Hartley v Woods

THE SIZE, COMPOSITION AND MOVEMENTS IN THE DECEASED'S ESTATE

The Deceased's Orangeville Property and its Sale

1. The evidence relating to the size, composition and movements in the deceased's wealth between her departure from the Orangeville property (in or about March 2009) and the date of her death (on 27 June 2013) is patchy and of variable quality.
2. The Orangeville property remained vacant for some months, pending sale, after the respective departures of the first and second plaintiffs and the deceased.
3. The property was sold in late 2010, with settlement in 2011. Contracts (not in evidence) were evidently exchanged on 9 December 2010 and settled on 17 January 2011. Records of the Commonwealth Bank created in December 2010 suggest that the sale was initially on the basis of a settlement planned for June 2011; but a "Statement of Advice" prepared by the Bank on or about 21 January 2011 records that the proceeds of sale of the property had been banked on 18 January 2011 pending clarification of the deceased's investment intentions. In his written submissions counsel for the defendant nominated 17 January 2011 as the date upon which the sale was settled. That nomination is consistent with the Bank's records.

The Deceased's Insurance Bond Investment

1. By the end of February 2011 the deceased had made, then varied, arrangements for the Bank to issue an "insurance bond" (providing for the payment of benefits on her death) predicated upon the availability to her of the proceeds of sale.
2. The wife of the third plaintiff deposed to a conversation with the defendant and his wife in January 2009 in which the defendant said that the deceased's property then comprised $1.3 million in money plus the Orangeville property. The defendant, for his part, says that, in January 2011 the deceased told the Commonwealth Bank that she had about $1.3 million, $1million of which she wanted to invest. It is common ground that the deceased had access to substantial liquid investments throughout 2009 and 2010, although the quantum of those investments remains obscure.
3. Commonwealth Bank records suggest that, in January 2011, the deceased's net worth was of the order of $1.8 million, principally comprising financial investments with a total worth of $865,000 and the Orangeville property or sale proceeds worth $905,000.
4. The amount invested by the deceased in a bond issued by the Commonwealth Bank varied more than once. The initial investment appears (as late as 12 January 2011 or thereabouts) to have been limited to $750,000, with a prospect of a further investment when proceeds of the Orangeville sale became available. Between 21-24 January 2011 or thereabouts the investment was raised to $1.5 million, an event consistent with the Orangeville sale proceeds having become available earlier than expected. By no later than 24 February 2011 or thereabouts, the investment was, however, reduced to $1 million, allowing for a contemporaneous payment of $500,000 to the defendant (formally effected on or about 2 March 2011).
5. These fluctuations in the size of the bond were accompanied by a change in the respective shares of the persons (the defendant and the third plaintiff) nominated by the deceased to be beneficiaries of the bond on her death. Initially (as early as 10 December 2010) the deceased's declared object in her entry into the bond was to benefit the defendant and the third plaintiff (in equal shares) to the exclusion of the first plaintiff. On or about 17 January 2011 (with formal effect from about 24 February 2011) the respective shares of the defendant and the third plaintiff were altered so that the defendant was to receive 75%, and the third plaintiff was received 25%, of a payout on the deceased's death.

A Payment by the Deceased of $375,000 for the Benefit of the Defendant's Bankrupt Daughter

1. Upon the deceased's death, the defendant and his wife say, only then did they discover that the $1 million bond had been reduced to $625,000 during the deceased's lifetime. That reduction is consistent with a payment of $375,000 evidently made by the deceased on or about 14 September 2012 to fund the purchase of a residence for the benefit of the bankrupt daughter of the defendant (Judy) in the name of another daughter (Kim). Those funds appear to have been withdrawn from the deceased's account on 14 September 2012 in aid of a settlement of the purchase effected on or about 2 October 2012.
2. No copy of the bond (in any of its forms) is in evidence.
3. The plaintiffs contend that the deceased's payment out of $375,000 on the daughters' property should be laid to the account of the defendant because, they allege, it was paid out by the deceased with his knowledge and he had a duty to protect the deceased's interests. Both the defendant and his wife deny contemporaneous knowledge of the payment. The nature and scope of any duty owed by the defendant to the deceased are contentious.
4. The defendant says, and I accept, that his (bankrupt) daughter raised with him the possibility that the deceased might provide her with assistance, but he immediately disclaimed any intention to become involved. On the evidence presently before the Court, the deceased's payment was made without the personal involvement of the defendant or his wife, both of whom claim to have been surprised at the diminution of the value of the bond as presented to them after the death of the deceased. The defendant's daughter (now discharged from bankruptcy) swore an affidavit in support of her father, but was not cross examined. The money paid out by the deceased for her ultimate benefit operated to reduce the sum which the defendant (and the third plaintiff) would otherwise have received on the bond issued by the Commonwealth Bank.

The Course of the Deceased's Wills

1. Between 4 March 2003 and 27 March 2009, inclusive, the deceased executed four wills which progressively favoured the defendant over the first plaintiff.

Disposition of the Deceased's Wealth During her Residence with Defendant

1. During the four and a half years that the deceased was a member of his household, the defendant acquiesced in what appears to have been a tendency on her part to make improvident gifts, principally in favour of himself and his family. In this, he was aided, not only by his holding an enduring power of attorney as the first plaintiff's replacement, but also by his knowledge of the means to operate the deceased's (Commonwealth) bank account. In the shadow of her death, immediately before and after the event, he "emptied" her bank account so that, her whole estate at the time of death was said to comprise no more than $31,588.57 cash in the bank.

Estimated Size and Nature of Deceased's Estate at Death

1. At the final hearing of these proceedings he contended that the deceased's estate at death amounted to $31,588.57. He made no allowance for any potential recovery by her estate of property disposed of during her lifetime (including, in particular, the purported gift of $500,000 to him personally on or about 2 March 2011 and the purported gift of $375,000 on or about 14 September 2012 for the benefit of his bankrupt daughter), property sought by the plaintiffs to be brought to account.
2. At the hearing, evidence was adduced by the defendant that the estate comprises a Commonwealth Bank account, credited with the $31,588.57 said to be the whole of the deceased's estate.

