Stojanovski v Stojanovski - [2019] NSWSC 1713 - NSWSC 2016 case summary — Zoe

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Stojanovski v Stojanovski

[2019] NSWSC 1713

Supreme Court of NSW|2016-12-02|Before: Robb J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2016-12-02

Before

Robb J

Source

Original judgment source is linked above.

Judgment (62 paragraphs)

[1]

anovski (No 2) [2012] NSWSC 1547 Stojanovski v Stojanovski [2013] NSWSC 1491 Stojanovski v Stojanovski [2018] NSWSC 1967 Stojanovski v Stojanovski [2018] FCA 580 Stojanovski v Stojovski [2016] NSWSC 976 Verzar v Verzar [2014] NSWCA 45; (2014) 12 ASTLR 523 Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56 Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 Texts Cited: GE Dal Pont, Law of Costs (4th ed, 2018, LexisNexis Butterworths Australia) Category: Principal judgment Parties: Steven Stojanovski (plaintiff) Robert Stojanovski (first defendant) Jovanka Stojanovski (second defendant) Jordan Stojanovski (third defendant) Angelina Stojanovski (fourth defendant/cross-defendant) Fabian Kane Micheletto (fifth defendant/first cross-claimant) Michael Carrafa (sixth defendant/second cross-claimant) Representation: Counsel: C Bevan; J Zmood (28 November to 2 December 2016) (plaintiff) A Crossland and M Cowden (28 November to 2 December 2016); A Crossland (17 February 2017) (first defendant) A Crossland and M Cowden (28 November to 2 December 2016); A Crossland (17 February 2017); M Cowden (31 August 2017); A Ahmad (1 May 2019); T Jonker (30 May 2019) (fourth defendant) S Golledge SC (fifth and sixth defendants)

[2]

Solicitors: One Group Legal (plaintiff) Foulsham & Geddes (28 November to 2 December 2016, 17 February 2017) (first defendant); otherwise self-represented (first defendant) Excused (second defendant) Excused (third defendant) Foulsham & Geddes (28 November to 2 December 2016, 17 February and 31 August 2017) (fourth defendant/cross-defendant); otherwise self-represented (fourth defendant/cross-defendant) Polczynski Robinson (fifth and sixth defendants/first and second cross-claimants) File Number(s): 2012/89349

[4]

