SUCCESSION - wills, probate and administration - making of orders to implement earlier judgment - no point of principle
Source
Original judgment source is linked above.
Catchwords
SUCCESSION - wills, probate and administration - making of orders to implement earlier judgment - no point of principle
Judgment (17 paragraphs)
[1]
Solicitors: First Choice Family Lawyers (plaintiff)
Spiro Troussas Principal Lawyer (first defendant)
Self-represented (second defendant)
Whittens McKeough (third defendant)
Sharah & Associates (fourth defendant)
File Number(s): 2015/374480
[2]
Introduction
Reasons for judgment in these proceedings were published on 22 June 2018: see Katramados v Hasapis [2018] NSWSC 948 (the principal judgment).
I will use the same terms to describe the parties and other matters as I have used in the principal judgment.
As explained at [332]-[336] of the principal judgment, I came to the conclusion that it would be premature for the Court to formulate the orders that the Court should make. Primarily, that was because the Court could not assess the effect that the consequential costs orders would have on the substantive orders.
When the reasons for judgment were published, I invited the parties to consider the consequences and provide additional written submissions. I appointed a hearing for 4 July 2018 to hear the parties. By that date, Julia, Mary and Billy had served further written submission and evidence. Adriana, who has represented herself for most of the proceedings, made oral submissions.
Following the hearing on 4 July 2018, the Court has received written submissions dated 11 July 2018 on behalf of Despina, supported by a solicitor's affidavit setting out the amount of Despina's costs of the proceedings.
These reasons for judgment do not resolve all of the outstanding issues in the proceedings.
After giving much thought to how the Court may resolve the difficult issues that remain, I have reluctantly come to the conclusion that I should make further procedural orders that will hopefully facilitate the efficient completion of these proceedings. Without the further procedural orders being satisfied, I fear that the Court will not be able to make final orders that provide a satisfactory level of certainty and justice to the parties in the implementation of the conclusions reached in the principal judgment.
Although there are issues that require further attention of the parties, there are other issues that are pressing and call for orders to be made as soon as possible. I will, in the manner that is explained below, make orders now where I feel able to do so, and attempt to strike an appropriate balance between the making and deferral of the orders to which the various parties may be entitled.
There are two preliminary issues that have significance for the formulation of the orders that should be made to give effect to the conclusions reached in the principal judgment.
[3]
Realisation of deceased's property in Greece
The first issue arises out of the fact that, as between the parties to these proceedings, the deceased died intestate both in respect of property situated in this State and property situated in Greece.
In the manner examined in the principal judgment, by reason of the different rules governing intestacy in the two jurisdictions, Julia and the three children of the deceased became entitled to share in the property of the deceased that was subject to the intestacy rules on the basis of different principles in each jurisdiction. The effect of the Greek rules is considered at [79]-[82] of the principal judgment, and the effect of the rules applicable in this State is considered at [84]-[88].
A practical problem arises out of the need to realise the intestate estate of the deceased in Greece. As considered at [66], [67] and [83] of the principal judgment, the Court was advised during the hearing that it would be necessary for the Greek assets to be sold by officers of the relevant Greek court, and that the process could take some time. Furthermore, it appeared that the assets in Greece that are subject to the intestacy rules may have uncertain values, as they appeared to be less readily realisable than the deceased's assets in Greece that were the subject of gifts in the deceased's December 2014 will. During the hearing, counsel for Julia urged on the Court that it should accept and act upon the estimates of the values of the relevant Greek properties, because no counter-estimates were provided by the defendants. The Court was not confident of that approach because the estimates were effectively given by Julia herself.
The distribution of the deceased's intestate estate between Greece and this State gave rise to the further practical problem that Adriana and Billy were likely to lose their homes as a result of the orders that will be made in the probate aspect of these proceedings and the application that trustees be appointed for the judicial sale of the property in which Adriana lives, and it seemed to be appropriate for the Court to facilitate Adriana and Billy receiving their share of the deceased's estate (including as a result of family provision orders that will be made) in Australian currency as soon as possible.
Consequently, the Court concluded at [327] that the family provision orders that were foreshadowed to be made in favour of Adriana and Billy should be made on the condition that Julia would be entitled to Adriana's and Billy's shares in the deceased's intestate estate in Greece.
At the hearing on 4 July 2018, the Court was informed by Julia's counsel that, contrary to the information provided to the Court at the hearing, Greek law allowed for the efficient realisation of the deceased's Greek intestate estate provided all interested parties cooperated by giving their authority to an appropriate person to sell the assets. If that is so, then the concern that the Court originally had that there might be a substantial delay in the realisation of the Greek assets may be able to be avoided. Furthermore, if the Greek assets can be realised reasonably quickly, it is at least possible that the Court will be able to quantify the family provision orders that are appropriate, with actual knowledge of the realised value of the Greek assets, rather than having to rely upon the uncertain information that has been provided to the Court.
Furthermore, the Court was advised at the 4 July 2018 hearing that Julia did not want to be given a right to Adriana's and Billy's shares in the deceased's Greek assets, in lieu of the right to an equivalent nominal value of the deceased's assets in this State. Julia did not want the Court to make a consequential order under s 66 of the Succession Act 2006 (NSW) (the Succession Act) having the effect of giving Adriana and Billy a right to amounts realised from the deceased's assets in this State on condition that they assigned to Julia their rights to the deceased's assets in Greece with an equivalent value.
As Julia is a resident of Greece who has greater familiarity with the deceased's Greek assets than the Court or any other party to these proceedings, and as she was the witness who provided estimated values for the Greek properties, her unwillingness to accept an equivalent share in value in the Greek properties to the deceased's properties in this State has further diminished my confidence that the Greek properties can be realised for the values given to them by Julia.
Consequently, my concern is increased that the Court's attempt to quantify appropriate family provision orders to be made in favour of Adriana and Billy may miscarry if they are founded only on appraisal values for the Greek properties that have not been provided by independent, expert valuers.
The need for an expeditious realisation of the deceased's intestate estate in Greece has correspondingly been enhanced.
I have given some thought as to whether the Court has power under s 66(1) of the Succession Act to make orders that require Julia and the three children of the deceased to take the steps reasonably necessary to cause the intestate estate of the deceased in Greece to be realised on the best terms available as soon as possible.
I have decided that that is a contentious question, and that in any event, it would not be appropriate for the Court to make any orders in reliance upon the section without hearing from the affected parties first.
However, it seems to me that the most practical course for the Court to take in the first instance is to direct the interested parties to confer and, if they agree, to propose some regime for the efficient realisation of the intestate estate in Greece as soon as possible. First, it seems to me to be self-evident that it is in the interests of all interested parties to cooperate in realising the relevant assets. If they do not do so, considerable delay may ensue as a result of the realisation being undertaken by officers of the Greek court. If the Greek assets can be realised as soon as possible, that may avoid the necessity for the Court to consider whether it should make orders in these proceedings that disturbed the status quo as to which parties should receive the assets in this State as opposed to the assets in Greece.
Accordingly, I will make an appropriate procedural order below, which will invite the interested parties to confer, and convey their positions to the other parties and to the Court, and if they can cooperate to formulate a process (whether involving an order of the Court or not) to ensure that the relevant Greek assets are realised as soon as possible and that they are dealt with appropriately.
If the interested parties are unable to agree, it may be necessary for the Court to make procedural orders to enable the parties to make submissions to the Court as to whether it has power under s 66 of the Succession Act, or some other source of power, to make orders that compel the interested parties to cooperate in the realisation of the relevant Greek assets.
[4]
Effect of parties' legal costs on family provision orders
The second problem that must be addressed arises out of the legal costs that the parties have advised the Court that they have incurred in connection with these proceedings, and the earlier proceedings in which probate of the deceased's 2006 will was granted by the Court to Despina.
The problem arises in the following way. For the reasons considered in the principal judgment, I concluded at [326] that if the whole of the $1,900,000 value of the deceased's property in this State had been available for distribution without deduction, it would have been warranted for the Court to make family provision orders in favour of Adriana and Billy by way of lump-sum legacies in the amounts of $700,000 and $750,000 respectively. The extra $50,000 provision for Billy would have acknowledged the fact that the deceased gave $57,000 to Adriana in 2013.
