Gibson v Haselgrove; Delmont v Haselgrove

Andresakis and Skouteris v Aletus Holdings (2006) 68 NSWLR 507 Charles v Charles (unreported, 25 March 1998, NSWSC) De Winter v Johnstone (Court of Appeal, 23 August 1995, unreported) Firman v Ellis [1978] 1 QB 88 Foley v Ellis [2008] NSWCA 288 Gorton v Parks (1989) 17 NSWLR 1 Hartley v Birmingham City Council [1992] 1 WLR 968 In re Gilbert (1946) 46 SR (NSW) 318 Kalmar v Kalmar; Estate of Kalmar [2006] NSWSC 437 CASES CITED : Massie v Laundy (7 February 1986, unreported) Maxwell v Public Trustee [2001] NSWSC 764 Nicholls v Hall [2007] NSWCA 256 Robinson v Tame (Court of Appeal, 9 December 1994, unreported) Salido v Nominal Defendant (1993) 32 NSWLR 524 Simonis v Perpetual Trustee (1987) 21 NSWLR 677 Singer v Berghouse (No 2) (1994) 181 CLR 201 Thompson v Brown [1981] 1 WLR 744 Turnley v Swaab [1999] NSWSC 594 Warren v McKnight (1996) 40 NSWLR 390 Wilkinson v Wilkinson [2002] NSWSC 175

June Dianne Gibson (Plaintiff in 3063 of 2008) PARTIES : Heather Ann Delmont (Plaintiff in 5016 of 2008) Ronald James Cleveland Haselgrove (Defendant in both matters)

J Wilson SC (Ms Gibson) COUNSEL : C Harris SC (Mrs Delmont) M Lawson (Defendant)

Maxwell & Co (Ms Gibson) SOLICITORS : Websters Lawyers (Mrs Delmont) Donaldson Walsh Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION FAMILY PROVISION ACT LIST

