PRACTICE AND PROCEDURE - originating process - family provisions claim - whether by pleadings or originating application - originating application to be preferred

PRACTICE AND PROCEDURE - filing of unnecessary documents adds to costs - poor practice

Family Provision Act 1969 (ACT), ss 7, 8, 20

Family Provision Act 1982 (NSW), s 15

Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), s 4(3)

Real Property Act 1900 (NSW), ss 74B, 74C, 74I, 74J

Testators Family Maintenance and Guardianship of Infants Act 1916 (NSW)

Court Procedures Rules 2006 (ACT), rr 38, 50, 431, 502, 505, 1179, 6007, 6008, 6700, 6710, 6741, 6742, 6743

Bondelmonte v Blanckensee [1989] WAR 305

Hughes v National Trustees, Executors and Agency Company of Australasia Limited [1979] HCA 2; (1978-1979) 143 CLR 134

Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201

Re Jones; Noonan v Jones [1978] VicRp 28; [1978] VR 272

Re Faulkner [1999] 2 Qd R 49

In Re Simson Deceased; Simson v National Provincial Bank Ltd [1950] Ch 38

Grove v Fisher and Anor [2002] WASC 247

Blunden v Blunden and Anor [2008] SASC 286

Ernst v Mowbray [2004] NSWSC 1140

Guardian Trust and Executors Company of New Zealand Ltd v Public Trustee of New Zealand [1942] AC 115

In the Estate of Gough, Deceased; Gough v Fletcher (1973) 5 SASR 559

Gonzales v Claridades (2003) 58 NSWLR 118

Young v Salkeld (1985) 4 NSWLR 375

Bydand Holdings Pty Ltd v Pineland Property Holdings Pty Ltd & Ors [2009] NSWSC 584

NCR Australia Pty Ltd v The Credit Connection Pty Ltd [2005] NSWSC 1118

Woolley v Woolley [2008] ACTSC 58 (20 June 2008)

Seymour-Smith & Ors v Electricity Trust of South Australia (1989) 17 NSWLR 648

David Syme & Co Ltd (Receiver and Manager appointed) v Grey [1992] FCA 479; (1992) 38 FCR 303

Bond Brewing Holdings Ltd v Crawford (1989) 1 WAR 517

AND: LYNDA BOX, DEBRAH BOX and SKYE BOX as Executors of the Will of GRAEME WILLIAM BOX

1. Under rule 38 of the Court Procedures Rules 2006 (ACT):

(a) the proceedings continue as if commenced by Originating Application; and,

(b) within 14 days, the plaintiff file and serve an Originating Application marked "Amended Originating Application" in the form of approved form 2.7 setting out the relief now sought and referring only to the affidavits now filed on behalf of the plaintiff on which she proposes to rely in the document filed.

2. The proceedings become a Major Matter for the purposes of Practice Direction No 3 of 2009.

(a) the plaintiff file and serve any further affidavits on which she proposes to rely on or before 12 January 2011;

(b) the defendants file and serve any affidavits on which they propose to rely on or before 28 February 2011;

(c) the plaintiff file and serve any affidavits in reply on or before 13 March 2011; and,

(d) the proceedings be listed for further directions on 15 March 2011 at 9:30am.

4. I direct, as to the properties at Spence ACT (the Spence property) and Queanbeyan (the Queanbeyan property), that:

(a) before the defendants enter into any contract for the sale of those properties, or either of them, they give to the plaintiff by service on her solicitors seven clear days notice of their intention to enter into such a contract together with a copy of the proposed contract showing all terms including as to price and finance in them;

(b) in the event that the plaintiff makes no application to the Court as a result of the notice of intention to enter into a contract for the sale of these properties, or either of the them, or no order is made on such an application, the defendants be at liberty to enter into such a contract or contracts subject to this order;

(c) where the defendants have contracted to sell the Spence property they shall submit to the plaintiff a Transfer in registrable form no later than 14 days before the date of completion of the sale;

(d) where the defendants have contracted to sell the Queanbeyan property, the plaintiff submit to the defendants no later than seven days prior to the date of completion a Withdrawal of Caveat Dealing Number [provided] in registrable form;

(e) if the plaintiff does not sign the Transfer submitted to her within seven days after it is submitted to her (or such further time as the defendants may allow) the Registrar shall have power to execute the Transfer as Registrar and that shall be as effectual as if the plaintiff had executed the Transfer herself;

(f) on completion of the sale of the properties, or either of them, the defendants shall deduct from the proceeds of sale:

(i) payment of all moneys necessary to discharge any encumbrances on the property or properties;

(ii) any agent's commission and disbursements payable;

(iii) the proper costs and disbursements payable to any solicitor acting for the estate in the sale; and,

(iv) the payment of any moneys necessary to enable an adjustment of rates to the date of settlement.