CRITICISM OF THE DEFENDANT'S FINANCIAL EVIDENCE

1. The defendant's evidence about his financial dealings with the deceased, and about disposition of her property, is unsatisfactory in a number of respects: 1. In February 2016 he swore an affidavit in which he claimed that, after the deceased's death, he "found" that the balance in her Commonwealth Bank account was about $1,500. A bank statement, apparently not available to him at the time he swore his affidavit, records that the account had a closing balance, as at 1 September 2013, of $1,609.04. 2. At the time he swore that affidavit, the defendant did not disclose that, between 27 June 2013 (when the deceased died) and 16 July 2013, he had deliberately withdrawn a total of $23,000.00 from the deceased's bank account (using her ATM card, the pin number for which he had established for her when she came to live with him in 2009) without informing the Bank of her death. As he conceded in cross-examination, he deliberately "emptied" the account for his own benefit, leaving only a balance of $8,706.41, $7,100.50 of which was released by the Bank on 12 August 2013 to fund the deceased's funeral expenses. 3. In none of the affidavits of the defendant read in his case did he disclose that on or about 2 March 2011 (at about the time he was assisting the deceased in establishment of her Commonwealth Bank insurance bond), he received $500,000 from the deceased which, in cross-examination, he contended had been given to him by the deceased, as a gift, which the deceased told him she wanted to watch him spend in her lifetime. 4. In his affidavit of February 2016 the defendant claimed to have had no knowledge of how much money the deceased had prior to moving from Orangeville to his property. All the more remarkable, then, that he also deposes to having received $50,000 from the deceased (not long after she moved in with the defendant and his wife in about mid-2009), he says, as a gift to show the deceased's "gratitude" for the defendant and his wife "agreeing to care" for her.
2. Criticism of the quality of the defendant's evidence about financial matters, or his probity in dealing with the deceased's bank account, does not carry with it a finding that his evidence generally is beyond belief. He was generally frank in presentation of his evidence. Acceptance or otherwise of his evidence requires examination of context.
3. In his oral evidence the defendant confirmed that, from at least the time the deceased came to live with him, he saw himself as having a responsibility for her welfare; but not one extending to management of her affairs generally or to supervision of her dealings with third parties.
4. Although aware that she was suffering from the onset of dementia, that she could not pass an ATM without (he suggests) compulsively withdrawing cash from her bank and that she was constantly giving away money or buying objects for which she had no evident need, he did nothing to safeguard her property. On the contrary, he appears to have facilitated her withdrawal of cash from the bank, not only via ATM outlets but also via cheques cashed at the bank. He selected her pin number (the year of her birth) for ATM withdrawals, and he regularly drove her to the bank or to shops where an ATM was accessible.
5. In cross examination (in response to the question, "In the three years or four years that she was there [at your property], she was constantly giving money or you were constantly taking money from her, weren't you?") the defendant answered: "If she offered me money, I took it. I'm not stupid."
6. In his evidence the defendant professed not to be interested in how the defendant dealt with her property. He said that it was "not any of my business": and that it was her "money, she can give it to whoever she wants".
7. That is his explanation for claimed ignorance of arrangements made with the Commonwealth Bank, in or about September 2012, which varied the deceased's insurance bond so as to provide $375,000 to fund the purchase of a residential property in the name of the defendant's daughter, Kim, for the benefit of his bankrupt daughter, Judy (she claims as a gift).
8. Having attended with the deceased on the Commonwealth Bank in making arrangements for the insurance bond from which he ultimately benefited personally, the defendant (in December 2010 - January 2011) then learned, if he did not already know, that the deceased's assets at that time (largely liquid in form) had a value of $1.8 million or thereabouts.

THE THIRD PLAINTIFF'S CLAIM TO A GRANT OF ADMINISTRATION

1. Before these proceedings, no grant of probate of any will of the deceased was sought or obtained. The absence of any application for probate reflects the apparent lack of any substantive estate to administer. The defendant's evidence is that, based upon an assessment of the value of the deceased's estate as $32,000 and upon recognition of himself and the third plaintiff as the deceased's residuary beneficiaries in equal shares (via her will dated 27 March 2009), he paid $16,000 to the third plaintiff without the formality of a grant of probate. The third plaintiff has not disputed his receipt of that payment.
2. At the commencement of the final hearing of the proceedings the plaintiffs' case against the defendant was clarified by orders designed to make explicit that he is sued both in his personal capacity and (named as the deceased's executor in her Will dated 27 March 2009) as a representative of the estate of the deceased. Pursuant to rule 7.10 of the Uniform Civil Procedure Rules 2005 NSW, the defendant was appointed to represent the estate of the deceased in the proceedings. The order for his appointment to that office provided that the estate be bound by judgments and orders made in the proceedings to the same extent as the estate would have been bound had a personal representative of the deceased been a party to the proceedings.
3. One of the prayers for relief in the proceedings is, however, a prayer that the deceased's will dated 27 March 2009 be admitted to probate and that a grant of administration of the deceased's estate, with the will annexed, be made in favour of the third plaintiff. This reflects a perception on the part of the plaintiffs, first, that further proceedings may have to be instituted on behalf of the estate to recover estate property and, secondly, that (by reason of conflicts of duty and interest) the defendant is not a suitable person to administer the estate.
4. As to the first point: Such, if any, rights as the estate might have against a person or persons other than the defendant (including, in particular, the daughters of the defendant) should be reserved for further determination in proceedings constituted for that purpose.
5. As to the second point: In my opinion, the defendant is not a suitable person to be the recipient of a grant to administer the estate. His deception of the deceased's bank in withdrawal of funds from her account after her death is a primary disqualifying factor, as are his own liability to account for money to the estate pursuant to this judgment, and the possibility that he might be required to make a claim (on behalf of the estate) against one or both of his daughters.
6. As a residuary beneficiary of the deceased's estate, the third plaintiff is a suitable recipient of a grant save and to the extent that he might be called upon to consider whether his wife should be required to bring to account the value of the jewellery (presently valued at $4,670) given to her by the deceased.
7. The circumstances in which that gift of jewellery was made were not explored at the hearing of the present proceedings. In a forensic response to observations made by the defendant in cross examination, counsel for the plaintiffs tendered a valuation of the jewellery (Exhibit P23), and counsel agreed to a formal notation by the Court, at the tail end of the case.
8. If the parties are unable to agree as to the status of the gift, and any consequent liability to account to the estate, I should be informed of that fact before final orders are made so that due consideration can be given to how best to determine the parties' dispute.

OTHER CLAIMS FOR RELIEF

1. As a residuary beneficiary of the estate of the deceased (in equal shares with the defendant) under the deceased's Will dated 27 March 2009, the third plaintiff claims against the defendant relief in the character of an accounting for the estate of the deceased, drawing upon allegations that: (a) throughout the time the deceased lived with the defendant and his family, the defendant owed the obligations of a fiduciary towards her, and he breached those obligations by subordinating his fiduciary obligations to his own interests, and those of his family, in receiving gifts, without her fully informed consent; and (b) he procured from the deceased gifts for himself and his family by an exercise of undue influence upon her.
2. The first and second plaintiffs make claims against the defendant (personally and as a representative of the estate of the deceased) relying upon: 1. an allegation of "promissory estoppel", arising out of promises made to them by the deceased that, after her death, they could acquire the Orangeville property on favourable terms, giving rise to a claim that the proceeds of sale of the Orangeville property are held on trust for them; and 2. Chapter 3 of the Succession Act 2006 NSW, governing claims for family provision relief against the estate and notional estate of the deceased.