I expressed the conclusion in that way in an attempt to provide a reasonably rational and objective explanation of the conclusion that I had reached, in the context of the other reasons set out in the principal judgment.
For practical reasons, however, those amounts would only be upper limits on the amounts of the legacies that could actually be ordered to be paid to Adriana and Billy.
For complicated reasons considered at [251]-[265] and [289 (15) and (16)] of the principal judgment, the legacies ordered to be paid to Adriana and Billy would have to be reduced as a result of the undertakings that they gave to Mary that they would not seek to throw any part of any family provision orders made in their favour (over and above what they would have received on the intestacy of the deceased) onto Mary's share in the intestate estate. Consequently, a calculation was required that assumed that Mary would continue to receive her share, but that share would have to be reduced proportionately so that she bore an appropriate share of the costs of the proceedings and the administration of the estate, in so far as those costs were to be borne by the estate, but would not be reduced by any amount referable to the family provision orders made in favour of Adriana and Billy.
The second adjustment that had to be made to the calculation of any legacies payable to Adriana and Billy was that it would first be necessary to deduct the legal costs that will be payable out of the estate, and the costs of administering the estate, and then to further reduce the amount of the legacies to ensure that Julia also receives a proportionate share in the deceased's assets in this State, albeit that Julia's share would be relatively small.
This necessity gave rise to the problem that the amounts of the legacies to be payable to Adriana and Billy could not be determined even approximately until it was known what the amount of the legal costs payable out of the estate would be.
At the time of delivery of the principal judgment, the Court did not have full information concerning the amounts of the parties' costs (and it still does not have that information).
At [280] of the principal judgment, I recorded that the estimate of Julia's costs was $284,175; I recorded at [283] the basis of my calculation that Adriana had incurred costs of $76,713.25 before she decided to represent herself; and at [282] I recorded that Billy had asked for costs capped at $120,000. I explained at [286] why I would proceed upon the assumption (really a guess) that the total costs payable out of the estate would be $500,000. I explained at [287] why that was an unsatisfactory situation. I proceeded in that way in order to have some rational, objective basis for judging the effect of the family provision orders that the Court contemplated making in favour of Adriana and Billy.
I will not set out the calculation, but for reasons that can be found at [289 (15) and (16)] and [330], if there is deducted from the assumed value of the deceased's estate in this State of $1,900,000, an amount of $500,000 for costs, and an amount of $187,500 as Mary's share, the balance is $1,212,500. Obviously, that is significantly less than the total amount of $1,450,000 that would have been payable to Adriana and Billy as legacies if the estate did not have to bear any legal costs.
This calculation demonstrates why the Court must look carefully at the amounts of costs incurred by the parties, and to whether those costs should be paid out of the estate, before any legacies payable to Adriana and Billy can be determined.
The problem that arises from the need to deal with the parties' legal costs is more complicated than appears from a consideration of the nominal amounts of the costs incurred.
The present proceedings are really two proceedings in one. The first is a probate application by Julia for an order setting aside the grant of probate of the deceased's 2006 will to Despina, and a consequent application that a grant of administration with the deceased's December 2014 will annexed be made to an appropriate person. Julia has succeeded in that claim, and it was not contested at the hearing. Secondly, there are family provision claims by Adriana and Billy that were opposed by Julia, and which succeeded in principle. Despina and Mary took essentially neutral positions at the hearing, save in respect of protecting their existing interests. Nonetheless, Despina and Mary were represented throughout the hearing.
These considerations add complexity to the question of whether the amounts of the costs incurred by the parties are objectively reasonable, and introduce questions concerning whether special costs orders should be made in relation to the two components of the proceedings, and in relation to how individual parties conducted their cases.
[5]
The amount of the legal costs incurred by the parties
The first question that must be addressed arises out of the evidence now before the Court concerning the amounts of the legal costs incurred by the parties.
If I understand the evidence now before the Court correctly, the estimate of $500,000 upon which I acted for the purposes of the principal judgment may be substantially inadequate. The evidence suggests that the total amount of costs incurred by the parties is about $803,000. (That amount is the total of all of the costs said to have been incurred by the parties, after adjusting the costs incurred by Adriana to avoid double counting certain costs incurred by Despina and Adriana jointly. There are uncertainties in this calculation which I will consider below).
I will come to the detail of this evidence below, but for the moment I will observe that, if an assumption were to be made that the deceased's estate in this State should bear costs of the proceedings of about $800,000, a calculation can be made (making the adjustments discussed in the principal judgment) so that Adriana would receive approximately $413,000 and Billy would receive approximately $442,000 as legacies. When it is remembered that both Adriana and Billy would have been entitled to receive about $416,500 from the deceased's estate on the deceased's intestacy, had Julia's probate claim not been contested and the family provision applications not been made, it will be seen that Adriana is about $3500 worse off and Billy is only about $25,500 better off as a result of these proceedings. (Those approximate calculations do not allow for even further legal costs that may be incurred, the costs of the administrator in administering the estate, the costs of realising the estate's property, or the possibility that Adriana and Billy may be ordered to pay some of Julia's costs of the probate claim).
While it is my experience that the amount of the costs incurred by the parties in family provision applications is almost always so large relative to the amount of the estate as to prevent the Court making family provision orders that are satisfactory, the possibility that the costs of the present proceedings total about $800,000 in respect of property that I have estimated to be worth $1,900,000 is truly concerning.
I express that view not only because of the absolute amount of the legal costs involved, but in various respects I consider the amounts incurred to be entirely out of proportion to the product of the costs as reflected in the material that was put before the Court at the hearing.
Each of the parties has made submissions to the Court concerning the specific costs orders that should be made, as to whether the costs should be borne by the deceased's estate; whether orders should be made on the ordinary or the indemnity basis; and whether individual parties should be ordered to pay parts of other parties' costs. The questions raised are complex, but the absolute amounts of the costs incurred demonstrate how critical the Court's determination of the cost questions will be to the Court's ability to make family provision orders in favour of Adriana and Billy that get as close as possible to the in principle amounts of $700,000 and $750,000 determined in the principal judgment.
A consideration of these costs questions has caused me to conclude that they should not be addressed until the Court has the benefit of more complete information concerning how the costs have been incurred than has been provided to date.
Furthermore, as the aggregate amount of costs incurred by the parties has been so great as to risk the utility of the proceedings being conducted at all (save for the revocation of the grant of probate to Despina and an alternative grant of administration being made with the deceased's December 2014 will attached) I have concluded that it is incumbent upon the Court to address the reasonableness of the amounts of costs incurred, rather than to simply make conventional costs orders and leave the problem to be resolved by the standard assessment process. If the Court were simply to make costs orders, and to leave the determination of the amounts of costs payable to an assessor, the assessor would probably start from the premise that in principle the costs claimants were entitled to the costs and the only issue would be the reasonableness and necessity for individual components of the costs claim. While it may ultimately be necessary to ensure that some form of assessment occurs, I regard the present to be a relatively extreme case that justifies the Court in taking some responsibility to ensure that the costs paid to the parties' lawyers can be justified.
It will be appropriate at this point to consider the information provided by each of the parties to the Court concerning the amount of legal costs that they have incurred.
[6]
Julia's costs
As set out at [278]-[280] of the principal judgment, the Court was given evidence that the total amount of the legal costs incurred by Julia in respect of these proceedings would be $284,175.
In par 1 of Julia's costs submissions dated 3 July 2018, her costs were stated to be: (a) solicitors costs for the probate suit up to 7 July 2017 of $70,477.95; (b) costs for the probate suit from 8 July 2017 to 21 February 2018 (after the end of the hearing) of $24,234; (c) disbursements for the probate suit including counsel and Greek lawyers of $162,526; (d) making a total of $218,975; plus (e) Julia's total costs for the family provision claim of $43,813. The total was said to be $262,788.88.
The calculation of Julia's costs appears to contain an arithmetical error. When the amounts stated in par 1 of Julia's costs submissions are added together, the total in (d) for the probate suit should be $257,237.95. The overall total stated in (e) should be $301,050.95.
