SUCCESSION – ADMINISTRATION OF ESTATE – DISTRIBUTION –
OTHER MATTERS – where at the time of making his will
the testator owned
and lived in a property – where the testator made a will providing for his
Source
Original judgment source is linked above.
Catchwords
SUCCESSION – ADMINISTRATION OF ESTATE – DISTRIBUTION –OTHER MATTERS – where at the time of making his willthe testator ownedand lived in a property – where the testator made a will providing for hiswife to live in the propertyafter his death – where by the will theproceeds of any sale of the property were left to his two children in equalshares– where by the will the testator left half of his estate’sresidue to his wife and the remaining half equally to histwo children –where the testator sold the property after making the will – where thetestator jointly purchased withhis wife a license to reside in a retirementvillage – where the testator predeceased his wife – where the estatecouldnot be distributed in full due to the license passing to his wife –where upon the testator’s wife’s death theexit entitlement for thelicense was paid to the estate – where the executor of the estate
contended that the returned exit
entitlement fell to the estate’s residue
– where the testator’s children contended that the returned exit
entitlement
was the proceeds of the sale of property owned and lived in by
testator at his death – where the executor applied to the court
seeking an
order to distribute the returned exit entitlement as residue – where the
executor sought an order for directions
and indemnity for liability incurred in
distributing the returned exit entitlement – where the distribution was no
longer in
issue at the time of filing the application – where the executor
persisted with the application – whether any directions
should be given
– whether the executor ought be granted indemnity from the estate for any
costs liability incurred in the application
– whether the filing of the
application was a reasonable step to take in the administration of the
testator’s estate
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND
TERRITORY COURTS – COSTS – COSTS OUT OF FUND OR PROPERTY –
LITIGATION
CAUSED BY TESTATOR, PERSONAL REPRESENTATIVE OR BENEFICIARY –
RELATING TO EXECUTION OR REVOCATION OF WILL – COSTS OF PERSONAL
REPRESENTATIVE OR APPLICANT – where the testator made a will – where
a dispute arose between the executor and the testator’s
children about the
nature of distributions to be made under the terms of the will – where the
executor applied to the court
seeking an order to distribute the returned exit
entitlement as residue – where the executor sought an order for indemnity
for liability incurred in distributing the returned exit entitlement –
where the distribution was no longer in issue at the
time of filing the
application – where the executor persisted with the application –
where the executor sought indemnity
costs against the testator’s children
– where the application was found to be misconceived and unnecessary
– where
the application was dismissed – whether indemnity costs
ought be awarded against the executor – whether the executor
ought be
granted indemnity from the estate for any costs liability incurred in filing the
application – whether the filing
of the application was a reasonable step
to take in the administration of the testator’s estate
Property
Law Act 2023 (Qld), Part 5
Trusts Act 1976 (Qld), s
96
Uniform Civil Procedure Rules 1999 (Qld), r
366
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
[1993] FCA 801, cited
Daracon Engineering Pty Ltd v Kelsall [2025]
NSWCA 189, cited
Fountain Selected Meats (Sales) Pty Ltd v International
Produce Merchants Pty Ltd (1988) 81 ALR 397, cited
Nolan v Collie
(2003) 7 VR 287
[2003] VSCA 39, cited
Rosniak v Government
Insurance Office (1997) 41 NSWLR 608, cited
Judgment (128 paragraphs)
[1]
SUCCESSION - ADMINISTRATION OF ESTATE - DISTRIBUTION - OTHER MATTERS - where at the time of making his will the testator owned and lived in a property - where the testator made a will providing for his wife to live in the property after his death - where by the will the proceeds of any sale of the property were left to his two children in equal shares - where by the will the testator left half of his estate's residue to his wife and the remaining half equally to his two children - where the testator sold the property after making the will - where the testator jointly purchased with his wife a license to reside in a retirement village - where the testator predeceased his wife - where the estate could not be distributed in full due to the license passing to his wife - where upon the testator's wife's death the exit entitlement for the license was paid to the estate - where the executor of the estate contended that the returned exit entitlement fell to the estate's residue - where the testator's children contended that the returned exit entitlement was the proceeds of the sale of property owned and lived in by testator at his death - where the executor applied to the court seeking an order to distribute the returned exit entitlement as residue - where the executor sought an order for directions and indemnity for liability incurred in distributing the returned exit entitlement - where the distribution was no longer in issue at the time of filing the application - where the executor persisted with the application - whether any directions should be given - whether the executor ought be granted indemnity from the estate for any costs liability incurred in the application - whether the filing of the application was a reasonable step to take in the administration of the testator's estate