The properties

This is another case where the children of a deceased parent have fought so fiercely over the estate of the parent that they have substantially dissipated that estate and destroyed the testamentary intentions of the parent. It seems that Nada, who worked as a cleaner, was an exceptionally frugal and astute investor, who accumulated an enviable portfolio of properties that she ultimately wished to divide between her two sons on an approximately equal basis.
I will start my explanation of how the initial dispute between Steven and Robert arose by identifying the residential properties that were acquired by Nada, either alone or with one or both of her sons, and how she attempted to dispose of her interests in the properties on her death in a way that would achieve approximate equality between her sons. There is some dispute between Steven and Robert as to the extent to which each of them contributed to the acquisition of the various properties. It seems that Nada was primarily responsible for their acquisition. However, Nada chose not to acquire all of the properties in her own name alone, and in various ways put the whole or part of the title to the acquired properties in the names of one or both of her sons, and in most cases herself as well. The manner in which the title to the properties was held influenced the way that Nada attempted to divide all of the properties on a roughly equal basis between her two sons, and, as it has happened, created the seed for the present dispute. In common with the approach adopted by the parties, I will define the properties by reference to the names of the streets in which they are located. Jersey Avenue, Mortdale (Jersey)
Jersey is unusual, as it is also known as Milsop Place, Mortdale. It is a large residential block with frontages to Jersey Avenue and Milsop Place. It is a single lot in a registered plan of subdivision. Dual occupancy has been permitted for the property. At the Milsop Place end there is a substantial residence. That residence has been the home of Jovanka for a number of decades, and she has been the sole occupier since the time of her separation from Steven. Initially, that was by mutual arrangement, but for some years it has been the result of an order made by the Family Court. Initially, there was also a substantial residence erected on the Jersey Avenue end of the property, apparently of some four bedrooms. Some time ago that residence burnt down. There is an issue between the parties as to whether approval will be given by the relevant council for Jersey to be subdivided into two lots, as that will make Jersey more valuable.
Jersey was acquired by Nada, Steven and Robert as joint tenants. As the title to Jersey was held in that manner at the time of Nada's death, Steven and Robert became joint tenants of Jersey by survivorship. As will be seen, the seed for the present dispute was Nada's attempt to oblige Robert to assign his half-interest as joint tenant in Jersey to Steven after Nada's death. Nada could not achieve that result by her will, as she would have been required to sever the joint tenancy, and even then she could only have devised her one-third interest to Steven by her will if she had severed the joint tenancy. Steven's present interest in Jersey is a subject of the dispute between Steven and Jovanka in the Family Court, as will be the balance of the title to Jersey if Steven succeeds in these proceedings. George Street, Mortdale (George)
A residence is erected on George, but the evidence suggests that the residence is rundown and is not in a habitable condition. Consequently, it is not tenanted. Apparently, considerable renovation work will be necessary to make the residence on George habitable. The evidence does not disclose the expected cost of this work.
George was acquired in the sole name of Nada, and remained in Nada's name at her death. Nada left the whole of her interest in George to Steven in her will. Strangely, although Robert has never challenged that gift, the title to George has never been transmitted to Steven. It is not clear why the transmission has not occurred. Initially, it appears that the certificate of title could not be found, and Jordan has not applied for the issue of a substitute. It may be that Jordan is now incapable of doing so. George is a subject of the dispute between Steven and Jovanka in the Family Court concerning the division of the matrimonial assets. Breakwell Street, Mortdale (Breakwell)
A residence is erected on Breakwell which, for some time, has been the home of Angelina and the children of Angelina and Robert, following their separation.
Breakwell was acquired in the sole name of Nada, and was owned by her at her death. By her will, Nada left the whole of her interest in Breakwell to Robert. As will be explained in more detail below, Jordan transmitted the title to Breakwell to Robert, who initially transferred Breakwell to himself and Angelina in equal shares, and, later still, Robert gave his half-interest in Breakwell to Angelina. The trustees now have an interest in Breakwell, which is better explained later in these reasons. Kemp Street, Mortdale (Kemp)
Kemp was originally acquired by Nada and Robert as joint tenants, and held by them in that manner at the time of Nada's death. Robert became entitled to the whole of Kemp at that time by survivorship. Robert gave the whole of his interest in Kemp to Angelina. Subsequently, the trustees have obtained an interest in Kemp. Morts Road, Mortdale (Morts)
Morts was for many years the matrimonial home of Robert and Angelina. Notwithstanding the involvement that Nada had in the purchase of Morts, it was agreed by Nada and Robert that the title to the property would be put solely in Robert's name. Robert continued to own Morts at the date of Nada's death. In two steps, Robert first transferred a half-interest in Morts to Angelina, and then, at a later time, Robert transferred his remaining half-interest in Morts to Angelina. The trustees now have an interest in Morts.
Steven initially claimed by his pleadings in these proceedings that, by reason of the circumstances in which Robert obtained his half-interest in Kemp and the whole of the title to Morts, Robert held his interests in both properties on a resulting trust for Nada. Steven has abandoned his claim that Nada's estate is beneficially entitled to Robert's interests in Kemp and Morts on that basis. Steven no longer makes any claim on Morts at all.

[9]