However, it is not clear whether the amount of $301,050.95 correctly reflects the overall total, because there is a discrepancy between the amount of $162,526 presented in par 1(c) of Julia's costs submissions, and par 5 of an affidavit on costs by the plaintiff's solicitor, Ms Londi Gramelis, that is annexed to the costs submissions. The affidavit provides for the same amounts as the submissions, with the exception that in par 5 of the affidavit the amount of $124,263 is stated for disbursements for the probate suit including counsel and Greek lawyers, rather than the higher amount of $162,526 stated in the submissions.
It is not clear which amount is correct, but if the amount of $124,263 in the affidavit is adopted, the total of Julia's costs correctly adds up to $262,788.88, which is stated to be the total in both Julia's costs submissions and the solicitor's affidavit.
Julia will be required to advise the Court which amount is correct.
I consider the total amount of $262,788.88 (and of $301,050.95) to be surprisingly large, albeit not necessarily excessive. I appreciate that a false appearance can be created by a consideration of the product of legal work reflected in the evidence that is put before a court, but I remain concerned with the amount of Julia's legal costs.
More significantly, it is important in this case that the Court be given evidence of the separate legal costs incurred by parties in relation to the probate claim and the family provision claims. That is because different principles may apply to the determination of the orders to be made as to how those costs should be born.
I am perplexed as to how Julia's costs of the family provision claims were limited to $43,813 out of the total which, as noted above, may be $262,788.88 or $301,050.95. While, on the one hand, the costs for the family provision claims would appear to be very reasonable, the resulting conclusion is that the costs of the probate suit (which may be $218,975 or $257,237.95 as noted above) appears to be extreme, particularly as by the time of the hearing all defendants had abandoned any opposition to the probate claim.
While I think that the total amount of Julia's costs requires explanation, I would not accept that the proper distribution of those costs between the probate claim and the family provision claims is justified without substantially greater explanation than the Court has been given.
[7]
Despina's costs
Despina has provided written submissions on the costs issue dated 11 July 2018, supported by an affidavit of a solicitor, Mr Spiro Troussas, sworn on 11 July 2018.
The total estimate for Despina's costs is, if I understand the evidence correctly, $223,682.33. Of that amount, $6600 is an estimate for future legal costs and disbursements, including counsel's fees. I will consider below the overlap between Despina's and Adriana's costs, which appears to have led to Despina actually claiming less than the full amount of almost $224,000.
I propose to require Despina to provide a much fuller explanation of her legal costs than has been provided, because on the basis of my present understanding of these proceedings, I am not disposed to believe my eyes when I read the evidence of her legal costs.
I explained the position taken by Despina at [45]-[47] of the principal judgment. Despina gave evidence of the circumstances in which she obtained a grant of probate from this Court of the deceased's 2006 will, and she also provided kerbside valuations of the deceased's property in this State. I would infer that Despina undertook investigations and sought legal advice on the issue of whether she should resist Julia's probate claim. At the hearing, Despina took a neutral attitude and did not oppose either Julia's probate claim or Adriana's and Billy's family provision claims. Despina was represented by counsel on each of the four days of the principal hearing. I am unaware of any justification for Despina being represented in that way.
Mr Troussas gave the following evidence in his affidavit concerning the legal costs incurred by Despina (save for the estimated future costs that were dealt with separately).
ITEM LAW FIRM FEE INCURRED AMOUNT
1 Nicolas Angelos & Co Solely by First Defendant $15,441.10
2 Coleman Greig Lawyers Jointly with the Second Defendant $105,533.56
3 Constantine G. Pavlis & Co Jointly with the Second Defendant $29,607.67
4 Principal Lawyers Solely by First Defendant $66,500
[8]
The total of these amounts is $217,082.33. The material before the Court shows that the costs in item 1 were Despina's costs of obtaining probate of the deceased's 2006 will. The costs in items 2 and 3 were incurred by Despina and Adriana in respect of their joint instructions of the solicitors concerned
In par 3 of his affidavit, Mr Troussas described Despina as having incurred the costs. He did not make it clear whether the costs have been paid.
In par 1 of Despina's written submissions, she says that she relies upon Mr Troussas' affidavit and that her costs are (a) $15,441.10 for probate; and (b) $66,500 for professional fees inclusive of costs. She does not mention the costs in items 2 and 3, or the extra estimated costs of $6600.
The costs of $15,441.10 incurred by Despina referred to in item 1 of Mr Troussas' affidavit will be wasted once the Court makes an order vacating the grant of probate of the 2006 will to Despina. As to the costs in items 2, 3 and 4 of Mr Troussas' table, no explanation has been given as to the division of those costs between responses to Julia's probate claim and Adriana's and Billy's family provision claims.
Mr Troussas said in par 4 of his affidavit that the $66,500 in item 4 had been calculated "on an indemnity basis, in regard to advice, attendance and appearance at the final hearing, as well as ancillary communications and/or instructions, to the exclusion of any costs attributable to [Adriana]".
Mr Troussas' affidavit states that the amount of costs in item 4 of his table is calculated on an indemnity basis. Nothing is said about the basis upon which the costs in items 1 to 3 have been calculated, and I would infer that they have been calculated on an indemnity basis. The Court has not been assisted by evidence as to what Despina's costs incurred would be if assessed on the ordinary basis.
I observe in passing that, even if I attributed these costs to the four days of the hearing and the additional hearing on 4 July 2018, and acknowledging that the costs cover preparation, the average costs are $13,300 per day of hearing.
The principal problem I have with Mr Troussas' table, however, is that it contains evidence that Despina jointly with Adriana incurred costs of $105,533.56 to Coleman Greig Lawyers, and $29,607.67 to Constantine G Pavlis & Co, while leaving unexplained the significance of those costs. Mr Troussas does not say whether Despina accepts that she is liable to pay those costs to the two firms in question, but she does not seek to recover those costs, whether out of the estate or otherwise (a strange position); or whether she takes the stance that as Adriana is also liable for those costs, Adriana should be responsible for paying those costs, and it should be Adriana's burden to seek whatever recovery of those costs she may be able to obtain. In short, the combined effect of Despina's submissions and Mr Troussas' affidavit is to leave the costs referred to in items 2 and 3 of the table up in the air.
I will return to this issue immediately below, when I deal with Adriana's legal costs.
[9]
Adriana's costs
As I noted at [121] and [283] of the principal judgment, there is some evidence that Adriana became liable for legal costs up to at least $76,713.25. Adriana gave evidence that she had borrowed $70,176.95 from her mother to pay legal fees, and she had an unpaid debt for legal fees of $6536.30. As Adriana represented herself, it is possible that this evidence may not have been complete.
The point is that items 2 and 3 of Mr Troussas' table, which are said to entail joint costs liabilities with Adriana, total $135,141.23. The relationship, if there is one, between this total amount and the amount of $76,713.25, which Adriana has indirectly acknowledged as being the amount of her legal costs does not appear from the evidence.
I will require Despina and Adriana to confer in relation to the costs in items 2 and 3 of Mr Troussas' table, and compare those costs with the $76,713.25 that I have attributed to Adriana's costs. They must work out whether those costs have been paid, who has made the payments, whether any amounts remain outstanding, who will be liable to pay those amounts, and who might claim an order for payment of those costs and on what basis. On the one hand, no costs that have been incurred should be ignored, but on the other hand double counting of costs must be avoided.
I do not know whether it is too late for the Court to do anything about it, particularly if the parties who have incurred the costs do not seek to protect themselves, but it strongly appears that (excluding the costs of obtaining probate of the 2006 will) the amount of the costs incurred by Despina and Adriana has been excessive in relation to the work product provided by the lawyers collectively. The Court is not in a position at this time to attribute specific responsibility for that outcome as between the various lawyers and their clients.
[10]
Mary's costs
Mary's submissions on costs dated 28 June 2018 were supported by an affidavit of her solicitor, Mr Alastair Gregory McKeough, sworn 4 July 2018, in which he estimated that Mary's total costs of the proceedings would be $158,259.46 (inclusive of GST) on an indemnity basis, and $131,882.88 (inclusive of GST) on the ordinary basis. Mr McKeough also gave evidence that Mary's costs of the hearing on 6, 7 and 9 February 2018 were $19,661.40 (inclusive of GST) on an indemnity basis, and $16,384.50 (inclusive of GST) on the ordinary basis. The reason for the costs of these three days being given separately was an argument as between Mary and Julia, to which I will refer below, as to whether Julia should bear Mary's costs of these three days.
