Pauperis v Pauperis

Claims and defences for determination

1. Ralph is the plaintiff in the proceedings. The defendants are Kurt and Judith. The proceedings have been conducted on pleadings: a statement of claim was filed on behalf of Ralph and a defence was filed on behalf of Kurt and Judith.
2. Ralph's case is that as at his mother's death, she was in legal possession of the Steigis estate properties. He says that Kurt and Judith only ever lived at Edward Street and looked after the Sanctuary Point property by arrangement with the deceased. As a result, by the time of her death, the deceased had an accrued entitlement to obtain possessory title to the properties under the RPA.
3. Ralph contends that, as his mother's executor, Kurt was obliged to prosecute applications for possessory title for the benefit of her estate. His failure to do so was a breach of his duty as executor. In the case of the Sanctuary Point property, registration of a possessory title over the property in his and Judith's names was a further breach of duty.
4. The fact that the Sanctuary Point property was registered in the names of Kurt and Judith creates a complication. On registration, Judith obtained a title to a one half share of the property which was indefeasible under RPA s 42, unless one of the exceptions to that enactment applied. That was so even though she did not pay for that share: Bogdanovic v Koteff (1988) 12 NSWLR 472 at 479-480. Ralph seeks to overcome indefeasibility by relying on one of those exceptions. He alleges that Judith knowingly participated in Kurt's breach of duty as executor.
5. Kurt and Judith's first line of defence is to deny that the deceased had any right to a possessory title over the Steigis estate properties. Rather, they allege, they had been in possession of those properties for a long time before the deceased's death and were therefore entitled to make their own application for possessory title.
6. So far as the Sanctuary Point property is concerned, Kurt and Judith deny any breach of trust in registering possessory title over the property. If, however, they were not entitled to possessory title, Judith denies that she knowingly participated in any breach of trust Kurt may have committed.
7. The principal relief claimed by Ralph with respect to the Edward Street property is an order compelling Kurt as executor to apply for possessory title over the property and thereafter to deal with it as an asset of the deceased's estate. This would mean selling the property once possessory title is obtained and distributing the proceeds in accordance with the deceased's will, under which Ralph would receive one-third.
8. As already noted, the Sanctuary Point property has been sold. It seems that, initially at least, those advising Ralph assumed that if his claim succeeded he would be entitled to one-third of the proceeds of sale. I assume that this is why that sum was set aside in the controlled monies account. But that now appears to have been an over-simplification.
9. It seems that John's interest in the estate was inherited by his son Kaspar. Accordingly, if Ralph's claims are correct, Kaspar would appear to have been entitled to a one-third share of both the Edward Street and Sanctuary Point properties.
10. Kaspar is not a party to the proceedings. I was told in the course of submissions that he did not wish to be joined. There was no evidence about this. In particular, there is nothing to show that Kaspar has surrendered his interests in the estate in the event that Ralph's claim succeeds. Counsel for Ralph had in his written opening submitted that John's death meant that gift in his favour failed, leaving Kurt and Ralph with half of the residue each, but this submission was not pressed.
11. It seems that Ralph's claim was pleaded on the assumption that he has a direct cause of action against Kurt and Judith. But in fact the claims pleaded against Kurt and Judith are claims for the benefit of the estate as a whole. Ordinarily such a claim must be made by the executor, but the court may, in a proper case, allow a beneficiary to prosecute the claim on the estate's behalf: Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109 at [163].
12. There is no difficulty with this in the present case. The Court has power to control the administration of trusts and estates. The exercise of that power is now governed by Uniform Civil Procedure Rules 2005 (NSW) Part 54. The orders which may be made include an order requiring the executor, or another party, to restore property to, or compensate, the estate. When I pointed this out to the parties, they accepted that what the Court is dealing with is a claim for orders under Part 54.
13. One consequence of the Part 54 procedure is that the Court can be flexible in allowing issues which arise in the course of administration of an estate to be raised and determined (provided that affected parties are given a proper opportunity to be heard). Also, if the Court finds that the executor has failed to pay monies to which a beneficiary is entitled, the Court can, and in my view ordinarily should, order that the executor comply with his or her obligation, even if the beneficiary is not a party to the proceedings.
14. Accordingly, in the ordinary course, should Ralph's claims succeed, then orders would be made against Kurt (and Judith) for the benefit of both Ralph and Kaspar (subject to formal proof that he is John's heir). It follows that if Ralph's claim with respect to the Sanctuary Point property succeeds, the controlled monies will be insufficient to meet both his and Kaspar's resulting entitlements.
15. Two further complications should be noted. First, if the properties are found to have been assets of the estate, allowance will need to be made for any expenditure on the properties by Kurt or Judith which would properly be a charge to the estate. In particular, there will need to be some allowance for the costs of obtaining possessory title over the Sanctuary Point property, which would have been required to sell the property on the estate's behalf.
16. Secondly, if the deceased's entitlement to the properties is upheld, but the knowing participation claim fails against Judith, the proceeds of Judith's half share of the property cannot be recovered from her. But that would not necessarily leave the estate without a remedy. A claim would remain against Kurt, both for his share of the proceeds and for the loss of the other half share. Also it would remain open to contend that Kurt should have taken steps at an earlier point to obtain registration of both the Edward Street and Sanctuary Point properties for the benefit of the estate. This would result in a further claim for monetary compensation, or an occupation fee, to compensate the estate for the delay.
17. The potential for monetary liabilities of this kind to be imposed on Kurt emerged clearly on the first day of the trial. This led to a protest from counsel for Kurt and Judith. Counsel submitted that the existing statement of claim did not articulate any such claims. Counsel also stated that Kurt would wish, if found to be in breach, to seek an order under the Trustee Act 1925 (NSW), s 85, excusing him from liability for any such breach. No such claim had been foreshadowed in the defence.
18. Counsel for Ralph responded by proposing amendments to the statement of claim to make the monetary claims clear. When counsel brought in the proposed amendments on the second day, counsel for Kurt and Judith maintained his objections.
19. Having heard argument on whether the amendment should be permitted, I formed the view that the claims in question fell within Ralph's existing pleaded case. Amendment to the statement of claim was not required to pursue the claims and Ralph should not be shut out from running them. At the same time the claims had only come into focus at the trial and Kurt should not be shut out from mounting a s 85 defence.
20. In the circumstances I decided that the best course was to decide whether the deceased had a possessory interest in the properties, and also the knowing assistance claim against Judith. I would defer dealing with the monetary claims against Kurt (if they arise) to a further hearing, at which time I would also consider the s 85 defence. The solution was not ideal but I considered it was the best way to make use of the Court's time and at the same time allow each party a fair opportunity to present his whole case on the monetary claims issues.
21. The result was that it was not necessary to make any orders concerning amendment of the pleadings. I will return to this question, if necessary, after delivering this judgment.

