal to waive any requirement for a deposit until after the hearing had commenced.
It seems to me that the taking of an interest in Property 430 that way was a breach by John of his duties as executor. There was no informed consent, at least of the plaintiffs, to John taking that interest.
The consequence of that finding needs to be considered.
Mr Crossland, on behalf of the plaintiffs, did not seek relief that the sale transaction in relation to Property 430 should be set aside because John impermissibly purchased or took an interest in the property: T 316.38-43.
Nonetheless, Mr Crossland did submit that a breach by John of his executorial duties was a basis for declining commission to John. I have addressed this below.

[96]

Belated evidence regarding no requirement for a deposit

Prior to the commencement of the hearing, none of John's evidence suggested that there was any variation of those terms regarding payment and investment of the deposit.
On the second day of the hearing, during the course of John's cross-examination, John, in response to a question from Mr Crossland (to the effect that he knew that when the auction took place and Martin was bidding that Martin did not have money at that time to pay the deposit of $300,000), asserted that there was a letter sent out to all the beneficiaries or the real estate agent to the effect that none of the beneficiaries had to pay a deposit: T 136.27-32.
John suggested that the letter, he thought, was from Mr McCabe. He did not know if Mr McCabe had told the beneficiaries or sent it to Mr Cutcliffe: T 136.35-36. The letter was called for and ultimately tended and became Exhibit P1 in the proceedings. The letter is from Turner Freeman to Cutcliffe Properties dated 21 June 2018 and relevantly states: We refer to the above property which is listed for auction tonight, 21 June 2018. We are instructed by our client that should any beneficiary of the estate (John Camilleri, Martin Camilleri, David Camilleri, Peter Camilleri, Reno Camilleri, Carol Galea) be the successful bidder at auction, then no deposit shall be required to be held.
The evidence from John regarding the letter prompted Mr Crossland to seek to read a supplementary affidavit from each of Carol and Reno. The affidavits sworn on 22 February 2023 were filed in Court on 24 February 2023 and read without objection.
Both indicated that, prior to John giving evidence on the second day of the hearing of the instructions in the letter regarding beneficiaries not being required to pay a deposit, they were not aware of such instructions.
Reno indicates that, had he known such instructions on 21 June 2018, he would have considered attending the auction and making a bid.
Carol indicates further that she would have given serious consideration to attending the auction and bidding with the intention of not paying the deposit but paying the whole of the purchase price once she obtained her share of the proceeds from the estate sale of the Arndell Park property together with whatever additional amount was required by the contract.
Neither Carol nor Reno were required by Mr Ellison SC for cross-examination on the supplementary affidavits.

[98]

Determination

The lack of transparency of what occurred in relation to the auction of Property 430 was not limited to the mystery of when John expressed a desire in having an interest in the property as a purchaser or otherwise and when that occurred.
It also extended to the terms on which the property was sold.
Whilst there is evidence that the letter (which is Exhibit P1) was sent to the agent, there is no evidence that Martin was made aware of the proposal that there be no deposit or the terms of Mr McCabe's letter.
As to Mr Ellison SC's suggestion that John as executor either could or was justified in waiving the obligation to pay any deposit, I noted during submissions that it is hard to see how he could waive the obligation given that the written contract required payment of the deposit: T 330.15.
It is far from clear to me how it would have been in the interests of the estate for the deposit to be waived. Mr Crossland submitted that I should find that no deposit was paid. Certainly, it is true that no amount of deposit was separately paid to Cutcliffe Properties as a deposit holder and no amount of deposit was invested.
Mr Ellison SC initially submitted that if there was any risk or potential loss regarding the deposit monies it was by Martin "who has handed over the purchase price (which has been distributed) but not received title": JOS [35].
Ultimately, as I understood it, Mr Ellison SC agreed that the failure to invest even the sum of $300,000 of the $2.5 million taken from Martin on account of the purchase was an arguable complaint: T 330.25-331.31.
It seems to me somewhat artificial for the plaintiffs to say that no part of the $2.5 million paid by Martin was referable to the requirement for a deposit.
I consider it appropriate to regard at least the sum of $300,000 of the $2.5 million as being referable to a deposit.
Nonetheless, it was not invested, and I accept the submission that the failure to invest at least that sum as a deposit was a breach by John of his executorial duties.
Further, it seems to me that the breach of its nature was a deliberate breach and constitutes a wilful default.
There was no submission that John's failure to invest the deposit was justifiable by reference to any discretionary power under the Will.

[100]

Alleged commercial use evidence

Carol gave particular evidence observing Martin and John on Property 430 over a period from around October 2015 until in or around July 2019: CB 191 [5]-[9]. Carol gave further evidence regarding activity on the property from about 30 June 2019 until early August 2019: CB 192 [10]-[12]. I accept Carol's evidence.
Peter gave evidence that in or about July-August 2019 he drove past Property 430 and saw from the road about two or three men inside the property in the paddock area attending to the outside walls of the shed: CB 188 [8]. I accept Peter's evidence.
The plaintiffs' submissions in this regard relied upon the following evidence (at POS [63]): (a) a couple of months after the auction had happened in June 2018, portable buildings began appearing on the site of 430 Londonderry (CB 197 [12]); (b) in about December 2018, (after the contract of sale, but long before settlement) Martin and John were on site at 430 Londonderry, and were observed unhitching a trailer truck near a shed, and the trailer truck was loaded with grass material (CB 191[8]); (c) by about April or May 2019, a portable house of a different structure, at the front of the block, had been placed on 430 Londonderry. On the same occasion, there were men in trade wear at the back of the property, some of whom were on the top of the roof of a shed, and appeared to be working on repairs (CB 197 [13]); (d) In around June 2019, tradesmen were seen attending to the outside of the sheds at 430 Londonderry (CB 197 [14]); (e) Also in June 2019, a few days later, Carol drove past 430 Londonderry, observing three men and two large working utes at the front of the poultry shed doors located inside the property on the paddocks. They were dressed in trade wear and were sitting down eating lunch. On her way back the same day, she saw the same three men. One was attending to one of the utes and the other two were carrying long and bulky items into the door of the sheds (CB 192 [11] (f) in around July 2019, Martin was seen driving into the property at 430 Londonderry with a walking floor truck filled with poultry bedding (CB 191 [9] and CB 201 [3]); (g) in July/August 2019, Peter drove past 430 Londonderry and saw from the road that 2-3 men were inside the property in the paddock area, attending to the outside walls of the shed (CB 188 [6]); (h) in early August 2019, lights were seen on in all three of the sheds. It looked like the sheds were fully lit inside and all the blinds were up (CB 192 [12]); (i) in the first two weeks of August 2019, Reno saw that the works on the outside of the sheds had been completed; new curtains had been hung, there was brand new tin on the roof and the fibro sheeting had been repaired and was in good condition (CB 197 [15])
The plaintiffs submit that the estate's accounts record that it received $300 per week rent from Matthew Sims (Mr Sims) for rent of the cottage on the property during "the year of delay". They submitted that the market rent for the property, as a whole, was, subject to the evidence of Mr Ellis, $1000 per week: POS [64].
The plaintiffs additionally submitted that John's failure to obtain rent for Martin and John's use of Property 430 during the pendency of the settlement of the sale was "a devastavit": POS [65].

[101]

Determination

John was cross-examined about work being done on the property prior to settlement of the sale. John asserted that Martin was at the property not him and he did not ask Martin what work was being done in the property asserting "that's his department". He claimed he had no idea what work Martin was doing on the property. He asserted that he could not recall going with Martin to the property at various times in December 2018 in doing some work there: T 180.35-181.6, 181.8-33.
I consider it highly unlikely that John has no recall of going to the property with Martin after the auction and no idea what Martin was doing on the property. In any event John eventually accepted that he knew that Martin was fixing up chicken sheds on the property and asserted that it was Martin's job all along to do all the maintenance on these properties "that we had": T 181.44-182.10.
Clearly, Mr Sims was paying rent in respect of Property 430: CB 1344. There are electricity account invoices relating to Property 430 directed to the estate of the deceased and also to Mr Sims: CB 1761-1822.
On 11 October 2019, a draftsperson prepared plans for Martin in respect of the proposed construction or installation of a steel framed garage for Property 430: CB 1385-1396.
On 15 October 2019, an environmental statement was prepared and provided to the General Manager of Penrith City Council by Martin for the proposed construction of a Colorbond garage on Property 430: CB 1397-1398.
The following details appear from the first page of the environmental statement (CB 1397): PROPOSAL The proposal is to construct a 52m2 Colorbond garage on a 2.7 hectare rural site. SITING The garage will be 7.9 metres from the northern side boundary and 66.6 metres from the front boundary. It will be located 2.1 metres from the proposed transportable building. BULK AND SCALE The garage is only a small structure. The wall height is 2.7 metres and the ridge height is 3.7 metres above the existing ground level.
Under the heading "Compliance", there is the following statement which bears upon the use of the garage (CB 1398): The property has 3 operational poultry sheds in the rear part of the site. There is also farm machinery shed [sic] in the south-east corner of the lot. The new garage will be an ancillary outbuilding to the proposed transportable dwelling. The use, location, area and height all comply with the Penrith Development Control Plan 2014, 01-Rural Land Uses.
On 4 November 2019, a development application was lodged by Martin in respect of the Colorbond garage noting the estimated cost of the work being $9,000: CB 1384. The details regarding the development application are minimal. However, the "Description" states "Colourbond Garage" and the "Category" states "Residential-Alterations and additions".
As I have noted above, there is no affidavit from Martin and Martin was not called to give evidence. In the absence of any evidence from Martin it is difficult to draw any clear conclusions regarding his proposed use of the garage. Nonetheless, the stated use appears to be that it would be an ancillary building to a proposed transportable dwelling.
On the available material, I find that that is the proposed use.
Having said that, whilst it is clear that there was construction activity on the property, it is far from clear to me that John and Martin had actual commercial use of the property in the sense of deriving income. The installation of the garage was after settlement of the sale of Property 430.
Clearly, during the pendency of the sale of the property, Mr Sims was on the property and otherwise paying rent.
Mr Ellis' evidence regarding the rental value of the property suggested a range as between $300-$350 during the P430 relevant rental period: CB 333. He adopted a rental value of $350 per week: CB 333, 334.
He did not suggest that the property had particular rental use apart from rental of the granny flat.
It is clear from the estate receipts that, up until 21 June 2018 when Property 430 was sold, the estate was receiving rental in the order of $300 per week from Mr Sims: CB 1519. Thereafter, until about February 2019, the estate continued to receive rent in the order of $300 per week from Mr Sims. From about 15 February 2019, the amount of rent received from Mr Sims increased to $450 per week (CB 1520) up to and including the time of settlement of the sale of Property 430: CB 1520, 1344.
Those monies were paid to the estate.
I am not persuaded that there was commercial use of Property 430 by John and Martin amounting to profit other than in respect of the rental of the property to Mr Sims. Further, Mr Sims, at least over the period between sale and completion with respect to Property 430, appears to have paid rental to the estate at least commensurate with the lower end of the range suggested by Mr Ellis and, at least from February 2019, at a higher figure.
I am not persuaded that the complaints of the plaintiffs regarding this issue amount to a wilful default by John, or at least not a wilful default sounding in quantifiable damages or compensation.