3063/08 JUNE DIANNE GIBSON V RONALD JAMES CLEVELAND HASELGROVE 5016/08 HEATHER ANN DELMONT V RONALD JAMES CLEVELAND HASELGROVE JUDGMENT 1 In each of these proceedings a claim has been brought for orders pursuant to s 7 of the Family Provision Act 1982 that provision be made for the maintenance and advancement in life of the respective plaintiffs out of the estate and/or notional estate of the late David William Delmont ("the deceased") who died on 6 January 2007, aged 63 years. The deceased was survived by his de facto partner, June Dianne Gibson (the plaintiff in proceedings 3063/08), his wife, Heather Ann Delmont (the plaintiff in proceedings 5016/08) from whom he had been separated for some time but was not divorced, and his three adult sons (Tom, William and Andrew Delmont). The defendant in each set of proceedings is the executor to whom probate of the deceased's will was granted on 11 June 2008. 2 Under the deceased's will (made on 7 June 1977, shortly after his marriage to Mrs Delmont on 29 April 1977), the deceased left the principal residence owned by him at the time of his death (that being, as at his death, a property in Nana Street, Brunswick Heads in which he held a half share as tenant in common with Ms Gibson, "Nana Street property") to his wife and the residue of his estate to his wife and his three children in equal shares. There was no provision under the deceased's will in favour of Ms Gibson. 3 As I understand it, the Family Provision Act application by Mrs Delmont is one which stands independently of that of Ms Gibson (in other words it is not what might be termed a "defensive" claim). Mrs Delmont's claim arises because although, under the terms of the will as it stands, she would receive a half share in the Nana Street property, this is encumbered by a mortgage securing a substantial loan and it is clear that a half share in that property, even together with a quarter share of the residue of the estate, would not be likely to be sufficient to enable Mrs Delmont to acquire a reasonable family home in or around the area where she now lives. 4 No claim pursuant to s 7 of the Family Provision Act is made by any of the three children of the deceased, although each has sworn an affidavit deposing to his own financial position. Background facts 5 The deceased and Mrs Delmont were married in 1977. Mrs Delmont ceased paid employment in 1977 when she became married. Prior to her marriage she had worked as a secretarial or clerical assistant and then as a library assistant. The deceased and his wife had three sons, each of whom attended private schools, and prior to 1996 the family enjoyed a comfortable lifestyle. 6 The deceased ran a large printing company - a business originally started by his grandfather. Towards the end of 1995, the company experienced financial difficulties which ultimately led to the bankruptcy of the deceased and his wife. The deceased and his wife borrowed moneys from her parents ($40,000) but this was evidently not sufficient to enable the company to trade out of its difficulties. Their youngest child was then in Year 5 at school. The family home was sold and the family moved into rented accommodation. Mrs Delmont returned to study, completed training in computing and receptionist skills, and returned to the workforce. The deceased obtained some casual work but Mrs Delmont's evidence is that her husband struggled to cope with the failure of the business and the disgrace he felt at the bankruptcy (and the evidence of Ms Gibson supports this). 7 In about 1996, the deceased moved to Byron Bay to work with his sister and her husband (who managed tourist accommodation there). After a few months, the deceased decided to remain there on a permanent basis. Mrs Delmont, who was working and supporting the family in Adelaide (where the children were settled at school - their school fees then being met by their grandparents), decided it was best for her and the children to remain in South Australia. This led to what appears to have been a relatively amicable separation. 8 In about 1998, the deceased met Ms Gibson (who was then managing a guesthouse with her twin sister, Janette) and, in late 1999, he and Ms Gibson commenced a de facto relationship which lasted until the deceased's death in January 2007. Nevertheless, the deceased did not divorce his wife (and nor did he change his 1977 will). According to Ms Gibson, the deceased was reluctant to obtain a divorce from his wife, regretting deeply that when his business failed "he had plunged his wife and children into a degree of penury" (para 22 affidavit dated 14 November 2008), but he also regretted that he "could not be more loyal to [Ms Gibson]" (see also T 29). 9 During the period from 1996 (when the deceased moved to Byron Bay) to his death, the deceased visited his family (and Mrs Delmont) in Adelaide two or three times a year, was in regular contact with his sons and with his wife, and from 2000 provided monthly financial support to his wife. When he stayed in Adelaide he would stay one or two nights with Mrs Delmont and his sons, occasionally sharing Mrs Delmont's room. I note this only as evidence that even after their separation their relationship remained a cordial one. 10 Ms Gibson knew of his visits to Adelaide and conversely the deceased's family knew of his relationship with her. On at least one occasion, Ms Gibson accompanied the deceased to Melbourne to watch his youngest son, Andrew, play cricket. On another occasion the deceased's oldest son, Tom, visited the couple in Brunswick Heads for a couple of months. 11 The deceased's assets at the commencement of his relationship with Ms Gibson were, not surprisingly, limited. However, shortly before the relationship commenced the deceased, through a company (Lavender Estates Pty Limited "Lavender Estates") in which he was sole director and shareholder, acquired (in August 1999) an apartment building in Fawcett Street, Brunswick Heads ("Broadview Apartments"). The deceased acquired Broadview Apartments for the sum of $490,000 through a loan of $100,000 from a family trust (the Delmont Family Trust) which had been established by his grandfather (and has since been wound up) and the balance by way of vendor finance. 12 At the commencement of their relationship, Ms Gibson already had an interest in the Pitlochary Guesthouse business which she ran with her sister, through her equal shareholding in Pitlochary Guesthouse Pty Limited ("Pitlochary"). In 1998, Ms Gibson had resigned from her employment as a court counsellor with the Family Court and had received a superannuation payout of about $180,000. 13 Over the course of their relationship, Ms Gibson and the deceased acquired a number of properties which they developed or renovated together. 14 The first such development was that of the Broadview Apartments. As noted, this property was acquired in August 1999 by the deceased's then wholly owned company, Lavender Estates. However, Ms Gibson's evidence is that she contributed her superannuation payout and other moneys to the development of Broadview Apartments. 15 In March 2000, Pitlochary advanced $250,000 in cash and $50,000 in furniture in relation to the Broadview Apartments development (as recorded in a joint venture agreement with Lavender Estates) and Pitlochary was allotted 500 shares in the company (the deceased then holding 503 shares). (Although the joint venture agreement provided for the transfer of an interest in the property to Pitlochary it seems that this step was not ever taken. Ms Gibson said the agreement was to protect Pitlochary's investment in the property.) At or about this time, it appears the Pitlochary Guesthouse business was closed (and it may be that the provision of furniture for Broadview Apartments was part of the winding up of that business). 16 Secondly, in April 2005 the deceased and Ms Gibson purchased a house (Bobra Glen) for $400,000 as joint tenants. The purchase price was funded by a National Australia Bank loan. Undivided ownership of this property passed on survivorship to Ms Gibson on the deceased's death. It was sold on 3 September 2007 for $540,000. The deposit of $54,000 was paid in Lavender Estates' account with the National Australia Bank. The balance of the proceeds of sale were also paid to the National Australia Bank. Lavender Estates' accounts recorded a loan in respect of the Bobra Glen property, which, after the sale of Bobra Glen, was then recorded as a loan in respect of Fawcett Street (Broadview Apartments), seemingly done by way of book entry. 17 Thirdly, in November 2006, shortly before the deceased's death, the deceased and Ms Gibson acquired the Nana Street property, this time as tenants in common, finance of $350,000 being provided by the National Australia Bank and a private loan of around $270,000 from friends of Ms Gibson and/or the deceased (Ms Coombs/Ms Varga). (The Coombs/Varga loan was shown in the accounts of Lavender Estates for the first time after the death of the deceased as a debt of $250,000.) From the submissions made by Senior Counsel for Ms Gibson (Mr Wilson SC) I understand that Ms Gibson accepts that this was in fact a loan made to herself and the deceased jointly for the purpose of acquisition of the Nana Street property; and not a loan made to Lavender Estates. I have therefore proceeded on the assumption that liability for the Coombs/Varga loan would fall to be borne as to 50% by Ms Gibson and as to 50% by the estate (not as loan repayable by Lavender Estates). Nevertheless I have not seen any documentation recording the actual making of the loan back in 2006 and it is fair to say that the loan arrangements in respect of the various properties (and the role of Lavender Estates in this regard) are not at all clear. 18 At some stage (it would seem in about 2003/4) Ms Gibson's sister withdrew from her involvement in the Broadview Apartments venture. Ms Gibson gave evidence that a sum of $350,000 was paid to Ms Gibson's sister (for the purchase of her interest (through her shareholding in Pitlochary) in Broadview Apartments. Although the circumstances by which this was effected were not clearly documented (and Ms Gibson's sister still remains recorded, in ASIC's records, as being a 50% shareholder in Pitlochary), it is said that it was as a result of this payment that the deceased's shareholding in Lavender Estates was increased (by agreement between Ms Gibson and the deceased) from 503 share to 833 shares. Ms Gibson says (though there was no independent evidence of this) that the $350,000 payment was funded by a loan made to her and the deceased jointly by ANZ Bank and later refinanced through the National Australia Bank. Neither the estate liabilities nor Lavender Estates' balance sheets disclose any debt to ANZ Bank by the deceased, though it may be that this is a result of the alleged refinancing of that loan. 19 The deceased died in January 2007. In the short period of time between acquisition of the Nana Street property (14 November 2006) and his death, including over the Christmas period, Ms Gibson says substantial work was carried out on renovations to the Nana Street property. In the period through to May 2007, almost $300,000 was paid by Lavender Estates for renovations to the Nana Street property. 20 For most of the time since the deceased's death, Ms Gibson has been the sole director of Lavender Estates (the executor not being appointed as a director until September 2008) and she has had control at all times of the company's cheque book. 21 Mrs Delmont and the deceased's brother were named as executors under the deceased's final will. His brother predeceased him. Mr Haselgrove, the defendant in both proceedings, was named in the will as alternate executor. In July 2007, Mrs Delmont renounced probate due to a perceived conflict of interest if she were (as she has done) to bring an application of the kind now brought against the estate. 22 Probate was granted in June 2008. The estate has not yet been distributed. There have been considerable difficulties, as to which I will comment in due course, between the executor and Ms Gibson in the administration of the estate. Application for leave to extend time for Mrs Delmont's claim 23 Mrs Delmont's claim was not filed within the prescribed period for the making of an application pursuant to s 7 of the Family Provision Act. Accordingly, an application is made by Mrs Delmont for leave for her claim to be brought out of time. 24 That application was made by the filing (with my leave) of an amended summons in proceedings 5016/08 when the hearing commenced before me. I gave such leave on the basis that both Ms Gibson and the executor were on notice of Mrs Delmont's intention to make a claim from the date of filing of her original summons in the 5016/08 proceedings and it did not appear that any prejudice would be occasioned by any party to either set of proceedings by the granting of leave to file the amended summons. 25 Pursuant to s 16(3) of the Family Provision Act, the court may not make an order under sub-section (2) extending the prescribed period for the making of an application in relation to a deceased person unless either the parties to the proceedings have consented to the application being made after the end of the period or sufficient cause is shown for the application not having been made within that period. There remains a discretion in the court, even if sufficient cause is shown, whether to allow an extension. It is clear that Ms Gibson, although not strictly a party to the 5016/08 proceedings, does not consent to the extension of time sought by Mrs Delmont. 26 The principles covering an application to extend time under the Act were considered by Young J, as his Honour then was, in Massie v Laundy (7 February 1986, unreported) and applied in Maxwell v Public Trustee [2001] NSWSC 764. The factors to which the court must look include the reason(s) for the lateness of the claim; whether beneficiaries under the will would be unacceptably prejudiced if time were extended; and whether there has been any unconscionable conduct by either side. A relevant factor is also the strength of the claim made by the party seeking an extension of time (per Hodgson J in Warren v McKnight (1996) 40 NSWLR 390). In De Winter v Johnstone (Court of Appeal, 23 August 1995, unreported), Powell JA was of the view that no extension of time ought to be granted unless it was established that the applicant seeking an extension would, in the event of it being granted, be entitled to an order for substantive relief. By contrast, Sheller JA in the same case considered that it was only necessary for the applicant to show that the application was not bound to fail. 27 On the threshold question as to whether sufficient cause was shown for the application not having been made within the prescribed period, Mrs Delmont relied on two affidavits - an affidavit sworn by her on 1 May 2009, and an affidavit sworn by her solicitor, Michelle Faye Crichton, on 8 May 2009. Both Mrs Delmont and Ms Crichton were cross-examined by Mr Wilson as to the circumstances in which the summons was not filed in time. 28 Mrs Delmont first sought advice from her solicitors as to any potential claim in respect of the estate in July 2007. It is apparent from Ms Crichton's evidence that the reason for the application not being brought within time was that Mrs Delmont's solicitors, practising in South Australia where Mrs Delmont resides, had at first assumed that probate would be obtained in South Australia and had mistakenly had regard to the time within which applications of this kind may be brought under the applicable legislation in South Australia (according to Ms Crichton that being a period commencing with the grant of probate and expiring six months after the grant of probate). When it was realised that probate would or might be sought in New South Wales, consideration was given by Ms Crichton to the position in this State. However, Ms Crichton said that she had then mistakenly had reference to the Testators Family Maintenance legislation (the time period specified in which confirmed in her mind her erroneous belief that the time within which an application would need to be brought by Mrs Delmont would commence from the grant of probate). Ms Crichton also said she had made an error in process in that in South Australia there was no provision to commence a claim until an executor was in place. I accept Ms Crichton's evidence. 29 As noted above, probate of the will was granted in June 2008. This was almost 18 months after the death of the deceased. Accordingly, by the time probate was granted (that being the time from which Ms Crichton mistakenly believed that the time commenced within which a claim by Mrs Delmont could be made and, indeed, the first time at which she believed such an application could be made), the time for filing of an application for provision under the Family Provision Act had almost expired. As it was, the application by Mrs Delmont was made within only a short time after the expiry of the prescribed period. 30 Mr Wilson submits that the making of a mistake by Mrs Delmont's solicitor as to the time within which her claim could be brought does not constitute "sufficient cause" for the purposes of s 9(3), relying on the judgment of McLaughlin M (as the Associate Justice then was) in Wilkinson v Wilkinson [2002] NSWSC 175. There (having regard to the decisions of Young J (as his Honour then was) in Charles v Charles (unreported, 25 March 1998, NSWSC) and Macready M (as the Associate Justice then was) in Turnley v Swaab [1999] NSWSC 594) McLaughlin M was of the view that the fact that counsel originally instructed by the solicitor for the plaintiff to advise in the matter did not advert to the bringing of a Family Provision Act claim (or that the plaintiff himself, not being experienced in the law, did not give express instructions for the bringing of such a claim) did not constitute sufficient cause for the application not having been brought within the prescribed period. 31 In Charles v Charles, Young J had said: I have said on more than one occasion that if an application under this Act comes to a solicitor before the limitation period expires and the solicitor does not lodge an application in time, then that in itself does not provide sufficient cause for the Court extending the time. It does not matter that the solicitor has been diverted from her task by counsel sitting on a brief for too long, or a Court losing a file, or her children all coming down with chicken pox at the same time, there must be something more than mere incompetence or inattention by a solicitor before time can be extended under this Act. 32 However, in Kalmar v Kalmar; Estate of Kalmar [2006] NSWSC 437, (where a summons seeking provision was filed more than two and a quarter years after the death of the deceased), White J expressed the view (at [24]) that: His Honour's statement [in Charles v Charles ] that inattention or incompetence by a solicitor is an insufficient ground to warrant an order extending time does not mean that an application for extension must be refused if the limitation period expired through the fault of the solicitor. Contrary to the impression conveyed in the passage quoted from De Groot and Nickel, Family Provision in Australia, it was not held in Charles v Charles that the extension ought not to be granted in that case. In fact, an extension of time was granted as notice of intention to apply had been given before the limitation period expired and the beneficiaries were not prejudiced by an extension. 33 Mr Wilson submitted that Mrs Delmont should be left to any remedy she may have against her solicitors. White J considered a similar submission in Kalmar and said (at [20]-[22]) that: Re Salmon is not authority for the proposition that an extension will not be given if an applicant would have a cause of action in negligence against his or her solicitor if the claim is barred by s 16.

In that case, Sir Robert Megarry took into account, as one of a number of relevant factors, whether a refusal to extend time would leave the applicant without redress against anybody at (176). In that case, an extension of time was refused, but there were a number of other relevant factors, including that the estate had been largely distributed. In that case, there was no question of the executor having placed obstacles in the applicant's path.