Chronology of events

1. Walter and the deceased migrated to Australia in 1949. Kurt had been born in 1947 before they left Germany. Ralph was born in 1951 and John followed in 1956.
2. In 1961 the family moved to a house at Conway Road, Bankstown. This was to be Walter's and the deceased's home for the rest of their lives.
3. Walter was a builder. The deceased worked for David Jones in Sydney as a sales assistant and then in a managerial position. Later she was a TAFE teacher. At home, the deceased kept the accounts for Walter's building business and for the family.
4. Luise Steigis' husband was Michael (known as Max) Steigis. He was Walter's paternal uncle (or perhaps half-uncle). They lived at the Edward Street property in Bankstown.
5. The Stegises apparently arrived in Australia after the Pauperises. They were sponsored by the Pauperises. Max Steigis died in 1965. Following his death Luise Steigis was herself in ill-health. Walter, the deceased and Ralph (mainly the deceased) looked after her.
6. Luise Steigis died in June 1969. There was no evidence concerning when the Edward Street and Sanctuary Point properties were acquired but at the date of her death they were unencumbered and she was the sole owner.
7. In evidence is the translation of a letter to the deceased dated 7 April 1970 from Luise Spiekermeier of Essen in Germany. Mrs Spiekermeier was Luise Steigis' aunt. The letter referred to earlier correspondence from the deceased which is not in evidence. Mrs Spiekermeier said, responding to the deceased's proposal to sell the property, that she could not do so "as long as there is no definite decision from the Authorities there". She asked the deceased to let the property out and formally granted authority to do so. She also said she would like to make payment to the deceased (out of the rent) for her trouble, and asked her to send details of the value of the property and a proposal for the amount of the payment.
8. There is no further correspondence with Germany in evidence until 1984. In the meantime, the property was rented out by the deceased (or perhaps by Walter and the deceased) to a man called John Burgess and his wife. Mr Burgess was an employee of Walter's. He and his wife moved in to the Edward Street property in the early 1970s. They lived there as tenants for about ten years.
9. I have already mentioned the family home at Conway Road, Bankstown. At a later point, Walter and the deceased bought a house at Anglers Reach, Lake Eucumbene, which was used as a holiday house for the family.
10. Kurt met Judith in 1978. At that point he had apparently already moved out of Conway Road. Kurt was working in information technology for a building society. He also owned a number of properties which he rented out for investment purposes.
11. Ralph married his wife, Jennifer Bernadette Pauperis, in 1977. Following his marriage he moved out of Conway Road. He had acquired a panel beating shop at Sefton with his parents' assistance and he and Jennifer lived above the shop. According to Ralph, he asked his father whether he could live at Edward Street but Walter refused, saying he was not going to make Mr Burgess and his wife move out.
12. John does not appear to have followed his older brothers in moving out of the Conway Road property. He lived there for all his life, except for some visits to the United States and a short period of marriage of about six months or so at some stage in the 1990s.
13. After the Burgesses moved out, which would have been in the early 1980s, the deceased rented the Edward Street property to a woman called Jennifer Mack and her husband. They had moved in before 1983 and stayed for about five years.
14. In 1984, Walter and the deceased retained Mr Anthony Hawkins, a solicitor, to pursue the question of entitlement to the Steigis properties further. In October 1984 Mr Hawkins wrote on their behalf to Mrs Spiekermeier. The letter stated the Pauperises wished to finalise the matter but needed details of who would inherit Louise Steigis' estate on her intestacy. She had no siblings, and thus her heirs would be her parents, the siblings of her parents or descendants of those siblings. Mr Hawkins sought these details from Mrs Spiekermeier for both sides of the family. This resulted in a response from Bruno Spiekermeier, who appears to have been Mrs Spiekermeier's son. A reply from Mr Hawkins to Mr Spiekermeier in March 1985 is in evidence. It appears from that letter that not all of the necessary information could be obtained from the Spiekermeiers.
15. Later in 1985 Walter and the deceased booked an extended holiday in Europe in the first half of 1986. In evidence is a letter from Mr Hawkins dated 18 February 1986 to Peter Plotz, a German lawyer in Dusseldorf (in fact there are two letters of the same date but for convenience I will treat them as if they were a single letter). Mr Plotz had previously assisted Mr Hawkins on another matter.
16. Mr Hawkins' letter stated that the deceased would contact Mr Plotz to arrange a meeting when she was in Europe. The idea seems to have been that Mr Plotz would identify the members of both sides of Luise Steigis' family who had been entitled to share in her estate on her death in 1969, and locate them or their heirs. Mr Plotz would document the process by obtaining birth certificates, death certificates and other records.
17. Mr Hawkins also proposed that Ms Pauperis should be paid something for her trouble in administering the estate and asked Mr Plotz to sound out Ms Steigis' family about the amount of payment. He suggested that it should be 15 per cent of the estate.
18. There is no further documentary evidence concerning enquiries in Germany. According to Kurt's affidavit in these proceedings, the deceased told him after her return from Europe in 1986 that she had spoken to members of Ms Steigis' family and been told that they were not interested in the property and that she should keep it. In her affidavit, Jennifer described the deceased telling a more colourful story. According to Jennifer's version, the deceased was actually chased out of the house of the Steigis relatives she visited in Germany.
19. There is no need to resolve this conflict in the evidence. It is clear that from 1986 onwards neither the deceased nor Walter made any further efforts to arrange for the properties to pass to Ms Steigis' German relatives.
20. In about 1988, Kurt and Judith moved into the Edward Street property. There is a dispute about the circumstances in which this occurred, which I deal with in more detail below.
21. In 2000, Walter had a heart attack when he was staying at the Anglers Reach property. He survived the heart attack but was thereafter in poor health and was cared for by the deceased. He died in 2005.
22. Following Walter's death, the deceased continued to live at Conway Road. John appears to have been mainly responsible for her care.
23. In evidence is a power of attorney granted by the deceased in favour of Kurt and John in January 2010. Later in the year, the deceased made what proved to be her final will. It is dated 18 November 2010. Two days later, she revoked the power of attorney.
24. In the will, the deceased appointed Kurt and John as executors, as I have already mentioned. She left Conway Road and its contents to them in equal shares. The residue of her estate she left to her three sons, Kurt, Ralph and John, in equal shares.
25. The deceased died about fourteen months later, on 31 January 2012. According to Ralph, for the last year or so she had been living in a nursing home but before that her health had been reasonable. In Kurt's affidavit, he stated that the deceased was in a nursing home for two years before her death, but in reply Ralph insisted that it was only one. It is not necessary to resolve this dispute.
26. It appears that Kurt and John began the processing of obtaining administration. But John died suddenly in October 2012. Probate was granted of the deceased's November 2010 will to Kurt on 29 November.
27. The inventory of property accompanying the grant of probate was in evidence. It was an annexure to an affidavit of Kurt sworn on 7 November 2012; the affidavit is not itself in evidence. The inventory of property included the Conway Road and Anglers Reach properties. It did not refer to the Steigis properties.
28. The affidavit was witnessed by a solicitor, Ulysses Coustas. Evidently he acted for Kurt in obtaining probate, but there is no further evidence about his role.
29. Nor is there any evidence about the sale or transfer of the Conway Road property. Presumably this was arranged between Kurt and Kaspar, as John's beneficiary.
30. In evidence is a letter dated 28 October 2013 to Kurt about the realisation of the Anglers Reach property from a solicitor acting for Ralph, Mr Garry Penhall. Apparently Kurt was willing to sell the Anglers Reach property to Ralph. There had been some discussions around setting off the price against Ralph's share of the estate, so that he would only have to pay the difference. But the net value of the residue of the estate was unclear. In order to advance matters, Mr Penhall conveyed an offer from Ralph to buy the property outright pay the full purchase price, and receive his share of the estate back in due course.
31. According to the witness evidence, the sale of the Anglers Reach property was completed at some point in 2014. There is no documentary evidence which would allow the date to be fixed with more precision. Nor is there any evidence of when the residue was calculated and Ralph's share distributed to him (if that is what happened).
32. At some point, also in 2014, Kurt consulted a firm of solicitors, Lai & Nguyen, concerning the ownership of Edward Street and the Sanctuary Point properties. A search of the Sanctuary Point property carried out by those solicitors dated September 2014 is in evidence. The evidence also records that the solicitors made an enquiry about the ownership of the property to Bankstown Council in April 2015 which was not pursued.
33. Kurt did not give any detailed evidence about the retainer of Lai & Nguyen. It appears that by some point in 2015 he was dissatisfied with their performance. He retained Craig Gordon Lockhart, another solicitor, to act for him concerning the Steigis properties instead.
34. Mr Lockhart prepared an application for possessory title over the Sanctuary Point property. The application form contained a statutory declaration which was completed and signed by Kurt in December 2015. But for reasons which are not explored in the evidence, it was not lodged at that time. Instead, Mr Lockhart prepared a further statutory declaration in support of the application dated June 2016. The application was stamped in July 2016.
35. The application was presumably lodged at some point soon after it was stamped. It resulted in requisitions from the Land Titles Office. The details of those requisitions are not revealed by the evidence. The application was resubmitted in October 2016. The resubmitted application was supported by fresh statutory declarations from Kurt, Judith and David Gillies. Mr Gillies was the owner of a property which adjoined the Sanctuary Point land.
36. The application appears then to have been resubmitted a second time in December 2016. There is no evidence which would explain why this happened. It was subsequently successful and registered.
37. Kurt and Judith had placed the Sanctuary Point land on the market in 2017. In Easter 2017, by extraordinary coincidence, Daniel was looking to buy a property in the area and was offered the land by a real estate agent. He was provided with a contract and noticed that his uncle and aunt were recorded as the registered proprietors. He approached Judith and some negotiations took place. He was apparently prepared to offer $260,000 or $270,000 but Kurt and Judith wanted more. Negotiations broke down. Then, it seems, Ralph learned about the sale. He lodged a caveat over the land on 12 May.
38. Although Mr Lockhart had been retained to act for Kurt and Judith with respect to both the Steigis properties, no application was made for a possessory title over the Edward Street property. The evidence does not explain what happened in the eighteen months or so following the lodgement of the caveat over the Sanctuary Point land in May 2017. In January 2019, Ralph lodged a caveat over the Edward Street property. He commenced the present proceedings in the following month.