[103]

John's cross-examination

John was questioned in relation to the normal time for settlement of a conveyancing contract and accepted that he was aware that a six-week period was a normal time: T 166.9-19.
John, when pressed on the point, asserted again that he did not read the contract, essentially conveying that he did not know that it was very likely that settlement date of the contract was six weeks after the auction. He denied that he was "disinterested" in what the contract actually said on the rights and obligations of the parties to the contract simply asserting that he had no concerns because "it was in-house, family members, money's there. There's no problems": T 166.33-167.12.
When it was put to John that he had no intention of paying attention to the obligations of the parties in respect of the date of settlement yet again he sought to distance himself from decision-making in relation to the matter, asserting that it was a matter for Mr McCabe (T 168.21-25): Q. From that time, you had no intention of paying attention to the obligations of the parties in respect of the date of the settlement? A. I don't recall what I did or whatever, but Kyle was in charge. What was, what was, what was my role in it? Kyle was in charge of it; the lawyers were in charge.
Further, John asserted that he could not recall what had happened regarding discussions about not needing to settle the property until advice was received from Ms Fisher or Mr Batten about stamp duty in relation to the Property: T 168.40-47. However, it is evident that he did have a "mutual agreement" to that effect as is evidenced by Mr McCabe's letter to John dated 30 July 2018: CB 1107. A similar letter was sent by Mr McCabe to Martin on the same day albeit not using the words "mutual agreement": CB 1108.
A fair reading of Mr McCabe's letter to John in the context of asserting that the completion date of the agreement is to be extended by mutual agreement must have meant that the agreement was between Martin and John as the parties to the contract. Yet, John, in responding to the question from me about it, suggested that it could have been an agreement between himself and Mr McCabe or himself and Mr Batten or himself and Ms Fisher: T 169.46-170.5.
To the extent that John (a) was attempting to convey that he has no interest in the time at which the contract for Property 430 would be settled, (b) asserts that he could not recall why settlement was delayed, and (c) asserted that he did not know that he has an agreement with Martin to defer settlement until advice regarding stamp duty exemption was received, I reject all such evidence.
It seems to me that the letter at CB 1107, on its plain reading, demonstrated there was an agreement between Martin and John to reschedule settlement to timing after stamp duty advice was received. Even if I am incorrect in those findings, and one were to assume the John did not recall what he did and simply left it to Mr McCabe to determine what would happen in relation to timing for settlement, that of itself to my mind reflects an abrogation of his duty as executor to properly administer the estate.
When John was asked what were the benefits to the beneficiaries in having the contracts settled he simply stated "I don't know" (T 171.4-7) and then gave the following evidence (T 171.9-19): Q. You have no idea what the benefit might have been for having the contract settled? A. (No verbal reply). Q. It didn't cross your mind at the time? A. Well, it probably did, but there, there's a reason behind all of this; it happened for a reason; it's happened now. I don't know what the reason is. Q. So you're saying to his Honour that you cannot assist his Honour with any reason for why the settlement was delayed for a year? A. Not really, no.
I do not accept the John did not know the reasons for the delay. However, even if I am incorrect in that finding, and one were to accept the John did not know the reason for the delay, that of itself to my mind reflects an abrogation of his duty as executor to properly administer the estate.
When questioned about the actual timing of the eventual settlement, John again was, to my mind, evasive and sought to distance himself from his role and the decision-making (T 171.36-43): Q. You don't say, do you, that Kyle made this decision; it was your decision, wasn't it? A. I didn't say that. Q. It was your decision, wasn't it? A. No, I don't say that. I don't know whose decision, but I must've spoke to Kyle and we come up with some conclusion that this is what had to happen. I don't know what happened.
John asserted that he did not know when he had agreed with Martin that he would be paying the sum of approximately $572,000 to settle the purchase: T 172.19-21. I do not accept that John has no recall when that had been agreed.
When questioned as to ultimately providing the money for the settlement of the purchase in August 2019, John seemingly accepted that he has kept such money in a bank account most probably accruing interest: T 171.45-172.10.
John stated that he had no idea whose handwriting has crossed out the words "or nominee" and inserted his name on the alternate vendor counterpart: T 172. He asserted that he could not recall seeing that version of the contract before, he could not recall whether he had given instructions for that to occur nor could he assist the Court in explaining how those words came to be crossed out and his name written on it: T 172.30-48.
I do not accept that John has such poor recollection that he was completely unable to shed any light on the matter.

[111]

Telstra shares evidence

The inventory of property of the deceased's estate disclosed, as an asset of the estate, 3,760 Telstra shares at $6.09 per share having a value of $22,898.40: CB 431.
John's first affidavit indicated that the 3,760 Telstra shares remained in Reno Senior's name and, following his death, were not transferred into the deceased's name: CB 138 [62]. There were in fact two parcels of Telstra shares. One was a parcel of 3,760 Telstra shares, which was disclosed in the inventory property. There was, additionally, a further parcel of 4,614 Telstra shares not disclosed in the inventory of property.
The accounts of the estate prepared by Ms Fisher disclose receipt of Telstra dividends in the financial years ended 2015 (CB 41), 2016 (CB 474), 2017 (CB 662), 2018 (CB 1070) and 2019: CB 1238.
A reconciliation of funds held by the estate as at 24 June 2020 disclosed the Telstra shares as being an unrealised asset valued at 24 June 2020 in the sum of $11,731.20: CB 1481.
On 16 July 2020, Pacific Custodians sold 3,760 Telstra shares in the deceased's estate at a price of $3.45 per share giving rise to a gross amount of $12,972 which, after a facilitation fee and GST, left net proceeds of $12,886.38: Exhibit D1 Vol 1, 449.
The estate accounts for the period to 8 August 2020 disclose that on 21 July 2020, the estate received the sum of $12,886.38 arising from a sale of Telstra shares: see item 449 at CB 1344, 1510.
On 16 December 2020, Ord Minnett sold on behalf of the estate of Reno Camilleri an amount of 4,614 Telstra shares at a price of $3.03 for gross sum of $13,980.42 which after brokerage and GST netted an amount of $13,826.64: CB 1742.
On 18 December 2020, the sale was settled. The updated statement of receipts and disbursements being Exhibit D1 records the receipt of the sale of the Telstra shares as being item 475.
On 24 January 2023, Turner Freeman wrote to Elderlaw stating that Telstra shares had been sold by Ord Minnett for $13,826 (CB 1723) enclosing a confirmation of sale tax invoice issued by Ord Minnett: CB 1742.

[112]

Determination

I am satisfied that the 3,760 Telstra shares said to form part of the deceased's estate as disclosed in the inventory of property were sold and the net proceeds accounted for to the estate.
However, it is evident that, at the time of the inventory of property, the Telstra shares had a value of $6.09 per share giving rise to a value just under $22,900.
It took approximately five years for John to arrange for sale of the Telstra shares and when they were sold in July 2020, the sale price was only $3.45 per share.
John did not provide any adequate explanation for the delay in selling the Telstra shares.
Further, John's evidence does not adequately explain why an amount of 4,614 Telstra shares which had evidently been part of Reno Senior's estate was not disclosed as an asset of the deceased's estate. Moreover, those shares were sold at an even lesser price being $3.03 per share approximately five and a half years after the timing of the inventory of property.
I consider that the failure of John to sell the Telstra shares promptly, resulting in a lesser price for the value of the shares that had been evident as at the time of the inventory of property, amounts to a default. In the absence of any explanation, the failure to disclose the shares of Reno Senior's estate as an asset of the deceased's estate seems to me to amount to a wilful default. Although I was not provided with specific evidence as to when the plaintiffs claim the shares ought to have been sold, it seems to me that a period of five years is self-evidently too long a time for John to have waited to sell the shares.
There was no submission that, at least in respect of this issue, John exercised any discretionary powers under the Will to delay the sale. His delay was not explained by him by reference to any discretionary power.
However, accepting as I do that the delay amount to a wilful default I was not provided with particular evidence as to when after the deceased's death or after probate was obtained that the shares ought to have been sold nor was I provided with evidence as to the value of the shares at that time. In the absence of such evidence, I cannot fix any specified amount of loss.

[120]

What are "tax agent services"

Mr Crossland made reference to the Tax Agent Services Act 2009 (Cth) (TAS Act) which allows tax agents (of which he accepted Mr Batten was one) to provide tax agent services which extend to the matters in that definition: T 321.
Section 90-5 TAS Act provides a definition of "tax agent services": (1) A tax agent service is any service: (a) that relates to: (i) ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise, under a * taxation law; or (ii) advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise, or could arise, under a taxation law; or (iii) representing an entity in their dealings with the Commissioner; and (b) that is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes: (i) to satisfy liabilities or obligations that arise, or could arise, under a taxation law; (ii) to claim entitlements that arise, or could arise, under a taxation law. (2) A service specified in the regulations for the purposes of this subsection is not a tax agent service.
A "taxation law", despite being asterixed in the definition, is not expressly defined in s 90-1(1) TAS Act.
However, the legislation provides that an expression has the same meaning in the TAS Act as in ITAA 1997 (other than the expression "this Act"): s 90-1(2).
Section 995-1 ITAA 1997 defines "taxation law" to mean: (a) an Act of which the Commissioner has the general administration (including a part of an Act to the extent to which the Commissioner has the general administration of the Act); or (b) legislative instruments made under such an Act (including such a part of an Act); or (c) the Tax Agent Services Act 2009 or regulations made under that Act.
As noted above, a service specified in the regulations for the purposes of this subsection is not a "tax agent service": s 90-5(2).
My attention was not drawn to any specific regulations.
Nonetheless, I note that the regulations specify services that are not "tax agent services": reg 26 Tax Agent Services Regulations 2022 (Cth). I have very briefly considered the provisions of reg 26. It is not self-evident to me that any of those provisions are relevant to the disputed charges in this case. In the absence of any specific submissions regarding the matter, I do not propose to proceed on the basis that any part of the specified services in reg 26 are operative.
I note that a "tax (financial) advice service" is a tax agent service (other than within the meaning of subparagraph (1)(a)(iii) of the definition of that expression) provided by a financial services licensee: s 90-15 TAS Act.

[121]

What work is disputed?

When Mr Batten was called to give evidence there was some discussion regarding the extent of the allegations regarding the legal work.
I made reference to the Revised Statement of Issues as did Ms Seiden SC: T 241.31-33, 245.31-246.7. That revised statement identified five issues touching upon the question of Mr Batten and his work being issues 17-20 and 30 as follows: 17.Whether John has used estate funds to pay the estate's lawyers, accountants and a 'taxation specialist' (Mr Batten) for work that was in fact for John (in his personal capacity) and / or Martin and not for the estate, in particular for: (a) John's and Martin's personal interests under the 2018 Deed; (b) taxation-related advice to John and Martin in respect of the purchase of 430 Londonderry; (c) work and advice related to John and Martin's attempts to obtain a stamp duty exemption for the appropriation by them of the property at Lot 8 Wingara Glen. 18. Whether Mr Batten (who is not a lawyer) was engaged to do, did, or purported to do, legal work for the estate. 19. Whether payment to Mr Batten from the estate's assets for the legal work was a wilful default. 20. Whether John's failure to take steps to seek reimbursement of the sums paid to Mr Batten for legal work was a wilful default. … 30. Whether John failed to take reasonable steps to ensure that (as per the 2018 Deed) Mr Batten made an application to Revenue NSW for an exemption of any stamp duty payable by Carol and Reno in respect of the appropriation by them of the property at Lot 111, Wilshire Rd, Londonderry, or whether John unreasonably failed to direct another person to make the application.
Both Mr Ellison SC and Mr Crossland suggested (T 241.31-41) that the more detailed account of those issues appeared in the document which was the revised summary of charges in dispute which focussed upon invoices 1620 and 1720: CB 72D-72J.
Mr Crossland indicated that the claim in relation to Mr Batten's invoices is dealt with in the PCS at [79] (and following): T 320.2.
Ultimately, Mr Crossland focussed upon the disputed charges in relation to the invoices in the revised summary of charges in dispute which were invoices 1620 and 1720: T 321.20-322.1.
Mr Crossland disputed that any of the work fell within the description of "tax agent service" or, more particularly, was not identified by Mr Batten as being as such and ultimately asserted that John has the onus on a wilful default basis of separating out what was legitimate work: T 322.3-33.
There was some issue as to Mr Batten's charge out rate. I observed that the charges seem to be more than $990 an hour: T 322.50-323.17.