Insofar as the question of alternative redress is relevant, it is not at all clear that the plaintiff would succeed in an action against her solicitor to recover as damages the amount of provision which she would otherwise be awarded had the claim been commenced in time. 34 Although in Kalmar the facts were somewhat different from those in the present case (not least because the solicitors did not know at the relevant time the contents of the will), it seems to me that there is an element of unfairness in leaving to someone in Mrs Delmont's position the uncertainty of a claim in negligence against her solicitors where, as here, it cannot be suggested that Mrs Delmont was herself dilatory in seeking advice as to her position (the evidence being that she first sought advice in July 2007, well within the prescribed period). 35 The estate has not been distributed and the executor does not object to the application (indeed the executor, in a balanced way, has through his Counsel, Mr Lawson, made submissions in favour of the grant of substantive relief to Mrs Delmont). Although there was no evidence of notice to Ms Gibson within the prescribed period of Mrs Delmont's intention to make a claim, no relevant prejudice has been shown to be suffered by her if the application were to be granted. In all the circumstances, I am satisfied that sufficient cause has been shown for the application not having been made within the prescribed period in order to satisfy the threshold test for an extension of time. 36 As to whether I should exercise my discretion to grant leave in this case, I have referred above to the factors to be taken into account. Some guidance is also provided in this regard by the judgments of the Court of Appeal in Salido v Nominal Defendant (1993) 32 NSWLR 524. Powell JA there considered that the principles applicable to the question of an extension of time under the Motor Accidents Act 1988 were similar to those which pertained under the Family Provision Act, stating (at 541): It seems to me that, in an application for an extension of time pursuant to the provisions of s 52(4) of the Motor Accidents Act 1988 - as was the case with similar applications pursuant to the provisions of the Motor Vehicles (Third Party Insurance) Act 1942, and as is the case with similar applications pursuant to the provisions of the Testator's Family Maintenance and Guardianship of Infants Act 1916 and the Family Provision Act 1982 - the questions for determination by the Court are, in substance, but two, they being:

1. whether a sufficient explanation has been given for the failure to commence proceedings in time; and

2. if so, whether, having regard to all the circumstances of the case, it is fair and just to grant, or to refuse, the application.

37 In that case, Gleeson CJ appeared to endorse the proposition that the fact that a plaintiff may have a cause of action for negligence does not necessarily stand in the way of an extension of time. His Honour said (at 530): The usual purpose of a limitation period is to protect a defendant from the injustice of having to face a stale claim: Donovan v Gwentoys Ltd [1990] 1 WLR 472 at 479 per Lord Griffiths. Additionally, Pt 5 of the Motor Accidents Act evinces a legislative intention to promote prompt settlement of claims and to encourage forensic diligence: cf Taylor v Francoif (1990) 19 NSWLR 445; Hill v Bolt (1992) 28 NSWLR 329 referring to the scope of the discretion to extend a statutory time period having regard to the approach taken by Lord Denning MR in Firman v Ellis [1978] 1 QB 886 and approved by the House of Lords in Thompson v Brown [1981] 1 WLR 744 and Hartley v Birmingham City Council [1992] 1 WLR 968. Gleeson CJ noted that (at 531):

In Hartley v Birmingham City Council , Parker LJ said, at 979, that the proper question for a judge to ask in dealing with an application for leave to proceed is whether it would be equitable to allow the action to proceed, that is to say, whether it would be fair and just to do so. In that case the court held that where, as a result of a slip by the plaintiff's solicitors, an action was commenced a few days out of time, the circumstance that the plaintiff would have had a cause of action for negligence against her solicitors did not stand in the way of an extension of time. It was not fair and just to confer on the defendant's insurers a windfall gain as a result of the solicitors' error. 38 In the context of the application there before him, where the legislation in question conferred a discretion (to be exercised judicially) as to the extension of time to commence proceedings Gleeson CJ noted the following guidelines (at 532-533) as being of assistance in obtaining consistency of decision-making:

Section 52(4) confers a discretion which is to be exercised judicially, in a manner that furthers the purposes of the statutory context in which it appears. The immediate purpose, as with any limitation period, is to protect defendants against the injustice of stale claims; the statute is also aimed at promoting forensic diligence.

Bearing in mind those statutory purposes, the question is whether, in the circumstances of each individual case, the applicant for leave has demonstrated that it is fair and just that leave should be granted.

The diligence, or lack of diligence, shown by a plaintiff or a plaintiff's representatives, in ascertaining and asserting his or her rights will ordinarily be a material factor, as will the extent of the relevant delay, and the reason for it.

The nature and extent of any forensic disadvantage to a defendant resulting from a plaintiff's delay will also be material. The effect, if any, of the delay upon the defendant's ability to defend an action is a matter to be taken into account, and may in come cases be of decisive importance.

Leave under s 52(4) may be refused if it would be plainly futile to grant it, …

(See also Andresakis and Skouteris v Aletus Holdings (2006) 68 NSWLR 507 for discussion of the relevance of the potential availability of a cause of action in negligence in the context of a reinstatement application.) 39 Taking into account those factors, it does not seem to me that Mrs Delmont's claim was so "stale" as to make it unjust for the claim now to be brought; the summons was filed within a short period after Mrs Delmont's solicitor had been alerted to the fact that the application was out of time. There was no lack of diligence on the part of Mrs Delmont which had led to the application being out of time and the error (or succession of errors) made by Mrs Delmont's solicitors seems to have been a product of confusion arising from the different legislative provisions applicable in another state to that in which the solicitors ordinarily practised rather than a failure to give attention to the matter or a mere lack of diligence. There has been no forensic disadvantage shown to have been caused to any party as a result of the delay and no relevant prejudice. The fact that, if leave is granted, this may have an impact on the provision, if any, Ms Gibson might obtain cannot be said to be a relevant prejudice. 40 Indeed, in the particular context of this litigation, it does not seem to me that there is any injustice to Ms Gibson or the estate by allowing an extension. I say this because, when considering Ms Gibson's own application (which was filed within the prescribed period) the court would still need (if satisfied that inadequate provision had been made under the will for Ms Gibson) to take into account the legitimate (and in that sense competing) claims of beneficiaries of the estate (which would on any view include Mrs Delmont and her sons), whether or not those beneficiaries had themselves brought any application under the Family Provision Act. Therefore, in determining whether and if so what provision ought be made for Ms Gibson, the position of Mrs Delmont would need to be considered in any event (as would the position of the remaining beneficiaries, her three sons). 41 There is no suggestion on the part of any of the other beneficiaries to the will that he would be unacceptably prejudiced (or prejudiced at all) if time were to be extended. Each of the adult sons has sworn at least one affidavit in the proceedings brought by Ms Gibson. None has any substantial assets of his own. All have HECS debts in respect of their tertiary education. All are currently employed. The two older brothers have a one third shareholding each in a company Kuthanara Pty Limited ("Kuthanara") set up by the deceased's father. Kuthanara owns two properties, one in Burleigh Heads and one in Yarraville. Those properties are mortgaged and the company has made a loss for the past couple of years. Nevertheless, as I understand it, each of the sons, broadly speaking, supports his mother's claim. 42 I have not been taken to any unconscionable conduct by either side which it is suggested should bear on the exercise of my discretion to grant the application for the extension of time. 43 Finally, insofar as I am entitled to take into account the strength of the application of Mrs Delmont in deciding whether to grant an extension of time, it seems to me that it must be said that Mrs Delmont's claim is, prima facie, a strong one. Mrs Delmont was married to the deceased for approximately 20 years prior to their separation. The separation occurred in circumstances in which the family was under considerable financial difficulty due to the failure of certain family companies which were managed by the deceased and his consequent bankruptcy. The deceased and his wife maintained a cordial relationship after their separation and after the deceased had commenced his de facto relationship with Ms Gibson. The evidence shows that the deceased had made a conscious decision not to divorce his wife and had expressed on more than one occasion a wish (or awareness of a moral obligation) to provide a house for his wife. While I consider the facts of the case in more detail at a later stage, the length of the marriage, the deceased's apparent recognition of a moral duty owed to his wife and family (evidenced by the voluntary payment of a monthly sum to his wife from 2000 onwards), and the maintenance of his links with his wife and family after the separation, coupled with his wife's straitened financial circumstances, suggest to me that Mrs Delmont's application is hardly one which (adopting the test suggested by Sheller JA) could be said to be bound to fail. 44 Accordingly, I grant leave under s 16(3) of the Family Provision Act for Mrs Delmont's application to be brought outside the prescribed period.