THE PLAINTIFFS' CLAIM TO AN ACCOUNTING

1. Funds of the deceased for which the plaintiffs claim that the defendant is liable to account to her estate are not pleaded or particularised with precision. A lack of clarity in the plaintiffs' case was not assisted by a liberal, if not unrestrained, cross examination of the defendant about the receipt and expenditure of money by the deceased and the defendant respectively.
2. The forensic latitude allowed to the plaintiffs in cross examination tended, perhaps, to suggest that the deceased was more profligate than she was and that the defendant received more of her largess than he did.
3. If the opening balance of the deceased's assets (in or about March 2009) had an estimated value of about $1.8 million then all but about $200,000 can be accounted for. $625,000 or thereabouts was paid out by the Commonwealth Bank on the bond arranged by the deceased, as varied. $560,000 was paid out to the defendant. $375,000 was paid out to his daughter(s). A further $6,000 was spent by the deceased for a holiday with the defendant and his wife. As emerged late in the hearing, the deceased also gave to the wife of the third plaintiff jewellery with a present value of $4,670. Leaving aside for the moment the defendant's unauthorised withdrawals from the deceased's bank account in the shadows of her death, her account had a credit balance of $31,588.57 at the time of her death. That amount apparently includes the $8,000 cash which the defendant deposes to having found in her room after her death, and the $23,000 the defendant emptied from her account at about the time of her death. Allowing for all these items (without any allowance for interest or pension income derived by the deceased), there is an unexplained shortfall in the deceased's assets of about $200,000.
4. That is no small amount in itself, but its application was spread (albeit perhaps not evenly) over nearly four and a half years, and a fair inference from evidence about the deceased's pattern of behaviour is that (as the defendant deposed) much of any such sum is likely to have been given away to a range of people (including persons unidentified) and dissipated by her in the course of ordinary living. Despite their use of the subpoena process, and their extensive cross examination of the defendant, the plaintiffs have not been able to uncover what happened to any shortfall, or to point to a reasonable basis for assuming that, if ordered to file accounts, the defendant would be able to shed more light on what occurred than he already has.
5. The plaintiffs (more particularly the third plaintiff) have sued the defendant for an accounting for moneys received by him from the estate of the deceased.
6. Subject to allowing the parties an opportunity to make additional submissions should they wish to do so, I am inclined to the view that: (a) even if the plaintiffs hold out a hope of establishing that the defendant received a substantial part of the $200,000 or so of the deceased's property presently unaccounted for, there is no utility in an order for accounts and such an order, if made, would operate unfairly to the defendant, to the point of being oppressive, given the course of the proceedings to date; and (b) if the third plaintiff seeks (as a representative of the estate of the deceased) to recover any money from the daughters of the defendant, jointly or severally, by reference to the $375,000 paid out by the deceased on 14 September 2012, that will require differently constituted, separate proceedings.
7. In making these observations, I am mindful that, having been found in breach of fiduciary obligations by this judgment, the defendant might be said to bear an onus to account for all his receipts of money or property from the deceased. I am equally conscious of: (a) a need to allow for the observations made in Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 416 at 420-423 about the liability of a "guardian" to account for funds in a situation in which a "guardian" and principal live a shared life; (b) a need to allow for the making by the deceased of gifts that might be justified on the grounds of friendship, family relationships, charity and other ordinary motives (by the reference to cases noted in Quek v Beggs (1990) 5 BPR [97405] at 11,764); and (c) a need (recognised in Vadasz v Pioneer Concrete (SA) Pty Limited (1995) 184 CLR 102 at 113-114 and Bridgewater v Leahy (1998) 194 CLR 457 at 493-494) for the Court to do what is "practically just" in its grant of equitable remedies.
8. Leaving to one side sundry cash gifts that might have been made from time to time by the deceased in favour of the defendant in the course of their living together, the principal, particular amounts in respect of which the third plaintiff (in particular) seeks an accounting in favour of the deceased's estate from the defendant are the following (his receipt of which the defendant concedes): 1. the amount of $50,000 given by the deceased to the defendant, in about mid-2009, he says characterised by the deceased as a show of gratitude for his agreement, and that of his wife, to care for her. 2. an amount of $10,000 paid out by the deceased (on an engineering account for a car that the defendant had spray-painted), for the benefit of the defendant, he says as a birthday present in about June 2010. 3. the payment of $500,000 to the defendant on or about 2 March 2011, he says as a gift characterised by the deceased as a sum she wished to enjoy watching him spend during her lifetime.
9. In the socio-economic context in which the deceased and the defendant lived (she as the recipient of a war widow's pension, and as a person with deteriorating mental health; he as the recipient of a disability pension, and as a person who took her into his household to care for her), these transfers of property for the benefit of the defendant were, jointly and severally, too large to be justified as a routine incident of ordinary life. They were extraordinary payments made in circumstances in which the defendant was not entitled, in good conscience, to receive substantial sums in disregard of the deceased's interests.
10. The deceased funded a holiday cruise for herself, the defendant and the defendant's wife, at a cost of approximately $6,000. This gift was not so substantial or extraordinary as to warrant the Court's intervention: Quek v Beggs (1990) 5 BPR [97405] at 11,764. The nature of the gift was also so closely intertwined with the deceased's personal benefit as to excuse any obligation the defendant might otherwise have had to account for benefits accruing to him. Cf, Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 420-423.
11. The plaintiffs seek to lay to the account of the first defendant the sum of $375,000 paid out by the deceased on or about 14 September 2012 for the benefit of the defendant's (then bankrupt) daughter. They have not, however, substantiated their allegation that that money was received by the defendant personally or that it was paid out by the deceased with his knowledge. Nor have they pleaded in these proceedings an equitable, Barnes v Addy claim, or a similar case, against the defendant referable to such, if any, case as might be alleged on behalf of the deceased's estate against the defendant's daughter(s). Neither have they specifically pleaded, at common law (or, rightly or wrongly, in equity), a claim that the defendant owed to the deceased, and breached, a duty of care.
12. In their primary case (based upon an unproven allegation that the defendant dealt with the deceased's assets pursuant to his appointment as an attorney), the focus for attention is upon a general allegation that "the defendant so dealt with the deceased's assets not for the benefit of the deceased, but for the benefit of himself and/or members of his family". Their allegation of "undue influence", in terms, does not extend beyond an allegation that, on the facts of the case, a presumption of undue influence by the defendant upon the deceased has been raised.
13. Their "breach of fiduciary duty" pleading might be read as presenting a hybrid case which attempts to fuse an equitable claim that the defendant is obliged to account to the estate of the deceased for benefits obtained by him personally and a separate claim (essentially, in negligence) that he is obliged "to make good to the estate any losses resulting from [his] failure to take reasonable steps to protect the interests of the deceased".
14. In essence, though, I take the pleaded case as contending that the defendant should be required to restore the estate of the deceased (Maguire v Makaronis (1997) 188 CLR 449 at 467-470), by an accounting for any benefits received by him or payment of compensation for losses suffered by the deceased's estate, by reason of breaches of fiduciary duty, or an exercise of undue influence, by the defendant.
15. However, both limbs of the plaintiffs' "breach of fiduciary duty" case are particularised by reference to an allegation that "the defendant is obliged to account to the estate of the deceased for moneys paid out to or by him not for the benefit of the deceased", harking back to the primary case about misuse of a power of attorney.
16. The plaintiffs have not articulated with clarity any case which could fairly impose on the defendant a liability to "account" for the $375,000 paid out by the deceased for the benefit of his daughter(s). The defendant did not "pay out" that sum in his capacity as the deceased's attorney or in any other capacity. The scope of any fiduciary duty owed by him to the deceased (as I find in this judgment) did not extend to management of her affairs generally or to supervision of her dealings with third parties. He did not procure the deceased to pay out the $375,000. He received no part of that sum. That aspect of the Statement of Claim must be dismissed.