[123]

Invoice 1720 is the second of the invoices under challenge in the proceedings. The work described in the invoice is as follows (at CB 1754-1755): Item Type Description Amount Service 24/10/2018 - Discussion with Amanda Fisher and Pat McCarthy in relation to the GST applying to the sale of Holbeche property $1,350.00 Service 26/11/2018 - Reading Tay c Chief Commissioner of State Revenue [sic] and letter to Kyle MCCabe [sic] concerning transfers and section 63 (1) (a) (iii) of the Duties Act 1997 post the Tay decision. $3,375.00 Service 08/05/2019 - Reading the NSW Supreme Court decision Galea v Camilleri NSWSC 167 [2019] $675.00 Service 13/05/2019 - Reading Galea v Camilleri [2019] NSWSC 167 and associated material Including summons dated 2o October 2015 and 1 August 2017, defence filed 1 August 2019 and various other documents $6,750.00 Service 07/07/2019 - Reviewing valuations of 42-50 Wingara Glen, 42-60 Wilshire Road and 62-80 Wilshire Road. Londonderry and 426-430 Londonderry Road, Londonderry $3,375.00 Service 13/07/2019 - Reading the executed Deed of Agreement dated 8 November 2018 between Camilleri's $1,012.50 Service 10/08/2019 - Drafting submission to Mira Brewster concerning the application of section 63(1)(a)(iii) of the Duties Act 1997 $9,450.00 Service 11/08/2019 - Drafting application for a private ruling from the ATO in relation to the disposal of the property at 19 Holbeche Road, Arndell Park, New South Wales $8,100.00 Service 05/09/2019 - Meeting with John Camilleri and Amanda Fisher in relation to the Estaqte [sic] of the Late Patricia Camilleri $2,025.00 Service 30/09/2019 - Drafting revised application for private ruling from the ATO in relation to 430 Londonderry Road, Londonderry $5,400.00 Service 26/11/2019 - Drafting letter to John Camilleri concerning the state of the rulings from the ATO and application to Revenue NSW as to section 63 of the Duties Act 1997. $2,700.00 Service 28/11/2019 - Meeting with Amanda Fisher to discuss progress of estate administration and income tax issues. $1,012.50

[126]

Parties' submissions

Mr Crossland submitted that the MGS invoices paid by the estate are in part (in a sum that John's accounts do not allow the plaintiffs or the Court to calculate) for work carried out for Martin and for John in his personal capacity. This occurred in the following circumstances (POS [69]): 1. from an early stage of Mr Batten's/MGS' engagement (which commenced in April 2018 (CB 774)), Mr Batten's work extended to advising John and Martin in relation to stamp duty and a particular form of "tax effective" ownership structure that they could take advantage of when estate land was transferred to them; in particular, John and Martin personally instructed Mr Batten in this capacity in respect of their in specie property (Lot 8) (CB 1151), and also instructed in relation to Property 430: e.g. CB 1217; and 2. it was an express term of the November 2018 Deed that, whilst John's costs in his capacity as executor were to be borne by the estate, all parties' costs of and relating to the deed were otherwise payable by each of the individual parties, including John in his capacity as residuary beneficiary: CB 1194 [15].
Mr Crossland submitted that the work in (1) had nothing to do with the tax affairs of the estate, and in relation to (2), as it turned out, the cost of Mr Batten's work on the Deed was wholly borne by the estate. Further, in relation to (1), Mr Crossland submitted that Mr Batten's retainer was never disclosed and was uncircumscribed and that he was in a position of conflict, at least in relation to the invoices in question: POS [69], PCS [80(a),(b)].
Mr Ellison SC noted that: 1. the exercise of powers pursuant to s 46 Trustee Act could not come about without the consent of the executor and the involvement of all relevant residuary beneficiaries: [47]; 2. the interest of John and Martin under the November 2018 Deed is no different from the interest of the four other residuary beneficiaries who take specific realty; and 3. the intention of the deed was to seek a benefit for all residuary beneficiaries, not just John and Martin: JOS [48],[49].
Thus, he submitted that: 1. in the above circumstances, it was entirely appropriate that the estate pay for the obtaining of legal advice relevant to the November 2018 Deed: [47]; 2. John conducted himself properly and did not prefer his personal interest over that of any other beneficiary: [48]; and 3. there is nothing which justifies a payment from him personally to the estate in respect of work done by any third party (relevantly MGS): JOS [48],[49].

[128]

Events covering the period in respect of invoice 1620

On 26 July 2018, Mr Batten sent a memo to Mr McCabe referring to the draft deed provided to him on 25 July 2018 and making comments in respect of the deed: CB 1097. The advice noted: Each party should be free to obtain their own advice, at their own cost, in relation to income tax and stamp duty and to put to the executor any arrangement that may legally reduce the incidence of income tax and/or stamp duty.
The references in the memorandum to John and Martin in respect of ownership or title to property are references, in context, to Lot 8 and not Lot 430: CB 1097, 1102 and 1103 in respect of clause 4a and 7A of the deed.
Whilst Mr Crossland sought to establish that Mr Batten had acted particularly in John's interests in the advice that he gave and suggested amendments regarding drafting, it is not clear to me that Mr Batten amended the deed in respect of seeking to provide releases for John or otherwise acting in John's particular interests. It is difficult in light of the denials from Mr McCabe and Mr Batten to find positively that Mr Batten acted particularly in John's personal interests as distinct from his interest as executor. I do not make that finding.
On 30 July 2018, Turner Freeman wrote to each of John and Martin regarding Property 430.
The letter to John in its terms is not suggestive that at that stage Mr McCabe understood or regarded John as being the purchaser of the property: CB 1107.
The letter to Martin addressed issues of rescheduling the date for settlement (2 August 2018) pending advice from Ms Fisher and Mr Batten in respect of a stamp duty exemption application and noting that interest would accrue at 10% per annum on the amount of $500,000 being the unpaid balance of the purchase price (having taken into account the cheque for $2.5 million provided to Mr McCabe's office): CB 1108.
On 30 July 2018, there was email correspondence as between Mr McCabe, Mr Batten and Ms Fisher regarding further proposed amendments to the deed. Mr McCabe sent an email to Elderlaw essentially requesting an extension until Wednesday 1 August for amendments which, in the words of Mr McCabe, "will assist him in his endeavour to minimise tax obligations for the beneficiaries": CB 1113.
On 1 August 2018, at 1:54 AM, Mr Batten sent to Mr McCabe and Mr Fisher (copied to Melissa Camilleri) a revised draft deed: CB 1116-1133. The draft contained a number of releases in respect of John and particularly in clauses 51 (CB 1126), 57 (CB 1127) and 68 (CB 1128) as follows: 51. John, in his capacity as executor of the deceased's estate, agrees to provide to John and/or Martin upon request (where the request identifies a document or category of documents) any advice and information that is in the estate's possession or control and which is relevant to any Capital Gains Tax or stamp duty obligations that exist or might exist in relation to 430 Londonderry. … 57. Subject to his obligations in this Deed, the Residuary Beneficiaries release John in his capacity as executor of the deceased's estate from his obligations to distribute the In specie Properties in the manner required by, or in a manner consistent with, Cl 10 of the deceased's last will. … 68. The Residuary Beneficiaries hereby release John, in his capacity as executor of the deceased's estate, from all claims, actions and litigation that may arise from the administration of the deceased's estate.
On 2 August 2018, at 5:18 PM, Mr Batten provided Mr McCabe and Ms Fisher with what is described as a "final version of deed of agreement". The email indicated that Mr Batten was happy in its current form: CB 1134.
It is not evident from the materials or evidence in the case what if any amendments had been made as between the two emails.
Mr Crossland cross-examined Mr Batten regarding clause 51 in the "final form" of deed: CB 1142. However, that form had existed earlier. Mr Batten did not deny that he had drafted it but did not accept that he had drafted it.
Clause 55 of the revised "final form" was in the following terms (at CB 1143): 55. John and Martin shall be liable to pay and agree to pay any stamp duty which is deemed payable in respect of the transfer or declaration of 430 Londonderry and John and Martin jointly and severally indemnify the Deceased's estate in respect of any stamp duty payable by the estate in respect of any property transferred or declared to be held by a nominated entity.
Clauses 56 and 57 (CB 1143) reflected earlier versions of clauses 54 and 55 in the draft deed sent on 1 August 2018: CB 1126.
On 7 August 2018, Mr Lewis wrote to Turner Freeman referring to the email of 2 August 2018 noting that the draft deed had not been marked up in a way that would allow comparison with the earlier draft. In particular, the email complained that Elderlaw was unable to advise their clients on the purpose and effect of the changes without having access to the advice of Mr Batten on which the changes had been made: CB 1150.
On 12 August 2018, Mr Batten sent a letter to Mr McCabe which, amongst other things, noted that "[t]he Executor and Mr. Martin Camilleri have already engaged my services" and then summarised the changes to the deed that had been made (seemingly in response to the query that had been raised by Mr Lewis): CB 1151-1152.
The letter also provided further advice on revenue issues: CB 1153-1155.
On 13 September 2018, a letter was sent by Turner Freeman to Elderlaw on Turner Freeman letterhead and signed by Mr McCabe. It is, for all intents and purposes, in the same form as the "draft" letter dated 29 August 2018: CB 1969. I think the inherent likelihood is that it is the latter letter (13 September 2018) which was sent and not the "draft" dated 29 August 2018. The draft form of agreement signed by John and attached to the 13 September 2018 letter contains 80 clauses in its operative provisions, including a clause 71 drafted in a way to provide for the residuary beneficiaries to release John in broad terms as follows (at CB 1181): 71. The Residuary Beneficiaries hereby release John, in his capacity as executor of the deceased's estate, from all claims, actions and litigation that may arise from the administration of the deceased's estate both before and after the execution of this Agreement.
There is an email from Mr McCabe to Elderlaw also dated 13 September 2018: CB 1189. Having regard to the email it seems to me that the letter was sent on 13 September 2018.
On 14 September 2018, Mr Batten emailed Ms Fisher and John in the following terms (at CB 1189): I just noticed that Kyle sent the agreement that I amended. I wanted him to send the original without my amendments. I thought we made the decision of no more fighting and just get on with it. We need to wind up the estate.
On 24 September 2018, Mr Batten sent an email addressed to Martin although directed to Maryanne's email address. The email indicated that Mr Batten had "finally got to speak to Kyle today and he is going to send the original agreement. We should be able to finalise this soon". The email attached invoice 1620: CB 1190.

[129]

Determination regarding invoice 1620

There are four items in respect of this invoice.
The work in relation to the first three items is said to have occurred on 26 July 2018, 1 August 2018 and 13 September 2018. The fourth item refers to telephone calls without any reference to a specific date and to writing emails to Mr McCabe and reading the same.
In relation to the first two items, I am unable to detect by objective examination of those materials that the work in relation to this invoice related to work done for the benefit of John and Martin as distinct from John in his capacity as executor of the estate. In light of Mr Batten's denial, I am not persuaded that that work was not work done for, and chargeable to, the estate.
I note that it was not until 12 August 2018 that Mr Batten sent a letter to Mr McCabe which, amongst other things, noted that "[t]he Executor and Mr. Martin Camilleri have already engaged my services": CB 1151-1152.
The third item is referable to work on 13 September 2018 being the "[d]rafting section 139 of the GST Act Notices, transfers and letter for Turner Freeman".
The reference to "section 139 of the GST Act Notices" appears to be a reference to draft forms of "Notice to the Executor" whereby the transferees confirm that for the purposes of s 139.5 A New Tax System (Goods and Services Tax) Act 1999 (Cth) that the proposed transferees do or do not intend to carry on an enterprise on the in specie lots transferred. Notices for Carol and Reno (CB 1185) and David and Peter (CB 1186) appear in the Court Book.
I have examined the letter from Turner Freeman to Elderlaw dated 13 September 2018. The letter sets out a proposal by John as executor of the estate regarding the relevant in specie properties, in particular, in respect of Carol and Reno on the one hand and Peter and David on the other.
In light of the definition of "tax agent service" including advising an entity about liabilities or obligations that arise or could arise under a taxation law or representing an entity in their dealings with the Commissioner, it seems to me that that work arguably falls within the meaning of a "tax agent service".
Further, in light of Mr Batten's denial, I am not persuaded that the work in relation to this item was not work done for and chargeable to the estate.
Lastly, in relation to the fourth item being various telephone calls with John, Ms Fisher and Mr McCabe and emails to Mr McCabe other than I have set out above regarding Mr Batten's email to Ms Fisher and John dated 14 September 2018, I cannot locate material regarding this.
In light of Mr Batten's denial, I am not persuaded that the work in relation to this item was not work done for, and chargeable to, the estate.

