(2013) 11 ASTLR 225
Chisak v Presot [2022] NSWCA 100
Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12
[1913] HCA 25
Gaines-Cooper v Commissioners for HM Revenue and Customs [2007] EWHC 2617 (Ch)
Grant v Roberts
Smith v Smith
Roberts v Smith
Source
Original judgment source is linked above.
Catchwords
(2013) 11 ASTLR 225
Chisak v Presot [2022] NSWCA 100
Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12[1913] HCA 25
Gaines-Cooper v Commissioners for HM Revenue and Customs [2007] EWHC 2617 (Ch)
Grant v RobertsSmith v SmithRoberts v SmithCurtis v Smith [2019] NSWSC 843
Harris v Caladine (1991) 172 CLR 84[1991] HCA 9
Hitchcock v Pratt (2010) 79 NSWLR 687[1944] HCA 13
Limberger v LimbergerOakman v Limberger [2021] NSWSC 474
LK v Director-General, Department of Community Services (2009) 237 CLR 582[2009] HCA 9
Lodin v Lodin [2017] NSWCA 327
McCosker v McCosker (1957) 97 CLR 566[1957] HCA 82
Norton v Locke (2013) 50 Fam LR 517[1994] HCA 40
Skinner v Frappell [2008] NSWCA 296
Slack v RoganPalffy v Rogan (2013) 85 NSWLR 253[2013] NSWSC 522
Spata v Tumino (2018) 95 NSWLR 706[2018] NSWCA 17
Steinmetz v Shannon (2019) 99 NSWLR 687Brinkman v Johnston (Supreme Court (NSW), Hodgson J, 4 February 1994, unrep)
Treadtel International Pty Ltd v Cocco [2016] NSWCA 360
Judgment (90 paragraphs)
[1]
Introduction
These reasons determine the issues raised by the parties to six proceedings that were heard together and all relate to the estate of the late Garry Francis O'Donnell (the deceased) who was born in Goulburn and died in Canberra on 26 November 2018 aged 67.
The deceased left a will dated 18 August 2015 (the will) in which he named four of his five children as his executors (the defendants or the executors). Probate of the will was granted to the executors by the Supreme Court of the Australian Capital Territory (the ACT) on 22 March 2019.
As did the parties themselves, I will, with no disrespect intended, generally refer to the parties and persons related to them by their first names.
[2]
The deceased's relationships
My explanation of the nature of the proceedings will be made clearer if I begin with a description of the relevant relationships in the deceased's life, focusing on the parties to the proceedings and other persons who are relevant to the determination of the proceedings.
The deceased married Cheryl Hogan in 1971. They were divorced in 1972. Cheryl remains alive. The defendant Jaimie is the deceased's son of that relationship born 13 May 1971, and is aged 50.
On 26 January 1975, the deceased married his second wife, Joan O'Brien. They separated in or about 1987 and divorced in 1991. Joan remains alive. The deceased has two daughters from his marriage to Joan, namely the defendants Vanessa, born 5 January 1981, aged 40, and Laura, born 29 June 1984, aged 37.
On 15 June 1990, the deceased married his third wife, Fiona Costanza. They separated in or about 1996 and divorced in 1998. Fiona remains alive. The deceased has two children of that marriage, namely the defendant Ashley, born 19 October 1989, aged 31, and Simon, born 7 June 1991, aged 30.
The executors of the deceased's will are Jaimie, Vanessa, Laura and Ashley.
From approximately 2000, the deceased had a relationship with Anna Gray, the plaintiff in one of the proceedings. Anna was born on 16 July 1959 and is currently aged 62. The nature of that relationship is the subject of dispute. The executors contend the relationship was that of boyfriend and girlfriend. The relationship ended in or about mid-2013. There are no children of that relationship. Family Court proceedings (referred to below) between Anna and the deceased were settled in 2015, without any judicial determination of the nature of the relationship.
Anna had children from a prior marriage, namely Jurek Gray, born 24 November 1985, aged 35, and Kristina Gray, born 11 July 1989, aged 32. Kristina and Jurek are plaintiffs in another of the proceedings.
In November-December 2012, the deceased met Kalpana (also known as Paris and Kay) and they married in Las Vegas on 9 May 2013. Kalpana, the first plaintiff to bring a claim, was the deceased's fourth wife. They remained married until the deceased's death. Kalpana was born on 21 December 1963 and is now 59 years of age.
There are no children of the deceased's marriage with Kalpana. Kalpana has a child from a prior marriage, namely Tobias Findlay, born 26 June 1986, aged 35.
[3]
The proceedings
On 17 April 2019, Kalpana filed a summons in this Court commencing proceedings No 2019/120911 against the executors seeking an order under s 59 of the Succession Act 2006 (NSW) (the Succession Act) for provision out of the estate and the notional estate of the deceased. Notwithstanding that Kalpana was his wife, the deceased made no provision for her in his will.
By originating application dated 3 June 2019 filed in the Supreme Court of the ACT in proceedings No 278/2019, Kalpana sought an order against the executors under s 8 of the Family Provision Act 1969 (ACT) (the Family Provision Act) for provision out of the estate of the deceased.
On 20 September 2019, Anna also commenced proceedings No 470/2019 against the executors in the Supreme Court of the ACT for an order under s 8 of the Family Provision Act for provision out of the estate of the deceased. Anna was not a beneficiary under the will.
Kristina and Jurek commenced their own proceedings No 2019/372281 in this Court against the executors seeking orders under s 59 of the Succession Act for provision out of the estate and the notional estate of the deceased. They also were not beneficiaries under the will.
On 2 July 2020, Anna commenced proceedings No CAC1389/2020 in the Family Court of Australia at Canberra against the executors, the primary purpose of which was to obtain relief setting aside a deed of settlement between Anna and the deceased made on 12 October 2015 (the deed of settlement) under the Domestic Relationships Act 1994 (ACT) (the Domestic Relationships Act) under which Anna received a property settlement from the deceased.
Finally, by statement of claim filed in this Court on 7 July 2021 commencing proceedings No 2021/194343 against the executors, Kalpana sought a declaration that the executors had committed devastavit by wrongfully depleting the estate of the deceased of its assets by a transfer of shares in a company that were registered in the name of the deceased, without receiving any consideration for the transfer. Devastavit is the name given to wrongful conduct by executors of a deceased estate whereby they have diminished the value of the estate available to be paid to creditors and distributed to beneficiaries.
On 16 October 2019, the Supreme Court of the ACT (Crowe AsJ) heard an application by Kalpana to cross-vest her application for family provision relief in that Court to this Court under s 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1993 (ACT), and an order to that effect was subsequently made. The claim became proceedings No 2019/363217 in this Court.
[4]
Relationship between the proceedings
Although the proceedings commenced by Kalpana on the one hand, and Anna and her children on the other, raise distinct issues, the resolution of some claims may be influenced by the outcome of other claims. Although it will be necessary to consider the issues raised by the individual proceedings in considerably more detail below, the following brief outline may assist an understanding of the relationship between the proceedings.
As the deceased did not make any provision for Kalpana in his will, Kalpana now seeks orders for family provision under both the NSW and ACT statutes. The total value of the provision sought by Kalpana in her final submissions is $9,471,248.90. Kalpana also sought an order for the payment of the costs of these proceedings out of the estate or notional estate of the deceased.
As will shortly be seen, the parties ultimately agreed that the value of the deceased's estate is $2,058,460.11, subject to the payment of any orders for costs that may be made in any of the proceedings. The deceased's actual estate is clearly insufficient to meet the orders for family provision and costs sought by Kalpana.
Under Part 3.3 of the Succession Act of this State (NSW), the Court is empowered to make what are called "notional estate" orders that may have the effect, in this case, that a part of the net assets of the O'Donnell group will be treated as part of the deceased's estate to the extent necessary to give effect to any order for family provision and costs in favour of Kalpana that the Court determines is appropriate. The value of the O'Donnell group is sufficient at between $28,170,236 and $32,720,859 to meet all the orders sought by Kalpana.
There is no equivalent to Part 3.3 of the Succession Act permitting a court to make orders designating notional estate for the purpose of meeting an application for family provision in the law of the ACT, or any other State or Territory in the Commonwealth.
The most significant issue concerning the claims made by Kalpana for family provision orders is whether the Court must determine those claims in the proceedings in this Court under the Succession Act or whether the statute that must be applied is the Family Provision Act. As will be seen, that is a complicated question of fact and law that depends principally on whether the deceased had a domicile in NSW or the ACT at the date of his death. The Court must apply the relevant principles of the conflicts of law to determine the statute that must be applied. Broadly, the law of the deceased's domicile governs the succession to all of his movable property and the law of the situs of his immovable property governs the succession to that property. In practical terms, immovable property is equivalent to real property and all other relevant property is characterised as movable property.
[5]
The deceased's estate
The deceased during his lifetime was a successful businessman. The inventory of property prepared by the executors for the purpose of the application for a grant of probate in the ACT recorded that the net value of the deceased's property was $6,463,024. The deceased's assets included a debt owed to the deceased by Kalpana of $765,000 that is disputed, and a pink diamond with a value of $1,210,050 that has not been discovered. However Kalpana and the executors agreed after the conclusion of the hearing that the value of the deceased's estate is $2,058,460.11, subject to the payment of any orders for costs that may be made in any of the proceedings. The Court was not informed of the basis of this agreement, and it is not clear whether it was agreed that the debt alleged to be payable to the deceased's estate was not payable or simply irrecoverable. As I understand it, the positions taken by the parties' respective expert accountants concerning the assets in the deceased's estate and their value are as set out in a spreadsheet that was marked for identification as MFI 5. The parties ultimately agreed that the value adopted by the defendants' expert was the correct one, so Kalpana must have abandoned her initial claim that the estate contained additional assets as asserted by her expert accountant.
Before the agreement between Kalpana and the executors referred to in the previous paragraph was reached, there was a substantial dispute between those parties concerning the value of the actual estate of the deceased. The parties retained expert accountants who prepared detailed expert reports and the expert witnesses prepared a joint report following a conclave. The parties devoted considerable forensic effort to this issue and the expert witnesses were cross-examined at length. The need for the Court to address this evidence has been obviated by the agreement reached by the parties.
As background, it should be recorded that in the deceased's final years he apparently increased the level of his personal expenditure, but did so using the financial resources of companies in the O'Donnell group, without complying with legal obligations such as the declaration of dividends in his favour and compliance with applicable income tax reporting requirements. This led to an audit by the Australian Taxation Office (ATO) and subjected the deceased's estate and companies within the O'Donnell group to potential liability under the current tax avoidance provisions in Division 7A of the Income Tax Assessment Act 1936 (Cth). It is sufficient to note that the executors reached a settlement with the ATO in relation to the application of Division 7A. This led to a reduction in the value of the actual estate of the deceased that is reflected in the agreement as to that value referred to above. As a result, the detailed effect of the agreement with the ATO was not ultimately explored by the parties. That does not matter for the purposes of these reasons, and the Court will simply accept the value of the actual estate of the deceased that was agreed. I note that the spreadsheet that is MFI 5 specifies amounts paid or remaining to be paid in relation to the Division 7A issue, and that some of the assets may not fetch their assumed value on sale.
[6]
The O'Donnell group
Over his working life, the deceased prospered and acquired substantial assets that were incorporated from time to time into what the parties called the O'Donnell group.
The parties explained the structure of the O'Donnell group by means of flowcharts. The flowcharts had three tiers of companies. At the top was Duboti Pty Ltd as trustee of the Mugga Way Family Trust. In the second tier were seven asset owning companies whose shares were owned as to either 100% or in two cases 50% by Duboti Pty Ltd. One of the companies in the second tier was Evenlong Pty Ltd, which has been mentioned above. Another company in the second tier, Fashionable Leasing Pty Ltd, owned either 100% or in one case 50% of the shares in the nine asset owning companies in the third tier. As a result of a process of rationalising the O'Donnell group undertaken by the executors since the death of the deceased, seven of the companies in the third tier are inactive or have been deregistered. It is unnecessary to identify the assets held by each of the companies in the O'Donnell group. Particular companies and the assets held by them will be considered below where relevant to the issues that require determination.
Sitting in the second tier but not part of the O'Donnell group under Duboti Pty Ltd is Soothink Pty Ltd, which is shown as being beneficially held as to 100% by the deceased. Soothink Pty Ltd is shown as being trustee of the Mugga Way Capital Trust, but that trust does not appear to have been explained clearly in the evidence.
The revised flowchart provided by the defendants became part of MFI-4. Kalpana provided a competing flowchart that became MFI-6, which was substantially same as the defendants' flow chart, except that, in stating the shareholding relationship between the deceased and particular companies, Kalpana relied literally on the information contained in the ASIC records concerning whether the deceased held shares beneficially or non-beneficially. The explanation for the difference is that, on 13 December 1996, the deceased executed a number of declarations of trust of shares held by him in companies in the O'Donnell group. At the same time, other persons who held some of those shares executed declarations of trust in the same terms as the deceased. On a number of occasions the other party was Fiona, the deceased's third wife. In some cases the beneficiary of the declarations of trust was Fashionable Leasing Pty Ltd. In other cases the beneficiary was Duboti Pty Ltd as trustee of the Mugga Way Family Trust. Declarations of trust were executed over the shares in Fashionable Leasing Pty Ltd in favour of Duboti Pty Ltd on the same basis. The effect was to make Fashionable Leasing Pty Ltd the beneficial owner of the shares in some of the companies in the third tier and Duboti Pty Ltd became the beneficial owner of shares in companies in the second tier and indirectly the beneficial owner of shares in companies in the third tier through Fashionable Leasing Pty Ltd. As I understand it, the result as depicted in the defendants' flowchart, was that, except for Soothink Pty Ltd, Duboti Pty Ltd as trustee of the Mugga Way Family Trust, stood at the top of the pyramid and directly or indirectly controlled and beneficially owned the companies in the two lower tiers, except in a small number of cases where a third party owned 50% of the shares in particular companies.
[7]
The Mugga Way Family Trust
The Mugga Way Family Trust was created by deed of trust made on 29 June 1991. Duboti Pty Ltd was appointed as Trustee. Under clause 1(c), the Vesting Day is the sooner of 80 years from the execution of the deed and the day of execution by the Trustee of a deed declaring that day to be the Vesting Day. It is sufficient to note that clause 3(a) provides that the Trustee holds the income of the trust in respect of each Accounting Period for one or more of the beneficiaries as the Trustee in its absolute discretion may determine, or alternatively the Trustee may resolve to accumulate income. Similarly, by clause 6(1), on the Vesting Day the Trustee has an absolute discretion to distribute the income and capital of the Trustee among the Beneficiaries. Finally, clause 7(5) empowered the Trustee in its sole discretion at any time to apply the whole or any part of the capital to any one or more of the Beneficiaries in such manner as the Trustee thinks fit. Capital and income Beneficiaries were separately specified in the Schedule to the trust deed.
The trust deed provided for an office of Appointor who at the date of the deceased's death was the deceased's long-term accountant. The Appointor was given various powers under the trust deed, including an unfettered power to remove and replace Duboti Pty Ltd as trustee, but those powers had not been exercised by the time of the deceased's death.
The Beneficiaries were identified in Item 6 of the Schedule to the trust deed. The first-named capital beneficiary was Soothink Pty Ltd. The capital Beneficiaries included "any other corporation, partnership or trust in which Garry Francis O'Donnell has a beneficial interest." The income Beneficiaries included Soothink and any child of the deceased.
As a practical matter, the Mugga Way Family Trust and the O'Donnell group of companies were structured in a way that gave the deceased the power and right in his absolute discretion to distribute the income and capital of the Trust to the identified Beneficiaries, including himself through Soothink Pty Ltd.
[8]
The deceased's control of the O'Donnell group and the Trust
At the date of his death, the deceased was the holder of all of the 100 issued shares in Duboti Pty Ltd. The deceased held 49 of those shares beneficially, and he apparently held 51 shares on trust for Duboti Pty Ltd itself, as trustee for the Mugga Way Family Trust. The evidence does not appear to establish how the deceased came to hold the 51 shares on trust for Duboti Pty Ltd. There was no contest as to the truth of this proposition, which is apparently based upon an assertion by the deceased's long-term accountant. There was no suggestion that the deceased's holding of the 51 shares as trustee constrained his entitlement to exercise his rights as the 100% shareholder in Duboti Pty Ltd to cause that company to exercise its powers as the trustee of the Mugga Way Family Trust in a manner that was favourable to the deceased.
The deceased was the sole director of every company in the O'Donnell group, except for Duboti Pty Ltd and the companies in which third parties held shares. For some years before the deceased's death, Jaimie was also a director of Duboti Pty Ltd. The evidence justifies a finding, however, that Jaimie's appointment as a director was nominal and he did not play an active part in the management of the company. I am also satisfied that Jaimie would have acted in all matters in accordance with the deceased's requests. Jaimie said in cross-examination: "all I was really required to do was sign paperwork usually once or twice a year" [T 395.43]. In answer to the question: "Did he run the companies the same way he ran what I asked you earlier, his way or the highway?" by saying: "Largely, yes" [T 396.4]. Asked what Duboti Pty Ltd did as the controlling company of the O'Donnell group, Jaimie said: "Not a clue" [T 396.32].
[9]
Overview of Kalpana's family provision claims
As I have explained above, Kalpana has made claims for family provision under s 59 of the Succession Act in this Court and under s 8 of the Family Provision Act in the Supreme Court of the ACT that has been cross-vested to this Court. It is necessary to consider whether Kalpana is entitled to maintain her claims and to identify the statutory provisions that govern them.
[10]
Kalpana's eligibility
Kalpana is eligible to make her claims for family provision as she was the spouse of the deceased at the date of his death for the purposes of s 57(1)(a) of the Succession Act and his partner for the purposes of s 7(1)(a) of the Family Provision Act because she was his spouse.
[11]
Timeliness of applications
Kalpana commenced the claim for family provision in this Court on 17 April 2019 and in the Supreme Court of the ACT on 3 June 2019. Her proceedings were commenced within the 12-month period following the death of the deceased required by s 58(2) of the Succession Act as the deceased died on 26 November 2018. Section 9(1) of the Family Provision Act requires, in the ordinary case, that the claim be commenced within the 6 months period after the grant of administration. As the grant of probate was made by the Supreme Court of the ACT on 22 March 2019, the application was within time under the Family Provision Act.
[12]
Statutory basis for family provision orders
The material provisions of the Succession Act that govern this Court's power to make a family provision order in favour of an eligible applicant are:
59 When family provision order may be made
(1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that -
(a) the person in whose favour the order is to be made is an eligible person, and
…
(c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.
(2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made.
Note -
Property that may be the subject of a family provision order is set out in Division 3. This Part applies to property, including property that is designated as notional estate (see section 73). Part 3.3 sets out property that may be designated as part of the notional estate of a deceased person for the purpose of making a family provision order.
…
60 Matters to be considered by Court
(1) The Court may have regard to the matters set out in subsection (2) for the purpose of determining -
(a) whether the person in whose favour the order is sought to be made (the applicant) is an eligible person, and
(b) whether to make a family provision order and the nature of any such order.
(2) The following matters may be considered by the Court -
(a) any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b) the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate,
(c) the nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate,
…
(g) the age of the applicant when the application is being considered,
(h) any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(i) any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate,
(j) any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k) whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so,
…
(m) the character and conduct of the applicant before and after the date of the death of the deceased person,
…
(p) any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered.
[13]
Principles governing application of the statutes
I respectfully adopt the following statement of the general principles to be applied in the exercise of the statutory jurisdiction to make family provision orders made unanimously by the Court of Appeal in Bassett v Bassett [2021] NSWCA 320 (Bell P, as the Chief Justice then was, Leeming and Payne JJA). Their Honours said:
[78] Before an order for provision can be made in favour of a child of the deceased (who is an "eligible person" within the meaning of s 59 of the Succession Act), the Court must be satisfied that "adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person": Succession Act, s 59(1)(c).
[79] Satisfaction in this regard is "jurisdictional" insofar as it is a prerequisite to the Court exercising its discretionary power to make an order for provision pursuant to s 59(2): see, for example, as to the use of the description "jurisdictional", White v Barron (1980) 144 CLR 431 at 456; [1980] HCA 14; Singer at 208-210; Hampson v Hampson [2010] NSWCA 359; (2010) 5 ASTLR 116 at [69]-[72]. Care must, however, be taken when answering this jurisdictional question not to confine the relevant consideration to an applicant's financial or material needs; the language of "proper maintenance, education or advancement" involves more than simply a question of financial needs: see Sgro v Thompson [2017] NSWCA 326 at [68]-[74] (Sgro).
[80] Once the level of satisfaction referred to in [78] has been reached, the Court has a broad discretion, "having regard to the facts known to the Court at the time the order is made" (emphasis added), to make such order for provision out of the estate as ought to be made "for the maintenance, education or advancement in life of the eligible person": Succession Act, s 59(2).
[81] In considering both whether to make a family provision order and the nature of any such order if the threshold required by s 59(1)(c) is satisfied, the Court is entitled to consider the broad range of matters specified in s 60(2) of the Succession Act. The breadth of the matters that may be considered under s 60(2) does not, however, authorise the making of an order which is for a purpose other than "the maintenance, education or advancement in life of the eligible person". Nor does it relieve the Court of the need to make the order "having regard to the facts known to the Court at the time the order is made" (emphasis added).
[82] The primary judge's summary of relevant principles, as noted at [59] above, was not challenged. It is convenient to add a reference to McCosker v McCosker (1957) 97 CLR 566 at 571-572; [1957] HCA 82 (McCosker), in which Dixon CJ and Williams J observed that:
"The question is whether, in all the circumstances of the case, it can be said that the respondent has been left by the testator without adequate provision for his proper maintenance, education and advancement in life. As the Privy Council said in Bosch v Perpetual Trustee Co (Ltd.) [1938] NSW St Rp 3; [1938] AC 463; (1938) 38 SR (NSW) 176 the word 'proper' in this collocation of words is of considerable importance. It means 'proper' in all the circumstances of the case, so that the question whether a widow or child of a testator has been left without adequate provision for his or her proper maintenance, education or advancement in life must be considered in the light of all the competing claims upon the bounty of the testator and their relative urgency, the standard of living his family enjoyed in his lifetime, in the case of a child his or her need of education or of assistance in some chosen occupation and the testator's ability to meet such claims having regard to the size of his fortune. If the court considers that there has been a breach by a testator of his duty as a wise and just husband or father to make adequate provision for the proper maintenance education or advancement in life of the applicant, having regard to all these circumstances, the court has jurisdiction to remedy the breach and for that purpose to modify the testator's testamentary dispositions to the necessary extent."
[83] Kitto J's observations in the same case at 579 are also of note:
"The testator has shown by the terms of his will that he did not fail to consider what he ought to do for the several members of his family and that it was his deliberate judgment that some of them, including the respondent, had been adequately provided for by assistance he had given them. His opinion on the subject is, of course, by no means conclusive. But there is nothing to suggest that he was under any misapprehension, or that he was in any way prejudiced against the respondent; and the case seems to me to be one of those in which the testator is much more likely to have formed a correct conclusion on the subject of the moral obligations he owed to his family than a court can well hope to be."
[84] In Singer at 208-209, the majority held, in the context of broadly equivalent provisions under the predecessor Family Provision Act 1982 (NSW), that:
"It is clear that, under these provisions, the court is required to carry out a two-stage process. The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased's estate for the applicant. The first stage has been described as the 'jurisdictional question'. That description means no more than that the court's power to make an order in favour of an applicant under s 7 is conditioned upon the court being satisfied of the state of affairs predicated in s.9(2)(a)."
[85] More recently, in Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 at [122] (Vigolo), Callinan and Heydon JJ observed, in relation to the corresponding Western Australian legislation, that the questions which the Court has to answer in assessing such a claim do not "necessarily always divide neatly into two" and that:
"Adequacy of the provision that has been made is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably. Adequacy or otherwise will depend upon all of the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made, and, as here, changes in the arrangements between the parties after it was made. These matters however will never be conclusive. The age, capacities, means, and competing claims, of all of the potential beneficiaries must be taken into account and weighed with all of the other relevant factors."
[86] Vigolo is also significant because three of the five justices (Gleeson CJ, Callinan and Heydon JJ) supported the continuing utility in this field of discourse of notions of moral obligation and duty. Thus, Gleeson CJ (at [25]) observed that:
"In explaining the purpose of testator's family maintenance legislation, and making the value judgments required by the legislation, courts have found considerations of moral claims and moral duty to be valuable currency. It remains of value, and should not be discarded. Such considerations have a proper place in the exposition of the legislative purpose, and in the understanding and application of the statutory text. They are useful as a guide to the meaning of the statute. They are not meant to be a substitute for the text."
See also Callinan and Heydon JJ at [121], cf Gummow and Hayne JJ at [63]-[73].
[87] It is also relevant to note that in Sgro at [83], White JA (with whom McColl and Payne JJA agreed) repeated what he had earlier said in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522 at [127] as follows:
"In my view, respect should be given to a capable testator's judgment as to who should benefit from the estate if it can be seen that the testator has duly considered the claims on the estate. That is not to deny that s 59 of the Succession Act interferes with the freedom of testamentary disposition. Plainly it does, and courts have a duty to interfere with the will if the provision made for an eligible applicant is less than adequate for his or her proper maintenance and advancement in life. But it must be acknowledged that the evidence that can be presented after the testator's death is necessarily inadequate. Typically, as in this case, there can be no or only limited contradiction of the applicant's evidence as to his or her relationship and dealings with the deceased. The deceased will have been in a better position to determine what provision for a claimant's maintenance and advancement in life is proper than will be a court called on to determine that question months or years after the deceased's death when the person best able to give evidence on that question is no longer alive. Accordingly, if the deceased was capable of giving due consideration to that question and did so, considerable weight should be given to the testator's testamentary wishes in recognition of the better position in which the deceased was placed (Stott v Cook (1960) 33 ALJR 447 per Taylor J at 453-454 cited in Nowak v Beska [2013] NSWSC 166 at [136] ). This is subject to the qualification that the court's determination under s 59(1)(c) and s 59(2) is to be made having regard to the circumstances at the time the court is considering the application, rather than at the time of the deceased's death or will."
[14]
Choice of law to be applied
As Kalpana's claim for family provision is for an amount that is substantially greater than the value of the deceased's actual estate, even if that estate is augmented by a remedy against the defendants for devastavit, the crucial issue in these proceedings is whether the Court must determine Kalpana's claim on the basis of the proceedings she implemented in this Court under the Succession Act, or whether the only claim she can prosecute is the claim commenced in the Supreme Court of the ACT under the Family Provision Act that has been cross-vested to this Court. That is because it is only in the former case that the Court has power, if the requirements of Part 3.3 of the Succession Act are satisfied, to designate parts of the property of the O'Donnell group of companies as the notional estate of the deceased.
The Court is required to choose which are the correct proceedings to determine, which involves the choice of the correct law to apply. Choice of law depends upon the application of the relevant rules of the conflicts of law. Even though Australia is a single country, in various ways the laws of the several States and Territories differ. For disputes governed by State and Territorial law, the States and Territories are treated as if they were separate countries. The conflicts of law rules of this Court, as the forum for the dispute (the lex fori), govern the choice of law. There is no controversy about the content of the applicable rule, which is conveniently set out in M Davies, AS Bell, PLG Brereton and M Douglas, Nygh's Conflict of Laws in Australia (10th ed, 2019, LexisNexis Butterworths) (Nygh's) at [38.43], as follows (footnotes omitted, and noting that 'Testator's Family Maintenance' is equivalent in meaning to 'family provision'):
The relevant principles applicable to jurisdiction in testator's family maintenance in the absence of legislative provisions are set out in the judgment of Sholl J in Re Paulin:
(a) The courts of the testator's domicile alone can exercise the discretionary power arising under the appropriate Testator's Family Maintenance legislation of the domicile so as to affect his movables and immovables in the territory of the domicile; …
(b) The same courts alone can exercise such discretionary powers as to affect under the same legislation movables outside the territory of the domicile; …
(c) The courts of the situs alone exercise such discretionary powers to affect, and then only if there is Testator's Family Maintenance legislation in the situs providing for it, immovables of the testator out of the jurisdiction of the courts of his domicile; and the courts of his domicile cannot exercise their discretion so as to deal with such immovables; …
[15]
Property available for designation as notional estate
If the Court has jurisdiction to hear Kalpana's claim under ss 59 of the Succession Act, it will have power to make an order designating property as notional estate of the deceased under Part 3.3 of that Act.
As Mason P said in Kavalee v Burbidge (1998) 43 NSWLR 422 (Meagher JA agreeing and Handley JA dissenting in part) at 441 concerning the substantially equivalent provisions of the Family Provision Act 1982 (NSW), which were replaced by Chapter 3 of the Succession Act:
A court approaching the interpretation of the notional estate provisions is at once confronted with a legislative scheme which is both beneficial to applicants and restrictive of the existing property rights of disponees. And it uses both technical legal terms and expressions of indeterminate reference.
[16]
Possible basis of relevant property transaction
The explanation of the application of Part 3.3 that follows will be assisted by a description of the relationship between the deceased and the O'Donnell group that relevant authority suggests may justify the Court in making a notional estate order in respect of the property of those companies. Relevantly:
Duboti Pty Ltd, as trustee of the Mugga Way Family Trust, could at any time in its absolute discretion have resolved to distribute the income and capital of the Trust to any income or capital beneficiary (as the case may be).
Soothink Pty Ltd was both an income and capital beneficiary of the Mugga Way Family Trust.
All of the shares in Soothink Pty Ltd were beneficially owned by the deceased. Any increase in the assets of Soothink Pty Ltd caused by a distribution to it of the income or capital of the Mugga Way Family Trust would have increased the value of the actual estate of the deceased.
At material times, there were two directors of Duboti Pty Ltd, being the deceased and Jaimie. As explained above, it was Jaimie's habit to exercise his powers as a director of Duboti Pty Ltd in accordance with the instructions of the deceased. The deceased exercised his powers as a director of Duboti Pty Ltd in a way that gave him complete control over the actions of that company.
In any event, as the deceased held all of the issued shares in Duboti Pty Ltd, the deceased could have resolved at any time to remove Jaimie as a director, before causing Duboti Pty Ltd to make whatever distribution the deceased wished the company to make as trustee of the Mugga Way Family Trust.
The deceased was able to exercise these powers at any time up to the date of his death but he did not do so.
The subject of the distribution that the deceased could have caused Duboti Pty Ltd to make could have been any of the shares held by Duboti Pty Ltd in the companies in the O'Donnell group or any of the units in the Newcastle Unit Trust.
In all of the cases where the deceased was the sole director of a company in the O'Donnell group the deceased could have caused the companies to declare dividends out of any available profits, or alternatively profits could have been distributed to Duboti Pty Ltd as the holder of units in the Newcastle Unit Trust, so that Duboti Pty Ltd would have received profits that would have been available for distribution to income beneficiaries.
[17]
Outline of facts of prior authorities
Following is an outline of the facts relevant to the authorities to which I will refer in considering the application of Part 3.3 in this case.
In Kavalee v Burbidge, the deceased established a type of company called a stiftung governed by the law of Liechtenstein that was called 'the Foundation' in the judgment. The deceased transferred substantial assets to the Foundation designed to limit the capacity of his wife and the children of his marriage to make successful claims on his estate. The deceased did not have what Australian law would recognise as a legal or beneficial interest in the assets of the Foundation, so those assets were not part of his estate at the time of his death. Under its constitution, the Foundation was controlled by a Founder, being a nominated company, which was empowered to create bylaws for the Foundation that governed how the assets of the Foundation were to be distributed. The bylaws were made in accordance with memoranda of wishes given to the Foundation by the Founder. As Mason P said at 440: "Put simply and in lay terms, the Founder had the right to cause the Foundation to deal with its assets as the Founder chose. And the deceased had the right to pull the strings that caused the Founder to jump at his direction." The Court of Appeal held that this Court could in principle make an order designating assets of the Foundation as notional estate of the deceased, provided it was established that the law of this State governed the succession to the deceased's property.
In Wardy v Salier [2014] NSWSC 473, White J (as his Honour then was) was required to determine whether the Court had power to make a notional estate order in respect of the assets of a discretionary trust whose terms were materially similar to the terms of the Mugga Way Family Trust: see [82]. The deceased owned the shares in, and was the director of, the company that was the trustee of the trust. The deceased was a nominated beneficiary of the trust. The deceased failed to exercise his powers as shareholder and director of the trustee to cause the trustee to resolve to distribute the assets of the trust to himself before he died. White J found that the Court had power to make an order designating the property of the discretionary trust as notional estate of the deceased.
The circumstances in Hitchcock v Pratt were materially different. Brereton J (as his Honour then was) made an order for the summary dismissal of the plaintiff's claim. The plaintiff had claimed that this Court could make an order designating real property in this State as notional estate of the deceased. The deceased had died domiciled in Victoria, so that the law of Victoria governed the succession to his movable property. The real property situated in NSW was owned by a company whose principal place of business and share register were in Victoria. The shares in the company were ultimately owned by another company resident in Victoria that was the trustee of a discretionary trust. The deceased was not a director of the trustee company, although he could have exercised a power to make himself the director. The deceased had been a director of the property-owning company before his death. The deceased was specifically excluded as an eligible beneficiary in the trust deed that governed the trust. The plaintiff's argument was that the deceased, as director of the company that owned the property in this State, could have caused the company to transfer the property to himself. Brereton J found that the Court could not make an order designating the real property in this State as notional estate of the deceased for two reasons: first, it would not have been lawful for the deceased who owed fiduciary duties to the property-owning company as its director to transfer the company's property to himself without payment of its full value, and secondly, even if the deceased had been the controlling director of the ultimate holding company that was the trustee of the discretionary trust, he could not have caused the trustee to distribute the value of the property to himself because he was explicitly excluded as a beneficiary of the discretionary trust.
[18]
Particulars of Kalpana's notional estate claim
The defendants filed a notice of motion on 25 August 2021 seeking particularisation by Kalpana of the notional estate orders that she sought. On 27 August 2021, in the course of a pre-trial directions hearing, Kalpana's senior counsel informed the Court that particulars of Kalpana's notional estate claim would be provided to the defendants. Those particulars were provided by letter from Kalpana's solicitors dated 8 September 2021: see Exhibit D3.
The letter stated: "Consistent with the Plaintiff's evidence that has been served on your clients, and in their possession since 2019, and indeed the agreements reached by the parties' respective accounting experts, the Plaintiff contends that the following assets are capable of forming the deceased's notional estate…" The defendants contest that there was any relevant agreement between the accounting experts. The letter then listed "the deceased's shareholding" in 12 companies in the O'Donnell group. The letter also listed "the deceased's shareholding in the Northern Territory Club Supplies Unit Trust". The deceased did not have a shareholding in that trust, as trusts do not issue shares. The trustee of that trust was a company called Belsos Pty Ltd. All of the companies that were listed, as well as Belsos Pty Ltd, are companies in which the deceased held shares that were subject to declarations of trust by the deceased in favour of either Fashionable Leasing Pty Ltd or Duboti Pty Ltd. As noted above, after probate of the deceased's will was granted to the executors, they executed transfers of the shares the subject of the declarations of trust in favour of the beneficiary companies. Kalpana's solicitors' letter ended by saying: "The relevant property transaction is the transfer of those shareholdings between 11 February 2019 and 23 July 2019."
This letter appears to be misconceived, and in any event it is not clear upon what basis Kalpana contended that transfers by the executors could be relevant property transactions within s 75(1) of the Succession Act. As I will explain below, Kalpana relied upon one of these transactions as the basis of her devastavit claim against the executors. Kalpana claimed that the relevant declaration of trust should not have been acted upon by the executors as if it remained valid, so the transfer of the relevant shares to the supposed beneficiary without full value was a devastavit.
[19]
Application of Part 3.3 of the Succession Act
I will now turn to a consideration of the application of Part 3.3 to the relationship between the deceased and the companies in the O'Donnell group and the property owned by those companies.
The issue is whether there is property that is not part of the estate of the deceased that can be designated as notional estate by an order under Part 3.3, and so is made available as the subject of a family provision order by s 63(5).
The starting place therefore is 80(1), which is the provision that empowers the Court to make an order designating property as notional estate of the deceased, and which is in the following terms:
(1) The Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies.
Section 80(2) specifies what are called the "relevant property transactions" to which s 80 applies. As will be seen, the only transactions that are candidates for relevant property transactions in this case are transactions "that took effect … on … the deceased person's death" within s 80(2)(c). Section 80(2)(a) and (b) provide that s 80 applies to relevant property transactions that took effect within 3 years or within 1 year respectively before the date of the death of the deceased person, provided those transactions conformed to stated criteria. Those criteria are not present or relevant in this case.
Section 80(3) confines the property that may be designated as notional estate by a notional estate order under s 80(1) to property that conforms to the description in the subsection, as follows:
(3) Property may be designated as notional estate by a notional estate order under this section if it is property that is held by, or on trust for -
(a) a person by whom property became held (whether or not as trustee) as the result of a relevant property transaction, or
(b) the object of a trust for which property became held on trust as the result of a relevant property transaction,
whether or not the property was the subject of the relevant property transaction.
[20]
Significance of real property in NSW owned by O'Donnell group companies
In Hitchcock v Pratt, Brereton J said at [20]:
[20] Accordingly, there will be jurisdiction in this case only if the deceased, having died domiciled in Victoria, left property in New South Wales. It is uncontroversial that he left no actual estate in New South Wales. However, the presence in New South Wales of property which could be designated as notional estate is sufficient to attract jurisdiction, since once designated it assumes for practical purposes equivalence to actual estate. Accordingly, if it were arguable that there was in New South Wales property capable of being designated as notional estate of the deceased, it would be inappropriate summarily to dismiss the proceedings.
Consequently, even if this Court does not have jurisdiction to apply Part 3.3 of the Succession Act where the deceased had control of the O'Donnell group generally, it is in principle relevant to consider whether at the time of the deceased's death there was real property situated in this State, being immovable property of a company in the O'Donnell group, that this Court has jurisdiction to treat as part of the deceased's estate because a notional estate order may be made in respect of that property.
As I understand the evidence, the candidate properties for the making of notional estate orders would have been as follows:
1. Evenlong Pty Ltd, as trustee for the Newcastle Unit Trust, owned the Pyrmont apartment that was sold in 2019 for $5.5 million and the Royal Hotel Bungendore that was sold in 2019 for $4.4 million. Duboti Pty Ltd, as trustee for the Mugga Way Family Trust, held 100% of the shares in Evenlong Pty Ltd and 100% of the units in the Newcastle Unit Trust. The deceased was the only director of Evenlong Pty Ltd.
2. Enjet Pty Ltd owned the Empire Hotel Goulburn that was sold in 2019 for $3.034 million and a property in Thredbo that was sold in 2020 for $2.55 million. Duboti Pty Ltd, as trustee for the Mugga Way Family Trust, held 100% of the shares in Enjet Pty Ltd. The deceased was the only director of Enjet Pty Ltd.
3. Amazonia Hotels Pty Ltd owned the North Nowra Tavern that was sold in 2020 for $12 million. Fashionable Leasing Pty Ltd and Duggan Family Hotels Pty Ltd each held 50% of the shares in Amazonia Hotels Pty Ltd. Duboti Pty Ltd, as trustee for the Mugga Way Family Trust, held 100% of the shares in Fashionable Leasing Pty Ltd. The deceased and Mark Duggan were each directors of Amazonia Hotels Pty Ltd. Mr Duggan and his company were independent investors to the deceased.
[21]
Legal principles governing determination of domicile
Every person has at every moment of their life one and only one domicile, but that domicile may change during the person's life. A person's domicile is of fundamental significance to the legal principles that govern important aspects of the person's life and death. Yet it may be that most people are oblivious to the fact that they have a domicile or that other people upon whom they may depend also have a domicile. The concept of domicile may be alien to their experience. They may go about their lives in ignorance of how their own domicile and the domicile of other people may crucially impact on their lives and their rights.
In Udny v Udny (1869) LR 1 Sc & Div 441 (Udny) Lord Westbury said, at 457-8, using the old term "domicil":
…[T]he civil status is governed universally by one single principle, namely, that of domicil, which is the criterion established by law for the purpose of determining civil status. For it is on this basis that the personal rights of the party, that is to say, the law which determines his majority or minority, his marriage, succession, testacy, or intestacy, must depend. … It is a settled principle that no man shall be without a domicil, and to secure this result the law attributes to every individual as soon as he is born the domicil of his father, if the child be legitimate, and the domicil of the mother if illegitimate. This has been called the domicil of origin, and is involuntary. Other domicils, including domicil by operation of law, as on marriage, are domicils of choice. For as soon as an individual is sui juris it is competent to him to elect and assume another domicil, the continuance of which depends upon his will and act. When another domicil is put on, the domicil of origin is for that purpose relinquished …
A somewhat more modern explanation of the concept of domicile was given by Lewison J (as his Lordship then was) in Gaines-Cooper v Commissioners for HM Revenue and Customs [2007] EWHC 2617 (Ch) at [1] (Gaines-Cooper):
[1] Given that many people move about the world from one country to another, it is essential to have a means of establishing under which system of law and within the jurisdiction of which country's courts questions relating to their civil status (such as marriage, divorce and legitimacy) and some aspects of their property (such as the devolution of moveable property on their intestacy) fall to be determined. It is to accomplish that purpose that the concept of domicile has been developed. It is a neutral rule of law for determining that system of personal law with which an individual has the appropriate connection, so that it will govern his personal status and questions relating to him and his affairs. Its essential feature is that it attempts to connect a person so far as it is possible with the country in which he has his permanent home or in which he lives indefinitely. But in addition to the principal objective of the law of domicile, it also has knock-on effects, such as a person's liability to pay tax. That is what this appeal is about.
[22]
Determination of the deceased's domicile
The parties directed their greatest forensic efforts towards a determination of the deceased's domicile at the time of his death that was favourable to their cases. That was because the deceased left his widow nothing in his final will and, on any version of events, Kalpana is morally entitled to a provision that is substantially greater than what events have shown is the value of the deceased's actual estate. Kalpana cannot secure her moral entitlement unless a finding is made that the deceased was domiciled in NSW. Her quandary is exacerbated by the possibility that the estate will be substantially diminished by costs orders that may be made in all of the proceedings. As a result of the way in which the hearing was conducted, it will be necessary for the Court to address the detail of the evidence led by the parties on the issue of the deceased's domicile.
[23]
Background
As noted, the deceased was born in Goulburn. At some time he moved to the ACT and engaged in business, principally, it seems, as a hotelier. The deceased prospered and, in 1998, he purchased 30 Mugga Way, Red Hill, in his own name. He continued to own that property until his death.
The deceased's life with his first three wives was predominantly lived in the ACT.
The companies in the O'Donnell group that were controlled by the deceased, without any significant third-party investment, all had their principal places of business and registered offices in premises in Fyshwick in the ACT owned by a company in the O'Donnell group.
At various times in the last 10 years of the deceased's life, either directly or through companies or trusts associated with the O'Donnell group, the deceased purchased property in Canberra, Sydney, Bateman's Bay, Nowra, the Gold Coast and Perth.
As noted above, the deceased caused Evenlong Pty Ltd, which was the trustee of the Newcastle Unit Trust, to purchase the Pyrmont apartment in July 2013.
Kalpana and the deceased met in November 2012 and commenced a relationship, which led to them marrying on 9 May 2013 in Las Vegas. The couple initially lived at the Mugga Way property. On 29 October 2014, the deceased's dog named Lady was bitten by a snake at the Mugga Way property. As Kalpana was afraid of snakes, the deceased agreed to purchase another property for the couple to use as a home. The property that the parties called the Barton penthouse was purchased on a fully furnished basis in December 2014 in the deceased's name. The deceased had originally arranged to buy the Barton penthouse in equal shares with Kalpana as tenants-in-common. Kalpana attended at the solicitor's office to sign the contract as a purchaser. Subsequently, in unknown circumstances, the deceased caused Kalpana to be removed as a purchaser and acquired the Barton penthouse in his sole name. As will be seen, this caused a short-term breach between Kalpana and the deceased.
The penthouse in the Versace Hotel on the Gold Coast was purchased in March 2016 using funds obtained from Evenlong Pty Ltd, and sold at a loss approximately 18 months later in November 2017.
In December 2015, the deceased and Kalpana entered a contract to purchase an 'off the plan' apartment at Elizabeth Quay, Perth. A deposit of $250,000 was paid. The contract was due to settle in early 2019, but as a result of the deceased's prior death, the contract was not completed and the deposit was forfeited.
[24]
Kalpana's credibility
This will be a convenient place to deal with the issue of the credibility of the evidence given by Kalpana, as her credibility is most affected by the evidence that she gave on the domicile issue.
It is unfortunate that, in such contentious proceedings as the present, it was necessary for the Court to conduct an audio-visual hearing because of the consequences of the COVID-19 pandemic. Those who have participated in many such hearings during the course of the pandemic will know that the quality of audio-visual hearings varied significantly and unpredictably from hearing to hearing. That was apparently the result of technical and bandwidth issues that were often little understood and difficult to remedy. My experience of the hearing in these proceedings was that the audio-visual difficulties that were experienced were relatively extreme. That meant that the ability of the Court to place any weight on the demeanour of witnesses depended upon the quality of the particular audio-visual connections that were in place for each witness who generally gave their evidence from different remote locations.
Kalpana gave her evidence from what appeared to be a relatively large conference room in which her legal representatives were also present on screen. I consider that the audio-visual connection was relatively poor and unreliable, so that it would not be fair for the Court to place any significant weight on views it might have formed concerning Kalpana's demeanour in giving her evidence. It appeared to me that Kalpana was significantly disadvantaged by reason of having to respond to a lengthy and forceful cross-examination in an audio-visual process.