The balance shall be paid to the defendants' solicitors' trust account to be held on an interest bearing deposit pending further order.

5. Notwithstanding order 4(f), the defendants may withdraw no more than $50,000 from the estate, including, if necessary, the balance of the proceeds of the sale of the Spence property and the Queanbeyan property, to pay legal fees and shall retain a copy of the tax invoice or invoices from their solicitors in respect of any such payment in the records of the estate.

6. On the plaintiff giving the usual undertaking as to damages, the defendants be restrained until further order from lodging for registration of the Transfer in respect of the Spence property signed by the plaintiff on or about 26 June 2009.

7. On the defendants giving the usual undertaking as to damages, the plaintiff be restrained until further order from lodging any caveat in respect of the Spence property or the Queanbeyan property.

8. The plaintiff's application in proceedings dated 11 November 2010 is dismissed.

9. The defendants' application in proceedings dated 3 November 2010 is dismissed.

(a) the defendants' costs of the appearance on 12 November 2010; and,

(b) the defendants' costs of the defendants' application in proceedings dated 3 November 2010 including one third of the costs of the hearing on 19 November 2010.

11. The defendants shall pay one third of the plaintiff's costs of the plaintiff's application in proceedings dated 11 November 2010, excluding:

(a) any of the plaintiff's costs of the appearance on 12 November 2010; and,

(b) one half of the plaintiff's costs of the hearing on 19 November 2010.

12. Liberty is reserved to the plaintiff to apply on short notice in respect of any matter arising out of the notice or notices to be given under order 4(a) above but otherwise liberty to apply on two days notice is reserved to each party.

1. On 19 November 2010, I heard argument about procedural matters relating to this action which is a claim by the plaintiff under the Family Provision Act 1969 (ACT) (Family Provision Act).

2. The plaintiff commenced the proceedings by Originating Claim with a Statement of Claim annexed as provided for in r 50 of the Court Procedures Rules 2006 (ACT) (the Rules). The defendants have challenged that pleading and the plaintiff seeks various orders for the effective despatch of the proceedings and to protect her interests in the meantime.

3. The Family Provision Act is the successor to the legislation which enables certain persons who consider that a will has not made adequate provision for them out of an estate to seek redress from the courts. Such legislation was first enacted in the early part of the last century, first in New Zealand (1900) and then in Tasmania (1912), Queensland (1914) and New South Wales (1916).

4. The law of wills and succession was originally the province of the ecclesiastical courts in England. Australia had no such ecclesiastical courts. On the making of the Testators Family Maintenance and Guardianship of Infants Act 1916 (NSW) proceedings under it were conducted in the Equity Division of the Supreme Court. The practice in respect of such applications followed the practice of that Court. This approach has been adopted elsewhere.

5. The focus of the law is on whether the deceased has made adequate provision for the proper maintenance and support of the applicant: Bondelmonte v Blanckensee [1989] WAR 305 (at 307). This, of course, involves a wide-ranging consideration of all the circumstances of the estate and the relationship between the claimant and the deceased: Hughes v National Trustees, Executors and Agency Company of Australasia Limited [1979] HCA 2; (1978-1979) 143 CLR 134.

6. This remains the position in this Territory where s 8(1) of the Family Provision Act gives this Court power to order for "the provision as the court thinks fit be made for the applicant out of the [estate of a deceased person]". The criteria for the Court's decision are set out in s 8(3) but as they include "the character and conduct of the applicant" (s 8(3)(a)) and "any other matter the court considers relevant" (s 8(3)(k)), there is, inevitably, likely to be a wide ranging inquiry into events and incidents great and small in the life of the applicant and his or her relationship with the deceased.

7. There are, of course, some formal criteria for an application, such as, the identities of the relevant people, the deceased (including date of death) and the executor, and that the applicant falls within a defined eligible category set out in s 7 of the Act. Those are, however, rarely in dispute.