THE FIDUCIARY CHARACTER OF THE DECEASED'S RELATIONSHIP WITH THE DEFENDANT AND A PRESUMPTION OF UNDUE INFLUENCE

1. The existence of a fiduciary relationship does not automatically give rise to a presumption of undue influence: PW Young, C Croft and ML Smith, On Equity (Law Book Co, Sydney, 2009), page 318, citing Re Coomber [1911] 1 Ch 723 and Cowen v Piggott [1989] 1 Qd R 41. The concepts of a fiduciary relationship and a special relationship of influence attracting a presumption of undue influence are nevertheless closely aligned in a factual setting such as the present case.
2. The plaintiffs' invocation of both concepts rather than, say, only the principles governing an exercise of undue influence appears to be a function of a design on their part to hold the defendant liable for the deceased's dealings with persons (notably, the daughters of the defendant) other than the defendant himself. If (as I find) the scope of any fiduciary duty owed by the defendant to the deceased did not extend to management of her affairs generally, or to supervision of her dealings with third parties, the focus of attention is on the defendant's receipt of property from the deceased. In that case, nothing of significance appears to turn on analysis of the facts by reference to a breach of fiduciary duty or by reference to an exercise of undue influence. On either basis, the defendant might be held liable to account for property he received from the deceased if the plaintiffs' case is made out.
3. The plaintiffs do not contend that the familial relationship between the deceased and the defendant (as aunty and nephew) was such, of itself, as to give rise to a presumption of undue influence. They contend, rather, that the defendant occupied the position of a fiduciary vis a vis the deceased on the facts of the particular case, and that, on those same facts, he enjoyed a special relationship of influence over her, in each case arising from his assumption of an ascendancy over her and from her dependency on, and trust in, him: Johnson v Buttress (1936) 56 CLR 113 at 134-135; Stivactas v Michaletos [No 2] [1994] ANZ Conv R 252 (1993) Aust Contract R 90-031; (1993) NSW Conv R R 55-683; BC 9301847.
4. The plaintiffs' case does not ultimately depend on a finding (which is not made) that the defendant effected a transaction, or any transactions, by means of a deliberate deployment of the power of attorney he held. A primary case of misuse of the power of attorney is pleaded, but the case substantively pursued is a broader one of breach of fiduciary obligations and undue influence. The defendant may have taken advantage of his status as an attorney and guardian; but this is not a case in which he executed documents or specifically deployed his instrument of appointment as an attorney. The existence of his appointments as an enduring attorney and guardian is relied upon essentially as an incident, and evidence, of a special relationship of influence arising from the conduct of the defendant and his wife in taking the deceased into their care.
5. I am satisfied that, throughout the time that the deceased was under the defendant's care, he did hold a position of ascendancy over her and she was both dependent on him and trusting of him. The fact that he was her nephew; that he provided her with accommodation in a family environment following her falling out with the first and second plaintiffs; and that, with no more than occasional or nominal opposition to her spendthrift tendencies, he encouraged or facilitated dissipation of her property by displays of improvident generosity, all contributed to her dependency upon him. He aided her in accessing an ATM or a bank. He readily accepted gifts. In no practical way did he discourage, or limit, her unbridled giving away of property.
6. She was an elderly woman suffering, and known by the defendant and his wife to be suffering, dementia. Her mental faculties were deteriorating. At the instigation of the defendant and his family, she left her home at Orangeville and took up residence with the defendant and his wife at faraway Corindi Beach. The ostensible purpose of the move was to enable the defendant and his wife to care for her within the environment of their family home. Although medical records (Exhibits D6 and D7) suggest that she was not wholly incapable of fending for herself, she was evidently increasingly in need of assistance. The defendant encouraged her to rely upon him and his family for that assistance. She was vulnerable to exploitation.
7. The relationship between the defendant and the deceased, from the time of her resettlement with the defendant, was such as: (a) to impose upon the defendant the obligations of a fiduciary, including a duty to use his position of influence over her in the interests of no one but the deceased; and (b) to give rise to a presumption of undue influence against him in the event (as occurred) of an alienation of substantial property by her in his favour.
8. However, these findings fall short of a finding that, by taking the deceased into his household to care for her, the defendant undertook to manage her affairs generally, or that she acquiesced in such an arrangement. He was in a position to influence her; but he was not engaged to control her affairs or, against her will, to stand between her and third parties. Albeit vulnerable to exploitation, she retained autonomy in management of her affairs until the end.
9. The defendant's obligation to account as a fiduciary did not extend in this respect beyond the parties' common understanding of their relationship.
10. In the course of these proceedings the defendant made no effective attempt to prove that the deceased in fact gave her fully informed consent to the transactions in which she conferred benefits on him, or to rebut the presumption that her conferral of those benefits on him was a product of undue influence on his part. There is no evidence that he resisted conferral of benefits upon him in anything other than a perfunctory way; in truth, he freely accepted whatever was on offer and encouraged the deceased to view him with favour in disposition of her property. Nor is there any suggestion that he counselled her to obtain independent, professional advice about any transaction effected in his favour. A documented illustration of this is his accompaniment of the deceased to the Commonwealth Bank for the purpose of establishing a bond in his favour, twice varied in his interests.

THE PLAINTIFFS' ALLEGATIONS OF FAILURE TO ACCOUNT AS A FIDUCIARY AND UNDUE INFLUENCE

The Pleadings

1. As the final hearing of the proceedings progressed, with an increasing emphasis on failures by the defendant to protect the deceased from improvident transactions or to account for property of the deceased, concern arose on my part as to whether the unfolding case of the plaintiffs went beyond the pleadings.
2. For that reason, directions were given for the pleadings to be amended to reflect the case actually litigated. The parties cooperated in this. On 2 September 2016 the Court received draft pleadings (MFI P24 and MFI D25), gave directions for engrossed pleadings to be filed and allowed the parties an opportunity to make further submissions based on the final form of the pleadings. The orders made by the court included a formal notation "that the defendant takes no objection to the draft further amended Statement of Claim as an expression of the nature of the case sought to be made by the plaintiffs in their conduct of the hearing of the proceedings and makes no application to reopen his case in response to that pleading."
3. The pleadings ultimately took the form of a "Further Amended Statement of Claim" (dated 2 September 2016 and verified on 5 and 7 September 2016) and a "Defence" to that Statement of Claim (verified on 5 September 2016 and dated 8 September 2016).

Submissions

1. The parties' final submissions scarcely travelled beyond their reformulated pleadings and scant written submissions. The principal authorities relied upon by the plaintiffs were: (a) Hewitt v Gardner [2009] NSWSC 1107 at [70] and [99]-[102], where Ward J (as her Honour then was) dealt with a "carer" case not unlike the present one; and (b) Meagher, Gummow and Lehane, Equity: Doctrines And Remedies (5th ed, Lexis Nexis Butterworths, Australia, 2014), paragraphs [5.270] and [5.275], which treat the obligation of a fiduciary to account for a profit made within the scope and ambit of the fiduciary's duty.

Fiduciary Obligations

1. The plaintiff's "fiduciary obligations case" was predicated upon a general allegation that the defendant "owed a fiduciary duty to the deceased", coupled with an allegation that he breached "his fiduciary duties" and general submissions, from which I infer that they contend, at least, that the defendant was required not to place himself in a position of conflict, nor to obtain a profit or benefit from his fiduciary position (Chan v Zacharia (1984) 154 CLR 178 at 198-199), without first obtaining the fully informed consent of the deceased (Maguire v Makaronis (1997) 188 CLR 449 at 466-467),a person whose deteriorating mental health might have precluded her from giving an informed consent.
2. What is required for a fully informed consent is a question of fact in all the circumstances of the particular case; there is no precise formula which will determine in all cases if fully informed consent has been given. The circumstances of a case may include the importance of obtaining independent and skilled advice from a third party. There may be no duty as such on a fiduciary to obtain an informed consent from his or her beneficiary, but the existence of an informed consent may go to negate what otherwise would have been a breach of duty: Maguire v Makaronis (1997) 188 CLR 449 at 466-467.
3. A beneficiary cannot be held to have consented to a breach of fiduciary obligations unless he or she had full knowledge of all material facts: Spellson v George (1992) 26 NSWLR 666 at 670G.