[2]
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - COSTS OUT OF FUND OR PROPERTY - LITIGATION CAUSED BY TESTATOR, PERSONAL REPRESENTATIVE OR BENEFICIARY - RELATING TO EXECUTION OR REVOCATION OF WILL - COSTS OF PERSONAL REPRESENTATIVE OR APPLICANT - where the testator made a will - where a dispute arose between the executor and the testator's children about the nature of distributions to be made under the terms of the will - where the executor applied to the court seeking an order to distribute the returned exit entitlement as residue - where the executor sought an order for indemnity for liability incurred in distributing the returned exit entitlement - where the distribution was no longer in issue at the time of filing the application - where the executor persisted with the application - where the executor sought indemnity costs against the testator's children - where the application was found to be misconceived and unnecessary - where the application was dismissed - whether indemnity costs ought be awarded against the executor - whether the executor ought be granted indemnity from the estate for any costs liability incurred in filing the application - whether the filing of the application was a reasonable step to take in the administration of the testator's estate
DW Dickie for the beneficiaries, Tania Moore and Iain Herbert
[11]
Paramount Legal for the beneficiaries, Tania Moore and Iain Herbert
[12]
[1] Guy Austin Gibbons is a solicitor and the executor of the estate of Keith Douglas Herbert, who is deceased. Mr Gibbons brings application for directions concerning the proper distribution of assets of the estate.
[13]
[2] Keith Douglas Herbert[1] was married to Margaret Ann Herbert.
[3] Keith had two children by a relationship prior to his marriage to Margaret: Tania Nicole Herbert (now Moore) and Iain Andrew Herbert. Margaret had three daughters and two sons who were also by a prior relationship: Gale Maree King (now Peschek), Paula Ann Morris, Wendy Jane Morris, Peter David Morris and Christopher Steven Morris. Both of Margaret's sons predeceased her.
[4] Keith died on 13 September 2012, leaving a will dated 29 January 2007.
[5] By his will, Keith appointed as his executor and trustee the Senior Partner of the firm of solicitors Bennett Carroll at the time of his death. Mr Gibbons held that position and as the nominated executor and trustee, probate was granted to him on 6 December 2012.
[6] At the time the will was made, Mr Herbert owned a property at Jimboomba. The evidence as to the ownership of that property is not clear. Counsel who gave written advice to Mr Gibbons assumed that Keith was the "registered owner" of the Jimboomba property. I assume that what she meant by that was that he was the sole registered proprietor. She assumed, it seems, that Margaret had no registered interest in that property. There is no evidence before me as to whether Margaret had any equitable interest.
[7] Keith made provision in his will for Margaret, his children Iain and Tania, and also, indirectly, Margaret's children.
[8] By cll 4, 5, 6 and 7, Keith dealt with "property I may own and normally reside in at the time of my death." Those clauses were:
[14]
"4. I LEAVE whatever property I may own and normally reside in at the time
[15]
of my death to my trustee on trust to permit my wife MARGARET ANN HERBERT to reside in the property during her lifetime or for as long as she so wishes on the proviso that she normally resides in the property at the time of my death or takes up residence therein within 3 months after my death.
[16]
5. I direct that, during her residence in the said property, my wife MARGARET ANN HERBERT is required to:-
[17]
a) Keep the property in a state of repair to the satisfaction of my
[18]
trustee and observe any reasonable requirements as my trustee may
[19]
b) Keep the property insured against loss, damage and all normal risks
[20]
with a reputable insurer and produce evidence of such insurance to
[21]
c) To pay all rates, taxes, insurance premiums and other outgoings on
[22]
I GIVE my trustee power to pay out of any proceeds of sale of this
[23]
property or any substituted property purchased as a result of this subclause to purchase a freehold or leasehold property which will be held for the benefit of MARGARET ANN HERBERT on the same trusts as above.
[24]
SHOULD my wife MARGARET ANN HERBERT be unwilling or
[25]
unable to reside in the property referred to in Clause 5 and 6 above, I DIRECT that the property be sold and the net proceeds relating to my
[26]
share of the property be paid to whichever of my daughter TANIA NICOLE HERBERT and my son IAIN ANDREW HERBERT shall
[27]
survive me by twenty-eight days (28) and if both in equal shares absolutely PROVIDED HOWEVER that should any of my said children predecease me leaving a child or children surviving me that such last mentioned child or children shall take and if more than one as tenants in common in equal shares the share which his her or their parent would have taken if such parent had survived me.