8. It seems to me, however, that the nature of the proceedings do not lend themselves to a process of issue refinement as is achieved by the ordinary process of pleadings. There are not, after all, a clear set of facts the existence of which need to be identified and then proved by evidence that can be marshalled by reference to them which are necessary for a cause of action and to raise issues for determination in the way that a common law action would be pleaded. Indeed, as the High Court said in Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201 (at 210-11), the question of whether adequate provision has or has not been made is the essential jurisdictional fact. It is a question of objective fact, proof of which requires a wide range of evidence encompassing the 11 criteria in s 8(3), including s8(3)(k), in itself, wide-ranging. Thus, there is, in reality, only one fact in issue in the proceedings and that is always in issue.

9. For these reasons, a Statement of Claim will rarely be a useful way to manage the litigation. It is, therefore, unsurprising that all jurisdictions in Australia use a version of the Originating Application and supporting affidavits as the method prescribed for making an application for family provision under equivalent legislation. South Australia does permit either this procedure or a Statement of Claim. I found no authorities which assisted me in deciding when, in that State, a Statement of Claim would preferably be used. This is not to say that processes which refine what is in dispute may not be appropriate, but usually that can only be ascertained after the affidavits of the parties have been filed. It is in this context that I deal with the applications before me.

10. The defendants filed an Application in Proceedings on 3 November 2010 seeking that the Statement of Claim, which had been filed with the Originating Claim, be struck out. The application was returnable on 12 November 2010.

11. It was supported by a schedule of correspondence (r 6007(5)(a)(ii) of the Rules) which included correspondence between the parties. In particular, the defendants' solicitors complained of the drafting of the Statement of Claim and identified claimed inadequacies. The plaintiff's solicitors responded, noting that the defendants' solicitors' letter had been forwarded to counsel for advice. The defendants' solicitors responded seeking some greater clarity.

12. In any event, the plaintiff then issued an Application in Proceedings dated 11 November 2010 supported by an affidavit of the plaintiff. The plaintiff sought the following orders:

1. That time be abridged for the service of this application.

(a) An order that, until further order, the Defendants as Executors be restrained from making any distribution of the said Estate and from otherwise dealing with the said Estate in any manner inconsistent with, or contrary to, or likely to diminish the value of, the Plaintiff's claim; and

(b) An order that the Defendants as Executors shall forthwith take possession of all property held by the Deceased at the time of his death, including all property, personal effects and mementos then held by the Deceased but now in the possession of any other person, and if any person in then forthwith take proper proceedings to recover possession of the same;

(c) An order that, pending the hearing and determination of these proceedings, the Defendants, (by themselves or by any servant, agent, nominee, assign or instrument of theirs) be restrained from registering or seeking to register, any transfer in favour of the Deceased or the Deceased's estate, which the Defendants may hold in respect of the property at [an address in] Spence, ACT:

2.(sic) The Defendants shall, within 28 days of these orders, file accounts as at 30 June 2010 of the administration under grant of Probate No P 103 of 2010 of the affairs of the deceased Graeme William Box and serve a copy thereof on the Solicitors for the Plaintiff, together with a copy of the tax return for the said Deceased's estate for the year ending 30 June 2010.

1. The Defendants shall direct that all the nett proceeds of any sale of land in New South Wales comprising part of the said Deceased's estate, be paid into the trust account of Tetlow Tigwell Watch and that payments from those moneys in trust may be paid out by further order including a specific amount of $50,000 for estimated reasonable legal costs for each of both the Plaintiff's side and the Defendant's side of these proceedings.
2. The Defendants shall file and serve any Defence within 28 days of these Orders (or within 28 days of the filing and serving of an Amended Statement of Claim herein by the Plaintiff).
3. The Defendant shall file and serve any affidavits in reply to the affidavits of the Plaintiff (and particularly to the Plaintiff's affidavit dated 25 August 2010) within 21 days of the filing of any Defence and shall also file and serve such other affidavits as may be necessary or appropriate to inform this Honourable Court of the assets and liabilities of the Deceased's estate and any evidence to be relied upon at the trial of these proceedings.
4. The Plaintiff should file and serve any affidavits in reply within 21 days of service of the affidavits of the Defendants.
5. Ian Nash, Esquire, of Senior Counsel be appointed as Mediator in these proceedings and the parties and their legal representatives if so instructed attend a Preliminary Conference within 21 days of the completion of the filing of affidavits in accordance with these orders. The fees of the Mediator and disbursements relating to the Mediation shall be paid by the Defendants from moneys held in trust for the estate of the Deceased.
6. That, until further order, the Defendants shall co-operative with the Plaintiff in offering the said Spence property to be let at a reasonable market rate rental and all rent proceeds thereof shall be paid into the Trust Account of the Plaintiff's Solicitors pending the hearing and determination of the proceedings herein.
7. That the life of the Caveat No. AF798275 X lodged by the Plaintiff over the said factory property at [an address in] Queanbeyan, NSW, be extended until further order.
8. Such further or other orders as to this Honourable court may seem fit.
9. Costs