Undue Influence

1. In the context of the present case, involving substantial gifts of an improvident nature, a convenient elaboration of principles governing undue influence (closely aligned with those governing fiduciary obligations) can be found in the following extracts from the judgment of McLelland J (as his Honour then was) in Quek v Beggs (1990) 5 BPR [97405] at 11,764 -11,765: "Undue influence … Legal principles Generally speaking, the law permits a person of full age and capacity to dispose of his or her property by gift or otherwise in such manner as he or she may choose. However in certain recognised categories of case, principles of equity intervene to render such a gift liable to be set aside by the court. One of those categories is where the donor makes the gift as a result of "undue influence" of the donee. In this context "influence" means a psychological ascendancy by the donee over the donor, and "undue influence" means the donee's taking improper advantage of such ascendancy: Union Bank of Australia Ltd v Whitelaw [1906] VLR 711 at 720. It is not necessary that the ascendancy amount to domination: Goldsworthy v Brickell [1987] Ch 378 at 402-6. A donor (or if he or she is deceased, a representative of his or her estate) will prima facie be entitled to have a gift set aside on the ground of undue influence upon proof of: (a) facts establishing that the gift was made by the donor as a result of undue influence of the donee; or (b) facts that give rise to a presumption that the gift was so made, unless the donee rebuts the presumption in the manner mentioned below. A presumption of undue influence arises if it is proved: (a) that at the time the gift was made there existed a relationship between the donor and the donee of such a nature as to involve reliance, dependence or trust on the part of the donor resulting in an ascendancy on the part of the donee; and (b) that the gift is so substantial, or so improvident, as not to be reasonably accounted for on the ground of friendship, relationship, charity or other ordinary motives on which ordinary persons act: Allcard v Skinner (1887) 36 Ch D 145 at 185; Johnson v Buttress (1936) 56 CLR 113 at 134-5; Yerkey v Jones (1939) 63 CLR 649 at 675; Goldsworthy at 400-1. In such cases, 'the Court interferes, not on the ground that any wrongful act has in fact been committed by the donee, but on the ground of public policy, and to prevent the relations which existed between the parties and the influence arising therefrom being abused': Allcard at 171 per Cotton LJ, applied in Inche Noriah v Shaik Allie Bin Omar [1929] AC 127 at 133; Bank of New South Wales v Rogers (1941) 65 CLR 42 at 85; Antony v Weerasekera [1953] 1 WLR 1007 at 1011, PC. The donee 'has chosen to accept a benefit which may well proceed from an abuse of his position of ascendancy and the relations between him and the donor are so close as to make it difficult to disentangle the inducements which led to the transaction. These considerations combine with reasons of policy to supply a firm foundation for the presumption against a voluntary disposition in his favour': Johnson at 135. The relationships capable of giving rise to the presumption include certain well defined categories (such as parent and young child, solicitor and client, doctor and patient) but are not limited to those categories… The donee may rebut the presumption of undue influence, when it arises, by proving that the donor (i) knew and understood what he or she was doing; and (ii) was acting independently of any influence arising from the ascendancy of the donee. See Lancashire Loans Ltd v Black [1934] 1 KB 380 at 409; West v Public Trustee [1942] SASR 109 at 119; Inche Noriah at 135; Wright v Carter [1903] 1 Ch 27 at 52, 57. It is not sufficient to prove only the first of these elements. In the frequently quoted words of Lord Eldon LC in Huguenin at 300 [ER 536], 'The question is, not, whether she knew what she was doing… but how the intention was produced', to which Sir John Romilly MR added in Hoghton v Hoghton (1852) 15 Beav 278 at 299; 51 ER 545 at 553, 'and though the donor was well aware of what he did, yet if his disposition to do it was produced by undue influence, the transaction would be set aside'. See also Harris v Jenkins (1922) 31 CLR 341 at 368; Bank of New South Wales v Rogers (1941) 65 CLR 42 at 54, 85; Zamet v Hyman [1961] 1 WLR 1442 at 1447; Whereat [v Duff [1972] 2 NSWLR 147]. Nor in relation to the second element is it necessarily sufficient to prove that the proposal to make the gift came from the donor (Spong v Spong (1914) 18 CLR 544 at 549; Whereat at 169) or that the donee took no active steps to procure the gift; Allcard at 183-4, 185-6; Wright at 52-3. The matters which in a particular case will need to be proved in order to rebut the presumption will depend upon the nature and incidents of the relationship on which the presumption is founded, since the influence which arises from different kinds of relationships varies in kind and degree: Johnson at 134..."
2. The intervention of equity (to preclude effect being given to an unconscionable transaction) may be justified, not by the fact that a donee has brought about a transaction, but in his or her accepting it and the benefits of it, albeit at the invitation of the donor: Stivactas v Michaletos (No 2) [1994] ANZ ConvR 252; (1993) Aust Contract R 90-031; (1993) NSWLR Conv R 55-683; BC 9301874 per Mahoney JA.

The Scope and Nature of the Defendant's Obligations

1. These principles adequately address that part of the plaintiffs' case based upon his receipt of gifts from the deceased; not that part based upon an alleged failure by the defendant to protect the deceased's interests generally, and the receipt of property by others (notably, his bankrupt daughter), to the loss of the deceased's estate.
2. A problematic part of the plaintiffs' case is located in their allegation that the defendant is liable (not only to account to the estate of the deceased for benefits obtained by him in breach of his fiduciary duties but also) to make good to the estate any losses arising from the defendant's alleged failure to take reasonable steps to protect the interests of the defendant vis a vis third parties. That limited case appears, principally, to be directed towards recovery of the $375,000 paid out of the deceased's bank account on 14 September 2012 for the benefit of the defendant's daughter(s) . The allegation of liability "to make good the estate" in respect of such a loss is implicitly associated with allegations that the defendant acted in breach of his fiduciary duties and that: (a) he acquiesced in the deceased's making a large and improvident gift to his bankrupt daughter; and (b) he failed to maintain control over and investigate dealings with the deceased's assets.
3. Quite apart from any deficiencies in the plaintiffs' pleading so far as they seek to impose on the defendant a "liability to account" to the deceased for benefits conferred on third parties, or for losses suffered by the deceased's estate by reason of a conferral of such benefits, there are two impediments to the success of such a case.
4. First, the scope of the defendant's fiduciary obligations did not extend to management, or control, of the deceased's affairs generally, or to interposition of himself between the deceased and third parties upon whom she might decide to confer a benefit; and his liability to account to the deceased as a fiduciary did not extend that far: Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 at 73 and 102-103.
5. Secondly, under current Australian law, fiduciary duties are generally proscriptive, not prescriptive: Young, Croft & Smith, On Equity (2009), paragraph [7.300], citing Breen v Williams (1996) 186 CLR 71 at 113 and 137-138 and Pilmer v Duke Group Limited (In Liq) (2001) 207 CLR 165 and 198. A breach of fiduciary case such as the present (unattended by a contract or other source of a positive obligation to protect a principal's interests by an exercise of reasonable care) does not readily lend itself to enforcement of a positive duty of care (On Equity, paragraphs [7.460]-[7.490]), a breach of which has not resulted in a receipt of property or other benefits by the fiduciary (On Equity, paragraphs [7.310] and [7.350]). See also Meagher Gummow and Lehane, Equity, Doctrines and Remedies (5th ed, 2014), paragraphs [5.050] and [5.325]-[5.440].
6. In my assessment, on the pleadings as drafted and the evidence presented to the Court, the plaintiffs cannot require the defendant to "account" for the $375,000 paid out by the deceased on 14 September 2012 for the benefit of his daughter(s), no part of which money he himself received.

THE UNFOLDING PATTERN OF THE DECEASED'S WILLS

1. By her Will dated 4 March 2003 the deceased appointed the first plaintiff as her executor. She gave the Orangeville property to the first plaintiff on condition that, before her death or within six months thereafter, he pay to her or her estate $100,000 to be distributed to the third plaintiff and the defendant in equal shares. And she named the third plaintiff and the defendant as residuary beneficiaries, again in equal shares.
2. By her will dated 27 May 2008, the deceased appointed the first plaintiff as her executor and nominated the defendant as an alternative executor. She gave to the defendant's wife (Carmen Woods) any car she owned at the date of her death. She gave some opal jewellery to the wife of the third plaintiff, Margaret Hartley. Other personal items she gave to Carmen Woods, her daughter Judy Anne Woods and Margaret Hartley in equal shares. She gave the Orangeville property to the first plaintiff (or, if he predeceased her, to the second plaintiff) on condition that, before or within six months of her death, $100,000 be paid for the benefit of the third plaintiff and the defendant in equal shares. The third plaintiff and the defendant were again named as residuary beneficiaries in equal shares.
3. By her Will dated 15 January 2009, the deceased appointed the defendant (or, in the alternative, his wife, Carmen) as executor. As before, she gave any car she might own to the defendant's wife; her opal jewellery to the third plaintiff's wife; and personal items to those two women together with Judy Anne Woods in equal shares. She gave to the defendant and his wife any television set she might own at the date of her death. She named each of the first plaintiff, the third plaintiff and the defendant as residuary beneficiaries, in equal shares; but she gave the first plaintiff an option to purchase the Orangeville property at two thirds its market value, exercisable within six months of her death; and she provided that the first plaintiff and his family be entitled to reside in the Orangeville property during the option period.
4. By her Will dated 27 March 2009, the deceased appointed the defendant (or, in the alternative, his wife Carmen) as executor. She repeated the gifts of her car, opal jewellery, television set and personal items found in the Will dated 15 January 2009. She named the third plaintiff and the defendant as residuary beneficiaries in equal shares. No provision was made at all for the first plaintiff, or any member of his family.
5. In the first two of these four Wills, the first plaintiff was named as executor. In the last two, the defendant was named as executor.
6. In the first two Wills, the first plaintiff was given the Orangeville property on condition of a payment of $100,000, leaving the third plaintiff and the defendant with the deceased's residuary estate. The third Will was differently drafted but not altogether different in its disposition of the Orangeville property, and the first plaintiff, the third plaintiff and the defendant were named as residuary beneficiaries. The substantial difference occurred in the last Will, with the first plaintiff written out entirely.