[28]
I LEAVE the reside of my estate as follows:-
[29]
a) As to 50% of my residue to whichever of my daughter TANIA NICOLE HERBERT and my son IAIN ANDREW HERBERT aforesaid shall survive me by twenty-eight days (28) and if both in equal shares absolutely PROVIDED HOWEVER that should any of my said children predecease me leaving a child or children surviving me than such last mentioned child or children shall take and if more than one as tenants in common in equal shares the share which his her or their parent would have taken if such parent had survived me.
>
> b) (i) As to 50% of my residue to my wife MARGARET ANN HERBERT aforesaid provided that she survive me by twenty-eight days (28).
[30]
(ii) Should my wife not so survive me, I DIRECT that
[31]
her share shall be paid to whichever of my stepdaughters GAIL MAREE KING, PAULA ANN MORRIS, WENDY JANE MORRIS and my stepson PETER DAVID MORRIS shall survive me by twenty-eight days (28) and if more than one in equal shares absolutely PROVIDED HOWEVER that should any of my said children predecease me leaving a child or children surviving me than such last mentioned child or children shall take and if more than one as tenants in common in equal shares the share which his her or their parent would have taken if such parent had survived me."
[32]
[9] Clauses 4 to 7 of the will are replete with ambiguity.
[10] Clause 4 contemplates that Keith will own a property in which he is residing at the time of his death. That property is then to be held on trust by force of cl 4 and the trustees are to permit Margaret to reside there on the terms prescribed by cl 5.
[11] Clause 6 assumes that the trustees will sell the property and purchase a substitute property which Margaret may live in upon the terms prescribed by cl 5. As observed later, while cl 6 assumes the trustees may sell, there is no obvious power to do so other than pursuant to cl 7.
[12] One wonders how cl 6 would ever have effect. By cl 4, Margaret has a right of occupation of the property owned and resided in by Keith at the time of his death. Presumably, that would only be sold if Margaret wished to not live in the property. There is a general power of sale in the will but surely, given cll 4 and 5, the property could not be sold against Margaret's wishes if she continued to reside in it.
[13] If Margaret no longer wished to reside in the property owned and resided in by Keith at the time of his death, that would trigger cl 7. The property would be sold and the proceeds distributed to Tania and Iain.
[14] Further confusion arises on the face of cl 6. It speaks of the use of "proceeds of sale of this property or any substituted property purchased as a result of this subclause".[2] What "subclause"? Surely the reference is not to a "subclause" but to cl 6 of the will. Clause 6 does not give any power of sale to the trustees of the property referred to in cl 1. Therefore, no "substituted property" could be purchased "as a result of this [clause]".[3] As earlier observed, cl 7 contemplates that if the property is sold then the proceeds are not used to buy another property but are to be distributed to Tania and Iain.
[15] Clause 4 seems to assume that Maragaret has no interest in the property that Keith "may own and reside in at the time of [his] death".[4] The clause is not framed in terms of Keith jointly holding property with another or Keith leaving his interest in jointly held property to his children.
[16] Similarly curious is the reference in cl 7 to the sale of "my share" when it seems Keith did not hold a "share" in the Jimboomba property but was the sole registered proprietor. Perhaps it was contemplated that before Keith's death he might purchase a property jointly with Margaret. If that is the case, then cl 4 has to be read so that Keith's part interest in the real property is vested upon Mr Gibbons to permit Margaret to live in the property. Subject to any right of Keith's estate to appointment of trustees for sale, Margaret would have that right anyway as a part owner of the property.
[33]
"1) The Deceased's entitlement as beneficiary of the estate of his father
[34]
Charles Cedric Parrie Herbert ("Father's Estate").
[35]
Licence in the accommodation residence unit for property at 45/357
[36]
Underwood Road, Eight Mile Plains ("the Accommodation
[37]
Residence") to be held as tenants in common between Margaret and
[38]
Queensland Police Credit Union shares in join names;"
[39]
[20] Mr Gibbons explains in his affidavit that the MLC superannuation did not fall to the estate as there was a binding death nomination in favour of Margaret. Whatever interest Keith had in the vehicle, the Telstra shares and the bank account with the Queensland Police Credit Union, also did not fall to his estate. Mr Gibbons discerned that those assets were held jointly with Margaret and passed to her by the doctrine of survivorship.
[21] The sum of $3,430.32 was received by Keith's estate as a result of Keith being a beneficiary of his late father's estate.