13. The orders sought by the plaintiff were, in some cases, not always easy to follow. For example, in prayer for relief (3) above, the drafting used the word "may" in relation to an order of the court for payment of funds out, but it was not clear whether what was intended was that such payments would only be paid out in this way. It also referred to an amount of $50,000 for legal fees but it was not clear whether this was to be paid out as part of the order or, if not, why it was mentioned.

14. Again, prayer for relief at (3) referred to the proceeds of the sale of the New South Wales land being paid into a trust account, but prayer (9) was to extend a caveat over what appeared to be that land and, of course, to extend the caveat would likely prevent such a sale with no mechanism to resolve the inconsistency.

15. Later, on 16 November 2010, the plaintiff made and filed a further affidavit.

16. I do not need to go into the facts in any depth, but a few remarks are necessary to understand the applications.

17. The plaintiff and the deceased, who died in 2009, lived in a domestic relationship between 1998 and 2006. They purchased a number of properties together and, at the date of death of the deceased, there were two properties remaining unsold, a house at Spence and a factory at Queanbeyan, New South Wales. The Queanbeyan property appears to have been purchased with loan funds, the repayment of which was received over the Spence property by mortgage for which the plaintiff remains liable.

18. It appears that in 2009, on a date not disclosed on the material before me, the plaintiff signed what was called a "Termination Agreement" (the Agreement) which appears to be a document designed to complete the separation of the property interests that the deceased and the plaintiff had in common. The plaintiff, in these proceedings, seeks a declaration setting aside that Agreement, claiming that she was subject to disadvantage, was not aware of its terms and did not have independent advice before signing it.

19. It appears, too, that the plaintiff claims an equitable interest in the properties at Spence and Queanbeyan, despite the terms of the Agreement.

20. As I understand it, the property at Spence is currently registered in the names of the plaintiff and the deceased. Apparently, as a consequence of the Agreement, the plaintiff signed a Transfer of her interest in that property but it has never been registered. The deceased and the plaintiff were, apparently, joint tenants of the property and the right of survivorship may have now overtaken that Transfer.

21. As can be seen, the plaintiff is claiming a variety of relief in these proceedings. All are equitable claims in addition to the Family Provision claim.

22. The proceedings were commenced by Originating Claim on 26 August 2010. The plaintiff also filed an affidavit with the Originating Claim, even though it had a Statement of Claim attached to it. It is not clear why that was done.

23. There was some correspondence as noted above (at [11]). This clearly complied with rr 6741, 6742 and 6743 of the Rules. It did not, however, achieve their object of avoiding wasteful pleading disputes where possible.

24. The defendants then made their application, returnable on 12 November 2010. On

11 November 2010, the plaintiff filed her application with a supporting affidavit.

25. When the matters came before the Court on 12 November 2010, the applications were adjourned to 19 November 2010 and the defendants were directed to file and serve any affidavits on which they wished to rely in opposition to the plaintiff's application by 17 November 2010.

26. In fact, the defendants did not serve any affidavits. The plaintiff did file one further affidavit. It annexed copies of the earlier affidavits filed in these proceedings. There was no need for this. The earlier affidavits were all filed and easily available to any judge or the master handling the file. It only adds costs and unnecessary paper to the file. I was told that it was done to make reference to them easier. Given the small number of documents presently on the file, I doubt it does that. No costs should be allowed for the cost of annexing copies of these earlier affidavits as it was not necessary or convenient to do so.

27. In any event, the affidavit did not comply with r 6710(d) of the Rules, namely the pages of the affidavit and annexures were not numbered sequentially which enabled easy access to the documents especially those annexed. It would have been even easier if tabs had been allocated to each separate annexure. Without such devices, it can be difficult and time-consuming to identify particular annexures.

28. On 18 November 2010, the day before the hearing, the plaintiff filed a document entitled "Amended Originating Claim" with attached a document entitled "Amended Statement of Claim". They both purported to have been filed under r 505 of the Rules which permits a party, without the leave of the court, to amend their pleadings before the close of pleadings. That authorised the filing of the Amended Statement of Claim but the Originating Claim is not a pleading and can only be amended with leave under r 502 of the Rules.