[130]

Events covering the period in respect of invoice 1720

On 26 November 2018, Mr Batten provided Mr McCabe with further advice in respect of transfer duty: CB 1206.
On 4 July 2019, Mr McCabe requested an update regarding the matter so that the beneficiaries could be assured regarding progress: CB 1282.
On 5 July 2019, Turner Freeman wrote to Elderlaw apologising for the delay and indicating that the principal delay in John's ability to finalise administration of the estate is that he was awaiting the outcome of a number of applications relating to taxation and duty which he had provided instructions to Mr Batten to make: CB 1283.
On 12 July 2019, Elderlaw responded to Turner Freeman noting that the fact that John intended to pass accounts did not relieve him of the obligation to allow inspection of records of the estate. The letter indicated that Elderlaw's clients wished to see records of correspondence with Mr Batten and any final or draft application and the advice that he had sent to Turner Freeman or John. The letter indicated that Elderlaw could not see any reason why Mr Batten's work might be delaying completion of the sale of Property 430 and requested details about that. I pause to note that, at this point, Elderlaw in the letter described the purchaser as being Martin: CB 1286.
There appears to have been some degree of delay in Mr McCabe responding to that request.
On 2 August 2019, Mr McCabe emailed Mr Batten requesting provision of an update as to the status of the applications for exemption of stamp duty and any other applications being made on behalf of the estate including Property 430: CB 1288.
On 5 August 2019, a formal letter was sent by Mr McCabe to MGS requesting an urgent response and an update of the status of the applications: CB 1289.
On 6 August 2019, Elderlaw wrote to Turner Freeman noting that it was (close to) the fourth anniversary of the grant of probate and that their clients expected (1) the estate to be administered expeditiously; (2) that the stamp duty related applications referred to in the November 2018 Deed be made expeditiously so that the transfers of the in specie properties to the beneficiaries could be finalised and registered; (3) that steps be taken to complete or terminate the contract for sale of the Property 430 (again described as being a sale to Martin); and (4) that the books and records of the estate be made available to the beneficiaries: CB 1290.
By 7 August 2019, the term deposit for the $2.5 million amount held on behalf of Martin had, with accumulated interest, a balance of $2,519,364.48: CB 1298.
The letter from Elderlaw (dated 6 August 2019) enclosed a draft form of a proposed statement of claim on behalf of the plaintiffs' noting that Elderlaw held instructions to commence proceedings and that, absent any meaningful response to their letters, they anticipated instructions to file and serve the process by Friday, 9 August 2019: CB 1291-1291A.
On 9 August 2019, Turner Freeman responded to Elderlaw by letter noting that the most significant matter on which they were awaiting completion continued to be work to be completed by Mr Batten in respect of various taxation and duties applications being made on behalf of the estate as well as the beneficiaries of the estate: CB 1299.
Reference was made to the fact that Mr Batten was on leave throughout January 2019 but only returned in late-February 2019 following an unexpected delay due to personal reasons: CB 1299.
The letter emphasised that completion of the administration of the estate could not occur until Mr Batten had provided his advice both as to CGT and stamp duty issues. The letter referred to a proposed discussion on Monday, 12 August 2019, particularly regarding Property 430, and indicated that Turner Freeman would provide Elderlaw with a comprehensive update no later than close of business on Tuesday, 13 August 2019: CB 1300.
On 10 August 2019 (following receipt of an email from Mr McCabe alerting him to threatened litigation seeking an urgent update), Mr Batten sent a letter to Ms Mira Brewster (Ms Brewster), a Senior Technical Advisor with the Duty Services Unit, regarding the November 2018 Deed and the proposed in specie transfer of the three Londonderry properties (Lots 8, 111 and 112): CB 1302.
On 10 August 2019, Mr Batten sent a letter to Ms Brewster enclosing valuations for a determination that the transfers for the three in specie properties (Lots 8, 111 and 112) as agreed pursuant to the November 2018 Deed should be stamped with nominal duty pursuant to s 63(1)(a)(iii) Duties Act: CB 1595-1601.
Further, on 10 August 2019, Mr Batten (MGS) sent a letter to the Commissioner of Taxation seeking an application for a private ruling and an application for exercise of discretion pursuant to s 152-80(3) ITAA 1997 in respect of the Arndell Park property: CB 1311.
The relevant facts as detailed in the letter noted that the deceased and Reno Senior had operated a farming business on the property immediately upon its acquisition (prior to 20 September 1985) for approximately 13 years: CB 1312.
The letter further recited that since the mid-1980s, the Arndell Park property was "leased to an arm's-length third party": CB 1313.
On 13 August 2019, Mr McCabe emailed Elderlaw confirming that settlement of the sale of Property 430 would take place on Friday, 23 August 2019 and that he expected that a further interim distribution to each of the beneficiaries would then take place during the course of the following week beginning 26 August 2019: CB 1320.
On 15 August 2019, Elderlaw wrote to Turner Freeman noting that unless there was written confirmation by 5 PM on 23 August 2019 that sale of Property 430 had settled, and the purchaser had paid both the settlement sum and interest, their clients would file the proposed statement of claim. The letter requested a response by 5 PM on 19 August as to when and where the clients could inspect (by 23 August) the books and records of the estate. It also requested, prior to 5 PM on 19 August, a written commitment from Mr Batten (directly) that before 25 August 2019 he would finalise all outstanding applications he had been asked to prepare, failing which it was noted that Elderlaw's clients would engage their accountant in relation to the stamp duty issue: CB 1321.
On 15 August 2019, Mr Batten emailed Ms Brewster the letter he had previously sent to her noting that the matter was "a little urgent": CB 1323.
On the same day, Ms Brewster emailed Mr Batten noting that the matter had been allocated a reference number and, in particular, that the letter had only been received by the (Duty Services Unit) office on 14 August and it would take approximately 3 to 4 weeks for the matter to be assessed suggesting that he follow-up progress of the matter through proper processes in two weeks' time. It was noted that a request to "escalate" the matter would require written reasons for urgency including implications if the matter was not escalated: CB 1325.
On 3 September 2019, Ms Fisher emailed Mr Batten regarding entitlement to rent in respect of the properties. He replied indicating that, in relation to Property 430, up until settlement the estate would be entitled to the rent to bear the expenses and, thereafter, once the property "passes to Martin and John on settlement", implied the rental entitlement was theirs from that point: CB 1341, 1343.
On 26 September 2019, Karen Lamont from Revenue NSW raised a requisition and requested the following: 1. The provision of a complete statement of appropriation of all estate assets, at market value, prepared by the executor/trustee; 2. The provision of valuations, prepared by a qualified valuer of all realty (or certified copies of any exchanged sale contracts if applicable); 3. The insertion of the amount of consideration on each attached transfer form; 4. The lodgement of a certified copy of Client IDs for each of the six beneficiaries; and 5. The lodgement of purchaser declarations for each of the six beneficiaries: CB 1602.
On 27 September 2019, Mr Batten sent an email to Ms Fisher requesting her to arrange for John and Martin to sign attached applications for exemption pursuant to s 274 Duties Act before appropriate witnesses in respect of their receipt as transferees of Property 430: CB 1360-1366.
On 30 September 2019, Mr Batten (MGS) wrote to Mr Spargo of the ATO as part of the application for a private binding ruling seeking a determination as to whether the Commissioner would exercise his discretion under s 152-80(3) ITAA 1997 to extend the time limit to allow the small business CGT retirement exemption to be applied in relation to the purchase of Property 430: CB 1367. Part of the factual background provided by Mr Batten to the Commissioner indicated that on Property 430, from the time that the property had been acquired until late September 2004, the deceased and Reno Senior had operated a farming business on the property and, from 8 September 2004 until 21 October 2014, a primary production business was operated by RPM Cam Pty Ltd as trustee for the RPM Trust on the property: CB 1368.
On 25 November 2019, Mr Batten (MGS) provided a letter of advice to John as executor regarding the five residuary properties. The letter, in summary, noted that: 1. the ATO had advised him that it would refuse to rule in favour as to the 50% interest acquired by the deceased in relation to the Arndell Park property and that the concessions provided for in Div 152 of the ITAA 1997 are not available to the capital gain derived on the sale of the Arndell Park property; 2. the Commissioner had exercised his discretion in relation to the extension of time for the application of Div 152 of the ITAA 1997 in respect of Property 430; and 3. in relation to whether Lots 8, 111 and 112 would be able to be assessed pursuant to s 63(1)(a)(ii) Duties Act that Revenue NSW sent a requisition on 26 September 2019 and that, now that the ATO had provided its ruling in respect of the Londonderry property, further information could be provided to Revenue NSW: CB 1412-1413.
On 30 November 2019, Mr Batten (MGS) issued invoice number 1720 in the sum of $49,747.50.

[131]

Some comments regarding the invoice 1720 items

There are 12 items in respect of this invoice.
Contrary to the claims in relation to invoice 1620, it is clear that at least some of the items claimed in this invoice are referable to advice regarding the rulings sought from Revenue NSW with a view to obtaining concessional duty exemption for the in specie beneficiaries of Lots 8, 111 and 112.
I have accepted above that, in light of the definition of "tax agent service" (including advising an entity about liabilities or obligations that arise or could arise under a taxation law or representing an entity in their dealings with the Commissioner) it seems to me that Mr Batten's work arguably falls within the meaning of a "tax agent service".
However, whilst work in relation to advising an entity about liabilities or obligations that arise or could arise under a taxation law or representing an entity in their dealings with the Commissioner is very arguably work which under Commonwealth legislation falls within the description of "tax agent services", there is a preliminary question regarding whether work carried out by an accountant or registered tax agent, in relation to the Duties Act, which is not a "taxation law" as defined, might involve someone in the position of Mr Batten impermissibly "engaging in legal practice" such as to contravene s 10 Uniform Law.
Subject to that question which I address below, I make the following comments regarding the items in invoice 1720.
The first item of the invoice relates to work carried out on 24 October 2018. There is no particular documentation relating to this other than the line item in the invoice.
The work refers to a discussion with Ms Fisher and Pat McCarthy in relation to GST applying to the sale of the Arndell Park property.
The contract for sale on its front page did not contain particular detail regarding the GST amount: CB 698. The second page of the contract noted that, subject to clause 13, the price includes GST (if any) payable by the vendor and expressly states that the sale is not a taxable supply because the sale is by a vendor who is neither registered nor required to be registered for GST: CB 699.
The contract for sale in relation to the Arndell Park property has a specific provision (clause 45) relating to GST which was deleted from the contract: CB 702. Clause 48 provided as follows (CB 703): Notwithstanding that this contract says that this sale is not a taxable supply, in the event the within sale is a taxable supply whether in whole or in part for the purposes of the GST Act, if the vendor serves a letter from the Australian Taxation Office stating that the Vendor has to pay GST on the supply, the Purchaser must pay to the Vendor, in addition to the purchase price, the amount of GST assessed. This Term shall not merge on completion.
The evidence does not disclose the content of the discussion between Mr Batten and Ms Fisher and Pat McCarthy. Nonetheless, in light of the above contractual provisions, it seems to be possible that John as executor required some advice on GST and there is insufficient evidence for me to form the view that this item did not relate to the estate.
In light of the definition of "tax agent service" including advising an entity about liabilities or obligations that arise or could arise under a taxation law or representing an entity in their dealings with the Commissioner, it seems to me that that work arguably falls within the meaning of a "tax agent service": s 90-5 TAS Act.
The second item being the advice given on 26 November 2018 (CB 1206-1207) seems to me to clearly relate to duty liabilities in respect of the transferees.
In relation to the third and fourth items being work done on 8 May 2019 and 13 May 2019 there is no particular documentation relating to this other than the line item in the invoice.
The fifth, sixth and seventh items (7 July 2019, 13 July 2019 and 10 August 2019) all seem to me to relate to work, arguably work done referable to John's obligations as executor pursuant to the November 2018 Deed and in particular clauses 7 and 8.
The eighth and tenth items, relating to drafting on 10/11 August 2019 (CB 1311) and 30 September 2019 (CB 1367) an application for a private ruling from the ATO in relation to disposal of the Arndell Park property, specifically relate to an application for the Commissioner to exercise his discretion under subsection 152-80(3) ITAA 1997 to extend the time limit to allow the small business CGT retirement exemption to be applied.
In relation to the ninth item being referable to a meeting with John and Ms Fisher regarding the estate on 5 September 2019, there is no particular documentation relating to this other than the line item in the invoice.
The eleventh item relating to drafting a letter to John on 26 November 2019 concerning the state of the rulings from the ATO and application to Revenue NSW as to section 63 Duties Act seems to me to relate to work arguably work done referable to John's obligations as executor pursuant to the November 2018 Deed and in particular clauses 7 and 8.
In relation to the twelfth (and last) item being referable to a meeting with Ms Fisher to discuss progress of estate administration and income tax issues on 28 November 2019, there is no particular documentation relating to this other than the line item in the invoice.