[22] There was some dispute as to the way the sum held in the QSuper account was to be distributed. That controversy was resolved by agreement embodied in a deed dated 20 February 2013. The parties to that deed were Mr Gibbons, Margaret, Tania and Iain. The effect of the deed was to distribute the QSuper funds by treating it as residue; one half to Margaret, one quarter to Tania, and one quarter to Iain.
[23] Margaret made a will on 19 July 2023.
[24] By her will, Margaret appointed the Senior Partner of Bennett Carroll Solicitors as at the date of her death as her executor and trustee. By the time of Margaret's death, that was not Mr Gibbons but Mr Alexander Fairweather. She then left a one quarter share of her estate to each of her three daughters and a one quarter share to Peter's children.
[25] By the arrangement through which Keith and Margaret occupied the unit in the retirement village, an exit entitlement was repayable to them upon Margaret's death. That was payable in shares reflective of the respective interests in the licence; one half fell to Keith's estate and one half fell to Margaret's.
[26] By cl 5 of Margaret's will:
"I DECLARE that I have considered making a gift, devise or bequest under my Will to my step children TANIA NICOLE MOORE and IAIN ANDREW HERBERT but I have decided not to as they will receive the funds from their father's half share of the Unit 45, Plains Retirement Village, 357 Underwood Road, Eight Mile Plains upon my death."
[27] The only rational inference which can be drawn from the terms of cl 5 of Margaret's will is that she believed that Keith's will operated such that Keith's share of the exit fee fell to be distributed pursuant to cl 7 of Keith's will. On her understanding, the whole of that part of the exit fee payable to Keith fell to his estate and then passed to Tania and Iain in equal shares.
[40]
[34] The application is said to be brought under r 366 of the Uniform Civil Procedure Rules 1999, which vests a power in the Court to give directions in proceedings. Usually, these applications are brought pursuant to s 96 of the Trusts Act 1973. By s 96(1), a written statement of facts should be prepared. That did not occur. Neither Tania nor Iain take any procedural point and the Court obviously has jurisdiction to give directions to Mr Gibbons.
[35] The application seeks orders:
[41]
"1. That the executor is to distribute the only asset of the estate, being an
[42]
Exit Entitlement received from Bethany Christian Care pursuant to a
[43]
Residence Contract dated 18 September 2008 in accordance with clause
[44]
2. That the executor be indemnified from the assets of the estate for any
[45]
liability incurred in carrying out the distribution of the estate in
[46]
3. That the costs of and incidental to this application be paid on an
[47]
indemnity basis by Tania Nicole Herbert, also known as Tania Nicole
[48]
[36] The application came before me on 20 October 2025. Mr Dickie of counsel appeared for Tania and Iain and stated, both in written submissions and orally, that it is not contested that Keith's share of the exit entitlement falls to residue and must be dealt with pursuant to cl 8 of Keith's will.
[37] There is no need to make an order in terms of paragraph 1 of the application as there is no controversy about the distribution. As there is no controversy about the distribution, no issue arises concerning Mr Gibbons's liability in making it, so no order need be made in terms of paragraph 2 of the application. The only live issue is as to costs.
[38] Mr Gibbons seeks an order for costs on the indemnity basis against Tania and Iain. Tania and Iain seek orders that Mr Gibbons pay their costs on an indemnity basis, inherent in that submission is that Mr Gibbons should have no indemnity for those costs from the estate. Otherwise, the costs would be borne effectively by Tania and Iain, who are entitled to the residue.
[49]
[39] Mr Gibbons instructed Bennett Carroll to act on his behalf in the administration of the estate. A senior associate of the firm, Ms Tania Gilmore, had conduct of the matter.
[40] Tania and Iain are represented by Paramount Legal. The solicitor handling the matter on their behalf is Mr Ronald Plass.
[41] As is already evident there have been difficulties in the administration of Keith's estate.
[42] By October 2024, tensions had heightened. Paramount had been requesting information in what Mr Gibbons (or at least Ms Gilmore) considered was an unreasonable manner. Ms Gilmore wrote to Paramount on 23 October 2024:
[50]
"We do not think it is appropriate for you to chase us each few working days. It is unreasonably increasing the costs of administering the estate to the detriment of all beneficiaries. We have been advised that settlement was effected on 18 October 2024[8] and the funds will be transmitted to our Trust Account within the time stipulated under the Retirement Villages Act.