29. The Amended Statement of Claim was entirely recast from the earlier version. Indeed, I was told it contained, in its 26 pages, approximately only 75 words from the original document. Despite the service of this document so close to the hearing of the two applications, the defendants were prepared to proceed with the argument about the adequacy or otherwise of it.

30. From a brief perusal of the Amended Statement of Claim, it appears that there may be some reasonable arguments to suggest it contained significant breaches of the rules of pleading. In particular, many of the allegations seem to be merely matters of evidence which go to support the fact in issue, namely, whether the deceased has made adequate provision for the plaintiff.

31. It seems to me, and in the interim I have become more convinced, that this is not a case where a Statement of Claim is desirable. The issues will be clear when an Originating Application is filed which claims relevant relief. The evidence to support those claims can then be put on affidavit and when all affidavits have been filed, there may be a case for a statement of issues and contentions to be prepared. Another option would be a form of Scott Schedule (along the lines of that referred to in r 431 of the Rules) to detail the matters in dispute.

32. Under r 38 of the Rules, I have power to make orders and give directions to reshape the proceedings in this way so as to ensure that the proceedings are progressed in an effective and efficient way. Neither party opposed that process.

33. I am aware that some judicial officers have expressed the view that where issues of credibility are involved, there is a distinct disadvantage to a tribunal of fact in having evidence-in-chief given by affidavit, with cross-examination being the only oral evidence of a witness. There is force in this. That does not mean, however, that affidavits should not be filed. After all, experts file reports and often are only cross-examined, though tribunals of fact are asked to reject their reports. At any stage a court may direct that evidence be given orally, including in chief: r 6700(3)(a) of the Rules.

34. Thus, such a view does not override the proper way of preparation for the trial (eg r 6700(2) of the Rules) and I shall make the appropriate order and give the appropriate directions to effect this.

35. I shall deal with each claim made by the plaintiff, with reference to the order number as set out at [12] above;

36. Where the notice required by r 6008 of the Rules is not given by service of an Application in Proceedings, the usual consequence is to offer the respondent an adjournment, not dismiss the application, though particular circumstances may warrant that latter response. In this case, an adjournment was actually given so this order sought is no longer relevant.

37. The law provides that a personal representative of a deceased person is at risk if he or she distributes the estate before the 12 month period within which an eligible applicant may apply under the Family Provision Act and after notice has been given: Re Jones; Noonan v Jones [1978] VicRp 28; [1978] VR 272. That is also true when notice has been given of an application which is then pending: Re Faulkner [1999] 2 Qd R 49 (at 53). This was originally said to be based on the need to avoid embarrassment to the court: In Re Simson Deceased; Simson v National Provincial Bank Ltd [1950] Ch 38 (at 42-3).

38. The making of the application is now regarded as a kind of interlocutory injunction restraining the legal personal representative of the deceased from distributing the estate until the end of the proceedings: Grove v Fisher & Anor [2002] WASC 247. The prohibition may, however, not be absolute so that a trifling legacy may be distributed or a distribution may be made where there is an urgent need from someone with a strong moral claim: Blunden v Blunden & Anor [2008] SASC 286 (at [23]). A distribution will not defeat the application, however, for under s 20 of the Family Provision Act, the distributed property may be the subject of an order for payment to an eligible applicant. It may also be that the legal personal representative is liable to the applicant or the estate for any distributions made which should be available for an order making provision: Ernst v Mowbray [2004] NSWSC 1140 (at [64]); Guardian Trust and Executors Company of New Zealand Ltd v Public Trustee of New Zealand [1942] AC 115 (at 127).

39. Notwithstanding this, the court may grant an injunction to restrain distribution in an appropriate case: In the Estate of Gough, Deceased; Gough v Fletcher (1973) 5 SASR 559 (at 565). There is, however, no present threat to distribute. It does not seem to me an appropriate case for injunctive relief on this ground.

40. The plaintiff also asserted that it was necessary for orders to be made requiring the defendants as the legal personal representatives of the deceased to collect the deceased's property. That is, of course, part of the duty of administration with which the legal personal representative is charged: Gonzales v Claridades [2003] NSWCA 227; (2003) 58 NSWLR 211 (at [14]).

41. There was, however, no material in any of the three affidavits made and filed by the plaintiff to ground a suggestion that the defendants are not doing this, nor that any of the items are in the possession of anyone else. The affidavits did not include one word about these items.