Kalpana was clearly emotionally upset by the process of giving evidence and on some occasions she could not satisfactorily continue. Kalpana's apparent demeanour was entirely consistent with what one might reasonably expect of a bereaved widow who had married and thought she was loved by, and could trust, a wealthy man, only to find that he left her nothing in his will, contrary to what I am satisfied were promises made by the deceased to Kalpana. If that were not bad enough, Kalpana must have discovered, after the deceased's death, that the law of this country had put her in the position where justice to her claim depended upon a court's finding as to the domicile of the deceased at the date of his death. Given that most lawyers do not understand domicile, it is only to be expected that the existence of this barrier to success in her case must have been a traumatic realisation. Consequently, I have attributed no significance to the highly emotional state in which Kalpana gave her evidence and her consequent tendency to lose the thread and to ramble in response to the questions that were put to her.
[25]
Kalpana's evidence
In Kalpana's 16 April 2019 affidavit affirmed in support of her application for family provision in this Court, Kalpana gave as her address the address of the Barton penthouse. Kalpana said, in par 151, that she and the deceased had plans to renovate the Mugga Way property and to retire there. She said in par 154 that she currently split her time between the Barton penthouse and the Pyrmont apartment.
Kalpana swore a supplementary affidavit on 23 May 2019, which was listed in the contents of the Court Book as containing evidence relevant to the domicile issue. Kalpana claimed in par 7 that, during their marriage and prior to the deceased's admission to hospital in November 2018, when they were in Australia, they spent half of their time living in the Pyrmont apartment. She said that following the deceased's death, she split her time between the Pyrmont apartment and the penthouse in Barton.
The defendants obtained orders from this Court that required Kalpana to vacate the Pyrmont apartment after the deceased's death, so that the apartment could be sold. Kalpana had to find alternative rental accommodation for herself and her dog. She filled out a tenancy application form that contained a statement that she had been living in Canberra for five years. The form was the subject of the following cross-examination [T 159.30-159.47]:
Q. When you filled out the tenancy application form, which is at page 43, I suggest to you that you correctly represented to the agent that you had been living in Canberra for five years. What do you say about that?
A. Mr Meek, I would have had to say anything to get a roof over my head. I didn't have any place to go. I was kicked out of my home. I had a puppy. No-one was renting. What am I going to say? Which address to put? What can I put?
Q. And - sorry, you go.
A. I can't put Pyrmont. It is - it is gone. What am I going to do? Which address?
Q. Are you suggesting that the detail that you were living in Canberra in the application form was a lie, is it?
A. I used to live in every place - when I'm in Canberra, I say I'm living there. I'm living in Sydney, our home was Pyrmont. I use home for all our residences. I say ..(not transcribable).. home. I say - our third home - we called everyone home, but our principal place was Pyrmont.
The cross examination on this issue continued, and also raised the fact that, at the time Kalpana claimed that her and the deceased's primary home was the Pyrmont apartment, she had arranged for overseas trips with the deceased with a Flight Centre office in Pyrmont, but the invoices were addressed to the Barton penthouse [T 163.35-163.49]:
Q. You say you just put any old address, is that right?
A. Because we have so many homes. We just - can I stop there. The other reason that we would put those addresses is because we can get our mail there. We never used to have any mail coming to Pyrmont because we - we just go there, open the door and we relax. That's our home. We didn't get any mail in Pyrmont. All our mail went to 30 Mugga Way or 27 Sydney Avenue.
Q. You see on page 8 that there is an invoice from Flight Centre for a flight to Bali to depart from 20 December 2015 returning 8 January 2016; right?
A. Yeah, I can see that, and I can see the address as well, but that's what I just explained in the previous question. We - we just put whatever because we didn't - we don't get mail in Pyrmont at all. We never received any - our mail going to Pyrmont. Gary had his own postal address that his work email - I mean his work documents go to PO box that he collects and the mail normally comes between Monday to Friday so we have to give some address where we can receive our mail.
[26]
Witnesses called by Kalpana on the domicile issue
Kalpana and the defendants called evidence from a number of witnesses to support their respective cases as to the domicile of the deceased at the date of his death. As the ACT is embedded in NSW, and as the deceased was frequently present in each of these jurisdictions, the element of the necessary intent to acquire a new domicile of choice was of particular significance in this case. Although it is conventional for the Court to place more weight on the objective evidence of the subject person's intention than statements made by the person concerning his or her subjective intention, I have found, in the unusual circumstances of the present case, evidence of statements made by the deceased in his day-to-day dealings with other people to have significant force.
Kalpana called evidence on the issue of the deceased's domicile from 16 acquaintances of the deceased. Only three of those witnesses were cross-examined by the defendants. I will consider their evidence first.
[27]
Peter Princi
Peter Princi said that he became a close friend of Kalpana before her marriage to the deceased, and after their marriage he and the deceased became closer friends. In December 2014, Kalpana and the deceased moved out of the Mugga Way property into a penthouse apartment in Barton. Mr Princi then gave the following evidence in his 18 July 2019 affidavit:
5. After the move to Barton, I had a conversation with Garry and Paris whilst out at dinner with them at Thai Chang Rai in Kingston. Garry said words to the effect, "Barton is only temporary. You should see the home we bought in Sydney! It's so close to the water, you can sit on the balcony and piss into the harbour. I bought it for Paris, we love it and are moving in shortly." Garry appeared excited as he said this.
6. After Garry and Paris moved to Sydney, I visited them at the Pyrmont apartment on many occasions. I also attended their dinner parties and other social events held over the years in Sydney. Garry and I also spent a lot of time sitting on the balcony at the Pyrmont apartment drinking.
7. In all of the conversations I had with Garry and Paris following their move, they both referred to the Pyrmont apartment, and Sydney, as their "home".
8. On one occasion I attended a Melbourne Cup event in Darling Harbour in Sydney with Garry and Paris. We returned to their apartment after and Garry said to me words to the effect of "because we live in Sydney now, I want to buy something bigger. There is a double apartment in this same complex I am interested in buying."
9. When Garry was in Canberra in May 2018, I had dinner with him at Ottoman Restaurant in Barton. I asked him what his movements for the week (sic). He said to me, "We're heading home for a few days" (referring to Sydney). I asked him when he would be back in Canberra, he said, "I don't know, maybe next week."
10. From what I observed, and from my discussions with Garry and Paris both together and separately, I understood that Sydney was Garry and Paris' permanent home.
Mr Princi gave the following evidence in cross-examination: [T 15/10/21 237.30-239.20]:
Q. ... Now, you mentioned the Pyrmont penthouse. Are you aware that that had been purchased before the Barton penthouse?
…
A. I was out with him at dinner or something when he - and he said - yeah, after - this was just after he bought the penthouse at The Realm, and he said, "We've purchased a property - we've purchased a property in Sydney." And he said that, "You should see it. It's beautiful." He said - you know, I - I said that in my affidavit because it sticks in my head. He said, "Wait till you come there." He said, you can stand on the balcony and piss into Sydney Harbour." That's how good it was. And he said to me that - that Barton - the Barton penthouse was only temporary, because they were moving to Sydney.
…
Q. I'm just trying to understand why he would have told you that the Barton property was temporary? Did he explain that?
A. I think you'd have to ask him that because he - he - that's what he said to me. He said the property was temporary. When he got the penthouse at Barton, he said it was temporary. They're moving to Sydney.
Q. The Barton penthouse was purchased after the Sydney apartment, so did you have any understanding of temporary for what?
A. He said was there temporary - it was only temporary because they were moving to Sydney.
Q. I suggest that you haven't properly recalled what he told you about the Barton apartment about it being temporary--
A. Well, I can - I can tell you this: that when he moved out of Mugga Way and moved into that Barton penthouse, he moved in there because - he moved out of Mugga Way because Paris was actually scared of snakes at Mugga Way, so I would assume that he just - he bought the penthouse so he could get Paris out of there, you know, because she was scared, and - and that was a temporary - a temporary fix until they moved to Sydney to the - to the property in Sydney.
Q. Let's go back to Mugga Way. You refer to the fact that Paris was scared of snakes. You understand that that's because she was living in the Mugga Way property with him; that's right, isn't it?
A. She was there for a short period of time, I believe, yes.
Q. When you say "you believe", what do you actually know?
A. Well, in Mugga Way - in the period of time they were at Mugga Way, I think I went to that place a maximum of two times because they then bought the - got her out of there because she was worried. They bought the Barton property, and they moved into there while they were preparing to move to Sydney.
…
Q. You have no actual knowledge of that, do you?
A. Only from what he told me he'd moved to Sydney. He'd always refer to Sydney as his home. I would go there on a regular basis and see them up in Sydney in Darling Harbour. That was his home.
Q. How many times do you say you were in Sydney with him?
A. Dozens of times in Sydney. It was only a three-hour trip up the road. We used to go quite regularly to Sydney.
Q. If I suggest to you that he was actually only in Sydney for a very small percent of the time over that period from 2014 until his death, what would you say about that?
A. I know that he had a lot of work in Canberra, so he did work in Canberra quite a bit, but he always went back to Sydney, and whether the percentages were more in Canberra or Sydney, I don't know, but Sydney was his home.
Q. You say that. You're aware that he did live and continued to live at times in the Barton penthouse; right?
A. When he was in Canberra?
Q. Yes.
A. If he had to stay here for a few days or something, of course he would be in the Barton penthouse.
[28]
Robert John Leticq
The next witness who gave evidence for Kalpana was Robert John Leticq. Mr Leticq said that he had known Kalpana since July 2009 and that he met the deceased in December 2012. After the marriage of Kalpana and the deceased in May 2013, Mr Leticq and his partner spent a significant amount of time with both of them socially and travelled with them on overseas holidays. Mr Leticq and his partner would catch up with Kalpana and the deceased two or three times a fortnight. This would often be for dinner at local Canberra restaurants or in Sydney after Kalpana and the deceased moved there in about September 2013. Mr Leticq said that after Kalpana and the deceased moved to Sydney they travelled back to Canberra often for business.
In his 1 August 2019 affidavit, Mr Leticq said:
5. … The four of us were having dinner one night in July 2013 at the Thai Chang Rai in Kingston when we had a conversation to the following effect:
Garry said: "I've bought a place at Pyrmont for Paris and I to live in."
I said: "Are you looking at settling down in Sydney?"
Garry said: "Yes, I am keen to settle down there soon, I prefer the Sydney lifestyle and have good mates up there. It's more entertaining and I enjoy the warmer weather of Sydney compared to Canberra. I've got bad knees and joints, and Canberra's cold weather is no longer good for me, they hurt a fair bit. That's one of the main reasons for the move. Paris can furnish it as she likes. I want her to be happy in our new home. She runs things past me but I'm happy if she is happy. This is our new start.
6. After Paris and Garry moved, whenever Vilayphone and I travelled to Sydney, we almost always visited Paris and Garry at their home in Pyrmont where we would have a meal with them.
…
8. In December 2014, during a dinner with Paris, Garry and Vilayphone, Garry said, words to the effect:
"I need to move from Mugga Way, because it's too big, Paris and I want something a little smaller as my Canberra base while here on business, we have purchased a nice unit in Barton and will move our things into that place.
…
10. In June 2018, during a visit to Canberra, I met up with Garry for dinner at Thai Chang Rai. During dinner, Garry said to me, words to the effect:
"I looked at buying a larger unit in our Pyrmont complex. I actually wanted to buy the place next door. However, they wanted too much for it. So, Paris, and I will keep looking around for something we like, and we've even thrown around the idea of buying a nice place in the eastern suburbs and building a house with more privacy."
…
12. In all of my conversations with Garry after he and Paris moved to Sydney, I observed he would always refer to the Pyrmont property as "home". I regarded it as his home.
[29]
Brian Morris
Brian Morris met Kalpana in 2008 and was introduced to the deceased shortly after she began her relationship with the deceased in 2012. Mr Morris had regular contact with Kalpana and the deceased for many years, either over the phone or in person almost once a week. Together with his wife, he attended meals, parties and overseas trips with Kalpana and the deceased. Mr Morris gave the following evidence in his 22 July 2019 affidavit:
4. In late June 2013, I met Garry at the Statesman Hotel. I asked Garry where Paris was. He laughed and said:
"She is still getting ready, we only just arrived from Sydney."
He said to me.
"Guess what I bought for Paris today? A house in Sydney, right on the water. We want to move up to Sydney, Paris loves it, but I will have to work even harder now!"
He laughed and went on to say:
"That's what you do for the woman you love. Sydney will be good for Paris and I, if she is happy, I am happy."
Garry was very excited, I asked him more about the property, and he said to me:
"I don't have any pictures, but Paris does on her phone, you'll have to have a look when she arrives."
In par 5 of his affidavit, Mr Morris gave evidence of a conversation with the deceased during a trip to Las Vegas in March 2016 in which the deceased said:
"We can live anywhere we like, and we chose Sydney, we absolutely love it. You guys should move up too."
Mr Morris' affidavit continued:
6. Garry and Paris came to a dinner party my wife and I held at our house in Kambah Canberra, Garry said to me:
"You too should come and live in Sydney, Paris would love to have friends like you closer to home."
7. We regularly visited Garry and Paris in Sydney. When we went up for business we would stay at their home in Pyrmont.
8. During a visit to Sydney in September 2018, Rabia and I told Garry and Paris about our plans to move to Queensland. Garry encouraged us to make the "big move" and said to me:
"Paris and I did it years ago and we are loving Sydney, it's the best thing we could have done."
He also said:
"My joint pain and knees have actually improved too since our move here. They were terrible in the Canberra cold all the time."
The cross-examination of Mr Morris was relatively brief and included the following [T 15/10/21 244.48-245.41]:
Q. In your affidavit, and I'm not being critical, but you don't refer to a lot of contact with them, or with Garry, over the five years between 2013 and 2018; right?
A. There was regular contact, but it was, again, on a social nature. For dinners and drinks, and parties and things like that.
Q. In the context of conversations you had, so you refer to a number of conversations in paragraphs 4, 5 and 6 of your affidavit. Those conversations took place at meal times, or lunch or dinner; right?
A. Most - most often it was after work. So after work meal times and drink times, yes.
Q. Some of that was at The Statesman Hotel?
A. Correct.
Q. There was a degree of drinking; right?
A. Yes. Social. Yes. We were all driving, so we didn't drink too much.
Q. You're aware that from time to time Garry would say things in the nature of big noting; right?
A. I beg your pardon?
Q. Garry would say things that were in the nature of big noting?
A. Big noting?
Q. Yes.
A. I wouldn't have called it big noting, no.
Q. Why?
A. He's a - he's a man of good means. He doesn't need to big note himself.
Q. You set out some discussions that you say that you had with him. As far as you're aware, most of your contact with him was in Canberra, wasn't it?
A. Canberra, Sydney and USA.
Q. Over the period of time that, say from 2014 until his death, is it the case that you wouldn't have spent a great deal of time with him in Sydney?
A. No. I wouldn't it was not a great deal of time. It was several times, but each of those times we were both up there for different reasons, and we would get together again for a meal in the evening.
Q. When you talk about 'several times", we're not talking about a large number. You're meaning by that maybe four or five or six times?
A. In that period of time I would have said less than 10 times.
[30]
Pushpanjali Vyas
Pushpanjali (Angelina) Vyas is Kalpana's sister. She said that she had known the deceased since 2012.
Ms Vyas gave the following evidence in her 26 July 2019 affidavit:
5. Kalpana called me in May 2013 and told me that she and Garry had married and were looking for a place in Sydney to live. She said words to the effect:
"Garry asked me to marry him! We did it in Las Vegas. We've found an amazing apartment on Sydney Harbour and we are moving out from Canberra."
6. At the end of June 2013, I was discussing with Garry and Kalpana their move to Sydney over the phone. They were very eager to move in, I asked what the rush was. Garry said to me:
"Angelina, we want Ruff to see his new home before he passes. He is going to love it."
Ruff was my sister's puppy who had heart problems and didn't have long to live at this point. Ruff passed away on 13 September 2013. Garry had a huge portrait made of Ruff and installed in their master bedroom in Sydney.
7. My younger sister Jayshree and I travelled and stayed with Kalpana and Garry in Sydney, Canberra, Gold Coast and Thredbo. Sydney was their home. however, they often travelled to their other properties, mainly to Canberra as they had business there. Every time we would speak on the phone to Kalpana, I would ask:
"Where in the world are you guys now? At home in Sydney or travelling?"
8. In late 2013, I was invited to celebrate New Year's Eve at Kalpana's home in Pyrmont. Garry and my sister celebrated many milestones in their Sydney home.
…
12. In September 2017, I had a conversation with Garry, he said to me:
"We are looking at building a home in Sydney somewhere on the water. It's not going to be cheap, but this will be where we will be retiring. We want a backyard for Zac to run around, plus your sister wants a pool. We are looking to see if we can buy an old home to demolish and rebuild."
13. Last year in July 2018 Garry said to me:
"Your sister has found her new dream home in Sydney at Versace. It's on the same wharf where we live now. It's a big apartment, plenty of room for everyone including Zac. We will sell the Pyrmont home and move to Versace."
Garry went on to tell me:
"We will be buying the Versace apartment in both names, so your sister feels secure. You know I will look after her."
Unfortunately, this never eventuated as Garry passed away a few months later.
Ms Vyas was cross-examined on another issue, being as to why she transferred a property that was in her and Kalpana's name to Toby. The cross examination on the domicile issue was as follows [T 18/10/21 269.24-269.44]:
Q. And I suggest to you that you're mistaken that Garry told you that he was living in Pyrmont at that time. What do you say about that?
A. Garry and Kalpana lived in Pyrmont, Sydney house. That's their home. Since their marriage, they've been living there. That's the only home they have and that's where I was visited them.
Q. So let's just be clear about this. You say that's the only home that you say that Gray and Kalpana ever had; is that right?
A. That's the only home they both lived in as a couple after marriage.
Q. And did they live there - do you say they live there all the time?
A. Yes, they lived there all the time but Garry and Kalpana had businesses in Canberra, so they would visit Canberra too. So I know they - they must have been having properties in Canberra. I don't know how many or what, but they have - they visit Canberra for their business purposes.
Q. I suggest to you that you're just completely mistaken about the idea that they lived there all the time; what do you say about that?
A. I'm not mistaken; I'm sure they are because I know which was - which was my sister's home where she's living. I know my sister because I talk to her every day. She lived in Pyrmont Sydney.
[31]
Cross-examination of Kalpana's domicile witnesses discontinued
First thing on the next morning of the hearing I was advised that senior counsel for the defendants had informed senior counsel for Kalpana that the defendants did not wish to cross-examine the remaining domicile witnesses who had made affidavits in Kalpana's case.
I do not know why senior counsel for the defendants made that tactical forensic decision. It may be that senior counsel took the view that his cross-examination of the first three domicile witnesses had not yielded any concessions that were beneficial to the defendants' case. However, from my perspective, the cross-examination of the first three domicile witnesses called by Kalpana was extremely valuable, albeit entirely unhelpful to the defendants' case. The effect of the cross-examination of the three witnesses was to satisfy me that their evidence had provided a consistent and valuable insight into the apparent real subjective intention of the deceased.
It is unfortunate that the Court did not have the opportunity to hear oral evidence from Kalpana's remaining domicile witnesses. In the circumstances, I consider that the proper course is to accept the evidence that the witnesses who were not cross-examined have given, except to the extent, if any, that the evidence is inherently improbable or it is inconsistent with the objective evidence.
I will now turn to the evidence given by Kalpana's additional domicile witnesses. It will be necessary to set out the material parts of their affidavits.
[32]
Lin Zhang
Lin Zhang said that she had been a friend of the deceased for approximately 20 years. She was introduced to Kalpana by the deceased in 2013. She shared a close friendship with Kalpana and helped her operate her shop. Lin Zhang said that she witnessed the couple's relationship blossom into a genuine and loving marriage, and the deceased frequently said to Lin Zhang privately that Kalpana was the love of his life.
Lin Zhang gave the following evidence in her 10 July 2019 affidavit:
4. Before their move to Sydney, Garry said to me:
"Lynn, I've asked Paris to find a place in Sydney, somewhere she can call her home. It's not fair to Paris living in Mugga Way as there is no privacy."
5. After Garry and Paris were married in 2013, we went to dinner with our mutual friends. Garry said to me;
"Guess what, Paris, and I have decided to move to Sydney to live. We found an amazing place at Sydney wharf, right across from the Star Casino."
6. When they purchased their apartment in Pyrmont in mid-2013 Garry said to me:
"We'll have you over for dinner once Paris has finished decorating and we're moved in".
7. Paris did her best to create a warm and welcoming home for Garry and herself. Their home in Pyrmont was decorated very differently to their other properties. I believe they bought the Barton property fully furnished as it was a temporary move from Mugga Way.
8. Garry and Paris frequently spoke about retiring soon. I once asked Garry about his plans for his businesses when he retires, he said to me:
"Well, I was planning on running away to the Caribbean somewhere warm and look what happened when Paris walks into my life. It won't be long, and I'll be able to run my business from anywhere so we will stay in Sydney."
8. On many social occasions, and most recently at a dinner at the Ottoman, Garry's favourite restaurant in Canberra, Garry would tell me about their life in Sydney. He said to me;
"Paris has turned Pyrmont into something special. I feel really at home there."
He said words to the effect of;
"I love Sydney Lin, but due to current work commitments I have to keep coming back to Canberra."
Garry and I had known each other for a long time, and he would often confide in me his goals and plans for the future. He often told me his plan was to "retire in our Pyrmont home."
10. Based on what was said to me in the preceding paragraphs and what I observed, I always thought the Pyrmont property was their home. I was graciously invited to stay at Garry and Paris Pyrmont home whenever I was in Sydney for longer periods of time, approximately once or twice a year. We would have lovely dinners and sit on their balcony. I have very fond memories with the both of them in their Pyrmont home.
[33]
Peter John Adams
Peter John Adams said that he knew the deceased for 26 years and regarded him as his best friend. Mr Adams spoke to the deceased almost daily. As he lives in Sydney, often these conversations were by telephone, but Mr Adams and the deceased did see each other almost weekly. Mr Adams also travelled many times with Kalpana and the deceased.
Mr Adams said in his 22 July 2019 affidavit:
3. I believe the property located at Pyrmont was bought as a home by Garry to live in with Paris as husband & wife. Prior to purchasing in Pyrmont, Garry would often say to me over the phone, or in person when we met:
"Canberra is too bloody cold. Paris and I are moving to Sydney. My hips and knees are deteriorating and I'm looking forward to living a more comfortable life in Sydney."
He also said to me;
"Mate, I might drive you crazy as I am coming to live in Sydney. We might be coming down the Spit Bridge area which is really close to you."
He and Paris eventually bought in Pyrmont in 2013.
4. I often visited Garry and Paris in Sydney. During one visit I observed Garry and Paris together fitting out the Pyrmont property. While showing me through the place and their new purchases, they both referred to the property as "our home".
In one conversation I had with Garry in person, I asked him how he and Paris were getting on decorating the apartment, Garry said:
"Paris is doing it for us, she loves it and is very good at it. It is her job to do the decorating and I want her to do it."
5. In 2013, Garry commissioned a large abstract painting depicting Sydney Harbour as a masterpiece for their new home to be painted by my uncle Ian Duncan.
6. I spent a large amount of time with Garry and Paris in Sydney as they were only half an hour away from where I live. I would meet Garry almost weekly in restaurants such as Nick's Seafood opposite their Pyrmont home, Fortune of War, The Rocks and many more. It always appeared to me as though Garry and Paris had moved to Sydney on a permanent basis to establish their life here.
7. Through my frequent contact with Garry, I was aware he would spend time in Canberra for his businesses. He would mostly travel to Canberra on a Monday and returned to Sydney again a few days later. When he would return to Sydney, Garry would often call me and say,
"I am back mate, lunch tomorrow?"
…
9. Garry died unexpectedly. From my observations and discussions with him, he was happy with his wife. He died after a long holiday he was looking forward to and he called me regularly to inform me of his and Paris' adventures whilst overseas.
[34]
Vilayphone Dubois
Vilayphone Dubois said that she had known Kalpana for 10 years and the deceased for six years. She considered them both to be good friends and would catch up socially several times a week in both Sydney and Canberra. When she visited Kalpana and the deceased in Sydney, she would stay at the Pyrmont apartment.
In her 31 July 2019 affidavit, Ms Dubois said:
5. On 15 December 2015, I caught up with Garry and Paris at Nick's Seafood in Darling Harbour to have lunch. Garry was very happy, talking about his Pyrmont home as we could see it from across from the restaurant. Garry said:
"Phone, I'm so happy we chose Sydney to start our lives fresh. Paris wants to refurbish the apartment and change the tiles in the bathroom. What do you think? Otherwise we were thinking of maybe building something nice in Point Piper so we can have a newer and bigger home and Paris can design and style our new home, how she would like."
6. On 8 January 2016, we were heading out to dinner at the Riley Street Garage in Woolloomooloo. While Paris was getting ready, Garry and I sat on the balcony at their Pyrmont apartment. While we waited. Garry said:
"Isn't our home beautiful? It's got a warm and homely feel to it. Paris and I put a lot into decorating this place. I know you helped Paris and attended stores with her and I thank you for that."
7. Before heading out to the restaurant, Garry and I had another, more personal conversation in relation to his and Paris' properties as follows:
Garry said: "I upset Paris when I bought the Barton apartment and didn't put her name on title. We had many conversations about it, and Paris felt insecure."
I said: "You know Paris really adores you, Garry, and it's important for you to make Paris feel secure in this marriage. Paris was very hurt at the time."
Garry said: "I should have done things differently Phone, Paris is my princess, it is my job to look after her."
Ms Dubois also gave evidence of conversations with the deceased in which he told her on 12 May 2018, a day before his birthday, that he had made a will which left Kalpana "more than enough money to be financially comfortable for the rest of her life."
[35]
Kevin Xu
Kevin Xu was employed for a time to clean the Barton apartment. He cleaned for Kalpana from 2008 or 2009 until 2013 and then for Kalpana and the deceased from 2015.
Mr Xu gave the following evidence in his 18 July 2019 affidavit:
4. In May 2013, Garry and Paris were heading to Manila for a holiday, Garry told me they were looking at purchasing a house in Sydney and said; "once we find a place, we will be moving to Sydney. We will still have you clean as we will be coming back for work."
5. In August 2013, Garry said to me;
"Kevin, we bought an apartment in Sydney and we will be moving in soon. We would like you to work for us full-time in Sydney. I can put your family up in an apartment in China Town rent free. You could be our driver in Sydney and your wife could cook and clean for us. I will pay you both a good salary."
While this was a wonderful offer, I had a good job in Canberra and declined.
6. Paris and Garry would spend majority of their time in Sydney but would travel to Canberra for work. Paris would call me from Sydney and let me know when they would be back in Canberra, usually on a Monday and ask me to clean before their arrival.
7. One night we had dinner with Garry and Paris at the Golden Century in Sydney, Garry said to me;
"You have to come over and see our new home. It's right on the water, you can fish from the balcony."
Garry told me he was happy living in Sydney, and it felt like "home".
8. I travelled to Sydney a lot with my partner and I would catch up with Garry and Paris whenever we all could in Sydney.
9. While I was cleaning Garry and Paris' Barton property in 2017, Garry was visiting from Sydney and said to me;
"Once the development for Statesman Hotel is complete, we will leave Canberra permanently and I will fully retire in Sydney."
10. Garry and Paris treated me more like a friend than an employee and would share with me their plans and overseas adventures. Garry had told me he was looking at another larger apartment in the same complex. He was laughing and said to me;
"It's in the same complex, thank God. We won't be moving far this time."
…
[36]
Noel Sutton
Noel Sutton met Kalpana in about 2000 and in the years from 2000 to about 2012 he developed a social relationship with her.
In his 16 July 2019 affidavit, Mr Sutton gave evidence of receiving a text message from Kalpana on 9 June 2013, advising him that she had married the deceased and was moving to Sydney to a property they had purchased in Pyrmont. Mr Sutton subsequently had a conversation with Kalpana in which Kalpana said to him words to the effect: "I'm so happy, Garry and I are moving to Sydney, Garry will still work in Canberra and stay down there when he is working, I am furnishing the Pyrmont home." Mr Sutton annexed to his affidavit a copy of the text he received from Kalpana, which included: "I'm also moving to Sydney bought a new place at syd wharf pyrmont". Mr Sutton said that he only spoke to the deceased a few times over the years, mainly small talk.
[37]
Nathan Heaton
Nathan Heaton said that he had been a friend of Kalpana for approximately 10 years. He first met the deceased at a dinner party Kalpana hosted at her apartment in Barton. Mr Heaton said that he frequently socialised with both Kalpana and the deceased while they were dating and after they were married. Mr Heaton said that both Kalpana and the deceased told him on occasions that they were looking forward to moving to Pyrmont in Sydney.
Kalpana and Mr Heaton were acquainted because they had worked together at Medicare Australia from around 2009, where they were both directors of their respective teams. Although Mr Heaton gave some evidence concerning the deceased's intention to resettle in Sydney, his evidence was more relevant to the circumstances in which Kalpana gave up her employment in the ACT. Mr Heaton said in his 19 July 2019 affidavit:
4. In 2013 Paris and I discussed her move to Sydney and went through the possible options regarding her role at Medicare Australia. She had mentioned having to leave her role with DHS and was worried. I had mentioned the possibility of working remotely from Sydney. However, that was not possible.
5. Paris left her executive level position at Medicare Australia shortly after purchasing their Pyrmont home in 2013. Paris very much enjoyed her work and I believe this would have been a major decision for Paris as her role with Medicare Australia was very secure and in resigning, she lost a very lucrative pension.
This evidence tends to corroborate Kalpana's evidence that she gave up her secure employment in the ACT as part of the arrangement with the deceased that they would relocate to Sydney and make their married life there.
[38]
Edward John Walsh
Edward John Walsh is a solicitor of this Court who said that he knew the deceased for approximately 10 years from 2008 until his death in 2018. Mr Walsh never acted for the deceased as his solicitor and their friendship was purely social.
Mr Walsh gave the following evidence in his 1 August 2019 affidavit:
5. From 2013, after Garry and Paris married, I began to socialise more frequently with Garry as he was spending more and more time in Sydney. On one occasion in mid-2013 Garry said to me:
"Paris and I have moved here to Sydney, I've still got a lot of work in Canberra but we live here now".
I cannot recall the exact place Garry and I had this conversation. However, it was over lunch one afternoon. I do recall it was in Sydney. Except for only a few Christmas parties at Garry's hotel (either the Kambah Tavern or Statesman Hotel), both in the ACT, all my contact with Garry was in Sydney.
6. I would socialise with Garry and Paris frequently at many restaurants in Sydney. Garry was always hospitable and nearly always with Paris. On these occasions, Garry would say things to me like:
"I enjoy Sydney living in Sydney more than Canberra"; and
"This is our new start in Sydney"; and
"Our home is so relaxing at Pyrmont; I can get away from work there."
[39]
Trevor Francis Quilkey
Mr Quilkey said that he had known the deceased for approximately 35 years. He had a very close relationship with the deceased and enjoyed many social engagements with him. The deceased introduced Mr Quilkey to Kalpana in about 2012 or 2013.
Mr Quilkey gave the following evidence in his 1 August 2019 affidavit:
6. In early 2013, I went to dinner with Garry and Paris again at Beppi's restaurant Sydney. I recall Garry said to me:
"I want to buy a place in Sydney for Paris and I."
I lived in NSW at the time and asked him if was going to move permanently. Garry said to me:
"Yes, Paris and I discussed it and we are ready to move, we will start looking at property shortly."
7. After Garry and Paris married, they returned to Australia from an overseas trip and purchased their apartment in Pyrmont shortly after. Garry phoned me and said:
"Guess what, we found a place in Sydney right on the water, I am looking forward to moving away from Canberra with my wife."
8. Garry sounded to me very excited to begin his married life with Paris, and shortly after at a lunch at Nick's Seafood restaurant at King Street Wharf, Sydney, he told me that they would now be residing at Pyrmont. I was pleased to hear this as it meant I would see more of Garry and Paris living in Sydney. Garry was a proud man and regularly spoke very highly of his wife Paris and how wonderful their home was in Pyrmont.
9. Over the next few years I visited Garry's and Paris townhouse at Pyrmont on approximately five or six occasions. It was a lovely property. I observed they had wonderful furnishings, many family photos and other memorabilia. In particular, I noticed Garry's "natty wardrobe". Garry was a wonderful dresser and it was my observation his clothing and personal belongings were located in Pyrmont.
10. Garry loved socialising in both the ACT and NSW. He would often call me when he returned to Sydney and we would have lunch or dinner. Garry said to me in 2015 whilst out to lunch:
"I'm glad to be back home in Sydney, I socialise a lot in Canberra, but mainly with business associates, as you know, mate, that's where I do a lot of business. Sydney is where I can relax and socialise with my friends."
…
12. I enjoyed socialising with Garry and being in his company. Garry would say to me on many occasions in Sydney when we would catch up;
"It's good to see you. Mate, no work bullshit, just a good catch up when I'm home."
I was under no confusion that Garry treated his Pyrmont property with his wife Paris as their home.
Garry reiterated to me in Sydney on more than one occasion:
"Sydney is our home, we love Pyrmont and living on the water".
13. Garry has had businesses in Sydney and across NSW for at least 20 years and had never bought a property in NSW to live prior to meeting and marrying Paris. Garry would typically stay in boutique 5 Star hotels when in Sydney. Once he met Paris & bought Pyrmont, from my discussions with him and observations, he no longer ever stayed at hotels in Sydney again.
[40]
Millie Sepkembo Omonei
Millie Sepkembo Omonei said that she had known Kalpana and the deceased since 2012 and spent a lot of time with the couple over the years and considered them to be very close friends.
Ms Omonei gave the following evidence in her 1 August 2019 affidavit:
3. I attended a dinner with Garry and Paris on 19 April 2013 at Chairman Yip restaurant in Canberra. Garry said in front of our mutual friends at the dinner table, "Paris, you should have a look at some properties in Sydney, something easy to take care of, and preferably by the water."
4. I was with Paris when she began looking at homes in Sydney. Paris told me that she and Garry had further discussed the move from Canberra. She said Garry wanted to keep their business and home life separate. They also loved socialising in Sydney.
5. Garry led a very busy lifestyle in Canberra, and they wanted somewhere away from that, where they could relax. I brought this up with Garry during a dinner in Canberra. He said to me;
"We are married now, it'll be good to have our own home somewhere away from Canberra. Paris and I both love Sydney." And "My knees are playing up, so I prefer the warmer weather."
I told Garry how I was going to miss Paris when they moved to Sydney, Garry said:
"It's only a short flight to Sydney or you can always take Murray's bus, it gets you right into the CBD in three hours!".
6. After Garry and Paris' meeting with James Crow in June 2013, their real estate agent who sold them the Pyrmont apartment, Garry told me how he was eager to finalise his purchase in Sydney. He said to me, "I'm tired of Canberra and dealing with the drama there."
During a social gathering in late June 2013 with Garry and Paris, I discussed how lovely the Pyrmont apartment was with Paris and Garry. Garry said to me:
"If Paris likes it, we will buy it. Our very own home in Sydney". I asked him what he thought of it and Garry said, "I saw it briefly with Paris in May and it looked good. I don't care what it costs, I think we will enjoy it there Millie - looks good!"
7. Garry wanted Paris to feel at home in their Pyrmont property. He asked me my opinion on the property. I told him when Paris and I initially walked into view it, Paris said, "wow, I think I just found my new home!", Garry said to me, "well, as long as my bride feels at home, I'm happy with her decision".
8. The Pyrmont (sic) was their first purchase together as husband and wife and he asked Paris to decorate the apartment however she liked. On 23 August 2013, we had dinner at Beppis restaurant in Sydney. Garry said to Paris in front of me,
"Darling decorate the apartment however you like, don't buy anything from Freedom, we want the best of the best, this is our home after all".
I helped Paris move some of her belongings from her original apartment in Canberra to make it feel cosy and comfortable.
9. Garry, Paris, and I would catch up almost twice a week for dinners and events with our mutual friends Villayphone Dubois, Robert Leticq, Lin Zhang, Briand (sic) and Rabia Morris and Peter Princi. The social gatherings occurred in Canberra and Sydney.
10. When inviting guests over for private dinners or events in Sydney, Garry and Paris both referred to the property as their "home". Garry would call me and say words to the effect of "we're having a dinner party at home in a couple of weeks if you can make it, you're welcome to stay (sic) our place if you can make it up." I would always travel to Sydney and stay with Garry and Paris while catching up.
11. Garry and Paris maintained property in Canberra and would stay there while attending to business or attending social events with friends. Annexed hereto and marked "A" is photograph of us attending a dinner at our mutual friend's.
12. On 25 March 2016, my partner and I were having a drink in the Qantas Lounge with Garry and Paris. Annexed hereto and marked "B" is a photograph of the four of us at the airport. We were going on a joint holiday to New Zealand. We were mucking around and singing the Qantas advertisement, "I still call Australia Home." Garry said,
"It should have been, 'I still call Sydney home!'." Garry said later in the conversation. "Once my businesses can run by themselves, Paris, and I can sit on our balcony here in Sydney, right on the water and relax, no more travelling to Canberra for meetings and things."
13. On occasions Garry would attend to business in Canberra and Paris would stay in Sydney. He said to me:
"If I have to go back to Canberra for business and Paris wants to stay here (Sydney), you're always welcome to stay and spend some time with Paris at our home".
[41]
Andrea Umdenstock
Andrea Umdenstock said that she had known the deceased since May 2016 when they met in Las Vegas and quickly became great friends.
Ms Umdenstock gave the following evidence in her 15 July 2019 affidavit:
2. I found Garry to be honest and funny. He had just bought a perfume for Paris when we met and I told him he was a "sweet husband". He proceeded to show me photos of his wife, Paris, and we spoke about his life in Australia. I told him I had been to Australia when I was 21 to see my then boyfriend compete in a ski competition. I told him we drove from Canberra to Sydney for competitions. Garry said to me "Paris and I live in Sydney, right on the harbour there." He told me he used to live in Canberra but that he had bought Paris a beautiful condo on the harbour.
3. I met Paris in December 2016. Garry and Paris came over to the United States for a holiday and visited me in San Francisco. Garry introduced me to his wife Paris, he said to me prior "You and my wife Paris will get along really well I think". We went out to dinner in San Francisco at a place I had suggested. Paris and I quickly became friends.
4. In April 2017 I visited Garry and Paris in Australia and stayed with them at their home in Sydney. Garry said to me "Do you like our home? I told you it was right on the water. It was good for us to start fresh here". They took me out to all of their favourite restaurants on the harbour.
5. Garry would call me from time to time and tell me how proud he was of Paris when she opened up her business. "Lusso by Paris". Although he would say, "I know I should just retire in Sydney with Paris", he wanted her to open a boutique, so that she had something to do during trips to Canberra while he checked on his businesses.
6. I came back to Australia to attend the launch of "Lusso by Paris" in Canberra. Garry told me he didn't enjoy going to Canberra socially because of his ex-wives and that he had many bad memories there. After the event, Garry was excited to leave Canberra and return home to Sydney. He kept talking about the clam chowder and Alaskan Crab legs he loved to eat in Sydney. He said to me "right, let's get home (referring to Sydney). I'll take you to the best seafood place in Australia! It's right by our place."
7. During my multiple visits to Australia since meeting in 2016, I always stayed in Sydney at Garry and Paris' home in Pyrmont. The three of us would sit on the Patio at the Pyrmont listening to Jazz music. Garry would be telling us jokes and we would all watch the Boats come and go. He would say to me, "how relaxing is this" and "can it get any better?". He told me about a large boat in the harbour and how it would leave for private night tours and that he would just watch the ferry take people up and down the channel. He said to me "we (referring to him and Paris) are so lucky to call this place home."
8. [Rejected]. When he and Paris came to visit in December 2016, he told me the house he owned in Canberra was a "bit of a burden," and that his children "live there for free".
9. During Garry and Paris' most recent trip to the United States in 2018, I spoke to Garry about his health as he was in a wheelchair. He mentioned his upcoming surgery and told me, "I can't wait to feel better so that I can dance with Paris at Toby's wedding, we're having the entire bridal party at our place (referring to Sydney).
10. To the best of my knowledge, I had always believed that Garry and Paris lived in Sydney and travelled to Canberra for work or certain social events only.
[42]
Susan Chesum
Susan Chesum said that she had known Kalpana since 2016 and met the deceased in the same year. Ms Chesum said that she had become a very close friend of Kalpana and they had been on several holidays together.
Ms Chesum said in her 23 July 2019 affidavit:
3. Garry and Paris had a Versace apartment on the Gold Coast which they ended up selling. I attended a dinner there in November 2017 and then their 'goodbye party' for the apartment the same month. When I asked why they were selling, Garry said to me:
"We intend on spending as much time as possible in Sydney."
4. In August 2016, I caught up with Garry and Paris in Canberra, it was freezing cold. Garry and Paris had just come back from a holiday in Las Vegas and had lots of stories to tell. Garry was complaining about the cold. I asked them why they stay in Canberra when they have a lot of options to live somewhere warmer. Garry said to me:
"I have to make a buck somehow."
And went on to say:
"We are in Canberra for business, we're heading home to Sydney in a few days".
5. Garry had told me that Sydney is the place he and Paris felt "relaxed". They loved socialising at the many restaurants on the harbour. If I was overseas and unable to make these social events, I would always see their photos or hear about it when I would chat to Paris. In late 2016 I visited Garry and Paris at their home in Sydney. I commented on how beautiful it was and Garry said:
"Paris has done a great job. No place like home."
One of Garry and Paris' favourite things to do in the Pyrmont (sic) was to sit on the balcony looking out to the water and watch the "world go by."
6. In December 2016, after coming back from Bali, I caught up with Garry and Paris. We had a Christmas party with mutual friends in Canberra before they were heading for a cruise. We talked about Zac, Garry and Paris' puppy. Garry said:
"Zac is a Sydney boy, he comes from Penrith. He is the boss! He is more playful and happier in our Sydney home. He is our baby and loves hanging out in his balcony. He barks at all the boats, so they all know him now. We all enjoy our time at home in Sydney."
7. Garry and Paris travelled very frequently. On one occasion in November 2017, I was speaking to Garry about travel and where they might want to go next. I suggested Kenya as I had been there earlier. I told him once he gets there he might not want to return. Garry said to me:
"Of all the places I have travelled to, I would still live in Sydney".
8. I was aware that Garry and Paris spent time in Canberra, however, I knew Sydney was their home.
[43]
Anousak (Noy) Phachanthavong
Anousak Phachanthavong is the owner of Thai Chang Rai Restaurant in Kingston ACT. Mr Phachanthavong said that he had known the deceased for about 15 years as he regularly dined at the restaurant. He got to know Kalpana from the time she began dating the deceased in 2012. He has catered for many of Kalpana's and the deceased's private rooftop parties and events for their friends.
Mr Phachanthavong said in his 23 July 2019 affidavit:
8. Garry and I would always chat every time he came in, Garry would say to me:
"Noy we are going back home to Sydney tomorrow morning for a few days, so it's going to be an early night."
And:
"I'm looking forward to just chilling out with my wife and our puppy Zac. Have you seen a photo of Zac? I am over Canberra Noy, if it wasn't for my business in Canberra, I would say 'goodbye' to Canberra."
9. I've always believed Garry and Paris's home was in Sydney. [Rejected].
10. Garry said to me during one of his dinner at my restaurant:
"Noy we are off to Las Vegas soon."
I asked Garry when they were leaving, he said:
"We are going home (referring to Sydney) for a few days before we take off on our overseas trip. Paris and I love spending a day or two just to make sure we are totally relaxed before we go away. We also want to make sure Zac is settled at home when we go away for long periods."
11. Garry showed me pictures of his home in Sydney. He would tell me how he was very keen to retire there in Sydney. Garry suggested I open another restaurant in Pyrmont where they lived, so they could dine there without having to come back to Canberra once they retire. Garry said to me:
"I can buy the building in Sydney, Noy, and you can rent it and run the restaurant."
12. Garry and Paris were very proud of their home in Sydney and always spoke about the lovely view and how it was very close to the city.
13. To the best of my knowledge, from what Garry said to me, Paris and Garry wanted to continue living in Sydney and were thinking of selling their existing home to buy our "bigger" and "nicer" place in Sydney.
The second sentence in par 9 and par 13 were only admitted as evidence of the deponent's state of mind.
[44]
Melissa Rixon
Melissa Jane Rixon said that she had known Kalpana since 2016, as she was a customer of Kalpana's shop called "Lusso by Paris".
Ms Rixon said in her 2 August 2019 affidavit:
6. On one occasion in 2016 I was chatting with Paris at Lusso. I asked her what her movements were for the week and she replied:
"I'm heading back home and will only be at work until midday today, my husband will be picking me up soon to drive us back. We want to miss the peak hour traffic in Sydney, so we can be home in time to head out to dinner."
From this conversation, I understood Paris lived in Sydney with her husband.
7. On another occasion in 2017 at Lusso, during the course of our conversation, Paris said to me:
"My husband and I have a beautiful home in Sydney, we love it there. We only come to Canberra for our businesses. I love high end fashion. However, Lusso is something my husband wanted me to do while he attended to his own business when we are in Canberra."
8. Paris had mentioned to me that she and her husband had property in Canberra to stay in while they visited, however, always look forward to returning to Sydney. From what was said to me, I believed Sydney to be her home and principal place of residence together with her husband.
The last sentences of pars 6 and 8 were only admitted as evidence of the deponent's state of mind.
[45]
Tobias Findlay
Kalpana's son, Toby, affirmed an affidavit dated 24 July 2019 in which he gave evidence in support of Kalpana's claim that the deceased was domiciled in NSW at the date of his death. Toby gave evidence in par 7 of a conversation at a restaurant after Kalpana and the deceased had returned to Australia after their marriage in May 2013 in which the deceased said to Toby:
Toby, I think your mum found her dream home in Sydney, we are both looking forward to moving there. It's in Darling Harbour.
Toby also gave evidence of a conversation at a restaurant that he described as being recent in which the deceased said to him:
Toby, I love living in Sydney, if it wasn't for my bloody business in Canberra, I would never have to go back there.
Finally, Toby said in par 13:
In 2017 my mother and Garry were talking about retiring in Sydney. Garry said, words to the effect:
Your mother and I are looking at buying a bigger place to live. We love living in Sydney and we both feel so relaxed when we come here.
It is notable that Toby gave his evidence in terms of Kalpana and the deceased wanting to retire in Sydney, and that the deceased only spent a lot of his time in the ACT because of the need to attend to his business interests there.