THE FIRST AND SECOND PLAINTIFFS' "PROMISSORY ESTOPPEL" CLAIM TO THE PROCEEDS OF SALE OF THE ORANGEVILLE PROPERTY

1. The first and second plaintiffs contend that, in 2002 after the death of the deceased's husband George, the deceased represented to them: initially, that, if they relocated from their Deniston residence to Orangeville and cared for her, she would leave the Orangeville property to the first plaintiff, the third plaintiff and the defendant in equal shares; and, subsequently, that she would leave the property to the first plaintiff by Will on condition that he paid $100,000 to her estate, for division between the third plaintiff and the defendant.
2. The first and second plaintiffs contend that, in reliance upon the deceased's representations, they sold their Deniston residence, relocated themselves and their children to the Orangeville property, and faithfully cared for the deceased until they were asked by the deceased, in early 2009, to leave the property.
3. I accept that the first and second plaintiffs sold their Deniston residence and relocated to Orangeville in response to the deceased's invitation that they live with her. I am also satisfied that, throughout the time they lived with her at the Orangeville property, they dutifully cared for the deceased. However, I am not satisfied that their conduct involved any calculated reliance upon a promise of future benefits beyond rent-free accommodation. Their motivation was an expression of a close family relationship, unattended by reliance upon a prospect of acquisition of the Orangeville property, or an interest in the property, on the death of the deceased.
4. When requested by the deceased, in early 2009, to leave the property, the first and second plaintiffs dutifully did so without protest. This is both consistent with, and reflective of, location of their motivations (as I find) in family comity rather than perceptions of personal advantage.
5. In my assessment, the first and second plaintiffs' "promissory estoppel" claim (as they describe it) must fail for want of any detrimental reliance by them upon promises of the deceased. The missing element of "reliance" is essential to the equity claimed: Delaforce v Simpson-Cook (2010) 78 NSWLR 483 at [5] and [42]-[44].