42. It is a strange order for the plaintiff to be seeking since she is not a beneficiary and has no direct interest in the estate. The terms mentioned in the order sought are "personal effects and mementos", which, are unlikely to impact on the value of the estate such as to prejudice the plaintiff in her application, unless they happen to be items such as valuable jewellery or art works and none such were specified.

43. It is true to say that some such objects were specified in the original Statement of Claim, including a stamp collection, paintings and antique furniture, a bottle collection, rare timber planks and a wine collection. That Statement of Claim was, however, not verified by affidavit and so the allegations were not in evidence before me. Those items were, in any event, omitted from the Amended Statement of Claim so it is not clear what relevance they had. The basis for such an injunction is, accordingly, quite unclear and unproved.

44. In any event, I have a real doubt as to whether the plaintiff has the standing to seek an order in these terms. In the absence of a provision such as s 15 of the Family Provision Act 1982 (NSW), and no such provision is to be found in the Family Provision Act, I do not consider that the plaintiff has such standing. Accordingly, I decline to make such an order.

(d) Prohibition on registration of the transfer of the Spence property (order 2(c))

45. The Transfer which is described (at [20]) above was apparently signed on 26 June 2009. If it is registered, there is a real prospect that the plaintiff may be prejudiced in her claim to have an equitable interest in the property recognised and to have the "Termination Agreement" set aside. There was no serious opposition to this order. It seems to me to be appropriate to make it.

(e) An order for accounts (order 2 (secondly appearing))

46. It is difficult to see the basis for the plaintiff's entitlement to seek such an order. As noted, she is not a beneficiary, only an eligible applicant under the Family Provision Act. Even if an order is made for provision, the plaintiff will not become a beneficiary of the deceased's estate, but merely the recipient of provision under an order made under the Act.

47. Again, I see no power in the Family Provision Act for me to make such an order. It is not ancillary to the orders that the plaintiff is entitled to seek. It is not an interim order of the kind that Young J identified in Young v Salkeld (1985) 4 NSWLR 375 that could be made under earlier legislation. In the absence of a provision in the Family Provision Act providing such power to the Court, I doubt that I have this power: Blunden v Blunden and Anor (at [28]).

48. If I am wrong about this, I note that there was no evidence of any kind in any of the plaintiff's affidavits that would justify requiring the defendants to prepare such accounts at the expense of the estate.

(f) Retention of the nett proceeds of sale (order 3)

49. The defendants, as the legal personal representatives of the deceased, have the power to collect and realise the estate (see [40] above). Even if the plaintiff has an equitable interest in the properties at Spence and Queanbeyan, it does not seem to me that she should be able to prevent their realisation since she does not claim to have a beneficial interest equal to the whole of the value of the properties.

50. She has not made a claim for any special interest in the properties and, indeed, by implication, this order she seeks seems to accept that the properties will be sold but only seeks to preserve her interest in the proceeds.

51. It seems to me that she is entitled to such protection.

52. Indeed, the defendants, in a letter dated 17 November 2010 from their solicitors, offered:

Our clients intend to sell both the Spence property and the Queanbeyan property forthwith. They do so because the costs of maintaining these properties and [sic] are no longer capable of being recovered from the rents available. Our clients are happy to give undertakings that the proceeds of any sales will not be dissipated pending the outcome of these proceedings other that in [sic] as to the ordinary costs of the sale, the discharge of the mortgage over the Spence property and to the sum of up to $50,000.00 in legal fees of the estate.

53. The defendants made much play of this offer and, in substance, it is important. It is, however, worth noting that in their letter of 7 October 2010, the plaintiff's solicitors wrote:

Our request by email dated 2 September 2010 for agreement on orders to preserve the estate pending suit has been ignored. We have lodged a caveat over the NSW factory land and enclose a copy. We are instructed to lodge a caveat in the ACT over the Spence property. We suggest all the nett proceeds of the sale of the NSW property be held in your trust account and may be paid out by order of the Court.

54. This would clearly be an invitation to negotiate on this issue. That the defendants made an offer is relevant but it came well after this request by the plaintiff and after the plaintiff had filed this Application in Proceedings.

55. At the hearing, the parties agreed on a form of procedure in principle to deal with this issue. I have refined it in terms I consider appropriate and will make appropriate orders.

56. Dr D Hassall, counsel for the plaintiff, submitted that undertakings of the defendants would not be sufficient. He submitted that orders should be made. He was unable to articulate what the difference was that was relevant here.