Respective Family Provision Act claims 45 Turning to the respective Family Provision Act claims brought by Ms Gibson and by Mrs Delmont, the test to be applied in each case is that outlined in Singer v Berghouse (No 2) (1994) 181 CLR 201. It is a two stage test. 46 The first stage is a question of fact, that being whether the provision (if any) made for the applicant is inadequate for the applicant's proper maintenance, education and advancement in life. The second stage, which involves an exercise of discretion, is for the court to decide the proper level of maintenance and adequate provision which should be made. 47 Each of these stages involves, to some extent an assessment of the competing positions of the respective plaintiffs. 1. Was the provision made under the will inadequate? 48 There was no provision made in the will for Ms Gibson at all. Mrs Delmont, on the other hand, was left the deceased's interest in his principal residence at the date of death (that being a half share as tenant in common with Ms Gibson in the Nana Street property) (clause 5 of the will) and a one quarter share of the balance and residue of the estate (clause 6 of the will). 49 The adequacy of provision under the will is to be decided having regard to the facts as they exist at the time of the hearing and not at the time of death (Nicholls v Hall [2007] NSWCA 256 at [40]). An assessment is required as to what level of maintenance is appropriate having regard to the applicant's financial position, the size and nature of the estate, the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who had legitimate claimants on the deceased's testamentary bounty. 50 Whether the court is satisfied that the provision made for the applicant was inadequate in this sense depends upon what has been described as a "multi-faceted evaluative judgment" per Basten JA Foley v Ellis [2008] NSWCA 288 at [3]. · The respective plaintiffs' financial positions. 51 Ms Gibson is a retired psychologist aged 65 years. She retired on medical advice due to severe back problems. It is unlikely that she will be in a position to return to full-time work. 52 As at the date of the hearing, Ms Gibson's assets and liabilities were itemised as follows: a half-share interest as tenant in common in the Nana Street property (the property as a whole being estimated to be worth $750,000) (her net interest in which is estimated at about $65,000 once a $350,000 loan to National Australia Bank and the Coombs/Varga $270,000 private loan, said to be referable to this property, are taken into account); a motor vehicle (said to be worth $8,000); an interest in the furniture and furnishings in the Nana Street property (estimated at $100,000); some jewellery ($4,000) a bank account credit of $1,226, and an interest (through her shareholding in Pitlochary) in a minority shareholding (38%) in Lavender Estates. (The majority shareholding in Lavender Estates (62%) is the major asset of the estate.) 53 The principal asset of Lavender Estates is the parcel of real estate in Brunswick Heads (Broadview Apartments) which Ms Gibson and the deceased had together been in the course of developing for a number of years prior to his death. There is some dispute as to the value of the shareholding in Lavender Estates (which largely turns on the likely value of the underlying real estate). On the figures initially put to me by Mr Wilson, Ms Gibson's interest in Lavender Estates would be worth approximately $515,000 assuming the Broadview Apartments were valued at around $3 million. 54 Ms Gibson has debts owing on her personal credit cards in the order of $47,500. Her other liabilities are a liability ($137,500) for half of the $270,000 private loan said to have been made to her (and the deceased jointly) by friends (the Coombs/Varga loan) and for half of the $350,000 National Australia Bank loan over the Nana Street property. (I have already taken those into account when estimating her net interest in the Nana Street property at $65,000 above.) 55 On a rough analysis, and assuming the figures as submitted by her Counsel are correct, Ms Gibson's net assets are presently in the order of approximately $650,000. If the Broadview Apartments land were to be worth more than the estimate used above, her assets would obviously be greater. In any event, her assets are largely comprised of holdings in real estate and shares. Ms Gibson says she is presently living on her age pension ($245 per week) and the income received by her from letting out part of the Nana Street property ($200 per week) (a combined income of about $445 a week) (para 3, affidavit dated 14 May 2009). 56 Mrs Delmont's financial position is markedly different. Since the bankruptcy, Mrs Delmont has lived in rented accommodation and has for some time taken in boarders to supplement her income. Mrs Delmont is aged 63. She has a remaining superannuation entitlement of $15,000, having already had to draw on her superannuation entitlements in order to support herself, with bank account savings of some $11,000 out of the amount earlier withdrawn from her superannuation fund, and a car said to be worth $15,000. Mrs Delmont is currently employed as a clerical assistant one day a week (though she says sometimes she works one and half days a week and this may in the future increase, depending on business, to up to two days a week) and supplements that income with a half day's work at a local crèche. Her current employment income is $360.00 per week which she supplements with income from a boarder who pays $150.00 per week. Her rent has increased to $400 per week. It does not appear to be disputed that she lives what might be described as a "hand to mouth" existence. She is the carer for her aged mother and also provides care to her mother-in-law who has early dementia. She has relied on her mother for financial assistance to meet bills (particularly utilities bills). · Size and nature of the estate 57 There is no dispute as to what the deceased's estate comprises, although the value to be placed on the assets of the estate is a matter of some contention. 58 The estate has an interest in a half share of the Nana Street property (that half share likely to have a net worth, after taking into account the National Australia Bank loan and the Coombs/Varga loan, of approximately $65,000); a 62% shareholding in Lavender Estates (833 out of 1,333 shares); and a one third shareholding in Kuthanara (that one third share being likely to be worth in the order of $100,000-$125,000). There also appears to be a $43,000 debt due to the estate from Lavender Estates. 59 The Broadview Apartments land was valued (for mortgage security purposes) in October 2008 at $2.9 million, having earlier been valued (as to market value on the assumption that an application for strata title approval would be obtained) in October 2007 at $3.7 to $3.8 million. The executor has been advised of a range of values for the property (including a valuation of $4 million and initial "hearsay" that it might be worth $5 million gained, he says, from his discussions with family members who he suggested were "familiar" with the real estate market in the area it would seem because they could have access to the internet). Ms Gibson considers that the property might realise $3.2 million to $3.5 million. She has had it listed recently with an asking price of $3.6 million. Both she and the executor seem to accept that $3.5 million would now be an acceptable price for the property. 60 Indeed, the property has been put on the market at various times since the deceased's death by Ms Gibson at prices ranging from $4.8 million in September 2007 to $3.3 million in mid 2008 (and $3.6 million more recently). There was a suggestion at one stage that there might be a prospective purchaser. However, on each occasion issue was taken by the executor as to the manner in which the property was put on the market, and as to the likely value of the property. In July 2008, the executor's lawyers referred to valuations in October 2007 of between $3.6 million and $3.835 million and in November 2007 of $4 million. Complaint was made as to the lack of consultation with the executor. There has from time to time been a flurry of solicitors' correspondence in which the executor has made various demands in relation to the marketing or sale of the property. The upshot is that the property remains unsold and there is still a dispute between the executor and Ms Gibson as to who is to be appointed to market the property. 61 There is also an issue as to when strata title approval is likely to be obtained in respect of the property. Ms Gibson gave evidence that the process had taken several years and that the dealings she (and the deceased) had had with the Council had been frustrating in the extreme. It was suggested by Senior Counsel for Mrs Delmont (Mr Harris SC) that Ms Gibson had deliberately delayed the progress of the strata title application (on the basis that this would lower the likely value of the property) until after this court hearing. Ms Gibson adamantly denied this (T 71). I do not believe such an inference should be drawn. While there is evidence that for a period of some months after the deceased's death Ms Gibson did not actively pursue the outstanding steps said to be required to obtain the building certificate required before strata title approval could be given (and on Ms Gibson's evidence those requirements were something of a moveable feast depending on what Council's attitude was from time to time), I think some delay is understandable if, as she says, she was in shock at the suddenness of Mr Delmont's death (T 70). In any event, it is not apparent that the minimisation of the value of the Broadview Apartments would in any way assist Ms Gibson's ultimate financial position or the outcome of this litigation. I would rather have thought it would have the opposite effect. 62 On the balance sheet of Lavender Estates as at 30 June 2006, the liabilities of the company total $1,625,658.44. If the value of the Broadview Apartments is in the order of $3.5 million, Lavender Estates' net assets, it was submitted, are approximately $1.375 million. 63 The costs of each of the plaintiffs in the respective proceedings are estimated at roughly in the order of $100,000. The executor's costs of the proceedings are estimated at approximately $70,000, although there is evidence of a further $80,000 - $90,000 in legal costs incurred by the executor for which, together with commission, the executor says he will in due course made a claim on the estate. For present purposes, in assessing the size of the distributable estate I have assumed that the overall legal costs which will be claimed will be in the order of $400,000. 64 As noted earlier, no claim is made by either Ms Gibson or Mrs Delmont in relation to the deceased's shares in Kuthanara. It is agreed by all parties that the deceased's shareholding in Kuthanara was intended to be for the benefit of his youngest son, Andrew, after he turned 21 (which occurred shortly before his father's death). As no claim under the Family Provision Act has been made by Andrew Delmont, and as the remaining beneficiaries were not represented in the proceedings, it is not open to me to make an order for the disposition of that part of the estate to him. I will, however, make an order under s 13 of the Act that the burden of any provisions made out of the estate of the deceased shall be borne out of the estate excluding the Kuthanara shareholding. This would have the effect that it passes to the residuary beneficiaries unaffected by any orders I make in these proceedings. It will be a matter then for Mrs Delmont and the two older sons to effect any transfer of shares to Andrew. 65 It seems to be accepted by all parties that the distributable estate is likely to be in the order of around $1 million, or something around $900,000 excluding the Kuthanara shareholding. · Relationship between the respective applicants and the deceased 66 There is nothing to suggest that the deceased did not have a close relationship with each of the respective plaintiffs. 67 Ms Gibson had a de facto relationship with the deceased for approximately eight years (commencing in about September 1999), during the course of which she and the deceased entered into the various property transactions described earlier and worked together (both on the renovation or development of a number of properties and, at least for some time, in a delicatessen business). 68 There is nothing to suggest that Ms Gibson's relationship with the deceased was not a caring relationship. It bears the indicia of a de facto relationship referred to in Simonis v Perpetual Trustee (1987) 21 NSWLR 677, namely it has the quality of permanence, emotional support, and a merging of lives made apparent to family and friends. 69 Ms Gibson gave evidence as to a particularly stressful time during the course of the relationship in which there were tensions between the couple (arising out of Ms Gibson's twin sister's wish to be paid out for her interest in the joint venture involving the development of the Broadview Apartments). Ms Gibson clearly found this upsetting (and broke down in the witness box when recounting this episode). However, the relationship weathered that storm and there is no suggestion that the relationship was one which would not have led to an assumption that the deceased would have regarded Ms Gibson as having a claim on his testamentary bounty. (That said, it may be that the deceased considered that the interest already gained by Ms Gibson out of their joint developments was sufficient for her maintenance and advancement in life after his death and that priority should be afforded to the other objects of his testamentary bounty.) 70 As to the position of Mrs Delmont, the evidence was that the deceased maintained cordial relations with his wife even after they separated and that he was very regretful that his bankruptcy had caused such a momentous change in the family lifestyle. There is no suggestion that the couple had intended to separate prior to the stresses of the bankruptcy on their relationship. Mrs Delmont had provided considerable support to the deceased during their marriage and supported their family after his bankruptcy. It is, I think, significant that the deceased, once he was financially in a position to do so, made monthly maintenance payments to his wife for her and/or their youngest child's support (and that Ms Gibson, to her credit, continued those payments until such time as the youngest son had finished his schooling). 71 Mrs Delmont and members of her family attended the deceased's funeral in New South Wales, apparently with the blessing of Ms Gibson, and similarly Ms Gibson and her sister attended a memorial service in Adelaide for the deceased, apparently with the blessing of Mrs Delmont. Ms Gibson acceded to a request by Mrs Delmont for the deceased's ashes to be given to her and those ashes were provided to Mrs Delmont on her husband's birthday, no doubt a significant day for both Ms Gibson and Mrs Delmont. 72 As to the deceased's relationship with his sons, the deceased kept in contact with them over the phone and during visits. The eldest son (Tom) visited his father and Ms Gibson at Brunswick Heads in March/April 2001 and assisted with work on the Broadview Apartments. The deceased made it clear to his sons that he intended to give Andrew shares in Kuthanara after he turned 21, just as he had done with his other two sons. The last time Mrs Delmont saw her husband was at a family 21st birthday celebration for Andrew. 73 Accordingly, it would seem to me that there is nothing in the relationship between the deceased and, respectively, each of his wife and his de facto partner (or for that matter between the deceased and other persons having a legitimate interest on his bounty, namely his sons) which suggests that the deceased would not have recognised a moral obligation to each of them. In the case of his wife, there is evidence from her, and from her son Tom, that the deceased intended to buy Mrs Delmont a house to live in, once his financial circumstances permitted this. · Conclusion as to first stage of the Singer v Berghouse test 74 The evidence put forward by Mrs Delmont is that, in order to acquire reasonable accommodation within a location near to the family home, a quarter share of the estate would be unlikely to provide sufficient funds for her to purchase a reasonable property and to have any money as a hedge against the vicissitudes of life. Two to three bedroom houses within a reasonable range are in the order of $510,000 to $750,000 or substantially more (see Mrs Delmont's affidavit of 8 May 2009). Mrs Delmont wishes to acquire a single level house (in case she has difficulty with mobility in advancing years) and that it be a three bedroom house where her sons (and any grandchildren in due course) can stay or visit from time to time. It is obviously preferable that it be in the vicinity of her work and her elderly mother and mother-in-law. 75 Mrs Delmont's current financial position is very difficult. It is clear in my view that there was inadequate provision made for Mrs Delmont's proper maintenance and advancement in life. 76 As to the position of Ms Gibson, while her net asset position is considerably more favourable than that of Mrs Delmont, she is nevertheless in a difficulty as to cash flow at least until she is able to realise her interest in Lavender Estates. If no order is made, then she is at risk of losing what I accept was intended to be her (and the deceased's) family home (the Nana Street property) and she would be left with her shareholding in Lavender Estates and substantial debts, with little income and a medical condition which is unlikely to permit a return to work. 77 Her evidence is that Lavender Estates has been in a parlous state over the past couple of years (see T 79) and she has had to inject her own funds into the company (by credit card payments and the like) in order to keep it afloat. While criticism is made (it would seem with some force) that the company's financial state has been affected by the fact that it has paid out considerable sums on expenses for Ms Gibson's (and when he was alive, the deceased's) benefit or for properties owned by her and the deceased (Bobra Glen and Nana Street), nevertheless in the circumstances, and particularly in light of the length of the de facto relationship and the indicia (in terms of joint property sharing) of a committed relationship, in my view for Ms Gibson to be left with no provision under the will means that there was inadequate provision made for her maintenance and advancement in life within the meaning of the Act.