As is pointed out in Mary's submissions, unlike her siblings, she at no stage opposed Julia's probate claim. It may be inferred that the whole of her costs were incurred in relation to the family provision claims made by Adriana and Billy, although that is a matter that should be confirmed.
It is not readily apparent to the Court how the total amount of the costs incurred by Mary could be justified.
[11]
Billy's costs
The way it was originally put to me by counsel for Billy, Billy's claim to be paid costs of $120,000 was a capped amount, the inference being that the costs that he incurred in fact exceeded that amount.
I note that in support of Billy's submissions on costs, an affidavit by his solicitor, Ms Joanne Sharah dated 4 July 2018 was read, which contains an estimate that Billy's total costs of the proceedings on the ordinary basis will be $120,000.
There is no evidence that separates Billy's costs of the probate claim from his costs of the family provision proceedings.
[12]
The parties' claims concerning the cost orders that should be made
In their written submissions, each of the parties (other than Adriana) has described the costs orders that they submit the Court should make in these proceedings.
I do not propose to rule on the cost claims until after the Court receives the further information described above to clarify the evidence concerning the costs incurred by the parties.
Broadly, as I understand Julia's position, it is that as she was in the de facto position of defending the deceased's estate, she should have her costs of defending the family provision claims out of the estate on the indemnity basis. She claims that the various defendants should be ordered to pay her costs of the probate claim in proportion to the steps that they took opposing that claim, and to the extent that there is any shortfall, her costs of succeeding in the probate claim should be paid out of the estate on the indemnity basis. Julia also submits that Despina and Mary should not on any basis be awarded their costs, because they adopted neutral positions at the hearing and could have submitted, except as to costs.
Despina has sought an order that her costs be paid out of the estate on the indemnity basis, but on various alternative terms depending upon the view taken by the Court as to whether, and if so when, Despina ought to have submitted to the order of the Court. Despina's submissions relate to the amounts in items 1 and 4 of Mr Troussas' table, and for the reasons that I have given above; I am not sure what the position is in respect of the costs in items 2 and 3.
As Adriana is self-represented, her position concerning the cost orders that should be made is not entirely clear. I would infer that she resists being ordered to pay Julia's costs of the probate claim, and would seek her costs of the family provision claim. The usual basis upon which the costs of the family provision claim would be awarded would be the ordinary basis.
Mary made submissions as to the costs orders that should be made in respect of the other parties' claims, but in respect of her own position she submitted that her costs of the family provision proceedings should be paid out of the estate on the indemnity basis, with the exception of the costs incurred by her from Day 2 to the conclusion of the hearing, which should be borne by Julia. Alternatively, if Julia is not ordered to bear any of Mary's costs, she sought an order that the whole of her costs in respect of the family provision applications should be borne by the estate on the indemnity basis.
The reason for Mary's first alternative costs claim is that, on the second day of the hearing, her counsel informed the Court that he would, with the Court's leave, withdraw from the proceedings, as Mary would abide the outcome of the hearing. Mary proposed that course because she had the benefit of the undertaking by Adriana and Billy that, if they succeeded in their applications for family provision orders, they would not seek to throw any part of any increase in their share in the deceased's estate upon Mary's share.
Julia's counsel responded to that information by informing Mary's counsel through the Court that, even if Adriana and Billy had bound themselves not to seek to throw any part of the family provision orders made in their favour upon Mary's share in the estate, those undertakings did not bind Julia, and Julia would argue that, as Mary had not put her own financial circumstances in issue, the Court should infer that Mary did not need any provision out of the deceased's estate and make an order that Mary's share in the estate should bear the whole of any increase in the provisions made in favour of Adriana and Billy.
As a result of this advice, it became apparent to Mary that she retained an interest in being represented for the balance of the hearing, and her counsel remained in court and participated in the hearing.
In the result, the outcome as determined by the principal judgment at [264] was that any increase in the provisions made in favour of Adriana and Billy over what they received on the deceased's intestacy should be borne rateably according to the relative shares of Julia and Mary in the estate of the deceased in this State. The consequence was that Mary's share will not be reduced (other than for her proportion of the costs that must be borne by the estate and the costs of administering the estate), and the family provision orders that are ultimately made in favour of Adriana and Billy will be reduced by the proportions that would in the absence of the undertaking that they gave to Mary have been borne by Mary's share of the estate. The effect of that outcome will be that, in the dispute between Mary and Julia on this issue, Mary will succeed.
As I understand it, Adriana and Billy only provided the undertaking to Mary that they would not seek to throw any part of any family provision orders onto her share of the deceased's estate relatively shortly before the commencement of the hearing. Consequently, until the undertakings were given, Mary had some interest in protecting her share in the estate which, before the commencement of these proceedings, was valued at $416,440.61 in total, and $243,712 in relation to the deceased's assets in this State. By reason of s 64 of the Succession Act, as the deceased was not domiciled in this State at the time of his death, the power of the Court to make a family provision border only extended to Mary's share of the intestate estate of the deceased in this State, which had a value of $243,712. The consequence is that Mary has incurred legal costs of $158,259.46 to protect an asset valued at $243,712.
Furthermore, Mary elected not to put her financial situation in issue, or to serve any evidence that contested of the claims made by her siblings. Mary relied upon brief affidavits sworn on 24 April 2017 and 17 January 2018.
While there may be some reasonable explanation as to how Mary's lawyers could have run up the costs that they have, that explanation entirely eludes me as presently advised.
The position adopted by Billy in his written submissions and at the hearing on 4 July 2018 was in essence that his costs should be ordered to be paid out of the estate capped at $120,000, and that the other parties' costs should also be paid out of the estate at the amounts stated in the principal judgment for those costs. As Despina and Mary had not provided evidence of their costs, Billy submitted that their costs should be paid out of the estate on the ordinary basis. For the reasons that I have considered above, if the Court made the costs orders as submitted by Billy, the remaining assets in the deceased's estate in this State would be insufficient to permit the Court to make an order that Billy receive a legacy that was much greater than the amount that Billy would have received anyway on the deceased's intestacy in relation to the assets in which Billy is entitled to share. Billy's submissions on the costs orders that should be made are for this reason perplexing.
The summaries that I have just set out concerning the positions adopted by the parties in respect of the costs orders that should be made by the Court are intended only to be illustrative of the positions adopted. As I have said, I do not intend to resolve the cost disputes now.
However, I will require each of the parties to deliver to my associate draft short minutes of order containing the precise orders that they submit that the Court should make in respect of costs (if appropriate with alternative orders). The parties have adopted quite inconsistent positions concerning the appropriate costs orders, in some cases in a manner that departs from orthodoxy (for example, as to whether successful applicants for family provision orders should be awarded their costs on the ordinary rather than the indemnity basis).
It is not appropriate that the Court should be put at risk of making errors in its understanding of the costs orders that the individual parties have asked the Court to make by reason of it being necessary for the Court to attempt to distil the costs orders that are sought from written submissions that refer to orders embedded in submissions as to what orders should be made.
[13]
Amounts of costs charged by parties' lawyers
It will be obvious from what has been said above that the Court is extremely concerned about the amounts of the costs that the parties have been charged by their lawyers in these proceedings.
The amount of costs (even if the total of about $800,000 is further reduced to some extent when the potential overlap of costs as between Despina and Adriana is more fully explained) seems on the face of it to be unjustifiable, and out of proportion, in relation to a dispute concerning an estate of $1.9 million in this State, and even allowing for the fact that the deceased's Greek estate is of evidentiary relevance to the family provision applications. As I have explained above, depending upon the extent to which the parties' costs are ordered to be paid out of the deceased's estate in this State, the whole of the proceedings could be rendered virtually futile.
In saying this, the Court acknowledges that its view as to the reasonableness of costs is dependent on the product of the lawyers' work that is evident in the evidence that is put before the Court and what happened during the course of the proceedings. The Court also acknowledges that the attitude of the parties themselves and the instructions that they give to their lawyers may often have the irrational effect of unnecessarily increasing the amount of the legal costs that are payable.