Factual issues

1. This section of the judgment contains a summary and analysis of the evidence on the specific factual issues which need to be the subject of detailed findings. I first briefly describe the witness evidence. I then deal with four issues which go to whether the deceased had possession of the properties prior to the deceased's death, or had surrendered possession to Kurt and Judith. These are: the payment of rates and other council levies on the properties; the payment of other expenses; the deceased's testamentary intentions, to the extent relevant to the properties; and the occupation and use of the properties by the deceased, and by Kurt and Judith, prior to the deceased's death.
2. Finally, I consider the evidence concerning Kurt and Judith's dealings with the properties after the deceased's death. This evidence is relevant to the claim against Judith.

Witnesses

1. The plaintiff's witnesses were Ralph, his wife Jennifer, and their son, Daniel. The defendant's witnesses were Kurt, Judith, Mr Gillies and Mr Lockhart.
2. All of the witnesses were cross-examined, although Mr Lockhart's cross-examination was brief and his reliability was not challenged. The events which were the subject of the evidence from the members of the deceased's family and from Mr Gillies went back to the 1980s. I did not find any of these witnesses' evidence particularly persuasive, even when it dealt with more recent events.

Council rates and levies

1. In evidence is a written response from Bankstown Council (the relevant local council) to a subpoena for records concerning the Edward Street property. The council records only cover the period from 1998 onwards, owing to a fire which happened in 1997.
2. The ownership of details held by the council for the property at all relevant times were "Estate L Steigis c/o Lisa Pauperis". It appears that this goes back at least as far as 1998.
3. Initially the address for correspondence was the deceased's home at Conway Road. On 6 April 2010 Kurt lodged a change of address form showing the new address for correspondence as Edward Street. The form described the owner as "Lisa Pauperis". It was signed by Kurt as the "son" of the owner (the box ticked by Kurt indicating that he was owner was crossed out).
4. In cross-examination, Kurt denied that he used the power of attorney (which had been granted about two months beforehand) to effect the change of address. There was no evidence of what authority the council required in order to record a change of address.
5. Also in evidence is a bundle of rate notices produced by Judith and issued by Bankstown Council. The addresses on the rate notices correspond with the ownership details as recorded by the council. The earliest one is dated July 2006. The first rate notice sent to Edward Street was issued in July 2010. All of the notices are annotated as being paid by Judith. Council records confirm a payment by Judith in 2011 but otherwise do not identify the payer.
6. The local council for the Sanctuary Point property was Shoalhaven Council. The earliest documentary evidence from that council concerning the Sanctuary Point property dates from 1997. It is a letter dated 14 November 1997 concerning an earlier notice issued by the council under the Rural Fires Act 1997 (NSW) and advising that if works were not undertaken that council would do the works itself. The letter was addressed to "L Pauparis" at Conway Road.
7. There is a second letter in evidence dated 26 May 1998 acknowledging receipt of an advance payment and stating that work would be undertaken as soon as possible. Both letters are annotated in the deceased's handwriting noting a payment of $132 on 22 May 1998.
8. Also in evidence is a statement of claim issued by the council out of the Local Court on 30 October 1998 and claiming $658.95 for unpaid rates. The statement of claim names "Lisa Pauparis" as the defendant and gives her address as Conway Road. There is also a record of a payment apparently made by Kurt or Judith, with the council's receipt in favour of the deceased dated 23 November 1998.
9. Judith also produced rate notices for the Sanctuary Point property issued by the Shoalhaven Council. The earliest is dated July 2006 and is addressed to "L Pauparis". From July 2010 onwards the name is unchanged but the address is shown as Edward Street. All of the notices are annotated as paid by Judith.
10. It is apparent that the name recorded as the owner for the Sanctuary Point property by the council was the deceased (albeit misspelt). As with the Edward Street property, the address for communications was changed in 2010.
11. In Jennifer's affidavit she stated that following the visit to Germany in 1986 she was told by the deceased that the deceased had been advised by her solicitor to "just use the place for yourselves, pay all the outgoings and the government won't take it back". It is clear enough the deceased did put her name on the council records as the person who was responsible for the properties, and in particular as the person liable to pay rates and levies. This probably happened long before 1986.
12. The records which I have summarised show that this remained the case for the rest of the deceased's life. But Kurt and Judith alleged that they were the ones who actually paid the rates and levies.
13. I have already referred to the fact that the deceased kept the family accounts. In his affidavit, Kurt stated that he still had a ledger book prepared by his mother which recorded the payments made for the Sefton property (see [34] above). But although at one point the ledger was marked for identification it was not tendered by either party and there is no evidence one way or another about whether it contained entries relating to the Steigis properties.
14. According to Jennifer's affidavit, she remembered seeing bills relating to Edward Street and Sanctuary Point, marked by the deceased as having been paid, when visiting the deceased after Walter's death. She put this as occurring as late as 2010. Ralph also gave evidence that the deceased paid rates on the properties, although his evidence was not specific as to time. Daniel in his affidavit stated that he saw a Sanctuary Point rates notice at Conway Road in about 2012. This date cannot be accurate as the address for rate notices had been changed by then.
15. In his affidavit, Kurt stated that initially the council rate notices were sent to Conway Road and Sanctuary Point. He said that sometimes the deceased would pay the rates and would be reimbursed. There was a routine whereby the deceased left bills to be paid or reimbursed out in a filing tray at Conway Road where Kurt would pick them up. Kurt said, however, that all expenses were paid by Judith and himself directly from about 2004/2005 onwards, with the deceased having no involvement. This was clarified in cross-examination. According to Kurt, the deceased continued to receive the notices up to 2010 but just did not pay them.
16. Judith stated that she and Kurt paid the rates on Edward Street and Sanctuary Point from when they moved into Edward Street in 1988 onwards. She said that initially they gave the money to the deceased who would pay. She said that they paid directly after 2000. Her evidence linked this to Walter's heart attack which happened at around the same time. The suggestion was that the deceased could no longer cope from that point with making the payments herself.
17. The deceased emerged from the evidence as an organised person who was concerned to ensure that Kurt and Judith paid their way. In cross-examination, Judith stated that she and Kurt always reimbursed the deceased for expenses associated with the property. She said that the deceased "was not a charity", at least so far as she and Kurt were concerned. There is no reason to doubt that the deceased did pass the cost of meeting council rates and levies on to Kurt and Judith.
18. To the extent that it matters, I am not satisfied that Kurt and Judith directly paid all the council rates and levies on the properties after 2000 (according to Judith) or even after 2004/2005 (according to Kurt). The annotated bills show that this was so from 2006 but before then the deceased could still have been paying the bills and seeking reimbursement. Certainly I do not accept that the deceased became unable to cope with making the payments. But at the same time it seems that even before 2000 some of the payments (for instance, the payment of the amount required to settle the Shoalhaven Council statement of claim) were passed on by the deceased for direct payment by Kurt and Judith.