57. I have given careful consideration to what fell from Einstein J in Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors [2009] NSWSC 584 (at [45] to [48]) and the examination of contempt of court orders by Campbell J in NCR Australia Pty Ltd v The Credit Connection Pty Ltd [2005] NSWSC 1118 cited by Einstein J (at [47]). It seems to me that there is, in this case, no relevant difference between an undertaking and an order of the Court, though enforcement may follow different paths.

58. Because of the complexity of the provisions to be made, I will make orders rather than require undertakings to be given to the Court by the defendants.

59. I will give appropriate directions as to the future conduct of the proceedings to ensure that they do not languish.

60. It seems to me that this matter is a Major Matter under Practice Direction No 3 of 2009. As a result, I will direct that these proceedings have become a Major Matter.

61. The plaintiff sought the appointment of a Senior Counsel in this jurisdiction as a mediator. The Court has power to make such an order under r 1179 of the Rules. In Woolley v Woolley [2008] ACTSC 58, Master Harper referred the proceedings to a mediator notwithstanding that neither party had sought it. Indeed, his Honour commented (at [17]):

It seems to me that this is the kind of proceeding ideally suited to mediation, despite the fact that it seems to me extraordinarily unlikely that the parties would agree to, still less arrange for, mediation unless ordered to do so by the Court.

62. Dr C Ward, who appeared for the defendants, however, announced firmly that though his clients would comply with any such order in good faith and approach the mediation confidently and properly, he was satisfied, from his knowledge of the parties and the dispute, that mediation would not resolve the dispute.

63. I have not heard from the parties themselves, but it is not inappropriate to rely on the submissions of this kind from counsel. It is true that the most apparently intractable disputes sometimes settle at mediation, but it can also be an expensive process which may also delay resolution.

64. Having carefully considered the matter, I do not consider it appropriate, in the circumstances, to make the order sought. There are a number of complex issues in the proceedings and while any dispute can settle, the approach by the parties that I have seen in the Court papers and to which Dr Ward referred makes the likelihood in this case not sufficient to justify me making an order compulsorily requiring the parties to undertake mediation.

(i) Cooperation in renting the Spence property (order 8)

65. The Spence property had been rented, but recently, as the defendants sought to sell it, the rental arrangements had fallen in abeyance. As such, it was not bringing in rent from which, were she found to have a beneficial interest in it, the plaintiff would be entitled to benefit. She was also not gaining any income from which to pay the mortgage.

66. Nevertheless, as it appears that both properties should now be sold, subject to suitable protection, this order sought is no longer relevant.

67. As the caveat the subject of this order sought by the plaintiff was lodged in New South Wales, the only jurisdiction I have to make such an order is under the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW), s 4(3). Whether that power is plenary, as was held by Rogers CJ Comm D in Seymour-Smith & Ors v Electricity Trust of South Australia (1989) 17 NSWLR 648, or more limited to subject-matter jurisdiction as held by Gummow J in David Syme & Co Ltd (Receiver and Manager appointed) v Grey [1992] FCA 479; (1992) 38 FCR 303, it seems to me that I do formally have the power to extend the caveat under the relevant NSW legislation.

68. Ipp J held in Bond Brewing Holdings Ltd v Crawford (1989) 1 WAR 517 that such cross-vested jurisdiction should only be applied to alleviate jurisdictional uncertainties so that an action would not fail for want of jurisdiction.

69. Nevertheless, if necessary, I would consider that this is the very kind of case where exercise of this jurisdiction was appropriate for it enables the whole of the estate to be administered in a co-ordinated and sensible way.

70. The plaintiff seemed concerned that the caveat, lodged on 6 October 2010, would lapse three months after that date. Under s74C of the Real Property Act 1900 (NSW), a caveat does so lapse, but it seems to me that this is only in respect of caveats lodged under s74B of that Act against primary applications, namely applications to bring land not subject to that Act under its provisions. The Queanbeyan land is already subject to this Act. The only way the caveat can lapse is if the Registrar gives notice under

ss 74I or 74J of that Act and the plaintiff does not obtain a Court order extending the operation of the caveat.

71. As no such notice has been given, I do not consider that I have jurisdiction to make such an order. In any event, having regard to the other orders I propose, it is not necessary to extend the operation of the caveat.

72. The question of costs was, as now often happens, vigorously argued.

73. As to the costs of the defendants' application, it seems to me that the plaintiff must pay the defendants' costs. The plaintiff did very substantially amend the Statement of Claim after the application to strike it out had been lodged. The fact that I have decided that the proceedings should proceed in a different way is not relevant to that issue.