[46]
Witnesses called by the defendants on the domicile issue
I will turn now to a consideration of the evidence given by the witnesses for the defendants on the issue of the deceased's domicile.
[47]
John Grenville Buxton
John Grenville Buxton said that he had known the deceased for over 50 years. He gave evidence of working for the deceased at the Kambah Inn restaurant and driving a leased cab in 2002, when he had a heart attack, following which he stopped working. After that time, Mr Buxton helped out the deceased, largely with office work.
Mr Buxton referred to going to the Realm, being the Barton penthouse, with cheques for the deceased to sign after he had returned from a long trip overseas. Mr Buxton said that the deceased was overseas for about 1 to 2 months in total every year for the last few years. Mr Buxton estimated that he saw the deceased 3 to 4 days a week in Canberra for the last five years, except when he was travelling overseas. As well as having dinner with the deceased, Mr Buxton said that he caught up with the deceased at the weekend for a pub lunch or a few beers on Saturday afternoon. Until his health deteriorated, according to Mr Buxton the deceased used to meet his friends at the Kambah Inn nearly every afternoon from 4 PM to 6 PM. Mr Buxton had lunch with the deceased and his other friends almost every Friday and often at other times during the week.
[48]
Diana Joy Buxton
Diana Joy Buxton is the wife of John Grenville Buxton. She gave evidence that she cleaned the Mugga Way property once a week on Thursday. She said that the deceased and Kalpana only lived at Mugga Way for the first year of their marriage, and then they moved to live in the penthouse at the Realm in Barton. She said that the deceased often spent a day or so every one or two weeks at Mugga Way. The deceased often slept on the couch downstairs.
[49]
Stephen Bray
Stephen Bray was the accountant for the deceased personally and for all of his companies for the last 26 years. He always met with the deceased for conferences at the deceased's business offices in Newcastle Street, Fyshwick, ACT or over lunch in Canberra. The deceased kept all his business records and share registers at his Fyshwick office. Mr Bray said that the deceased and he met for lunch, sometimes with other associates of the deceased, two or three times a week at various locations in the Canberra region.
[50]
Jaimie Peter O'Donnell
Jaimie is the deceased's oldest child. Jaimie said that during most weeks during the past several years he had seen the deceased at least 2 to 3 times a week, particularly in the mornings. This was apparently in Jaimie's capacity as the manager of the Statesman Hotel before Jaimie took leave due to ill health. Jaimie said that he was aware of the deceased's trips overseas and knew from conversations that the deceased often flew in and out of Sydney for business. Quite often, the deceased would be back by late afternoon.
[51]
Mark Patrick Duggan
Mark Patrick Duggan is a businessman who invests in hotels. He met the deceased in 1994, and the pair became good friends and began to do business together in the hotel industry.
Mr Duggan said that he only met Kalpana a few times and visited the Pyrmont apartment on one occasion before they all went out to dinner. Mr Duggan said that he used to meet the deceased about once every 4 to 6 weeks when the deceased came to Sydney.
Mr Duggan said that in the last two or three years when the deceased was not overseas he met with the deceased about 8 to 10 times a year when he was in or passing through Sydney. Usually after lunch, the deceased would say that he had to leave to catch a bus or plane back to Canberra. He added at par 11(c) of his 25 September 2019 affidavit: "On only a couple of times I recall Garry saying: "I am in Pyrmont. Do you want to come out to have a couple of beers?".
Mr Duggan gave evidence about the deceased's involvement with the Pyrmont apartment in pars 13 to 19 of his affidavit. Mr Duggan said that, over lunch in about 2013 or 2014, the deceased said to him: "I am looking for a place to buy to use instead of hotels when I am doing business up here. If I do more business in Sydney, if we expand Amazonia it will be convenient." Some weeks later the deceased said to Mr Duggan: "I've done the deal. It gives me a place to stay if I'm up here as I can do more business in Sydney. If we expand Amazonia, it would be convenient.".
Mr Duggan gave evidence of having a small circle of Sydney friends with the deceased who regularly had lunches. Mr Duggan said that when he spoke to the deceased on the phone, the deceased usually said that he was in Canberra, and that he rarely said: "I'm in Pyrmont". He said that often the deceased would say when they met before lunch: "I've just driven up," or "I've just flown in." Mr Duggan said that at no time could he recollect the deceased's stating that he was staying or living in Pyrmont, save for him saying, on one occasion: "I'm staying up tonight."
Mr Duggan said that the deceased said he bought the penthouse in Barton so "would we've somewhere to live". He said that he had kept his home in Mugga Way, "So I can escape back there if she gets too difficult," or words to that effect.
[52]
William Sui
William Sui said that he owns the restaurant known as Bambusa Asian Cuisine in the ACT. The deceased was a regular patron at the restaurant, coming at least 30 times or more a year with his friends. The deceased visited the restaurant mostly for lunch at a minimum of once a week or once a fortnight, but sometimes he came twice a week. On about two occasions a year, the deceased was absent from the restaurant for two or three weeks. Mr Sui said that he met Kalpana who came with the deceased to the restaurant perhaps a few times a year over the past four or so years.
[53]
Leo Jack Stanley Channon
Leo Jack Stanley Channon was a son-in-law of the deceased. He is married to the deceased's daughter Vanessa. From late 2011 until June 2015, Mr Channon and Vanessa lived in an apartment controlled by the deceased in Kent Street, Sydney. During that time, the deceased invited the couple to have a weeknight dinner with him about once every 4 to 6 weeks. Mr Channon recalled Vanessa saying to him: "Dad's in town again, he's just telephoned so we're going out to dinner tonight." Usually, Laura and her then husband, Lee, would join the party for dinner and, from 2013, Kalpana would sometimes join as well.
Mr Channon gave evidence in par 6 of his 27 September 2019 affidavit of statements made by the deceased at dinner as to why he was in Sydney, in the following terms:
a. On several occasions at dinner Garry said he was flying out of, or had flown back into Sydney International Airport on one of his frequent business or holiday trips as he was not able to fly internationally out of Canberra.
b. On other occasions at dinner he said words to the effect: "I'm in Sydney for business". Garry spoke about a number of his Sydney-based business associates including Mark Duggan, John from ING (whose surname I cannot recall but whom I knew was based in Sydney and arranged a lot of the finance for Garry's business dealings), Mischa (whom I knew to be his jeweller, but I am not aware of his surname) and Peter Adams.
c. On one occasion I recall Garry saying he was in Sydney because he was: "working on potential pub opportunities in western Sydney". He used to say it was "a bit wild out there" because patrons had to "pass through metal detectors to gain entry to the premises".
d. Sometime after this dinner during another dinner Garry said: "I'm here to look at pub opportunities in King's Cross". Soon afterwards, I became aware that he had purchased an interest in the Empire Hotel in King's Cross together with Mark Duggan.
Mr Channon gave evidence that he would ask the deceased: "When do you go back to Canberra?" And the deceased would respond: "I'm heading home tomorrow." Mr Channon said that at no time did the deceased refer to Sydney as his home in any conversations that he had with the deceased, nor did he ever express to Mr Channon an intention or desire to move to Sydney.
Mr Channon gave evidence of visiting Canberra with Vanessa on four occasions after 2011. He said that he observed the deceased visiting his mother, who lived near the Mugga Way property, quite regularly, saying words to the effect: "I'll see you again soon, Mum, most likely next week." Mr Channon observed the deceased to spend a lot of time going to his office at Fyshwick and working and socialising at his Canberra hotel businesses. He said that the deceased was proud of the wine cellar and private dining room that he had built at the Mugga Way property.
[54]
Abraham van Arkel
Abraham van Arkel said that he had known the deceased for 25 years. He met the deceased socially and became good friends and confidants with the deceased in business.
Mr van Arkel said in his 29 September 2019 affidavit:
3. At least 2 or 3 times a week, unless Garry was overseas or away on business, he, I and mutual friends would meet for lunch ...
Mr van Arkel identified a number of the friends and the restaurants in which lunches took place, all of which were in Canberra. Kalpana was not present at the lunches. Mr van Arkel met Kalpana once or twice at birthday parties.
Mr van Arkel said:
6. My conversations with Garry included knowing when our lunches were not on for a week or two. Garry would say to me or others in the group: "I won't see you for a while. We are off to…" and he would mention places such as Las Vegas, Milan and Hong Kong, or cruises he was taking. I was aware that in the last few years, Garry often travelled overseas.
[55]
Lee Peter Burney
Lee Peter Burney was the partner of the deceased's daughter, Laura, between 2013 and March 2018. Mr Burney said that Laura and the deceased had a close relationship. In 2012, the deceased offered to buy an apartment in Sydney for them to live in while they saved money for a house. The deceased said that he wanted to buy an investment property in Sydney. Mr Burney said that he and Laura would see the deceased about once a month or so when he came to Sydney. Mr Burney met Kalpana at a restaurant in 2013.
Mr Burney gave the following evidence in his 1 October 2019 affidavit on the subject of the Pyrmont apartment:
7. In that same year, Garry had bought the Empire Hotel in King's Cross. He said to me on one of his visits:
"I will be in Sydney a lot more for business and am thinking about buying a property to stay in while I'm in town. It is better than staying in hotels, which just wastes money. It's a good time to buy right now."
8. Garry later bought 8/56a. Pirrama Road, Pyrmont at Sydney Wharf ("the Pyrmont property").
9. After the property was furnished, Garry said to both Laura and I: "can you water the plants?" We agreed. We had a fob and key and I visited the empty apartment once or twice a week to do this. Usually, Laura was with me and at other time I did the watering.
10. I recall visiting Garry and Kalpana at the Pyrmont property on … occasions.
[56]
Peter Michael Conway
Peter Michael Conway said that he had known the deceased since 1982 or 1983. Mr Conway described himself as a company director and registered lobbyist. He worked on various projects with the deceased concerning the master plans relevant to the redevelopment of Curtin and Kambah.
For the past four years Mr Conway had visited the deceased's Fyshwick office at least once a week and sometimes more often, except when the deceased was travelling overseas. Mr Conway estimated that he met with the deceased between 30 and 40 times a year at the Fyshwick office, and then they would adjourn to their regular restaurants for lunch. When the deceased left the lunches he would often say "I'm off to see Mark", or "I've got to talk to ING about financing," or "I've got to keep ING in the loop."
Mr Conway could recall dropping the deceased off at the Mugga Way property and the Realm in Barton. During his last year the deceased started to ring and invite Mr Conway to join the deceased's daughter for lunch on Saturday. Mr Conway gave evidence of statements made by the deceased at lunch to the effect that Kalpana wanted her family to be close to the penthouse in the Realm, so she moved her son into the deceased's unit next door: "But he's not paying rent, so I'm going to throw him out."
In relation to the Pyrmont apartment, Mr Conway said in par 11 of his 1 October 2019 affidavit that the deceased told him about the apartment shortly after he bought it but the deceased did not mention it very much after that.
[57]
Ashley Grace O'Donnell
The deceased's daughter, Ashley, gave evidence in her 1 October 2019 affidavit relevant to the issue of the domicile of the deceased at the date of his death. From November 2011, Ashley lived in a self-contained apartment with her partner behind the Mugga Way property.
Ashley gave the following evidence on the subject of the deceased's domicile:
11. I am swearing this affidavit primarily in relation to the question of domicile and/or cross-vesting which I am informed and verily believe is before this Honourable Court on 16 October 2019. I have limited the rest of this affidavit to matters which I am informed and verily believe are relevant to these issues only.
12. Kalpana O'Donnell swore an affidavit on 23 July 2019, filed 2 August. 2019 and filed 20 supporting affidavits which state that Garry thought the property located at Unit 8 56A Pirrama Road, ('Pyrmont') was his 'home'.
13. At no time in any conversation with me, has Dad ever referred to Pyrmont as 'home'.
14. In paragraph 18 of her affidavit. Kalpana states that she and my father moved from Mugga Way in December 2014 because she had no privacy and a snake had bitten my father's dog.
15. It is not the case that Kalpana and Dad's privacy was affected as at no time did I enter the large family home, except to feed the dog in the laundry and when invited for drinks and dinner together.
16. In conversation when we went out or socialising, Kalpana referred to the Mugga Way property as "the mausoleum". She once commented to me, "I don't like all the family photos around the place. It's like a mausoleum."
17. Kalpana and Dad did move to the 27/11 Sydney Avenue, Barton (the penthouse") in December 2014.
a. Dad was hospitalised a few months later in February 2015.
b. That month Dad had returned to Mugga Way. [Rejected].
c. Dad was also unwell and spent most of his time lying on the couch.
d. Dad then returned to the penthouse.
e. A few days later, Kalpana sent a text to me saying: "come and get him." She then accompanied me as I drove Dad to hospital. He was bleeding out and Dad often said to me after this incident: "you saved my life."
f. To be exhibited at AO2 are medical records relating to this medical emergency.
18. Dad loved his home at 30 Mugga Way, Red Hill, ('Mugga Way') and always referred to it as 'home'.
a. From December 2014, he and Kalpana lived at 27/11 Sydney Avenue, Barton ('the penthouse) unless they were travelling - [rejected]. On those times, Dad would then come back to Mugga Way and say to me after saying some derogatory things about his wife, words to the effect: "I just want some peace and quiet."
b. I also know of these return to home visits because I would cook for Dad every night when he was at Mugga Way or we would go out to dinner.
c. This would happen for about 4 days at a time, every couple of months for the past three years.
d. Sometimes this occurred a few months in a row and at other times there would be a gap - especially when he and Kalpana travelled overseas.
e. At other times, Kalpana would go on her own to Sydney or Perth. Her parents and sister live in Perth. During those times, I would meet with my father at the penthouse. I estimate this occurred 4 times a year until he was so ill that I was with him every day.
19. Although Dad really felt that Mugga Way was his home. He had difficulty climbing the stairs and when he decided on the Barton Penthouse after they had looked at others, he felt it was suitable as it was on a single level apart from the pool. Dad had had a double knee replacement in 2017. As this was to be their home Dad said to me: "I can get a lift in for the pool." In papers we have had to go through, since our Father's passing I observed a quote for putting in this lift.
20. [Rejected]. Dad always told me where he was and where he was going when travelling, so this pattern was regular.
21. [Rejected].
[58]
Laura Elspeth O'Donnell
Laura gave the following evidence on the issue of the domicile of the deceased at the date of his death in an affidavit apparently sworn on 1 October 2019:
5. The plaintiff claims that Pyrmont property was my father's 'home' during his marriage. She deposes in her affidavit of 23 July 2019 that he "lived there half the time."
6. I have never heard my father referred to the Pyrmont property as 'home'.
7. About once every two months, and more often if he was about to go overseas, Dad would take me out to dinner. These invitations usually on the telephone were usually at very short notice. During the conversations Dad would say:
"I have been in Sydney for a few days for business but are you around for dinner tonight? I am heading home tomorrow to Canberra. Make a reservation for us all or wherever you like, sweetie." I would book dinner for Dad, the Plaintiff - Kalpana (also called 'Paris'), myself and anyone else Dad had invited along.
8. [Rejected].
9. [Rejected].
10. Distillery Drive was very close to the Pyrmont property Dad had bought in 2014. During the time that my then husband, Lee and I lived in Distillery Drive, he and I would have to water the plants at the Pyrmont property 1 to 2 times a week. Dad asked me to do this, saying: "I don't want the plants to die. I am not there often enough to keep them watered."
11. We continued doing this for two years until the plants wilted when we were away. [Rejected].
12. Dad telephoned me more after my marriage broke down in 2016. He was very concerned for me. He would call me frequently and during those calls, he would comment about what he was doing such as:
a. "I'm about to catch Ashley for dinner." Ashley lived in Canberra.
b. "I was at The Statesman for dinner." The Statesman is in Canberra.
c. "Lady and Milo have had a couple of T-bones this week." Lady and Milo are Dad's dogs that lived with Ashley at 30 Mugga Way Red Hill, Canberra.
[59]
Vanessa Alicia-Wyn Channon
Vanessa gave evidence in an affidavit affirmed on 2 October 2019 on the subject of the domicile of the deceased at the date of his death. She said that in November 2018 when the deceased's doctors advised that the deceased had reached the palliative stage: "Kalpana vigorously agitated to take Dad "home" to Barton for his final days despite clear medical evidence that he was not a good candidate for end-of-life care at home".
Vanessa annexed to her affidavit a number of documents that were produced in the context of the deceased's hospitalisation and death. Those documents, including documents produced by Kalpana, noted the Mugga Way property as the deceased's residential address and the Barton penthouse as Kalpana's address. Earlier documents produced in the context of the deceased's medical care were to similar effect.
Vanessa gave evidence in her 2 October 2019 affidavit on the subject of "the investment property at Pyrmont, New South Wales" in the following terms:
16. In 2011, after my husband and I returned from living overseas, Dad purchased the property for us to reside in in Sydney. The property was purchased in the name of one of Dad's Trust Companies. He said he wanted to give us a: "head start on saving for a house deposit" and that he "enjoyed spending time with you when I'm up here for business." This property and the one he purchased for my sister Laura to reside in are those he referred to in his Statutory Declaration signed at the time of signing his Will.
17. At the time, I protested that Dad was: "being too generous", but he brushed this aside and said: "it is a solid investment. It makes me happy to be able to look after my family".
18. My husband and I lived in Sydney from December 2011 until June 2015.
19. During the time we lived in Sydney, I would have dinner with Dad when he visited Sydney. [Rejected]. I recall that we would catch up about once per month to once in every six weeks or so. My husband Leo, my sister Laura and her then husband Lee would often join us for dinner. After about mid-2013, Kalpana would sometimes join us.
20. Dad and I regularly discussed the Sydney property market as my husband and I were actively looking at buying our own house there. Dad was a shrewd property investor and had an eye for opportunity. From 2011, he advised that the property prices would only increase as they had not yet recovered from the global financial crisis. I trusted his judgment. By 2013, Dad said to me: "the Sydney market is going to run hot" which I took to mean it was going to be a good time to buy in Sydney.
21. Prior to Dad purchasing the Pyrmont apartment, Dad stayed at 403/2 York Street, Sydney, when visiting Sydney which is an apartment that he bought with Peter Adams.
22. In October 2013, Dad invited my husband and I to see the Pyrmont apartment he had bought and to have lunch with him and Kalpana…
23. Before going out for lunch, dad showed off the apartment and its harbour views. He appeared to be very proud of the deal he had struck for his apartment. [Rejected]. He said: "It will achieve solid growth as it can never be built out" and "it's a sure thing".
24. Dad did not refer to the Pyrmont property as 'home' or 'his home' at any time during this lunch, or in any conversation I had with him after the purchase of the Pyrmont property. He at no time said to me that he was moving away from Canberra to reside in Sydney. Dad did say to me: "The apartment is walking distance to you and Laura. I'm looking forward to spending more time with you and my new granddaughter when I am in Sydney for work".
25. [Rejected].
26. [Rejected].
27. Throughout my life, I have known Dad to consistently purchase real estate as an investment. Over the years I am aware he held various properties, such as in Bateman's Bay, Sydney and on the island of Capri in the Gold Coast. He would often do these up and sell these assets to make a profit.
28. When Dad was in or about to come to Sydney and caught up with me, I would invariably ask: "Hi there. What are you doing up here?" Dad would respond:
(a) "I'm having a meeting in Burwood," or "I'm looking at a pub in Burwood,"
(b) "I'm meeting with the bank."
(c) "I'm meeting Mischa,"
(d) "Mark and I are looking at an opportunity in Kings Cross."
29. I disagree with Kalpana's assertion in her affidavit that Dad said he "wanted to purchase a larger property in Sydney and retire there". Dad often joked about retiring, but in the same breath would say: "I'd be bored to death without my work".
30. At no time did Dad advise me that he was moving to Sydney. At no time did Dad call Pyrmont 'home'. At no time did he say when telling others where he was going: 'I'm going home to Pyrmont.'
31. If I ever heard Dad referring to a property as 'home' it was always the Mugga Way property. It was an emotional purchase for him. I know this because he often told the story that after "growing up, peeling potatoes at the back of a hotel in Goulburn, I promised myself: 'when I grow up I'll buy the best house in the best street in Canberra." When he bought the Mugga Way property Dad felt that he had 'made it.' He used to say when speaking fondly of this house: "When I got the keys, I knew I had made it".
32. After my husband and I moved to Brisbane in June 2015, I spoke with Dad every two weeks to three weeks on the phone or texted with him.
33. If at the time of these telephone calls Dad was travelling, he would often refer to Canberra as his home. For example, he would say:
(a) "I'm looking forward to catching up with my mates for a beer at the Statey [The Statesman Hotel] when I get home".
(b). This was one of Dad's favourite places to spend time and not just because his Trust company had an interest in it. His son, Jaimie worked in the Statesman Hotel for many years.
34. [Rejected]. To date, the walls of the Mugga Way property remain adorned with photographs of Dad's children and grandchildren. Unfortunately, due to the debt of Dad's various companies, we took advice and have had to place the Mugga Way property on the market for sale. It is held in Trust as a result of 1992 Court Orders when finalising his divorce from Fiona O'Donnell.
[60]
Cheryl Ann Brewer
Cheryl Ann Brewer said that she knew the deceased since about 1990. She worked in various capacities at the Statesman Hotel between 1990 and 1992 and from March 2010. She was the full-time manager for about 18 months but from September 2011 to the date of her 3 October 2019 she was a part-time accounts and payroll clerk.
Ms Brewer said in relation to the issue of the deceased's domicile at the date of his death:
8. I saw Garry nearly every week when he came in to sign his cheques. He was pedantic about signing his cheques.
9. My workflow was set up to ensure I had the papers and cheques read (sic) for Garry to sign and view.
10. Initially Garry would come in on a Friday and then when my days changed after I returned to part-time work in 2011, he would come in on Tuesdays. If unable to make it in, Garry would telephone me and say:
a. "I am on my way to… (wherever he was going). I can't get in to sign the cheques. What's there?"
b. I would then tell Garry what was needed to be signed and Garry would say: "Then okay, just sign them. I'll see you next week."
c. Garry usually told me when he was going overseas. He would say: "oh love, I'm going overseas. I'll be back in a couple of weeks."
d. If he was going away for a length of time, for example, to Milan where I knew from conversations he went several times, he would tell me and give me the date saying words to the effect: "I am coming home on…" or "I'm going to Italy and will be back on…" and he would give a date.
11. Garry was a man of habit and routine. I expected him and saw him nearly every Tuesday. If he was not there I would ring Garry and ask "are you coming in?"
12. Except for a few weeks about twice or three times a year, Garry came in regularly and was never away for more than a few days at a time.
13. Otherwise, if not telling me in person he left, he would telephone me and say:
"I'm on my way to (an overseas destination or wherever he was going). I recall him naming Hong Kong, 'Vegas, Hawaii one year, and Italy.
14. There were periods of a few weeks at a time when Garry did not come into the hotel.
a. In the last few years these occurred at least twice a year.
b. I do know he went to Italy to buy stock for his wife. I know this because Garry said to me: "I'm going to Italy to buy shoes."
c. I also recall him saying on one occasion: "I'm going up to Sydney to buy a pub."
d. I then knew I had to manage things at The Statesman in his absence.
15. I am aware that John Buxton was the person who looked after the other businesses and cheque books which he had Garry sign. He prepared the cheques for the companies Fashionable Leasing and Evenlong. I did the checks for Belboa and Bresheld companies.
16. Towards the end, Garry was very sick and would sometimes come for a short time and ask me to sign the "rest of them" (being the cheques).
17. At no time did Garry ever tell me that he was moving to live in Sydney and he rarely spoke about Pyrmont.
18. [Rejected].
[61]
James Llewellyn Crow
James Llewellyn Crow is a real estate agent who sold the Pyrmont apartment to Evenlong Pty Ltd ATF Newcastle Unit Trust. The deceased negotiated the purchase.
Mr Crow gave the following evidence in his 30 September 2019 affidavit:
7. Last year in late 2018, I had spoken to another owner in the building and been advised of Garry's passing.
a. Soon after Garry died, I sent a text offering my condolences to Paris.
b. I followed up with a few short text messages in case the Pyrmont property was being sold.
c. A little later in about March 2019, I received some urgent text stating words to the effect: "James, I really need your help. Can you write a letter and say that when you were negotiating the price in Pyrmont, Garry said he was buying it for me."
I ignored the text as this was not the case.
d. About 2 weeks later I received about two more texts asking in words to the effect: "It was bought for me, wasn't it? Are you able to provide me with a letter on letterhead stating the property is worth 6 1/2 million dollars?" I ignored these texts as this was not true.
[62]
Further objective evidence relevant to the deceased's domicile
Although a comparison of the days the deceased spent in Sydney compared to Canberra in percentage terms is material to the determination of his domicile, it is not determinative. At the time the deceased arranged for the acquisition of the Pyrmont apartment, substantially all his business interests were in the ACT, although he had some business interests in other places, including Sydney, and over the years he visited Sydney from time to time to pursue business in this State. Given the reality of his business interests, it was possible that, in the period after the Pyrmont apartment was acquired, the deceased could have decided to make Sydney his chief residence in circumstances where he was nonetheless required to spend most of his time in Canberra to manage his businesses.
The defendants tendered the results of an analysis that they had carried out of the deceased's mobile phone records that had enabled them to determine the relative percentages of the time that the deceased was apparently in Canberra, Sydney or elsewhere. The analysis showed that the deceased spent a much smaller proportion of his time in Sydney when compared to Canberra. As the analysis put in evidence by the defendants was only given in relative percentage terms, I decided that it was appropriate to analyse the evidence of the deceased's location from day to day more thoroughly.
The defendants tendered the deceased's mobile phone records for the period from about 7 January 2014 to the date of the deceased's death. Vanessa gave evidence in pars 3 and 4 of her 21 July 2021 affidavit that the deceased's mobile phone number was always the one number. The telephone records show that the deceased frequently made mobile telephone calls during each day. The approximate location of the deceased when he made the calls is shown by the description of the site of the mobile telephone receiving tower stated in the telephone records. As the locations were mostly well-known Australian place names, it was a relatively easy - although time-consuming - exercise to make a judgment as to what the deceased's location was in most days. I carried out this exercise on a line-by-line basis for the whole of the period by marking the deceased's apparent location on a calendar that I arranged to be printed out for each year. The telephone records only allowed an identification of when the defendant apparently made a mobile phone call from a location in the Sydney metropolitan area, which did not prove that the deceased stayed on that day at the Pyrmont apartment. It was sometimes possible to tell whether the deceased had travelled from Canberra to Sydney on a particular day or in the reverse direction on another day. Some days it appeared that the deceased had travelled to Sydney to take a flight from Sydney airport.
[63]
2015 First 7.2 64.5 18.3
Second 6.9 66.9 16.2
Third 14.7 74.3 3.0
Fourth 11.7 59.5 21.3
Total 40.5 265.2 58.8 364.5
[64]
2016 First 18.1 62.3 10.6
Second 8.3 59.3 22.5
Third 7.8 55.3 28.6
Fourth 16.0 67.7 8.0
Total 50.2 244.6 69.7 364.5
[65]
2017 First 8.5 53.2 25.3
Second 8.0 63.7 17.3
Third 9.3 64.5 18.2
Fourth 11.8 63.8 16.5
Total 37.6 245.2 77.3 360.1
[66]
2018 First 9.5 56.5 24.0
Second 14.5 70.8 4.7
Third 11.7 52.8 26.2
Fourth 0 9.0 10.0
Total 35.7 189.1 64.9 289.7
[67]
Grand total 211.0 1185.5 335.8 1732.3
Percentage 12.2% 68.4% 19.4%
[68]
The analysis that I carried out was unsurprisingly consistent with the percentage exercise undertaken by the defendants. The primary conclusion that is supported by this analysis is that the deceased's presence in Sydney over the period was not really consistent with the deceased treating the Pyrmont apartment as his chief residence, and only residing in Canberra as a result of the necessity to manage his principal businesses in that jurisdiction.
A summary of the conclusions that I have drawn as a result of the exercise is as follows:
There was no particular pattern in relation to the deceased's presence in Sydney. That was so over the whole of the period.
The evidence of the deceased's presence in Sydney was not consistent with the deceased spending his weekends in Sydney and living in Canberra during the weekdays for business purposes.
The evidence was not consistent with the deceased spending holiday periods in Sydney and living in Canberra at other times.
The deceased rarely spent many consecutive days in Sydney. I have not determined the number precisely, but it appears that the highest number of consecutive days was 5 days (starting on 16 April 2018), although on a relatively small number of occasions the deceased spent 4 or 3 consecutive days in Sydney.
On most occasions when the deceased had returned to Australia after a relatively lengthy overseas trip, he appears to have returned relatively immediately to Canberra, and not stayed for a significant period in Sydney. While that may be consistent with the deceased's business needs being pressing at the end of a period overseas, it would be natural for the deceased to spend at least a little time at his home after returning from a lengthy trip in order to acclimatise.
Kalpana's mobile phone records were only in evidence for the period 6 December 2017 to 7 May 2019. An analysis of Kalpana's phone records for the portion of that period in which the deceased was alive generates a very similar result to that which I have described above for the analysis of the deceased's phone records.
A number of additional aspects of the objective evidence are of significance to the determination of what was the deceased's own view as to his chief residence after the date of the acquisition of the Pyrmont apartment.
[69]
Conclusion as to the deceased's domicile at the date of his death
I have found the task of determining the deceased's domicile at the date of his death a very challenging one, given the principles that must be applied, the conflicting evidence, and the seriousness of the consequences of the decision. For the following reasons, I am satisfied that, on the balance of probabilities, the deceased remained domiciled in the ACT at the date of his death and had not acquired a domicile of choice in NSW.
Although the deceased maintained and used residences in both jurisdictions, it is clear that, measured by the relative time that the deceased spent in the ACT and the significance of his work there in the maintenance of his businesses, the deceased's predominant physical connection remained with the ACT. On all significant occasions when the deceased was called upon to state his own understanding of his place of residence he stated an address in the ACT. As I have explained above, not only did the deceased spend by far the greater proportion of his time in the ACT, but the analysis that I carried out, based upon the deceased's telephone records, did not paint a picture of the deceased's use of the Pyrmont apartment that appeared to be very consistent with the deceased believing that the Pyrmont apartment was his chief residence.
While I have generally accepted as being reliable the evidence given by the independent witnesses called by Kalpana on the issue of the deceased's domicile, I do not regard that evidence as being sufficiently persuasive to justify a conclusion that the deceased had acquired a domicile of choice in NSW. Some of the witnesses appear to have exaggerated their appreciation of the proportion of the deceased's time that he spent living at the Pyrmont apartment. Although the evidence of a number of Kalpana's witnesses concerning the statements made by the deceased about his intention to make his home in Sydney is persuasive, much of it is consistent with the deceased expressing an intention to retire in Sydney after he had managed to arrange his business affairs in a way that would permit that outcome. The evidence is, in reality, consistent with the deceased foreshadowing a change in the circumstances of his permanent residency that would, if it had occurred, have led to him acquiring a domicile of choice in NSW.
A comparison of the evidence given by Kalpana's witnesses with the evidence given by the defendants' witnesses concerning the statements made by the deceased as to the place that he considered was his home suggests that the deceased may have embellished his evidence concerning his preferred place of residence in the first case, and that he may have withheld providing statements on that subject in the second case. If the deceased was in fact seriously contemplating establishing his home in retirement in Sydney, he may well have been hesitant to inform his children and his friends and associates in the ACT of that intention.
[70]
Kalpana's devastavit claim
Kalpana's statement of claim filed in this Court on 7 July 2021 sought a declaration that the defendants, as executors of the deceased's estate, committed a devastavit by wrongfully depleting the estate of its assets. As subsidiary relief, Kalpana sought an order for an enquiry as to damages for the devastavit committed by the defendants, or alternatively damages, or in the further alternative that the defendants give an account on a wilful default basis, or as a final alternative that the defendants pay her equitable compensation or an account of profits.
Kalpana pleaded that, by reason of her having commenced her family provision claim in this Court pursuant to Chapter 3 of the Succession Act, as well as having commenced her proceedings in the Supreme Court of the ACT pursuant to s 8 of the Family Provision Act, Kalpana "has standing to bring this claim, or will have standing upon an order for provision being made": see par 5. The defendants denied that Kalpana has standing and said that Kalpana's application for family provision relief does not provide her with standing.
The defendants admitted that part of Kalpana's allegation in par 7 that alleged that as executors they owed a duty to beneficiaries to preserve, protect and administer the assets in the deceased's estate, but they did not admit Kalpana's claim that the same duty was owed to creditors, and they denied that the duty was owed to family provision applicants.
The act on the part of the defendants that Kalpana pleaded constituted a devastavit was the transfer by the defendants on 21 July 2019 of shares held in the name of the deceased in Bel Boa Pty Ltd to Duboti Pty Ltd: see par 10. The defendants admitted that the transfer occurred and that it occurred without any consideration being paid to the deceased's estate. The defendants denied that the transfer was a breach of duty, as alleged by Kalpana in par 12, which was in the following terms:
12. In the premises, the Defendants dissipated an asset of the Estate as a result of their wilful neglect.
Particulars
(a) The deceased beneficially owned the said shares in Bel Boa.
(b) A search of the records maintained by ASIC would have indicated to the Defendants that the deceased owned the said shares at the time of his passing.
(c) The deceased's shareholding in Bel Boa represented a valuable asset of the estate.
(d) As pleaded in [11], the Defendants caused the shares in Bel Boa to be transferred without receiving any consideration thereof.
(e) The Defendants did so when they knew that the Plaintiff had brought proceedings for a family provision order.
[71]
Anna's original claim in the Family Court
On 4 November 2014, Anna commenced proceedings in the Family Court of Australia at Canberra (the Family Court) against the deceased in proceedings No CAC 1543/14 for a declaration under s 90RD of the Family Law Act 1975 (Cth) that a de facto relationship existed between Anna and the deceased and, I infer, for orders altering the property interests of the parties under s 90SM of that Act and possibly other relief under Pt VIIIAB Div 2. The Court was not given a copy of the initiating process.
Anna apparently did not seek property orders under s 15 of the Domestic Relationships Act 1994 (ACT) on the basis that she and the deceased had been in a domestic relationship within the meaning of that term in s 3 of that Act.
As I understand the evidence, the proceedings were set down for hearing on 12 October 2015, solely to determine the preliminary issue of whether Anna and the deceased had been in a de facto relationship, so that the declaration could be made under s 90RD, as a condition to the Family Court being able to make property and other orders at a later time. Both Anna and the deceased were represented on the hearing by senior counsel experienced in family law matters.
Although the purpose of the hearing was to determine a threshold question as to whether a de facto relationship had existed between the parties, the parties reached a settlement on all issues relevant to the claim. Although the copy of the deed that is in evidence is undated, it was apparently made on 12 October 2015. A term of the deed of settlement was that Anna's application for a declaration under s 90RD of the Family Law Act that a de facto relationship existed between Anna and the deceased was dismissed, and an order was made to that effect (Order 2). An order was made by consent under s 15 of the Domestic Relationships Act that required the deceased to transfer a residential property and a motor vehicle to Anna (Order 3). The settlement led to an order being made by consent granting leave to Anna to commence the proceedings out of time (Order 1). An order was made discharging existing costs orders as well as an order that the parties bear their own costs of the proceedings (Order 4).
[72]
Deed of settlement between Anna and the deceased
The orders noted that the parties had entered a deed of settlement and release that was placed on the court's file. Pursuant to that deed, the deceased agreed to pay Anna $1 million.
The deed recited that the deceased denied the existence of the de facto relationship alleged by Anna. It further recited that Anna had advised the deceased immediately prior to the commencement of the hearing that it was her intention to claim alternative relief on the basis that the parties were in a domestic relationship for the purposes of the Domestic Relationships Act from 2000 until July 2013. It was recited that Anna had also informed the deceased that, bearing in mind the state of his health, it was Anna's intention to make an application to the Supreme Court under the Family Provision Act 1969 (ACT) for further provision out of the deceased's estate after his death.
Recital E of the deed provided:
E. At the date of entering into this Deed, O'Donnell and Gray:
(a) have obtained independent legal advice about the terms of the Deed and the effect on each party of entering into this Deed; and
(b) have full knowledge of the facts and circumstances of the release (provided by each party in this deed) and of their/his/her rights and claims.
There was no evidence led in the present proceedings upon which the recital in sub-par (a) could be challenged. At the heart of Anna's claim is a challenge to the recital in sub-par (b).
There was also a recital that, notwithstanding that the deceased asserted that there was only a friendship between the parties over the relevant period, the deceased would consent to a declaration that he and Anna were in a domestic relationship pursuant to the Domestic Relationships Act, and that he would consent to the extension of the period for the commencement of applications under that Act.
Recital G of the deed is also relevant to the determination of the claim now made by Anna. It provided:
G. For the purpose of the property adjustment provisions of the Domestic Relationships Act 1994 (ACT):
(a) O'Donnell has property with the net value of not less than $70m;
(b) the property [to be given by the deceased to Anna] which is owned by O'Donnell has a value in the range of $2m to $3m;
(c) Gray owns [a residential property] that has a value of around $800,000.
[73]
Relevant terms of the Domestic Relationships Act
As it is relevant to the orders that were made by the Family Court on 12 October 2015, it may be noted that "domestic relationship" is defined in s 3(1) of the Domestic Relationships Act 1994 (ACT) in the following terms:
3 Meaning of domestic relationship
(1) In this Act:
domestic relationship means a personal relationship between 2 adults in which one provides personal or financial commitment and support of a domestic nature for the material benefit of the other and includes a domestic partnership but does not include a legal marriage.
It is not necessary to set out all the other provisions that govern the making of an application for orders adjusting property interests under the Domestic Relationships Act, though it may be noted that s 13(1) required that the application be made no more than two years after the day on which the relationship ended, but s 13(2) empowered the court to grant leave to a person to apply for an order after the end of the two-year period if specified circumstances existed.
Section 15(1) of the Domestic Relationships Act provided:
15 Property orders
(1) On application by a party to a domestic relationship, a court may make an order adjusting the interests in the property of either or both of the parties that seems just and equitable to it having regard to -
(a) the nature and duration of the relationship; and
(b) the financial or non-financial contributions made directly or indirectly by or on behalf of either or both of the parties to the acquisition, conservation or improvement of any of the property or financial resources of either or both of them; and
(c) the contributions (including any in the capacity of homemaker or parent) made by either of the parties to the welfare of the other or any child of the parties; and
(d) the matters referred to in section 19 (2), as far as they are relevant; and
(e) such other matters (if any) as the court considers relevant.
[74]
Circumstances in which the Family Court orders were made
"De facto relationship" is defined in s 4AA of the Family Law Act. It is not necessary for the Court to examine the difference between the meaning of this term and a "domestic relationship" for the purposes of the Domestic Relationships Act. Nor is it necessary to examine the nature of the property orders that may be made under each Act or the relative attractiveness of those orders. It is sufficient for present purposes to note that Anna commenced proceedings in the Family Court for orders against the deceased that could be made only if she established that there had been a de facto relationship between the parties. That was a threshold issue to be determined at the hearing on 12 October 2015.
Following negotiations in which both parties were represented by senior counsel and solicitors, Anna agreed to accept an order made by consent by the Family Court in its accrued jurisdiction under the Domestic Relationships Act. The deceased's consent extended to an order permitting Anna to bring her claim under that Act out of time. The parties also consented to orders being made in favour of Anna under s 15 of the Act, in addition to the deceased's covenant in the deed to pay Anna $1 million. This complete settlement was reached even though the parties had not been required to serve evidence for the purposes of the application that went beyond the issue of whether Anna and the deceased had been in a de facto relationship. In consideration of the deceased's covenants in the deed of settlement, Anna agreed to release his estate from any application by her for further family provision under the legislation of any Australian State or Territory.
When Benjamin J made the consent orders on 15 October 2015 and noted the terms of the deed of settlement, his Honour was not in a position to satisfy himself that the terms of the order were just and equitable from the perspective of either or both parties. The evidence that had been served went to the issue of whether the parties were in a de facto relationship, and not whether they were in a domestic relationship. The evidence would only have incidentally, if at all, been relevant to the orders for the adjustment of the property interests of the parties that were actually made under s 15 of the Domestic Relationships Act. The transcript recorded that his Honour said that the parties had come to a solution that was a credit to them because: "I think the expression in this case is that it would have been all duck and no dinner, because there was no intermediate position that a Court could come to. It was either the Court has jurisdiction, and it would go on for another hearing, which would have run for days, I would have thought, or it would have been dismissed as the Court being without jurisdiction." This comment by his Honour reflected the contingency that Anna faced. If she failed to establish a de facto relationship her claim would fail completely. Consequently, upon the advice of her legal advisers, she may have thought it prudent to accept a compromise of her claim that afforded her substantial success in the proceedings.
[75]
Anna's family provision application in the ACT
On about 20 September 2019, Anna filed an originating application in the Supreme Court of the ACT to commence proceedings No SC 470 of 2019 against the executors of the deceased's estate for further provision for Anna's maintenance, education or advancement in life pursuant to s 8 of the Family Provision Act 1969 (ACT) out of the estate of the deceased. The basis upon which Anna claimed eligibility was that she was the de facto spouse of the deceased between 2000 and 2013. The basis of eligibility claimed by Anna was that provided for in s 7(1)(a) of the Family Provision Act that she was a partner of the deceased person. "Partner" is defined in s 7(9) as meaning someone who was the domestic partner of the person at any time. A note to the section refers the meaning of domestic partner to the Legislation Act (2001) (ACT). Under s 169(1) of that Act, a domestic partner is a person who lives with another person in a domestic partnership. "Domestic partnership" is defined in s 169(2) as being a relationship between two people "living together as a couple on a genuine domestic basis." It may be noted that Anna may possibly also have been an eligible person under s 7(1)(b) as a person who was in a domestic relationship with the deceased. Section 7(9) refers the meaning of "domestic relationship) to the Domestic Relationships Act.
Anna has not commenced proceedings in this Court under s 59 of the Succession Act. The Court was informed by Anna's counsel that she was not eligible to make an application under that Act. That may be because eligibility under s 57(1)(b) of the Succession Act of a person with whom the deceased person was living in a de facto relationship at the time of the deceased person's death would not apply to Anna as her relationship with the deceased had ended before his death.
Paragraph 5 of Anna's affidavit in support of her family provision application stated Anna's understanding that probate issued in the ACT in March 2019 declaring assets of $10 million. As I have recorded above, the inventory of property prepared by the executors recorded the net value of the deceased's property in the ACT as being $6,463,024. The gross value of the deceased's assets was said to be $10,262,192. To that extent, Anna's stated understanding was then correct. However, as noted above, it was agreed between Kalpana and the executors following the end of the hearing that the value of the deceased's estate is in fact $2,058,460.11, subject to the payment of any orders for costs that may be made in any of the proceedings. I will consider below whether any of the evidence led in Anna's proceedings justifies the Court in concluding for the purposes of her application that the estate has a value greater than that which was agreed as between Kalpana and the executors.
[76]
ACT family provision application cross-vested to this Court
As I have noted above, on 16 October 2019, the Supreme Court of the ACT made an order cross-vesting Anna's family provision application to this Court. In determining that application, this Court would have to apply the Family Provision Act. As also noted above, that Act contains no provision for the designation of notional estate of the deceased. Any order for further family provision that is made in favour of Anna would have to be made out of the deceased's actual estate.
[77]
Legal basis for setting aside Family Court orders
The provision that empowers a court, with jurisdiction to do so, to set aside the deed of settlement is s 28 of the Domestic Relationships Act, which provides:
28 Variation and setting aside of orders
If, on the application of a person in respect of whom an order under section 15 or 19 is in force, a court is satisfied that -
(a) there has been a miscarriage of justice because of fraud, duress, suppression of evidence, the giving of false evidence or any other circumstance; or
…
the court may vary the order or set it aside and, if it thinks fit, make another order under this part in substitution for the order.
The issue of whether the deed of settlement should be set aside is critical to the outcome of Anna's application for further family provision out of the estate of the deceased. If the deed is not set aside, the effect of clause 5.2.2(d) will be that the executors will plead the deed of settlement as an absolute bar to Anna's claim. It must be noted that the Family Provision Act does not have a provision that is equivalent to s 95(1) of the Succession Act to the effect that a release by a person of the person's rights to apply for a family provision order has effect only if it has been approved by the Court and to the extent that the approval has not been revoked by the Court.
Clause 5.2 of the deed of settlement appears to be expressed in terms of releases of Anna's claim and not covenants not to sue. Anna has not contested the validity of clause 5.2 on the basis that it is contrary to public policy, if not approved by a court under a statutory provision such as s 95 of the Succession Act. Consequently, it is not necessary for the Court to consider the issues dealt with by the High Court in Lieberman v Morris (1944) 69 CLR 69; [1944] HCA 13 and Singer v Berghouse (No 2) (1994) 181 CLR 201; [1994] HCA 40.
[78]
Family Court application to set aside earlier orders and for other relief
Anna's application for orders setting aside the deed of settlement and the orders made by the Family Court on 12 October 2015 was made by an initiating application filed in the Family Court in Canberra at some time in 2020, as No CAC 1389/2020. The Court does not have a copy of the original initiating application. An amended initiating application was filed in the Family Court on 18 August 2021, and further amended by order made by Gill J on 24 August 2021. As amended by leave, the first two orders sought by Anna were:
1. That, by way of determination as a preliminary threshold issue, order 3 made by consent, in the Family Court at Canberra on 12 October 2015 expressly pursuant to the provisions of s 15 of the Domestic Relationships Act (1994) ACT be set aside pursuant to the provisions of s 28 of the said Act, upon the basis that that then respondent, the late Garry Francis O'Donnell, ("the Deceased"), failed to make any proper or adequate financial disclosure to enable the Court to determine that the said orders were just and equitable.
2. That by further way of determination as a preliminary threshold issue, the term of the Deed of Settlement and Release signed by the parties pursuant to the provisions of the Family Provision Act (1969) ACT and directed to remain on the Court file, be declared to be null and void and to be and to be of no force and effect whatsoever, upon the orders made on 12 October 2015 being set aside pursuant to order 1 herein, as a consequence of clause 2.1 of the said Deed.