Other property expenditure

1. Also in evidence were water bills issued by Sydney Water for the Edward Street property. The earliest bill in evidence is dated February 2006 and is addressed to the deceased, but at Edward Street. This remained the same right through until her date of death. All the bills in evidence are annotated as paid by Judith.
2. According to Kurt's affidavit, the water rates were always sent to Edward Street and paid. Judith was more circumspect, stating only that the bills were sent to Edward Street from "at least" 2006, which is what the documents in evidence show.
3. Also in evidence was an insurance renewal for home insurance for the Edward Street property issued by the insurer, NRMA, in mid-2010. Payment details produced by NRMA showed that the policy went back at least as far as 2002. It was issued in the name of "Estate Lisa Pauperis".
4. Why the policy referred to the deceased's estate as being the insured at a time when she was alive was not explored in the evidence, but Kurt accepted that the insurance had been effected by his mother and she was the insured under the policy. Kurt said, however, that in about 2009 he obtained insurance for the property in his own name (or perhaps the names of himself and Judith) and the NRMA policy was allowed to lapse.
5. The water bills for Sanctuary Point were issued by the Shoalhaven Council which was also the water supply authority. They show the same pattern as for the rate notices and cover the period from July 2008 onwards. All of the bills in evidence are annotated as paid by Judith.
6. Also in evidence is a contractor's bill for mowing issued to Judith in July 2008. According to Kurt and Judith, earlier payments were made to contractors from some point after 2000 for regular mowing and clearing work, but the bills were no longer in existence. According to Judith, she destroyed her earlier records before the issue of ownership was raised in 2014.
7. Also in evidence is correspondence from a neighbour concerning the fencing of the property. The correspondence is addressed to "L Pauparis" (evidently deriving from the council's records) at Edward Street. It started in December 2011. On 12 January there is an annotation from Judith of a telephone call with the neighbour. This was only a few weeks before the deceased died on 31 January. The note states: "Fence. Mowing. Interested in buying?" There was no affidavit evidence, or cross-examination, about this conversation. According to Kurt and Judith, a few years later the issue came up again and they agreed with the neighbour to fence the property and share the cost.
8. It is clear that, as with the council rates, the deceased had recorded herself as the person liable to pay the water rates on both properties, and this remained the case throughout her lifetime. Similarly she effected insurance on the Edward Street property up until 2010. Again, there is no reason to doubt that the expenses were ultimately met by Judith and Kurt from 1988 onwards although this may have involved reimbursing the deceased on occasions, at least before 2006.

Deceased's testamentary intentions

1. As already noted, in her November 2010 will the deceased gave one-third of her estate to each of her sons, but made an exception for the Conway Road property, which she divided between Kurt and John only. The will contained a clause explaining this: I DO NOT WISH TO LEAVE any part of [the Conway Road property] to my third son RALPH UDO PAUPERIS as in the 1970s, my late husband and I sold our unencumbered property on Canterbury Road in Punchbowl and at that time, we gave RALPH UDO PAUPERIS the whole of the proceeds of that sale which RALPH UDO PAUPERIS used towards purchasing [the Sefton panel-beating property] in his sole name.
2. In his affidavit, Ralph confirmed that his parents provided him with financial support for the purchase of the Sefton property and this is why he did not receive a share of the Conway Road property. He said however that the reference to the sale of a property at Punchbowl was a mistake and in fact the property sold was elsewhere. This was confirmed by Kurt.
3. The provisions of the November 2010 will may go back to an earlier point. Walter's will is not in evidence. But according to Jennifer's affidavit, if he had survived the deceased, his will divided the Conway Road property equally between Kurt and John and divided the Anglers Reach property equally among all three sons. There may well have been an earlier will of the deceased's which mirrored Walter's.
4. Jennifer also recorded a conversation with the deceased about the Sanctuary Point property. Apparently her son Daniel went camping in the area and decided he would like to own a property there. Jennifer said that she raised with the deceased the possibility of using the Sanctuary Point land: I said to her: "Daniel has been camping down in Sanctuary Point and likes the area. Can we use Luise's land in Sanctuary Point? We could put a holiday house on it and go there for holidays". She replied: "Oh no that is not possible, the land is not ours to use. Our lawyer said we can't do anything to bring the property to the attention of the authorities or the government will take it off us". She then went on to say: "Kurt looks after the land because he lives at Edward Street".
5. Jennifer also recorded in her affidavit conversations with the deceased about the Anglers Reach property in which the deceased insisted that on her death it would be equally shared. To similar effect was a conversation recorded by Daniel. According to Jennifer the deceased made it clear during her lifetime that she intended, subject to the Conway Road property going to Kurt and John, that all of her sons would be treated equally and that this would have been what Walter would have wanted also.
6. Both Daniel and Jennifer also gave evidence of their grandparents' belief that Kurt had done well for himself financially.
7. None of this evidence was questioned in cross-examination.