[132]

Preliminary question regarding whether work carried out by a non-legal practitioner accountant or registered tax agent, in relation to the Duties Act, contravenes s 10 Uniform Law

There is, as noted above, a preliminary question which I note below regarding whether work carried out by an accountant or registered tax agent, in relation to the Duties Act (which is not a "taxation law" as defined) might involve someone in the position of Mr Batten impermissibly "engaging in legal practice" such as to contravene s 10 Uniform Law.
For the plaintiffs to succeed in relation to this issue there needs to be a determination as to whether the estate should not have paid for the work performed by Mr Batten on the basis that his work in relation to advising in respect of the application for exemption under the Duties Act involved Mr Batten impermissibly "engaging in legal practice".
I was not provided with specific submissions by reference to caselaw as to what is meant by "engaging in legal practice" and in particular whether work in relation to the Duties Act is such "engagement".
There are decisions of Courts in NSW (and, indeed, other jurisdictions) dealing with the meaning of various antecedent forms of the phrase "engage in legal practice" in s 10 Uniform Law as well as NSW decisions dealing with s 10 Uniform Law itself. Those decisions emphasise that: 1. the expression "engage in legal practice" means "engage in legal practice as a legal practitioner" (Felman v Law Institute of Victoria [1998] 4 VR 324 (Felman v Law Institute of Victoria) at 352 per Kenny JA (Winneke P and Brooking JA agreeing); Council of New South Wales Bar Association v Dwyer [2015] NSWCA 302 at [12] per Emmett JA (Basten and Ward JJA - as their Honours then were - agreeing); 2. what constitutes engaging in legal practice is a question of fact to be determined objectively in each case (Council of the Law Society of New South Wales v Australian Injury Helpline Ltd (2008) 71 NSWLR 715; [2008] NSWSC 627 (Council of the Law Society of New South Wales v Australian Injury Helpline Ltd) at [55] per Adams J; Overdean Developments Pty Ltd v Garslev Holdings Pty Ltd (No 3) [2021] NSWSC 1482 at [792] per Williams J; Vaughan v Legal Services Board [2008] VSC 200 at [5] per Pagone J); 3. there is no bright line in separating the permissible legal work from the impermissible legal practice (Council of the Law Society of New South Wales v Australian Injury Helpline Ltd at [55]); and 4. some activities (such as the giving of advice) regularly performed by legal practitioners are also frequently lawfully performed by persons who are not legal practitioners (including, e.g., accountants, financial advisors and tax agents etc) (Kekatos v The Council of the Law Society of New South Wales [1999] NSWCA 288 at [18] per Giles JA (Handley and Powell JJA agreeing); Felman v Law Institute of Victoria at 350).
It is evident by reference to the above decisions that what I have described as the preliminary question is a contestable issue.
Where findings may affect, even indirectly, non-parties' interests or for the taking of an account or making of an inquiry in proceedings for the administration of the estate of a deceased person, notice should be given to such person pursuant to r 46.12 UCPR so to permit the person to have an opportunity to intervene in the proceedings to seek to protect their interests: Juul v Northey at [211]-[215], [241]-[245] per McColl JA (Basten and Campbell JJA agreeing).
There are several problems with me making a determination on the issue of invoice 1720.
First, whilst Mr Batten was called to give evidence in the proceedings, he is not joined to the proceedings and did not have the rights of a party to the proceedings.
Secondly, there were no particular submissions made by reference to statutory construction principles and any relevant case law regarding whether the sort of work carried out by Mr Batten in relation to advising in respect of the application for exemption under the Duties Act involved Mr Batten impermissibly "engaging in legal practice".

[133]

Outcome regarding invoice 1720 issue

I consider that there is at least a tenable argument that the eighth and ninth items arguably fall within permissible work pursuant to a "tax agent service".
I further consider that, subject to the question regarding the provisions of s 10 Uniform Law, by the terms of clauses 7 and 8 of the November 2018 Deed John in his capacity as executor has, in dealing with the residuary estate, reached a compromise with the respective beneficiaries (including himself) whereby he undertook to effectively facilitate applications to reduce the burden of the beneficiaries in relation to transfer duty or CGT including: 1. providing instructions to Mr Batten to make applications to Revenue NSW in relation to any "stamp duty" exemptions; and 2. providing the other residuary beneficiaries with advice and documentation in the estate's possession or control relevant to "stamp duty" or CGT.
John has a power pursuant to s 49(1)(c) Trustee Act to compromise a claim on the estate.
It seems to me that the entry by John as executor into the deed with other residuary beneficiaries (including himself) in relation to the in specie properties is an example of the exercise of that power.
The fact that the residuary beneficiaries would be liable themselves to pay any stamp duty (clause 9) did not mean that acts taken by John to seek advice from Mr Batten in relation to facilitating the "reducing the burden of" the residuary beneficiaries was work not appropriately done on behalf of the estate. Rather, it seems to me it was work consistent with his obligations in respect of clauses 7 and 8.
However, in light of the fact that (a) Mr Batten was not joined to the proceedings, (b) there is a contestable issue regarding whether Mr Batten's work and advice in respect of the application for exemption under the Duties Act involved him impermissibly "engaging in legal practice", and (c) I received no express submissions in the manner I have described above, I expressly refrain from making any determination in relation to whether John, by reason of s 10 Uniform Law impermissibly paid monies from the estate to discharge Mr Batten's invoice 1720.

[136]

The process of seeking duty exemptions

Following the signing of the November 2018 Deed, on 26 November 2018, Mr Batten provided Mr McCabe with further advice: CB 1206. On 4 December 2018, there was the correspondence I have referred to regarding Elderlaw seeking some form of indication regarding the work to be done by Mr Batten and a breakdown of his costs.
On 10 December 2018, Turner Freeman advised the residuary beneficiaries that John had provided instructions to Mr Batten to proceed with the applications in relation to concessional duty on the transfers and requested provision of the signed transfers: CB 1209.
On or about 18 December 2018, Mr Lewis signed the transfer on behalf of Carol and Reno and Elderlaw provided this directly on that day to Mr Batten: CB 1210-1211.
Between approximately 9 January 2019 to 19 February 2019 (CB 1217), Mr Batten was away from Sydney (apparently focussing on building works to a property which were supposed to start on 9 January 2019).
On 14 February 2019, Mr McCabe corresponded with Mr Batten. At that stage, he appears to have been in the process of establishing or at least exploring the establishment of a unit trust for Martin and John to receive Lot 8: CB 1212.
On 14 February 2019, Mr McCabe, in email correspondence with Mr Batten, expressed his understanding that Mr Batten was in the process of establishing a unit trust for Martin and John to be an entity which would receive, apart from Lot 8, also Property 430: CB 1212.
On 21 February 2019, Mr Batten responded to Mr McCabe apologising for not being in touch sooner noting that he had only in the last few days made it back to Sydney. He indicated that he would be in the office the following week and would then be in touch. He noted that, in relation to Lot 8, Martin and John should be the transferees and then the property could be moved into a trust subsequently without a duty impost: CB 1217.
On 7 March 2019, Mr Batten had prepared the necessary documentation for John and Martin in relation to registration of a company Renopat: CB 1217C-1217E. It appears evident that this was the company proposed to be the trustee of a unit trust to receive the properties.
On 8 March 2019, Mr Batten responded to a query from Ms Fisher regarding the application of s 274 Duties Act in relation to Property 430: CB 1218.
On 22 March 2019, John and Martin signed the relevant purchaser/transferee declarations in respect of Property 430: CB 1219-1229.
On 27 March 2019, Turner Freeman provided Mr Batten with the original transfer, contract and purchaser/transferee declarations for Martin and John in respect of Property 430: CB 1230-1231ZZG.
On 3 June 2019, Elderlaw wrote to Turner Freeman regarding various issues. The letter noted that it was about seven months since John had executed the November 2018 Deed under which he was obliged to affect the transfer to Carol and Reno of Lot 112: CB 1232.
For the period from 4 July 2019 to 26 September 2019, I have set out above in dealing with Issue 13 the events covering the steps taken by John and his solicitors and Mr Batten to obtain duty rulings regarding the in specie transfers of the Londonderry lots which include Lot 111.

[139]

Determination

The Elderlaw letter dated 3 June 2019, noting that it was about seven months since John had executed the November 2018 Deed, suggests there had been untoward delay. The factual context that I have recited above suggests that there was certainly activity in terms of work being carried out by Mr Batten.
When that activity is analysed (leaving aside the period from about 9 January to 19 February 2019, when Mr Batten was away from Sydney) it falls essentially into three distinct periods and categories.
First, there was some advice from Mr Batten following the execution of the November 2018 Deed and the eventual provision by Elderlaw to Mr Batten on 18 December 2018 of the transfer signed by Carol and Reno.
Secondly, leaving aside the intervention of Christmas and New Year, I infer that from about early to mid-January 2019, there was preparation required in relation to the listing for hearing of the revocation proceedings on 29 January 2019 with an estimate of three days. Although on the first day of the hearing the plaintiff sought leave to discontinue the proceedings, I accept that there would likely have been preparatory work which required John's attention up to the end of January 2019.
Thirdly, from approximately Monday, 3 March 2019 until 3 June 2019, the focus of Mr Batten's work appeared principally to relate to advice he was giving and steps he was taking regarding setting up a unit trust for Martin and John, and otherwise connected with Property 430, preliminary to lodgement of applications to Revenue NSW for concessional duty treatment for them.
The letter from Elderlaw dated 3 June 2019 to Turner Freeman appears to have been the catalyst for Mr Batten to progress the applications for lodgement of the necessary documents to Revenue NSW which occurred on 15 August 2019: CB 1325.
Certainly, from the perspective of Carol and Reno, there was a significant gap of time in which the application seemingly did not progress as between 18 December 2018 and 15 August 2019.
If that were the only consideration, it seems to me that there would be substantial force in the claim that there was undue delay by John in ensuring that Lot 112 was transferred in a context in which the application for concessional duty was addressed.
However, clearly there were other aspects of the administration that John was attending to during the period between December 2018 and August 2019.
As I have noted above, from about 21 February 2019, when Mr Batten responded to Mr McCabe's email, until 29 March 2019, it appears that John's focus was in relation to steps connected with progressing the duty application in respect of Property 430.
The evidence leaves unexplained any particular activity by John and Mr Batten in the 10 weeks between 27 March 2019 and 3 June 2019.
Leaving aside the focus of work of Mr Batten in relation to John and Martin's purchase or interest in Property 430, there is a gap of about three months between 1 March 2019, when Robb J delivered reasons for judgment in the revocation proceedings, and 3 June 2019, when Elderlaw corresponded with Turner Freeman.
The reasons for delay in progressing Carol and Reno's application for concessional duty during that period is not particularly addressed by John in the evidence.
For their part, as far as I can see, Carol and Reno did not cause their solicitors Elderlaw to specifically correspond about the matter in the seven-month period between the letter from them on 18 December 2018 until the letter dated 3 June 2019.
Ultimately, the position appears to be that Revenue NSW will not be able to make a determination until final accounts are provided.
Final accounts will not be able to be provided until administration of the estate is complete and that will not occur until at least these proceedings are completed.
I consider the eight-month delay between 18 December 2018 and the lodgement on 15 August 2019 in John taking steps to ensure that Mr Batten made an application to Revenue NSW was delay beyond what might be regarded as reasonable.
Despite, the plaintiffs' own lack of follow-up during that period, which is also not particularly explained, I do not regard John's delay as being satisfactorily explained.
It seems to me that that lack of explanation for the delay bears adversely upon John's claim for commission.