[51]
We are instructed that moving forward, we will not be responding to arbitrary deadline demands, noting that this matter and our firm's invoice has been waiting for 12 years to be finalised. We will finalise this matter with the appropriate priority and professional care."
[52]
[43] By letter of 30 October 2024, Mr Plass raised issues about payment of Mr Gibbons's costs from Keith's estate. His argument was that Margaret's estate should bear some of the costs that were sought to be recovered from Keith's. A statement of account was called for.
[44] On 2 December 2024, Ms Gilmore responded. It is unnecessary to analyse her response except to note that this was said:
[53]
"Given the acrimony in open correspondence, our client will require your client's signed release and indemnity before distributing the estate funds held"
[54]
[45] Mr Plass wrote to Bennett Carroll again on 3 December 2024. Importantly:
[55]
"Your comments concerning the exit entitlement are of concern to our client. There can be no suggestion that the exit entitlement as it relates to the late Mr Herbert forms part of the residuary of the estate of the late Mrs Herbert as it is clear by the Will's drafting that the word 'property' refers to the residence owned by him as at his date of death.
[56]
Are you now seeking to claim that our clients are not entitled to their father's share of the RDA? If so, this is clearly in contravention of the intention of the late Mr Herbert as understood and evidenced by clause 5 of the late Mrs Herbert's Will."
[57]
[46] Those comments of Mr Plass put in issue the proper construction of cll 7 and 8 of Keith's will.
[47] On 17 December 2024, 21 January and 29 January 2025, Mr Plass enquired as to when he would receive a reply to his letter of 3 December 2024. That reply was made on 31 January 2025. Ms Gilmore gave explanations in relation to the various issues raised by Mr Plass and advised that counsel had been briefed to advise Mr Gibbons on whether the exit entitlement falls to residue pursuant to cl 8 or the specific bequest to Tania and Iain under cl 7 of Keith's will.
[48] By 11 February 2025, Bennett Carroll had received the advice of counsel and on that day wrote to Mr Plass.
[49] In that letter Ms Gilmore asserted privilege over the advice but summarised the important aspects to Mr Plass. Privilege has since been waived and the advice was in evidence before me. Ms Gilmore also enclosed a document styled "Deed of Release and Indemnity" and stated in the letter:
[58]
"Upon receipt of the signed Release and Indemnity, the Executor shall distribute the Estate funds held in accordance with clause 8 of the late Mr Herbert's Will."
[59]
[50] The parties to the draft deed are not only Mr Gibbons, Tania and Iain, but also Mr Fairweather who, as earlier observed, is the trustee and executor of Margaret's estate.
[51] The Deed of Release and Indemnity contains a number of recitals recording the dispute as to the proper construction of cll 7 and 8 and their effect upon the distribution of the exit entitlement. In particular:
[60]
"D. The Executor has obtained advice from Counsel as to whether the Exit
[61]
Entitlement received by the estate forms part of the residuary estate and
[62]
should be divided in accordance with clause 8 of the Will or, whether the
[63]
Exit Entitlement should be identified as 'property' as referred to in clauses
[64]
4,5 and 6 of the Will and therefore, bequeathed pursuant to clause 7 of the
[65]
The executor has determined that the Exit Entitlement form part of the residuary estate and out to be distributed in accordance with clause 8 of the Will.
[66]
F. The executor has agreed to the distribution of the estate to the
[67]
Beneficiaries/Releasors provided the Beneficiaries/Releasors indemnify
[68]
the executor accordingly, and based upon the undertakings and releases
[69]
[52] Clauses 1 and 2 refer to the "distribution" which is a reference to the distribution of the exit entitlement money pursuant to cl 8 of the will. That distribution was contemplated to be made pursuant to counsel's advice.
[53] Clauses 1 and 2 of the draft deed would discharge and indemnify Mr Gibbons for liability "arising out of the distribution"[9] and "on account of such distribution."[10]
[54] Clause 6 then provides:
[70]
"6. The parties[11] and each of them hereby forever completely release,
[71]
discharge and forever holds harmless each other and Bennett Carroll
[72]
Solicitors as solicitors for the Executor with respect to (and agree to
[73]
indemnify and keep indemnified to the people discharged) in respect of
[74]
any or all loss arising as a result of any and all causes of action, claims
[75]
including but without limiting the generality of the foregoing claim for
[76]
legal costs or consequential loss of profit), demands, actions, suits or
[77]
proceedings relating to the administration of that estate, which the
[78]
parties, or any person man y now have or at any time heretofore had or
[79]
at any time hereafter may have or but for the execution of his Deed
[80]
could have against the parties discharged (and each of them) with
[81]
respect to or in any way connected with the matter."[12]
[82]
[55] The effect of cl 6 is to give a blanket discharge of any liability not to only the executor of Keith's estate (Mr Gibbons) and his solicitors, but also to Mr Fairweather, the executor of Margaret's estate.