However, it does not appear that the legal work that has been done in the preparation of this matter has always been done with an eye to efficiency and proportionality. I may be wrong, but I have not seen in the Court's file any real evidence that in the probate claim the parties have sought to comply with the requirements of Part 31 Division 2 of the Uniform Civil Procedure Rules 2005 (NSW) concerning expert evidence, particularly the requirement for directions to be sought in Rule 31.19, or that the parties have complied with Practice Note SC Eq 5. Whatever the position may be, the Court can only note that Julia served an expert report on the effect of the law of Greece as to the validity and effect of the various wills made by the deceased, made by Mr Sotirios Sofronov dated 13 April 2017, and Despina and Adriana served an expert response by Mr Andreas Voltis dated 15 June 2017 that reached almost identical conclusions as had Mr Sofronov. This seems to be a case where it may have been worthwhile at least in the first instance for the parties to have joined in appointing a single expert to provide evidence as to the effect of Greek law.
The Court is bemused by the amount of the costs incurred by Despina (and Adriana during the period in which they jointly retained the same lawyers) and by Mary given the stance that both Despina and Mary took at the hearing.
The Court cannot know whether this most unfortunate outcome has been a result of the proceedings being treated as a probate claim (and managed in the Probate Registry) with family provision claims tacked onto it, when in reality it has turned out to be an uncontested probate claim, and the real dispute has been that which has arisen out of the family provision claims.
The difficulty that the Court faces again and again is that by the time the Court is in a position to decide the dispute the costs have already been incurred and often, to some extent, already paid by the parties. Lawyers who have the professional obligation to ensure that the legal costs of proceedings are fair and proportionate will often have been paid even when the costs are not fair and proportionate, and the Court may be left with no option but to visit the consequences on the parties by limiting the amounts of costs that are recoverable, or in proceedings such as the present, that are recoverable out of the estate.
I can but wonder wistfully whether the time has come when the Court should impose upon parties to proceedings such as the present limits in advance on the costs that may be incurred, or which may be recoverable by costs orders made in the proceedings.
It must always be remembered by parties and their lawyers that, under s 98 of the Civil Procedure Act 2005 (NSW), generally costs are in the discretion of the Court, and the Court has full power to determine by whom, to whom and to what extent costs are to be paid. Rule 42.4(1) of the UCPR provides: "The Court may by order, of its own motion or on the application of a party, specify the maximum costs that may be recovered by one party from another". Section 99(1) of the Succession Act authorises the Court to order the costs of proceedings in so far as they have involved applications for family provision orders to be paid out of the estate of the deceased in such manner as the Court thinks fit. The capacity of the Court to make just and proportionate costs orders has been discussed by Handley AJA (with whom McColl and Macfarlan JJA agreed) in Nudd v Mannix [2009] NSWCA 327 at [33]-[49]. See also Curnow v Curnow [2014] NSWSC 896 at [152]-[153].
I have come to the view that not only does the Court require further information concerning the parties' costs than they have provided to date, but that the Court should also give the parties the opportunity to make submissions, should they wish to do so, on the issues that I have foreshadowed concerning the absolute amount of the costs that the various parties have incurred, and whether, if the Court takes the view either that some of the costs should be paid out of the estate, or that some of the parties should be ordered to pay the costs of other parties, limits should be imposed on the amount of costs that are to be paid in that way.
I am conscious that the Court is in the unsatisfactory position where, in order to try to resolve what it considers to be an acute difficulty arising out of the effect of the amount of costs incurred on the ability of the Court to do justice in the proceedings, it risks driving up the costs by reason of compliance with the Court's directions that are intended to ameliorate the difficulty.
I can only say that the parties and their present lawyers would be well advised to be circumspect and highly efficient in the manner in which they provide the required further information and submissions to the Court.
[14]
Costs of Julia's probate claim
The second matter upon which the Court will require further assistance involves more detailed submissions from parties interested in the orders for costs that should be made in respect of Julia's probate claim.
I am satisfied that, as Julia has been compelled to seek orders revoking the grant of probate of the 2006 will to Despina, and she will succeed in obtaining an order for administration of the deceased's estate with the December 2014 will annexed in favour of an administrator nominated by her, she is entitled to her costs of the probate claim on the indemnity basis out of the estate. As I understand it, none of the defendants resist the making of such an order. My only concern at the moment is the unexplained distribution of Julia's costs as being $218,975 or $257,237.95 for the probate claim and $43,813 for the family provision claims, as discussed above.
My principal concern is with the application by Julia that the defendants other than Mary should be ordered to pay her costs of the probate claim. Julia makes that application as if such an order should be made simply on the basis that the defendants failed in their opposition to the probate claim. The defendants resist the Court making that order, but have not provided reasoned submissions to support their position.
It may be noted, having regard to conclusions that were reached in the principal judgment, that the deceased made his 2006 will while in Sydney after obtaining Despina's consent to act as his executor, and he informed Adriana and Billy that they would enjoy the benefits provided to them under the 2006 will, which would have given them respectively title to the deceased's interests in the Campsie property and the Dulwich Hill property. The deceased subsequently made three holographic wills in Greece in 2012 and 2014, and there is no evidence that he informed Despina or his children that he had changed his testamentary intentions. In broad terms, the evidence would justify a conclusion that the deceased allowed his executor and children to conduct themselves in the belief that the 2006 will was the last will of the deceased.
Without at this stage deciding the issue, there is a case to be made that the deceased induced Despina to obtain the grant of probate that she did. Furthermore, having regard to the hand-written nature of the three holographic wills, as well as their terms, which did not attempt in any conventional way to deal with the whole of the deceased's estate, the fact that they created an intentional intestacy in relation to most of his estate, and the fact that their effect was so greatly at variance with the assurances that the deceased gave to his children, that the deceased's own actions justified not only Despina obtaining probate of his 2006 will, but in Despina and the deceased's children at least undertaking appropriate investigations to determine the effect of all of the wills made by the deceased.
This is not the appropriate occasion for the Court to consider the relevant principles in any detail, but it may be observed that, even though the doubts as to the effect of the deceased's testamentary instruments did not arise out of any doubt about his capacity to make a will, there are at least arguable grounds for consideration of whether special costs orders should be made in favour of Despina, Adriana and Billy on the basis that the deceased's conduct created such a doubt about his testamentary intentions as to justify those defendants undertaking some level of investigation, before they ought to have been satisfied that they did not have a basis for resisting Julia's probate claim. I will refer only to the decisions of Perpetual Trustee v Baker [1999] NSWCA 244 at [13]; Bell v Crewes [2011] NSWSC 1159; and Gray v Hart; Estate of Harris (No 2) [2012] NSWSC 1562. The following observation by White J (as his Honour then was) in Bell v Crewes at [65] that, where the Court considers making an order that the losing parties' costs be paid out of the estate, the Court must consider making an "adjustment to ensure there were not excessive costs recovered by reason of the separate representation of persons who had the same interest" should be noted.
Upon consideration of this issue, it did not appear to me to be appropriate for the Court to make any ruling on the question of whether or not the Court should order Despina, Adriana and Billy to pay any part of Julia's costs of her probate claim, without first giving the interested parties an opportunity to make submissions on this subject.
This issue does not only raise a point of principle as to whether it is appropriate for the Court to make a special costs order in this context, because even if it should, an issue would remain as to how far any special costs order in relation to the defendants' costs of resisting the probate claim should go, having regard to the nature of the enquiries undertaken by the defendants, and the circumstances in which they continued to resist the probate claim.
There is also a separate issue about whether any special costs order should involve the defendants' costs being paid out of the estate, or whether the order should have the effect of not requiring the defendants to pay Julia's costs, in circumstances where they would then have to pay their costs of resisting the probate claim themselves.
[15]
Orders capable of being made now
Julia has succeeded in her probate claim and there is no reason why appropriate orders to give effect to her success should not be made now.
The only outstanding issue of which I am aware is that the Court has been told that Mr Salier has agreed to accept an appointment as the administrator of the deceased's estate in this State with the December 2014 will annexed. I am not conscious of the Court being given evidence of Mr Salier's consent to the appointment, and if that has not yet been done, it should be done. Also, I do not understand the deceased's children to have indicated whether or not they agree to Mr Salier's appointment as administrator, and if they do not agree, on what basis. The orders that are to be made will have to deal with these matters.
It is also clear that Julia is entitled to the making of appropriate orders under s 66G of the Conveyancing Act 1919 (NSW) for a court ordered sale of the Campsie property so that Julia can receive the net proceeds of sale that represent her half interest as a tenant in common with the deceased of that property.