[140]

Summary of determination regarding wilful default issues (1-15)

In summary, I have found that: 1. Issue 1 - I am not persuaded that there was any significantly undue delay by John in applying for and obtaining the grant of probate. 2. Issue 2 - Whilst there is an explanation as to what occurred in relation to the IAG shares, there is, in my view, no satisfactory explanation for the delay by John of almost 5 years in arranging for sale of the IAG shares. 3. Issue 3 - I am not persuaded that there was a breach of John regarding rental of the Arndell Park property in the manner suggested by the plaintiffs. However, I consider there was delay by John for a period of about four months (mid-August 2018 to mid-December 2018) in considering and taking any steps to obtain a market rate of rent for the Arndell Park property. 4. Issue 4 - I am not satisfied that it has been demonstrated that there is a wilful default by John in relation to not arranging for transfer of the specifically gifted properties earlier than he did. 5. Issue 5 - I am not satisfied that it has been demonstrated that there is a wilful default by John in relation to not appointing the selling agent earlier than he did or that he had delayed unreasonably in doing so. 6. Issue 6 - The taking of an interest in Property 430 in the manner John did was a breach by John of his duties as executor. There was no informed consent, at least of the plaintiffs, to John taking that interest. 7. Issue 7 - The failure to invest the sum of $300,000 as a deposit was a breach by John of his executorial duties. 8. Issue 8 - I am not persuaded that there was commercial use of Property 430 by John and Martin. 9. Issue 9 - There was no adequate explanation by John as to delay in completing the purchase of Property 430 nor any adequate reason for not issuing a notice to complete soon or shortly after the specified completion date of 2 August 2018. Rather, there was an agreement between Martin and John to reschedule settlement to timing after stamp duty advice was received. The consequential delay on the part of John amounts to a wilful default. 10. Issue 10 - The lack of proper settlement adjustments was irregular. However, in the absence of any evidence which demonstrates what the adjustments ought to have been and whether such adjustments ought to have been in favour of the estate, I make no finding as to whether this complaint constituted a breach by John. 11. Issue 11 - The failure of John to sell the Telstra shares promptly resulting in a lesser price for the value of the shares that had been evident as at the time of the inventory of property amounts to a default. In the absence of any explanation the failure to disclose the shares of Reno Senior's estate as an asset of the deceased's estate, it seems to me that those failures amount to a wilful default. 12. Issue 12 - Whilst I accept that the estate paid an invoice in the sum of $13,097 for renovation work in relation to David's property, I am not positively satisfied that no adjustment has been made for that. However, the paucity of documentary evidence concerning demonstrating any adjustment to the share that would be distributed to David is concerning. 13. Issue 13: 1. I am not persuaded that the use of estate funds to pay Mr Batten's invoice 1620 was work for John's personal interests nor an impermissible use of estate funds. 2. I have declined for reasons of procedural fairness to make any determination in relation to the use of estate funds to pay Mr Batten's invoice 1720. 1. Issue 14 - In light of my findings as to Issue 13, there is no proved default by John in his failure to seek reimbursement from Mr Batten. 2. Issue 15 - The eight-month delay between 18 December 2018 and the lodgement on 15 August 2019 in John taking steps to ensure that Mr Batten made an application to Revenue NSW was delay beyond what might be regarded as reasonable

[144]

Factors relevant to determining the amount (if any) of commission

Where commission is claimed pursuant to statutory provisions, at least in New South Wales, the enquiry is framed not in terms of any entitlement of the executor but rather in terms of a discretion in the Court: GE Dal Pont, Law of Executors and Administrators (2022, LexisNexis) (Law of Executors and Administrators) at 343. The exercise of jurisdiction under s 86 to grant commission is subject to the filing or passing of accounts: s 86(2) PA Act.
Generally speaking, the factors which the Court will take into account in assessing the amount of commission if any include: 1. The pains and trouble involved (i.e. what has been done by the executor in the performance of executorial duties); 2. Promptness in the filing of accounts; 3. Whether any other benefits were received by the executor out of the estate; 4. The complexity of the estate; and 5. Whether there are any breaches of executorial duties and whether any refund has been made: see Stephen Janes, David Liebhold and Paul Studdert, Wills, Probate and Administration Law in New South Wales (2nd ed, 2020, Thomson Reuters) (Wills, Probate and Administration Law in New South Wales) at 883-884.
In general, the Court will take into account a wide variety of relevant factors. Ordinarily, an executor should attend to their duties personally except in cases where a prudent person would in their own affairs employ some other person: s 53 Trustee Act.
Executors, for the purposes of the Trustee Act, are included within the definition of trustees by reference to the definition of legal personal representatives: s 5 Trustee Act.
Executors have, as such, a statutory power to employ auditors (s 51) and valuers: s 52 Trustee Act.
The quantum of commission is, very broadly speaking, determined having regard to the above-mentioned factors but by reference to the assets and income of the estate.
Leading texts suggest that, ordinarily, commission varies from 1% to 5% on income collections, from 0.25% to 2.5% on capital realisations and between 0.25% and 1% on assets transferred in specie but based on the value sworn in an inventory of property not the value at the date of transfer: Wills, Probate and Administration Law in New South Wales at 883.
Specifically, the Court is not constrained to calculate a commission by way of percentage: Re Estate Gowing (2014) 17 BPR 32,763; [2014] NSWSC 247 at [26], [45]-[49] per Lindsay J; Re Estate Ford at [56].

[145]

Circumstances in which commission might be denied

There may be circumstances in which an executor applies and, having regard to the Court's assessment of the standard of what is just and reasonable by reference to the executor's pains and trouble and administration, may deny any remuneration.
Further, an executor's conduct might have the effect of significantly moderating the amount of commission that is sought by an executor for such pains and troubles.
Understanding how the Court might act in this regard is guided, but not constrained by caselaw.
A convenient summary of considerations where commission has been denied or reduced is set out by Dal Pont in dealing with remuneration of executors: Law of Executors and Administrators at 362-363.
It is not hard to find strong judicial statements suggesting that a very high standard of conduct is expected from executors. Thus, Walker J in In the Will of Henry Sherringham (1901) 1 SR (NSW) 48 (In the Will of Henry Sherringham), at 49, remarked that representatives must, to be allowed commission, show that their conduct of the affairs of the estate is free from any suspicion and that there has been no neglect on their part which has in any way prejudiced the estate. Whilst the Court is mindful of the nature of the high office of the calling of executor, the Court must not be distracted from applying the statutory standard.
Some guide as to the type of circumstances which might justify denial of commission is gleaned from the caselaw.
Thus, where an executor's misconduct goes to the core of his duties and reveals a disdain for the role and office, commission may be denied.
In In the Will of James Greer, Street J refused an application for commission where an executor purchased two out of four farming blocks sold at auction: at 23.
The reasoning of Street J in refusing commission is enlightening.
The purchase was consented to not merely by the co-executor but also all of the beneficiaries except one beneficiary who was a minor (who was unable to consent).
The executors submitted that the purchase was beneficial from the point of view of the estate and that the fact that one of the vendors bid at the sale, rather than prejudicially affecting it, increased competition: at 22.
Those matters were regarded as beside the point. Street J expressed no opinion as to whether the course taken by the purchasing executor was beneficial to the estate or otherwise. His Honour noted that he did not have sufficient information to enable him to express an opinion on that point but even if it was beneficial, he was not concerned to enquire into it.
The critical matter was that the executor had placed himself in a position in which his interest conflicted with his duty as executor (and vendor) to obtain the highest price attainable, while as a purchaser his interest would lead him to endeavour to purchase at as low a price as possible. His Honour considered that the executors had deliberately chosen to disregard their duty in a most important particular and, in doing so, had acted in a way which was described as "reprehensible" to such an extent as to justify the deprivation of commission: at 23.
In Jones v Estate of Farley (Supreme Court (NSW), Santow J, 10 October 1997, unrep), an executor who failed to file accounts and have them passed for a period of seven years and was removed by the Court for lack of appropriate attention to estate affairs was nonetheless permitted commission having spent extensive time and effort in supervising the management of property and effecting its beneficial sale. A critical consideration appears to be the fact that information was provided to beneficiaries on an annual basis and they were not materially prejudiced in the circumstances: at 37.
In Atkins v Godfrey [2006] WASC 83, Le Miere J considered the question of whether commission should be awarded in a context where there were complaints against an executor.
One of the complaints was that the executor had failed to bring his claim for commission promptly or to apply to settle the account properly so as to enable a distribution of the estate in a timely fashion.
His Honour found that there was a degree of delay and the executor had failed to pursue the finalisation of the estate with the expedition he should have and that the executor had allowed the administration of the estate to drag on longer than it should have. His Honour found that it did not amount to a breach of trust, but it was a failure by the plaintiff to pursue the administration of the estate with due expedition. His Honour held that the commission allowed to the executor should reflect that fact and reflect the fact that the estate should have been finalised earlier than it had been: at [67]-[68].
There are other examples, including one where an executor who engaged in inordinate delay for three decades (where probate had issued in 1970 but there was no distribution until 2004) was refused commission: see Chiro v Linton (No 2) [2009] SASC 197 at [21] per Lunn J. His Honour, in response to an argument to the effect that at least part of the delay could be explained by uncertainty as to who would take under the Will, considered that the executor should have applied for advice from the Court (at [16]) and was at fault in not distributing the estate by no later than mid-1972 and allowed commission only up to that date: [23].
In Re Buckingham (2016) 51 VR 453; [2016] VSC 757 (Re Buckingham), McMillan J refused commission in circumstances where there had been significant losses caused by the executor in his administration of the estate, significant difficulties caused by him as a result of his failure to account properly and significant claims relied upon by him that did not relate to the administration of the estate: at [92].
Her Honour noted that whilst there would be some pains and troubles to justify an executor claiming commission in relation to telephone calls or emails to solicitors or accountants or considering correspondence in respect of estate matters, most of the administration work had been done by professionals who charged fees. In those circumstances it was regarded as inappropriate and unreasonable to expect that such work would be remunerated twice from the estate: at [92].
Commission was refused and the application dismissed having regard to a combination of a number of matters including substantial delays, withholding of information concerning the administration of the estate, providing confusing and inaccurate administration accounts, claiming for a significant amount of time for work done for the executor's own benefit and failing to administer the estate in a timely and cost-effective manner causing significant financial loss to the beneficiaries: at [93].
Indeed, the combination of those matters was regarded by her Honour as removing any basis for the executor receiving even a small amount by way of commission: at [93].
Finally, another example of a case in which commission was refused is Re Badstuebner (deceased) (2020) 4 Qd R 490; [2020] QSC 144 (Re Badstuebner).
In that case, the deceased, by his Will, left his residual estate to his four children in equal shares and appointed one of them as executor. The estate was uncomplicated. Probate was granted in June 2018 and from then until at least November 2018, the executor pursued a distribution of the estate which, via a deed he propounded, would have seen him receive the ownership of the deceased's home as well as other vehicles and chattels. That attempt failed. Commission was denied having regard to various factors which included: delayed administration in the second half of 2018 by which the executor self-interestedly pursued ownership of the deceased's house, the executor threatening not to make an interim distribution if a proposed deed was not executed, a sustained pattern of breaches thereafter which were ultimately regarded as being very serious and deliberate abuses of the position of control entrusted to the executor: at [94]-[100] per Henry J.