If these orders are made, then Order 3 made on 12 October 2015 in favour of Anna under s 15 of the Domestic Relationships Act will be vacated and the deed of settlement will be declared void.
The basis relied upon by Anna in order 2 for an order setting aside the deed of settlement is clause 2.1 of that deed which has been set out above. Under that provision, if the Family Court did not make the orders to which the parties consented under the terms of the deed, the deed would not take effect. The Family Court did make those orders, so the deed did take effect. I understand Anna's submission to be that if the orders are vacated, the implied effect of clause 2.1 is that the deed of settlement will cease to have effect. That appears to be the basis for Anna's claim for an order that the deed of settlement be set aside. As I understand the position taken by the executors, they do not dispute that the deed of settlement should be set aside if the Family Orders are set aside.
[79]
Anna's submissions
Anna served an outline of submissions dated 6 October 2021 before the commencement of the hearing and final written submissions dated 28 October 2021 that augmented the initial submissions. Anna's counsel also addressed the major themes in Anna's submissions orally. In view of the discussion of the procedural history of Anna's claim that has been set out above, it will be appropriate to note the following features of that claim as it was ultimately put to the Court.
First, whatever may have been said to Gill J, Anna did not propound a case that the deed of settlement and Order 3 made on 12 October 2015 should be set aside under s 28(a) of the Domestic Relationships Act on the ground of duress caused by Anna's then legal advisers. The true ground upon which Anna challenged the validity of the deed of settlement and Order 3 was the suppression of evidence; in particular, that the deceased did not fully disclose his true financial position.
Secondly, even though, as I have explained above, Gill J cross-vested to this Court Anna's claim in order 7 of the amended initiating process, which appears to claim an order varying the orders made by Benjamin J on 12 October 2015, even if orders 1 and 2 setting aside the deed of settlement and Order 3, and the orders sought in orders 3 to 6 for the adjustment of the deceased's property in favour of Anna, these orders were not pursued at the hearing before me. In fact, as best I can tell, nothing was said at the hearing about the relief sought in order 7 of the amended initiating application.
Thirdly, and more significantly, nothing was said at the hearing or in Anna's submissions about her claim for further family provision under s 8 of the Family Provision Act that had been cross-vested to this Court from the Supreme Court of the ACT. It may be that Anna appreciated that her claim for further family provision in competition with Kalpana's claim would not be strong, given the evidence as to the ultimate value of the deceased's actual estate. For whatever reason, Anna only prosecuted her cross-vested claim made in orders 1 and 2 of the amended initiating application. Anna's counsel accepted that, if her application that the Court make those two orders failed, she would fail in these proceedings and would not be entitled to further prosecute her proceedings in the Family Court. Counsel made it clear that if Anna succeeded in obtaining orders that had the effect of setting aside the deed of settlement and vacating Order 3, the course Anna would follow would be to pursue her claims in orders 3 to 6 of her amended initiating application in the Family Court. Anna apparently chose that course based on an understanding that the Family Court's jurisdiction would extend beyond making orders that applied only to the actual estate of the deceased, and that the Family Court could "look behind the corporate veil" and "dismantle trusts": see [T 720.8]. It is not necessary for this Court to make any comment on that expectation on Anna's part.
[80]
Kristina's and Jurek's family provision claims
On 26 November 2019, Kristina and Jurek filed a summons in this Court seeking orders that provision be made for their maintenance pursuant to s 59 of the Succession Act out of the estate and/or notional estate of the deceased.
[81]
The consequence of the Court's finding as to the deceased's domicile
As the Court has found that the deceased was domiciled in the ACT at the time of his death, and as the Court has found that the deceased did not die owning immovable property in this State (even allowing for the possibility that the application of the notional estate provisions in the Succession Act might have the effect that immovable property in this State was part of the notional estate of the deceased) this Court does not have jurisdiction to make the family provision orders sought by Kristina and Jurek.
Unlike Kalpana and Anna, who commenced proceedings in the Supreme Court of the ACT for family provision under s 8 of the Family Provision Act, which have been cross-vested to this Court, the application made by Kristina and Jurek depends upon this Court having jurisdiction to make family provision orders in their favour under s 59 of the Succession Act.
Nonetheless, the parties to Kristina's and Jurek's application have contested all issues on the assumption that the Court might find that it had jurisdiction to entertain Kristina's and Jurek's application for further family provision in these proceedings. The Court is therefore faced with the difficulty that many complex and contentious issues remain for determination, but if the Court's decision on the jurisdiction issue stands, the time and effort required to decide the remaining issues will be wasted. Nonetheless, the Court must risk the waste by devoting at least enough attention to the determination of the remaining questions so that the findings made will obviate, to a reasonable extent, the risk of unacceptable delay and inconvenience if the Court's determination of absence of jurisdiction is overturned. In the face of its belief that the exercise is unnecessary, the Court is entitled to temper the level of detail that it addresses in determining the remaining issues.
[82]
Entitlement to bring application
The first issue is whether Kristina and Jurek have established that they are entitled to make their application, which brings with it a question of eligibility and a question whether there are factors that warrant the making of the application.
Kristina and Jurek are plainly domiciled in the ACT, which has been the place of their long-term permanent residence, but have not made an application for provision under s 8 of the Family Provision Act because they are not eligible under s 7 of that Act. Kristina and Jurek claim to be eligible to make an application for family provision under s 59 of the Succession Act on the basis that they satisfy the eligibility criteria in s 57(1)(e), which provides:
57 Eligible persons
(1) The following are eligible persons who may apply to the Court for a family provision order in respect of the estate of a deceased person -
…
(e) a person -
(i) who was, at any particular time, wholly or partly dependent on the deceased person, and
(ii) who … was, at that particular time or at any other time, a member of the household of which the deceased person was a member,
…
Satisfaction of those criteria is not sufficient of itself to ensure eligibility, as it is also necessary for applicants who seek family provision on that basis to satisfy s 59(1)(b), which requires Kristina and Jurek, who are only potentially eligible beneficiaries under s 57(1)(e), to satisfy the Court that, having regard to all the circumstances, there are factors which warrant the making of the application.
[83]
Were Kristina and Jurek wholly or partly dependent on the deceased?
The relevant head of eligibility in this case is that provided by s 57(1)(e), which in this case imposes two requirements. The first requirement is that Kristina and Jurek establish that they were, at any particular time, wholly or partly dependent on the deceased person: Succession Act, s 57(1)(e)(i).
Whether the applicant was wholly or partly dependent on the deceased person is a question of fact, and that fact is determined by the answer to the question: "has reliance on another to fulfil a need been shown?": Spata v Tumino (2018) 95 NSWLR 706; [2018] NSWCA 17 at [71], [78] (Payne JA, with whom Macfarlan JA and Sackville AJA agreed at [1] and [132] respectively).
Dependency requires a consideration of the whole relationship, considering "past events and future possibilities": Purnell v Tindale [2020] NSWSC 746 at [154] (Henry J), citing Ball v Newey (1988) 13 NSWLR 489 at 491 (Samuels JA, with whom Hope and Mahoney JJA agreed at 490 and 493 respectively); and Spata v Tumino at [68], [78] (Payne JA).
Emotional dependency alone does not satisfy the condition in s 57(1)(e)(i); the dependent person must, at least, be beholden to the deceased person "for some material or physical help or succour": Skinner v Frappell [2008] NSWCA 296 at [85] (Young CJ in Eq, with whom Basten and Campbell JJA agreed at [17] and [22] respectively); Purnell v Tindale at [155] (Henry J), also citing Petrohilos v Hunter (1991) 25 NSWLR 343 at 346-347 (Hope AJA, with whom Clarke and Sheller JJA agreed at 344).
It is not legitimate to read the phrase 'partly dependent' as requiring a finding that the dependency be "significant" or "substantial"; rather it means that the dependency be "more than minimal": Chisak v Presot [2022] NSWCA 100 at [47], [57] (White JA, with whom Macfarlan and Gleeson JJA agreed at [1] and [2] respectively).
The evidence in my view clearly establishes that Kristina and Jurek were substantially dependent on the deceased for a considerable proportion, if not all, of the period of the relationship between Anna and the deceased. In my view, this conclusion is sufficiently established by an analysis of the comprehensive affidavit that the deceased affirmed in the proceedings commenced by Anna in the Family Court for relief on the basis that she was the de facto partner of the deceased. The affidavit was affirmed on 4 June 2016, and was tendered in the proceedings commenced by Kristina and Jurek as annexure to Ashley's 29 September 2020 affidavit. The deceased's affidavit conceded a significant number of aspects of Anna's claim concerning the nature of the relationship that she had with the deceased, while attempting to establish that the relationship was only one of friendship 'with benefits' (to repeat an expression used by the deceased). The deceased repeatedly asserted that, although he had a sexual relationship with Anna for some of the period, he almost never stayed overnight at the house in which she was living, and Anna almost never stayed overnight at the Mugga Way property that the deceased claimed was his only home in Canberra before he met Kalpana.
[84]
Were Kristina, Jurek and the deceased members of the same household?
The second requirement is that Kristina and Jurek establish that they were, at the time when they were dependent upon him, or at any other time, members of the household of which the deceased person was a member: Succession Act, s 57(1)(e)(ii). In Yesilhat v Calokerinos [2021] NSWCA 110 at [104], Macfarlan JA (with whom Bathurst CJ and Brereton JA agreed at [1] and [123] respectively) stated:
[104] … At least in ordinary circumstances, membership of a household involves the persons concerned living together, and as summarised by the primary judge (at [765]) citing Kingsland v McIndoe [1989] VR 273, "a degree of continuity and permanency of living arrangements and a form of special familial relationship". Other relevant authorities to similar effect were recently summarised by Henry J in Purnell v Tindale [2020] NSWSC 746 at [157]-[162].
I respectfully adopt the summary of Henry J in Purnell v Tindale referenced by Macfarlan JA:
[158] The Act does not specify a particular length of time during which Mr Purnell must have been a member of the same household as the deceased and the period during which he and the deceased shared the same household does not necessarily have to coincide with the period during which he says he was wholly or partly dependent on her: Wolff v Deavin [2012] NSWSC 1315 at [30] (Macready AsJ).
[159] Central to the concept of being a member of a household is people "living together" in a home: Benny v Jones (Supreme Court (NSW), Young J, 13 February 1990, unrep). This is consistent with the Oxford English Dictionary definition of "household" being "the inhabitants of a house considered collectively; a group of people (esp. a family) living together as a unit; a domestic establishment (including any servants, attendants, etc.)".
[160] Prima facie, there must be some element of residence or living of the two people concerned in the same house. It is not sufficient for a person to visit on a regular basis without regularly staying overnight: Wagstaff v Wagstaff (Supreme Court (NSW), Windeyer M, 6 November 1991, unrep); Marning v Staniforth (Supreme Court (NSW), 25 March 1987, Hodgson J, unrep); Bezjak v Wyatt at [79].
[161] The phrase 'household' is abstract and is to be contrasted to the word 'house'. There are no hard and fast rules as to what constitutes a household, and the point at which a living arrangement becomes a household is one of degree. A person can be a member of two households. As Hallen J notes, it is the characteristics and dimension of the domestic relationship that makes a "house" a "household": Russell v NSW Trustee and Guardian [2013] NSWSC 370 at [38], [39]; Spata v Tumino [2017] NSWSC 111 at [48], not disturbed on appeal, Spata v Tumino [2018] NSWCA 17 at [58]; Marning v Staniforth (Supreme Court (NSW), 25 March 1987, Hodgson J, unrep); Wolff v Deavin [2012] NSWSC 1315.
[162] The concept of membership of a household also connotes a degree of continuity and permanency of mutual living arrangements. There is no set period of time in which a person has to be a member of the household, but they must be a member of the same household as the deceased for some period: Bezjak v Wyatt [2018] NSWSC 199 at [78] and [79]; Amprimo v Wynn [2015] NSWCA 286 at [90] citing with approval statements made by Bryson AJ in Porthouse v Bridge [2007] NSWSC 686 and McLelland J in Munro v Lake (Supreme Court (NSW), 8 February 1991, unrep); Russell v NSW Trustee and Guardian [2013] NSWSC 370 at [35] to [51] and the cases cited there.
[85]
Are there factors that warrant the making of the application?
In Re Fulop Deceased (1987) 8 NSWLR 679 at 681 McLelland J (as his Honour then was) said of the use of the word "factors" in the equivalent s 9 of the Family Provision Act 1982 (NSW): "… This suggests that the "factors" referred to in this subsection are factors which when added to facts which render the applicant an "eligible person" give him or her the status of a person who would be generally regarded as a natural object of testamentary recognition by a deceased." This statement of principle has been generally followed, including in the recent decision of the Court of Appeal in Sun v Chapman [2022] NSWCA 132 at [120] (White JA), [193] (Brereton JA); see also Lodin v Lodin [2017] NSWCA 327 at [5]-[7] (White JA), [106]-[107], [113]-[119] (Sackville AJA).
I have found this issue to be a difficult one to determine in the circumstances of the present case. First, it does not arise if I am correct in my conclusion that the deceased was domiciled in the ACT at the date of his death and he was not entitled to any immovable property situated in this State at that time. In that respect the issue is academic. Secondly, Kristina and Jurek did not address the issue in their submissions. The executors dealt with the issue in sparse terms in par 312 of their outline written submissions. Thirdly, Kristina and Jurek are not eligible to make claim under the Family Provision Act, which is the relevant legislation of the only jurisdiction with which the relationship between the deceased and Kristina and Jurek had any connection. That relationship had no real connection at all with this State, so the commencement of Kristina's and Jurek's claim for provision under s 59 of the Succession Act is an opportunistic attempt to take advantage of the more liberal criteria for establishing eligibility under that Act than under the Act that is most clearly pertinent to their relationship with the deceased.
I have concluded that, were it necessary for this Court to decide the issue, I would not accept that Kristina and Jurek have established that there are factors that warrant the making of their application for family provision.
First, the relationship of Kristina and Jurek with the deceased was only a de facto 'step' relationship for a period of about 13 years that ended about 5 years before the death of the deceased. The deceased's primary relationship was with Anna, but, to the extent that he financially supported Anna, it followed as a practical matter that he supported her children who lived with her. The evidence establishes that the deceased maintained a warm relationship with Kristina and Jurek, and because he was a wealthy man and generous by nature he provided Anna's children with many material benefits that they would otherwise not have enjoyed.
[86]
Measure of proper and adequate provision
In Bassett v Bassett, the Court of Appeal (Bell P, Leeming and Payne JJA) at [95]-[97] approved the observations made by Hallen J in Limberger v Limberger; Oakman v Limberger [2021] NSWSC 474 at [66], concerning the importance of counsel for the claimant in a family provision case being in a position to assist the Court with an identification of what provision is being sought. That assistance may be expressed approximately or within a range, but it is necessary in order to enable the Court to efficiently determine what provision ought to be made for the claimant. In the present case, neither claimant committed themselves to any particular claim in relation to the further provision that they sought. Both identified a small number of specific needs. Kristina said in her affidavit, at pars [68] and [69], that she wished to purchase accommodation in the eastern suburbs of Sydney, and that she needed a capital sum to assist her to have a start in life. Jurek's evidence, in par [68] of his affidavit, was that he wished to acquire a business so that he may become self-supporting, he needs a capital sum to assist him in life, and he wishes to acquire a home in the Canberra city area.
I have found that this Court does not have jurisdiction to make family provision orders in favour of Kristina and Jurek under the Succession Act because the deceased was not domiciled in NSW at the date of his death. I have also found that, even if the Court did have that jurisdiction, it should not be exercised in favour of Kristina and Jurek because there are not factors that warrant the making of the application as is required by s 59(1)(b) of the Succession Act. If I am wrong in both of those findings, it will follow that the deceased was domiciled in NSW, and as a consequence the Court will have jurisdiction to designate property of the O'Donnell group as notional estate of the deceased. That would have the effect that, in principle, there would be property available to make family provision orders in favour of Kristina and Jurek. Whether such orders should be made would depend upon many factors, including the competing claims of Kalpana and the deceased's children. I do not propose to attempt to assess what orders for family provision should be made in favour of Kristina and Jurek in these hypothetical circumstances. The reason is that Kristina and Jurek have not provided evidence of the cost of the maintenance that they claim to require with sufficient specificity to enable the Court to assess what family provision orders should be made in their favour on a basis that does not involve guesswork. If it became necessary for me to do so, I would call for further submissions concerning the family provision orders that would be appropriate. It may be that the state of the evidence would have the result that the most that the Court could do would be to assess an appropriate lump sum to be paid to each of the claimants.
[87]
Consideration of Kalpana's family provision claim
Having dealt with Kalpana's devastavit claim, and the claims made by Anna, Kristina and Jurek, I will now consider the significance of the evidence led by the parties concerning Kalpana's claim for family provision.
The Court must consider the application of s 8 of the Family Provision Act, which I have extracted above. Section 8(3), in pars (a) to (j), lists criteria for the Court's consideration, although par (k) permits the Court to consider any other matter it thinks relevant. By reference to the listed criteria, I consider that Kalpana conducted herself as a loving, faithful and supportive wife, who moulded her life to the deceased's wishes: see par (a). That said, because of the lifestyle she enjoyed, Kalpana's conduct was very much in her own interests, at least as long as the deceased was alive.
The defendants suggested that the relationship was tempestuous. It may have been on occasions. The incident whereby the deceased deceived Kalpana into thinking she was a joint purchaser of the Barton penthouse would reasonably have infuriated any wife. Much of the evidence given by Kalpana's domicile witnesses that has been set out above strongly supports the conclusion that the deceased was content with his marriage. There has been nothing in Kalpana's character that would diminish her entitlement to testamentary support by the deceased.
As to par (b), Kalpana was married to the deceased, although the duration of the relationship was relatively short, at about five years. However, had the deceased not died at the relatively young age of 68 years, there is no reason to think that the relationship would not have continued for much longer. Kalpana did relatively little to contribute to the deceased's property or financial resources for the purposes of par (c). As it has happened, although the deceased made many valuable gifts to Kalpana, the benefit of those gifts has largely proved to be ephemeral. As to par (d), I am satisfied that Kalpana made reasonable contributions to the marriage as a homemaker, although an effect of the deceased's wealth was that the role of Kalpana as homemaker may not have been as onerous as it might have been in other circumstances.
I will consider the criteria in pars (e) to (g) more fully below in relation to the detail of the evidence. As the deceased's children are all adults, the deceased was not responsible for their support for the purposes of par (h). Paragraphs (i) and (j) are not material in the present case.
[88]
Conclusion
The result is a family provision order will be made in favour of Kalpana in the proceedings that she commenced in the Supreme Court of the ACT that will give her all of the property in the actual estate of the deceased that is available to be distributed. Kalpana's claim for family provision commenced in this Court and for relief in respect of the claimed devastavit by the defendants will be dismissed. All of the claims made by Anna, Kristina and Jurek will be dismissed.
Given the interrelationship between the proceedings it will be necessary for the Court to receive submissions from the parties as to the costs orders that should be made.
As there may be some complexity in the formulation of the orders that should be made in favour of Kalpana, I will also receive submissions from Kalpana and the defendants as to the form of the orders that should be made in favour of Kalpana.
My Associate will arrange with the solicitors for the parties in the new law term for a directions hearing to deal with all outstanding issues next year.
[89]
Need for law reform
The outcome of these proceedings causes me respectfully to recommend that all of the authorities in this country who have a role in law reform revisit the question of whether the family provision legislation in each jurisdiction should empower the courts of those jurisdictions to designate notional estate of deceased persons and to explore the possibility of introducing substantially common legal provisions for that purpose.
Kalpana has succeeded in obtaining an order for further provision out of the estate of the deceased, but not for the amount that I have determined would have been fair to her. Given all of the circumstances of the case, that is because fairness could only have been achieved if the Court had been empowered to make an order designating part of the property of the O'Donnell group as notional estate of the deceased. The absence of that power turned on the issue of the domicile of the deceased at the date of his death. The finding that the deceased was domiciled in the ACT was fatal to the prospect of fairness being achieved in this case.
As Brereton JA has said extrajudicially:
In my view, the proper measure nowadays of the community's expectation as the basic minimum which testators should provide for their spouses, even in an unhappy marriage, is that provision which the surviving spouse would have received pursuant to Part VIII of the Family Law Act had the parties separated and instituted such proceedings. In a happy marriage, the standard might well exceed this … The dutiful spouse who finds upon her husband's death that no or inadequate provision has been made for her is then in no worse position than a spouse who has separated before death and commenced property proceedings. …
There is neither social sense nor legal logic in a surviving spouse who has not instituted proceedings before the other dies being in a position worse than would have been the case had such proceedings been instituted. Even more so where the surviving spouse was not separated but remained happily married until the death of the other, should such spouses not be in a worse position vis-a-vis the estate of the other than had the marriage failed …
If the outcome did in fact depend upon the chance of whether property proceedings had or had not been instituted before death, or resulted in a 'dutiful' spouse who remained happily married to the deceased being worse off than if he or she had separated from the other, there would be justifiable cause for complaint.
[90]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 16 December 2022
Parties
Applicant/Plaintiff:
O'Donnell
Respondent/Defendant:
O'Donnell
Legislation Cited (13)
Constitution, Ch III Domestic Relationships Act 1994(ACT)
Bird v Bird (No 4) [2012] NSWSC 648
Bird v Bird [2013] NSWCA 262; (2013) 11 ASTLR 225
Chisak v Presot [2022] NSWCA 100
Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12; [1965] AC 694
DJ Singh v DH Singh [2018] NSWCA 30
Evans v Evans (1910) 10 SR (NSW) 594
Fremlin v Fremlin (1913) 16 CLR 212; [1913] HCA 25
Gaines-Cooper v Commissioners for HM Revenue and Customs [2007] EWHC 2617 (Ch)
Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith [2019] NSWSC 843
Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9
Hitchcock v Pratt (2010) 79 NSWLR 687; [2010] NSWSC 1508
In re Cartier, Deceased [1952] SASR 280
In re Jennery, dec'd, Jennery v Jennery [1967] Ch 280
In re Olson (Deceased), Treadwell v Public Trustee [1944] NZLR 778
In the Estate of Fuld, dec'd (No 3) (1968) P 675
In the Marriage of Ferrier-Watson v McElrath (2000) 26 Fam LR 169; [2000] FamCA 219
In the Marriage of M P and M J Suiker (1993) 17 Fam LR 236
Kavalee v Burbidge (1998) 43 NSWLR 422
Lieberman v Morris (1944) 69 CLR 69; [1944] HCA 13
Limberger v Limberger; Oakman v Limberger [2021] NSWSC 474
LK v Director-General, Department of Community Services (2009) 237 CLR 582; [2009] HCA 9
Lodin v Lodin [2017] NSWCA 327
McCosker v McCosker (1957) 97 CLR 566; [1957] HCA 82
Norton v Locke (2013) 50 Fam LR 517; [2013] FamCAFC 202
Petrohilos v Hunter (1991) 25 NSWLR 343
Plummer v Inland Revenue Commissioners [1988] 1 All ER 97
Potter v Minahan (1908) 7 CLR 277; [1908] HCA 63
Purnell v Tindale [2020] NSWSC 746
Re Fulop Deceased (1987) 8 NSWLR 679
Singer v Berghouse (No 2) (1994) 181 CLR 201; [1994] HCA 40
Skinner v Frappell [2008] NSWCA 296
Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522
Spata v Tumino (2018) 95 NSWLR 706; [2018] NSWCA 17
Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114
Stone v Stone [2019] NSWSC 233
Sun v Chapman [2022] NSWCA 132
Taylor v Farrugia [2009] NSWSC 801
The Estate of Thiess; Brinkman v Johnston (Supreme Court (NSW), Hodgson J, 4 February 1994, unrep)
Treadtel International Pty Ltd v Cocco [2016] NSWCA 360; (2016) 117 ACSR 176
Udny v Udny (1869) LR 1 Sc & Div 441
Wardy v Salier [2014] NSWSC 473
Wentworth v Wentworth (Supreme Court (NSW), Young J, 4 September 1991, unrep (BC9101598))
Yesilhat v Calokerinos [2021] NSWCA 110
Texts Cited: P L G Brereton, "Where Death and Divorce Meet: The Intersection of Family Provision and Family Law" (Speech, National Family Law Conference, October 2006)
R F Croucher, "Towards uniform succession in Australia" (2009) 83 ALJ 728
G E Dal Pont and K F Mackie, Law of Succession (2nd ed, 2017, LexisNexis Butterworths)
J de Groot and B Nickel, Family Provision in Australia (6th ed, 2021, LexisNexis)
J R Martyn and N Caddick, Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (20th ed, 2013, Sweet & Maxwell)
N Perram, "The origins and present operation of the action in devastavit" [2012] FedJSchol 23
Tasmanian Law Reform Institute, Final Report No. 27: Should Tasmania Introduce Notional Estate Laws? (September 2019)
Category: Principal judgment
Parties: Proceedings 2019/120911
Kalpana O'Donnell (Plaintiff)
Jaimie Francis John O'Donnell (First Defendant)
Vanessa Channon (Second Defendant)
Laura O'Donnell (Third Defendant)
Ashley O'Donnell (Fourth Defendant)
Evenlong Pty Ltd (Fifth Defendant)
Duboti Pty Ltd (Sixth Defendant)
On 8 September 2021, the Family Court of Australia (Gill J) made an order cross-vesting Anna's proceedings in that Court to this Court to consider the application under the Domestic Relationships Act to set aside the deed of settlement for alleged fraud and failure to disclose.
It will be convenient to note at this point that Kalpana sought and obtained an order from the Court that two companies that form part of the group of companies controlled by the deceased (the O'Donnell group) be joined as defendants to Kalpana's family provision proceedings under the Succession Act. One of those companies is Duboti Pty Ltd which, as will be seen, is the trustee of the Mugga Way Family Trust, which is the overarching discretionary trust that held all of the property controlled by the deceased that was not personally owned by him. The other company is Evenlong Pty Ltd, which is the trustee of the Newcastle Unit Trust. The shares in Evenlong Pty Ltd and the units in the Newcastle Unit Trust are owned by Duboti Pty Limited. Among other property, Evenlong Pty Ltd owned an apartment at Pyrmont in this State (the Pyrmont apartment) at which Kalpana and the deceased lived from time to time and which forms a significant aspect of the narrative in these proceedings. Under the deceased's will, the executors now control Duboti Pty Ltd, Evenlong Pty Ltd and the other companies in the O'Donnell group.
Kalpana has not sought any specific relief against Duboti Pty Ltd or Evenlong Pty Ltd. Those companies have not played any independent role in the proceedings. Apparently, the executors' solicitor has advised Kalpana's solicitor that the executors would agree to be bound by, and act in accordance with, any notional estate orders made by the Court (in circumstances that will be explained below). That undertaking will not strictly bind the two companies that have been joined or any other companies in the O'Donnell group. In the circumstances, it will not be necessary to address the position of the two companies as parties.
The Court will be able to apply the Succession Act, and therefore Part 3.3 that permits orders for family provision and costs to be satisfied out of the whole of the deceased's notional estate, if it finds that the deceased was domiciled in NSW. There is also a possibility, which I will consider below, that real property situated in NSW that was owned by companies in the O'Donnell group at the date of the death of the deceased will fall within the jurisdiction of this Court under Part 3.3 of the Succession Act because an order can be made designating the property as notional estate of the deceased. If the finding is that the deceased was domiciled in the ACT and there was no real property in this State, the only family provision statute that will apply is the Family Provision Act. That will place a ceiling on the assets that are available to satisfy all family provision and costs orders that the Court may have been able to make.
The value of the actual estate of the deceased may be affected by the outcome of Kalpana's separate proceedings for an order that the executors have committed devastavit in respect of the deceased's estate. Kalpana submitted in her final submissions that the shares the subject of this claim had a value of $3,607,401 as of 30 June 2021. If as a result of Kalpana succeeding on her devastavit claim the executors were ordered to replenish the deceased's estate by that amount, then the additional sum would increase the assets available to the Court to make orders for family provision in Kalpana's favour, even if the application must be determined under the Family Provision Act of the ACT because it is found that the deceased was domiciled in that Territory.
If the Court makes an order in Anna's favour setting aside the deed of settlement, then an issue will arise as to what the effect of that order will be on the deceased's estate. The assets settled by the deceased on Anna under the deed of settlement had a considerable value. Ordinarily, the Court will not make an order setting aside a transaction such as the deed of settlement without at the same time making appropriate orders that will restore the status quo as between the parties to the transaction before it was implemented. If orders of this nature were made against Anna in the present case, a consequence of her success would be that she would be required to restore the property settled on her to the deceased's estate. If that were to happen, then the estate would be increased by the value of the restored property, which might improve Kalpana's prospects of her claim for family provision, if the Court finds that the deceased was domiciled in the ACT when he died. I will explain below why Anna has resisted the suggestion that her success in obtaining an order setting aside the deed of settlement will require her to restore the settled property to the deceased's estate.
Realistically, if Anna's application for an order setting aside the deed of settlement succeeds but she is entitled to retain the property settled upon her under the deed of settlement, she will have little prospect of obtaining orders for family provision out of the deceased's estate if he is found to have been domiciled in the ACT. The value of the property settled by the deceased on Anna appears to be greater than the probable value of the deceased's actual estate, and Anna's need for family provision will diminish in contest with Kalpana's need for provision.
Jurek and Kristina have not made an application for family provision in the Supreme Court of the ACT because they accept that they are not eligible claimants under the Family Provision Act. They have an arguable case that they are entitled to be treated as eligible claimants under the Succession Act. Realistically, Jurek's and Kristina's prospects of success depend upon the Court finding that the deceased was domiciled in NSW and making an order designating part of the O'Donnell group as notional estate of the deceased for the purpose of their applications. Jurek and Kristina do not have a strong case for family provision in competition with Kalpana if the available subject of the orders for provision that they seek is limited to the actual estate of the deceased.
Kalpana's costs calculated on the ordinary basis to the completion of the hearing were estimated to be $1,440,995. The amount of Kalpana's costs on the indemnity basis was said to be $1,551,235, and, if an uplift factor of 25% is permitted, a total of $1,727,171. The executors advised that their legal costs for the hearing will total $1,062,945.08. I infer that those costs cover defence of all of the proceedings. Anna estimated her costs to complete the hearing at $250,000. Kristina's and Jurek's costs are said to be $255,000.
The value of the deceased's estate that is available to satisfy any orders for family provision and costs made in favour of claimants will be reduced to the extent that the defendants' costs are ordered to be paid out of the estate. The costs payable out of the estate to any successful claimant will also diminish the assets available to satisfy family provision orders. Uncertainty may be created by orders for payment of costs against unsuccessful claimants because it might not be clear whether the defendants will be able to recover those costs.
All of the real (or immovable) property owned personally by the deceased, and thus part of his actual estate, was situated in the ACT. Those properties were 30 Mugga Way, Red Hill; a property that the parties called the Barton penthouse; and another apartment in the same building as the Barton penthouse. I will explain the significance of these properties more fully below.
Notwithstanding the existence of the declarations of trust, it appears that for some time the returns made to ASIC in respect of the shareholding in the companies stated that the deceased and the other shareholders retained the beneficial ownership of the shares. After the grant of probate of the deceased's will to the executors, they acted upon the declarations of trust to execute transfers of the shares in favour of Duboti Pty Ltd or Fashionable Leasing Pty Ltd. The defendants' flowchart was prepared on the basis that the execution of these transfers was valid. Kalpana's flowchart was prepared on the basis that the transfers had not been executed. As I understand it, the transfers will be valid even if it was wrongful for the executors to have implemented them. Accordingly, I have proceeded on the basis that the defendants' flowchart correctly represents the current ownership structure of the O'Donnell group of companies.
The defendants have been in control of the O'Donnell group since the grant of probate to them, as the effect of the deceased's will was that the defendants became entitled as the deceased's executors to exercise the powers attached to the deceased's shareholding in the various companies. Subject to the outcome of these proceedings, the deceased's five children will become entitled to his shares in the companies in the O'Donnell group by implementation of the scheme contained in the will. The Court does not know in any detail what steps have been taken to execute the terms of the will. That does not matter, as it is sufficient to know that the defendants have been in control of the O'Donnell group since the grant of probate.
It may be noted generally that the assets held by individual companies in the O'Donnell group comprised valuable hotel investments, childcare businesses, home units and other real properties and a rural property. Nothing at this stage turns on the detailed composition of the assets held by the companies in the O'Donnell group.
The evidence given by the expert valuation witnesses retained by the executors and Kalpana respectively attributed a total net value to the O'Donnell group of $28,170,236 or $32,720,859. The variance of $4,450,622 cannot be resolved on the evidence, and the parties apparently agree that the difference is not material for the purposes of these proceedings, as either value will be sufficient to satisfy Kalpana's family provision claim and a costs order in her favour if the assets in the O'Donnell group are available for that purpose.
The equivalent provision that governs the making of family provision orders by the Supreme Court of the ACT is s 8 of the Family Provision Act, which relevantly provides:
(1) On application by a person entitled, under section 7, to apply for provision out of the estate of a deceased person, the Supreme Court may order that the provision as that court thinks fit be made for the applicant out of the estate.
(2) The Supreme Court shall only make an order under subsection (1) if satisfied, in consideration of the criteria set out in subsection (3), that as at the date of the order, adequate provision for the proper maintenance, education or advancement in life of the applicant is not available -
(a) under the will of the deceased; or
…
(3) The criteria for the Supreme Court's decision under subsection (2) in relation to the deceased and the applicant are as follows:
(a) the character and conduct of the applicant;
(b) the nature and duration of the relationship between the applicant and the deceased;
(c) any financial and non-financial contributions made directly or indirectly by or on behalf of either or both the applicant and the deceased to the acquisition, conservation or improvement of any of the property or financial resources of either or both persons;
(d) any contributions (including any in the capacity of homemaker or parent) by either the applicant or the deceased to the welfare of the other, or of any child of either person;
(e) the income, property and financial resources of the applicant and the deceased;
(f) the physical and mental capacity of the applicant, and the deceased (during his or her life), for appropriate gainful employment;
(g) the financial needs and obligations of the applicant and the deceased (during the life of the deceased);
(h) the responsibilities of either the applicant or the deceased (during his or her life) to support any other person;
(i) the terms of any order made under the Domestic Relationships Act 1994, section 15 with respect to the property of the applicant or the deceased;
(j) any payments made to either the applicant or the deceased by the other, under an order of the court or otherwise, in respect of the maintenance of the other person or any child of the other person;
(k) any other matter the court considers relevant.
…
Under s 8 of the Family Provision Act, the Court has power to order that the provision that the Court thinks fit be made for the applicant out of the estate of the deceased, but only if it is satisfied, having regard to the listed factors that, as at the date of the order, adequate provision for the proper maintenance, education or advancement in life of the applicant is not available under the will of the deceased. Under the Succession Act two criteria must be satisfied. First, the Court must be satisfied that, at the time it considers the application, adequate provision for the proper maintenance, education or advancement in life of the applicant has not been made by the will of the deceased person. If the Court is so satisfied, it may order such provision out of the estate of the deceased as the Court thinks ought to be made for the maintenance, education or advancement in life of the applicant, having regard to the facts known at the time the order is made.
There was no suggestion in the present case that the differences between the two statutory regimes made any material difference to Kalpana's applications under each statute and the parties accepted that the effect of the two statutes was broadly equivalent.
The primary difference between the two statutory regimes is that s 8(1) of the Family Provision Act only permits provision to be ordered out of the deceased's estate. While s 59(2) of the Succession Act is to the same effect, the note to that subsection advises in effect that a family provision order may be made out of property that is designated as part of the notional estate of the deceased under Part 3.3, as well as out of the estate.
The observations of Dixon CJ and Williams J in McCosker v McCosker (1957) 97 CLR 566 at 571-572; [1957] HCA 82, extracted by the Court of Appeal in Bassett v Bassett at [82], are of particular relevance in the present case, as the deceased chose to apply his wealth to fund an extremely opulent lifestyle for himself and Kalpana during the period of their relationship.
As noted above, the deceased made no provision for Kalpana in his will, but he did make a statutory declaration at the same time in which he stated his reasons for leaving nothing to his wife. Consequently, the considerations stated by White J (as his Honour then was) in Slack v Rogan; Palffy v Rogan (2013) 85 NSWLR 253; [2013] NSWSC 522, in the extract contained in [87] of their Honours' judgment above, will be significant in the present case.
Although Kalpana was the deceased's fourth wife, his former wives have made no claim on his estate. The competing claims are between Kalpana, the deceased's five children, Anna, Kristina and Jurek. Thus, the competition is between a fourth wife of about five years duration, the five children of the deceased by prior marriages, a party who claims to be a former de facto partner, and that party's children by a prior marriage. I must qualify the reference to Anna's claim for family provision because, as I will explain below, Anna ultimately supported her claim for an order setting aside the deed of settlement and the orders made by the Family Court but does not appear to have made submissions in support of her family provision claim.
For the purpose of determining the merits of Kalpana's claim, it will be necessary to examine recent authority that has considered the application of the family provision sections of the Succession Act in the context of applications by widows for family provision relief. The Court of Appeal considered this issue in Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114. Although White JA was the presiding judge, I will refer first to the judgment of Brereton JA, as White JA expressed his reasons relevantly as a response to Brereton JA's reasons. Materially, Brereton JA said (footnotes omitted):
Widows' claims
[98] His Honour said that claims by widows do not constitute a separate category deserving of more favourable treatment, and that there was no general rule that if the size of the estate is sufficient a widow is entitled to expect that she will be provided for such that she may continue to live in the style to which she is accustomed. That there is no general rule that the widow's claim is always paramount is undoubted. So much was stated in the passage cited by his Honour from Re the Will of Gilbert, though the qualification stated by Jordan CJ is also important:
"… there is no general rule that the widow's right is in all cases paramount; although, on the facts, and in the circumstances, of particular cases, it may be proper to regard it as such. On the other hand, where, for example, the applicant is a second wife who has been married to the testator for only a short period, it may be proper, on the facts of a particular case, to take specially into account the position of the children of the first marriage".
[99] The proposition that there was no general rule that the widow's claim is always paramount was restated in Bladwell v Davis, by Bryson JA (albeit obiter, as leave to appeal was refused). Again, however, the qualifying comments of Ipp JA, with whom Stein AJA agreed, are important:
"[1] I agree with Bryson JA, for the reasons his Honour has stated, that 'it would be an error to accord to widows generally primacy over all other applicants regardless of circumstances and regardless of performance of the stages of consideration described in Singer v Berghouse (1994) 181 CLR 201 …'.
[2] I would add, however, that where competing factors are more or less otherwise in equilibrium, the fact that one party is the elderly widow of the testator, is permanently unable to increase her income, and is never likely to be better off financially, while the other parties are materially younger and have the capacity to earn more or otherwise improve their financial position in the future, will ordinarily result in the needs of the widow being given primacy. That is simply because, in such circumstances, the widow will have no hope of improving herself economically, whereas that would not be the position of the others. In that event, the need of the widow would be greater than that of the others."
[100] Those statements, about "paramountcy" or "primacy" of a widow's claim, were made in the context that there were competing claims on estates that were insufficient to meet all of them. In contrast, the present case is not one in which questions of primacy or paramountcy arise. That is because, as the primary judge said, the deceased's estate was ample to accommodate the appellant's claim without occasioning hardship to the respondents. This was not a case in which the estate was insufficient to meet all claims on the testator, or to enable him to satisfy his obligations to all of them, and so no occasion to determine whether primacy had to be given to one over the others arose.
[101] The question of what provision ought as a matter of community standards be made for a widow has been addressed in numerous cases, and the obligations of a testator towards a surviving spouse have often been described. …
…
[104] The "broad general rule" referred to in Luciano v Rosenblum was echoed by the Court of Appeal in Golosky v Golosky, in which Kirby P (as his Honour then was), with whom Cripps JA agreed, said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse is provided with accommodation appropriate to that which she or he has been accustomed, and to the extent that the assets available permit, a fund to meet unforeseen contingencies:
"(c) Consideration of other cases must be conducted with circumspection because of the inescapable detail of the factual circumstances of each case. It is in the detail that the answer to the proper application of the Act is to be discovered. No hard and fast rules can be adopted. Nevertheless, it had been said that in the absence of special circumstances, it will normally be the duty of a testator to ensure that a spouse (or spouse equivalent) is provided with a place to live appropriate to that which he or she has become accustomed to. To the extent that the assets available to the deceased will permit such a course, it is normally appropriate that the spouse (or spouse equivalent) should be provided, as well, with a fund to meet unforeseen contingencies; see Luciano (above) 69 to 70;
(d) A mere right of residence will usually be an unsatisfactory method of providing for a [spouse's] accommodation to fulfil the foregoing normal presupposition."
[105] In O'Loughlin v O'Loughlin, Davies AJA, with whom Mason P and Meagher JA agreed, said:
"[20] It is undoubtedly true to say that there is no such thing as a 'standard widow' and that every case must be determined on its own particular circumstances. However, it has long been recognized that, arising out of the marriage relationship, a testator has a duty to provide support for his widow after his death if she has need of it and if his estate has funds so to provide. Courts give more attention to the needs of a widow than they do to the needs of the children, if the children are adult and well able to support themselves. This point was made clear by the remarks of Lord Romer in Bosch v Perpetual Trustee Company Limited which I have cited above. There are many dicta to the same effect. In Worladge v Doddridge (1957) 97 CLR 1, Williams and Fullagar JJ said at 11:
'It is clear that the claim of a widow, where the estate is of considerable value, and there are no competing claims of children, should not be disposed of in any niggardly manner. She is entitled to such a provision for her maintenance and support as the court or judge thinks proper and "proper" is a word which, as the Privy Council pointed out in Bosch's Case lets in all the considerations there adverted to.'
[21] In Gregory v Hudson [1999] NSWCA 221, Handley JA, with whom Cole AJA agreed, cited with approval the remarks of Powell J in Luciano v Rosenblum which I have mentioned. In Sayer v Sayer, Sheller JA referred to the fourth principle as stated by Stout CJ in In re Allardice, Allardice v Allardice which was referred to by Lord Romer in Bosch v Perpetual Trustee Company Limited. At paragraph 9, Sheller JA also referred to the remarks of Powell J in Luciano v Rosenblum and expressed the view that, in the case before him, the widow's claim was 'paramount'. These are examples of cases where judges have referred to a need on the part of a widow for maintenance and support and a moral obligation on the part of the testator to provide it."
[106] As this court pointed out in Burke v Burke, such observations are not rules of law, but guidelines that may give assistance and provide guidance that are not to be elevated to rules of law. That does not mean that they are without importance and significance, because, as Basten JA explained in Chapple v Wilcox:
"[19] … the real provenance of the 'principles' is that they constitute a reflection of community values, being a factual matter, but one as to which reasoned findings of judges with experience in these matters may well provide valuable guidance."
[107] Similarly, Barrett JA explained:
"[67] … [they] provide a useful touchstone that may be applied with circumspection by judges called upon to ascertain and apply 'the feeling and judgment of fair and reasonable members of the community' in cases of the present kind."
[108] Such guidelines also provide the additional benefit of affording a certain amount of consistency in decision-making, and indication of expectations and advice to litigants. Without such guidelines, decision-making and advising in this field becomes a morass of idiosyncratic decisions devoid of any consistency.
[109] Some of the passages to which I refer use the traditional concept of "moral duty", rather than the more fashionable one of "community standards". For my part, I prefer the former, which - despite its disapproval in Singer v Berghouse - was rehabilitated in Vigolo v Bostin, and is recognised in the statute. However, I doubt that the difference matters much; what the community expects a testator to do by way of provision for claimants on his or her bounty, and what the testator is morally obliged to do in that respect, are probably the same thing.
White JA added the following observations:
[37] With the following riders, that are in part by way of emphasis and in part by way of qualification, I agree with the reasons of Brereton JA in relation to guidelines for widows' claims (at [98]-[109]). The matter of emphasis is that guidelines such as those expressed by Powell J in Luciano v Rosenblum (1985) 2 NSWLR 65 for claims by widows … cannot be elevated to inflexible rules and are subject always to the consideration of the particular circumstances of each case, including the size of the estate, any competing claims, the applicant's conduct and the applicant's relationship with the deceased. …
…
[40] My qualification concerns recourse to community standards or community expectations. I acknowledge the weight of authority that endorses a judge's bolstering his or her view as to whether an applicant has been left without adequate provision for proper maintenance or advancement in life and whether a testator or testatrix has failed in his or her moral duty to provide such adequate provision, by reference to what the community (or fair and reasonable members of the community) would expect (for example, Chapple v Wilcox at [11], [12] and [102]; Andrew v Andrew (2012) 81 NSWLR 656; [2012] NSWCA 308 at [12] and [13]).
[41] My first difficulty is in understanding what is meant by community standards or community expectations. Does it refer to the community generally or to a more particular community of which the deceased and his family and the applicant form part informed by particular cultural, ethnic, religious or social values? I assume that the answer is the former, although I am not aware of any case in which the question has yet come up for decision. What would be the position if the expectation of a particular cultural, ethnic, social or religious community in which the deceased lived was that a child who married without his or her parents' consent should be cut off without a penny? Would evidence of that expectation be an answer to an otherwise worthy claim? I would answer that question in the negative, but that is because I do not consider the references to community standards or community expectations are to an externally provable fact. In Goodman v Windeyer (1980) 144 CLR 490; [1980] HCA 31 Gibbs J said (at 502):
"… the words 'adequate' and 'proper' are always relative. There are no fixed standards, and the court is left to form opinions upon the basis of its own general knowledge and experience of current social conditions and standards".
…
[43] It is the court's perception of what fair and reasonable members of the community would expect a testator to provide for the applicant, not something that is to be proved as a standard against which the court's judgment is to be made, that is relevant.
Simpson AJA substantially agreed with the reasons given by Brereton JA.
Finally, Ward CJ in Eq (as her Honour then was) said in Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith [2019] NSWSC 843:
[168] As the Court of Appeal in Steinmetz v Shannon [2019] NSWCA 114 (Steinmetz v Shannon) has recently made clear, guidelines (of the kind that have been expressed in various cases relating to claims by widows, or adult children, or grandchildren) cannot be elevated to inflexible rules and are always subject to the consideration of the particular circumstances of each case, including the size of the estate, any competing claims, the applicant's conduct and the applicant's relationship with the deceased (see White JA at [37]; Brereton JA at [106]).