Occupation and use of Steigis properties

1. Kurt and Judith both gave evidence that from the time they moved into the Edward Street property in 1988 they treated it as their home. They were cross-examined about the amount of time they spent living there, in particular by reference to the water consumption shown on the water bills. This indicated that there were periods of time, some extending for months, when they were away attending to other properties. But in my view it is clear that at all times from 1988 Kurt and Judith were in occupation of the Edward Street property, and the cross-examination based on the water rates did not displace this conclusion.
2. In his affidavit, Ralph gave an account of a family discussion before Kurt and Judith moved into Edward Street. At that time, Kurt owned three properties: one at Pyrmont in Sydney; one at North Arm Cove at Port Stephens; and a separate property of his own at Anglers Reach. Kurt was under financial pressure. He had been involved in a car accident and had to pay compensation.
3. According to Ralph, the deceased proposed that Kurt move in to the Edward Street property so that he could rent out the Pyrmont property. In return Kurt was to pay the expenses of, and look after, both the Edward Street and Sanctuary Point properties. Also Ralph was to buy Kurt's Anglers Reach property, which he later did.
4. In his affidavit Ralph recorded later conversations with Kurt in which Kurt would complain about having to look after the Sanctuary Point property. According to Ralph, he would tell Kurt to stop whinging as he (Kurt) had the benefit of living in Edward Street rent free and looking after Sanctuary Point was part of the arrangement.
5. In his affidavit Ralph placed these conversations as happening before his purchase of Anglers Reach, which took place in 1991. In cross-examination he placed them some time after 1998. Then he suggested that it might have been around the time of, but possibly after, the Anglers Reach property purchase in 1991.
6. I have already set out evidence from Jennifer of being told by the deceased about Kurt mowing the grass at Sanctuary Point. Jennifer stated in her affidavit that the undergrowth problem at Sanctuary Point was also referred to when the family got together at Anglers Reach at Christmas time. On occasions the deceased had complained about the council taking action against her. On other occasions she had referred to Kurt keeping the land clear.
7. Kurt's affidavit account was different. He acknowledged that he had been involved in a car accident which he said happened in about 1989. He said that there was no discussion concerning financial problems; rather, he ceased his IT work for other reasons and went to work for his father in 1990.
8. According to Kurt's affidavit, his occupation of the property followed a conversation with his mother (not a family conversation) which took place after Ms Mack had moved out (see [51] above). Kurt's version was: I said to my mother: "I am going to move into Edward Street. I will pay the rates. I will pay the rates on the Sanctuary Point property. I will also pay other associated costs. I will take over the costs". I cannot recall what my mother said but she agreed.
9. In cross-examination, Kurt said that Ms Mack moved out in August or September 1988. He and Judith would thus have moved in some time later. In cross-examination, Judith said that it was late 1988 when she and Kurt moved in.
10. In her affidavit, Judith stated that she was not present when any conversations concerning the occupation of Edward Street took place. In cross-examination she confirmed this, stating that she was told by Kurt that they were moving to Edward Street (and in fact that she did not wish to move).
11. In his statutory declaration of October 2016, Kurt stated that he visited Sanctuary Point with the deceased on "various" occasions before the deceased "handed the property over". He said that he "took over the property, its maintenance and payment of all costs and expenses" when he moved into Edward Street.
12. Kurt also said that following the receipt of the council notices from 1997 the deceased said that she wanted nothing more to do with the Sanctuary Point property. He said she was frail. The implication was that she was no longer capable of managing the property.
13. Kurt stated that he and Judith took possession from that point. He acknowledged that his mother had had possession before then. He said that "within a year" he and Judith went and inspected the property to see what needed to be done to control the growth on it. He stated that he and Judith paid the council cost of $132 from May 1998 (see [80] above). Since then they had paid contractors or undertaken the mowing themselves. He also referred to receiving a complaint from Mr Gillies in 2001 and arranging for the Council to clear the property in response to the complaint.
14. In his affidavit, Kurt stated again that his mother said that she did not want anything to do with either property. Again he placed this as happening in 1998. The affidavit went on to deny the conversation alleged by Ralph in which Kurt supposedly complained about having to do the mowing. Kurt said that he never visited the property until 2000 when Judith and he visited for the first time. On that occasion they picked up large branches which had fallen but he did not undertake any mowing himself until the time came to sell the property after the deceased's death. At other times mowing was done by contractors.
15. In her affidavit, Judith stated that the deceased gave Kurt the bills for clearing the Sanctuary Point property and Judith and Kurt paid them. She said that this prompted them to go there (in "about 2000"). Judith also referred to Walter's heart attack in 2000. The thrust of her evidence was that, once she had to look after Walter, the deceased could not cope with the property. From this point, but not before, the arrangement was for Kurt to cut the overgrowth. Elsewhere Judith said that she and Kurt made a decision to look after the Sanctuary Point property after the deceased started getting notices from the council.
16. In his statutory declaration, Mr Gillies said that he had lived next door to the Sanctuary Point property since 1987. The statutory declaration stated that he knew the deceased and contacted her concerning neighbour matters. In early 2001 he was told by the deceased that she had "handed the property over" to Kurt and Judith and that he should contact them. Thereafter he discussed such matters with them.
17. Mr Gillies stated that he saw contractors retained by Kurt and Judith on the property. He also saw them mowing the block themselves, and referred to recent discussions concerning the removal of a tree. He said that no one else attended the property over the period.
18. In cross-examination, Mr Gillies' evidence was different. He denied any discussions with the deceased. He said he only spoke to Kurt and Judith after they came down and started preparing the block for sale. He was referred to the statutory declaration and the inconsistency, and then said the statutory declaration would be correct. But he confirmed that he had only met Kurt and Judith to talk to when they approached him for assistance at the time they were preparing the application for possessory title. At that point he gave them some council documents from his files.
19. Counsel for Ralph put to Mr Gillies that his statutory declaration had been prepared for him and that he had signed it without paying too much trouble to determine how accurate it really was. Mr Gillies denied this. However, his evidence in cross-examination suggested to me that that may well be what actually happened. I do not regard the statutory declaration as reliable.
20. In cross-examination, Judith confirmed that she was unable to give direct evidence of the conversation which took place before she and Kurt moved to Edward Street. The insurance policy was referred to at one point and she volunteered that she thought that if a fire took place then the deceased would be entitled to the insurance monies.
21. Judith was also cross-examined about the circumstances in which she and Kurt "took possession" of the Sanctuary Point property. Her affidavit had been somewhat unclear as to the sequence of events (see [121] above) and the role, if any, of Walter's death. That carried through to her evidence in cross-examination and she said that the timing was "a bit murky". But she continued to link it to Walter's death.
22. Judith said that the deceased never went to the Sanctuary Point property to keep the growth down. She waited for council notices. She (Judith) and Kurt did the same.
23. Judith said that she regarded the Sanctuary Point property as an imposition. She confirmed that she paid rates on the property for twelve years before she even visited. She denied that she only paid the rates because the deceased required it as a condition of occupying the Edward Street property but she did not offer any other reason for making the payments.
24. Judith said that the first interaction with the neighbours at Sanctuary Point was in 2001. But when counsel put to her that she first spoke to Mr Gillies when she did the possessory title application, she said that she could not recall.
25. In cross-examination, Kurt was asked about the visits to the property with the deceased. He said that he drove his mother down to the Sanctuary Point property a couple of times in the late 1970s. The first visit was to find out where the property actually was. He said that there were no visits by the deceased to the property from the 1980s onwards.
26. Kurt was also cross-examined about the timing of the conversation which took place before he and Judith moved into the Edward Street property in 1988. He said that Ms Mack had given notice that she was leaving and the conversation took place while she was still in occupation. He was pressed on the inconsistency between this and the evidence in his affidavit that the conversation took place after Ms Mack left. He said that what he said orally (that is, the conversation took place after she had given notice but was still in occupation) was correct. He insisted that he told the deceased he was moving in, and did not ask.
27. In cross-examination Kurt was pressed on this. He said: Q. You didn't move in two weeks before she moved out? A. Yes, but I got my mother's - I'll put it to you this way. I told my mother my intention when she told me it was becoming vacant. Q. Were you about to say just then, I got my mother's permission to move in? A. No. I'm distracted. I tried to think correctly, okay.
28. It was apparent from Kurt's evidence that he considered that the Sanctuary Point and Edward Street properties went together. On his account, however, he volunteered that he would look after both properties when he said he was going to move in to Edward Street.
29. In cross-examination it was put to Kurt that building supplies were left by his father at the Edward Street property. Kurt initially did not accept this but later acknowledged that some supplies and furniture belonging to his parents were indeed stored at Edward Street.
30. The idea that Kurt would just have told his mother that he and Judith were moving in to the Edward Street property is, in my view, inherently unlikely. I am not satisfied that Kurt's account is correct. I think it is far more likely that he asked her permission and that was what Kurt was about to say when he corrected himself in the passage of transcript which I have extracted above.
31. As I have said, in cross-examination Kurt accepted that payment of the expenses on the Sanctuary Point property went together with Edward Street. It is inherently probable that the deceased required payment of those expenses as a condition of Kurt and Judith occupying Edward Street rent-free. I can see no reason why Kurt and Judith would have volunteered to pay such expenses. I am satisfied that in fact the deceased did require this as a condition of permitting Kurt and Judith to occupy Edward Street.
32. I think the evidence from Kurt that in 1998 or thereabouts the deceased said she did not want anything to do with the properties is suspect. If the deceased did decide this, it is not easy to see why she would not have recorded Kurt and Judith as the owners. At the very least one would expect that the address would have been changed at that point.
33. In fact the evidence of Kurt and Judith is at best confused about whether the supposed trigger for the deceased handing over Sanctuary Point was the council notices or the deceased's supposed inability to cope after Walter's heart attack. The theory that the deceased was unable to cope following Walter's heart attack is only supported by Judith and even then her evidence is not completely consistent. Kurt placed the relevant events as happening before 2000. Judith's evidence does not comfortably fit with the evidence that the first visit by her and Kurt was prompted by the council correspondence. In fact at least two years passed between the demands from the council about clearing and Walter's heart attack.
34. In my view it is equally if not more likely that the council took action in 1997 and 1998 because of a failure by Kurt and Judith to pay bills on time, rather than any inattention by the deceased. Even if it was due to the deceased's inattention, I do not accept Kurt's evidence that she was frail by 1998. All of the other evidence suggests that she was capable of managing the property until well after 2000.
35. For these reasons, I am not satisfied that the deceased handed over the Sanctuary Point property to Kurt and Judith in 1998 or at any other time.