2. What is the proper provision for each of the applicants? 78 The assessment of what is the proper level of maintenance and adequate provision which should be made for each of the plaintiffs, in light of the finding above, requires the court to take into account matters such as the contributions to the property and welfare of the deceased; the character and conduct of the applicants in relation to the deceased; and the circumstances before and after the death of the deceased (including the extent of the claims of other persons on the estate of the deceased). 79 It was recognised in Singer that the assessment the court may arrive at at the first stage of the proceedings (as to what is the proper level of maintenance and what is adequate provision) may largely determine the order which may be made in favour of the applicant but a finding that there has been inadequate provision does not of itself require the making of an order for maintenance, particularly when circumstances when the estate is of the size in order to enable such an order to be made. 80 I note that it has been said that it is not the purpose of the Family Provision Act to ensure that there is an overall fair division of the estate (Gorton v Parks (1989) 17 NSWLR 1 at 6) nor is it to deal with the righting of moral wrongs of relationship between the deceased and an applicant (Robinson v Tame (Court of Appeal, 9 December 1994, unreported). In circumstances where, as here, the deceased has in effect assumed a testamentary obligation to maintain both a spouse and a de facto partner, the unfortunate reality is that there may not be enough for both to receive what might have been seen as proper provision had there been only one. 81 The starting point seems to me to be that, absent an order for either plaintiff, Ms Gibson will have assets of about $600,000 to $650,000 and Mrs Delmont (who presently has almost no assets) would receive under the will a half share in the Nana Street property plus a quarter share in the residue. That would leave Ms Gibson in a position to acquire her own home (perhaps with some cash left over) but would not be sufficient for Mrs Delmont to do so (although clearly a lump sum to Mrs Delmont would greatly improve her current financial position). · Contributions to the property and welfare of the deceased 82 It was submitted that Ms Gibson should obtain effectively the "lion's share" of the estate because the interests in the deceased's assets as at the date of death had been built up during the period of their relationship and there had been substantial financial contribution by Ms Gibson. 83 It is not disputed that the deceased's assets at the time of death were built up during the time in which he was in a de facto relationship with Ms Gibson and on any view of the matter she contributed materially to the accumulation of those assets. 84 Ms Gibson's evidence is that over the period of their relationship there were occasions when she supported the deceased out of her income, as he had no income. This evidence was challenged in cross-examination. In particular, Ms Gibson seemed to accept in cross-examination that the deceased was in receipt of some income from time to time from the Delmont Family Trust (the discretionary trust established by the deceased's grandfather) though she did not have any knowledge of how much (T 28); and it appears that the deceased may have obtained income from rent produced from the property holdings acquired through one or other of Lavender Estates or Kuthanara. Nevertheless, I accept that Ms Gibson was a source of financial and personal support to the deceased over the last eight years of his life. 85 I accept that Ms Gibson's superannuation payment contributed to the pool of funds from which the couple acquired/developed one or more of their properties (just as the deceased had contributed funds from the Delmont Family Trust). 86 Mrs Delmont's contribution to the property of the deceased was at an earlier time. His property as at the date of death did not directly reflect any contribution by her. However, she had contributed to his welfare and supported him throughout their marriage including at what I would assume was a very stressful time during his bankruptcy; as well as supporting their children financial and emotionally throughout the years after separation. 87 In terms of the contributions to the property and the welfare of the deceased, it seems to me that broadly speaking each of the plaintiffs has made a substantial contribution to the property and welfare of the deceased. · Character/conduct of the applicants 88 In relation to the character and conduct of the applicants in relation to the deceased, there is no disentitling conduct of relevance. 89 In In re Gilbert (1946) 46 SR (NSW) 318 Jordan CJ considered that disentitling conduct (for the purposes of the Testator's Family Maintenance and Guardianship of Infants Act 1916, s 3(1)(20)) meant: … character or conduct relevant to the purposes which the Act is intended to serve, for example, misconduct towards the testator, or character or conduct which shows that any need which an applicant may have for maintenance is due to his or her own default. 90 I was referred to matters going to Ms Gibson's credit in relation to her conduct after the date of death of the deceased. I consider those below when taking into account circumstances after the date of death. However, it does not seem to me that they amount to conduct which is disentitling in the sense considered in In re Gilbert. · Circumstances before/after the deceased's death 91 I have considered above the position before the deceased's death. The relevant matters after the deceased's death are, in my view, twofold: first, the benefits received by Ms Gibson out of Lavender Estates funds while she has been in control of that company (potentially diminishing the value of the estate and, in any event, providing to her a benefit indirectly from the estate) and, secondly, her conduct in allegedly obstructing the administration of the estate.