[169] There is, and should be, no predisposition for or against the making of orders for provision for adult children (just as there is, and should be, no predisposition for or against the making of orders for the deceased's spouse). To approach the matter with such a predisposition would, if nothing else, be inconsistent with the observations of the Court of Appeal (in Steinmetz v Shannon and elsewhere) and inconsistent with the recognition in numerous cases that, in the circumstances of the particular case there at hand, there had been inadequate provision for an adult child (and the making of orders for provision out of the estate for an adult child in the particular circumstances of that case) (see, for example, Stern v Sekers; Sekers v Sekers [2010] NSWSC 59).
[170] Each case must be determined on its merits, whether the applicant for provision be an adult child, surviving spouse, or other dependant; I do not read the observations of the Court of Appeal in Sgro v Thompson as suggesting otherwise (and, as I say, the Court of Appeal in Steinmetz v Shannon makes this clear). As Lindsay J said in Verzar v Verzar [2012] NSWSC 1380 (at [131]), in a passage that has been endorsed by Hallen J in Sreckovic v Sreckovic [2018] NSWSC 1597 (Sreckovic) (at [154]):
Whatever guidance one might draw from analogous cases all analogies, and any guidelines drawn from a pattern of similar cases, must yield to the text of the legislation, the duty of the Court to apply that text to the particular circumstances, and the totality of material circumstances, of each case. Preconceptions and predispositions, comforting though they may be, can be the source of inadequate consideration of the jurisdiction to be exercised: Bladwell v Davis [2004] NSWCA 170 at [12] and [18]-[19] .
Brereton J (as his Honour then was) stated equivalent principles in Taylor v Farrugia [2009] NSWSC 801 at [26] and Hitchcock v Pratt (2010) 79 NSWLR 687; [2010] NSWSC 1508 at [6].
These principles are now consistent with s 64 of the Succession Act, as it has been in effect from the time of the deceased's death, which is:
64 Orders may affect property outside jurisdiction
A family provision order may be made in respect of property situated outside New South Wales when, or at any time after, the order is made, only if the deceased person was, at the time of death, domiciled in New South Wales.
The application of these principles depends upon the domicile of the deceased at the date of his death, and whether the property sought to be made subject to a family provision order is classified as movable or immovable property for the purposes of the conflicts of law. That classification can sometimes involve complications, but in the present case it is clear that only real estate would be treated as immovable and all other candidate property would be classified as movable property.
If the Court finds that the deceased was domiciled in NSW at the date of his death, then this Court has jurisdiction to determine the claim commenced by Kalpana in this Court. For that purpose, the Court would apply the relevant provisions of the Succession Act, and the property that may be made the subject of a family provision order would be any real estate of the deceased in NSW and any movable property of the deceased wherever situated. If the deceased was domiciled in the ACT, then this Court will only be able to make a family provision order under the Succession Act if there is real property in this State that is amenable to being the subject of an order under that Act. I use the word "amenable" because there is authority for the proposition that it is not essential that the deceased be the owner of the real property at the date of his death so that the real property forms part of his actual estate. In Hitchcock v Pratt, Brereton J (as his Honour then was) held at [20] that, if there is real property situated in this State that can be designated as notional estate under Part 3.3 of the Succession Act, that property may attract the jurisdiction of this Court even if the deceased was domiciled elsewhere, "since once designated it assumes for practical purposes equivalence to actual estate". If that is right, this Court will have jurisdiction to make a family provision order under the Succession Act against real property in this State that is not part of the estate of the deceased if it is treated as the deceased's notional estate.
However, if the deceased was domiciled in the ACT then, absent real property in this State that is part of the actual estate of the deceased, or may be designated as part of his notional estate, only the Supreme Court of the ACT has jurisdiction to make a family provision order. In this case, that jurisdiction and the proceedings in that Court have been cross-vested to this Court. In the determination of the ACT proceedings, this Court would have to apply the Family Provision Act, which does not possess the notional estate provisions of the Succession Act. The Court would be left to fashion a family provision order over real property in the ACT and any movable property of the deceased wherever situated.
The deceased could also have exercised his power as a director of companies in the O'Donnell group to cause companies whose shares were owned by the companies of which he was a director to be wound up and their surpluses distributed in specie to their shareholder.
As the deceased did not exercise any of his powers in respect of the O'Donnell group before his death to achieve a distribution to Soothink Pty Ltd, the effect of the deceased's will was that the executors became entitled to exercise the deceased's powers as shareholder of companies in the O'Donnell group and to appoint themselves as the directors of those companies.
A consequence of the deceased's failure to exercise his powers to cause Duboti Pty Ltd to distribute income and capital of the Mugga Way Family Trust to Soothink Pty Ltd is that the deceased's actual estate upon his death was less in value than it otherwise would have been.
Conversely, the effect of the failure of the deceased to exercise his powers before his death was that the value of the Mugga Way Family Trust that remained available to be distributed to the remaining nominated beneficiaries was not decreased by any distribution for the benefit of the deceased.
The deceased demonstrated the reality of his ability to control the companies in the O'Donnell group by the manner in which he extracted money to fund his lifestyle in the last years of his life, which led to the difficulty experienced by his executors in their dealings with the ATO in respect of the application of Division 7A. The deceased apparently caused companies to pay money for his benefit without attending to the requirements of company law and his obligation to declare income that he received to the ATO. The Court does not have evidence of the detail of these transactions, but there is no reason to conclude that the deceased did not exercise power that was lawfully reposed in him.
At the hearing, Kalpana does not appear to have prosecuted her case in the manner prefigured by her solicitors' letter giving particulars of her notional estate claim. It also appears that the defendants did not treat the letter seriously as they made no response to it, other than to note that particulars had been given in those terms. That was a reasonable course for the defendants to have taken.
The case propounded by Kalpana at the hearing concerning the operation of Part 3.3 of the Succession Act was formulated in the following way. The transcript at T 372.34 records that the Court marked for identification as MFI-1 the issues as propounded by Kalpana. Kalpana's list of issues included:
ix. During his lifetime did the Deceased exercise a power or was capable of exercising a power such that property within the O'Donnell Group became held by him in his own right.
x. With reference to s 76(2)(a) and (c) of the Succession Act 2006, at the time of his death was the deceased capable of exercising a power, such that property then within the O'Donnell Group became held by him in his own right and was that Deceased capable of exercising a power to extinguish other interests held by other persons in the O'Donnell Group.
The second of these issues explicitly proposes that there were circumstances that satisfied the definition of a relevant property transaction in the specific examples in s 76(2)(a) and (c) of the Succession Act. It is not clear whether issue ix was intended to capture circumstances that would satisfy the definition of a relevant property transaction in s 75(1) but not fall within the identified paragraphs of s 76(2).
Although Kalpana nominally introduced issues into the proceedings that in theory would be capable of justifying the making of a notional estate order against property owned by companies in the O'Donnell group, Kalpana did not develop that argument in detail in her submissions. In particular, Kalpana did not put any submissions directed at establishing that real property owned by companies in the O'Donnell group situated in NSW could be designated as notional estate of the deceased, even if the deceased was found to be domiciled in the ACT. Consequently, the defendants did not have an opportunity to answer such submissions in respect of how the complex provisions in Part 3.3 applied to the making of notional estate orders in respect of real property owned by companies in the O'Donnell group that is situated in this State.
I have emphasised the word "the" where it is used in the expression "as the result of" in s 80(3)(a) because the use of the definite article would usually have the effect that it was necessary for the relevant property transaction to be the sole cause of the specified result. In Kavalee v Burbidge, Mason P made observations about the causative effect required of a prescribed transaction in s 22 of the Family Provision Act 1982, which is the equivalent of s 75 and s 76 of the Succession Act, and uses the indefinite article in the expression "as a result of" when stipulating the required effect of what is now called the relevant property transaction. There are differences in the structure and subtle differences in wording of apparently equivalent provisions in the sections of the Family Provision Act 1982 and the Succession Act that govern the making of notional estate orders. That gives rise to questions as to whether the drafting differences connote a legislative intention to produce different results. In Kavalee v Burbidge, Mason P said at 446 in relation to s 22(1)(a) of the former legislation, which is equivalent to the present s 75(1):
… I do not see s 22(1)(a) as confined to acts or omissions that are the operative cause of property becoming held by the deceased's intended disponee. To do so would ignore the thrust of this liberal enactment which emphasises its scope with the words "directly or indirectly", "as a result of which" (emphasis added) and "whether or not the property becomes … so held immediately".
Mason P added, at 446-7: "In my view, the choice of a looser test of causation is open. For the reasons given, s 22(1) suggests, and certainly permits, the looser approach to the factual issue of causation that I have adopted". Further, his Honour said: "… The legislation is clearly intended to operate in the context of human agents where several may have to act in concert and where there is the possibility that one may not co-operate. …"
The question is whether the use of the different expression "as the result" in s 80(3), and, as will be seen, in s 76(2)(a) and (c) of the Succession Act, has the effect that the observations made by Mason P on the issue of causation under the former legislation no longer apply, so that the relevant property transaction must be the operative cause of the stipulated result.
In Wardy v Salier, White J noted, at [109] and [110], that the expression "with the result that" is used in s 76(2)(a) and (c) of the Succession Act, while the equivalent provisions in s 22(4)(a) and (c) of the Family Provision Act 1982 that preceded the Succession Act used the expression "and, as a result of". White J also noted, at [111]-[112], the reasoning of Mason P in Kavalee v Burbidge at 454, wherein the President relied upon the use of the indefinite article in the Family Provision Act provisions instead of the definite article as justifying the interpretation that it was sufficient if the transaction was a contributing cause of the prescribed result. I respectfully agree with and adopt the reasoning of White J at [113]-[115], that led his Honour to express the following conclusion at [115]:
[115] In my view, the use of the expression "with the result" in s 76(2)(a) does not mean that the omission to exercise a power must be the sole cause of property becoming held by another person or subject to a trust, or to another person's becoming, or continuing to be, entitled to exercise the power. In my view, a contributing cause is sufficient. The use of the definite article rather than the indefinite article in describing the causal relationship does not imply that the omission must be the sole cause of the outcome, be it a change in the holding of property or the continuation of the holding of property. With respect to Mason P in Kavalee v Burbidge I do not think that the words "with the result that" have a different meaning from the words "as a result of which". Both phrases denote a causal relationship. The nature of the required causal relationship is to be discerned from the context and purpose of the provisions rather than the use of the definite or indefinite article. In my view, the conclusions reached by Mason P in Kavalee v Burbidge were primarily drawn from his Honour's analysis of the legislative purpose of the legislation. His Honour's reference to and reliance on the use of the indefinite article was an additional textual reason given for the conclusion, but was not essential to it. Indeed, when referring to s 22(4) in relation to a different argument, his Honour used the language "as the result of which" in describing the operation of s 22(4) (at 455.D).
The result is that the failure by the deceased to exercise his control over Duboti Pty Ltd to cause it to exercise its discretion as trustee of the Mugga Way Family Trust to make a distribution to himself before his death may be a relevant property transaction even if it was only a contributing cause of the requisite effect.
I respectfully agree with and adopt the reasoning given by White J at [125]-[142] that led his Honour to conclude that the various sections in Part 3.3 work harmoniously to permit a transaction being a relevant property transaction whether or not the transaction results in a change in the holding of property. At [142], White J concluded:
[142] The words that can be added to cure the problem are straightforward and clear and do not involve a great change to the drafting. By adding the words "was or" before "became held" in paras (a) and (b) of [s 80] (3), the subsection has an harmonious operation with ss 75 and 76 and also with s 77. Section 77(2) recognises that a relevant property transaction can take effect without property becoming held by another person or subject to a trust and makes provision to deal with that. Section 80(3) does not. To add the words in question would be consistent with the other provisions and so satisfy the fourth condition referred to by McColl JA in Taylor v The Owners - Strata Plan No. 11564 [2013] NSWCA 55; (2013) 83 NSWLR 1 at 9, [40].
Consequently, the failure by the deceased to exercise his control over Duboti Pty Ltd to cause it to exercise its discretion as trustee of the Mugga Way Family Trust to make a distribution to himself before his death may also be a relevant property transaction even though it did not have the effect of transferring property to a person.
The power given to the Court by s 80(1) to make a notional estate order is predicated on the Court being satisfied that the deceased entered into a relevant property transaction before his death. The circumstances that constitute a relevant property transaction are specified in s 75(1) in the following terms:
(1) A person enters into a relevant property transaction if the person does, directly or indirectly, or does not do, any act that (immediately or at some later time) results in property being -
(a) held by another person (whether or not as trustee), or
(b) subject to a trust,
and full valuable consideration is not given to the person for doing or not doing the act.
This provision may be satisfied if (a) the deceased does or does not do any act; (b) where the deceased does an act, the relevant effect is achieved directly or indirectly; (c) the effect is immediate or at some later time; (d) the deceased's conduct has the specified result; and (e) full valuable consideration is not given to the deceased for doing or not doing the act. The specified result is property being held by another person or being subject to a trust.
While s 75 describes the circumstances that may constitute a relevant property transaction in terms of absolute generality, s 76(1) provides that the circumstances set out in subsection (2) constitute the basis of relevant property transactions for the purposes of s 75, subject to full valuable consideration not being given. Section 76(3) has the effect that the circumstances specified as examples in s 76(2) do not limit the acts or omissions that may satisfy the requirements of being a relevant property transaction set out in s 75(1).
It is only necessary to set out that part of s 76(2) on which reliance has been placed by Kalpana, as follows:
(2) The circumstances are as follows -
(a) if a person is entitled to exercise a power to appoint, or dispose of, property that is not in the person's estate and does not exercise that power before ceasing (because of death or the occurrence of any other event) to be entitled to do so, with the result that the property becomes held by another person (whether or not as trustee) or subject to a trust or another person (immediately or at some later time) becomes, or continues to be, entitled to exercise the power,
…
(c) if a person holds an interest in property in which another interest is held by another person (whether or not as trustee) or is subject to a trust, and the person is entitled to exercise a power to extinguish the other interest in the property and the power is not exercised before the person ceases (because of death or the occurrence of any other event) to be so entitled with the result that the other interest in the property continues to be so held or subject to the trust…
In Kavalee v Burbidge, at 451, Mason P explained that the expression "a power to dispose of property" is not restricted to a power of appointment in the technical sense, saying:
… A "power to … dispose of property" is not a technical term of law. In context it must mean something more than a traditional power of appointment, assuming that the latter concept were limited in any presently relevant way.
Although the existence of the power to dispose of property is not to be determined in a technical way, the power must be legally enforceable and a practical capacity to achieve a particular result without the ability to legally compel that result not sufficient. Mason P said at 452:
I accept that there is a vital distinction between de facto control and legal entitlement: see Re Sutton Coldfield Grammar School (1881) 7 App Cas 91; National Companies & Securities Commission v Brierley Investments Ltd (at 287). Section 22(4)(a) [s 76(2)(a)] requires entitlement. However, entitlement and immediate enjoyment are different. Here the powers of DFC as Founder were at the deceased's disposal as a matter of right, through the rights which the deceased had over Mr Defago. And, if he chose, the deceased was, as a matter of right, able to have the Founder replaced by a Founder that would do the deceased's bidding. Indeed, the deceased could have required DFC to appoint the deceased himself as the Founder. All steps to effect an appointment or disposal of assets as the deceased chose were really administrative once the deceased determined to act.
A power to dispose of property may reside in the deceased even where other persons also had the power to achieve the same result, as his Honour said at 452:
… But more than one person may have concurrent powers to deal with or dispose of the same item of property. For example, a first and second mortgagee may each have a concurrent power of sale.
This observation is consistent with the effect of s 55(3)(c) of the Succession Act, which provides:
(3) A reference in this Chapter to a person entitled to exercise a power means a person entitled to exercise a power, whether or not the power -
…
(c) is to be exercised solely by the person or by the person together with one or more other persons (whether jointly or severally).
As I have noted above, s 80(2) provides that the section applies to relevant property transactions that have taken effect at or during specified times. Section 77 is the provision that governs when relevant property transactions take effect. Relevantly to the present case, the section provides:
77 When relevant property transactions take effect
(1) For the purposes of this Chapter, a relevant property transaction is taken to have effect when the property concerned becomes held by another person or subject to a trust or as otherwise provided by this section.
(2) A relevant property transaction consisting of circumstances described in section 76 (2) (a), (c) or (d) is taken to have been entered into immediately before, and to take effect on, the person's death or the occurrence of the other event resulting in the person no longer being entitled to exercise the relevant power.
I am satisfied by parity of reason with the Court of Appeal in Kavalee v Burbidge and by White J in Wardy v Salier (in the latter case, particularly at [117]) that the failure of the deceased to exercise his powers as a director and shareholder in Duboti Pty Ltd in the manner described above, added to his failure to exercise his powers as director and shareholder of other O'Donnell group companies, where he was the sole director and shareholder, constitutes a relevant property transaction within the meaning of s 75(1) and s 76(2)(a) of the Succession Act.
I respectfully agree with the observation of White J in Wardy v Salier at [123] that there is no reason to think that the deceased would have been acting improperly had he exercised his power as a shareholder and director of Duboti Pty Ltd to appoint trust assets to himself.
I consider that the circumstances of this case satisfy that part of the description of the relevant property transaction in s 76(2)(a) whereby the failure of the deceased to exercise a power to dispose of property before death has the result that "another person (immediately or at some later time) becomes, or continues to be, entitled to exercise the power." That is because, upon the death of the deceased, Jaimie, as the only remaining director, continued to be entitled to exercise the power of a director, and the executors became entitled to exercise the powers of shareholders in Duboti Pty Ltd.
I am also satisfied, by parity of reasoning with White J in Wardy v Salier at [118]-[122], that the same failure to act by the deceased was a relevant property transaction within the meaning of s 75(1) and s 76(2)(c) of the Succession Act.
None of the nominated beneficiaries or classes of beneficiaries under the Mugga Way Family Trust had any property interest in the assets of the trust. As discretionary beneficiaries, all they had was a right to require Duboti Pty Ltd to properly perform its duties as such: Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12; [1965] AC 694. However, by reason of the definition of "property" in s 3(1) of the Succession Act "property includes any valuable benefit". The remaining nominated beneficiaries of the Mugga Way Family Trust received a valuable benefit by reason of the deceased's failure to exercise his powers to cause Duboti Pty Ltd to make a distribution of trust property to himself, because upon the deceased's death the executors became entitled together to exercise the powers that the deceased did not exercise and the amount of property that remained available had not been reduced because of any distribution made in favour of the deceased.
The remaining provisions in Part 3.3 prescribe the manner and circumstances in which the Court may make a notional estate order designating property as notional estate of the deceased after it is satisfied that a relevant property transaction has occurred that engages the Court's power in s 80(1).
Section 83 of the Succession Act restricts the power of the Court to designate property as notional estate of the deceased unless, in effect, the Court is satisfied that the relevant property transaction has diminished the estate that is available for distribution. In the present case, the relevant part of s 83(1) is par (d), which provides:
83 Disadvantage and other matters required before order can be made
(1) The Court must not, merely because a relevant property transaction has been entered into, make an order under section 80, 81 or 82 unless the Court is satisfied that the relevant property transaction or the holding of property resulting from the relevant property transaction -
…
(d) involved an omission to exercise a right, a discretion or a power of appointment, disposition, nomination or direction that could, when the relevant property transaction was entered into or at a later time, have been exercised by the principal party to the transaction or any other person (whether alone or jointly or severally with any other person) so as to result in a benefit to the estate of the principal party to the transaction or a person entitled to apply for a family provision order from the estate or, if the deceased person was not the principal party to the transaction, the deceased person (whether before, on or after death).
Section 83(1)(d) is applicable in the present case because any relevant transaction that the deceased entered into involved the deceased not exercising powers that he had that had the effect that property did not become part of the deceased's estate at the time of his death.
The effect of s 84 of the Succession Act is that, if the notional estate order is made, a person's rights are extinguished to the extent that they are affected by the order.
Section 86 makes the Court's power to make a notional estate order subject to the provisions in Division 3. Relevantly, that Division includes s 87, which provides:
87 General matters that must be considered by Court
The Court must not make a notional estate order unless it has considered the following -
(a) the importance of not interfering with reasonable expectations in relation to property,
(b) the substantial justice and merits involved in making or refusing to make the order,
(c) any other matter it considers relevant in the circumstances.
The combined effect of s 84 and s 87 of the Succession Act is to place substantial restrictions on the ability of the Court to make notional estate orders that will depend on the specific circumstances of each particular case. As the effect of a notional estate order in relation to property will be to extinguish every other person's rights in relation to that property, the effect of the order may well be to interfere with the reasonable expectations of other persons in relation to the property and create injustice to those persons. That may well be the consequence of the making of a notional estate order in relation to specific property owned by a company within a group of companies such as the O'Donnell group. Obviously, the interests of third-party shareholders and creditors may often make it unjust for the Court to make a particular notional estate order.
Under s 88 of the Succession Act, the Court must not make a notional estate order unless it is satisfied that the deceased left no estate, or the estate is insufficient to meet any family provision order or order for costs that would be made, or the estate is not sufficient to meet the family provision order or because other persons are entitled to make an application for family provision or because there are special circumstances.
Section 89 of the Succession Act is important because it sets out the circumstances that the Court must consider in fashioning an appropriate notional estate order. That may be a complex and problematic exercise, as the Court may be presented with choices that may differentially affect third parties, and may have commercial and taxation consequences. As I understand the position adopted by the defendants at the hearing, it is not necessary in this case to set out s 89 or to discuss it, at least at this stage. The defendants have asked the Court to determine the question whether a family provision order should be made under the Succession Act in favour of Kalpana, and if so, the value of the family provision that should be given to Kalpana. If the actual estate is not sufficient to meet that order, and the Court is satisfied that it has jurisdiction to and should make an order designating notional estate of the deceased, then the defendants wish to have time to investigate the notional estate order that should be made in relation to the O'Donnell group that reasonably satisfies Kalpana's entitlement, but does not subject the O'Donnell group and the defendants to any unnecessary disadvantage. That is a reasonable position for the defendants to adopt, and it is the course that I will follow. That will also have the effect of sparing the Court from undertaking an exercise that would not readily be feasible on the evidence before the Court.
To the extent that Kalpana relied upon the fact that the deceased was "entitled to exercise a power" within the meaning of s 76(2)(a) and (c) of the Succession Act, Kalpana could not rely upon the mere existence of the deceased's power as a director to cause a relevant company to transfer real property owned by that company directly to the deceased without full valuable consideration, as that would have involved a breach of the deceased's fiduciary duty to the company: see Hitchcock v Pratt at [28]-[29], where Brereton J followed reasoning to that effect by Hodgson J (as his Honour then was) in The Estate of Thiess; Brinkman v Johnston (Supreme Court (NSW), Hodgson J, 4 February 1994, unrep (BC9405349)) at 18.
That may not have been the end of the matter, had Kalpana relied upon the general definition of the relevant property transaction in s 75(1) and put a more complex case based on all of the powers that the deceased was entitled to exercise as a consequence of his relationship with all relevant companies in the O'Donnell group. It may be arguable that, although the deceased could not lawfully exercise his power as the director of a property owning company to cause the company to transfer property to himself without consideration, there may have been a means for the deceased to have achieved that result by dismantling the O'Donnell group of companies from the top down, probably by causing relevant companies to be wound up and their property distributed in specie to shareholders so that it ultimately became owned by Duboti Pty Ltd as trustee for the Mugga Way Family Trust.
It is not necessary for the Court to consider this possibility, because it was not advanced by Kalpana or contested by the defendants. The Court may assume that Kalpana considered the difficulties that the restrictions in Part 3.3 would have confronted her and she has not propounded this case. As I will explain below, Evenlong Pty Ltd was heavily indebted to a financier. The deceased only had a one-half interest in Amazonia Pty Ltd so that any notional estate order made in respect of property owned by that company would be likely to unreasonably extinguish the rights of third parties. These circumstances would probably have prevented the Court making a notional estate order against real property in this State owned by those companies. The position with Enjet Pty Ltd is less clear.
In these circumstances, the Court will only be able to apply Part 3.3 of the Succession Act if the evidence justifies a finding that the deceased was domiciled in NSW at the date of his death.
While a person's domicile is a conceptual legal device for ascertaining the law that governs aspects of the person's status, the choice of the person's domicile may have fundamental implications for other persons who have relationships with the person that are governed by the person's domicile. A party to a marriage might learn that the marriage is void because the other party did not have capacity to marry under the law of that party's domicile. As may happen in the present case, a party to a marriage may escape compliance with the community's expectation that the party adequately provide for the party's spouse on the party's death, if the law of the party's domicile does not provide an effective remedy to the widow or widower to achieve that outcome.
It is clear that the deceased was domiciled in the ACT at the time of his marriage to Kalpana. The principal question in this case is whether the deceased had acquired a domicile in New South Wales at the date of his death. It is not clear whether the deceased's domicile in the ACT was a domicile of origin or a domicile of choice. I note that the defendants' submissions refer to the domicile as being a domicile of choice, which seems likely as the deceased was born in New South Wales. As a matter of law it no longer matters which form the ACT domicile took, as the principle that governs whether that domicile was supplanted by a domicile of choice in New South Wales is the same in either event.
The classical statement of the principle governing the acquisition of a domicile of choice was made by Lord Westbury in Udny, beginning as follows at 458 (emphasis added):
Domicil of choice is a conclusion or inference which the law derives from the fact of a man fixing voluntarily his sole or chief residence in a particular place, with an intention of continuing to reside there for an unlimited time. This is a description of the circumstances which create or constitute a domicil, and not a definition of the term.
In a great many of the reported cases, the enquiry is whether a person who has a domicile in one country has acquired a new domicile of choice in the circumstances in which the person has moved residence to a new country. The question is whether the person who has changed his or her country of residence has formed the intention necessary to acquire a domicile of choice in the new country of residence. In such a case the word "sole" in Lord Westbury's reference to the person's residence is applicable. However, in the deceased's case, he had residences in a number of States and Territories at the one time and he moved residence between them. Here, the question is the identification of the deceased's chief residence. That exercise may be relatively straightforward where the person divides his or her residence between a couple of countries with significantly different legal systems. As will be seen, the issue might be significantly more challenging where the person resides in a number of states and territories of a union (such as Australia) where the movements are frequent and the differences in the content of the legal systems are minimal in relative terms.
Lord Westbury's statement of the common law principle has been accepted in numerous cases, but it is sufficient to note that it was approved by the High Court in Fremlin v Fremlin (1913) 16 CLR 212; [1913] HCA 25 (Fremlin) by Barton J at 223 and Isaacs J (with whom Gavan Duffy J agreed at 244) at 232-3.
Lord Westbury's principle was more clearly set out by Ligertwood J in In re Cartier, Deceased [1952] SASR 280 (Cartier) as follows (footnotes omitted):
The fundamental principles relating to domicile were stated by Lord Westbury in Udny v. Udny. Using his exact words, I shall state them in a series of propositions, all of which are material to the determination of the question before me: -
"(1) It is a settled principle that no man shall be without a domicile, and to secure this result the law attributes to every individual as soon as he is born the domicile of his father if the child be legitimate and the domicile of the mother if illegitimate.
(2) This has been called the domicile of origin and is involuntary.
(3) Other domiciles, including domicile by operation of law, are domiciles of choice. For as soon as an individual is sui juris it is competent to him to elect and assume another domicile, the continuance of which depends upon his will and act.
(4) When another domicile is put on, the domicile of origin is relinquished and remains in abeyance during the continuance of the domicile of choice.
(5) As the domicile of origin is the creature of law and independent of the will of the party, it would be inconsistent with the principles upon which it is by law created and ascribed to suppose that it is capable of being by the act of the party entirely obliterated and extinguished. It revives and exists whenever there is no other domicile, and it does not require to be regained or reconstituted animo et facto in the manner which is necessary for the acquisition of a domicile of choice.
(6) Domicile of choice is a conclusion or inference which the law derives from the fact of a man fixing voluntarily his sole or chief residence in a particular place with an intention of continuing to reside there for an unlimited time:
(a) There must be a residence freely chosen and not prescribed or dictated by any external necessity, such as the duties of office, the demands of creditors, or the relief from illness.
(b) It must be residence fixed not for a limited period or particular purpose, but general and indefinite in its future contemplation.
(c) Residence originally temporary may afterwards become general and unlimited, and in such a case as soon as the change of purpose or animus manendi can be inferred, the fact of domicile is established.
(7) The domicile of origin may be extinguished by act of law, as, for example, by sentence of death or exile for life, which puts an end to the status civilis of the criminal, but it cannot be destroyed by the will and act of the party.
(8) Domicile of choice, as it is gained animo et facto, so it may be put an end to it in the same manner.
(a) An acquired domicile may be effectively determined by unequivocal intention and act.
(b) When it is so determined, the domicile of origin revives until a new domicile of choice be acquired."
It is only necessary to add to these propositions that a domicile of choice may be relinquished by the acquisition of a new domicile of choice, in which case there is no temporary reviver of the domicile of origin.
Lord Westbury's propositions have been applied in the exceedingly numerous cases which have been decided on the question of domicile in the eighty years which have elapsed since he pronounced them. They are the bases of the English treatises and text books on domicile. The difficulties which have arisen have been in their application to the circumstances of the particular case.
This common law principles have been varied by statutes of the Commonwealth and all the States and Territories that are equivalent to the Domicile Act 1979 (NSW). The Domicile Act is not a code and the common law continues to apply as modified by the Act: In the Marriage of Ferrier-Watson v McElrath (2000) 26 Fam LR 169; [2000] FamCA 219 (McElrath) at 187 [71] (Holden and Jerrard JJ).
A number of the sections of the Domicile Act vary the common law position as stated in Cartier as follows:
Section 6 abolishes the common law rule (see Ligertwood J's points 4, 5 and 8(b)) that, when a domicile of choice is acquired, the domicile of origin is relinquished but remains in abeyance, so that it revives if the domicile of choice is abandoned without a new domicile of choice being acquired at the instant of abandonment. The section has the effect that, once a person's domicile of origin is lost by the acquisition of a new domicile of choice, the domicile of origin does not revive when the person ceases permanently to reside in the country of the domicile of choice, but instead that domicile of choice continues until the person acquires a new domicile of choice.
Although not included in the extract from Cartier set out above, Ligertwood J also recorded the common law principle that more cogent proof of the loss of the domicile of origin was required than proof of the loss of a domicile of choice. A person's domicile of origin was considered to be tenacious, in that the circumstances in which a person acquired a domicile of origin at birth made that domicile "more enduring, its hold stronger, and less easily shaken off" than a later domicile of choice. Section 11 of the Domicile Act provides that the "acquisition of a domicile of choice in place of a domicile of origin may be established by evidence that would be sufficient to establish the domicile of choice if the previous domicile had also been a domicile of choice."
In relation to Lord Westbury's use of the expression "sole or chief residence in a particular place", s 9 of the Domicile Act provides:
The intention that a person must have in order to acquire a domicile of choice in a country is the intention to make his or her home indefinitely in that country.
It is thus seen that the legal principles that govern the acquisition of a domicile of choice by a person require proof that the party has formed a particular intention in relation to the putative new country of domicile. Ascertainment of subjective intention, particularly that of a dead person, may be inherently difficult as a matter of satisfactory proof. The High Court commented upon the primacy of intention in the acquisition of a domicile of choice in LK v Director-General, Department of Community Services (2009) 237 CLR 582; [2009] HCA 9. The Court at [24] cited a text that referred to "…the distasteful problems of the English concept [of domicile] and the uncertainties of meaning and proof of subjective intent". Their Honours added (footnotes omitted):
[24] ... But it was soon recognised that domicile, in English law, is "an idea of law". Thus, in considering acquisition of a domicile of choice, questions of intention loomed large, and the relevant intention had to have a particular temporal quality (an intention to reside permanently or at least indefinitely). Use of "habitual residence" in the Abduction Convention rather than domicile as the relevant connecting factor entails discarding notions like the revival of domicile of origin and the dependent domicile of a married woman which marked the English law of domicile. More importantly for present purposes, use of "habitual residence" in preference to domicile entails discarding the approach of the English law of domicile which gave questions of intention a decisive importance in determining whether a new domicile of choice had been acquired.
Care must now be taken in considering previous authority concerning the quality of the intention that is necessary for a person to acquire a domicile of choice, to adjust for the change in the law whereby a person's domicile of origin was treated as more tenacious than a person's subsequent domicile of choice, as, if the relevant change was from a domicile of origin, the description of the required intention may overstate the intensity of the intention and the standard of proof that is required. It is nonetheless instructive to consider the description of the process given by Isaacs J in Fremlin at 233-4. It will be convenient to set out the extract from his Honour's reasons in parts, so that appropriate observations may be made. His Honour began by saying (footnotes omitted):
That change is said to be serious. The voluntary abandonment of one civil community for another is never a light step, but it is a question of degree. It would be most serious for an Australian to exchange his domicil of birth for that of a domicil in China, but less serious in the United States, still less in England, and least of all in a neighbouring State of the Commonwealth, where not merely conditions of life, currents of thought and laws are similar, but in many cases are identical. The strength of the individual facts would, therefore, vary in each case. But while there would be less serious consequences arising from the change, the necessity and inducements of change, and, consequently, the likelihood of intended change, are diminished. …
Depending upon the facts of the case, it may be easier for the Court to find that the person has acquired an intention to change that person's system of law, and thus the person's domicile, the less substantial the differences between the new system and the system of law that originally applied to the person. The way this process now works may be glimpsed from an understanding of how it originally worked. In Potter v Minahan (1908) 7 CLR 277; [1908] HCA 63, Isaacs J said at 315-6, where the issue was whether a Chinese person who had been born in Australia but had returned to live in China for many decades had acquired a Chinese domicile (footnotes omitted):
... He was in language, education, ideas, and probably religious faith, entirely at one with the people around him; every day found him closer to them, and farther from the people of Australia, and although in point of law no difference exists for this purpose between a native of China, or France, or America, the practical differences are enormous, and the weight of the circumstance that the propositus lived his life in one or other of these countries is vastly different. This consideration has received judicial recognition in In re Tootal's Trusts, and the reasoning was approved by the Privy Council in Abd-ul-Messih v. Farra. Chitty J., speaking of a suggested domicil of choice by an Englishman in China, said: - "The difference between the religion, laws, manners, and customs of the Chinese and of Englishmen is so great as to raise every presumption as against such a domicil, and brings the case within the principles laid down by Lord Stowell in his celebrated judgment in The Indian Chief and by Dr. Lushington in Maltass v. Maltass." Dr. Lushington in the last-mentioned case said: - "I give no opinion, therefore, whether a British subject can or cannot acquire a Turkish domicil; but this I must say, - I think every presumption is against the intention of British Christian subjects voluntarily becoming domiciled in the dominions of the Porte. As to British subjects, originally Mussulmen, as in the East Indies, or becoming Mussulmen, the same reasoning does not apply to them as Lord Stowell has said does apply in cases of a total and entire difference of religion, customs, and habits."
Although the differences between the legal system of the Australian States and Territories may be relatively minor, which may suggest a readiness of persons to intend to adopt the legal system in a new State or Territory, according to Isaacs J, that consideration should be balanced by the proposition that there will be less need for the person to abandon his or her original system of law. These considerations expose the difficulties involved in ascertaining the real intention of the person.
The extract from the reasons of Isaacs J in Fremlin continued as follows:
… The intention is to be judged of upon all available testimony. Of this, conduct is the most important, because the most reliable. A man's own declarations are, of course, admissible in evidence, but, as laid down by the Privy Council in McMullen v. Wadsworth, the doctrine of the Roman law still holds good, that "It is not by naked assertion, but by deeds and acts, that a domicil is established." Naked assertion without deeds and acts would be useless, and assertion inconsistent with deeds and acts is equally useless to control them. In Potter v. Minahan I emphasized this point. Lord Lindley lays stress upon it in Winans v. Attorney-General. In Anderson v. Laneuville the Privy Council said that declarations, though undoubtedly admissible, are not entitled to the first degree of consideration. Nevertheless, they are to be tested and appraised, and are not to be ignored. If the declarant is not found to be untrustworthy, and if his declarations be not opposed to the clear inference otherwise to be drawn from his conduct, it is impossible to deny them weight. For instance, in Wilson v. Wilson Lord Penzance says: - "It seems to me that the question which the Court has to ask itself is this: assuming that the mere circumstances attending the residence in England, if the man were dead, and we knew nothing of his intentions, except what we could gather from that residence, would not be sufficient to enable the Court to arrive at the conclusion that he had adopted an English domicil, still when we have the man here, and when he swears that was his intention, why should not the Court believe him? The Court must not take his word as conclusive proof of the fact, and if there are circumstances in the case which tend to show that what he says is not true or likely to be true, they may influence the conclusion at which the Court would arrive. Therefore the question is here, not so much whether the circumstances of his English residence tend to prove English domicil, as whether, the man swearing to his intention to create an English domicil, there are such circumstances on the other side as warrant the Court in throwing over his oath and disbelieving him."
Similarly, in Cartier, Ligertwood J said:
The question of the acquisition of a new domicile or of the abandonment of an acquired domicile (except in the case of minors and married women) always involves the intention of the party. That intention must be inferred from what the party does and says. It is a fact to be proved by circumstantial evidence. Even where the party in good faith has expressed his intention in documents or to third persons or on oath, the Court will inquire by reference to the circumstances whether he has really meant what he has said. …
The nature of the issues that require determination when the question is whether a person has changed his or her domicile mean that previous decisions, even on apparently similar facts, provide little guidance, and the judgments involved may enlarge the scope for reasonable difference of opinion. In Cartier, Ligertwood said:
… As the ascertainment of the intention is an inference from the circumstances, it is not surprising that in the cases seemingly inconsistent dicta can be found as to the effect of particular circumstances. In one case, residence is said to be of great significance; in another, of little significance. Similarly as to the possession of property, the form of a will, the appointment of an executor, expressions of intention, and so on. A large number of these dicta were cited to me in an attempt to induce quite contrary conclusions from the same fact. The dicta are only seemingly inconsistent because they must be read with reference to all the other circumstances in the case. The importance of any one fact is relative. The real question is what is the proper conclusion to be drawn from all the circumstances. The dicta are useful as providing a pattern of convincing reasoning, but should not be confused with principles of law.
In In the Estate of Fuld, dec'd (No 3) (1968) P 675 (Fuld), Scarman J (as his Lordship then was) said on the same subject at 682-3:
… But, before I do so, a word of warning. This branch of the law is adorned by a great number of cases, not all of which is it easy to harmonise. The difficulty arises not from a lack of clarity in judicial thought but from the nature of the subject. Domicile cases require for their decision a detailed analysis and assessment of facts arising within that most subjective of all fields of legal inquiry - a man's mind. Each case takes its tone from the individual propositus whose intentions are being analysed: Anglophobia, mental inertia, extravagant habits, vacillation of will - to take four instances at random - have been factors of great weight in the judicial assessment and determination of four leading cases. Naturally enough in so subjective a field different judicial minds concerned with different factual situations have chosen different language to describe the law. For the law is not an abstraction: it lives only in its application, and its concepts derive colour and shape from the facts of the particular case in which they are studied, and to which they are applied. Thus the relationship of law and fact is a two-way one: each affects the other.
Although previous authority may not in this context provide a reliable touchstone for determining whether a change of domicile has occurred, it may provide useful guidance that gives some confidence as to how the somewhat abstract and elusive principles are to be applied. The following authorities have considered the ascertainment of a person's domicile in circumstances where the person had more than one substantial residence over a significant period of their life.
In Plummer v Inland Revenue Commissioners [1988] 1 All ER 97 (Plummer), Hoffman J (as his Lordship then was) was required to decide on an appeal from a determination of the Inland Revenue Commissioners whether their determination of the domicile of the appellant as being in England for taxation purposes was correct. It is relevant to the circumstances of this case that, at 105, his Lordship said:
While studying in London the taxpayer spent many weekends and some, but by no means all, of her holidays in Guernsey. The commissioners have scheduled to the case a table which showed that in the tax year 1980-81 the taxpayer spent 173 days in England and 154 in Guernsey, in 1981-82 213 in England and 112 in Guernsey, in 1982-83 229 days in England and 98 in Guernsey, in 1983-84 245 days in England and 106 in Guernsey and in 1984-85 247 days in England and 83 in Guernsey. The remaining days were spent on holiday abroad.
His Lordship treated the evidence of the time spent in the relevant countries as being material to the determination of the appellant's domicile, although not decisive. His Lordship continued at 105-7 by saying:
The commissioners began by framing the question for themselves as whether the taxpayer had become an 'inhabitant' of Guernsey for all or part of the relevant period. The term 'inhabitant' as a description of a resident for the purposes of the law of domicile was taken from Dicey and Morris on the Conflict of Laws (11th ed, 1987) pp 128-129, where it is contrasted with being present in a country casually or as a traveller. It is clear however that the commissioners did not employ the term with this dichotomy in mind, because although they found that the taxpayer had not become an inhabitant of Guernsey they could hardly have said that her presence there for more than three months in each year was casual or as a traveller. In another part of the case they had said that six weeks was her longest period of continuous residence in Guernsey. They were using the term 'inhabitant' rather in the specialised sense in which Nourse J used it in IRC v Duchess of Portland [1982] 1 All ER 784, [1982] Ch 314-319, where he said:
'Residence in a country for the purposes of the law of domicile is physical presence in that country as an inhabitant of it. If the necessary intention is also there, an existing domicile of choice can sometimes be abandoned and another domicile acquired or revived by a residence of short duration in a second country. But that state of affairs is inherently improbable in a case where the domiciliary divides his physical presence between two countries at a time. In that kind of case it is necessary to look at all the facts in order to decide which of the two countries is the one he inhabits.'
Speaking for myself, while I find the contrast between an inhabitant and a person casually present useful to describe the minimum quality of residence which must be taken up in a new country before a domicile there can be acquired, the concept of being an inhabitant seems to me less illuminating in cases of dual or multiple residence such as the present.
Clearer guidance is to be found in a well-known passage in the speech of Lord Westbury in Udny v Udny (1869) LR 1 Sc & Div 441 at 458:
'Domicil of choice is a conclusion or inference which the law derives from the fact of a man fixing voluntarily his sole or chief residence in a particular place, with an intention of continuing to reside there for an unlimited time.'
I infer from this sentence, which was quoted by the commissioners, that a person who retains a residence in his domicile of origin can acquire a domicile of choice in a new country only if the residence established in that country is his chief residence. The commissioners therefore asked themselves whether the taxpayer had made her grandmother's house in Guernsey 'her chief place of residence'. They regarded this question, in my judgment rightly, as being the same as whether 'in the sense in which the term is used in this context' the taxpayer had become an inhabitant of Guernsey.
Counsel for the taxpayer submitted that a person whose presence in a new country is sufficient to amount to residence may, notwithstanding that his chief residence remains in his domicile of origin, acquire a domicile of choice by evincing an intention to continue to reside permanently in the new country. I think that this submission is inconsistent with the passage which I have quoted from Lord Westbury and which has always been treated as an authoritative statement of the circumstances in which a domicile of choice may be acquired …
In Gaines-Cooper, the issue was whether a taxpayer with an English domicile of origin had acquired a domicile in the Seychelles. His Lordship said:
[32] Thus conduct which took place after the date of the alleged acquisition of a domicile of choice was relevant to determining the character of a person's residence. The question whether a person's residence in a particular territory is his chief residence is, as it seems to me, a question of the character of his residence in that territory.
[33] In Re Grove (1888) 40 Ch D 216 Lopes LJ said that the law was that "in order to determine a person's intention at a given time, you may regard not only conduct and acts before and at the time, but also conduct and acts after the time, assigning to such conduct and acts their relative and proper weight and cogency". However, the fact that Lopes LJ's observations are directed to intention does not mean that either expressly or impliedly he was saying that you cannot look at subsequent conduct for the purpose of determining someone's residence.
[34] In addition in the present case it is necessary to give some further consideration to the concept of "chief residence". In IRC v Bullock [1976] STC 409 Buckley LJ said:
"A man may have homes in more than one country at one time. In such a case, for the purpose of determining his domicile, a further enquiry may have to be made to decide which, if any, should be regarded as his principal home."
[35] Since this postulates two homes, it is clear that the was LJ considering more than just physical presence in two or more territories.
[36] In IRC v Duchess of Portland [1982] STC 149 Nourse J considered the case of a taxpayer who had homes in both England and Quebec. He said that residence for the purposes of the law of domicile is "physical presence in [a] country as an inhabitant of it". While residence of short duration may be enough to support the acquisition of a domicile where a person abandons one country for another, Nourse J went on to say:
"But that state of affairs is inherently improbable in a case where the domiciliary divides his physical presence between two countries at a time. In such a case it is necessary to look at all the facts in order to decide which of the two countries is the one he inhabits."
[37] In the Duchess of Portland's case the factual question was whether the Duchess had acquired a domicile of choice in Quebec on her annual visit in 1974. In order to decide that question Nourse J reviewed the pattern of her life between 1948 (when she married and came to England) and 1978 (which was the last year of assessment concerned in that case). He did not distinguish between looking at "all the facts" for the purpose of deciding the question of residence on the one hand, and the question of the necessary intention on the other.
[38] In the Duchess of Portland's case Nourse J glossed the requirement of "residence" as "physical presence … as an inhabitant". Mr Flesch did not suggest that this gloss was wrong. This gloss does not seem to me to maintain the rigid separation between residence on the one hand, and intention to stay on the other, for which Mr Flesch argued. Once the quality of physical presence comes into the picture, that quality can (only) be evaluated by an examination of the conduct of the propositus over a more prolonged period.