74. As to the plaintiff's application, the results have been mixed. Some of the relief sought could not, in my view, have ever been granted. On the other hand, the plaintiff has had some success.

75. The appearance on 12 November 2010 was, however, wasted and that was because the plaintiff failed to serve the Application in Proceedings in good time. These are all matters that need to inform the exercise of the Court's jurisdiction over costs in this case.

76. On 24 November 2010, the parties appeared before me and I made the following orders.

1. Under rule 38 of the Court Procedures Rules 2006 (ACT):

(a) the proceedings continue as if commenced by Originating Application; and,

(b) within 14 days, the plaintiff file and serve an Originating Application marked "Amended Originating Application" in the form of approved form 2.7 setting out the relief now sought and referring only to the affidavits now filed on behalf of the plaintiff on which she proposes to rely in the document filed.

2. I direct that the proceedings become a Major Matter for the purposes of Practice Direction No 3 of 2009.

(a) the plaintiff file and serve any further affidavits on which she proposes to rely on or before 12 January 2011;

(b) the defendants file and serve any affidavits on which they propose to rely on or before 28 February 2011;

(c) the plaintiff file and serve any affidavits in reply on or before 13 March 2011; and,

(d) the proceedings be listed for further directions on 15 March 2011 at 9:30am.

4. I direct, as to the properties at Spence ACT (the Spence property) and Queanbeyan (the Queanbeyan property), that:

(a) before the defendants enter into any contract for the sale of those properties, or either of them, they give to the plaintiff by service on her solicitors seven clear days notice of their intention to enter into such a contract together with a copy of the proposed contract showing all terms including as to price and finance in them;

(b) in the event that the plaintiff makes no application to the Court as a result of the notice of intention to enter into a contract for the sale of these properties, or either of the them, or no order is made on such an application, the defendants be at liberty to enter into such a contract or contracts subject to this order;

(c) where the defendants have contracted to sell the Spence property they shall submit to the plaintiff a Transfer in registrable form no later than 14 days before the date of completion of the sale;

(d) where the defendants have contracted to sell the Queanbeyan property, the plaintiff submit to the defendants no later than seven days prior to the date of completion a Withdrawal of Caveat Dealing Number [provided] in registrable form;

(e) if the plaintiff does not sign the Transfer submitted to her within seven days after it is submitted to her (or such further time as the defendants may allow) the Registrar shall have power to execute the Transfer as Registrar and that shall be as effectual as if the plaintiff had executed the Transfer herself;

(f) on completion of the sale of the properties, or either of them, the defendants shall deduct from the proceeds of sale:

(i) payment of all moneys necessary to discharge any encumbrances on the property or properties;

(ii) any agent's commission and disbursements payable;

(iii) the proper costs and disbursements payable to any solicitor acting for the estate in the sale; and,

(iv) the payment of any moneys necessary to enable an adjustment of rates to the date of settlement.

The balance shall be paid to the defendants' solicitors' trust account to be held on an interest bearing deposit pending further order.

5. Notwithstanding order 4(f), the defendants may withdraw no more than $50,000 from the estate, including, if necessary, the balance of the proceeds of the sale of the Spence property and the Queanbeyan property, to pay legal fees and shall retain a copy of the tax invoice or invoices from their solicitors in respect of any such payment in the records of the estate.

6. On the plaintiff giving the usual undertaking as to damages, the defendants be restrained until further order from lodging for registration of the Transfer in respect of the Spence property signed by the plaintiff on or about 26 June 2009.

7. On the defendants giving the usual undertaking as to damages, the plaintiff be restrained until further order from lodging any caveat in respect of the Spence property or the Queanbeyan property.

8. The plaintiff's application in proceedings dated 11 November 2010 is dismissed.

9. The defendants' application in proceedings dated 3 November 2010 is dismissed.

(a) the defendants' costs of the appearance on 12 November 2010; and

(b) the defendants' costs of the defendants' application in proceedings dated 3 November 2010 including one third of the costs of the hearing on 19 November 2010.

11. The defendants shall pay one third of the plaintiff's costs of the plaintiff's application in proceedings dated 11 November 2010, excluding:

(a) any of the plaintiff's costs of the appearance on 12 November 2010; and,

(b) one half of the plaintiff's costs of the hearing on 19 November 2010.

12. Liberty is reserved to the plaintiff to apply on short notice in respect of any matter arising out of the notice or notices to be given under order 4(a) above but otherwise liberty to apply on two days notice is reserved to each party.

I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.