THE FIRST AND SECOND PLAINTIFFS' CLAIMS FOR FAMILY PROVISION RELIEF

1. The ostensibly nominal size of the deceased's actual estate (valued at $31,588.57 by the defendant) is not an insurmountable obstacle to the making of family provision orders in favour of the first and second plaintiffs. A family provision order may be made in relation to property that is not part of the estate of a deceased person, or that has been distributed, if it is designated as "notional estate" of the deceased person by an order made under Part 3.3 of the Succession Act: section 63(5).
2. The first and second plaintiffs have standing under Chapter 3 of the Succession Act to apply for family provision relief in respect of the estate, or notional estate, of the deceased, because they are "eligible persons" within the meaning of section 57(1)(e) of the Act, thus satisfying the pre-condition for a successful application found in section 59(1)(a). They were partly dependent upon the deceased (insofar as they enjoyed rent-free accommodation), and they were members of the household of which the deceased was a member, throughout the time that they lived with her at the Orangeville property. The fact that the deceased occupied a separate part of the premises so that she might have space of her own does not preclude a finding that the first and second plaintiffs and the deceased were all members of the same household.
3. In his Defence the defendant admits that the first and second plaintiffs are "eligible persons" within the meaning of section 57(1)(e) of the Succession Act. This admission follows submissions in which the defendant accepted that the first and second plaintiffs were financially dependent on the deceased (by reason of their rent-free occupation of the deceased's property over a period of nearly six years), and accepted that it is open to the Court to find that the first and second plaintiffs and the deceased were members of the same household.
4. The first and second plaintiffs' application for family provision relief was made within the time limitation (of 12 months after the death of the deceased) for which section 58(2) of the Succession Act provides. The deceased died on 27 June 2013. The first and second plaintiffs' application for relief was made by a Statement of Claim filed on 26 June 2014, just within the time limit.
5. The fact that no grant of administration has yet been made in respect of the deceased's estate is no impediment to the first and second plaintiffs' making of an application for family provision relief: Succession Act, section 58(1).
6. Having regard to all the circumstances of the case (past and present), there are, as required by section 59(1)(b) of the Succession Act, factors which warrant the making of a family provision application by each of the first and second plaintiffs. Such factors are those which, when added to facts which render an applicant for family provision relief an eligible person, give him or her the status of a person who would generally be regarded as a natural object of testamentary recognition by the deceased: Re Fulop (1987) 8 NSWLR 679 at 681D-E; Churton v Christian (1988) 13 NSWLR 241 at 252E-E.
7. The first and second plaintiffs were close members of the family of the deceased during the years they lived with her. Her recognition of them as such is illustrated by the promises she made to them about leaving her property to them, and by a succession of wills that illustrated the deceased's serious intent in acting upon those promises. They were displaced in her affections at a time when her mental health was sharply deteriorating and the defendant encouraged her to embrace his family instead. In the period in which they lived with the deceased the first and second plaintiffs were dutifully attentive towards her. All in all, those facts are sufficient to satisfy the section 59(1)(b) requirement of "factors warranting".
8. The evaluative judgments for which sections 59(1)(c) and 59(2) of the Succession Act provide, with due reference to matters listed in section 60(2) of the Act, are to be viewed through a prism of the present, having regard to considerations of "justice and wisdom" (The Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 20) informed by prevailing community standards of what is right and appropriate (Andrew v Andrew (2012) 81 NSWLR 656 at [16] and [36]).
9. By virtue of section 59(1)(c) of the Succession Act, the Court can only make a family provision order in favour of the first and second plaintiffs (severally) if satisfied that, at the time when their respective applications are being considered, adequate provision for their respective proper maintenance, education or advancement in life has not been made by the deceased.
10. What is "adequate" and "proper" in a particular case depends on, and is relative to, the circumstances of the case: Scales' Case (1962) 107 CLR 9 at 19.
11. With some force, the defendant contends that neither of the first plaintiff nor the second plaintiff can surmount this hurdle because: (a) the estate, including any notional estate, of the deceased is relatively small; (b) the first and second plaintiffs jointly own net assets worth about $1,050,000; (c) during the lifetime of the deceased they benefited from about six years of rent-free accommodation at the expense of the deceased; and (d) comparatively, the first and second plaintiffs are better off financially than the defendant and his wife, whose net assets are worth something in the order of $950,000, including the $400,000 term deposit. The defendant also contends that an assessment of the adequacy of the provision made for the first and second plaintiffs (during her lifetime) should take into account the deceased's testamentary intentions, following her request that the first and second plaintiffs vacate her property, as indicated in her last will.
12. Accepting that there is force in these submissions, I nevertheless find that the deceased did leave each of the first and second plaintiffs without adequate provision within the meaning of section 59(1)(c). Although I propose to dismiss the first and second plaintiffs' estoppel claim, I am mindful that the deceased did make promises of a substantial benefit to them, she did create in them an expectation of testamentary benefit and, although not motivated by her promises, they did live with her for six years in a dutiful, attentive family relationship, a measure of which is their quiet acquiescence in her request that they leave the property. They are not without assets, but neither are they without a mortgage debt. Both are approaching their senior years: the first plaintiff is presently aged 66 years, the second plaintiff is 67.
13. A larger impediment to the first and second plaintiffs' application for family provision relief focuses upon the size (and nature) of the deceased's estate, the practical need for there to be a designation of notional estate if any family provision order is to be made and the requirement (manifested in section 59(2), and reinforced in the notional estate provisions, of the Succession Act) for the Court to be satisfied that some provision "ought" to be made for the maintenance, education or advancement in life of the plaintiffs respectively.
14. Leaving aside the possibility that the deceased's actual estate (ostensibly nominal) might be augmented by recovery of other property disposed of during her lifetime, the practical focus for attention, on both sides of the record, is a $400,000 term deposit held by the defendant as the remaining balance of his share of the Commonwealth Bank insurance bond taken out by the deceased, with his encouragement, in January - February 2011.
15. A review of factors specified by section 89(1) of the Succession Act for the Court's consideration supports selection of the bond as property available for designation as notional estate of the deceased. It has a clear connection with her estate. It might be characterised, not unfairly, as a will-substitute insofar as it made provision for the deceased's principal (residuary) beneficiaries, as well as providing a means of denying testamentary provision to the first and second plaintiffs.
16. No party has contended that the third plaintiff's share of the insurance bond payout should be designated as notional estate, or that any moneys paid to him by reference to the estate or notional estate of the deceased should be applied towards a family provision order in favour of his co-plaintiffs. The focus for attention is on the defendant's receipt of insurance bond proceeds, in large part, not only because he received the lion's share of the bond proceeds but also because he and his family received the lion's share of any largess of the deceased acquired by her family during her lifetime. Orders that he account for moneys received from the deceased qualify this view of the case.
17. A factor to be taken into account (both in the context of the primary provisions of Part 3.2, and in the context of the notional estate provisions of Part 3.3, of the Succession Act) is the defendant's apparent reliance upon the remaining bond moneys in his possession (the $400,000 deposit) as a principal asset, and as a source of regular income, for him and his wife in their retirement.
18. The bond was nominally arranged by the deceased, with the active encouragement of the defendant, who accompanied her to the bank (in particular, for joint interviews on 10 and 17 December 2010, if not also on 6 January 2011) and provided her with close assistance throughout the time (between December 2010 and February 2011 or thereabouts) when arrangements for the bond were made. Documents produced on subpoena by the Commonwealth Bank confirm, and the defendant admits in his Defence, that in December 2010 the deceased evinced an intention to deal with her assets and her estate so as to deny or limit provision being made out of her estate for the maintenance of the first plaintiff.
19. The defendant's admission is clear enough on the pleadings despite typographical errors apparent in the text of the Statement of Claim. The language of the Statement of Claim substantially follows that of section 80(2)(a) of the Succession Act 2006 NSW. That provision governs the availability of property transactions as a foundation for a designation of property as "notional estate" of the deceased for the purpose of an application for family provision relief under Chapter 3 of the Succession Act 2006.
20. Given the close personal relationship between the first and second plaintiffs (as a married couple), and the deceased's association of the second plaintiff with the first plaintiff in dealing with the first plaintiff and benefits to be conferred upon him, I infer that the arrangements made for the purpose of the bond, and for the nomination of beneficiaries of the bond, were made with the intention of denying or limiting provision being made out of the estate of the deceased not only as a means of denial of benefits to the first plaintiff but also as a means of denying benefits to the second plaintiff.
21. The bank records indicate that initial arrangements for the issuance of the bond were effected on 19 January 2011, and that the nomination of the defendant and the third plaintiff as beneficiaries (in 75:25% shares respectively) were formally effected on 24 February 2011. Given that the deceased died on 27 June 2013, the transaction(s) by which arrangements for the bond were made on any view took effect within the timeframe contemplated by the Succession Act, section 80. The plaintiffs contend that the balance of the proceeds of the bond paid out to the defendant on the death of the deceased, and invested by him in a fixed term interest-bearing deposit, is available for designation as notional estate of the deceased.
22. The defendant's opposition to claims for family provision relief made by the first and second plaintiffs stops short of an active contest as to the availability of that fund as property able to be designated as notional estate. The defendant's Defence "does not admit" an allegation in the Statement of Claim that, as a consequence of a prescribed transaction, the whole of the proceeds of the insurance bond "is" notational estate. However, the defendant's submissions did not assertively "deny" the plaintiffs' case on this point, limiting the substance of his case to a submission that, even if the insurance bond proceeds were to be designated as notional estate, "the estate" of the deceased is relatively small, and the first and second plaintiffs have not established that the deceased left them without adequate provision, or that provision should be made for them out of the estate or notional estate of the deceased.
23. I am satisfied that the defendant's term deposit can, and should, be designated notional estate of the deceased for the purpose of making family provision orders in favour of the first and second plaintiffs (Succession Act, section 78(1)(a)), and for the purpose of orders being made for the costs of the proceedings (Succession Act, sections 78(1)(b) and 99(1)), to the extent necessary (Succession Act, sections 87(a)-(b), 88(b) and 89(2)).
24. Establishment of the bond, the proceeds of which funded the current term deposit, and nomination of beneficiaries other than the first and second plaintiffs, purposefully disadvantaged the first and second plaintiffs insofar as it diminished the deceased's estate: Succession Act, section 83(1)(a).
25. Without a designation of notional estate, the deceased's estate is insufficient for the making of family provision orders, and costs orders, that, as the Court, I am of the opinion should be made: Succession Act, section 88(b). In my opinion, each of the first and second plaintiffs should receive a legacy of $40,000 ($80,000 in total) by way of a grant of family provision relief.
26. In forming an opinion that such provision "ought" to be made for the maintenance, education or advancement in life of the plaintiffs (Succession Act, section 59(2)) I have reviewed the matters identified in section 60(2) of the Act for the Court's consideration. Until such time as the defendant, in his own interests, intervened, the first and second plaintiffs and the deceased had a close family relationship of long duration. Although they obtained nearly six years of rent-free accommodation through the generosity of the deceased, their relationship with the deceased was never merely one of landlord and tenant, and she more than once encouraged in them an expectation of testamentary benefit. They were dutiful and attentive in their care of her during their occupation of her property. Their expectation that they would obtain some benefit from her estate, as an aid to them in their latter years, was reasonably well grounded.
27. The defendant's participation in the process of displacement of the first and second plaintiffs in the affections of the deceased, in displacement of the first plaintiff as a beneficiary of her will and in facilitation of the dissipation of her property whilst she was ostensibly under his care - all to the disadvantage of the first and second plaintiffs, disrupting their living arrangements and disappointing their expectations - is sufficient to address the requirements of the Succession Act that consideration be given to: 1. the importance of not interfering with reasonable expectations, essentially those of the defendant but also of his family, in relation to property (section 87(a)); and 2. the substantial justice and merits involved in making or refusing to make an order designating the defendant's term deposit as notional estate (section 87(b)).
28. A legacy of $40,000 for each of the first and second plaintiffs is, in my opinion, an appropriate quantum of relief even if, by recovery of property dissipated by the deceased, the size of her actual estate is taken to be greater than $31,588.57 or thereabouts.
29. Subject to the moderating operation of Chapter 3 of the Succession Act, the deceased was entitled to dispose of her estate as she deemed fit. No challenge has been made to the validity of her last will, dated 27 March 2009, which must be taken as a genuine reflection of her testamentary intentions. A legacy of $40,000 for each of the first and second plaintiffs provides them with a measure of relief that is adequate to their circumstances, all things considered.