(i) Personal benefits obtained by Ms Gibson 92 Ms Gibson accepts that from the date of the deceased's death various of her expenses, including electricity, telephone calls, rates and car expenses have been met by Lavender Estates. It is also apparent that Ms Gibson, after the date of the deceased's death, continued to use Lavender Estates' moneys for her personal purposes for renovations (in relation to the Bobra Glen and Nana Street properties). 93 The Nana Street property has been extensively renovated. In particular, the evidence (see Ex P2/F; T 57) discloses that sums totalling $293,000 were expended by Lavender Estates on the renovation of the Nana Street property most, if not all, of which were after the death of the deceased. While Ms Gibson maintains this was necessary to preserve the Nana Street property (which she described as a building site, with a shell of a house (T 74)) and that the estate will benefit therefrom, it seems self-evident that, on any objective view, that property has been overcapitalised (it having been acquired and redeveloped to the tune of an expenditure of $800,000 and yet now apparently being worth only $750,000). 94 (I should note that it would seem Ms Gibson has a tendency to over-capitalise properties; she conceded that the development of the property sold by her sister had been an "expensive development" (T 24) and Ms Gibson accepted that the Bobra Glen property had also been overcapitalised (T 56). That would, of course, ordinarily be entirely a matter for Ms Gibson, but to the extent that she has utilised Lavender Estates' funds for the Nana Street property, any such overcapitalisation at the expense of the company would tend to diminish the value of the estate.) 95 Mortgage repayments have been made by Lavender Estates in respect of each of the Nana Street and Bobra Glen properties after the date of the deceased's death. Counsel for the executor, Mr Lawson, handed up an aide memoire summarising the drawings made on Lavender Estates' cheque account in respect of Bobra Glen and Nana Street from the date of death through until the sale of Bobra Glen and, in the case of Lavender Estates, until 30 January 2009 which show that the sum of $16,308.08 had been expended on the Bobra Glen "loan" out of Lavender Estates' funds and $57,652.22 out of the Lavender Estates' business cheque account for the Nana Street "loan". Although the estate benefits to some extent out of the latter payments, there is a disproportionate weighting (62%) on payments out of Lavender Estates compared to payments had they been made by Nana Street co-owners jointly (50%) and there can have been no benefit to the estate out of the payments in relation to Bobra Glen. 96 The evidence consistently given by Ms Gibson was that she simply continued to follow the practice which she and the deceased had adopted prior to his death whereby all moneys were, essentially, put into the Lavender Estate "pot" and that company paid all disbursements in relation to the various properties (and their personal disbursements). It appears that this was done without raising appropriate loan accounts or entries or indeed without a recognition of the need for steps to be taken before financial or other assistance was provided to related entities or for the directors personally. 97 Ms Gibson in cross-examination gave evidence to the effect that insofar as she had maintained the course of conduct which had been in place prior to the death she had done so on her solicitor's advice, although she accepted that she recognised that when the deceased died the financial relationship changed and all personal expenses from that time should be paid by her (T 45). In this regard, I find it difficult to accept that Ms Gibson's solicitor could properly have advised her to continue to make payments of personal expenses out of company funds, but I am prepared to assume that this evidence was a product of misunderstanding between Ms Gibson and her solicitor. The evidence she gave in this respect was somewhat confused (T 44, T 45, referring to a question put to her solicitor, "should I separate out the accounts" and the answer "No, continue the way David set it up until some decision about the estate is made") (see also T 89). 98 It was submitted that wherever there was evidence of conduct which was inconvenient for Ms Gibson's claim this was sought to be explained by her by reference to reliance upon advice said to have been given by her solicitor. I think it more likely that Ms Gibson in fact has very little idea what payments were made out of what entity; and no real appreciation of the need to account separately for personal and company benefits. She said (T 85): All the money went into Lavender Estates but it doesn't necessarily mean that the money originated in Lavender Estates. The contributions all went into that account and monies were disbursed from that account but that does not necessarily mean that the company was indebted. 99 When pressed as to the (quite reasonable) demand made by the executor that she stop spending Lavender Estates' money on anything other than day to day business and usual business affairs of the company her response was, "Well I think, you know, the ordinary course of business of Lavender Estates is capable of many definitions you know" (T 99). 100 It was submitted that Ms Gibson has also received a personal benefit by reference to the apparent increase since the date of his death in the amounts owing from the deceased's credit card (that increase being from either $25,000, as estimated by the executor, or $34,000, as estimated by Ms Gibson, when the deceased died to $82,000 on the material in evidence). These credit card debts appear to have been paid out of Lavender Estates' funds (albeit recorded as a reduction in the deceased's loan accounts with that company). Ms Gibson's only explanation for much of the increase was that there must have been an error on the original amounts recorded as owing. She had earlier given evidence of payment of amounts on her credit cards to keep the Lavender Estates' funds in credit, it may be that this was the source of some of the after-death debts - though that is speculation on my part. Absent an administrative error it is hard to see who else could have incurred the credit card debts after the deceased's death.