In her written submissions delivered for the purposes of the 4 July 2018 hearing, Julia proposed that her solicitor, Ms Londi Gramelis, be appointed as the sole trustee for sale. No interested party expressed opposition to Ms Gramelis being appointed as sole trustee for sale, but that may have been because none of the parties noticed the issue.
Conventionally, two independent trustees would be appointed after they had provided their consents, and the Court had received some evidence of their reputation and suitability for appointment.
Of course, the appointment of independent trustees for sale will usually increase the transaction costs, and sometimes parties are able to agree on some alternative, less expensive course. It may be that the appointment of Ms Gramelis would be an effective way to reduce costs in the present case.
However, the Court should not depart from the conventional approach without the considered consent of the parties. One problem in that respect is that it will be Mr Salier as the administrator of the estate, after he has been appointed, who is the proper person to represent the estate in determining the terms upon which one or more trustees for the sale of the Campsie property should be appointed. It may be satisfactory for the Court to act with the consent of all of the parties directly interested in the estate of the deceased in this State, if such consent can be obtained on a properly informed basis, but before Mr Salier has been appointed it may be difficult to achieve agreement between all of the parties as to the terms of appointment of a trustee or trustees for sale.
Apart from the practical issue of who should be appointed to undertake the sale of the Campsie property, the issue that has held up the process to date is Adriana's desire to purchase the property, which has been her and her mother's home for some time, using her share in the deceased's estate as part of the purchase price for the property.
Adriana's original submission was that she be permitted to purchase the Campsie property for the price of $1,250,000, which was the value that the parties accepted for the purposes of these proceedings, based upon an appraisal. As I stated at [273] of the principal judgment, however, that would be an artificial course for the Court to take, and the property should be put to auction, or alternatively sold by private treaty if the auction is not successful. It would not be fair for the Court to act upon the appraisal without Julia's consent. Appraisals may be sufficiently accurate to enable the Court to make the judgments necessary to decide family provision applications, but they should not be taken to be sufficiently accurate so as to justify the possibility that Julia would be deprived of a better outcome if the value of the property was decided by the market.
Quite reasonably, at the hearing on 4 July 2018, Adriana informed the Court that she really needed to know the value of her share in the deceased's estate before Adriana and her sons could realistically seek finance from a financial institution to enable them to bid at any auction of the Campsie property.
While that was a reasonable approach for Adriana to take, it is unfortunately not feasible as a matter of practicality. It may take some time for the Court to deal with outstanding costs issues, for the reasons considered above. That will delay both the calculation of Adriana's notional legacy, and also the calculation of the amount by which the notional legacy will have to be reduced by reason of the undertaking given to Mary, and the need to ensure that Julia receives her proportionate share in the estate. In any event, the actual value of Adriana's legacy depends upon the sale prices obtained from the sale of the deceased's interest in the Campsie property and the sale of the Dulwich Hill property. It would not be appropriate for the Court to order that Adriana (or Billy) are to receive a fixed legacy from the estate in circumstances where the effect is that the other beneficiaries have to bear the market risk of the properties being sold at prices less than the values assumed by the parties and the Court based upon market appraisals.
Additionally, in the principal judgment the Court proceeded on the basis that Adriana and Billy could be made the beneficiaries of family provision orders out of the deceased's property in this State, on the basis of the making of conditions that they assign their interests in the deceased's Greek estate to Julia. As I have explained above, there are practical difficulties involved in realising the deceased's property in Greece as to which he died intestate. That is a presently unresolved problem, and it may not be fair for the Court to impose upon Julia the benefit of the condition if she is not willing to accept it. There are underlying doubts about the value and realiseability of the Greek properties. It may take time for these underlying doubts to be resolved.
Consequently, the Court is not able to assure Adriana of the precise amount that she will receive by way of legacy from the deceased's estate. While I remain of the view that the Court should be open to facilitating Adriana being able to acquire the Campsie property using her interest in the deceased's estate as part of the purchase price, the Court cannot justify delaying the process of the sale of the property indefinitely, as that would deprive Julia of access to her much-needed share in the sale price of the property.
No other course is available but for Adriana to make her own mind up as to whether her proposal remains feasible, and if so with the help of her sons to make such arrangements as she may be able to make so that she can bid at auction for the Campsie property.
I will provide in the draft orders that I will set out below a relatively simple mechanism for Adriana to be permitted to apply her share in the deceased's estate towards the purchase of the Campsie property. The approach that can be taken must necessarily be conservative because of the level of doubt concerning the ultimate value of Adriana's share in the deceased's estate. I will not speculate as to whether the arrangement proposed will be attractive to any financier approached by Adriana and her sons. It may well be that the proposal is not feasible if it is not possible to apply some of the assets of Diamando, Adriana's mother, to the acquisition of the Campsie property as a home for Adriana and Diamando: see the principal judgment at [228]-[242].
As I have recorded in the principal judgment, Billy also wishes to have an opportunity to raise finance to purchase the Dulwich Hill property. Billy's aspiration may be more difficult to achieve because he will not have assistance in raising the finance to pay for the property. His proposal does not, however, face the problem that the estate only has a half interest in the property. Otherwise, Billy faces the same problems as does Adriana that arise out of the fact that the precise value of Billy's share in the estate of the deceased will not be able to be determined for some time.
It will be fair for the Court to give Billy the same opportunity in principle that it will give to Adriana to apply his share in the estate of the deceased towards the purchase of the Dulwich Hill property. It will be a matter for Billy as to whether or not it is feasible for him to take advantage of that opportunity.
As was the case for Adriana and the value of the Campsie property, I do not consider that it would be just to give Billy a right to try to purchase the Dulwich Hill property for the price adopted by the parties to these proceedings based upon an appraisal, rather than for the true value to be determined by the market.
In her statement of claim, Julia sought an order in prayer 5 that Billy transfer the title to the Dulwich Hill property to Julia (on the basis that when the statement of claim was filed, Julia sought an order for administration of the deceased's estate in her name). As long as it is possible that Billy may be able to pay for the property, it may be superfluous and unnecessarily expensive to require Billy to transfer the Dulwich Hill property to whomever is appointed as the administrator of the deceased's estate, on the basis that the property may then be re-transferred to Billy. It may also be unnecessarily disruptive to require Billy to give up possession of the Dulwich Hill property until shortly before the completion of the sale of that property to some third-party.
I have made provision for these matters in the proposed orders that I have set out below.
[16]
Orders
I propose to make orders in substantially the following terms to deal with the various issues that require resolution by the Court. Given the complexity of the issues, and the fact that the parties have not addressed in detail the terms of all of the orders that should be made, I will defer making the orders, and will give the parties an opportunity to comment on the terms of the proposed orders.
Because of the complexity of the issues that remain for determination, I propose to deliver these reasons for judgment in draft to the parties, and then to appoint a date for the reasons to be formally handed down. That will give the parties an opportunity to consider in advance the issues that must be dealt with, including the formulation of the final terms of the orders and the insertion of appropriate dates. That course will hopefully reduce the costs of the continuation of the proceedings.
Adriana and Billy are the parties who have most to lose from the costs claims made by the other parties, both in respect of Julia's claim that they should pay her costs of the probate claim, and all other parties' claims concerning the amounts of the costs that should be paid out of the estate of the deceased in this State. For the reasons that I have explained in this judgment, if all of the costs orders sought by the other parties are made by the Court, Adriana and Billy will be substantially worse off than if Julia's probate claim had been admitted at the outset, and the family provision claims made by Adriana and Billy had not been made. It will be necessary for Adriana and Billy to give careful thought to the costs orders that they wish to submit should be made by the Court, having regard to the possibility that those orders may make the claims for family provision orders futile.
It will be obvious from the terms of the draft orders, that if the parties are able to cooperate in their own interests, they will be able to obviate the need for some of the proposed steps to be taken by dealing immediately with the subject matter of those steps. The parties are invited to cooperate as fully as possible to simplify the issues that remain to be resolved by the Court. It will be in the parties' interests to try to staunch the continuing losses that they will collectively suffer by reason of the costs of further disputation.