[39] In Plummer v IRC [1987] STC 698 Hoffmann J held that a person who retains a residence in his domicile of origin can acquire a domicile of choice in a new country only if the residence established in that country is his chief residence. The formulation of the applicable test in Udny requires both a chief residence and also an intention to continue to reside indefinitely. Thus the question whether a person's residence is his chief residence is part of the first limb of the test rather than the second. The test is predicated on the fact that a person has a residence in each of the competing territories. Plainly, therefore, residence alone is not enough to satisfy the first limb of the test where a person has two or more residences. If a person has two or more residences in different territories, which is his chief one? In Plummer itself the taxpayer's complaint was that the Special Commissioners had paid attention only to the "day count" and had ignored the quality of her presence in each country. Hoffmann J said that that was not a fair reading of their decision; but it seems to me that he did not reject the submission that both the day count and the quality of presence were of importance in determining which of two or more residences is a person's chief residence. Again, it seems to me that if the fact finder is required to determine which of two residences is a person's chief residence, then the tribunal must look at the evidence over a more prolonged period than might otherwise be the case.
A consideration of the earlier decision of Scarman J in Fuld is instructive insofar as it throws light on the requirement, obscured to the modern mind, that the acquisition of the new domicile requires animo et facto as stated by Lord Westbury in Udny (as found in Ligertwood J's proposition 5 in Cartier that is extracted above). Whatever the elusive meaning of domicile may be, it requires a particular quality of presence in the country at the time of acquisition and a coincident intention. The case concerned the ascertainment of the domicile of the deceased at the date of his death. The deceased was born in Germany and had a German domicile of origin. He was interned in Canada during the Second World War and acquired Canadian nationality. He lived in London for much of his life but frequently returned to Germany where his business interests were. He had a home in Germany but did not live there permanently because of personality differences with his mother. After considering in depth the evidence relevant to the determination of the deceased's domicile, his Lordship expressed his conclusion in the following words, at 693-4:
I am satisfied that Peter Fuld resided in London from 1946 to November 1961. But London was not his sole residence. He also had a place of residence in Germany. For most of the time, however, and particularly in his later years, he regarded London as his chief place of residence. He did so because of his immediate circumstances, of which the most important was the presence of his mother in Frankfurt. I am not satisfied that he ever made up his mind to settle in England, or, to put it in the language of the authorities to which I have referred, that he ever formed the intention of continuing to reside in England for an unlimited time. It may be, as Mr. Parker has submitted, that he never made up his mind. I think it more likely that his innermost wish was at all times, and more particularly after he had married the German girl Marina, to return to Germany, to live in Annastrasse and to play an active part in the management of the family business. Immediate external circumstances, i.e., the presence of his mother in Germany, the strain of their relationship, and the reluctance of those in control of the family business to let him into its management, alone thwarted him. But 14 Annastrasse was there, his mother was old, and his stake and rights in the business were so immense that the realisation of this intention was no mere pipe-dream but, in his mind and in all objective probability, something to be achieved sooner rather than later.
His Lordship found that the deceased's chief residence was in England. That was not sufficient to justify a finding that the deceased had acquired a domicile of choice in that country. It was also necessary to show that the deceased had the intention required to acquire a domicile in the country of his chief residence. The necessary intention had not been proved.
The parties relied upon Slattery J's statement of the principles that govern the determination of a person's domicile in Application of Perpetual Trustee Company Ltd; Re: Estate of the late Evelyn Mary Dempsey [2016] NSWSC 159. That was an ex parte matter in which his Honour was required to give judicial advice to the trustee. While I respectfully agree with his Honour's reasons, I have not referred to them in this judgment because his Honour was only concerned with the simpler case of whether a person who had moved from one State to another had changed her domicile.
In par 175 of their final written submissions, the defendants relied upon [177] of his Honour's reasons to support the proposition that to prove a change of domicile by reason of the acquisition by a person of a residence in a different state, it was necessary to prove "the intention of the resident to remain physically present in the state or jurisdiction for a period then regarded by him or her as unlimited in time." In [177], Slattery J said:
The necessary mental element to obtain a domicile of choice has sometimes been described as "an intention to reside permanently or indefinitely in a country": Nygh at [13.19]. The term "permanent" in the formula is nothing more than a way of indicating that the person's intention is one which when formed is one to remain a resident of the country for a period then regarded by him or her as unlimited in time and without having addressed himself or herself to the question of giving up such residence and leaving the country of his or her choice upon the happening of some particular and definite event in the foreseeable future, notwithstanding that he or she may entertain a "floating" intention to return at some future period of time to his or her native country: Hyland v Hyland (1971) 18 FLR 461 per Asprey JA…
His Honour's statement of principle does not require that the person have an intention to remain physically present in the jurisdiction for an unlimited time. An intention to make a home indefinitely is different to an intention to remain physically present.
In my view, the expression "the intention to make his or her home indefinitely in that country" in s 9 of the Domicile Act should have effect conformably with the notion of a person's chief residence as explained in the authorities considered above.
This consideration of the principles that are applicable to the determination of a person's domicile shows that there is a sense of gravity in the process of changing domicile that involves more than a change of residence that is shown by events to have been permanent. There is a concurrent element of intention to remain indefinitely in the new place of residence that justifies a finding of an intention to submit to the new legal system as the source of the person's personal law. The existence of the relevant intention may be inferred as a matter of fact from long-term residence. However, as McElrath at [77]-[78] shows, the necessary intention in a refugee fleeing a war-ravaged home country may be inferred the instant the refugee sets foot in the country of refuge, notwithstanding that there has been no time to establish a residence.
On 1 December 2016, Kalpana entered into a lease of retail premises at Manuka in the ACT in the name of her company, Milan Fashions and Shoes Pty Ltd, from which she conducted a retail business selling fashion goods until after the death of the deceased. In circumstances that will be explained more fully below, the deceased largely funded the business, save for its operating profits. The business failed after the death of the deceased as Kalpana did not have sufficient funds to keep it viable. Kalpana spent a considerable period of her time working in the shop, including on Saturdays.
The deceased was clearly domiciled in the ACT up to the time when the Pyrmont apartment was purchased. The issue is whether the deceased acquired a domicile of choice in NSW as a result of his and Kalpana's establishing a residence at the Pyrmont apartment.
The credibility of Kalpana's evidence depends upon the consistency of her testimonial evidence and the relevant objective evidence. In that respect, Kalpana's evidence is found seriously wanting, primarily because of the blunt assertions that she made in the interests of her own case concerning the proportion of their time that Kalpana and the deceased spent living in the Pyrmont apartment in this State that was purchased in July 2013, which was fundamentally inconsistent with the objective evidence. There are also strong grounds for the Court to conclude that Kalpana's position, when she commenced her family provision claim in this Court, was that she was then living, and the deceased had up until the time of his death lived, in the ACT, in a way that lawyers would understand to mean that they were both domiciled in that jurisdiction. Kalpana's position appears to have changed following a realisation that the deceased's actual estate would not be sufficient to meet the family provision order that she sought, if it was found that the deceased was domiciled in the ACT.
In Kalpana's first affidavit, when she said that she and the deceased had plans to renovate the Mugga Way property and to retire there, Kalpana annexed a letter from the architect who provided a preliminary design for the renovations. I will set out the terms of the letter below. The letter prompted the following cross-examination of Kalpana [T 168.45-169.18]:
Q. That's because you said to her that you and Gary were proposing to have that redeveloped as a residence; right?
A. We were looking at two places, the Versace apartment in Sydney where we wanted to retire and the other place as well as in Canberra. So, we have the same stuff going on. We live in Sydney and we actually looked at the property in Sydney as well and we were going to buy that for $9 million and then redeveloped, just because Gary never wanted to sell Mugga Way.
Q. Gary told you that Mugga Way was a wonderful place where he had lived; right?
A. No, he didn't say that to me. He just - he said, "I don't want to sell the property", because he's - he - he wanted to sell to the Canadian Embassy next door. Everyone knows in Canberra, he wanted to tell that to the Canadian Embassy at a very good rate. So, eventually he said - because the Penthouse was never a permanent - I mean, permanent place for Canberra when we go back. To retain Mugga Way forever and he said, "Why don't we build something snake-proof and all that stuff, so when we come to see our family and friends in Canberra" - they have connections. So, we were never going to disconnect from Canberra. So, we wanted to build ..(not transcribable).. and then all that Versace ..(not transcribable).. Sydney, Pyrmont, which we were going to re-finalise the sale as soon as we came from my last trip. Unfortunately, Gary passed away, because - we put an offer and it got accepted very late.
The cross examination on this subject continued as follows [T 169.45-170.13]:
Q. The reason you contacted Dana Tosolini was because Gary had an idea that he would like to live back in the Mugga property, right, and have it redeveloped?
A. No, that's not correct, Mr Meek. I actually asked - because Gary didn't want to sell 30 Mugga. So, Gary was saying, "We can never - you will never go back, if we ever want come back to Canberra, why keep the Penthouse?"
So, we wanted to sell the Penthouse and put towards the redevelopment of the 30 Mugga. So, when we go back to Canberra we can stay in that beautiful place. Gary didn't want to live in Mugga Way. He left Mugga Way when he met me. Literally, we stayed there for a few months and then we bought that Penthouse and the Pyrmont was bought first which - that's where we wanted stuff - married life, as a husband and wife.
Q. You stayed there for about 15 months, between September 2013 and December 2014, when the Barton Penthouse was purchased?
A. Yeah, whenever we went a bit - for a work, yeah. Gary was working at that time. I wasn't working. So, I'm not going to just leave him alone, like, to go to Canberra without me. I wanted to accompany my husband. I want to be with him.
Kalpana was cross-examined about the fact that a letter dated 29 June 2018 from Manuka Vet Hospital about the need to vaccinate a pet was addressed to the Barton penthouse [T 170.32-170.39]:
Q. They sent it to that address because that's the address you gave them; correct?
A. As I said, yes. Monday to Friday, the man goes there so we always give 30 Mugga Way or 27/11, whatever it is, because we don't - we are normally - in Sydney, we don't want to get mail or phone calls or anything, so we leave business behind in Canberra and we come to relax in Pyrmont, our home, and feel - like, we don't want to be disturbed by business connections, mailing and emails coming through.
During the deceased's final illness, Kalpana exchanged texts with Vanessa about Kalpana's desire to bring the deceased home from hospital to be cared for by Kalpana at the Barton penthouse. Kalpana was cross-examined on this evidence at [T 172.37-173.26]:
Q. If you look at page 37, you see that?
A. 37? Yes.
Q. You see that these are a series of texts in November 2018 with you and Vanessa?
A. Yeah, I have them as well here.
Q. You see at about the middle of the page there's a text, Tuesday 20 November 2018, 4.57pm?
A. Yes, I can.
Q. "Hey guys, I've been thinking that I will bring my husband to our home (Barton) and care for him." Right?
A. Yes.
Q. That's because that was where he was living at that time, right?
A. If it was my home, I wouldn't put Barton in bracket, because we live in Sydney. So, that's why I had to put the bracket because I couldn't - my husband wanted to come to Sydney and die. They - he - they didn't let him come home, and I can't bring him to Sydney. So, I was asking my husband, "Where would you like to go?" He goes, "I want to be where you go. Where you're going to be." I said, "Do you want to go to Mugga Way? Do you want to go to Sydney?" He couldn't even come to ..(not transcribable).. I actually begged - you'll see my emails as well. I've got so many text messages. I begged and cried. I ..(not transcribable).. for my husband. ..(not transcribable).. I asked the kids if they can let me have my husband and ..(not transcribable).. Mugga Way, at least Mugga Way. And Ashley said, "That's fine. We'll organise something in Mugga Way," because I thought maybe he wanted to ..(not transcribable).. spend last days there in Mugga Way because it's his favourite home. He lived there for last 40 years or whatever. And ..(not transcribable).. yeah, and then she said she - my husband can't go back ..(not transcribable).. make some arrangements, and there's no time for that.
Then I said, "Okay." My husband wanted to come to Sydney to be with me, and then I said - I said to - I don't know who I was saying to - all the kids. I said, "Can I just take him home?" Any home, Barton, and that is the bracket. Why would I put my home in bracket, Barton? Because we had so many homes but we lived in Sydney. I couldn't bring my husband to Sydney. They didn't even let me ..(not transcribable).. the last days of his life he wanted to spend with me. But anyway, that is my - I don't know what else to say with that.
There was a great deal of evidence that the deceased socialised in Canberra many days per week with his long-term Canberra friends and associates, even after the date that the Pyrmont apartment was purchased. Kalpana gave the following explanation of this evidence [T 174.17-174.43]:
Q. You're aware that Gary socialised in Canberra?
A. Yes, Gary has a lot of friends in Canberra because he lived for many, many years before me. Even I'm from Canberra. I mean, I didn't live - I mean, I lived in Canberra for some time for my job, and so we both have very strong connections in Canberra. We always wanted to keep the connection with Canberra, because we never wanted - that's why we chose Sydney because it's so close to Canberra. So, we can still have a connections with our friends. And we also have beautiful friends in Sydney that is not related to work; Gary's personal friends that he doesn't do business with - my friends as well - that we have nothing to do with business. And we don't get recognised in Sydney because it's so big. Like, in Canberra even I was getting noticed. Like, people would come and say, "Are you the owner of Lusso by Paris?" So, we were constantly being - like, we just want to run away home and stay - so, whenever we came to Sydney, we felt relaxed.
As soon as we opened that front door, we go, "Wow, we are back home. We don't need to go into all that business and friends hanging around." And Gary did business Monday to Friday, and he never did - Gary never did business after 12 o'clock. He goes to lunch. And he wants to go ..(not transcribable).. whether it's in Sydney or Canberra, he never works after 12 o'clock. He goes to lunch with his mates or whatever. So, yeah, he - we always would have kept something in Canberra because we both have connections in Canberra. We have families ..(not transcribable).. but we wanted to be away from that as well, so it gives us the opportunity to have our home and plus have that lifestyle if we wanted to. We could have had anywhere - any place home, but we chose Sydney because it was close to work.
There was evidence that allowed a broad objective analysis of the relative proportions of time that the deceased spent in Sydney as compared to Canberra. I will refer to this evidence more fully below. Kalpana was cross-examined about the significance of this evidence, as follows [174.44-175.3]:
Q. I suggest to you that he was only in Sydney on average about every four to six weeks for two to four days at a time.
A. I - since he - I didn't count how many days we come home or all that stuff. For us, it was when we could come home, we came home and we stayed ..(not transcribable).. and we have all our personal document - I have all my birth certificates, passports, everything is in Sydney. My marriage certificate, my son's baby shoes, the first shoes he wore. My school certificate. Everything is stored in Sydney. And I know Laura broke into my apartment, so she should know what I have in Sydney anyway.
Further, at [T 177.9-177.16]:
Q. Do you contend that Gary spent most weekends in Sydney?
A. As I said previously, it's weekends, sometimes it's weekdays, it just depends on our business - like whatever. If he's busy, then we come during the week and he goes back to Canberra. It just doesn't matter. We just - we just do whenever we can, we escape to come back home. We didn't have any schedule like - yeah, mostly we will do weekends but sometimes we do week days and we stay there till we come back on Saturday and then stay until Wednesday. It just - we don't have any particular schedule to come home.
Finally, at [T 177.18-177.33]:
Q. You have seen that Vanessa and Laura have put forward an analysis of phone records of Gary and you.
A. Yeah, I've seen that.
Q. Yes. And you have considered that material; is that right?
A. Yeah, but there are lots of factors that hasn't been taken into consideration because we used to sail many more days in 2013 and 14 where I didn't have a business. Towards the end, I started to run a business in Canberra so we became more busier and busier and we had less time for home. We were running a business, we were travelling to Milan and Paris and London. We had no time. We were both very busy, Mr Meek. During the last three years we had very busy businesses running and Gary actually was even busier in Canberra in - towards the end because he was doing the redevelopment of ..(not transcribable).. That was - that was going to be his last project, and then we were going to retire at the Versace apartment in Sydney. That's the truth.
The deceased was sufficiently wealthy that he had no difficulty in maintaining more than one residence and splitting his time between those residences as he chose. However, the deceased's principal business activities and friendships remained tied to Canberra. The conduct of the deceased's businesses required that he spend a preponderance of his time in the ACT. The deceased maintained other businesses in this State and other places, and the conduct of those businesses required the defendant to travel relatively frequently away from Canberra. The deceased and Kalpana also engaged in frequent overseas trips for holidays and to purchase stock for Kalpana's retail business in the ACT, and they were frequently away for many weeks at a time. Given that the acquisition of a domicile of choice involves a person in establishing a residence in a particular jurisdiction and forming a particular intention, the determination of the real domicile of a wealthy person, who has residences in a number of places, may cause real difficulty. In part that is because the deceased may in fact form the requisite intention in relation to a place of residence that is not the primary residence measured in terms of time spent. As in the deceased's case, the demands of business may oblige a person to spend most of his or her time residing in one jurisdiction, when in reality they have formed the required intention that will lead to them acquiring a domicile in a different jurisdiction of residence in which circumstances require them to spend less time. It is also possible that ordinary human inertia will have the effect that, in relation to matters such as the address on bank accounts, vehicle licences and the like, a person may not change their nominated address to the address of the residence that has in fact become their place of domicile. However, even though these considerations may be valid to some extent, I did not find convincing Kalpana's attempt to explain away the evidence that suggested that her and the deceased's chief residence was the Barton penthouse.
The brief notes I made on my copy of Mr Princi's affidavit were: "honest, candid, clear recollection and persuasive". When giving his evidence in cross-examination, Mr Princi appeared to me to be a disinterested witness who had a definite and clear recollection of the events the subject of his evidence.
In a number of the paragraphs of Mr Leticq's affidavit that I have omitted, he gave evidence of statements made by the deceased about the deceased formerly owning a house in the Bahamas, and the deceased having sold shares owned by him in Aristocrat for over $300 million. The accuracy of the statements made by the deceased on these subjects is highly questionable, but I have no reason to doubt Mr Leticq's evidence that the statements were made.
The primary thrust of Mr Leticq's cross-examination was to obtain a concession that the statements made by the deceased concerning his former house in the Bahamas and his shareholding in Aristocrat were made after the deceased had consumed a significant amount of alcohol. Mr Leticq resisted the suggestion but appeared to accept that he did not himself have any evidence to verify the assertions made by the deceased. Mr Leticq was also cross-examined about the statement in his affidavit to the effect that the deceased said that he intended to move from the Mugga Way property [T 15/10/21 240.48-241.21]:
Q. Well, if you look at paragraph 8 of your affidavit and the conversation you record you say he told you, "I need to move from Mugga Way"; right?
A. Yes, which is something he didn't do after all.
…
Q. When you say it's something he didn't do after all, what do you mean by that?
A. He didn't - he retained Mugga Way. He didn't move - he didn't move out completely. I believe he still had furniture there and he was still visiting occasionally. His daughter was living in the back, and so there was still an association with the property. I thought at the time when he made that comment that he would sell but he didn't sell it.
Q. And to the extent that you had an understanding from him about it, he didn't sell it because, in a sense, it was a place he called his home; right?
A. No. It was because he had a sentimental attachment with it. It was the first substantial property he bought after he made a lot of money, and that his daughter was still living in the back, and I just feel he had no need for the money so it was something that just remained in his possession.
Q. But is it fair to say that most of the contact you had with Garry was actually in Canberra?
A. Most of it.
The brief notes I made on Mr Leticq's affidavit were: "sober, dignified, measured and persuasive". Mr Leticq's evidence as to statements made to him by the deceased that were directly relevant to the issue of the deceased's domicile was not challenged in any significant way. I am satisfied that Mr Leticq was an honest and reliable witness who gave evidence of statements made to him by the deceased that he recollected clearly.
During the cross-examination of Mr Morris. I made the following single note on his affidavit: "forthright". Mr Morris was a very impressive witness.
The brief notes that I made on the Court's copy of Ms Vyas's affidavit were: "credible, prompt, plausible".
Ms Omonei finished her affidavit by saying:
16. From having a close relationship with Garry and Paris, I observed them both putting a lot of time and money into this property to make it 'just right'. They were always updating their decor to keep it modern and comfortable as they spent most of their time there. They decorated it with their personal belongings and photographs together. Based on the above, it is my opinion that the Pyrmont apartment was never bought to be a business venture of any kind.
The last sentence was only admitted as evidence of the witness' state of mind.
Mr Channon gave the following evidence on the subject of the Pyrmont apartment:
10. Garry and I often discussed the Sydney property market, when he was chatting to us at dinner in Sydney, particularly as Vanessa and I were saving for our own home. Before he bought Pyrmont, I recall Garry saying to me: "there is significant upside in buying property in Sydney because the prices haven't yet recovered after the global financial crisis". During this time he also said to me: "You will never see prices like this again".
11. I knew Garry to be an astute property investor and understood that, through companies and trusts, he had purchased properties in Sydney, as well as properties on the Gold Coast, in Thredbo, in Goulburn and Bateman's Bay over the years.
12. I was interested in his success as a property investor and asked him about how he tended to structure his operations.
a. Garry said to me that the properties were "always held through trusts".
b. I worked with wholesale unit trusts regularly through my work as a financial services lawyer so was familiar with this investment structure in a professional context.
c. I gathered that Garry usually used unit trusts, but on one occasion he remarked that he was considering a new type of trust for an investment that he hadn't used before, a "hybird trust" which I recalled as being an amusing turn of phrase, but understood it to be a reference to our "hybrid trust".
13. During one of our conversations about the Sydney property market, Garry told me about an apartment he had found in Pyrmont, which was in one of the pier developments on Pirrama Road. He said to me: "just wait till you see the view". When I first visited the property sometime later, I remember being quite gobsmacked with that view, as it was a beautiful, low rise apartment with unobstructed views directly across the harbour towards the Sydney CBD.
14. During another conversation with Garry at the Pyrmont property at the Pirrama Road when Kalpana and Garry hosted Vanessa and I for a seafood lunch, he said to me while we were at the table:
"I've bought it as an investment. There is no way I'll lose money, given its location and water views".
15. I visited the Pyrmont property only a couple of times. [Rejected]. On one visit, when I put some beers that I had brought to share into the fridge at the Pyrmont property I recall being a bit surprised that the only things already in the fridge were a couple of bottles of champagne and a bottle of vodka.
16. Even after purchasing the Pyrmont property, in subsequent conversations with Garry, he continued to refer to Canberra as his home. [Rejected].
17. [Rejected]. He often remarked at how terrible the delays were with Sydney traffic jams and that he couldn't wait to get back [Rejected] to Canberra where traffic flowed more smoothly and where, as he said: "20 minutes would get you wherever you needed to go".
18. [Rejected].
Ashley gave evidence that the deceased telephoned her constantly and they often spoke five times a day. The calls were primarily taken when the deceased was in Canberra.
Ashley said that during his last few years, on most Saturdays when he was not travelling, in hospital or in Sydney, the deceased had lunch with her and his other friends. Ashley said that Kalpana worked in her shop in Manuka each Saturday.
Ashley gave evidence that the deceased was a creature of habit and that his normal routine, which she knew from their very close relationship and daily telephone calls was as follows, other than when he was overseas:
a. Monday lunch at Blue Ginger in the city (ACT), dinner with me at the Ottoman or at home in Mugga Way;
b. Tuesday or Wednesday dining at Olive's in Mawson, or Blackfire in Braddon ACT;
c. Thursday night attending the meat raffle and often having dinner with me at The Statesman Hotel in Curtin ACT;
d. Friday lunch with his friends at Bambusa, Olive's or the Ottoman restaurants.
e. Most Saturdays when he was not travelling, in hospital or in Sydney [Rejected] he had lunch with me and my partner Joseph. This was usually at Belluci's at Manukau in ACT as Kalpana worked in her boutique on Saturdays. Often his friends joined us.
f. On Saturday afternoon Dad would catch up with John Buxton at the Kambah Inn.
Finally, Ashley gave the following evidence concerning the Pyrmont apartment:
29. I have visited Pyrmont twice. I recall that Dad initially went to Sydney about once a month for a few days. This coincided with he and Kalpana flying out of the country. Even when he was at Pyrmont, we talked every day.
30. At no time when talking to me did Dad ever refer to the Pyrmont apartment as "home".
Allowing for unavoidable error at the margins, the following table sets out the result of the analysis that I carried out on a quarterly basis showing the number of days that the deceased was primarily present in the locations indicated:
Year Quarter Sydney Canberra Other Total
2014 First 11.5 59.5 13.0
Second 9.8 59.1 22.1
Third 13.5 61.8 12.2
Fourth 12.2 61.0 17.8
Total 47.0 241.4 65.1 353.5
The deceased gave 30 Mugga Way as his address in his will and the associated statutory declaration that he executed on 27 August 2015.
He also gave the same address in the documents that he executed in relation to Anna's claim in the Family Court leading up to the execution of the deed of settlement and release dated 12 October 2015.
When the deceased signed the contract to purchase the Barton penthouse on 5 December 2014, he gave 30 Mugga Way as his address.
The deceased generally gave his address as 30 Mugga Way on documents such as his driver's licence and on tax returns and in documents lodged with ASIC. However, this conduct may be less significant because it could have been the result of inertia. The deceased also gave addresses in the ACT at the time of his admission to hospital. That could also be because he was taken to hospital at times when he was in the ACT where the hospital was located, so it would have been natural for him to give a residential address in the ACT.
Kalpana (as well as Kristina and Jurek) relied upon a Land Tax Questionnaire that the deceased may have caused to be submitted to the NSW Office of State Revenue in relation to the purchase of the Pyrmont apartment. The deceased signed the Questionnaire on 13 June 2014 and declared "that all information provided is true and correct in every particular". The copy of the Questionnaire that is in evidence is not completely legible. The document contains a pro forma statement that it constitutes an initial return for land tax. It states that the landowner was Evenlong Pty Ltd. Inconsistently, the deceased appears to have inserted "landowner" as the capacity in which he had completed the form. The document contains the following:
4 a) (i) Exemption for principal place of residence (where you live). Generally this exemption does not apply to land held by companies and trusts.
To apply for an exemption for any land on the previous page, complete the details in the table below. For the exemption to be considered please attach copies of utility bills such as electricity and water covering all periods of the claim.
It appears that the deceased inserted the address of the Pyrmont apartment in the space provided under the above statement on the form, together with a statement that the property had been occupied from what appears to say June 2013.
Kalpana submitted that the manner in which the deceased completed the form is evidence that he considered the Pyrmont apartment to be his principal place of residence. While the form is capable of providing some evidence to that effect, the effect is substantially diluted by the following considerations. The form was tendered by Kristina and Jurek in their case, without any explanation as to its provenance and what was actually done with it, and, if it was submitted to the Office of State Revenue, what the outcome was. Although the form has the appearance of being an application for exemption from the requirement to pay land tax, the acknowledgement that the owner was Evenlong Pty Ltd, in the context of the statement in the form that exemption generally did not apply to land held by companies, throws doubt on what the deceased's purpose was. There is no evidence that the deceased submitted the required utility bills with the form. The utility bills were evidently evidence that was required to demonstrate that a claimant for an exemption genuinely lived in the property as his or her principal place of residence. The other evidence that is discussed in these reasons concerning the times when Kalpana and the deceased occupied the Pyrmont apartment justifies significant scepticism that the deceased could have attached utility bills that could have persuaded the Office of State Revenue that the Pyrmont apartment was the deceased's principal place of residence. At the end of the day, the evidence simply does not disclose what the deceased did with the form after it was completed.
In her first affidavit affirmed on 16 April 2019 in support of her family provision claim in this Court, Kalpana gave the following evidence:
151. Gary and I had plans (sic) renovate the Mugga Way property, and to retire there. Annexed hereto and marked " Q" is a copy of a letter from Dana Tosolini, our architect.
The attached letter appears to be signed by Ms Tosolini, although it is not on letterhead and it is addressed: "To whom it may concern" and is dated 30 November 2018. It states:
I was contacted by Paris O'Donnell on or about 27th May 2018.
She asked me to draw plans for a proposed refurbishment at their residence at [30 Mugga Way].
I prepared sketch plans on the gratuitous basis for a re-design of the house.
I was subsequently advised by Paris that she and Garry were considering a total demolition of the property and the building of a new property. She said I would be consulted if and when they proceeded with the design of a new house.
27 May 2018 was only six months before the date of the deceased's death.
Finally, Kalpana's case that the deceased was domiciled in NSW at the date of his death largely depended on her claim that she and the deceased had made the Pyrmont apartment their chief residence. The deceased arranged for Evenlong Pty Ltd to purchase the Pyrmont apartment. At the date of the deceased's death, Evenlong Pty Ltd owned to the Pyrmont apartment (which was later sold for $5.5 million in 2019), the Royal Hotel Bungendore (sold for $2.4 million in 2020) and two childcare centres in the ACT that had estimated values of $2.9 million and $3.24 million. The total value of Evenlong Pty Ltd's assets was about $14.04 million, ignoring the differences in timing of the estimations of value. An email dated 21 March 2019 to the defendants' former solicitors from the solicitors for the deceased's primary lender, ING, stated that Evenlong Pty Ltd was indebted to ING under a number of loan facilities as follows: $4,350,000 drawn down on 24 July 2013, $3,200,000 drawn down on 4 December 2014 and $3,200,000 drawn down on 6 April 2016. The total indebtedness of Evenlong Pty Ltd was about $10,750,000. The draw down on 24 July 2013 included $3.6 million for the purchase price of the Pyrmont apartment and $200,000 to pay the stamp duty on the purchase. Thus, the deceased did not arrange to buy the Pyrmont apartment in his own name. He caused Evenlong Pty Ltd to buy the apartment using borrowed money in circumstances where the company was very highly geared. The position may be compared with the Barton penthouse, which the deceased bought in his own name and it remained in his name at the time of his death. These circumstances make it difficult to conclude that the deceased had a real intention that the Pyrmont apartment would be his chief residence.
Finally, I have not been able to accept the evidence given by Kalpana as to the proportion of their time that she and the deceased used the Pyrmont apartment as their residence. That is a serious matter, as it tends directly to undermine the weight of all of the evidence that Kalpana gave that supported a conclusion that the deceased had acquired a domicile of choice in NSW.
I therefore conclude that even if the deceased had formed an intention to eventually retire to a residence in NSW that would have been consistent with his having later acquired a domicile of choice in this State, he had not sufficiently manifested and implemented that intention before his death.
If that is a correct conclusion, in all of the circumstances considered above, this Court does not have jurisdiction to determine Kalpana's claim under the Succession Act, and must instead determine her claim commenced in the Supreme Court of the ACT under the Family Provision Act that has been cross-vested to this Court.
As the value of the deceased's actual estate is not sufficient to satisfy Kalpana's claim for family provision, it will be appropriate to determine Kalpana's devastavit case in order to ascertain whether the actual estate will be increased by reason of Kalpana's success on that claim. It will then be possible to consider the basic elements of Kalpana's family provision claim. Even then, it will be necessary to determine the claims made by Anna on the one hand, and Kristina and Jurek on the other, before a final determination can be made of Kalpana's family provision claim. That is because, in different ways, the claims by those other parties are in competition to Kalpana's claims against the deceased's estate.
In pars 16 and 17 of her statement of claim, Kalpana pleaded an alternative claim to her devastavit claim based upon the allegation that the defendants held the deceased's shares in Bel Boa Pty Ltd on trust for the purpose of the due administration of the deceased's estate, and that the transfer of the shares to Bel Boa Pty Ltd for no consideration constituted a breach of trust.
In submissions, Kalpana did not support her pleaded claim that the defendants had engaged in breach of trust. It was not suggested that there would be any difference to the outcome of Kalpana's claim that depended upon whether the defendants were liable as executors for devastavit, or whether the claim was for breach of trust. The latter would be pertinent if the defendants had executed the deceased's will to the point where they held his shares in Bel Boa Pty Ltd as trustees before they executed the transfer of those shares to Duboti Pty Ltd.
Kalpana did not lead evidence at the hearing to prove the value of the shares in Bel Boa Pty Ltd that the defendants transferred to Duboti Pty Ltd, so there was no evidence that would enable the Court to quantify the amount of damages, or equitable compensation, that it might order the defendants to pay by way of replenishment of the deceased's estate. If Kalpana were to succeed in her devastavit claim, the only available course would be for the Court to give directions for an enquiry as to damages, or alternatively, for the taking of accounts.
In their defence to the statement of claim, the defendants responded by claiming that the deceased held the shares in Bel Boa Pty Ltd in trust for Duboti Pty Ltd as the trustee of the Mugga Way Family Trust, so they were not entitled to seek consideration for the transfer. The defendants relied upon declarations of trust signed by each of the deceased and Fiona on 13 December 1996 and registered on 23 December 1996 in the ACT Registrar General's Office.
The evidence disclosed that, at all material times, Bel Boa Pty Ltd was the owner of the hotel business of the Statesman Hotel in the ACT. The freehold of the land on which the Statesman Hotel is constructed is owned by Kaber Pty Ltd. Fashionable Leasing Pty Ltd holds 100% of the shares in Kaber Pty Ltd beneficially. The shares in Fashionable Leasing Pty Ltd are all held by Duboti Pty Ltd.
The expert accounting report prepared by PwC for the defendants in relation to the financial position of the deceased's estate as of 2 October 2020 referred to a valuation of Kaber Pty Ltd based upon a valuation report said to be dated 16 October 2019 that attributed a value of $5 million to the company. The valuation was not in evidence. A separate valuation was not given for Bel Boa Pty Ltd. I infer that the $5 million figure was an estimate of the combined value of the freehold and the business of the Statesman Hotel.
The parties' respective accounting expert witnesses prepared a joint expert report that included the financial position of the O'Donnell group as of 13 November 2020. The consolidated balance sheet that was included in the report showed that PwC maintained that the Statesman Hotel had a value of $5 million. Kalpana's expert assigned a value of $7,700,000 to the hotel, giving a variance of $2,700,000. The difference was explained by the note: "Difference in independent valuations." The different valuations relied upon by the experts were not in evidence, and the parties did not attempt to demonstrate what the true value of the Statesman Hotel was.
Apart from the uncertainty as to the value of the Statesman Hotel, there was no evidence as to the legal arrangement between Kaber Pty Ltd as the owner of the freehold and Bel Boa Pty Ltd, as the company conducting the business, that would permit any estimate of the share of the total value of the Statesman Hotel to which Bel Boa Pty Ltd was entitled.
The submissions made on Kalpana's behalf in support of her devastavit claim were unfortunately exiguous. Kalpana relied upon the decision of Rein J in Bird v Bird (No 4) [2012] NSWSC 648 at [105]. His Honour's decision was partly reversed on appeal, but not in a way that affected his statement of principle: see Bird v Bird [2013] NSWCA 262; (2013) 11 ASTLR 225. I will set out [104] and [105] of the judgment of Rein J, as follows:
[104] There is no dispute that executors are under a positive duty to call in and collect the assets of the deceased: see Re Whelan (Deceased) [1961] VR 706 at 719 per Sholl J. The executors, if necessary, must bring proceedings to that end but can, in the alternative, set off a debt owed to the estate against a legacy due to a beneficiary: see Cherry v Boultbee (1839) 4 My & Cr 442; (1839) 41 ER 171. …
[105] Once it is established that there is a debt owed to the estate, it is incumbent on the executor to "show why he did not get it in": see Stiles v Guy (1848) 16 Sim 230 and In re Brogden; Billing v Brogden per Cotton LJ at 568. An executor who fails to call in a debt is liable in devastavit: National Trustees Executors & Agency Co of Australasia Ltd v Dwyer (1940) 63 CLR 1 ("National Trustees v Dwyer") per Latham CJ. Devastavit or "waste" includes both the wrongful distribution of assets depriving the estate of funds to meet the other beneficiaries' needs and the failure to get in assets, debts or liabilities and failure to preserve. As is explained by Perram J in Bovaird v Trustee of Bankrupt Estate of Frost [2010] FCA 1159, the approach of equity that "wilful default" is required has prevailed. What is required to constitute "wilful default" however is "a want of prudence": see J R Martyn and N Caddick, Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 19th ed (2008) Sweet & Maxwell at [55-13].
The history of claims of devastavit and the modern procedure for ensuring that the legal personal representatives of deceased persons properly get in and preserve the deceased's estate have been comprehensively considered by Perram J, writing extra-judicially, in "The origins and present operation of the action in devastavit" [2012] FedJSchol 23, which records an address given by his Honour to the Society of Trust and Estate Practitioners on 16 May 2012.
Kalpana's case seemed to rest on the fact that, at times after the deceased and Fiona signed the declarations of trust in favour of Duboti Pty Ltd, the deceased's shareholding in Bel Boa Pty Ltd continued to be recorded in returns lodged with ASIC as being beneficially held by the deceased. As I understand it, Kalpana did not contest the fact that the deceased and Fiona executed the declarations of trust on 13 December 1996 and that those declarations of trust were formally registered in the ACT on 23 December 1996. Kalpana also did not contest as a fact the defendants' case that they executed the transfer in reliance upon the existence of the declaration of trust made by the deceased.
In her written submissions dated 7 October 2071, Kalpana made the following response to the position adopted by the defendants:
49 There are at least, three observations to be made in response to that assertion:
a. First, to the extent the register should have recorded the deceased holding the shares non-beneficially as a consequence of the Declarations of Trust signed in 1996, the Declaration signed by Fiona O'Donnell would be invalid. That is because the shareholding would only ever, even on the Defendants' version of events been held (whether beneficially or non-beneficially) by the deceased.
b. Second, the apparent error on the register is at odds with the events that followed in the financial years ending 1999, 2000, 2001 and 2002 when the deceased prepared and submitted (presumably with the assistance of his long standing accountant) Annual Returns. Such error would seem extraordinary when the input to the Annual Return requires personal and positive confirmation over successive years the shares are beneficially held.
c. Thirdly, despite being someone with apparent direct knowledge of the matter, the Defendants have not obtained any evidence from Fiona O'Donnell in relation to the shareholding, which might reasonably have been expected (and in which case the relevant inference ought to be drawn; see Jones v Dunkel (1959) 101 CLR 298).
50 As a consequence of the Executors' failure to disclose the deceased's shareholding in Bel Boa in probate, and then wrongfully depleting the estate of an asset, the Executors committed a Devastavit on the estate. They are therefore liable to the estate for the loss suffered.
In their submissions in reply, the defendants explained in pars 48 to 57 the circumstances in which, on 13 December 1996, following the deceased's separation from Fiona but prior to his divorce, the deceased and Fiona made declarations of trust in respect of his shareholding in nine companies. It is not necessary to consider that evidence in detail, as Kalpana's devastavit claim only relates to the transfer by the defendants of the deceased's shares in Bel Boa Pty Ltd to Duboti Pty Ltd.
The evidence included declarations of trust signed by the deceased as to 51 shares and Fiona as to 49 shares in Evenlong Pty Ltd. They each promised, among other things, to execute as transferor and hand over a signed transfer in favour of the beneficiary when required. An ASIC current company extract for Evenlong Pty Ltd as of 5 December 2018 showed that the deceased held all 100 shares in the company beneficially.
The defendants' response to Kalpana's devastavit claim in their submissions dated 7 October 2021 was:
313. The devastavit claim should be dismissed. Kalpana is not a beneficiary of the estate. At the time that the claim was filed she had no standing to bring the claim.
314. Even if, contrary to the submissions, Kalpana was given an order for provision it would not be an order entitling her to a share of residue.
315. In any event, the shareholding transferred was shareholding held on trust by the deceased. It was not property to which the deceased was beneficially entitled. There is no arguable case that the deceased's estate has been depleted by reason of the transfers.
The defendants are entitled to succeed in their defence of Kalpana's devastavit claim on the basis of the third of their submissions in par 315 that is set out above. Kalpana did not mount an arguable response to the defendants' case that they transferred the shares in Bel Boa Pty Ltd in the deceased's name to Duboti Pty Ltd to give effect to a declaration of trust made by the deceased. On the basis that the declaration of trust was effective, the deceased had no beneficial interest in the shares, which he held on a bare trust for Duboti Pty Ltd, so the transfer for no consideration did not waste the assets of the deceased's estate.
The fact that the deceased apparently continued to be recorded after the date of the declaration of trust as being beneficially entitled to the shares in returns made to ASIC is inconclusive, as the returns may have been prepared by someone who did not know of or who had forgotten the declaration of trust. The mere existence of the returns without further explanation is not sufficient to neutralise the effect of the declaration of trust. As a forensic matter, the defendants are entitled to rely upon the fact that the deceased executed a declaration of trust. The validity of the declaration of trust is enhanced by the fact that it was formally registered. No burden of adducing evidence passed to the defendants merely because of proof of the contents of the returns to ASIC. No burden fell on the defendants to call Fiona to give evidence about the circumstances in which the declarations of trust that she and the deceased executed.
It is conceivable that some case could have been made about the validity of the declaration of trust as a result of the fact that the deceased did not apparently act upon the declaration at any time between 1996 and the date of his death, other than to preserve the declaration of trust so that it could be acted upon by his executors. However, as the defendants were prima facie entitled to treat the declaration of trust as valid, given the circumstances in which it was preserved by the defendant, it was for Kalpana to establish that the declaration of trust was legally ineffective at the time it was implemented by the defendants. Kalpana did not mount a viable case as to why the declaration of trust was ineffective. Kalpana did not explain why the declaration of trust signed by Fiona was invalid, and I do not understand her case in that respect.
For completeness, I note that Kalpana, properly, did not claim that any entitlement in Duboti Pty Ltd to enforce the trust arising out of the declaration of trust signed by the defendant had become statute barred by the date the defendants transferred the shares in Bel Boa Pty Ltd to Duboti Pty Ltd. It is probable that the express trust created by the declaration of trust was in fact statute barred at the time of the transfer. By reason of the inclusion of express trusts in the definition of "trust" in s 11(1) and by the limitation in s 47(1)(e) of the Limitation Act 1969 (NSW), it is arguable that Duboti Pty Ltd's cause of action to recover the shares in Bel Boa Pty Ltd held in the deceased's name became statute barred 12 years after the date the declaration of trust was signed by the deceased. That conclusion may be debatable because, although the deceased, as the controlling mind of Duboti Pty Ltd, knew that he had signed the declaration of trust immediately as it was signed, there may be a countervailing argument that it was a breach of fiduciary duty by the deceased that he did not cause Duboti Pty Ltd to enforce the declaration of trust. It is not necessary to delve into this issue, because it is established that executors are not obliged to take advantage of limitation provisions when performing their duty to get in and preserve the deceased's estate: see J R Martyn and N Caddick, Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (20th ed, 2013, Sweet & Maxwell) at [57-18].
As I have found that Kalpana's devastavit claim has failed on the facts, it is not strictly necessary for the Court to decide the validity of the defendants' submission that Kalpana does not have standing as a family provision applicant to make a devastavit claim against the defendants. However, it is appropriate to make the following observations on the issue of standing.
It is implicit in the defendants' submissions that they contended that only beneficiaries of a deceased estate that have an entitlement to share in residue have standing to bring proceedings against the executor to replenish the estate from the consequences of a devastavit. The defendants did not explain why that should be so.
As Perram J explained in the paper to which reference has been made above, whatever the obscure procedural history of the action in devastavit may be, in the modern world it is an incident of administration proceedings in Equity or a modern simplification of that procedure.
The beneficiaries of the estate are parties who have standing to institute administration proceedings: see Evans v Evans (1910) 10 SR (NSW) 594 at 596 (A H Simpson CJ in Eq); G E Dal Pont and K F Mackie, Law of Succession (2nd ed, 2017, LexisNexis Butterworths) at [12.46].
Section 63(1) of the Succession Act provides that a family provision order may be made in relation to the estate of a deceased person. Where the executor of the deceased becomes entitled to property of the deceased as part of the estate but wastes that property by conduct that constitutes a devastavit, any order in an administration suit, or any other order that has the same effect of requiring the executor to replenish the estate, will have the effect that the estate as replenished will be a proper subject for a family provision order.
Pursuant to s 71(1) of the Succession Act, any family provision order that is made by the Court will ordinarily take effect as if the provision was made in a codicil to the will of the deceased person, if the deceased person made a will.
As a family provision order does not have the effect of an order of the Court against the person of the executor, but only creates a new entitlement under the will of the deceased, the proper procedure to enforce a family provision order is not by execution against the executor's property, but is by commencement of an administration action against the executor or by an equivalent procedure: see In re Olson (Deceased), Treadwell v Public Trustee [1944] NZLR 778 (Smith J); In re Jennery, dec'd, Jennery v Jennery [1967] Ch 280 (Davies and Russell LJJ); Wentworth v Wentworth (Supreme Court (NSW), Young J, 4 September 1991, unrep (BC9101598)); and J de Groot and B Nickel, Family Provision in Australia (6th ed, 2021, LexisNexis) at [8.11].
Accordingly, once the Court has made a family provision order in favour of the applicant out of a deceased's estate, the applicant should have standing to pursue administration against the executor, and if the executor has committed devastavit, the applicant should be able to pursue that claim for the purpose of the replenishment of the estate so that the order for family provision can be met.
It is possible that, if the assets remaining in the hands of the executor are sufficient to fulfil the family provision order, for example, to pay an order in the form of a legacy, the applicant will not have standing to pursue the executor for the devastavit. But, if the remaining assets are not sufficient, I can see no reason why an applicant in whose favour a family provision order is made will lack standing on the ground that the applicant does not have an interest in the residue of the estate.
If this reasoning is correct, an applicant for family provision relief will only acquire standing to commence proceedings to enforce the due administration of the deceased's estate if and when the family provision order is made in the applicant's favour. That may strictly have the effect of requiring an applicant for family provision relief to obtain an order from the Court in the applicant's favour before the applicant has standing to pursue the executor in new proceedings for the administration of the estate to obtain relief that requires the executor to replenish the estate against the consequences of a devastavit committed by the executor. That may be thought to be an inefficient and costly procedural requirement, compared to a procedure that permitted the applicant to claim family provision relief and to seek to achieve the replenishment of the estate from the consequences of the executor's devastavit in the one proceedings. That convenient approach may not be available, and it may be necessary for the applicant to establish standing before the applicant will be permitted to seek the due administration of the estate: see for comparison the decision of the Court of Appeal in Treadtel International Pty Ltd v Cocco [2016] NSWCA 360; (2016) 117 ACSR 176, where the Court of Appeal held that a party who was not a member of a company was not permitted in the one proceedings to sue to establish his right to be a member at the same time as he pursued relief against a party who was only liable at the suit of a member. It may be that this decision was influenced by aspects of company law involving the significance of the register of members of a company. But it demonstrates that an applicant may not be permitted to seek relief that would give the applicant standing to seek different relief in the one proceedings.