(ii) Obstruction of administration of estate 101 There was evidence by the executor as to the difficulty in exercising his role on behalf of the estate viz-a-viz the shareholding of Lavender Estates. It is not disputed that Ms Gibson was in sole control of Lavender Estates (or at least its bank account) at all relevant times. Mr Haselgrove became a director in September 2008 but Ms Gibson has refused to sign a document giving the executor access to the company's cheque books and funds (saying he is in Adelaide and has no functional role in the company's operation). The evidence is that Ms Gibson has also obstructed the efforts of the executor to appoint an alternate director, at least insofar as the particular alternate director the executor was seeking to appoint (he being the deceased's brother-in-law and someone with whom Ms Gibson has refused to deal - she saying this arrangement was, for personal reasons, highly unworkable). I should note, however, that Ms Gibson was apparently prepared to nominate other suitable alternative directors. 102 I think it is a matter of concern that the affairs of the company have reached this apparent impasse. Certainly, whatever the position Ms Gibson and the deceased may have adopted prior to his death in relation to the company, it is not appropriate for Ms Gibson to continue to pay funds out of Lavender Estates for her personal benefit or (without the consent of the executor) otherwise than in the ordinary course of the company's business as properly understood. 103 It was submitted that Ms Gibson had adopted a deceptive attitude in correspondence with the executor and the beneficiaries, in order to obstruct the executor and the beneficiaries from seeking, or obtaining, any control over the Lavender Estates funds so that she could continue to expend company funds on personal matters. This submission was made first by reference to a letter dated 8 May 2007, in which Ms Gibson's lawyers had responded to the executor's lawyers that the finance to carry out the works in respect of Bobra Glen had been obtained by her (rather than by Lavender Estates) and was in the order of $140,000, the renovation being expected to cost $80,000, (whereas in fact as at May 2007 at least $293,000 had been paid out by Lavender Estates in relation to those works) (see pages 18 and 27 of the Haselgrove bundle). Clearly, this was misleading by omission. Whether it was for the purpose suggested by Mr Harris is an inference available to be drawn. 104 Similarly, it is said that deception was practised on the solicitor acting for the beneficiaries insofar as Ms Gibson's lawyers wrote that the debts of Lavender Estates incurred in the deceased's lifetime were in excess of $2 million whereas the balance sheet for Lavender Estates (Ex P2/D) showed debts as at June 2008 of $1.62 million (a sum significantly less than the $2 million) and these had not been debts incurred during the deceased's life, at least insofar as some $293,000 had been incurred in relation to the Nana Street property renovations in the period from November 2006 to May 2007. Ms Gibson conceded that this was incorrect. Again, it seems there would be an available inference that Ms Gibson was seeking to present an incomplete picture of events. 105 I think an inference might be drawn that a less than complete picture was being put forward in order to stave off attempts by the executor/beneficiaries to ascertain the precise position with Lavender Estates, at least until the work on the Nana Street property was completed. Certainly, Ms Gibson had no intention of stopping work on the Nana Street property (and made that clear to Mr Haselgrove's lawyers), she seeing it as vital that it be made "viable", describing it as a building site (T 46). · Credit 106 Mr Wilson submitted that insofar as any submission was made against Ms Gibson as to the diminution of the assets of the estate in this respect, the court should also take into account the significant voluntary unpaid contribution Ms Gibson had made to the management of Broadview Apartments and the affairs of the company since the date of death. (The executor himself said in cross-examination that he appreciated Ms Gibson's efforts, but maintained she should have paid tax as an employee if she was to be treated as an employee.) Mr Harris points to the fact that the Lavender Estates' accounts show that moneys were paid for a property manager/consultant by way of management fees and for staff wages and that it could not be assumed that Ms Gibson had made a substantial contribution to the property. Moreover, Ms Gibson stood to receive a personal benefit from such a contribution. 107 It was submitted by Mr Harris that I should make adverse findings in relation to Ms Gibson's credit insofar as there were many things which were incorrect in her affidavits and which he said demonstrated at best a "cavalier" attitude towards the preparation and placement of evidence before the court. Ms Gibson's evidence was that the documents, or a number of the documents, which were exhibited to her affidavit had not been seen by her at the time that she swore the affidavit. In a number of instances there were discrepancies on the documents that were exhibited to the affidavits (such as whether her sister remained a shareholder of Pitlochary (as the recent ASIC search shows) or had been paid out of that company). (In that particular instance, Mr Wilson notes, that insofar as the Janette Gibson material is concerned, this would be a submission against interest on the part of Ms Gibson since if Janette Gibson still owned an interest in Pitlochary it would mean that Ms Gibson's financial position was even worse than she had stated.) It is a matter of concern that it would seem Ms Gibson initially affirmed her affidavit without having before her some or all of the very documents said in the affidavit to be exhibited to her. 108 There were a number of errors and inconsistencies between her affidavit evidence and the documents to which Mr Harris took Ms Gibson in the witness box and she conceded in a number of instances that her affidavit evidence was incorrect (see T 24 re sale price of her sister's house; T 26 as to the dates of the deceased's bankruptcy - though I note that her evidence seems to be consistent with that of Mrs Delmont in this regard; T 31 as to the amount paid from the Pitlochary sale proceeds into Broadview; T 36 as to her full time wage over the period from 1999; T 65 as to the date her sister sold out of Pitlochary; T 77 as to her explanation for the response to the request for information as to Nana Street construction costs; T 79 as to the response to the lawyers acting for the beneficiaries). Moreover, her evidence as to the loans taken out and moneys expended on various properties was at times contradictory (see T 83/85). 109 It may be that the inconsistencies and vagueness in her accounts of the financial details are a product of the fact that the deceased (not Ms Gibson) had previously been responsible for administrative matters, rather than of any intent to mislead the court. However, it seems to me that I am unable to place reliance on Ms Gibson's generalised assertions as to what money come from, or went to, where; nor can I necessarily place much weight in the accountants' loan entries - loan accounts seemingly being re-named (and debts discharged), as Counsel put it, apparently on the stroke of a pen. That is not to say that there was no contribution by Ms Gibson to the deceased's property accumulation, but it does make it difficult to be clear as to precisely how much of the expenditure which was channelled through Lavender Estates was expended for its benefit as opposed to Ms Gibson's personal benefit at the end of the day. 110 For example, the evidence as to the payment out of Ms Janette Gibson was based solely on assertions as to the taking out of an ANZ Bank loan by the deceased and Ms Gibson jointly (see T 67/68) - there being no documentary material in support of that. The evidence was put by way of affidavit having been filed only on 20 May 2009, too late (as Mr Harris pointed out) for there to be any sensible opportunity to issue subpoenas or notices to produce in relation thereto. No evidence was given by Ms Janette Gibson, who was in court during the hearing. 111 In terms of credit generally, however, I should say that Ms Gibson gave what I considered to be a fair (and empathetic) account of the deceased's relationship with his family; she acknowledged and respected the ongoing familial obligations of the deceased. 112 Whatever else be the case however, it seems clear that Ms Gibson has already received a significant benefit out of estate moneys. While the estate does have a half interest in Nana Street property, there seems to me a real question as to how much the amounts paid in respect of Nana Street renovations have gone beyond asset preservation and in fact amount to over-capitalisation; and, in relation to the mortgage repayments, as the estate's interest in the company is 62% (whereas liability for the mortgage was only 50%) any moneys expended out of Lavender Estates for the mortgage fees exposed the estate to a disproportionate burden of those mortgage payments. 113 Therefore, while I do not regard Ms Gibson's actions in this regard as falling within disentitling conduct, as that is understood in this context, nevertheless I consider it relevant in assessing what provision should now be made for Ms Gibson that she appears to some extent to have diminished the assets of the estate by diversion of funds from Lavender Estates accounts to her personal use and in relation to the Nana Street property (albeit that the estate might obtain some benefit out of the latter). She did so knowing (as she accepted in cross-examination) that the position had fundamentally changed since the deceased's death and she appears to have continued to expend funds (for example on Nana Street and Broadview Apartments) even over the executor's objections. 114 In summary, it appears that Bobra Glen was purchased with a National Australia Bank loan to Ms Gibson and the deceased jointly for $250,000 and the balance from Lavender Estates. Lavender Estates paid for renovations, mortgage repayments and the couple's living expenses while at Bobra Glen. As at June 2006, the Lavender Estates' accounts showed a $403,000 loan in respect of Bobra Glen (which would, it seems, include the original $250,000 National Australia Bank loan). 115 The Nana Street property was purchased in November 2006 (at a time when the Lavender Estates expenditure on Bobra glen was shown as $400,000) by way of a loan from National Australia Bank to Ms Gibson and the deceased drawn down to $350,000 (Ms Gibson in evidence said this was "extended … with the loan over Bobra Glen" (T 83) and by way of the $270,000 private Coombs/Varga loan, although Ms Gibson also says some of that went into Broadview Apartments development). 116 Lavender Estates paid the mortgage repayments and at least $293,000 on renovations for Nana Street (although Ms Gibson's evidence was confusing about the source of all moneys for these renovations, that seems ultimately to have been accepted by her - see T 82-84). 117 When Bobra Glen was sold the proceeds of sale were paid to Lavender Estates' National Australia Bank account and in its books the Bobra Glen loan was thereafter shown as a loan - Fawcett Street (ie Broadview Apartments). Therefore, after the date of the deceased's death any indebtedness of Ms Gibson and the deceased to the Bank remaining in relation to the Bobra Glen/Nana Street borrowings seems to have been treated in the Lavender Estates accounts as referable to Broadview Apartments. 118 While I accept that the estate may have gained a benefit out of Ms Gibson's managerial efforts in relation to Broadview Apartments, the value of those efforts would be very difficult to quantify (and were also for her benefit). Further, it is by no means apparent that had the executor been given any role in determining whether Ms Gibson's services were required he would have agreed to them. In any event, the bulk of the company expenditure since the deceased's death seems to have been on the Nana Street property. · Conduct of Executor 119 Complaint was made by Mr Harris as to the manner in which the executor had conducted matters. There was significant delay in the initial appointment of the executor (only a small portion of which could have been referable, contrary to the executor's suggestion in the witness box, to the uncertainty as to whether Mrs Delmont would renounce probate - since she did so in July 2007). 120 It would appear that part of the reason for the delay in the appointment of the executor (as was accepted or acknowledged by Mr Haselgrove), and perhaps a significant part, was his wish to ensure that arrangements were put in place for payment of his fees before any steps were taken in relation to his executorship. Mr Haselgrove suggested that the delay arose due to the need for him to ascertain Mrs Delmont's position as to acceptance of the executorship. However, he was notified of her position close to 12 months before he applied for probate; during which time it would seem he was occupied carrying out research in relation to the company "investigating the whole matter of the estate and the ability of me to act as director" (T 121), his role and the interpretation of the will (that being straightforward in its terms) (T 124) and what needed to be done in relation to the estate, seeking agreement as to his fees, and engaging in correspondence with Ms Gibson's solicitors in his capacity as a prospective executor. Mr Haselgrove explained this as being on the basis that in an estate involving assets outside South Australia where he resided it was necessary for him to make those arrangements in advance. That may well be prudent for him personally from a business perspective. However, I do not consider that his evidence reflected well on him in this regard. The fact is that Mr Haselgrove accepted that there was some urgency in an executor being appointed to the estate because he knew at the time that the major asset of the estate was its majority shareholding in Lavender Estates that Ms Gibson was in control of the company funds, and that a substantial asset of the estate was at risk (insofar as he believed there was inappropriate expenditure by her) in those circumstances and yet there was a significant period of delay before Mr Haselgrove sought appointment as a executor. There is of course an ability for executors to claim commission in the ordinary course without any need for consent by the beneficiaries or potential claimants. 121 Costs were incurred over a substantial period of time in correspondence on behalf of Mr Haselgrove which it was suggested had been a complete and utter waste of time (such as complaints made at the fact that Ms Gibson had (quite properly) notified ASIC of the deceased's death) it being suggested that she had "wrongly removed" the deceased as a director of the company - something which Mr Haselgrove sought in evidence to explain by suggesting (inconsistently with what had been written, presumably on his instructions) that he had been raising a complaint as to the company being carried on as one director company. 