The draft orders that I propose, subject to further submissions from the parties, are:
Probate claim
1. Order the plaintiff to serve on the second, third and fourth defendants and deliver to the associate to Robb J by [Date] a written consent by Gordon Albert Salier (the Administrator) to accept an appointment in solemn form as administrator of the estate of the late Nicholas Kalantzis (the Deceased) with the Deceased's will dated 21 December 2014 annexed.
2. Order the second, third and fourth defendants to notify the solicitors for the plaintiff and the associate to Robb J by [Date] if they oppose the appointment of the Administrator contemplated by order 1, together with a statement of their reasons for opposing the appointment (limited to 3 pages), in which event the associate to Robb J will arrange for the proceedings to be relisted for further directions.
3. Order that the grant of probate (the Grant) made to the first defendant by this Court on 30 March 2015 in probate suit 24780 of 2015 is revoked.
4. Order the first defendant to deposit the Grant in the Registry.
5. Subject to compliance with order 1, and no objection being served in accordance with order 2, order that administration of the estate of the Deceased with the Deceased's will dated 21 December 2014 annexed in solemn form be granted to the Administrator.
6. Order that the file be returned to the Registrar to complete the new grant in accordance with order 5.
Sale of Campsie property
1. Order the plaintiff to serve on the second, third and fourth defendants and deliver to the associate to Robb J by [Date]:
1. a written consent by Londi Gramelis (the Trustee) to accept an appointment as trustee pursuant to s 66G of the Conveyancing Act 1919 (NSW) for the sale of the property at 75 Duke Street, Campsie in the State of New South Wales, being folio identifier F/369428 (the Campsie property); and
2. a written statement of the basis upon which the Trustee, if appointed, will charge fees for the execution of her duty under the appointment.
1. Order the second, third and fourth defendants to notify the solicitors for the plaintiff and the associate to Robb J by [Date] if they oppose the appointment of the Trustee contemplated by order 7.
2. If none of the second, third and fourth defendants notify their opposition to the appointment of the Trustee contemplated by order 7, order the plaintiff to serve on the second, third and fourth defendants and deliver to the associate to Robb J by [Date] draft short minutes of order in the usual form for the appointment of the Trustee, with the intent that the orders will be made by the Court in chambers.
3. If any of the second, third and fourth defendants notify their opposition to the appointment of the Trustee contemplated by order 7, order the plaintiff to identify 2 alternative independent trustees (the Alternative Trustees) to be appointed by the Court as trustees for the sale of the Campsie property in lieu of the Trustee, and to serve on the second, third and fourth defendants and deliver to the associate to Robb J by [Date]:
1. consents of each of the Alternative Trustees to be appointed;
2. affidavits by 2 referees for each of the Alternative Trustees; and
3. a written statement of the basis upon which the Alternative Trustees, if appointed, will charge fees for the execution of their duties under the appointment.
1. Order the second, third and fourth defendants to notify the solicitors for the plaintiff and the associate to Robb J by [Date] if they oppose the appointment of the Alternative Trustees contemplated by order 10, together with a statement of their reasons for opposing the appointment (limited to 3 pages), in which event the associate to Robb J will arrange for the proceedings to be relisted for further directions.
2. If none of the second, third and fourth defendants notify their opposition to the appointment of the Alternative Trustees contemplated by order 10, order the plaintiff to serve on the second, third and fourth defendants and deliver to the associate to Robb J by [Date] draft short minutes of order in the usual form for the appointment of the Alternative Trustees with the intent that the orders will be made by the Court in chambers.
3. The short minutes of order prepared by the plaintiff in compliance either with order 9 or 12 shall provide for:
1. the payment of any debt secured on the Campsie property;
2. the payment of any costs of the sale of the Campsie property;
3. the payment of any fees and expenses due to the Trustee or the Alternative Trustees, as the case may be;
4. the payment of half of the balance remaining to the solicitor for the plaintiff and the payment of the other half of the balance remaining to the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased;
5. the sale to be conducted consistently with orders 14 and 15 below intended to give the second defendant an opportunity to make an offer to purchase the Campsie property by applying her share in the estate of the Deceased towards the purchase price of that property; and
6. any other terms that may be usual or convenient.
Second defendant's right to bid for Campsie property
1. Order the second defendant to notify the plaintiff, the third and fourth defendants, and the associate to Robb J in writing by [Date] if she wishes the sale of the Campsie property to be conducted consistently with order 15, and if the second defendant does not give that notification, that order shall not apply, and the short minutes of order for the appointment of the Trustee or the Alternative Trustees for the sale of the Campsie property shall not make provision for that order, but shall entitle the second defendant to make an offer to purchase the Campsie property in the same manner as all other prospective purchasers may make such offers.
2. If the second defendant serves a notification that she does wish for the sale of the Campsie property to be conducted consistently with this order, order that the short minutes of order provide for:
1. the second defendant to bid at any auction for the sale of the Campsie property or to make an offer for its purchase by any sale by private treaty;
2. if the second defendant is the successful bidder or offeror, the second defendant shall enter into a contract with the Trustee or the Alternative Trustees, as the case may be, to purchase the Campsie property on the same conventional terms as are offered to other potential purchasers;
3. on completion of the contract the Trustee or the Alternative Trustees, as the case may be, shall accept payment by the second plaintiff of the price (as adjusted under the terms of the contract), less $400,000;
4. the $400,000 shall be an allowance for the value of the second defendant's share in the estate of the Deceased (with the final value of that share to be determined by the orders made by the Court in these proceedings and the completion of the administration of the Deceased's estate in this State and Greece);
5. if the second defendant's share in the estate of the Deceased is ultimately ascertained as having a value of less than $400,000, the second defendant will be liable to pay the difference to the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased, within 3 months of demand being made; and
6. from the date of completion of any contract for the sale of the Campsie property to the second defendant the potential liability of the second defendant to pay any additional amount as referred to in sub-order (e) will be a charge on the Campsie property, which charge may be protected by a caveat lodged against the title to that property.
Sale of Dulwich Hill property
1. Order that the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased, be authorised to conduct on behalf of the fourth defendant the sale of 436 New Canterbury Road, Dulwich Hill in the State of New South Wales, being the property contained in Certificate of Title Volume 13259 Folio 59 (the Dulwich Hill property), and being part of the estate of the Deceased upon such terms as the person so authorised may think fit.
2. Order that the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased, shall have full authority to determine the terms of sale of the Dulwich Hill property and to require the fourth defendant to execute such contract of sale and memorandum of transfer, and any other necessary documents, as may be required to implement the sale of that property.
3. Order the fourth defendant to duly execute such contract for the sale of the Dulwich Hill property, such memorandum of transfer, and such other necessary documents, as may be submitted to the fourth defendant in accordance with Order 17 and to redeliver the executed documents within 7 days of receipt.
4. If the Dulwich Hill property is sold to any third party, order the fourth defendant to deliver up possession of the Dulwich Hill property to the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased, within 14 days of being advised of the sale in writing.
Fourth defendant's right to bid for Dulwich Hill property
1. Order that, notwithstanding that the title to the Dulwich Hill property is in the name of the fourth defendant as registered proprietor, the fourth defendant may bid at any auction of the Dulwich Hill property or negotiate for its purchase in any sale by private treaty as if the fourth defendant were not the registered proprietor of the property
2. Order that if the fourth defendant bids at any auction for the sale of the Dulwich Hill property or makes an offer for its purchase by any sale by private treaty the following terms shall apply:
1. if the fourth defendant is the successful bidder or offeror, the fourth defendant shall be liable to the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased, on the same conventional terms as are offered to other potential purchasers, save that it will not be necessary for the parties formally to complete the contract and the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased, will accept the payment of the price by the fourth defendant at the time provided for completion;
2. at the time provided for completion of the contract the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased, shall accept payment by the fourth plaintiff of the price as adjusted under the terms of the contract, less $450,000;
3. the $450,000 shall be an allowance for the value of the fourth defendant's share in the estate of the Deceased (with the final value of that share to be determined by the orders made by the Court in these proceedings and the completion of the administration of the Deceased's estate in this State and Greece);
4. if the fourth defendant's share in the estate of the Deceased is ultimately ascertained as having a value of less than $450,000, the fourth defendant will be liable to pay the difference to the Administrator, or such other person to whom the Court may grant administration of the estate of the Deceased within 3 months of demand being made;
5. from the time provided for completion of any contract for the sale of the Dulwich Hill property to the fourth defendant the potential liability of the fourth defendant to pay any additional amount as referred to in sub-order (d) will be a charge on the Dulwich Hill property, which charge may be protected by a caveat lodged against the title to that property.