Conduct after death of deceased

1. In his affidavit, Ralph gave evidence making a request of Kurt for Kurt to give him documents concerning the Edward Street and Sanctuary Point properties. The suggestion was that this put Kurt on notice that the properties were regarded by Ralph as part of the estate.
2. According to Ralph's account, he asked his brother John for documents before John died in October 2012 but nothing was produced. After John's death, he made a request of Kurt for some documents concerning their father's family background and asked for documents concerning the Steigis properties at the same time. He said that Kurt told him that if he came on any he would pass them on. In his reply affidavit he expanded by saying that Kurt later told him that John had burned all the papers.
3. Daniel also gave evidence of the conversation. On Daniel's version the conversation concerned the sale of the house at Lake Eucumbene. It took place after John's death. Daniel stated that he remembered the conversation because it was an amicable one when there had evidently been tension between the brothers in the past. He recalled that it included a request for paper work concerning the Steigis properties.
4. Kurt denied this evidence. He acknowledged that a meeting took place at Conway Road but said there was no mention of the Steigis properties. He recounted an acrimonious conversation concerning certain fittings from the house which Ralph wanted. Daniel allegedly said that he (Daniel) would take them after Kurt's death.
5. Judith also gave evidence in her affidavit about the destruction of papers. She said that she saw burned papers when she came to Sydney after John suffered the heart attack from which he died.
6. I have already referred to the letter written by Mr Penhall on Ralph's behalf in October 2013. That letter contained no reference to the Edward Street or Sanctuary Point properties. In cross-examination, Ralph was asked about whether he ever gave any instructions to Mr Penhall to write to Kurt about that subject. He said he did not. He also said that his request for documents in the conversation with his brother was based on a suggestion made to him by his solicitor (presumably Mr Penhall).
7. It is strange that if Ralph regarded the properties as being part of the estate he did not say something sooner, or have Mr Penhall say something. There is no evidence from Mr Penhall nor any documents so I do not know when it was that Mr Penhall was retained and what the scope of his retainer was. Overall, the evidence does not allow me to make any positive finding that a request was made for documents, either to John before his death or to Kurt afterwards.
8. Of course, it is possible that Kurt's attention could have been drawn to the properties being part of the estate in other ways. There is no evidence of what work was done by Mr Coustas at the time that probate was obtained. Nor is there evidence about when Lai & Nguyen were retained and what their instructions were. But in cross-examination Kurt said that he approached that firm after the altercation involving Daniel to find out what his rights were.
9. On Kurt's version of the altercation with his brother and Daniel, the dispute was about fittings at Conway Road. Ralph clearly had no interest in that property under the will. It is therefore difficult to see how the altercation could have led Kurt to think that his supposed ownership of the Edward Street and Sanctuary Point properties was under a cloud. But on Kurt's own evidence, that is what happened, presumably at some point before September 2014.
10. In cross-examination, Judith indicated that she was aware of the concept of possessory title. She said that in the late 1990s a friend of hers had "nearly" been able to claim a property based on possessory title and he had "told her about it". She was pressed as to why, having that knowledge, and supposedly being in possession of Edward Street and Sanctuary Point from 1998, she did not move earlier. She said that she and Kurt had "neither the time nor the money". I did not find this at all convincing, especially when Judith did not suggest that she ever tried to find out (at least before Lai & Nguyen were retained) how much it would cost.
11. Mr Lockhart's statutory declaration annexed a bundle of invoices which he described as invoices to "the recorded owner L Pauperis" for the Sanctuary Point property and stated that all had been paid by Kurt and Judith. His statutory declaration continued: The payment records evidence that the applicants took over possession of the property from Lieselotte Pauperis on or before 1998 and that the applicants have had that uninterrupted possession of the property since then to date. All payments were from the applicants' bank accounts or paid in cash by the applicants evidenced by them holding the original invoices and receipts.
12. The bundle of invoices began with the 1998 payment record annotated by the deceased. It next included the October 1998 statement of claim and receipt. All the other documents post-dated the deceased's death.
13. In her statutory declaration, Judith said she had read Kurt's statutory declaration and it was true and correct. She also said she had read Mr Lockhart's statutory declaration and the annexures and what he said was also true and correct.
14. Judith was cross-examined about this. She said at the time of the application for possessory title, she knew that Kurt was the executor and had indeed helped him to discharge his functions as executor. She said she did not approach Mr Gillies to give his statutory declaration. She was asked about the terms of the original December 2015 application. She said she never believed that the deceased had any claim to the property.
15. In cross-examination, Mr Lockhart was asked about the handwriting on the May 1998 annexure to his statutory declaration. The form of Mr Lockhart's statement suggested that the handwriting was Judith's. He said that that was what he was told. He was asked by whom and he said it was by Judith. In fact the writing was the deceased's.