[146]

Wilful default principles

Mr Crossland submitted (at POS [60]) that the duty of an executor is to act with reasonable diligence in both realising the estate's assets and discharging debts, and also in distributing the estate to those entitled: Ford v Princehorn at [28] per White J, citing Mavrideros v Mack (1998) 45 NSWLR 80; [1998] NSWCA 286 at 104 per Sheller JA (Priestley and Beazley (as her Excellency then was) JJA agreeing); Garthshore v Chalie (1804) 10 Ves Jun 1; 32 ER 743; and In re Tankard; Tankard v Midland Bank Executor and Trustee Co Ltd [1942] Ch 69; see too Brooks v Young (2018) 131 SASR 365; [2018] SASCFC 81 at [86] per Doyle J (Kelly J agreeing), Walker v Walker [2022] NSWSC 1104 at [64], [67] per Richmond J; See also GE Dal Pont, Law of Succession (3rd ed, 2021, LexisNexis) at [12.1] and [14.27]. See also In re Speight; Speight v Gaunt (1883) 22 Ch D 727 (it was also an instance of wilful default).
Mr Crossland submitted (POS [49]-[50], [74]-[78]) that: 1. The executor must affirmatively satisfy the Court of their active participation in the administration (i.e. "trouble and pains"). Where there have been "substantial delays, withholding of information concerning the administration of the estate, providing confusing and inaccurate administration accounts, claiming for a significant amount of time for work done for [the executor's] own benefit and failing to administer the estate in a timely and cost effective manner, causing significant financial loss" (which is what the plaintiffs alleged against John) commission should be refused: Re Buckingham at [93] per McMillan J. 2. The executor must show that their conduct of the affairs of the estate is free from any suspicion, that there has been no neglect on their part which has in any way prejudiced the estate, and their conduct is absolutely above board and not in any way reprehensible: In the Will of Henry Sherringham at 49 per Walker J; In the Will of James Greer at 23 per Street J. 3. Where the estate has had and paid for the services of professional lawyers, a professional accountant, a professional tax adviser, and multiple real estate agents to carry out the day-to-day work of the estate, the executor will have taken less pain and trouble since the work was substantially accomplished by paid professionals: Re Badstuebner at [23] per Henry J. 4. In an account on the basis of wilful default an executor must account not only for what he has received but also for what he might without his wilful neglect or default have received: Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146; [2002] NSWCA 22. 5. Conduct need not involve conscious wrongdoing in order to constitute a wilful default: Re Tebbs (deceased); Redfern v Tebbs [1976] 2 All ER 858 at 863; [1976] 1 WLR 924 at 929-930 per Slade J.
Mr Ellison SC did not appear to cavil with those propositions.

[147]

Principles regarding accounts in common form and accounts on a wilful default basis

The principles regarding the taking of accounts in common form and the taking of accounts on the basis of wilful default are set out in various texts and caselaw. The principles were discussed at length in Juul v Northey at [180]-[243] per McColl JA. It is clear from the decision in Juul v Northey that whilst there are important differences between executors and trustees, the following principles regarding accounting on the basis of wilful default are applicable as between a beneficiary and executor.
In summary, and omitting citations, the principles are as follows: 1. Under an order for taking accounts in common form the accounting party accounts only for what has actually been received and disposed of. The other party to the accounting can challenge the accounting party's account by asserting that more was received (surcharging) or by asserting that less was disposed of (falsifying). 2. Under an order for taking accounts on the basis of wilful default (or wilful neglect and default) the accounting party must account not only for what has actually been received, but also for what should have been received: that is, for what would have been received if the relevant duties of the accounting party had been properly discharged. 3. Wilful default must (generally) be pleaded with particulars of the allegation of wilful default either in the pleadings or set out in a supporting affidavit or witness statement. 4. The breach of duty need not be conscious wrongdoing and wilful default is not co-extensive with breach of trust: there may be a breach of trust which is not wilful default. 5. A plaintiff must prove, inter alia, that the defendant is an accounting party, and that he, the plaintiff, is entitled to some sum from the defendant, although he is uncertain what is the quantum of that sum. He must do more than demonstrate that he might be owed some money, or that he wants to have a kind of general discovery. 6. As such the decree for an account on the basis of wilful default is not a mere direction to inquire and report. It is a decree affirming his rights, only leaving it to be inquired into, how much is due to him from the party accounting. 7. An executor or administrator is in the position of a gratuitous bailee, who cannot be charged with the loss of his testator's assets without wilful default. 8. Wilful default in such a context is an omission or passive breach of duty by an executor to do something which, as a prudent executor, he ought to have done - as distinct from an active breach of executorial duties, that is to say something which the executor ought not to have done. 9. Examples include: simple failure to get in an asset of the estate, sale of a trust asset at an undervalue or less than the full value of the asset and failure to obtain rent for a stranger's occupation of a trust property. 10. To make an executor account on the footing of wilful default, the plaintiff must plead that assets might have been received but for the default of the representative and must prove at least one example of wilful default on the part of the defendant. 11. The allegation of wilful default must be made good at the hearing and cannot be left for decision at some later stage of the action. 12. The burden of proof lies on the plaintiff to adduce proper evidence to show not only such a loss, but a loss under such circumstances as to show default on the part of the executor such that but for the wilful neglect or default of the defendant, an item might have been received. 13. The executor bears an evidentiary onus in seeking to resist the finding of wilful default and, in that respect, they could seek to demonstrate action (whether by proceedings or otherwise) for the recovery of an asset would be fruitless. 14. A wilful default order requires the defendant to replenish funds wrongfully depleted by him or her and in that sense to make restitution for the benefit of the plaintiff. 15. An order that an account be taken and that the defendant pay the amount found to be due on the taking of such accounts is a final order which cannot later be varied (absent any relevant statutory provision). 16. An order merely for the taking of accounts, under which the proceedings are adjourned for further consideration will not determine the plaintiffs' claim for relief and is an interlocutory order, which will not be a "perfect judgment" until an order that money be paid. 17. It is not open to the primary judge to review and reconsider what he had decided at the wilful default hearing. 18. Where findings may affect, even indirectly, non-parties' interests or for the taking of an account or making of an enquiry in proceedings for administration of the estate of a deceased person, notice should be given to such a person pursuant to r 46.12 UCPR so as to permit the person to have an opportunity to intervene in the proceedings and seek to protect their interests. 19. The procedure for the removal of executors differs from that for the removal of trustees. 20. Removal of executors is achieved by the Court, in its probate jurisdiction, revoking the grant of probate upon a proper case being established. Although the "sorts of situation that can count as a 'proper case' are not rigidly confined" generally the Court will exercise its discretion to revoke a grant of probate if the due and proper administration of an estate has either been put in jeopardy or prevented either by reasons of acts or omissions on the part of the executor or by virtue of matters personal to the executor, for example, mental infirmity, ill health, or by virtue of the proof of other matters which established that the executor was not a fit and proper person to carry out the duties he or she had sworn to perform. 21. The Court has an inherent jurisdiction to remove a trustee where the welfare of the beneficiaries and of the trust estate requires such a remedy, a condition which is said to be satisfied where the Court considers that the continuance of the trustee in the trust would prevent its proper execution. 22. If a Court concludes that an executor has been guilty of wilful default, and that the occasion of wilful default relates to matters personal to an executor, such as where the executor owes (but denied owing) money to the estate, the executor ought to be removed from that role to ensure an independent legal personal representative can consider whether, in light of the finding, they should take proceedings to recover the funds found to be owing to the estate. 23. Any such newly appointed independent legal personal representatives would (because estate assets had not been got in) be administrators de bonis non administravit, rather than executors.

[148]

Principles regarding pausing administration pending litigation

Ordinarily, if there is an issue regarding an executor dealing with assets whilst dealing with a pending family provision claim, a proposal is put forward or negotiated between the respective competing and affected parties and some acceptable regime agreed to. If there is doubt regarding what an executor may prudently do, then it is open to the executor to apply to the Court for advice or a determination regarding the matter.
In In re Ralphs (deceased); Ralphs v District Bank Ltd [1968] 1 WLR 1522, Cross J, at 1525, said about trustees in a difficult position: They should form their own view, with the assistance, of course, of their legal advisers, as to the payments which could properly be made, and if they are not prepared to make such payments on their own responsibility, they should ask the parties who might conceivably be affected ... for their consent. If such consent is not forthcoming the executors can apply for the court for leave to make the payment in question, and the court, if it thinks that any withholding of consent was unreasonable could throw the costs of the application on the party to blame.
During the hearing I referred (T 310) to the decision of Young CJ in Eq (as his Honour then was) in Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305. His Honour at [16] referred to the passage of his Lordship, Cross J, above and stated that: That passage throws up the principle that trustees cannot merely take the view that if there are contested proceedings they cannot do anything in and about the estate, particularly making any interim distributions, until all those problems are resolved. It is the duty of the trustees to direct their minds to the proper administration of the estate. Everyone knows it is difficult where there are warring members of a family who will not budge from their positions, but it needs to be done. If the trustee is to seek consent he or she has to make a decision as to what should happen and, if necessary, seek the imprimatur of the court.

[149]

The wilful default claims

Mr Crossland indicated that the plaintiffs rely upon the matters set out in their Points of Defence document: POS [75] (especially at [22]). I note that the Point of Defence document was subsequently amended, and leave given for it to be filed in Court on 23 February 2023.
The amendment related to issues regarding the auction of Property 430 essentially to the effect that: 1. John did not inform beneficiaries until 18 June 2018 that an auction of Property 430 would be held on 21 June 2018; 2. John reached an agreement with Martin that if he was the successful bidder at the auction they would treat the bid as a bid also made on behalf of John or, alternatively, John promised Martin prior to the auction that if Martin was the successful bidder he would not have to pay a deposit but he did not make an equivalent promise to the other beneficiaries, with the consequence that Carol and Reno, believing that they would have to pay a deposit if they were the successful bidders, did not attend the auction: [22(n)].
I have considered the terms of the Amended Points of Defence. I do not propose to recite in detail the various defences which run to 7.5 pages.
In substance, the defences are: 1. the complaints raised against John identified within the issues listed in this judgment, with the effect that John delayed in his administration of the estate and preferred his own interests over those of beneficiaries; and 2. the fact that much of the work carried out by John involved assistance from professionals with minimal or no particular work carried out by him - in particular, disputing that John regularly consulted with such professionals.
Mr Crossland especially relied upon two instances of John's conduct as giving rise to wilful defaults.
First, he submitted that failure to obtain rent or commercial or non-nominal rent for estate property is an instance of wilful default: Bartlett v Barclays Bank Trust Co Ltd (No 2) [1980] Ch 515 at 546 per Brightman LJ: POS [50]-[51].
Secondly, he submitted that John's conduct in relation to the purchase of Property 430 constituted a wilful default, and that an executor who purchases a portion of the trust estate at auction (without any entitlement to do so) may be disentitled to commission (citing In the Will of James Greer at 23 per Street J) a fortiori where, as here, the executor is an undisclosed purchaser of Property 430: POS [61], [74(b)], [76].