[56] Mr Plass responded on 12 February 2025 challenging the interpretation of the will as opined by counsel. At that point then, the construction question was still a live controversy. Ms Gilmore responded on 20 February 2025 by refuting various aspects of Mr Plass's letter and stating:
[83]
"We require receipt of the signed Release and Indemnity provided to you undercover of our letter of 11 February 2025."
[84]
[57] On 25 February 2025, Mr Plass wrote again:
[85]
"We refer to your emails of 11 February 2025 in which you:
[86]
1. Advised your intention to reduce our clients' entitlements pursuant
[87]
Requested our clients agree to sign a deed of release and indemnity;
[88]
Advised that our clients should expect to receive approximately $24,000 - each from the exit entitlement of $135,000-
[89]
We are instructed to demand the immediate release and transfer to our Trust
[90]
Account of the $48,000- which you have advised is in your Trust Account being held for the benefit of our clients.
[91]
Such funds are to be paid into the following bank account within seven (7)
[92]
We are further instructed that our clients do not agree to signing the deed of release and indemnity.
[93]
Our clients' rights are reserved in every respect."
[94]
[58] Ms Gilmore responded on 3 March 2025 by affirming her earlier statement of intention to distribute the exit entitlement as residue. She also provided an estate account.
[59] Various letters passed between the respective solicitors and on 24 June 2025, Ms Gilmore wrote:
[95]
"We refer to our letter dated 3 March 2025, in which we requested your confirmation as to whether you hold instructions to accept service on behalf of your clients. To date, we have not received your advices in this regard.
[96]
Further, you have not provided any authority or case law that contradicts the advice we received from Counsel, as outlined in our letter to you of 11 February 2025. In the absence of any such response, our client's position remains unchanged.
[97]
Unless we receive the executed Release and Indemnity, which was enclosed with our letter of 11 February 2025, within 14 days from the date of this letter, we will have no alternative but to apply to the Court for Directions. In that event, we will be seeking an order that your client pay our client's costs on an indemnity basis, and her own from her funds."
[98]
[60] Mr Plass responded on 1 July 2025. The letter dealt with various subjects but in particular stated:
[99]
"At no stage has this office raised any legal issue concerning the legal position outlined in your letter of 11 February 2025. Having taken advice from counsel following receipt of your letter we wrote to you on 12 February 2025 raising issues best described as fairness and equity. We did not raise any objections to your legal conclusions."
[100]
[61] Mr Plass went on in the letter of 1 July 2025 to say that he thought there were now no issues between the parties. He said:
[101]
"We are unsure as to any reason why the Executor would now wish to apply for Directions as we do not know of any issues that remain outstanding. Please advise if our understanding is incorrect and an issue remains that cannot be determined by way of direct communication between our firms."
[102]
[62] As at 1 July 2025 there was no longer a controversy concerning the proper construction of cll 7 and 8 of Keith's will or as to how the exit entitlement would be distributed.
[63] On 9 July 2025, Mr Gibbons, apparently in his capacity as consultant to Bennett Carroll, wrote to Paramount Legal. He pointed out that there were several issues that seemed not to be resolved. Importantly though, he said this:
[103]
"We have your letter and email of the 1st of July which appears to be indicating that you believe there are no issues remaining between the various parties interested in this estate. Though your letter does not specifically state so, it appears that your clients now agree with Counsels opinion regarding entitlements and distribution of funds received in this matter."
[104]
[64] After dealing with various other matters, Mr Gibbons then said:
[105]
"In view of the long, vociferous and tortured history of this matter, including allegations of a professional conduct nature, the executors will not release any estate funds to your clients without a full extinguishment of all issues and rights, signified by the singing of the Deed of Release and Indemnity forwarded to you."
[106]
[65] As at 9 July 2025 then, Mr Gibbons's position was:
[107]
(a) he understood that there was no controversy in relation to the distribution of the exit entitlement; but
(b) given the existence of other, more general complaints, he required the Deed of Release and Indemnity to be executed before administration of the estate progressed.
[108]
[66] On 17 July 2025, Mr Plass again wrote to Bennett Carroll:
[109]
Our clients find it extraordinary that you expect them to provide indemnities in favour of the executors and additionally your firm in the administration of the estate of the late Mr and Mrs Herbert. We expect this demand was not made of the remining estate beneficiaries prior to the date of this letter.