Deceased's interest in Steigis estate properties

1. This case is similar in its facts to the decision of Darke J in Strel v Cordia [2016] NSWSC 1596. That case concerned a house and land at Petersham in Sydney. The land was owned by Sylvia Graef. In 1959 Richard Strel entered into a terms contract with Ms Graef to buy it from her. Mr Strel moved in with his family. He lived there until he died in 1987. The evidence did not establish directly that Mr Strel had paid all of the amounts due under the terms contract. Mr Strel lodged a caveat over the property but never registered himself as the proprietor of the land.
2. Following Mr Strel's death, his daughter received advice that she should just "hold on" to the property. She made occasional visits and undertook some small items of maintenance. The property otherwise remained in the condition her father had left it.
3. In 1991 Ms Strel spoke to a neighbour, Mr Cordia. She agreed to allow him to use the property to store his belongings. In return Mr Cordia agreed to pay the rates and outgoings. Ms Strel allowed this situation to continue for many years. In 2015 she obtained a grant of administration for her father's estate and gave notice to Mr Cordia to vacate. He disputed that Ms Strel had any interest in the property and claimed that, even if she did, he had acquired a possessory title to the property as a result of occupying it.
4. Darke J was satisfied on the evidence that Mr Strel had in fact complied with his obligations under the terms contract. He thus had an equitable entitlement to complete the transfer, which passed to his daughter as an asset of his estate. His Honour also found that Mr Cordia's occupation of the property had been with Ms Strel's consent. That occupation was not adverse to her and therefore did not give rise to a possessory title.
5. In the present case, it is clear that prior to 1988 the deceased was in possession of the Edward Street property. As I have already noted, Kurt accepted that this was so. In particular, the deceased exercised dominion over the property by renting it out.
6. The evidence is not so clear for the Sanctuary Point property, which was vacant land where the indicia of possession were fewer. It appears that prior to 1988 the deceased did little or nothing on the property, although, as I have already found, she did visit it on at least a couple of occasions.
7. But what the deceased did do was to put her name on the property as the owner for the purposes of the payment of council rates and levies. In my view this is of itself a clear indication of an intent to exercise dominion over the property. As the Local Court proceedings to which I have referred illustrate, it involved an acceptance of liability to be sued by the council for rates and levies.
8. The evidence about the deceased saying the Sanctuary Point land was not "ours to use" and not wanting to draw the attention of "the authorities" by building on it (at [103] above) is not easy to understand. An application for development approval would presumably have been made to the Shoalhaven Council which had apparently already recorded the deceased as the owner. But it is not impossible that someone who was not familiar with the idea of possessory title in Anglo-Australian land law (and who had grown up in the Third Reich) could fear that if "the authorities" became aware that land was being occupied without any authority from the true owner, it might be taken away. This, however, does not affect my conclusion that the deceased intended to exercise dominion over the Sanctuary Point property. Arguably it reinforces that conclusion.
9. The family connection with Mrs Steigis had been through Walter rather than through the deceased herself. Furthermore, the evidence about Mr Burgess' occupation suggests that Walter was involved in deciding to rent the property to him. Nevertheless, the only evidence in the case refers to the property being rented out, and the outgoings being paid, by the deceased alone. Furthermore, the 1986 correspondence refers to a proposed meeting between Mr Plotz, the German lawyer, and the deceased, even though both Walter and the deceased were travelling together. On the other hand, the correspondence also refers to both Walter and the deceased as the "clients".
10. In the end, it is not necessary to determine whether the deceased's possession of the property prior to 1988 was as an individual, or was joint with Walter. No point was taken about any interest of Walter's by counsel for Kurt and Judith. Even if Walter had some possessory interest, it would have passed on his death to the deceased.
11. Counsel for Kurt and Judith pointed out that the deceased had originally purported to act on behalf of the Steigis estate. Counsel characterised any interest the deceased had as an interest on behalf of the Steigis estate and noted the deceased never purported to exercise her own rights against the estate.
12. In my view, this is not the case at least from 1986 onwards. The evidence from both Kurt and Jennifer was that the deceased was advised to retain the property for herself after the unsuccessful attempt to sort the matter out in Germany, and she did so. In any event, I do not think it matters.
13. Possession is a legal rather than an equitable concept. A person who has possession of land is entitled at law to exclude others from the property, and to resist being excluded by anyone else, apart from a person having better title at law. Like any other legal asset, possession may be the subject of equitable obligations, including obligations as executor, but that does not alter or qualify the nature of the legal interest.
14. On my findings the deceased manifested an intention to assume dominion over the properties to the exclusion of others. The fact that, at least initially, she did so in the interests of Mrs Steigis' heirs, whoever they might be, rather than herself, did not affect her legal possession.
15. In Strel, because of his findings about completion of the contract, it was not necessary for Darke J to determine whether possession of RPA land, on its own, is an interest which passes to the executor when the person in possession dies. Nevertheless his Honour said at [64] that if he was wrong in his view about completion of the contract, Mr Strel had a bare right of possession which passed to Ms Strel.
16. In the present case, the issue arises directly for decision. I agree with his Honour's conclusion. A person in possession of RPA land has an interest commensurate with an interest in possession of old system land: Newington v Windeyer (1985) 3 NSWLR 555 at 563E-564A. There is no doubt that possession under old system title passes to the possessor's legal person representative on death: Allen v Roughley (1955) 94 CLR 98. As at common law, possession of RPA land is a valuable right which gives rise to an entitlement to apply for possessory title. There is every reason why that right should be treated the same as a right of possession of old system land.
17. This case thus turns on whether Kurt and Judith obtained possessory title as against the deceased before she died, as a result of their occupation of the Edward Street and Sanctuary Point properties from 1988 onwards.
18. On my findings, Kurt and Judith first obtained occupation of the Edward Street property with the permission of the deceased, and on terms that they would pay the rates and outgoings on that property and on the Sanctuary Point property. This in itself is an indication of an intent by the deceased to continue in legal possession of those properties. This is confirmed by the deceased's maintenance of her name on the council records for the property.
19. For reasons I have given, I do not accept that the deceased ever handed the property over to Kurt and Judith, in the sense that she ceded possession of it to them. I have already rejected the evidence of Kurt to this effect. It would also have been inconsistent with the deceased's intention to treat all of her sons equally in the division of her property (apart from the Conway Road property). There was simply no reason why the deceased would have made a present of Edward Street and Sanctuary Point, which were clearly valuable assets, to Kurt alone.
20. I am not satisfied that Kurt and Judith ever exercised any rights of occupation or dominion over the land which was adverse to that of the deceased. Payment of the rates and outgoings on the land was, on my findings, consistent with the terms on which the deceased had permitted them access in the first place. Judith's conversation in January 2012 with the neighbour which touched on the potential for sale was not explored in the evidence. The sale contemplated may have been a sale by the deceased. In any event, nothing came of the proposal and was only shortly before the deceased's death. There is no suggestion that the deceased ever knew about it.
21. For these reasons, I reach the same conclusions on the facts as Darke J reached in Strel. I am satisfied that the deceased went into possession of the two properties following Mrs Steigis' death and retained possession up to the date of her own death in January 2012.