In the present case, the defendants may have been entitled to test their claim that Kalpana did not have standing to pursue her devastavit claim by applying at an early stage of the proceedings for an order that that claim be struck out of her statement of claim for want of standing. The defendants did not take that course, although they served submissions shortly before the commencement of the hearing that asserted that Kalpana lacked standing to pursue her devastavit claim. The defendants did not object to the devastavit claim being dealt with on its merits at the hearing. They renewed their argument in final submissions that Kalpana lacked standing. There is a strong argument that in these circumstances compliance with the requirements of s 56 of the Civil Procedure Act 2005 (NSW) would authorise the Court to decide the devastavit claim on its merits, if in its judgment it made a family provision order in Kalpana's favour that could only be satisfied by the defendants replenishing the deceased's estate to cure any consequences of a devastavit committed by them. In the circumstances, it is not necessary for the Court to decide this question.
Clause 2 of the deed of settlement is relevant to Anna's claim that the deed of settlement should be set aside if the Court is persuaded to make an order setting aside the orders made by the Family Court on 12 October 2015. Clause 2 provided:
2 COMMENCEMENT
2.1 This Deed will take effect forthwith upon entry by the Family Court of Orders in accordance with Annexure "A" and if such Orders are not entered then this agreement is of no force and effect and any concessions by either party shall not be admissible against the other in any proceedings or court.
Clause 3.2 contained an agreement between the parties that they shall forthwith consent to the Family Court Orders as set forth in Annexure "A", and that those orders and the steps required to be taken by the deceased were "in full and final satisfaction of the Family Court Proceedings, Domestic Relationships Claim, and any Family Provision Claim".
Both parties gave releases of the other in respect of many types of claim listed in clause 5 of the deed. Relevantly to these proceedings, clause 5.2 provided:
5.2 Release by Gray
Upon commencement of this Deed, Gray releases and discharges O'Donnell from all actions…and other liabilities of any nature (whether or not the parties were or could have been aware of them)…against O'Donnell in any way related to each of, their relationship (however described), the Family Court Proceedings, the Domestic Relationship Claim, the Family Provision Claim, the circumstances recited in this Deed or allegations arising out of or in any way related to the Parties.
5.2.2 In particular Gray agrees that upon commencement of this Deed she releases O'Donnell in respect of any claim whatsoever and howsoever arising including:
…
(c) save pursuant to the terms of this Deed any further property adjustment under the Domestic Relationships Act 1994 (ACT);
(d) any provision out of O'Donnell's estate under the Family Provision Act 1969 (ACT) or equivalent jurisdiction in another state or territory.
(e) any property adjustment under the Family Law Act 1975.
5.2.3 At any time from commencement of this Deed, O'Donnell is entitled to request Gray to join in an application to the relevant court, at O'Donnell's cost, to seek an order of that court approving this Deed to relinquish any claim for family provision for Gray. Upon such request being made, Gray agrees she will promptly comply and do all things necessary to obtain the approval in the same terms as those set out in this Deed.
5.2.4 Gray agrees that this Deed may be relied upon by O'Donnell and any person/entity referred to in clause 6 and pleaded as a bar to any proceedings brought by Gray in any jurisdiction.
"The Family Provision Claim", where used in clause 5.2, had been defined in Recital C(ii) as the family provision claim that Anna had advised that she intended to bring against the deceased's estate.
If clause 5.2 of the deed of settlement is valid and enforceable, it would create an absolute bar to Anna prosecuting the family provision claim that has been cross-vested from the Supreme Court of the ACT to this Court. It would also prevent Anna from prosecuting further her subsequent claim in the Family Court that will be described below.
Consequently, any further family provision in favour of Anna, assuming that it was not barred by the deed of settlement, would have to be out of the same pool of assets as any order that is made in favour of Kalpana or Anna's children. That proposition will be true if my decision that the Court cannot make an order declaring any property to be notional estate of the deceased is correct. However, as I will explain below, Anna did not prosecute her family provision proceedings at the hearing in this Court.
It is necessary then to set out the balance of the orders sought by Anna in her amended initiating application, which are as follows:
3. That pursuant to the provisions of Section 90SN of the Family Law Act (1975), order 2 made on 12 October 2015 be set aside.
4. That pursuant to the provisions of Section 90RD(1) of the Family Law Act (1975), it be declared that a de facto relationship existed between the Applicant and the Deceased during the period between June 2000 and June 2013, or during such other period as may be determined by the Court.
5. That pursuant to the provisions of Section 44(6) of the Family Law Act (1975), that leave be granted to the Applicant to make an application for adjustment of property pursuant to the provisions of Section 90SM of the said Act.
6. That the Respondents as the Executors of the Deceased's estate, do all acts and things and sign and execute all documents necessary to cause assets, comprising a total amount of $20 million of the Deceased's Estate, or alternatively, such amount as is equivalent to 20% of the net value of the Deceased Estate, whichever amount is the greater, to be transferred to the Applicant by way of adjustment of property, pursuant to the provisions of Section 90SM of the Act.
7. That if orders 1, 2, 3, 5 and 6 herein and the declaration as sought in 4 herein are not made, that in the alternative to orders 1 and 2 herein, that pursuant to the provisions of Section 28 of the Domestic Relationships Act (1994), the orders made by consent, in the Family Court at Canberra on 12 October 2015, expressly pursuant to the provisions of Section 15 of the Domestic Relationships Act (1994) ACT be varied such that the Respondents as the Executors of the Deceased's Estate, do all acts and things and sign and execute all documents necessary to cause assets, comprising a total amount of $20 million of the Deceased's Estate, or alternatively, such amount as is equivalent to 20% of the net value of the Deceased Estate, whichever amount is the greater, to be transferred to the Applicant by way of adjustment of property.
8. That the Respondents pay the Applicant's costs of and incidental to these proceedings.
It is not necessary to examine the legal basis of these further orders in any detail. If Order 2 made on 12 October 2015 is set aside, then it will be open to Anna to seek to prove that she was in a de facto relationship with the deceased for the purposes of the Family Law Act. Anna would then prosecute an application for adjustment of property pursuant to s 90SM of that Act.
Anna's aspiration is to obtain an adjustment of property by which she will receive $20 million or 20% of the deceased's estate, whichever is the greater. If that estate is limited to the actual estate of the deceased, then the value of any order made in favour of Anna as sought would be substantially less than she received under the deed of settlement and Order 3 made on 12 October 2015. Anna's claim for $20 million would also exhaust the estate.
On 24 August 2021, in addition to making an order amending order 1 as claimed in Anna's amended initiating application, Gill J made a number of case management orders. By order 2, Gill J ordered that orders 1 and 2 "are to be dealt with as a primarily issue", which I understand to mean that they would be dealt with as a preliminary issue.
Gill J made the following notation:
3) The applicant concedes that the relief sought at orders 3 to 6 of the amended application for final orders filed on 18 August 2021 will be ended should the applicant fail in respect of orders 1 and 2, although the applicant may still pursue the relief in orders 7 and 8 of that amended application for final orders.
The effect of the concession by Anna in the note is that, if the deed of settlement and Order 3 made on 12 October 2015 are not set aside, then Anna will be precluded from making her application for an adjustment of property pursuant to s 90SM of the Family Law Act. On the other hand, if the deed of settlement and Order 3 are set aside, then Anna will be free to pursue her Family Law Act application.
The effect of the notation also appears to be that, even if the deed of settlement and Order 3 are not set aside, Anna will be free to pursue an order under s 28 of the Domestic Relationships Act that Order 3 made on 12 October 2015 be varied so that Anna receives 20% of the deceased's estate, rather than the amount that she received under the deed of settlement and Order 3.
Amended order 1 of Anna's amended initiating application sought an order pursuant to s 28 of the Domestic Relationships Act on the basis that the deceased "failed to make any proper or adequate financial disclosure to enable the Court to determine that the said orders were just and equitable." Gill J, on 24 August 2021, by order 9 noted as follows:
9) Having been advised by counsel for the applicant that a portion of the claim will relate to an alleged duress applied upon the applicant by her then legal representatives in 2015, and having been further advised the respondent has caused a subpoena to be issued to those legal representatives the Court is advised that the claim on the part of the applicant necessarily involves a waiver of legal professional privilege in respect of that aspect of the involvement of the applicant and her legal representatives.
It is not, with respect, clear on the face of the orders what the significance of this notation is. There is a suggestion that Anna will rely upon duress by her own legal representatives, but that is not stated as being a ground in amended order 1 for setting aside the deed of settlement and Order 3 under s 28 of the Domestic Relationships Act.
On 24 August 2021, Gill J also made case management orders that Anna file points of claim to set out "the facts to substantiate any relief sought by reason of fraud or duress claimed under s 28 of the Domestic Relationships Act." The executors were also ordered to file a response.
Finally, by order 10, Gill J gave an indication that there was a possibility that the threshold matter may be able to be listed by the Family Court for February or March 2022. That indication was given to assist the parties in terms of the listing of the related proceedings that were then before this Court.
The proceedings that were then before this Court were listed for a pre-trial hearing before me on 27 August 2021. There was discussion about the possible consequences for the determination of the proceedings of the fact that Anna's proceedings that were before the Family Court might only receive a hearing of the preliminary question whether or not the settlement deed and Order 3 made on 12 October 2015 should be set aside on February or March 2022. If those preliminary issues were decided in Anna's favour, the proceedings would be set down for further hearing by the Family Court at some later date. That gave rise to the possibility that all the proceedings in which family provision orders were sought in this Court, and which were already fixed for hearing for 15 days commencing on 11 October 2021, could not properly be resolved, because the Court could not make a final determination of the available assets in the deceased's estate because the outcome of the Family Court proceedings could have a substantial effect on the available estate.
As I was not willing to vacate the hearing of all the proceedings that were then before this Court, I was effectively faced with Hobson's choice. The only course available was for me to invite Anna to apply to the Family Court to have the whole of the proceedings in that Court cross-vested to this Court. That would not necessarily solve the problem that this Court faced. If this Court decided on the preliminary issue that had been cross-vested to it that the deed of settlement and Order 3 made on 12 October 2015 should not be set aside, then the outcome might be that there was a bar to Anna prosecuting her claim for family provision under the Family Provision Act that had earlier been cross-vested to this Court.
At the time, I thought that gave this Court one chance in two of being able, at the forthcoming hearing, to determine the size of the deceased's estate for the purpose of deciding all remaining applications for family provision orders. I did not appreciate that the notation in order 3 made by Gill J left open the possibility that Anna would remain able to seek an order varying Order 3, even if she failed in her application for an order setting aside that order. The risk remained that the Court might decide that the deed of settlement and Order 3 ought to be set aside, in which case the Court would have to deal with the consequences in the best way that it could. That is because the Family Court only cross-vested the hearing of the preliminary issues in orders 1 and 2 to this Court. If this Court decided to set aside the deed of settlement and Order 3, Anna would then be free to pursue her claims in orders 3 to 7 in the Family Court. That would lead to this Court being part heard until the remaining part of Anna's Family Court proceedings could be determined.
Anna's proceedings came before Gill J again on 8 September 2021, his Honour then sitting as a judge of the Federal Circuit and Family Court of Australia Division 1 (which, for convenience, I will continue to call the Family Court). The first matter noted by his Honour in his orders was that the proceedings before his Honour were related to the proceedings that were pending before me in this Court regarding Anna's family provision claim, and that it was more appropriate that the proceedings under the Domestic Relationships Act be determined by this Court.
The substantive order made by Gill J was as follows:
1. That pursuant to Section 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act (Cth) 1987, the elements of the Applicant's Amended Initiating Application seeking relief under the Domestic Relationships Act (ACT) 1994, be transferred to the concurrent NSW Proceedings involving the parties.
The effect of order 1 is clarified by notation c, in which his Honour recorded:
c. The relief referred to in Order 1 hereinbelow incorporates the following Orders sought by Applicant under the Domestic Relationships Act (ACT) 1994 in her Amended Initiating Application:
a. Order 1 (as amended by Justice Gill in Order 1 dated 24 August 2021); and
b. Order 2; and
c. Order 7 (in the alternative to orders 1 and 2)…
This appears to mean that, by order 1, Gill J cross-vested to this Court Anna's application for orders setting aside the deed of settlement and Order 3, as well, in the alternative, as her application for an order under s 28 of the Domestic Relationships Act varying Order 3.
Anna filed her points of claim in this Court on 14 September 2021. That document sets out the basis of Anna's claim in the following terms:
1. The Orders made by consent between the Plaintiff and the Deceased in the Family Court at Canberra on 12 October 2015 be set aside pursuant to the provisions of Section 28 of the Domestic Relationships Act (ACT) 1994, as there has been a miscarriage of justice because of suppression of evidence: -
Particulars
(a) The Deceased withheld evidence as to the true nature and extent of his financial circumstances.
(b) The Deceased did not file a Financial Statement or Affidavit and failed upon oath to make a full and frank disclosure of his financial circumstances at the time the Orders were made.
(c) The Deceased's disclosure as to his financial circumstances was not proper, was inadequate and lacked specificity in circumstances where the extent of his financial disclosure was that he had property with a net value of not less than $70 million and a property known as [the property transferred to Anna], which had a value in the range of $2 million to $3 million.
2. That the Orders made by consent between the Plaintiff and the Deceased in the Family Court at Canberra on 12 October 2015 be set aside pursuant to the provisions of Section 28 of the Domestic Relationships Act (ACT) 1994, as there has been a miscarriage of justice because of fraud: -
Particulars
(a) The Deceased deliberately withheld evidence as to the true nature and extent of his financial circumstances.
(b) The Deceased, upon the declaration being made as to the existence of a domestic relationship, thereafter failed to fulfil his obligation to make a full and frank disclosure of his financial circumstances.
(c) The Deceased's disclosure of his financial circumstances was vague, insufficient, and misleading, such as the Family Court was unable to determine whether the orders adjusting the interest in the property of the parties seemed just and equitable.
The first thing to note about the points of claim is that they do not include a claim that Anna entered the deed of settlement or agreed to Order 3 as a result of duress applied by her then legal representatives.
Of the grounds for the Court to find that there has been a miscarriage of justice listed in s 28(a) of the Domestic Relationships Act, Anna has only relied upon suppression of evidence and fraud. The particulars of each claim are as set out in the points of claim.
It does not appear from the points of claim that Anna has maintained her alternative claim in order 7 of the amended initiating process for an order varying Order 3 in the event that the Court does not order that the deed of settlement and Order 3 be set aside in their entirety.
The executors filed a cross summons in these proceedings on 15 September 2020, rather than a response to the points of claim as ordered by Gill J. The relief claimed in the cross summons was relevantly as follows:
1. A declaration that it is unconscionable for the cross-defendant to resile from the Deed of Settlement and Release executed by [the deceased] and the cross-defendant and annexed to the consent orders made on 12 October 2015 in the [Family Court proceedings].
2. A declaration the cross-defendant is estopped by the Deed of Settlement and Release made on 12 October 2015 in the [Family Court proceedings] from claiming provision from the estate of [the deceased].
3. An order that the cross-defendant is obliged to do all things and execute all documents necessary to release the deceased's estate from any claim for provision or any claim for further provision in any Australian jurisdiction.
…
5. An order that the proceedings commenced by [the amended initiating application] be dismissed.
6. An order that the cross-defendant pay the cross-claimants' costs of the proceedings.
Anna filed a defence to the cross summons on 21 September 2021. The effect of the defence was that the deed of settlement and Order 3 were obtained without full and frank disclosure of the deceased as to his financial circumstances. Anna alleged that, if the deed of settlement is set aside, then the orders made by the Family Court must be vacated.
The result is that this Court is only required to decide whether Anna has established a right to the making of orders 1 and 2 of her amended originating application. If it decides that she has not proved that entitlement, that will be the end of the proceedings instituted by Anna in this Court and the Family Court. If the Court decides that orders 1 and 2 should be made, then the Court will not be required to proceed to determine Anna's cross-vested family provision application. It would then be a matter for Anna to pursue her claims for relief in orders 3 to 6 of her amended initiating application in the Family Court. That would have the collateral effect that this Court would not be able to determine with adequate certainty what the ultimate value of the actual estate of the deceased would be.
I mentioned the possibility above that it might be a necessary condition of the Court making orders setting aside the deed of settlement and vacating Order 3 that Anna re-transfer to the executors the property transferred by the deceased to Anna under the deed of settlement and Order 3. In final submissions, Anna's counsel resisted this suggestion on the basis that the appearance that a conditional order would be appropriate was an artefact of the cross-vesting from the Family Court to this Court only of that part of Anna's application in the Family Court that sought to set aside the deed of settlement and vacate Order 3. Counsel submitted that, if the Family Court had retained jurisdiction over the whole of the proceedings, and if it had decided to set aside the deed of settlement and vacate Order 3, it would then have immediately proceeded to decide Anna's claim that she was in a de facto relationship with the deceased, and if it decided she was, the Family Court would then have decided whether property adjustment orders should be made, and if so, it would have made them in the same judgment that dealt with the setting aside of the deed of settlement and the vacation of Order 3. The occasion for the Court to require restitution of the status quo would be artificial as it would arise out of the need for this Court and the Family Court to decide separate aspects of the one proceedings. Consequently, it was submitted, this Court could not properly require Anna to re-transfer property to the executors, and then decide the other family provision claims that are before it on the basis that the actual estate of the deceased was augmented by the re-transferred property. That is because Anna would be entitled in the Family Court to argue that she should be able to retain the transferred property and that additional property should be transferred by the executors to her.
I accept counsel's submissions, which has the result that if I were to make an order setting aside the deed of settlement and vacating Order 3, I would require Anna to preserve the assets, and leave it to the Family Court to determine the balance of the claims in Anna's amended originating application. This Court would then have to abide the outcome of those proceedings before it could reliably determine the content of the actual estate of the deceased.
Anna's application for orders in terms of orders 1 and 2 of her amended initiating application is based upon the fact that the deceased provided a disclosure of his assets during the negotiations that led to the making of the deed of settlement and Order 3 on 12 October 2015. That led to the inclusion in the deed of settlement of recital G(a) that "[the deceased] has property with a net value of not less than $70m". The success of Anna's application depends upon her establishing that in fact, at the time, the deceased's assets were worth an amount that was so much more than $70 million that the Court should find that there was a suppression of evidence (or any other circumstance) within the meaning of s 28 of the Domestic Relationships Act so that there has been a miscarriage of justice.
Anna's submissions recognised that the recital in the deed of settlement used the expression "not less than", which was not a positive assertion that the value was only $70 million, but was a representation consistent with the net value of the deceased's property being any amount greater than $70 million. Apart from submitting that a disclosure in these terms involved a suppression of evidence, or was otherwise misleading, Anna submitted in par 8 of her final submissions that the consent of the parties to the orders made by Benjamin J did not abrogate his Honour's "mandated responsibility to make orders, which seemed just and equitable, irrespective of whether the parties were represented by the most eminent Senior Counsel in the field of Family Law."
In this respect, Anna's submissions appear to have 'a bet each way'. First, the orders sought should be made under s 28 of the Domestic Relationships Act because the deceased's disclosure of his asset position was not an adequate performance of his duty to make full and frank disclosure of his assets. Secondly, even if the disclosure was not inadequate, because it was couched in terms of being "not less than $70m", the fact that the parties consented to Benjamin J making the orders did not obviate his Honour's duty to satisfy himself, for the purposes of s 15 of the Domestic Relationships Act, that the orders sought seemed just and equitable, having regard to the factors set out in s 15(1). Presumably, Anna's submission implies that Benjamin J should have insisted upon a more definitive disclosure by the deceased of his net asset position, so that his Honour could have satisfied himself that the property to be transferred to Anna was appropriate for the purposes of s 15.
Anna's submissions conceded the validity of an argument put by the executors that the deceased was not required to make a formal disclosure of his asset position, in compliance with the Family Court rule requiring such disclosure, because the only issue before the Court was the threshold issue of whether Anna had established the necessary de facto relationship between herself and the deceased. The executors relied upon the judgment of the Full Court of the Family Court in Norton v Locke (2013) 50 Fam LR 517; [2013] FamCAFC 202. At [78]-[83], the Full Court (Bryant CJ, Murphy and Benjamin JJ) found:
[78] Part 24 of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) is confined, in its application to "… proceedings in relation to financial matters" (r 24.01). "Financial matters" is defined, relevantly, in the FCC Rules as including proceedings under s 90SM of the Act. Section 90SM requires, for its application, "the breakdown of a de facto relationship". Plainly enough, that must, in turn, depend upon the prior existence of a "de facto relationship". The existence of a de facto relationship is, then, a jurisdictional fact in the sense earlier described.
[79] In our view, perforce of the reasons earlier outlined, until such time as the relevant jurisdictional facts are established, there is no power to order the provision of financial information pursuant to pt 24 of the Rules.
[80] However, as has been said, the court has the power to make orders controlling its own process. In our view, the court does have the power to make orders or give directions in respect of the provision of such information as is reasonably necessary for the determination of the jurisdictional facts. It may well be that a court could be persuaded that financial information, broadly so-described, is directly relevant to the establishment of a jurisdictional fact. For example, the intermingling relationship or lack of intermingling of the parties' respective financial affairs, may be directly relevant to the establishment of whether a de facto relationship exists (see, s 4AA(2)(d) of the Act).
[81] Here, the specific order made by his Honour required of the appellant the filing of a Financial Statement in compliance with r 24.02 and the provision by the appellant "of all documents referred to in r 24.04". The latter rule requires production of:
(a) copies of the party's 3 most recent taxation returns;
(b) copies of the party's 3 most recent taxation assessments;
(c) if the party is a member of a superannuation plan:
(i) if not already filed or exchanged - the completed superannuation information form for any superannuation interest of the party; and
(ii) for a self-managed superannuation fund - the trust deed and copies of the 3 most recent financial statements for the fund;
(d) if the party has an Australian Business Number, copies of the last 4 business activity statements lodged;
(e) if there is a partnership, trust or company (except a public company) in which the party has an interest, copies of the 3 most recent financial statements and the last 4 business activity statements lodged by the partnership, trust or company.
[82] It is, in our view, difficult to see how the documents required by that rule could be required for the narrow purpose to which directions might be fashioned by the court for the limited "jurisdictional purpose" just outlined.
[83] In our view, it is established that the order was made without jurisdiction and it, too, should be set aside.
Anna's response was that it did not matter that the proceedings had not reached the point where the Court had found that it had jurisdiction because Anna had established that it was a de facto relationship between herself and the deceased, so that the Court had power to engage its rules that required the deceased to file and serve a financial statement. Anna submitted that the cardinal obligation of the deceased to make full and frank disclosure of his property to Anna was engaged when, during the settlement discussions that must have taken place leading up to the making of the deed of settlement, the deceased made the financial disclosure that led to the inclusion of recital G(a) in the deed of settlement. Anna relied upon the judgment of the Full Court of the Family Court in In the Marriage of M P and M J Suiker (1993) 17 Fam LR 236. Nicholson CJ, Baker and Strauss JJ said at 241-3:
Under the Family Law Act 1975 the need for a resolution of disputes by negotiation and the consequent making of consent orders or the approval of maintenance agreements is an essential part of the legislation and the rules. Relevant provisions in force at the time included s 79(9) and s 87 of the Family Law Act 1975 and O 24 and O 31 r 8 of the Family Law Rules. In our opinion, the necessity for full and frank disclosure of financial matters to the court and to the other party are basic to the process of the court and the fundamental aims of the financial legislation contained in s 79 of the Family Law Act 1975. As Dawson J said in Harris v Caladine (1991) 14 Fam LR 593, [1991] FLC 92 217 at Fam LR 617, FLC 78,485 6
In considering what order, if any, should be made under s 79, a court is required under subs (4) of that section to take a number of matters into account, including the various financial contributions made by the parties to the marriage. And subs (2) provides that a court shall not make an order under the section unless it is satisfied that, in all the circumstances, it is just and equitable to do so. The fact that an order is sought by consent does not relieve a court, or a registrar, from compliance with the requirements of the section, but it may render compliance much less demanding. Provided that a court, or a registrar, is adequately informed, where the parties are at arm's length and are properly represented little more than consent may be needed to establish that the requirements of the section have been met: see Jenkins v Livesey [1985] AC 424 at 437,444.
Even if the consent pursuant to which an order is made under s 79 amounts to a contract between the parties, it is the order itself which is of legal significance. As Lord Diplock observed in de Lasala v de Lasala [1980] AC 546, at 560, in related circumstances:
"Financial arrangements that are agreed upon between the parties for the purpose of receiving the approval and being made the subject of a consent order by the court, once they have been made the subject of the court order no longer depend upon the agreement of the parties as the source from which their legal effect is derived. Their legal effect is derived from the court order."
And in the case of an application under s 79, even if there is consent amounting to a contract, that is not enough of itself to entitle the parties to an order. The requirements of the section must be satisfied.
It is implicit in these passages that the consent to an order must be informed consent. The consent to the order is itself part of the judicial process on which the court places reliance. If that consent is based on misleading or inadequate information, then there may be, in our opinion, a miscarriage of justice either by reason of the "suppression of evidence" or by reason of "any other circumstance".
The extract that the Full Court gave from the judgment of Dawson J in Harris v Caladine (1991) 172 CLR 84 at 124; [1991] HCA 9 is pertinent to the present case. The observations made by Dawson J in the context of the application of s 79 of the Family Law Act apply equally to applications under s 90SM of that Act in the context of de facto relationships. They may also apply to applications under s 15 of the Domestic Relationships Act, although the latter Act does not use language common to legislation that vests jurisdiction in courts created under Ch III of the Constitution, where the criteria governing the court's jurisdiction are usually expressed in a way that makes it clear that jurisdiction must be established before the court can embark upon the substance of the claim. It may be that the Supreme Court of the ACT was not required to decide first that a domestic relationship, for the purposes of s 3, had been established before it embarked upon a hearing for orders pursuant to s 15 of the Domestic Relationships Act. Although s 15 gives the Court a discretion (by use of the word "may") to make an order adjusting property interests that seems just and equitable to it having regard to the listed factors, the existence of the domestic relationship may not be a jurisdictional fact. A difficult question may arise as to whether it made a difference that the orders under s 15 were not made by the Supreme Court, but were made in the accrued jurisdiction of the Family Court. Was the Family Court permitted by the fact of its accrued jurisdiction to proceed in the same way as if it had been the Supreme Court, or should s 15 be read as imposing a jurisdictional requirement, because of the context of the Family Court being a Chapter III Court? The parties did not address these considerations, and I do not think it is necessary to decide the issue in these reasons.
It should be noted, however, that while s 79(4) of the Family Law Act uses the expression "the court shall take into account" and s 90SM(4) of the Family Law Act uses the expression "the court must take into account", s 15 of the Domestic Relationships Act simply says that the court "may" make an order adjusting property interests, having regard to the listed factors. Consequently, whether or not the existence of a domestic relationship is a jurisdictional fact, a court making orders under s 15, even if it be a Chapter III Court exercising accrued jurisdiction, may be entitled to make orders without satisfying a mandatory requirement to have regard to listed factors. I prefer the view that a Ch III Court exercising accrued jurisdiction under a State or Territory law is entitled to decide the case in the same manner in which a Court of the relevant State or Territory would decide it, and suspect that the parties' legal representatives agreed to base the compromise on the Domestic Relationships Act for the very purpose of avoiding the need to establish the existence of a domestic relationship as a jurisdictional precondition of Benjamin J being empowered to make orders in the terms agreed in the deed of settlement.
I will nonetheless assume (without deciding) that Benjamin J was not empowered to make orders under s 15 of the Domestic Relationships Act unless he was satisfied that a domestic relationship between the parties had been established, and then that it was just and equitable for him to make the orders that he was asked to make having regard to the factors listed in s 15.
It is at this point that the observations of Dawson J in Harris v Caladine, as adopted by the Full Court in Suiker, explain that, while the consent of the parties did not relieve Benjamin J from the need to comply with the requirements of s 15, the fact of the consent rendered "compliance much less demanding", provided Benjamin J was adequately informed, and as the parties were at arms' length and were properly represented, "little more than consent may be needed to establish that the requirements of the section have been met".
I am satisfied, in the present case, that Benjamin J was entitled to make the orders that he did make under s 15 of the Domestic Relationships Act, provided only that his Honour was entitled to rely upon the consent of the parties to the orders that he made. Anna has accepted that the parties were represented by eminent senior counsel in the field of family law. The parties settled the whole of the dispute, notwithstanding that the only issue before the Court was the threshold issue of whether the parties had been in a de facto relationship for the purposes of s 90SM of the Family Law Act. They chose not to finally contest the availability of relief under that provision. I infer that the only evidence that was before the Court in a comprehensive form was evidence relevant to the de facto relationship issue, and the evidence relevant to the issues generally would only have been incidental. I infer that the parties' legal advisers carefully considered the prospects of Anna succeeding in establishing that there was a de facto relationship between the parties. There is no basis for this Court to form any view on that issue. It must be inferred that the parties' legal representatives considered that the outcome was sufficiently uncertain to justify a compromise. For reasons that are not known, a compromise based upon an acknowledgement by the deceased that there was a domestic relationship for the purposes of the Domestic Relationships Act was considered to be an adequate basis for a compromise. Benjamin J was correct in his observation that Anna faced an all or nothing outcome if she persevered with her claim that a de facto relationship had existed between the parties. I am satisfied that Benjamin J did not in any way fail in his judicial approach to the request by the parties that he make the orders that he made by consent.
Further, I reject Anna's submissions that Benjamin J's approach to the consent application before his Honour miscarried because his Honour did not find that the consent orders were not just and equitable on the information before the Court. Accordingly, I reject Anna's submission in par 1 of her initial outline of submissions that the financial disclosure made by the deceased was not adequate to enable the Court to determine that the orders were just and equitable. In pars 5 and 6 of her final submissions, Anna started with the recited disclosure that the deceased had property with a net value of not less than $70 million and submitted that, when added to the property disclosed by Anna, the available pool of the parties was not less than $70,804,504. On the basis that the property transferred by the deceased to Anna had a value of $4 million, the division of net assets would be 6.78% to Anna and 93.22% to the deceased. Anna submitted that this division between the parties, after an asserted relationship of some 13 years, "could not be considered by the Court to seem just and equitable." Anna added: "In any event and most crucially, there is no adequate basis upon which consideration could be given by the Court as to whether the orders seemed just and equitable because of the suppression of evidence by virtue of the [deceased's] failure to make adequate financial disclosure, thereby causing a miscarriage of justice."
In making these submissions, Anna has conflated Benjamin J's preparedness to accept that the consent orders proffered by the parties based on the information that was disclosed by the parties were just and equitable, with the position that his Honour may have adopted had the deceased disclosed to Anna that he had property with a net value much greater than $70 million. I do not accept that this Court has a proper basis for setting aside the orders made by Benjamin J, insofar as those orders were made based on the information available to his Honour. Nothing in the process adopted by Benjamin J based on the information that he had involved a miscarriage of justice within the meaning of s 28 of the Domestic Relationships Act. Furthermore, Anna's submission that a division of the pool of assets that gave her only 6.78% must necessarily fail the just and equitable test does not make due allowance for the fact that the division was a compromise. The Court does not know what evidence had been served and cannot assess the risk of total failure that Anna faced. The Court cannot know what Benjamin J knew of that evidence, even though it had not yet been tendered. As I have said above, for the sake of argument, I am prepared to accept that it may have been necessary for Benjamin J to have satisfied himself that there was adequate evidence of the existence of a de facto relationship, so that he had jurisdiction, and then to satisfy himself that there was a basis for his Honour being satisfied that the consent orders were just and equitable in the circumstances. On that assumption, this Court has no proper basis for finding that there was a miscarriage of justice in the orders made by Benjamin J.
However, for the purposes of Anna's application under s 28 of the Domestic Relationships Act, Anna's consent to the orders will not preclude this Court setting aside the orders, if there was some miscarriage of justice for any of the reasons listed in s 28(a), by reason of some factor other than Benjamin J's preparedness to act on the parties' application that he make the orders that he did by consent. The real and only issue in Anna's application is therefore whether the disclosure of the deceased's financial circumstances that he in fact made was so misleading and such a breach of his duty to give full and frank disclosure that there was a suppression of evidence or any other circumstance that led to the making of the orders being a miscarriage of justice. It does not matter whether or not the Court could have ordered the deceased to serve a financial statement. It is plain that in the settlement process he was required to make a disclosure and consequently the disclosure that he made was required to be full and frank.
Anna's submissions were directed at establishing why the Court should set aside Order 3 made by the Family Court on 12 October 2015. They have not engaged with the further issue of why the Court should set aside the deed of settlement. That issue is directly raised by order 2 of Anna's amended initiating application that has been cross-vested to this Court. It is not self-evident that a consequence of Order 3 being set aside is that the deed of settlement will also be set aside. It is more common for the Court to have to deal with applications whereby a party to a deed of settlement claims that the deed is voidable because of some vitiating factor, with the consequence that orders made by the Court, by consent, in accordance with the requirements of the deed should also be set aside. Anna's application is made in reverse, in the sense that she asserts that there are statutory grounds for setting aside the orders made by the Family Court and she submits that the invalidity of the deed of settlement is a necessary consequence.
The parties did not engage with this question. The proposition that the deed of settlement should be set aside on any general law principles is not obviously true. Anna did not plead any basis for setting aside the deed of settlement at general law. The deceased's disclosure that he had property with a net value of not less than $70 million is not falsified by proving that the deceased had property with a greater value than $70 million. There was evidence that the deceased had resisted providing a financial statement to Anna in accordance with the Family Court rules before the hearing on 12 October 2015, on the ground that he could not be ordered to do so until the Family Court had decided that it had jurisdiction in the matter by reason of a finding that there was a de facto relationship between the parties. As explained above, the deceased was entitled to adopt that position. That position may have made it difficult, as a practical matter, for the parties to successfully negotiate a complete settlement of the claim. It seems likely that the deceased made a limited disclosure to facilitate settlement and to persuade Benjamin J to make the agreed orders by consent. The disclosure was in guarded terms, which was likely to have been intentional on the deceased's part to preserve the secrecy of his financial position while making a partial disclosure to Anna.
The releases and the bar to Anna commencing the proceedings that are now before the Court are found in clause 5.2 of the deed of settlement and not in the orders made by the Family Court. The issue of whether there are grounds to set aside the deed of settlement is therefore a crucial one. It may be that a miscarriage of justice can be established for the purposes of s 28 of the Domestic Relations Act in circumstances that would not justify an order setting aside the deed of settlement under general law principles. If orders are set aside under s 28, then it follows from the terms of the section that new orders may be made under s 15. To that extent, by force of the statute, any release or agreement not to sue contained in a deed of settlement between the parties will be ineffective, whether or not the deed of settlement is formally set aside. There is a question about whether the deed of settlement will remain effective insofar as it releases claims under the provisions of other statutes such as s 8 of the Family Provision Act and s 90SM of the Family Law Act.
For the reasons that follow, I have not found it necessary to decide whether a consequence of the Court making a finding that the orders made by the Family Court involved a miscarriage of justice necessarily have the legal consequence that the deed of settlement must be set aside, whether or not it was liable to be set aside at general law. I would not enter upon a consideration of that issue, given that the Court has not been assisted by any submissions by the parties.
The reason why it is not necessary to resolve this issue is because this and the other technical issues that I have raised above, but not resolved, must fall away if there are no factual grounds for the Court to find that the disclosure made by the deceased that he had property with a net value of not less than $70 million was materially false or seriously misleading or deceptive. I will allow for the sake of argument that, if the deceased was well aware that he had net assets of, say, $200 million, a disclosure that he had net assets of not less than $70 million could arguably, by implication, be false or misleading or deceptive in the circumstances. Whatever the validity of that proposition may be, if the evidence does not establish that the deceased had property with a net value of substantially more than $70 million, the issue becomes moot, as does every other issue considered above.
The evidence in these proceedings requires the Court to find that the deceased's disclosure that he had property with a net value of more than $70 dollars million could only be false in the sense that the net value of his property was less than $70 million. That being so, there are no grounds for setting aside the orders made by the Family Court on the basis that there was a miscarriage of justice, and there is no statutory or general law basis for setting aside the deed of settlement.
In explaining my reasons for reaching this conclusion, it is necessary first to record that I made the following order on 12 October 2021 on the second day of the hearing:
The Court orders in each proceedings evidence in one case shall be treated as evidence in all other cases, subject to the right of any party to argue that particular parts of the evidence should be ignored in respect of their case on the basis that it is irrelevant.
Anna has not made any submission that any part of the evidence led in the proceedings between Kalpana and the executors should be ignored for the purposes of her case on the basis that it is irrelevant.
As I have explained above, the inventory of property compiled by the executors valued the deceased's estate as $10,262,192. The inventory of property included certain property that has not been found and a debt of $765,000 claimed to be owed by Kalpana that has not been proved. As I have also noted, Kalpana and the executors ultimately came to an agreement that the value of the deceased's estate was $2,058,460.11 as of 25 March 2022, when the Court was advised of the agreement. Although Anna was not party to that agreement, she did not challenge it in any positive way.
The parties found it impossible to determine, on the basis of strict accounting principles, what the value of the deceased's estate was. That was because the accounting information that was left upon the death of the deceased was not sufficiently reliable for the expert accountants to reconstruct the balance of account as between the deceased and the companies in the O'Donnell group. The expert accountant retained by the executors had arbitrarily assumed a zero balance of obligations each way as at a particular date, because there was no realistic way to reconstruct a true initial accounting position. The expert accountant retained by Kalpana challenged that assumption in various ways, but there was no sound basis for determining the true balance of account. Notwithstanding that these difficulties made the agreement reached between Kalpana and the executors an arbitrary one, I am satisfied that the agreement fell within the range of possibilities that were permitted by the objective evidence.
Even if, for the purposes of Anna's application under s 90SM of the Family Law Act, or even in the alternative under s 15 of the Domestic Relationships Act, the relevant property of the deceased included all of the property in the O'Donnell group of companies, the evidence at the hearing established that the net value of those companies fell within the range of $28,170,236 to $32,720,859. There is no reason in the evidence for the Court to infer that the value of the companies changed in a significant way between 12 October 2015 and the date of the hearing of the proceedings. The deceased signed a statement of his personal assets and liabilities as of 16 January 2013, in conjunction with an application for finance, that listed his net worth as being $63,600,000. Another statement of the O'Donnell family group assets produced by a former solicitor of the deceased, but undated, listed the net assets at $51,500,000. An application for finance dated 17 January 2016 made on behalf of the deceased, to which he was not a party said: "Garry shows a net worth on paper of approx $64 M. However, those close to him know his true net worth would be more like $100 M."
The Court can only act upon objective evidence of the net value of the deceased's property as of 12 October 2015, including the value of the O'Donnell group of companies, on the assumption that the deceased controlled that value. That evidence simply does not sustain Anna's claim that the amount of $70 million disclosed by the deceased was a substantial understatement of the net value of his property.
In her case, Anna relied upon the following evidence to support a finding contrary to the one that I have made:
In par 24 of her 5 June 2020 affidavit, Anna said that, in 2012, the deceased raised with her, "the topic of giving me access to his offshore accounts". Anna said that she understood the deceased was referring to money he had in overseas accounts. If the deceased said that, he did not give Anna access to the accounts.
In par 39 of the affidavit, Anna said that that the deceased spoke to her about having a pub and gaming hotel in the Philippines with about 200 poker machines. The deceased said to Anna that when he travelled to the Philippines 3 to 4 times a year: "I usually pick up about 300,000 each trip."
In par 40, Anna gave evidence that the deceased said that he had assets in Jersey, the Bahamas and Gibraltar.
In 2008, according to Anna in par 41 of her affidavit, the deceased said to her that he thought he should give her the codes to his offshore accounts.
Anna gave more elaborate evidence concerning the deceased's business ventures in the Philippines in par 114 of her 14 September 2021 affidavit. In par 115, Anna provided a further explanation of the deceased having said to her that he held assets in Jersey, Barbados and other tax havens as a result of being investigated by the ATO in 1992.
Anna also relied upon the evidence given by Robert Leticq in par 9 of his affidavit sworn on 1 August 2019 in which he said that he had a conversation with the deceased on 14 July 2018, as follows:
Garry said: "I recently sold most of my Aristocrat shares because the price was attractive and I made plenty."
I said: "how much is 'plenty'"
Garry said: "over 300 million".
As I understand it, all of the other evidence given by Anna concerning property that may have been owned by the deceased is consistent with that property being owned by companies within the O'Donnell group.
Anna submitted that I should accept the evidence that she gave concerning the statements made by her to the deceased concerning his ownership of property outside Australia. I am inclined to accept that the deceased made the statements to Anna. However, it does not follow that the statements were true. So far as I am aware, there is not a skerrick of objective evidence to support the truth of the claims that the deceased may have made about him having substantial assets outside Australia.
Consequently, I find that Anna has not proved her case for the Court to make an order setting aside the orders made by the Family Court on 12 October 2015. It follows that the Court will not make an order setting aside the deed of settlement, whether or not the entitlement to that order would follow an order setting aside the Family Court orders.
For the reasons that I have explained above, it appears that Anna's claim for further family provision under s 8 of the Family Provision Act has not been pursued at the hearing in this Court. For completeness I should state that I would have dismissed Anna's application if it had not been barred by the deed of settlement and it had been pursued before me. I would have taken that course because Anna received property valued in the order of $5 million under the deed of settlement.
In her 1 October 2021 updating affidavit, Anna said that she retained the residential property that had been transferred to her by the deceased, which had an estimated value of $3 million subject to a need to expend rectification costs of $400,000. She had vehicles worth about $75,000. In addition, she had total money in the bank of $942,552.53. Anna was the owner of a restaurant business which she was trying to sell, whose goodwill had been damaged by the pandemic lockdown.
Anna provided comprehensive evidence that would, in an appropriate case, support a claim that the deceased was morally bound to make a substantial provision in her favour. Whether or not adequate provision was made under the deed of settlement is a debatable question. The difficulty with her case is, however, that she is in competition with Kalpana for the relatively small actual estate of the deceased that has now been found to be available as the fund that is relevant to all competing family provision claims. I am satisfied that the situation is sufficiently extreme that, having regard to the benefits received by Anna under the deed of settlement, there is no justification that she be given further provision given that the deceased made no provision for his widow, Kalpana.
I consider that it is proper and safe for the Court to rely upon the concessions made by the deceased in this affidavit that are against the interests of his estate at the suit of Kristina and Jurek. The deceased's evidence was that he purchased a house in Deakin in which he permitted Anna and her children to live rent-free. The deceased purchased a house in Garran in which he permitted Anna and her children to live without payment of rent between about July 2009 and late 2011/early 2012 while the Deakin property was being renovated. The deceased paid for the renovations. The deceased paid the rates and other expenses such as electricity accounts while Anna and her children lived at one of the properties owned by the deceased. The deceased acknowledged that he provided a box of meat from his hotels for Anna and her family from time to time. He permitted Anna and her children, once they were old enough, to drive cars owned by companies controlled by the deceased. The deceased paid for overseas travel, meals at restaurants and other expenses for Anna and her family. The deceased gave Anna $1,000 per week from about June 2014 until she served him with the process by which she commenced the Family Court proceedings.
To this summary should be added the statement of Brereton JA (with whom Bathurst CJ agreed at [1]) in Yesilhat v Calokerinos at [133], focusing on the necessity of a finding that members of a household be living together (endnotes omitted):
[133] It is also inherent in the concept of membership of the same household that the members of the household be living together. The notion of membership of a household involves a common residence in which two or more persons not only share the facilities but also live together. Membership of (as distinct from presence in) a household involves aspects of continuity and permanency of mutual living. Although the question as to when a living arrangement becomes a household is one of degree, and there are no hard and fast rules, at least generally, the minimum requirements include at least some element of residing (as distinct from visiting), and mutual living so that there is a quasi-family unit (as distinct from boarding). The fact that a person lives in the residence of another only periodically, or for a very short period, is insufficient to render him or her a member of the other's household, as the required degree of continuity and permanency is not present. Where one person occasionally stays over at the other's house, but maintains his or her own separate accommodation as a principal place of residence, it cannot be said that they are living together or members of the same household, notwithstanding that the emotional relationship between them is substantial, strong, loving, intense, and enduring. In this respect, there is a distinction between a visitor and a resident, which may be easier to recognise than precisely describe; but residence involves aspects of continuity and permanence, and indicia such as use of the place as an address, and as a location where personal items and effects are kept and the activities of daily living (such as sleeping, washing and dressing) are performed.
The thrust of the deceased's affidavit in Anna's Family Court proceedings was to deny the existence of certain of the indicia of a de facto relationship, the absence of which would also have the effect of disproving the contention that the deceased was part of a household that included Anna and her children. The deceased sought to establish that, although there was continuity and a measure of permanency for a period approaching 13 years, the deceased did not reside in the houses that he bought for Anna and her family to live in, and, in particular, that he did not reside in those houses, as might have followed if he had regularly slept there, or maintained his possessions there. The deceased sought to maintain the position that he was a visitor for meals and watching television but always went home to bed. The deceased said that, with rare exceptions, he did not stay at Anna's house and he did not live there. He did not leave any of his possessions at the house such as his clothes.
The question whether Kristina and Jurek were, at any time, members of the household of which the deceased was a member is unusual in this case because it does not depend upon whether Kristina and Jurek were members of the household maintained by the deceased. It is clear that, as her children, Kristina and Jurek were members of the household maintained by Anna at the Deakin and then the Braddon properties. The issue is whether the deceased was also a member of that household. The evidence would comfortably sustain a positive determination of that issue, but for the possibility that the deceased only stayed occasionally at Anna's family residence and that he maintained his own residence at the Mugga Way property. This is not a black and white question, as there is no rule that a person can only be a member of one household at any time. It is an issue of degree that depends upon the evidence. Where the person does not habitually sleep in the house where the household is maintained, the question is one of degree having regard to the combined significance of the quality of the person's inclusion in the household and the frequency with which the person sleeps in the house.