CONCLUSION

1. Subject to allowing the parties an opportunity to be heard as to the form of relief to be granted, I am minded to make orders to the following effect: 1. ORDER that letters of administration with the will of the deceased dated 27 March 2009 annexed be granted to the third plaintiff. 2. ORDER that any requirement for an administration bond be dispensed with. 3. ORDER that the proceedings be referred to the Registrar to complete the grant in accordance with the Probate Rules. 4. ORDER that the defendant, by the payment of equitable compensation, account to the estate of the deceased (with interest calculated in accordance with the Civil Procedure Act 2005 NSW, section 100) for the following sums given to him by the deceased: 1. the amount of $50,000 given to the defendant in mid--2009. 2. the amount of $10,000 given to the defendant in about June 2010. 3. the amount of $500,000 given to the defendant on or about 2 March 2011. 1. ORDER that the term deposit of $400,000 held by the defendant be designated as notional estate of the deceased insofar as may be necessary: 1. to make provision for the first and second plaintiffs under Chapter 3 of the Succession Act 2006 NSW as set out in Orders 7 and 8 of these Orders; and 2. to pay costs of the application for that relief. 1. ORDER that provision be made out of the notional estate of the deceased for the maintenance, education and advancement in life of the first plaintiff in the sum of $40,000. 2. ORDER that provision be made out of the notional estate of the deceased for the maintenance, education and advancement in life of the second plaintiff in the sum of $40,000. 3. ORDER that no interest be paid on the provision made for the first and second plaintiffs under Chapter 3 of the Succession Act 2006 NSW if paid within 28 days of the date of these orders but that, if not so paid, interest accrue on that provision from the expiration of 28 days from the date of these orders. 4. ORDER, subject to further order, that the defendant by himself, his servants and agents be restrained from charging, disposing of or dealing with the term deposit identified in Order 6 otherwise than for the purpose of satisfying Orders 4 and 5 (after satisfaction of Orders 7 and 8) or any order for costs made in the proceedings. 5. RESERVE for further consideration, in proceedings constituted for that purpose, whether any person other than the defendant has a liability to account to, or to compensate, the estate of the deceased for the sum of $375,000 paid out by the deceased on or about 14 September 2012 for the benefit of the daughter(s) of the defendant. 6. ORDER that the plaintiffs' Statement of Claim otherwise be dismissed.
2. Given that the third plaintiff and the defendant are (in equal shares) residuary beneficiaries of the deceased's estate, it might be appropriate to modify the terms of the Court's orders to allow for that fact. Consistently with the rule in Cherry v Boultbee (PW Young, C Croft and ML Smith, On Equity (Law Book Co, Sydney, 2009, paragraphs [15.560]-[15.600]), the defendant cannot, in conscience, participate in the deceased's residuary estate unless and until he has fulfilled his duty to restore property to the estate or borne the financial consequences of his failure to do so.
3. Draft Order 9, intended to operate as an asset preservation order, arises for consideration because of the evidence of the defendant (a pensioner) that that is the only substantial fund of money available to him and (in my assessment) a risk that he could dissipate that fund to avoid satisfaction of the Court's judgment. It may not be necessary in the context of arrangements made between the parties for preservation of the fund pending the determination of these proceedings. However, by drawing the topic to attention, it can be dealt with in an orderly way. That there is, or may be, a risk of dissipation of the fund can be assessed by reference to the defendant's dealings with the deceased's bank in the shadow of her death, and his failure to make a timely disclosure of the extent of the gifts he received from the deceased during her residency with him. I am not presently minded, in the absence of an application for such an order, to propose the making of an asset preservation order operative beyond the fund.
4. Upon an assumption that costs should follow the event, an order should be made that the defendant pay the plaintiffs' costs of the proceedings, qualified by an allowance in favour of the defendant for the failure of the first and second plaintiffs to establish their claim in estoppel.
5. A reservation of rights, such as that contemplated by draft Order 10, is probably not necessary, but is proposed out of an abundance of caution, to forestall any contention (based on Reichel v Magrath (1889) 14 App Cas 259) that a suit on behalf of the estate to recover the $375,000 paid out by the deceased for the benefit of the daughter(s) of the defendant would, if instituted, constitute an abuse of the processes of the Court because of the failure of the plaintiffs to effect a recovery of such funds, as against the defendant, in these proceedings.

EDITORIAL NOTE (26 October 2017)

1. Having entertained submissions from counsel about the form of orders, and costs orders, to be made so as to give effect to the Court's reasons for judgment, Lindsay J made the following orders and notations: 1. ORDER that Letters of Administration with the Will of the deceased dated 27 March 2009 annexed be granted to the Third Plaintiff. 2. ORDER that any requirement for an Administration Bond be dispensed with. 3. ORDER that the proceedings be referred to the Registrar to complete the grant in accordance with the Probate Rules. 4. ORDER that the Defendant, by the payment of equitable compensation, account to the estate of the deceased (with interest calculated in accordance with the Civil Procedure Act 2005 NSW, Section 100) for the following sums given to him by the deceased: 1. the amount of $50,000, with interest to accrue from 1 July 2009. 2. the amount of $10,000, with interest to accrue from 1 July 2010. 3. the amount of $500,000, with interest to accrue from 2 March 2011. 1. ORDER that the term deposit of $400,000 held by the Defendant be designated as notional estate of the deceased insofar as may be necessary: 1. to make provision for the First and Second Plaintiffs under Chapter 3 of the Succession Act 2006 NSW as set out in Orders 6 and 7 of these Orders; and 2. to pay costs of the application for that relief. 1. ORDER that provision be made out of the estate and notional estate of the deceased for the maintenance, education and advancement in life of the First Plaintiff in the sum of $40,000. 2. ORDER that provision be made out of the estate and notional estate of the deceased for the maintenance, education and advancement in life of the Second Plaintiff in the sum of $40,000. 3. ORDER that no interest be paid on the provision made for the First and Second Plaintiffs under Chapter 3 of the Succession Act 2006 NSW if paid within 28 days of the date of these Orders but that, if not so paid, interest as for a legacy under the Probate and Administration Act 1898 accrue on that provision from the expiration of 28 days from the date of these Orders. 4. ORDER, subject to further order, that the Defendant by himself, his servants and agents be restrained from charging, disposing of or dealing with the term deposit identified in Order 5 otherwise than for the purpose of satisfying Order 4 (after satisfaction of Orders 6, 7 and 8) or any order for costs made in the proceedings. 5. Reserve for further consideration, in proceedings constituted for that purpose, whether any person other than the Defendant has a liability to account to, or to compensate, the estate of the deceased for the sum of $375,000 paid out by the deceased on or about 14 September 2012 for the benefit of the daughter(s) of the Defendant. 6. ORDER that the Statement of Claim otherwise be dismissed. 7. The costs of and incidental to Orders 1, 2, and 3, incurred by the Third Plaintiff including his application referable thereto, be paid out of the estate of the deceased on the indemnity basis. 8. Subject to Orders 5(b) and 12, ORDER that 70% of the costs of the Plaintiffs on the ordinary basis be paid out of the estate or notional estate of the deceased. 9. ORDER that the defendant bear his own costs of the proceedings. 10. NOTE the agreement of the parties the following is to be treated as an interim distribution to the Third Plaintiff in respect to his entitlements as a residuary beneficiary under the Will of the deceased: namely, $16,000 paid to the Third Plaintiff by the Defendant. 11. NOTE that no party seeks orders referable to paragraphs 42-44 of the reasons for judgment published as Hartley v Woods [2017] NSWSC 1420. 12. ORDER that exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined. 13. ORDER that these Orders be entered forthwith.

Amendments 26 October 2017 - Editorial Note (26 October 2017) with final orders. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 October 2017