Realisation of deceased's Greek assets
1. Order the plaintiff and the second, third and fourth defendants to advise each other and the associate to Robb J by [Date] whether they will agree in principle to authorise an appropriate person to conduct the sale of the Deceased's assets in Greece that were not the subject of gifts in the Deceased's December 2014 will (the Greek property), with the intention that if all of the named parties do not advise of their in-principle agreement the associate to Robb J will relist the proceedings for further directions.
2. If all of the parties named in order 22 advise of their agreement in principle to grant the authorisation, order the plaintiff to formulate a proposal for the appointment of an appropriate person to conduct the realisation of the Greek property and to deliver the proposal to those parties and the associate to Robb J by [Date].
3. Order that the proposal referred to in order 22 provide for:
1. the person or persons to be authorised to conduct the sale of the Greek property;
2. the basis of the remuneration of the person or persons to be so authorised;
3. the power of the person or persons to be so authorised to determine the price and the other terms for the sale of the Greek property;
4. the basis for the person or persons to be so authorised to determine the net proceeds of sale of the Greek property;
5. the person or persons to be authorised as stakeholder to retain the net proceeds of sale of the Greek property pending the determination of how those proceeds should be distributed between the persons entitled to share in the value of the Greek property;
6. the stakeholder to retain the net proceeds of sale of the Greek property pending the further order of the Court concerning how those proceeds should be dealt with in conjunction with final orders to be made by the Court on the applications for family provision orders made by the second defendant and the fourth defendant; and
7. such other matters as may appear to be necessary or convenient.
1. Order the plaintiff to make such arrangements as may appear to be necessary or convenient to obtain the responses of the second, third and fourth defendants to the proposal formulated by the plaintiff and to negotiate the terms of a final agreement to provide for the realisation of the Greek property.
2. Order the plaintiff to deliver to the associate to Robb J as soon as is reasonably possible after it has been made a copy of any agreement made between the plaintiff, and the second, third and fourth defendants for the realisation of the Greek property.
3. Order the plaintiff to approach the associate to Robb J as soon as is reasonably possible after the plaintiff determines that it is unlikely that the plaintiff, and the second, third and fourth defendants will enter into an agreement for the realisation of the Greek property, with the intent that the proceedings will then be relisted for further directions.
4. Order the plaintiff to inform the associate to Robb J as soon as it is reasonably possible after the Greek property has been realised and the amount of the net proceeds of sale of the Greek property is in the hands of the stakeholder or stakeholders, with the intent that the proceedings will then be relisted for the purpose of giving directions concerning what final orders should be made in the proceedings.
5. Note that no order made by this Court concerning the realisation of the Greek property or the making of any agreement between the plaintiff, and the second, third and fourth defendants concerning the realisation of the Greek property, is intended to interfere with or affect the jurisdiction of any relevant Greek court to apply the law of Greece in relation to the intestate estate of the Deceased concerning the Greek property.
Resolution of outstanding costs issues
1. Order each party by [Date] to serve and deliver to the associate to Robb J draft short minutes of the orders for costs that the party submits should be made by the Court in these proceedings, including orders in the alternative where appropriate (see [97] of this judgment).
2. If any party wishes to submit that the Court should make any order permitted by s 98 of the Civil Procedure Act 2005 (NSW) determining the costs that are to be payable to any party (including an order that the cost payable to the party are not exceed a specified amount) the party must in addition to specifying the order in the short minutes of order prepared in accordance with order 30 by [Date] serve and deliver to the associate to Robb J written submissions in support of the party's application.
3. If any party wishes to submit that the Court should make any special order in respect of the costs of the plaintiff's probate claim (see [116], [117] at this judgment) the party must in addition to specifying the order in the short minutes of order prepared in accordance with order 30 by [Date] serve and deliver to the associate to Robb J written submissions in support of the party's application.
4. Order the plaintiff by [Date] to file and serve an affidavit (which may be made by a solicitor for the plaintiff after having made all due enquiry and which shall be as concise as the circumstances reasonably permit) which:
1. confirms the correct amount of the plaintiff's estimated costs of the proceedings (see [49]-[53] of this judgment);
2. confirms the distribution of the plaintiff's estimated costs of the proceedings as between her probate claim and the defence of the family provision claims (see [58], [59] of this judgment);
3. if the plaintiff's estimated costs of her probate claim are confirmed; explains and justifies the amount of those costs.
1. Order the first defendant by [Date] to file and serve an affidavit (which may be made by a solicitor for the first defendant after having made all due enquiry and which shall be as concise as the circumstances reasonably permit) which:
1. confirms that the $15,441.10 in costs incurred by the first defendant in respect of services provided by Nicolas Angelos & Co related to the first defendant's costs of obtaining a grant of probate of the Deceased's 2006 will (see [62], [63] at this judgment);
2. in respect of all of the costs referred to in the affidavit of Mr Troussas (see [59], [62] of this judgment) explain (i) the extent to which those costs were incurred in relation to the plaintiff's probate claim or the family provision claims in these proceedings; and (ii) whether those costs have already been paid or remain outstanding;
3. explains how the first defendant's claim for costs in these proceedings (see [65] of this judgment) relates to the whole of the first defendant's estimate of her costs of these proceedings (see [59], [62] of this judgment);
4. explains the first defendant's position concerning the sharing of liability as between the first defendant and the second defendant in relation to legal costs incurred jointly by those defendants (see [62] of this judgment);
5. explains and justifies the need for the first defendant to be represented by counsel and solicitor on each day of the hearing (to the extent that the first defendant was so represented);
6. in respect of each order for costs in her favour that the first defendant claims in her draft short minutes of order should be paid on the indemnity basis, whether out of the estate of the Deceased or otherwise, the justification for the costs being ordered to be paid on that basis; and
7. explains and justifies the amount of the costs that the first defendant claims should be paid out of the estate of the Deceased or by any other party.
1. Order the second defendant by [Date] to file and serve an affidavit which shall be as concise as the circumstances reasonably permit and which:
1. gives evidence of all of the legal costs paid by the second defendant to date (identifying the lawyers, the amount and date of payment and the relevant tax invoices);
2. gives evidence of all of the legal costs payable by the second defendant that remain outstanding (identifying the lawyers, the amount and the relevant tax invoices);
3. explains the second defendant's position concerning the sharing of liability as between the first defendant and the second defendant in relation to legal costs incurred jointly by those defendants (see [62] of this judgment); and
4. explains the extent to which all of the costs incurred by the second defendant were incurred in relation to the plaintiff's probate claim or the second defendant's family provision claim in these proceedings.
1. Order the third defendant by [Date] to file and serve an affidavit (which may be made by a solicitor for the first defendant after having made all due enquiry and which shall be as concise as the circumstances reasonably permit) which:
1. explains the extent to which all of the costs incurred by the third defendant were incurred in relation to the plaintiff's probate claim or the family provision claims in these proceedings; and
2. explains and justifies the amount of the costs that should be paid out of the estate of the Deceased or by any other party.
1. Order the fourth defendant by [Date] to file and serve an affidavit (which may be made by a solicitor for the first defendant after having made all due enquiry and which shall be as concise as the circumstances reasonably permit) which:
1. explains the extent to which all of the costs incurred by the fourth defendant were incurred in relation to the plaintiff's probate claim or the fourth defendant's family provision claim in these proceedings; and
2. explains and justifies the amount of the costs that should be paid out of the estate of the Deceased or by any other party.
Further orders
1. Leave is granted to all parties and any administrator of the estate of the Deceased or any trustee appointed for the sale of any property in which the Deceased's estate has an interest to apply to the Court on 3 days' notice in respect of the resolution of any issue or the making of any orders necessary to give effect to any orders made by the Court in these proceedings or any reasons for judgment published by the Court.
2. The Court further reserves its decision on all outstanding issues in these proceedings.
3. The Court reserves costs.
[17]
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Decision last updated: 15 February 2019