[150]

Defendant's submissions as to commission

John's affidavit evidence acknowledged that the process of lodging and proceeding with the objection to the land tax assessment delayed the administration of the estate. However, he claimed that this resulted in a very favourable outcome for the beneficiaries: CB 135 [38].
Mr Ellison SC submitted that a comparison of the Points of Claim filed 18 May 2022 by John and the Points of Defence filed 19 May 2022 by the plaintiffs shows that, save for the quantum of commission and the matters raised in paragraph 22 of the Points of Defence, there appears to be no dispute the executor is entitled to commission "presumably, significant": JOS [23].
Mr Ellison SC accepted that in respect of the claim for commission, John acknowledges a percentage may be inappropriate given the rise in real property values significantly inflating the value of the estate and in circumstances where it was events generally outside of the control of the executor which caused the significant rise: JOS [24].
In summary, Mr Ellison SC submitted on John's behalf (JOS [26], [50]-[55]) that the administration of the deceased's estate has been complex, time-consuming and has taken a significant emotional toll on John (CB 77 [20]): 1. It is eight and a half years since the death of the deceased (October 2014). 2. It is seven and a half years since probate was granted (October 2015). 3. The deceased held significant and detailed real and personal property. 4. The defendant has successfully defended two proceedings brought by Carol and other plaintiffs. 5. The defendant is defending the current proceedings for well over 3 years. 6. The defendant has had to arrange the sale of five parcels of realty and the deceased's water licence: CB 136-137. 7. The defendant has dealt with the OSR for land tax and a Trustee Act, s 46 Application and the ATO with regard to CGT: CB 977, 1367, 1379. 8. The initial land tax assessment of $334,000 (CB 546) was reduced to $164,000 and then to a nil assessment with the assistance of Ms Fisher: CB 134 [33]-[39], 1582. 9. The ATO provided a favourable private ruling with regard to CGT: CB 1399. 10. Transmission applications with regard to devises to specific beneficiaries were provided in November 2016 and by various dates in 2017, all realty had been transferred. 11. There were interim distributions of capital to each (residuary) beneficiary as follows: 1. April 2018 - $7,900 (CB 1345 ff); 2. July 2018 - $2.5 million (CB 1351 ff); 3. September 2019 - $500,000; and 4. January 2021 - $200,000. 1. The defendant successfully continued and concluded proceedings commenced by the deceased against Reno for recovery of a large debt: CB 366, 380. 2. It was entirely appropriate and necessary for John to engage professionals, the failure to engage those professionals bearing in mind the need to sell valuable realty and obtain land tax and CGT rulings would have been negligent. Whilst professional tasks were left to those professionals, John nevertheless had to give continuing instructions over a number of years and make many administrative decisions. 3. Whilst there was some minimal delay in transferring properties, the claims by Carol (and others) and especially her family provision claim justified a delay in transferring any asset in circumstances where any entitlement of any beneficiary could have been at risk by a successful family provision claim which would have been directed to a rearrangement of any part or parts of the deceased's estate. 4. Whilst the second litigation only dealt with the effect of the codicil (which removed Carol as a co-executor), the first litigation involving both family provision and rectification concluded in August 2016. The transferring of the specific devises commenced in November 2016 and concluded within months. 5. In respect of the whole of the administration of the estate and in respect of each beneficiary, there is no evidence any delay (however brief or lengthy) caused any prejudice.

[152]

Determination

I have accepted that in relation to a number of claims there are breaches of duty by John.
Whilst, as I have noted, Mr Crossland asserted that all of the wilful default claims bore upon John's claim to commission, the two particular matters that he identified as breaches which could critically underpin a denial of any claim by John to commission were in relation to the Arndell Park property and Property 430.
In relation to the claims by the plaintiffs regarding the Arndell Park property, I am not persuaded that there was a breach by John regarding rental of the Arndell Park property in the manner suggested by the plaintiffs. However, I consider there was delay by John for a period of about three months (mid-August 2018 to mid-December 2016) in considering and taking any steps to obtain a market rate of rent for the Arndell Park property: Issue 3.
In relation to the claims regarding Property 430, there were and are critical breaches by John. Specifically: 1. The taking of an interest in Property 430 that way was a breach by John of his duties as executor. There was no informed consent, at least of the plaintiffs, to John taking that interest: Issue 6. 2. Further, the failure to invest the sum of $300,000 as a deposit was a breach by John of his executorial duties: Issue 7. 3. There was delay in completing the purchase of Property 430 and an agreement between Martin and John to reschedule settlement to timing after stamp duty advice was received. The consequential delay on the part of John amounts to a wilful default: Issue 9.
The lack of proper settlement adjustments was irregular: Issue 10.
The eight-month delay between 18 December 2018 and the lodgement on 15 August 2019 in John taking steps to ensure that Mr Batten made an application to obtain concessional stamp duty on the part of the plaintiffs in relation to Lots 111 and 112 is delay which was beyond what might be regarded as reasonable: Issue 15.
On the other issues, in summary, I have found that: 1. There was no significantly undue delay by John: (a) in applying for and obtaining the grant of probate: Issue 1; (b) not arranging for transfer of the specifically gifted properties earlier than he did: Issue 4; and (c) in relation to not appointing the selling agent earlier than he did: Issue 5. 2. Whilst there is an explanation as to what occurred in relation to the IAG and Telstra shares, there is, in my view: (a) no satisfactory explanation for the delay by John of almost 5 years in arranging for sale of the IAG shares: Issue 2; and (b) prima facie loss to the estate by the delayed sale of Telstra shares: Issue 11. 3. I am not persuaded that there were unaccounted profits or impermissible commercial gain from use of Property 430 by John and Martin: Issue 8. 4. I am not positively satisfied that no adjustment has been made for $13,097 paid by the estate in relation to renovation work on David's property: Issue 12. 5. I am not persuaded that the claims made by the plaintiffs against John in respect of Mr Batten's invoices establish any relevant default such as would impact upon John's claim for commission: Issues 13 and 14.
No detailed submissions were directed by Mr Ellison SC to guiding the Court in assessing how, if I found any breaches by John, such breaches should moderate the amount of commission claimed.
In some respects, the forensic battle between the parties consisted of assertions by John to be awarded the commission claimed and assertions by the plaintiffs as to awarding no commission at all.
John accepted that there is nothing about the land tax objection application that delayed his rights to sell the Arndell Park property and Property 430 and that he could have sold those properties at any time after he became executor: T 120.9-21.
John understood from 2014 that his siblings were waiting for their distribution from the estate and did not want delays: T 88.49-89.2.
John accepted that he knew that it would be a "bad thing" for him to prefer his interests in the estate over those of the other beneficiaries although he denied that he had so preferred his interests: T 93.16-26.
There were serious breaches by John. It appeared evident, despite John's begrudging willingness to accept it, that requests from Carol's solicitors on 11 August 2015 (CB 429) to be provided with details of rentals in respect of the deceased's properties were not effectively answered until almost 6 years later, and the first time John provided any details regarding the tenancy of the Arndell Park property was in his seventh affidavit dated 18 June 2021 (CB 246-247): T 115.13-116.45.
My assessment of the matter is that the default by John in relation to Property 430 is very significant.
I agree with the submission of Mr Crossland that John's conduct in relation to Property 430, in particular, in the lack of transparency regarding his involvement in obtaining an interest and lack of consent from the plaintiffs in obtaining any such interest are of a graver nature than those which presented themselves in In the Will of James Greer, in which commission was denied.
I accept that the Arndell Park property was successfully sold for a substantial price and that there was some degree of "pain and trouble" in John dealing with Carol's claims in the rectification and family provision proceedings and revocation proceedings.
However, John was considerably assisted by professionals in the administration of the estate. John acknowledges: the assistance he received from Ms Fisher, at least initially, in ascertaining and calculating the nature of the value of the deceased estate's (CB 130 [10]); Ms Fisher's assistance with Mr Batten in handling all of the accounting and tax affairs of the estate (CB 182 [13]) and their assistance in finalising those affairs and preparing accounts: CB 183 [24]-[26].
Overall, my assessment is that John's conduct of the administration of the estate was unnecessarily prolonged in the respects that I have indicated and gave rise to some degree of loss (albeit mostly unquantified) in other respects that I have indicated.
I consider that John's lack of transparency in his failure essentially up to the time of the hearing to not disclose his interest in Property 430 and failure to seek any informed consent to obtain such an interest was a breach of his duty. The breach was further compounded by the failure to invest the deposit and delay in completing settlement of the sale, to suit his own interests.
No submission was put that a power under the Will permitted John to purchase or otherwise obtain an ownership interest in Property 430.
John's conduct in becoming a purchaser or otherwise obtaining an ownership interest in Property 430 was sufficiently grave as to go to the core of his duties and reveals a disdain for the role and office.
I consider that, having regard to those matters and the other defaults that I have found, John so materially failed the standard that no commission ought to be awarded.

[154]

Amendments 18 April 2023 - [5] - change "final day of hearing" to "final day of the hearing" [16(2)] - change "in Supreme Court" to "in the Supreme Court" [16(6)] - change "8 August 2020" to "31 March 2022" [40] - change "23,439,896" to "23,479,896" [42] - indentation amended [70(4)] - change "affect" to "effect" [78] - change "John's property" to "David's property" [101] - change "at [15] Gleeson CJ" to "at [15] per Gleeson CJ" [111] - insert space between "r" and "31.3(1) UCPR" [238] - change "$60 million" to "16 million" [241] - add comma after "Further" [248(1)] - change "$50 million" to "$15 million" [248(2)] - change "$40 million" to "$14 million" [291] - change "$50 million" to "$15 million" [343] - change "issue 13" to "Issue 13" [362] - change "are set out" to "as set out" [375] - change "do not wish to speak to Mr Batten" to "did not wish to speak to Mr Batten" [405] - change "of an immediate update regarding at" to "of an immediate update regarding it" [410] - change "improvements shut such as" to "improvements such as" [411] - change "concrete service" to "concrete surface" [431] - change "cited" to "sighted" [448] - change "Ultimately there were two issues" to "Ultimately, there were two issues" [509] - change "The plaintiffs written closing submissions" to "The plaintiffs' written closing submissions" [514(2)] - change "as an asset of the deceased estate" to "as an asset of the deceased's estate" [514(3)] - change "an asset of the deceased estate" to "an asset of the deceased's estate" [547] - change "Beasley P" to "Beazley P" [575] - change "once were sold" to "once it was sold" [585] - change "considered it, seems to me" to "considered it, it seems to me" [591] - change "However use" to "However, use" [616] - change "was to precisely" to "as to precisely" [616] - change "appointment I have" to "appointment, I have" [618] - change "became either a purchaser or having some interest" to "became either a purchaser or a person with some interest" [631] - change "further lacked less than fully frank disclosure" to "further lacked fully frank disclosure" [650] - change ""send an email to let the beneficiaries know that (T" to ""send an email to let the beneficiaries know that" (T" [650] - change "44) later altered" to "44) but later altered" [650] - change "to send it to": T" to "to send it to: T" [656] - change "on use of the word" to "on his use of the word" [662] - change "75.32-34" to "75.32-34." [663] - change "that was the handwriting" "that it was the handwriting" [680] - change "on that date CB 1134" to "on that date: CB 1134" [755] - change "didn't" to "did not" [755] - change ": : T 180.35-.181.T 181.8-.33" to "T 180.35-181.6, 181.8-33." [757] - change "Cleary" to "Clearly" [791] - change "$500" to "$500,000" [806] - change "state" to "the estate" [824] - change "to a wilful default. I was not" to "to a wilful default I was not [825] - change "On 30 June 2016" to "On 30 June 2016," [855] - change "cl" to "reg" [869(3)] - change "(Cl 10)" to "(clause 10)" [870(2)] - change "he would require" to "he will require" [870(2)] - change "2109" to "1209" [915] - change "the clients" to "their clients" [927] - change "his clients" to "their clients" [931(2)] - change "the provision valuations" to "the provision of valuations" [941] - change "items" to "item" [984] - change "Issue 13 and the events" to "Issue 13 the events" [989] - change "the November 2018," to "the November 2018 Deed," [1013] - change "8 August 2020" to "31 March 2022" [1032] - change "at 362-363" to "at 362-363." [1042] - change "affecting" to "effecting" [1054(1)] - change "the administration, (i.e." to "the administration (i.e." [1061] - change "plaintiffs'" to "plaintiffs" [1062(2)] - change "pay deposit" "pay a deposit" [1071(12)] - change "Successfully continuing and concluding proceedings" to "The defendant successfully continued and concluded proceedings" [1071(15)] - change "transfer of the specific devices" to "transfer of the specific devises" [1072] - change "grant in quantum" to "grant and quantum" [1086] - change "later John provided any details" to "later, and the first time John provided any details" [1094] - change "reveal" to "reveals" 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: 18 April 2023

Galea v Camilleri; The Estate of Patricia Camilleri

At a glance

Court

Decision date

Before

Source

Judgment (154 paragraphs)

Parties

Legislation Cited (15)

Cases Cited (48)

Cited By (3)