122 Mr Haselgrove also complained in relation to the circumstances in which the Broadview Apartments land was listed on a number of occasions by Ms Gibson for sale (without consultation with him). Apart from the fact that the time at which this complaint was first made was before Mr Haselgrove had accepted the position as executor and sought probate in respect of the will (it being asserted that Mr Haselgrove had no duties at that stage and Mr Haselgrove making a point at the time of the fact that he had not yet accepted probate), nevertheless there was correspondence and threats by Mr Haselgrove in relation thereto. Mr Haselgrove's affidavit said that his solicitors had written instructing the property to be removed from the market, although when reference was made to the terms of the letter in fact it did not go so far as that. 123 It was submitted that I should take this course of conduct into account in determining whether any costs or the level of costs should be recoverable by the executor. In particular, it was stated that the executor should not recover from the estate his costs of the affidavit sworn by him on 15 October 2008 which itemised the correspondence between the parties in some detail in respect of the conduct of Ms Gibson which it was alleged had caused a diminution (albeit unspecified in quantum) in the value of the estate. Mr Lawson, in response, contends that this was evidence which was filed in the context of an earlier expedition application and that it is not appropriate for there to be any reduction in the level of costs recoverable by reference to this. 124 It seems to me that Mr Haselgrove was in a position of some difficulty in balancing the interests of the estate and the wishes (seemingly changing from time to time) of the beneficiaries. Insofar as criticism is made of his conduct and in relation to delay in effecting the sale of the Broadview Apartments, some of this appears to be explicable by the fact that at least at some stage one or more of the beneficiaries was (or were) not in favour of the sale of the Broadview Apartments. I note also that as executor and trustee he was given the ability, amongst other things, to postpone any sale of the assets and to transfer the property in specie. 125 On balance, I do not propose to make any deduction from the costs which would ordinarily be recoverable by the executor on an application of this kind. However, I note that these should not include any costs in relation to the administration of the estate. In due course it may be necessary for the reasonableness of some of the costs apparently incurred by Mr Haselgrove to be considered by the court. 126 One matter, in relation to the executor's position, which does seem to me to be relevant in considering the substantive application before me is the suggestion by the executor (T 136/137) that, before finalising the estate he would need thoroughly to investigate the affairs of Lavender Estates (in particular, to verify all cheques drawn on the Lavender Estate accounts from the date of the deceased's death) and that this might then cause him to make further investigations (it would seem as to any claims the company may have against third parties, presumably including Ms Gibson, in relation to the running of the company's affairs while she has been in control of the funds of the company). Counsel for the executor in fact opened by submitting that any order for provision for Ms Gibson should be conditional upon her providing a full accounting to the estate in relation to her dealing with company or estate funds, to ascertain the benefits obtained by her personally. Ms Gibson was cross-examined by Mr Lawson as to whether she would be in a position to comply with such an order. 127 Mr Haselgrove also apparently intends "to research the legal avenues available in order to obtain control of, or access to, the company's bank accounts if the cooperation of Ms Gibson is not forthcoming following the hearing" and would need full details of all cheques "that might lead to me wanting to know other things" (T 132, T 134). 128 Mr Haselgrove was quite adamant that, as executor, he had to take on board the beneficiaries' interests and said with great emphasis that "I don't propose to sign off on any of the accounts for this company until I've satisfied myself that they are in proper order". 129 In circumstances where it seems likely that all creditors' claims will be able to be met out of the sale of the Broadview Apartments, and where neither Mrs Delmont nor Ms Gibson (nor for that matter at least one of Mrs Delmont's sons, who was present in court and able to give instructions) is keen to see the costs of administration of the estate escalate in a lengthy fact finding mission for which Mr Haselgrove (whose accounting skills are said to come from the "knocks of hard life" (T 137)) will no doubt wish to be remunerated, I see merit in the suggestion put forward by Senior Counsel both for Mrs Delmont and for Ms Gibson, that an order for provision should be made out of the estate so as to allow Ms Gibson to retain all benefits obtained personally by her through the company (provided that does not prejudice any creditors). 130 Moreover, insofar as Mr Haselgrove seemed quite unmoved in the witness box by his acknowledgement (T 131) that he and Ms Gibson had been "at loggerheads" in relation to the sale of the Broadview Apartments for quite some time (something for which Mr Haselgrove apparently blames Ms Gibson but where there seems to me to be some fault on both sides) and made the rather surprising suggestion (T 141) that a decision as to which of the prospective agents' commissions should be accepted could be deferred and made once a sale was imminent and a prospective purchaser located (a course of action highly likely to result in competing, if not double, claims for agents' commission), I also consider it to be in the interests of the parties (and beneficiaries) for steps to be taken to break, so far as possible, the current impasse in relation to the listing/marketing of the Broadview Apartments for sale. · Conclusion as to second stage test 131 The primary submission by Mr Wilson, was that Ms Gibson should obtain the deceased's interest in the Nana Street property and that, because the Broadview Apartments enterprise was commenced and carried on during the course of the relationship between Ms Gibson and the deceased, she should obtain the whole of the deceased's interest in the shares in Lavender Estates. This would leave the only other asset in the estate being the estate's shareholding in Kuthanara Pty Limited, which both Ms Gibson and Mrs Delmont submit should be to the benefit of the deceased's youngest son. This would leave almost nothing for Mrs Delmont. 132 Counsel for the executor, Mr Lawson, submitted that an appropriate way in which to address the competing claims of Ms Gibson and Mrs Delmont, if I were to be of the view (as I am) that inadequate provision had been made for both under the will is that an award be made in Ms Gibson's favour for the transfer to her (encumbered as it presently is) of the estate's interest in the Nana Street property and, as part of the provision made for her out of the estate, she be entitled to retain all benefits derived to date from Lavender Estates (assuming that company's creditors had been paid out in full). (As noted earlier, both Mrs Delmont and Ms Gibson were, I think, understandably (though perhaps for different reasons) concerned at the suggestion, raised for the first time in the evidence given by Mr Haselgrove, that Mr Haselgrove might be seeking (at the cost of the estate) to enter into further litigation in relation to the conduct of the affairs of Lavender Estates by Ms Gibson, particularly given the delay in finalising the estate to date.) An award of that kind it was submitted should be conditional upon Broadview Apartments being in the hands of trustees for sale. 133 In response, it was submitted by Mr Wilson that if a half share of the Nana Street property were to be transferred to Ms Gibson carrying the National Australia Bank debt, then on the likely available assets of the estate, this would leave Ms Gibson with the Nana Street property (and in due course with funds out of her shareholding in Broadview Apartments from which she would be in a position to meet the debt on that property) but with only a small amount of cash available to her and that she should not be left in a position of having a house with very little in the way of cash savings. It was eloquent, Mr Wilson suggested, that no real attempt had been made to quantify any diminution to the estate said to have been caused by Ms Gibson. Certainly, Mr Haselgrove's affidavit, while setting out in detail the correspondence in which he had engaged (and in some cases at best incorrectly paraphrasing what was therein set out), makes broad assertions but no attempt to quantify the alleged diminution in value suffered by the estate. (It was suggested, for example, that merely listing the property for sale might have caused a diminution in value - a proposition impossible to sustain on the material before me, if at all.) 134 Mr Harris submitted that Ms Gibson has already the benefit of payment by Lavender Estates of electricity, telephone, car expenses and the like (as well as, or so he says I should infer, the increase in the deceased's credit card debts paid out of Lavender Estates); and the benefit of substantial renovations carried out (at Lavender Estates' expense) to the Nana Street property which had been intended to be her home. 135 Quarantining the Kuthanara shares, and assuming that legal costs were to be allowed in full in these proceedings, Mr Harris' initial submission was that Mrs Delmont should have provision in the order of $770,000 to allow her to purchase a home and have an additional fund. 136 In final submissions (in response to my query as to whether an arrangement could be found whereby Ms Gibson could retain the Nana Street property conformably with provision of sufficient funds to enable Mrs Delmont to purchase accommodation of her own), Mr Harris submitted that an amount of $650,000 be awarded to Mrs Delmont which would allow her to purchase a modest 2 or 3 bedroom property in an area near her home and leave her with a small emergency fund; and which would leave approximately $100,000 from which provision could be made for Ms Gibson on top of the interest she already has in relation to the Broadview Apartments. 137 Mr Harris also submitted that if the assets of the company when realised were sufficient to pay out all of the companies' liabilities, Ms Gibson should have further provision in the amount of the benefits received by her from the company and from the deceased's estate from the date of death. 138 It was suggested that any surplus in the estate (which was considered unlikely) should be available out of the estate for Mrs Delmont. This, it was said, would ensure that the money provided for in respect of Mrs Delmont's claim would be subject to a "floor" and not subject to unnecessary costs. There was some debate as to how any trustee for sale might be appointed. 139 In all the circumstances, I think Mrs Delmont's claim should have priority to that of Ms Gibson by reason of the greater position of hardship in which she is and has been for some time. To the extent that it is possible to achieve a position where Mrs Delmont and Ms Gibson have secure accommodation and a reasonably comfortable lifestyle, that seems to me to be the result which would be consistent with community expectations. 140 I considered whether to make orders for the transfer in specie to Ms Gibson of the Nana Street property since it seemed to me this would be a practical division of assets likely to leave both Ms Gibson and Mrs Delmont with secure accommodation. However, in circumstances where the debt position on the Nana Street property is somewhat confused (particularly in relation to the Coombs/Varga loan) it seems more appropriate to make awards of money by way of provision of maintenance out of the estate but to provide a mechanism by which Ms Gibson could acquire that property if she wishes (and hence to retain the benefit of the funds expended on the renovations, some at least of which represent in my view a benefit already received from the company and indirectly from the estate) since the date of death. 141 Accordingly, I think it is appropriate that Mrs Delmont have provision made for her in the form of an order for payment out of the estate (excluding that part of the estate comprised by the Kuthanara shareholding) of the sum of $650,000 and that this payment should be in priority to any payment to Ms Gibson; that provision be made out of the estate (again excluding that part of the estate comprised by the Kuthanara shareholding) to Ms Gibson in the sum of $100,000; that Ms Gibson be given an option to acquire the Nana Street property (by way of offset against her share of any proceeds of sale of Broadview, if that be the most convenient course) on payment of a sum sufficient to discharge in full the estate's liabilities in respect of that property including the Coombs/Varga loan insofar as that may be a liability of the estate); and that, if the assets of Lavender Estates, when realised, are sufficient to pay out all its liabilities, then Ms Gibson should have further provision out of the estate to the extent comprised (and already satisfied) by the benefits received or notionally received personally by her from Lavender Estates since the date of the deceased's death. 142 The Kuthanara shareholding, and any other assets comprising the residue of the estate after the above provisions have been made out of the estate, will fall to be distributed in accordance with the will. 143 I consider that it would be appropriate that it be a condition of the relief so granted that the executor and Ms Gibson, in their capacity as directors of Broadview Apartments, be directed to take immediate steps for the sale by Lavender Estates of the Broadview Apartments so as to permit the winding up of the affairs of that company as soon as practicable. In light of the evident difficulties between the executor and Ms Gibson I would like to hear submissions as to how best such a sale may be effect in an expeditious and cost-effective manner. 144 As to costs, I consider that the plaintiff's costs in each of the proceedings should be paid out of the estate of the late David Delmont on a party and party basis and that the defendant's costs of the proceedings (which are not to include any costs referable to the administration of the estate other than the defence of the respective proceedings before me) be paid out of the estate of the late David Delmont on an indemnity basis. 145 I suggest that the matter be listed on a suitable date for the parties to bring in a form of orders to reflect the above. **********

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