Knowing participation claim against Judith

1. Counsel for Ralph accepted that, in order to sustain the knowing participation claim against Judith, he needed to establish that Judith participated in a "dishonest and fraudulent design" by Kurt with knowledge of the dishonest and fraudulent nature of Kurt's conduct: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [160]. The case thus involved a type of fraud. The framing of the case in this way would presumably have been deliberate and necessary, since something less than knowing participation would not have satisfied the fraud exception to indefeasibility in RPA s 42.
2. On her own evidence, Judith was aware from the 1990s of the fact that in some circumstances possessory title could be obtained as a result of de facto occupation and control of land. On the information available to her, she might well have contemplated that the deceased would have had some rights in that regard with respect to the Edward Street and Sanctuary Point properties.
3. Judith had been married to Kurt since 1978 and would presumably have learned, second-hand, something about the deceased's dealing with the Steigis properties before that date. She would also have had an opportunity to observe the deceased's conduct herself from 1978 onwards. Moreover it is unlikely that she was unaware that, as I have found, hers and Kurt's occupation of the Edward Street property and their control over the Sanctuary Point property was the result of an agreement between Kurt and his mother.
4. Ralph's suggestion that Kurt was short of money and wished to live at Edward Street to conserve money is not implausible. It was denied by Kurt but there was no independent evidence in support of the denial. Nor is it inconsistent with the fact that Judith did not wish to move. She may have seen moving as a financial necessity, or simply agreed to do what Kurt wished. It is not necessary to go so far as to conclude that the later sale of the Anglers Reach property was part of the same arrangement.
5. The arrangement which I have found was made between Kurt and his mother about Kurt and Judith moving into the Edward Street property was a critical fact which was not mentioned in either Kurt's or Judith's statutory declarations. The failure to mention it made the facts recited in the statutory declarations about payment of rates and expenses by them misleading.
6. Furthermore, the implication conveyed in Mr Lockhart's statutory declaration, namely, that Kurt and Judith had themselves directly paid the $132 to Shoalhaven Council for land clearing in May 1998, was (unknown, of course, to Mr Lockhart) incorrect. That was so even if, as appears likely, the deceased paid the amount herself and was reimbursed. On Mr Lockhart's evidence in cross-examination, that incorrect information came from Judith. If that was what happened, there would be every reason to think that Judith (and Kurt) would have known that the information was incorrect.
7. The evidence before me thus raises some suspicions about Kurt and Judith's application for possessory title. The information presented to the Registrar General was incomplete and inaccurate in material respects and there is reason to think that Kurt and Judith could have been aware of that.
8. But there was little exploration of this in Judith's (or Kurt's) cross-examination. Judith was not asked any questions about what she thought was needed in order to obtain possessory title. Nor was she asked about the advice she (or Kurt) may have received on this question from Lai & Nguyen or Mr Lockhart.
9. It was not put to Judith that, on facts known to her, the deceased held possessory title in 1988. Nor was it put to her that the statutory declarations were misleading because they omitted to mention the arrangement under which she and Kurt had assumed occupation. Nor was it put to her that Mr Lockhart's statutory declaration, insofar as it suggested that the deceased had not herself paid for the hearing costs in May 2018, was incorrect. Mr Lockhart's evidence that he was told that the handwriting was that of Judith was given after Judith had been cross-examined, but no application was made to have her recalled.
10. Accessorial liability for breach of trust depends upon knowledge of facts, not necessarily the legal consequence of the facts. But in this case any allegedly fraudulent conduct lay in what was said by Kurt and Judith in support of the application for possessory title. It was not enough to establish that Kurt's duty as executor actually obliged him to apply to register a possessory title over the Sanctuary Point property in his name, for the benefit of the estate, rather than in his and Judith's name, for their own personal benefit. It was necessary to show that Judith knew of that obligation, or at least that she knew of the facts giving rise to that obligation.
11. Similarly, it was not enough to establish that Judith made statements in support of the application which were in fact incorrect. For practical purposes it was necessary to show that the application was actually fraudulent, in the sense that false statements were made deliberately and with knowledge that they were false and with the intention of obtaining a benefit, in the form of registration of a possessory title, to which Kurt and Judith were not otherwise entitled.
12. Judith may not have appreciated that the deceased's possessory rights continued after her death. And the distinction in the present case between the deceased being liable to pay rates and outgoings on the property and having those expenses paid on her behalf by Kurt and Judith, on the one hand, and Kurt and Judith accepting liability and paying those expenses in their own name, on the other, is a fine one. Judith may not have thought it was important.
13. None of this means that Judith can escape liability for knowing participation by relying on her ignorance of the applicable legal principle. But it underlines the importance of clearly identifying, and putting to her (and to Kurt, so as to establish the existence of the "dishonest and fraudulent design" on his part), the facts necessary to establish what Kurt's obligations as executor were, and the facts which allegedly made the application a fraudulent one. This was not done.
14. For these reasons, despite the suspicions raised by the evidence, I do not consider that Ralph has established his case of knowing participation against Judith. It is not necessary to go into what the precise scope of Kurt's obligations as executor were, and how they arose. I think that on no view could I be satisfied that Judith had the requisite dishonest intent.

Conclusions and orders

1. I have concluded that: (1) at the time of her death, the deceased had a possessory interest in the Edward Street and Sanctuary Point properties, which entitled her to apply for possessory title over those properties, and this interest passed to Kurt as the deceased's executor; (2) the knowing participation claim against Judith with respect to the registration of possessory title over the Sanctuary Point property fails: on registration she acquired an indefeasible half interest in that property.
2. As a consequence of conclusion (1) it will be necessary to make declarations recording the deceased's interests in the two properties as at the date of her death. If Kurt continues as executor, there will need to be an order against him requiring him to prosecute an application on behalf of the deceased's estate for possessory title over the Edward Street property, and then to sell the property and divide the proceeds in accordance with the terms of the deceased's will.
3. As a result of conclusion (2) Ralph's claim against Judith fails. That claim should be dismissed.
4. I will direct Ralph to bring in a minute of order giving effect to these conclusions.
5. One consequential matter which the interested parties need to consider is whether Kurt should continue as the sole executor and trustee of the deceased's estate given the conflict between his duties as executor and his personal interest as occupier of the property. One solution might be to appoint Kurt and Ralph as joint administrators of the estate. An alternative would be to appoint someone independent but that is likely to prove more expensive and it could result in delay.
6. It will now be necessary to make directions for the further conduct of the proceedings, and specifically for the determination of the monetary claims against Kurt. This will presumably require a timetable for amendments to the pleadings and the filing of further evidence. If possible, the parties should aim for a single hearing which will enable the Court to determine the amount(s) due without the need for any further accounting procedures.
7. At the same time I ask the parties to consider whether Kaspar should be joined to the proceedings. As I have already noted, that may not, strictly speaking, be necessary. But joinder in this case may be convenient in order to facilitate the administration of the estate.
8. My preliminary view is that I should not deal with costs until after all of the issues in the proceedings have been determined. But if any party wishes to make an application for an order for costs at this stage, I will consider it.
9. The orders of the Court are:
10. Fix the proceedings for the making of final orders on the issues determined to this point, and directions for the further conduct of the proceedings, on 29 October 2020 at 4:00 pm or such other date and time as may be agreed with my Associate.
11. Direct that the plaintiff consult with the defendants, and, not less than two days before the hearing date, submit a minute of order giving effect to these reasons and addressing the consequential matters referred to in the judgment.

Amendments 12 February 2021 - typographical errors 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: 12 February 2021