The evidence on this issue was not as comprehensive as it could have been. Anna gave evidence bearing on the issue. Kristina and Jurek baldly claimed that they lived with the deceased for most of the period of his relationship with Anna, but they gave little direct evidence of the detail of the deceased's alleged membership of Anna's household. None of Anna, Kristina and Jurek were cross-examined on the subject, and no concessions were sought from them directed at establishing that the only real residence of the deceased was the Mugga Way property.
Anna's evidence, in her 5 June 2020 affidavit, was that initially she stayed over at the Mugga Way property 5 to 7 nights a week while her mother cared for Kristina and Jurek. That evidence is not consistent with Christine and Jurek being members of a household of which the deceased was a member. In her 14 September 2021 affidavit, Anna said that this regular pattern "continued until we moved into the Deakin property in 2005." At pars 162 and 163, Anna said:
162. Garry stayed several nights a week with me there. He maintained his home at Mugga Way, and usually left the Deakin property early in the morning to feed the dogs at Mugga Way. Often before going to lunch at 12 pm, Garry drove his car and parked on the driveway at Deakin to have it ready for him.
163. Garry said to me many times "This is our home together. Make it the way you want it to be".
Further, at par 170, Anna said:
170. On many occasions Garry would fall asleep on the couch at the home. Later in the night, I would help Garry to get up and we would go to bed in the room we shared. This was a common occurrence.
Later, at par 192, Anna said:
192. … He came for dinner nearly every night and stayed overnight from time to time. He frequently fell asleep on the couch. Often, I would drive him back to Mugga Way late at night.
Significantly, Anna said, at par 195, that in February 2010 the deceased bought two Jack Russell dogs for himself. The dogs lived at the Garran property until 2011, as they could not be left alone at Mugga Way as the deceased was so rarely there. The deceased's fondness for his dogs leads to the conclusion that he regarded himself as being a member of Anna's household while his dogs lived with her.
The evidence given by Kristina and Jurek was expressed in much more general terms to the effect that the deceased moved into the Deakin property in 2005 with their mother and them and that they "lived together".
Ashley was the only one of the executors who gave substantive evidence in response to Kristina's and Jurek's claim. That was apparently because Ashley said that she lived at the Mugga Way property for periods between December 2007 and December 2014. Ashley attended Geelong Grammar School between 2005 and 2007. She returned to stay with the deceased approximately every 4 to 6 weeks and during the school holidays. Between 2008 and 2010, she attended university at the Australian National University and lived with the deceased for approximately half of the time over this period. Between December 2010 and January 2015, Ashley worked as a travel agent at a suburb in the north of Canberra. She continued to split her time between living with the deceased at Mugga Way and living with her mother. In November 2011, Ashley moved into a one-bedroom flat located above the garage at Mugga Way. The thrust of Ashley's evidence was to establish that the deceased maintained his residence at the Mugga Way property, for example, by continuing to arrange for a cleaner to attend the house, and that she frequently saw him coming home at night and also saw him almost daily. Ashley said that, approximately twice a week, she picked up the deceased from Anna's house and drove him home to Mugga Way.
Ashley's evidence in cross-examination was: [T 689.43-690.5]
Q. So you cannot say with any degree of certainty that your father did not sleep over at Anna's place or that she did not sleep at Mugga Way?
A. I can say from my perspective - if you're talking about did I sleep in my father's bed every night the answer's no. So that's a good thing. But I did live with my dad from 2007 until 2014 when he moved to the Barton penthouse and he came home to Mugga Way every night during that time and he did not live with Kristina and Jurek and Anna.
Q. I put it to you that that's not true.
A. I put it to you that it is true. I'm so sorry, Mr Stevens, but dad did not live there. Dad live there at Mugga Way from 1988 when he purchased the property until December of 2014 at which time he moved with his wife to the Barton penthouse…
I am not satisfied that Ashley's involvement with the deceased and her presence at the Mugga Way property was sufficient to justify her in giving this evidence in the absolute manner in which it is expressed. Anna accepted in her evidence that the deceased returned to Mugga Way on most nights when he attended Anna's home for dinner and relaxation. I do not accept that Ashley's experience of the deceased's movements permitted her to reliably assert that he returned to the Mugga Way property "every night". I am satisfied that I should accept the evidence given by Anna on this issue.
I have concluded on balance, having regard to the whole of the evidence of the deceased's involvement with Anna and her children over the period 2000 to 2013, that the deceased was for a substantial period a member of the same household as Kristina and Jurek. Anna's evidence satisfies me that, though he may have had more than one household at the time, the deceased was a member of Anna and Kristina and Jurek's household from after 2005.
The deceased lived in the household maintained by Anna between January 2005 and mid-2013. Kristina was about 14 and a half years of age at the beginning of this period and Jurek was 18. Consequently, Kristina only had about 3 and a half years to reach adulthood and Jurek was already an adult. Kristina gave evidence that she suffers symptoms of an anxiety disorder that started when the deceased and Anna separated and was diagnosed in 2013. It has become much worse in the last five years. Kristina suffers from insomnia, has an enlarged thyroid with an uncertain prognosis and suffers a severe peanut allergy. Jurek is generally in good health, but suffers from anxiety and depression. The evidence does not make clear whether Jurek suffered from those conditions during the time that he was part of the same household as the deceased. Even though I have found that the deceased, Kristina and Jurek were part of the same household, it was not the deceased's household, and the deceased maintained a separate life that was measured by his practice of returning to the Mugga Way residence on a majority of evenings. Though there is some evidence that, while his relationship with Anna lasted, the deceased said to Kristina and Jurek on occasions that, if he were to pass away, they would be looked after, the evidence as a whole does not sustain a finding that the deceased accepted moral responsibility for the future maintenance of Kristina and Jurek.
Secondly, consideration must be given to the effect of the deed of settlement and release of 12 October 2015 between the deceased and Anna and the orders that were consequently made by the Family Court. At the time the deed was made, Kristina and Jurek were living with Anna as they still do. It is reasonable to infer that the deceased was aware that Anna was providing a house for her children. Consistently with s 14 of the Domestic Relationships Act, which required that, as far as practicable, a court must make orders that will end the financial relationship between the parties to the domestic relationship and avoid further proceedings between them, an object of the deed was to achieve that result as between the deceased and Anna. It is true that the interests of Kristina and Jurek were not directly relevant to the settlement as between the deceased and Anna, but in light of the nature of their relationship, it would have been reasonable for the deceased to have considered that the provision that he made for Anna under the deed would exhaust any residual moral obligation that he had to Kristina and Jurek.
A feature of this case that is relatively unusual is that not only was the deceased wealthy, largely because he was in a position to control the O'Donnell group, but the deceased was generous and he liked to spend his money. There is some suggestion in the evidence, supported by a submission made by the defendants, that from about early 2014 the deceased substantially increased the level of his discretionary spending, which appears ultimately to have been reflected in the difficulties faced by the deceased's executors in dealing with the Division 7A problem with the ATO.
Kalpana explained in detail in her initial 16 April 2019 affidavit in support of her application for family provision orders in this Court the level of generosity displayed to her by the deceased and the lavish lifestyle that she and the deceased enjoyed, in which, according to Kalpana, the deceased showered her with gifts and proudly displayed her as his wife to his friends and associates, both in this country and at destinations in the course of their frequent overseas trips.
The defendants responded to this evidence by submitting that, to a large extent, Kalpana has already received such substantial provision from the deceased during his life that her call on his estate for additional provision is substantially diminished. The other side of that coin, however, is that the deceased, during the course of his marriage to Kalpana, assiduously created of his own volition a lifestyle that will be relevant to the determination of whether the deceased made proper provision for the adequate maintenance of Kalpana in his will. In the circumstances of the present case, the complete absence of any provision could hardly be proper or adequate. The evidence of the lifestyle enjoyed by the couple may in those circumstances influence the provision that the Court determines is fit to be made for Kalpana out of the estate of the deceased for the purposes of s 8(1) of the Family Provision Act.
The deceased made his last will on 18 August 2015. The will was complex and its provisions were set out over 22 pages. It is not necessary to consider the terms of the will in detail. Under schedule 1 clause 1, the defendants were appointed as the deceased's executors. The primary effect of the will was to create a separate testamentary discretionary trust for the benefit of each of the deceased's five children.
The deceased made a statutory declaration on 27 August 2015 in which he explained his reasons for leaving nothing to Kalpana. The statutory declaration stated as follows:
1. I have signed my Will on 18 August 2021.
2. I have chosen to exclude my wife, Kalpana O'Donnell (Nee Findlay) from receiving a benefit from my estate on my death for the reasons set out in this Statutory Declaration.
3. I met my wife about 3 years ago and we were married about 2 years ago in Las Vegas.
4. At the time of meeting my wife she already owned considerable assets of her own. She owned two units in the Realm Hotel, Barton ACT and units in Queanbeyan, NSW. She also held superannuation from working in the Public Service.
5. I believe my wife will inherit considerable amounts from her parents, who, to my knowledge are quite wealthy. I believe my wife is independently financially secure without the need to receive any money from my estate.
6. Kalpana currently owes me personally $765,000.00 plus interest for money I lent her to pay out two mortgages to Members Equity, which were over a unit in the Realm Hotel and a unit in Queanbeyan which was owned by her father which he had allowed her to mortgage for her personal purposes. I agree to forgo payment of that amount to my estate on my death, provided there is no claim made by her against my estate.
7. I don't believe that my relationship with Kalpana will be at a significant length to justify giving large amounts of money to her. It is not my intention to claim any money from her estate if she predeceased.
8. I have five children of my own from previous relationships. I have over the years provided them with financial support from time to time, and continue to do so. I have previously purchased an apartment for Vanessa and an apartment for Laura, both of whom have been able to live in the apartments, rent free.
9. I have paid university fees for Ashley. For Jamie, I provided him with financial assistance to purchase his house at 9 Schubert Place, Kambah ACT. For Simon, I have assisted him financially by paying for a few hundred thousand dollars in legal fees for him. I have also provided all of my children with vehicles for their own private use.
10. I would like to ensure that I continue to provide for my children financially after my death and wish for them to receive the whole of my estate.
The deceased did not inform Kalpana before his death that he had not made any provision for her in his will.
While some parts of the explanation given by the deceased as to why he decided to leave nothing to Kalpana in his will may have a measure of truth and reasonableness, I am not satisfied at all that the statutory declaration discloses that the deceased gave a proper and careful consideration to his testamentary obligations to Kalpana, such that the Court should accept that the deceased is the better judge of the proper distribution of his estate amongst his potential beneficiaries, and accordingly not substitute its view of what is fit for that which the deceased expressed in his will. That is true as at the date of the statutory declaration. It is all the more true "as at the date of the order", which is prescribed by s 8(2) as the date at which the Court must determine whether adequate provision for the proper maintenance of Kalpana is not available under the will of the deceased.
I am not prepared to take the statutory declaration at face value, as an honest statement of reasons, as opposed to a stratagem to protect the deceased's estate against a future family provision claim that might be made by Kalpana. I do not accept the deceased's honesty without reservation. I have mentioned above that he led Kalpana to believe that she would be a joint purchaser with him of the Barton penthouse. The deceased went to the extent of arranging for Kalpana to attend at his solicitor's office to sign the contract of sale. By an unknown process the deceased subsequently caused Kalpana's name as purchaser to be struck out of the contract. He did not tell Kalpana of his actions. Kalpana subsequently learned the truth accidentally. That is not the conduct of an honest husband.
Further, I accept Kalpana's evidence that the deceased led her to believe while he was alive that he would provide for her always. Kalpana said at par 164 of her 16 April 2019 affidavit:
On one or two occasions, once in 2016 and another later in 2018, Garry said to me, "I need to update my Will, I need to make sure you are looked after." Garry always assured me he would make sure I was looked after for the rest of my life.
I accept that evidence, which is consistent with the objective evidence of the way the deceased treated Kalpana. A husband who takes that course, while knowing that he has consciously omitted his wife from his will, is not an honest person. The deceased adopted a transactional attitude to his relationship with Kalpana. So that the Court does not hide from reality, it must be said that the deceased, a wealthy and ageing man, secured for himself the benefit of a good life with an attractive, younger fourth wife, who reciprocated the affection that the deceased at least superficially displayed towards her. He treated her extremely generously while he was in a position to enjoy what she offered him in return. His attitude was that upon his death his matrimonial obligation to Kalpana ceased, notwithstanding what he promised her.
In par 5 of the statutory declaration, the deceased gave as a reason for disinheriting Kalpana that he believed she would inherit considerable amounts from her parents, who, to his knowledge, were quite wealthy. He added that he believed Kalpana was independently financially secure without the need to receive any money from his estate.
Kalpana's father, Mr Krishna Naidu, swore an affidavit on 26 July 2019 in which he referred to the statement made by the deceased in the statutory declaration to the effect that he believed that Kalpana would inherit considerable amounts from her parents, who, to his knowledge were quite wealthy. Mr Naidu said that his wife passed away on 1 November 2018. He is not a wealthy man and Kalpana will not inherit considerable amounts from her parents. Mr Naidu was on a full Commonwealth aged pension at the time and had been so for the last 15 years. He does not have any other means of income. Mr Naidu and his wife lived in a unit in Perth worth approximately $170,000, and he does not have any other assets in Australia or overseas. I accept Mr Naidu's evidence.
There is some truth in the reason given by the deceased in par 4 of the statutory declaration. At the time Kalpana met the deceased, she did own two units, being Unit 14/11 Sydney Avenue, Barton (Unit 14) and Unit 30/5, Sydney Avenue, Barton (Unit 30). I understand that Unit 14 was located in the Realm Hotel, where the Barton penthouse was located. I am not sure whether Unit 30 was in the same building, but that does not matter. In January 2017, the deceased purchased Unit 14 in the context of providing funds to Kalpana to establish her fashion retail business. Thereupon, Unit 14 became part of the deceased's estate. Although Kalpana had effectively substituted her retail business for Unit 14, the evidence justifies an inference that, by the date of the deceased's death, the deceased did not have good reason to believe that the retail business could prosper without his continuing financial support and business advice. The deceased was entitled to regard Unit 30 as being a real asset of Kalpana's, and Kalpana transferred that asset to her son, Toby, after the date of the deceased's death.
The deceased may also have been entitled, as he stated in par 6 of the statutory declaration, to believe that, at that date, Kalpana personally owed him $765,000. The evidence does establish that the deceased paid an amount of $765,000 on 22 April 2015 to discharge two mortgages that Kalpana had over Unit 14 and over Unit 21/11 Crest Avenue, Queanbeyan. Cross-examined on the issue at [T 223.24], Kalpana said: "I deny that completely. He never - Garry never asked me to pay anything back. He gave me lots…" Kalpana was emotionally upset during this part of her cross-examination and her evidence was not all able to be transcribed fully.
The defendants submitted that a finding that the payment was a loan is supported by evidence of a text message from Kalpana, apparently to the deceased, dated 20 March 2015 at Court Book 30/980:
Do u think you can help me towards 2 Barton Apartments loan? Total loan $590k for both. I'd like to keep both places forever, but if I have to, I'd rather sell when property prices are up not now. It's financially hard for me to service loans without any work or earnings.
But it's okay if u can't.
This message is inconclusive as to whether the help sought was in the form of a loan. The word "help" does not necessarily signify a request for a loan. The Court cannot make a finding on the available evidence as to the detail of the events that led to the transaction. I am doubtful that the relationship between Kalpana and the deceased was such that Kalpana would have formally agreed to take a legally enforceable loan on demand from her husband on which interest was payable. I find it hard to see Kalpana and the deceased formally agreeing an interest rate. It is completely inconsistent with the weight of the evidence as to how deceased treated Kalpana that he would have insisted that she enter into an enforceable loan agreement with him. It is more likely that the deceased acted with outward generosity while inwardly deciding to treat the payments as a loan.
As at the date of the deceased's death, Kalpana was unemployed and had formally given up her employment in early 2014. There was evidence that Kalpana holds Bachelor of Arts and Master of Business degrees, and that she was employed for approximately 18 years in the Commonwealth Public Service in human resources and auditing up to a date in 2013. Kalpana went on leave after an investigation was commenced into the circumstances in which she had been employed in a particular role where the choice of Kalpana to be given the position may have been influenced by the presence on the selection panel of a person who may have had a relationship with Kalpana that gave him a conflict of interest. The evidence does not allow the Court to form any view on that issue, and it is immaterial to the determination of Kalpana's entitlement to family provision. What is important is that I accept Kalpana's evidence that, when the opportunity was presented to Kalpana to return to her employment, she acceded to the deceased's request to retire so that she and the deceased could spend their time together, including so that Kalpana could travel with the deceased at their own convenience. The subtleties that may have been involved in Kalpana's decision to resign from her employment do not matter. What is significant is that the deceased knew that his wife had chosen to leave her employment at his request, and that her absence from the workforce, at her age, for a significant period would probably substantially impair her future earning capacity.
Paragraph 372 of the defendants' final written submissions lists seven properties that Kalpana owned in the year before she met the deceased. The information as to five of those properties appears to have been taken from par 27 of Kalpana's 16 April 2019 affidavit. In par 372(b), the defendants submitted that Kalpana sold Unit 21/11 Crest Road, Queanbeyan for $1,295,000 in August 2016. That appears to be an error, because Kalpana's evidence in her affidavit was that the property was sold for $195,000. There is no other evidence that would suggest that Kalpana received an amount that was $1,100,000 more than she claimed to have received.
Kalpana said, at pars 58 and 59 of her 16 April 2019 affidavit, that she sold the four properties listed at par 27, other than the property that was later transferred to Toby, on the advice of the deceased that Kalpana no longer needed the properties because she was married to the deceased. Kalpana said that the proceeds of sale of the properties was used to pay off the mortgages and any excess was spent on Kalpana and the deceased. The defendants challenged this evidence in their submissions, on the ground that there was no objective reason for the deceased to suggest that Kalpana had no need to retain her ownership of the properties. The Court is not in a position to resolve this issue, although, as Kalpana was unemployed, there may have been some sense in her selling the properties.
As an applicant for a family provision order, it was incumbent upon Kalpana to disclose to the Court, as fully and frankly as possible, all details of her material and financial circumstances as they were at about the time of the hearing: see, for example, Stone v Stone [2019] NSWSC 233 at [60] (Hammerschlag J, as his Honour then was) citing DJ Singh v DH Singh [2018] NSWCA 30 at [284]-[291] (Gleeson JA).
In her first affidavit made on 16 April 2019, Kalpana disclosed at [27] the five properties that I have referred to above, and what happened to those properties, including that Unit 30, which she had purchased for $501,000, had been transferred to her son, Toby. Kalpana disclosed at par 51 the motor vehicles that had been bought for her by the deceased, including in August 2015 the purchase of a brand-new Ferrari for around $768,000. Kalpana acknowledged at par 52 that the deceased had paid off her home loan of $765,000. Kalpana said that the deceased did not want her to have any debts and considered it was his job, as her husband, to take care of the home loan for her. Kalpana said that the deceased never suggested that he required Kalpana to pay back any money to him. Kalpana disclosed in par 156 that, at the date of her affidavit, the only assets in her name were the Ferrari, a Porsche, superannuation of approximately $720,000 that she cannot access until she reaches the age of 65, cash in the bank of approximately $15,000 and personal and household possessions with an estimated value of around $20,000.
Kalpana disclosed in par 139 of her 16 April 2019 affidavit that the deceased paid $500,000 for the fit out of her retail fashion store and an additional $900,000 to purchase stock. Kalpana transferred the title to Unit 14 to the deceased in return for the payment of the $900,000. Kalpana said in her affidavit that the deceased wanted her to have a hobby, and, at par 134, that "Garry thought a luxury store would be the perfect business for me". Kalpana started the business in March 2017. Kalpana said that the deceased helped her to find suitable premises to rent, and that he promised he would support her in running the business. Kalpana was unable to maintain the business after the death of the deceased because she did not have the funds to do so.
Kalpana provided the following explanation for her transfer of Unit 30 to Toby in her initial affidavit, referring to her first husband, Mr Clive Findlay, who she had married in 1985:
21. In 1999 Clive and I got divorced. We had a property settlement, from which I received approximately a cash sum of $55,000.00 and a small share from the sale proceeds of a property Clive owned in Adelaide. Annexed hereto and marked "B" is a copy of the letter received from Clive's lawyer and Orders made by the Family Law Court.
22. Whilst not included as an Order of the Court, Clive gave me an additional payment in the sum of $500,000.00 which we both agreed would be used for the purposes of purchasing a property on trust for Toby. Though I owned other properties in which Toby and I resided over those ensuring years, I ultimately purchased an apartment in 2012 located at 30/5 Sydney Avenue, Barton for $501,000.00. That property was subsequently rented out, with Clive and I agreeing that the income would be kept in an account to be paid to Toby upon him reaching adulthood. This property was transferred to Toby on 8 March 2019.
Kalpana was cross-examined on the issue of whether she had received any money from Mr Findlay on trust for Toby at [T 303.1-10] as follows:
Q. You agree that you haven't produced any document recording or evidencing the arrangement that you had with Mr Findlay for this trust; right?
A. It was just based on trust. He transferred the money, and I got that property for Toby, and I transferred at that time. It was all done through my - it was done through bank transactions, and Toby's father has given a stat dec saying that he didn't send that money.
Q. The stat dec hasn't been put in evidence.
A. I don't know why it's not put. I'm not a - I'm not a lawyer, but I've disclosed to this Barbara Campbell, their lawyers.
Mr Findlay did not make an affidavit for the purpose of the proceedings, but Kalpana called him as a witness at the hearing. Mr Findlay made a written statement signed on 22 March 2019, which was tendered into evidence as part of Exhibit P2 on 18 October 2021. As Kalpana had not given the defendants notice that she would rely upon Mr Findlay's statement, I only admitted it on a limited basis, which I stated at [T 251.40] as being that the statement was only admissible to demonstrate that it exists and that it was provided to the defendants' former solicitor in response to a notice to produce. Consequently, the tender was capable of countering the implication in the questions asked of Kalpana in cross-examination that Kalpana had not produced any documents to support Kalpana's claim that she had received money on trust for the purchase of a property for Toby.
Mr Findlay's statement contained an assertion that, in around 2008, he sold a property at Northbridge in Perth for $650,000. Mr Findlay said that he gave Kalpana the net proceeds that he received on the sale on the understanding that she would buy a property that she would hold on trust for Toby in the future. Given the limited basis upon which the statement was received into evidence, it was not, at the time of tender, capable of corroborating Kalpana's claim. Mr Findlay was cross-examined on the content of his statement dated 22 March 2019 in a manner that caused him to confirm it, so it was effectively cross-examined into evidence.
Mr Findlay appeared to be a straightforward witness who gave his evidence candidly and acknowledged when he could not recall events that he was involved in many years ago. He said that he could not at all recall a transfer of property that he signed in favour of Kalpana's mother. Mr Findlay said that he never owned the property and could not recall the transfer, although it bore his signature. This event apparently occurred in about December 1998. Mr Findlay was not able to give any explanation for the transfer, and said that he did not have the remotest idea what the explanation was.
Following his divorce from Kalpana, the couple reached a property settlement in October 1999. Mr Findlay said that the marital property settlement had nothing to do with his later sale of the Northbridge property and his transfer of most of the sale price to Kalpana to buy a property to be held on trust for Toby.
Mr Findlay confirmed the evidence in his 22 March 2019 statement that he sold the Northbridge property because Toby was relocating from Perth to Canberra. Mr Findlay said that he did not need the property so he sold it and sent the money to Kalpana. This occurred in 2010. The sale price was about $640,000. On 4 October 2010, Mr Findlay transferred $530,000 to Kalpana's bank account. He did not speak with Toby at the time about the transaction. He had minimal contact with Kalpana on the subject. Mr Findlay said that he just told Kalpana that the property had been sold and he was sending her the money, and that she should buy Toby a property when she saw fit. Mr Findlay acknowledged that Toby was about 24 at this time and he was doing well in Canberra, and had purchased a couple of units. Mr Findlay acknowledged that Toby was a capable adult, but he wanted a "backup" for Toby. Mr Findlay explained why he did not give the money directly to Toby by saying that men of Toby's age are "not set in your relationships," and that "men don't get mature that easily". Mr Findlay said that he gave the money to Kalpana because he trusted her to look after their son.
The cross-examination of Mr Findlay concluded at [T 564.10-38] as follows:
Q. You'll recall that I've asked you questions about the transfer of the Beechboro Road property to Kalpana's mother.
A. Yes.
Q. I suggest to you that that was part of the deal, part of the Family Court settlement that you had with Kalpana; what do you say about that?
A. It was not.
Q. You deny that but you haven't been able to give any explanation at all as to why you transferred that property to her mother; correct?
A. Right.
Q. I suggest to you it was part of the deal and it was intended to be Kalpana's property; what do you say about that?
A. There was nothing in any document to indicate that, and it was not part of the settlement, no.
Q. You deny that quite strongly but you have not been able to provide any explanation at all as to why you would have transferred the property to her mother?
A. I told you I have no idea about it because I have never owned that property.
Q. And I suggest to you that the money you gave to Kalpana, transferred to Kalpana in October 2010 was some arrangement with Kalpana rather than a gift intended for Toby?
A. That's your assumption.
Q. And you deny that, do you?
A. I told you why I did it.
In final submissions at [T 768.9], the defendants' senior counsel said: "Now, I hasten to add, I am not suggesting that Mr Findlay is lying about what has happened, but there is a distinct undercurrent in the evidence on the plaintiff, Kalpana, that some really weird stuff is just not being fully explained to your Honour."
The defendants submitted that this transaction was mysterious, the explanation convoluted, and there were unexplained, curious aspects of the transaction. That may be so. However, although there are unusual features of this transaction, I accept Mr Findlay as a witness of truth, and that the transaction occurred substantially in the manner stated in his evidence. The payment by Mr Findlay to Kalpana occurred in October 2010, more than 10 years after the marital property settlement in October 1999. No challenge was made to Mr Findlay's evidence concerning the matrimonial property available to be shared between himself and Kalpana at the time of the property settlement. Mr Findlay purchased the Northbridge property in about 2004. There was no objective reason for Mr Findlay to make a gift to Kalpana personally of the proceeds of sale of the property in October 2010.
Kalpana said, in par 159 of her affidavit, that she had previously had a bank account with the sum of $550,411 in it that she had transferred to Toby "a few weeks ago". Kalpana gave the following explanation of why she paid the amount in her bank account to Toby:
… This partly represented the income that was received for the property I purchased on trust for Toby, which had been leased out. Clive had always said to me, and I agreed, that any income received for the property would be held on trust for Toby. I transferred the entire amount to Toby a few weeks ago. The additional amount was gifted to him as he is getting married this year, and I wanted to give him a head start in life.
In relation to the payment of the sum of $550,411 to Toby, Kalpana did not provide any records that established the amount of the rent that had been received for Unit 30 and it is not clear what proportion of the amount paid is claimed to represent rent or the additional amount that was a gift.
Toby affirmed an affidavit on 24 July 2019 that contained evidence in support of Kalpana's claim that the deceased was domiciled in NSW. It did not deal with the transfer of the unit or the payment of the money to Toby. In cross-examination, Toby acknowledged that on 11 January 2019, Kalpana transferred to him the sum of $550,441.50. Toby said that the reason given to him by Kalpana was the result of an obligation imposed upon Kalpana as a result of her divorce from Mr Findlay.
The evidence demonstrates that, on 23 January 2017, the deceased wrote a cheque in favour of cash for $900,000. The cheque butt records the $900,000 as being for the purchase of Unit 14. Kalpana presented the cheque on 23 January 2017 and it was credited to her Commonwealth Bank of Australia (CBA) account. Further, on 23 January 2017, Kalpana transferred that money to her company Milan Fashion & Shoes Pty Ltd, as a payment described as "director injection". Between 8 February 2017 and 9 November 2017, Kalpana made various withdrawals totalling $876,000. One of those withdrawals was the sum of $500,000 on 8 November 2017. The other withdrawals were apparently for the purpose of the retail business. On that date, Kalpana opened a term deposit with the CBA in the sum of $500,000. On 5 January 2019, Kalpana terminated the term deposit and transferred the amount and accumulated interest of $512,004.49 into an account in the name of Kalpana and her mother. That happened after the date of the mother's death. On 11 January 2019, Kalpana transferred out of that account the sum of $550,441.50 to Toby. It is clear that the source of the money paid to Toby was originally the $900,000 that the deceased paid to Kalpana on 23 January 2017 in return for the transfer of the title to Unit 14 to him. That fact is not necessarily inconsistent with Kalpana having received rent for Unit 30 and, having spent that money for her own purposes, her applying the money received from the deceased to substitute for the money that she claimed she was holding on trust for Toby. However, the fact remains there was no objective evidence to prove the amount of any rent received by Kalpana for Unit 30.
There was one further incident of Kalpana being involved in a transfer of property to Toby soon after the death of the deceased. It involved a property in Morley, Western Australia. On 5 February 2019, Kalpana and her sister Pushpanjali Vyas signed a transfer of the property that was in their joint names to Toby for consideration that was expressed simply as being "the desire to make a gift". Kalpana's explanation for this transaction was that when Pushpanjali originally wished to buy a property as her home, her credit rating was not sufficiently good to enable her to borrow the balance of the price in her own name. Because Kalpana was in employment, Kalpana agreed to be a joint purchaser and mortgagor to enable Pushpanjali to acquire a home. Kalpana said that the property was not purchased with Kalpana's money, and that she considered her sister to be the only person entitled to the property. Kalpana said that she participated in the transfer of the property to Toby at Pushpanjali's request. As I understand it, Kalpana's position is that she did not think to disclose the transaction in her evidence because she never considered that she had any interest in the property. Pushpanjali has continued to occupy the property as her home.
Asked in cross-examination about the 5 February 2019 transfer to him of the property in Western Australia, Toby said that he believed his aunt had transferred the property to him. He did not recall that Kalpana was also a transferor. Toby gave the following explanation at [T 262.1-11]:
Q. And no consideration was paid by you for the transfer of that unit; correct?
A. Correct. So with that unit it was something that my aunty called me about. She could see that - she didn't want the family to be arguing around what was happening with that unit if she passed away. She wanted to make sure that her wishes for what happens to the property when she passes away actually happens. I'm the only grandson on that side of the family so she organised to transfer it to me now. However, I didn't need to pay anything because she still lives there, she still runs the property; it's just in my name so that if anything happens to her, there's no real arguments over what happens to the property.
Toby added at [T 263.19-24]:
Q. You got the property at Morley for no payment; right?
A. Correct. But I also don't - I don't see myself as getting the place in Morley. It's still my auntie's house. She still lives in it. The bills are paid for through the rent. It's a duplex arrangement. So the front property pays for the whole thing. It's old. I'm doing this - I'm just a name on the title. She still lives in it and it's still her house.
Pushpanjali was cross-examined about the circumstances in which the Morley property was transferred to Toby in February 2017 at [T 266.46-268.50] (which I have edited for brevity):
Q. Ms Vyas, in February 2019 you transferred with your sister Kalpana your interest in a property at 3 Weir Place, Morley to Tobias, your nephew; correct?
A. Yes. Yes, sir.
Q. Why did you do that?
A. Because I paid my loan off to the bank and since my sister Kalpana was on my property on the title for the bank purpose to get a loan from the bank to build a granny house at the back of my house to look after my mother who had aneurism and she was almost bedridden, so I was afraid she would go into a nursing home or something, so I planned to build this granny house, wanted a loan so I took a loan from the bank and she was on the title. And once I had the money to pay off the loan, she need not be on my title any more.
…
Q. Why did you transfer the [Morley] property to Toby? He had nothing to do with anything that you've just described.
A. Because I have no children and it is my intention always I've had that in mind that my property will go to Toby, and that's why I have decided that before I die or anything like that I want to be sure what happens to my property, that no-one else comes to fight for my property in the process of my death, and they ask for a share or anything like that, and it is in Toby's name. But I have lived in this property since 20 years and I'm living in this property now, and I will live in this property till I'm 100 or whatever, till I die, and that is what going to happen in my property. But the property is in my nephew Toby's name in case something happened to me, that's all.
…
Q. And Kalpana had a share in that property, right?
A. She had no share except her name being on the title.
Q. You agree that her name had been on the title to the property; right?
A. Yes, because to secure a loan I needed her name to be on the property; otherwise I could not get a loan without her showing the income that if - because I had no income to get a loan. So that's why I asked my sister because I want to build a granny house for mum so, "Can you help me?" So she said yes. So she went on the loan and that's all, it's on the loan. It's not her property; it's my property because the - I took a loan. The house I lived in had no loan at all. It was - there was no loan; it was all completely paid off my house. It's only when I needed a small bit of money to build the granny house, I borrowed the money from the bank and that's when she went on the title. Before that I was the sole owner of the property. There was no-one else on the property, and it was - there was no loan on the house.
Q. So is there some arrangement that the property might come back to you?
A. Property might come back to me? It could come back to me if I see - I mean, I don't know but I'm undecided. There's no reason for it to come back to me because I don't see - I don't - I mean, I trust Toby. He will take care of the property but if he does not take care of the property, I mean - and in case I feel suspicious I can always take my property back on my name.
Q. Did Kalpana say to you in February 2019 that she needed to get some property out of her name?
A. Out of her name? I would - no, Kalpana didn't say anything about property and getting - her name getting out or anything like that. It's my property. I decide what to do.
Although there are obvious unusual features of this transaction, I accept the evidence given by Kalpana and Pushpanjali that Kalpana had no beneficial interest in the property and that is the reason why the transaction was not referred to in Kalpana's evidence.
I now turn to the issue of Kalpana's financial position at the time of the hearing. By that time, the Ferrari had been sold for $210,000, and the proceeds applied towards Kalpana's general funding needs. Kalpana said at par 17 of her affidavit in respect of the proceeds of sale of the Ferrari: "I have since used that money to support my maintenance and lifestyle I had with my husband." The Court can only observe that it has been a matter for Kalpana to determine the wisdom of expending her available funds on the basis that she will be able to maintain the lifestyle that was provided for her by the deceased.
Up to the time of Kalpana's updating affidavit on 30 September 2021, Kalpana had received an estimated $356,000 from the executors by way of interim provision. She was being paid $3,000 a week on a continuing basis.
Kalpana gave evidence of her liabilities by reference to a spreadsheet that she said was prepared by her accountant. The total is stated at $451,462 made up of $303,262 borrowed from family members and acquaintances, $48,200 in rent on her Sydney residence and $100,000 that was paid to break the lease of the premises from which Kalpana operated her fashion shop in Manuka through Milan Fashion & Shoes Pty Ltd which was guaranteed by Kalpana. I note, however, that in par 14 of her affidavit Kalpana appears to say that the total surrender costs were $66,000.
Kalpana stated her assets as being:
Porsche Macan GTS: estimated $65,000.
Superannuation: $753,000.
Additional superannuation: $38,300.
Cash in bank: $534.56.
Personal and household possessions: $20,000.
The defendants made a submission that Kalpana's company, Milan Fashion & Shoes Pty Ltd, owes three debts to companies in the O'Donnell group that total $996,236. It is not apparent to me that the defendants have proved the existence of those debts, but I would infer that the debtor is insolvent, and it has not been shown that Kalpana guaranteed the debts. If the payments were made to Kalpana's company by the deceased out of the funds of O'Donnell group companies, they are likely to represent the funding disclosed by Kalpana that she understood was made by the deceased personally.
The defendants submitted that the Court should assess Kalpana's claim for family provision on the basis that Kalpana had enjoyed the benefit of four properties owned by the deceased's estate or companies in the O'Donnell group after the death of the deceased and before the defendants could obtain possession of the properties, which at least in some cases required a court order. The defendants valued the benefit at $310,000 for 124 weeks' possession of the Barton penthouse, $114,000 for 38 weeks' possession of the Pyrmont apartment (owned by Evenlong Pty Ltd), $18,840 for 24 weeks' possession of Unit 14, and $12,702 for 25 weeks' possession of a unit at Fyshwick in the ACT. I do not accept that these amounts should all be treated as benefits for which Kalpana should account. In the aftermath of the death of the deceased, Kalpana acted for a period as if she should be entitled as his widow to residential accommodation that conformed with what she had enjoyed during her marriage. I accept that Kalpana should be treated as having enjoyed the benefit of rent-free accommodation in one of the properties until the defendants succeeded in having her thrown out of all of the homes that she had enjoyed at one time or another. However, whatever may be the appropriate value to be attributed to that benefit, it is immaterial in the scheme of things.
The relevant circumstances of the deceased's children as beneficiaries under his will have been accurately summarised in pars 483 to 543 of the defendants' final written submissions. It is not necessary to set out that summary in these reasons. It is plain that the deceased had a loving relationship with all of his children and that they are worthy recipients of his testamentary beneficence. The material and financial circumstances vary between the beneficiaries, with the daughters being relatively better off than the sons. Simon has a particular need for his inheritance because of his and his partner's medical condition and the needs of Simon's daughter from a previous relationship, who has cerebral palsy and needs substantial care.
The evidence as to the needs of the beneficiaries must be considered, however, in the context that the executors are now in control of Duboti Pty Ltd as trustee of the Mugga Way Family Trust, as Jaimie was appointed a director of that company on 21 November 2014 and the other three executors were so appointed on 11 February 2019, according to an ASIC search dated 6 August 2019. As at that date, the deceased was still recorded as owning 49 shares in the company beneficially and 51 shares non-beneficially. The executors now have the right to control the exercise by Duboti Pty Ltd of its absolute discretion in relation to the distribution of the profits and capital of the Mugga Way Family Trust. The executors are also able to control the individual companies and trusts in the O'Donnell group, save in any case where a third party has equal control of a company. The executors are already directors of the significant companies in the O'Donnell group that are wholly controlled by Duboti Pty Ltd. The defendants did not make any submission that casts doubt on their ability to control the O'Donnell group and the Mugga Way Family Trust.
As I understand the effect of the deceased's will, his executors are required to divide his estate equally for each of his children and to transfer each allocated part to the trustee of each child's testamentary trust: see schedule 1 clause 3. The practical result should be that each child of the deceased should have become entitled to an equal share of the deceased's actual estate under the will. Provided that they continue to cooperate, they should be able to share between themselves equally the benefits of ownership of each part of the deceased's estate. That would include the deceased's shares owned beneficially in Soothink Pty Ltd, which is an income and capital beneficiary of the Mugga Way Family Trust. The beneficiaries are able to control the board of directors of Soothink Pty Ltd and cause profits to be distributed by dividend or to wind up the company and divide its property between them. As children of the deceased, the beneficiaries are individually income beneficiaries under Item 6(2)(h) of the Mugga Way Family Trust deed.
In principle, these observations are subject to qualification by reason of the fact that clause 11 of the Mugga Way Family Trust deed empowers the Appointor to appoint and remove trustees by deed at any time. At the date of the deceased's death, his accountant, Mr Stephen Bray, was the Appointor. It may be that on the proper construction of Item 8 of the Schedule to the deed, Fiona became the Appointor upon the deceased's death.
There was no evidence that Duboti Pty Ltd had been replaced as trustee or that there was any likelihood that a new trustee would be appointed. Nor was there any evidence as to how the beneficiaries intended to operate the Mugga Way Family Trust in the future, and what benefits the beneficiaries could hope to receive by that process. In the circumstances, it is reasonable for the Court to infer that each beneficiary, by and large, can expect to enjoy an equal share of an asset that has been valued at between $28,170,236 and $32,720,859, which means that each of the beneficiaries has received under the deceased's will a benefit that should be valued in the order of $6 million.
In par 108 of Kalpana's written closing proceedings she set out the order for further provision that she seeks as follows:
Accommodation (comparable to the Pyrmont apartment): $5,600,000;
Stamp duty: $329,000;
Capital fund: $3,000,000;
Repayment of debts: $542,248.90;
in addition to the provision already paid.
In response, the defendants submitted in the oral submissions of their senior counsel that any order for family provision that is made in favour of Kalpana, on the basis that the deceased is found to have been domiciled in the ACT such that the order can only be made in respect of his actual estate, should be limited to the transfer of Unit 14 to Kalpana for the purpose of her accommodation, plus a fund valued at between $700,000 and $1,000,000, "which would effectively consume the estate": [T 751.45]. Senior counsel added at [T 752.3] that the consequences would be: "One is that the executors would effectively have their costs dealt with outside of the estate; two, that the plaintiff's legal costs, if they were to be paid, would effectively consume the benefit."
It is obvious that the Court cannot make the family provision orders sought by Kalpana, given its finding that the deceased was domiciled in the ACT at the time of his death. Given, on the findings that I have made, that the beneficiaries under the deceased's will have control over the O'Donnell group and the Mugga Way Family Trust, I am satisfied in principle that, as between Kalpana and the beneficiaries, a family provision order should be made in Kalpana's favour that gives her the whole of the remaining actual estate of the deceased, subject to the effect of the costs orders that may be made.
Given the observations made by senior counsel for the defendants that I have recorded above concerning the defendants' costs, I consider that it would be a fair outcome, on the facts of this case, for the Court not to make an order that the defendants' costs be paid out of the estate of the deceased.
I should add that, if I had found that the deceased was domiciled in NSW at the date of his death, I would have made an appropriate order designating part of the property of the O'Donnell group as being notional estate of the deceased that was sufficient to satisfy the family provision order and the order for payment of Kalpana's costs that I would have made on that basis. As explained above, I would have given the defendants the opportunity to consider the most appropriate formulation of the notional estate order to be made.
I would not, however, have made the family provision order that Kalpana has sought and that I have set out above. I consider that family provision in that amount would have been excessive, given the length of the marriage between Kalpana and the deceased and the fact that Kalpana did not in any way contribute to the acquisition of the deceased's wealth. While I am satisfied that the standard of living that the deceased funded during the period of his marriage to Kalpana is relevant to the value of the family provision order that would be justified in Kalpana's favour, I am not satisfied that Kalpana is entitled to expect anything like the continuation of the lavish lifestyle that she enjoyed. I accept that the deceased led Kalpana to understand that his wealth was in practical terms limitless, but the reality is that the level of the deceased's expenditure required him to 'raid' the resources of the O'Donnell group in a manner that was not prudent or sustainable, if the businesses operated by the group were to remain financially sound. Although the actual level of expenditure by the deceased on his lifestyle with Kalpana is relevant to the determination of what is adequate provision for her proper maintenance, it does not follow that Kalpana is entitled to expect the continuation of a lifestyle that was not sustainable and prudent. It is also relevant that the source of the money that Kalpana transferred to Toby after the death of the deceased was money paid to her by the deceased.
If I had found that the deceased was domiciled in NSW at the date of his death I would have made an order that Kalpana be paid a lump sum out of the deceased's estate and notional estate in the sum of $5 million, as well as an order that her costs on the ordinary basis be paid likewise. A factor that I would have considered to be significant is the access to the superannuation that Kalpana will enjoy when she reaches the age of 65.
See P L G Brereton, "Where Death and Divorce Meet: The Intersection of Family Provision and Family Law" (Speech, National Family Law Conference, October 2006 at 19, 24 and 37), cited in the Tasmanian Law Reform Institute, Final Report No. 27: Should Tasmania Introduce Notional Estate Laws? (September 2019) at [5.6.13-14].
The circumstances of this case speak eloquently of the difficulty and expense that may sometimes be involved in determining the domicile of a deceased person, particularly within a federation such as Australia, where freedom of movement may lead to a dispersal throughout the country of persons who live in one State or Territory but are domiciled in another. It may be thought that the legitimate sovereignty of each State and Territory justifies bespoke succession laws, but the fact that succession to movable property is governed by the deceased person's domicile means that persons who are domiciled in one State or Territory will largely carry the succession laws of that State or Territory with them wherever they may live in the country. Although domicile is a characteristic of every person, it is a concept that is probably unknown to almost all members of the community. Even where it is known, it may not be readily ascertainable except in clear cases. The effect is that people carry their personal law around with them with consequences that may be hidden from others to which they become related.
The result is that there will be many persons who live for long periods in this State whose property will be governed by the succession laws of some other State or Territory. Persons who become related to such persons may be oblivious of the consequences.
There is a case for the law reform authorities to consider the consequences of these circumstances. There is a case for uniformity of succession law, at least for the purpose of protecting the interests of core relations such as spouses and equivalent partners and children. The sovereignty of the several States and Territories could be accommodated if they wished to differ in respect of their family provision laws as to the rights of claimants more indirectly related to a deceased person.
It is a surprise to learn that Victoria and South Australia have simply rejected the proposal of uniformity with the notional estate provisions in the New South Wales legislation, and Tasmania has proposed to defer introducing uniformity until all other States and Territories do so. The position is explained in the Final Report No. 27 of the Tasmania Law Reform Institute referred to above.
These remarks should not be understood as a plea to the other States and Territories to surrender and to introduce the equivalent of Part 3.3 of the Succession Act into their own family provision laws.
As Prof Rosalind F Croucher said in her article "Towards uniform succession in Australia" (2009) 83 ALJ 728 at 740, referring to a report of the National Committee on Uniform Succession Laws (footnote omitted):
What is curious - to me at least - is that there was apparently no discussion in the National Committee's work of the model of the claw-back property provisions. The New South Wales provisions are used because they are there and have been in force for a while now to see if there is anything hugely wrong with them. It is a convenient - and pragmatic - approach to law reform, in sticking to the familiar.
But the model has always bothered me. For a start, it is based on the old New South Wales death duty provisions. There the formula was a complex one, the end result of which was just to determine - precisely - the dutiable value of assets on death. It was not about attaching property in any way and, hence, served a different purpose. In the family provision context the question is to give an expanded definition of property that might be considered in weighing up provision for family members. A precisely formulated scheme, like that of death duties placed the emphasis in the wrong place - for family provision purposes…
I respectfully agree. The notional estate provisions should be written in language that is intelligible to competent suburban solicitors who do not specialise in succession law. The language of Part 3.3 is abstruse and abstract and Part 3.3 is, in my view, a matrix of interlocking statutory provisions that do not harmonise in a way that facilitates their application.
As it is clearly the case that Part 3.3 of the Succession Act is a major barrier to the other States and Territories moving to achieve a reasonable level of commonality in the family provision laws of all of the States and Territories, there is a case for the law reform authorities of this State to revisit the issue of the reform of Part 3.3.