[110]
It cannot be ignored that the executors for both estates have been solicitors and/or partners of your legal firm which has held the conduct of the drafting of the Wills for both Mr and Mrs Herbert and the subsequent estate administrations.
[111]
Consequently, our clients are entitled to reserve their rights in every respect. It is unreasonable to demand that they waive their rights.
[112]
If your firm and the executors have properly conducted the administration of the estates they have nothing to fear from our clients. If our clients were to commence proceedings and those proceedings were brought improperly or without reasonable prospects of success, then in those circumstances such proceedings would be struck out and our clients would become subject to costs orders.
[113]
Our clients have instructed us to repeat our previous requests for the release of their estate entitlements.
[114]
For the sake of certainty, we are instructed that our clients do not agree to signing any Deed of Release and Indemnity and that we hold instructions to accept service.
[115]
Please either release our clients' estate entitlements as previously requested or alternatively bring your foreshadowed application for Directions. Should you bring that application we place you on notice that our clients will be represented at the application and will seek an order for costs on an indemnity basis against the applicant/s."
[116]
[67] It is said by Mr Gibbons on the current application that this letter does not show a clear indication that the distribution of the exit entitlement under cl 8 is accepted. That position, though, is stated in Mr Plass's earlier correspondence as Mr Gibbons understood and recorded in his letter of 9 July 2025. The letter of 17 July 2025 from Mr Plass is obviously referring to other, more general complaints.
[68] Further, Mr Gibbons' letter of 9 July 2025 made clear that the critical issue to him was not any concession about whether the exit entitlement fell to residue. The critical issue was the "full extinguishment of all issues and rights" by execution of the draft deed.
[69] Whether Tania and Iain have any legal remedy against Mr Gibbons, or Bennett Carroll, is not a matter for current consideration. However, it is understandable that Mr Plass raised that issue. There are, as earlier observed, shortcomings in the drawing of Keith's will. There is also evidence that Margaret was not properly advised when she made her last will. She obviously misunderstood the operation and effect of Keith's will, a will drawn and, it seems, held by Bennett Caroll.[13]
[70] On 21 August 2025, Mr Plass wrote saying that he held instructions to accept service of the application for directions. The current application was filed on 1 September 2025.
[71] On 16 October 2025, some four days before the application was heard, Ms Gilmore wrote to Mr Plass in these terms:
[117]
"In order to progress the matter, and in accordance with order 2 that we seek, we would be prepared to amend the Deed of Release by removing reference to Bennett Carroll Solicitors on the basis that the costs of the Application are paid for by the Respondents."
[118]
[72] Bennett Carroll are only mentioned in cl 6 of the draft deed. The intent then of the letter of 16 October is that the deed would be amended so that the executor of Keith's estate (Mr Gibbons) and the executor of Margaret's estate (Mr Fairweather) would have a blanket indemnity from all liability, whether arising from the distribution of the exit entitlement or otherwise, but any causes of action against Bennett Carroll remain.
[73] The application seeks directions in relation to the distribution of the exit entitlement. That concerns the dispute as to how the exit entitlement is treated. That dispute was not live at the time the application for directions was filed. Whatever other problems there may have been with the estate, and no matter what other claims may be open against either Mr Gibbons, Mr Fairweather or Bennett Carroll, the matter the subject of the application was not an active controversy between the parties by the time the application was filed and served.
[74] It follows then that the application ought not to have been filed. It was not a reasonable step taken in the administration of Keith's estate.
[75] Not only was the bringing of the application misconceived, it was also unreasonable. Mr Gibbons and Bennett Carroll acted in different capacities in the administration of the estate. Beneficiaries complained about their actions. They are entitled to do so. They are entitled to seek whatever redress they may be advised to pursue.
[76] As a condition of dealing with the exit entitlement in accordance with the terms of Keith's will, Mr Gibbons attempted to impose upon Tania and Iain a condition that they not only discharge and indemnify him from the consequences of making that distribution, but also that they give a wide-ranging discharge and indemnity to Mr Gibbons, his solicitors, Bennett Carroll, and also the executor of Margaret's estate, Mr Fairweather. When asked for the justification for such a course, Ms Brereton who appeared for Mr Gibbons on the application before me, could offer no rational explanation.
[77] The offer to settle on the terms set out in Ms Gilmore's letter of 16 October 2025 is also unreasonable. It required Tania and Iain to pay the costs of an application which was misconceived and unreasonable.
[78] Mr Gibbons ought pay Tania and Iain's costs of the application. For the reasons I have explained, bringing it was unnecessary.
[119]
[84] I make the following orders:
The application is dismissed.
The applicant pay the costs of Tania Moore and Iain Herbert of the application on the indemnity basis.
The applicant not be indemnified from the estate of Keith Douglas Herbert either for his own costs of the application or the costs he is liable to pay Tania Moore and Iain Herbert pursuant to order 2.
[120]
[1] I shall refer to all the members of the extended Herbert family by their first given names for convenience and without intending any disrespect.
[121]
[3] In cl 6 there is the mistaken reference to "subclause".
[17] By cl 3, Keith made a small gift to the Board of Benevolence of Aged Masons, Widows and Orphans and then left 50% of the residue to Tania and Iain jointly and 50% to Margaret. The will provided that in the event that Margaret predeceased Keith, her share passed to any of her children who survived her.
[18] Keith did not retain the Jimboomba property and, upon its sale, he did not acquire the fee simple in any replacement property. Instead, he acquired a licence in the name of himself and Margaret to reside in a unit in a retirement village. The payment required as an "incoming contribution" under that arrangement was $335,000.00.
[19] Upon Keith's death, Mr Gibbons identified the assets of the estate as:
[28] Keith's intention was, clearly enough, that Tania and Iain would inherit his house or any replacement. The replacement residence was, for practical purposes, the unit, which was occupied through a licence. That was purchased in joint names, no doubt, because if Keith died Margaret required a right to stay in the unit.
[29] It seems likely that what was intended by Keith was that Margaret's children would not receive any benefit from disposal of the property in which Keith and Margaret resided unless, perhaps, that property was not the Jimboomba property but was a property held in joint names. Because the licence was purchased in joint names, and if Keith's share falls to residue, Margaret's children effectively receive 75% of the benefit which flows from the jointly occupied property. They receive Margaret's 50% interest by direct gift under her will, and they receive one half of Keith's 50% interest, being their share in the residue of Keith's estate, which passes to Margaret under Keith's will and then to them under Margaret's will.
[30] Keith no doubt believed that his interest in "property" would include the residential license and Margaret also thought that and acted accordingly.[6] Margaret's daughters have chosen to take the benefit of their mother's mistake.
[31] Further, the only claim of Tania and Iain is to residue and much of it has been consumed in costs. The sum expected to come to each of Tania and Iain is only about $24,000.00.
[32] Despite all this, Mr Gibbons must administer Keith's will according to its terms. To ensure that was achieved he sought advice from counsel as to whether the licence to occupy the unit is "property [Keith] may own and normally reside in at the time of [his] death."[7]
[33] Counsel opined that Keith's share of the exit entitlement is an asset which falls to be distributed under cl 8 (residue) rather than the specific bequest to Tania and Iain under cl 7. That might be right. The correctness or otherwise of that opinion need not be determined as Tania and Iain accept that Keith's share of the exit entitlement falls to residue.
[79] There have been various cases which have considered the circumstances in which costs should be awarded on an indemnity basis.[14] In Rosniak v Government Insurance Office,[15] the Court of Appeal of New South Wales observed that generally some evidence of unreasonable conduct was required.[16]
[80] Here, the threat of an application for directions has been used in order to seek to extract a collateral advantage, being discharge of liability in relation to matters unrelated to the matter the subject of the application. Such conduct is unreasonable and, in my view, justifies an order for indemnity costs.
[81] A trustee has a right of indemnity in relation to expenses which are properly incurred. What is "proper" in this context may vary according to the circumstances of the case and the particular duties which fall upon the trustees in those circumstances.[17] The fact that Mr Gibbons was unsuccessful in the application would not of itself disentitle him from indemnity for costs which he has incurred, or costs for which he is liable to another party. An application might be reasonably made even if ultimately it was unsuccessful.
[82] However, that is not the case here. As has been explained, the application sought relief in relation to an issue that was no longer current. The application was brought against the context of insistence of execution of a deed which sought to discharge and indemnify Mr Gibbons and related parties from potential liability which was unrelated to the subject matter of the application.
[83] As I have found, the bringing of the application was misconceived and unreasonable. The bringing of the application was not a step properly taken in the administration of Keith's estate. It follows that Mr Gibbons should not have indemnity from the estate for either the costs that he has incurred or the costs for which he is now liable to Tania and Iain.