Nada's will

It will be convenient at this point to set out the terms of Nada's last will, which are as follows: THIS IS THE LAST WILL AND TESTAMENT of me NADA STOJANOVSKI of [redacted] Breakwell Street Mortdale, 2223 in the State of New South Wales. 1. I hereby revoke all former wills and testamentary dispositions previously made by me. 2. I appoint as sole EXECUTOR of this my will Mr. JORDAN STOJANOVSKI of [redacted] Breakwell Street Mortdale 2223. 3. In this my will the term "my trustee" shall mean and include executor or executors and trustee or trustees for this my will and the trusts arising under it. 4. I distribute my estate both in property and personal as detailed below: A/ To my eldest son Steven Stojanovski of [redacted] Milsop Place Mortdale 2223 I give the following properties with the following conditions as set out below. [Redacted] George Street Mortdale (ref: Lot [redacted]) [redacted] Jersey Avenue Mortdale (ref: Lot [redacted]) [This property is currently under three (3) names, namely myself Nada Stojanovski, my son Robert Stojanovski and my other son Steven Stojanovski.] In line with my wishes Robert Stojanovski is to transfer his share in this property to his brother Steven Stojanovski. Conditions: In the event of the marriage breakup between Steven and his wife control of the above properties is to be given to the Trustee (Executor) for determination. B/ To my younger son Robert Stojanovski of [redacted] Morts Road Mortdale 2223 I give the following properties with the following conditions as set out below. [Redacted] Breakwell Street Mortdale 2223 (ref: Lot [redacted]) [Redacted] Kemp Street Mortdale 2223 (ref: AUTO CONSOLE [redacted]) Conditions: In the event of the marriage breakup between Robert and his wife control of the above properties is to be given to the Trustee (Executor) for determination. 5/ All of my property in financial institutions is to be equally divided between my sons Steven and Robert Stojanovski.
Nada's will was duly signed at Kogarah on 3 January 2006 before two witnesses, being Mr Jonce Dunevski and Mr Pande Fuzevski.
By this inexpertly prepared will, Nada intended to achieve the following result. She would devise George to Steven. As upon her death, Steven and Robert would become half-owners of Jersey, Robert was required to transfer his half-share to Steven, so that Steven would become the sole owner of Jersey. As in practical terms, Jersey could be divided into two properties, representing the Jersey end and the Milsop end, Steven would acquire ownership of three properties. Theoretically, he could live in one and live off the rents of the other two.
As to Breakwell, Nada devised the whole of her interest to Robert. Nada intended to devise her half-interest in Kemp to Robert (although in law it would in fact pass to him by survivorship). Robert already held the title to Morts in his own name. That way, Robert would also become the sole owner of three properties, and would broadly be in the same position as Steven.
However, to achieve her ends, she had to oblige Robert to agree to transfer his half-interest in Jersey to Steven. That explains the parenthetical statement and reference to the transfer in Nada's will in respect of Jersey. Nada may have been able to achieve an equivalent result by some other means, but it seems that, having devoted much of her life to acquiring the five properties, she wanted to give them in specie to her sons on her death.
No party attributed any significance to the conditions in clause 4 of Nada's will concerning the consequences of any breakup between Steven and Robert and their wives. It will not be necessary to refer to the conditions further.

[11]

The source of the dispute

As mentioned above, Nada died on 20 January 2006. There appears to be no reason why Nada's testamentary intentions would not have been implemented in full if Robert had acted in accordance with the testamentary agreement. However, he refused to do so. That refusal has put in train the events that have led to the present proceedings, as well as many other circumstances that are likely to lead to the financial ruin of both Steven and Robert.
Not only would Nada's wishes have been given effect, if Robert had honoured the testamentary agreement, but Nada would have achieved a position where the properties that she had acquired would have been divided with rough equality between her two sons. Nada had some money in her estate at the time of her death, which was distributed in accordance with clause 5 of her will. As the financial and other circumstances of Steven and Robert at the date of Nada's death were roughly equivalent, the matter would probably have ended there, as there were no real grounds at that time for either son to challenge the effect of Nada's will by commencing proceedings for some further family provision.
Steven could have sought a remedy for Robert's refusal to honour the testamentary agreement by instituting proceedings to enforce it. Strictly, Jordan, as Nada's executor, was probably the proper party to enforce the agreement. There is no evidence that Steven requested Jordan to commence proceedings to enforce the agreement, or that Jordan declined to do so. It may be that, if Jordan had not been prepared to attempt to enforce the agreement, Steven, as the intended beneficiary, may have been given leave to represent the estate.. Steven may also have brought an action to replace Jordan as executor with another person. None of these matters were explored in the evidence. As will be seen, the fact is that Steven did not initially do anything to try to enforce directly the testamentary agreement.
Eventually, Steven instituted proceedings himself to enforce the testamentary agreement against Robert. Robert and Angelina contested that claim at the first stage of the hearing of these proceedings, which took place between 28 November and 2 December 2016. The reasons for the inordinate delay in the completion of the hearing, which occurred between 30 May and 6 June 2019, will be explained below. In the interval, as mentioned above, Robert became bankrupt. As Robert continued to hold a joint interest with Steven in Jersey at the date of his bankruptcy, Robert's interest vested in the trustees. After the trustees were joined as fifth and sixth defendants to these proceedings, they filed a defence in which they admitted Steven's claim for orders enforcing the testamentary agreement in favour of Steven. That may have been thought to end the need for the Court to determine Steven's claim for the enforcement of the testamentary agreement. However, Angelina, on the basis of her claim in the Family Court for an appropriate distribution of the matrimonial assets as between Angelina and Robert, claimed to have standing to defend Steven's claim to enforce the testamentary agreement. Steven challenged Angelina's claim for standing at the second stage of the hearing. The claim to enforce the testamentary agreement was nonetheless dealt with at the hearing, on the basis that the Court would deal with the standing question in its judgment.
As will be seen, I have concluded that Steven is entitled to succeed on his claim to enforce the testamentary agreement. I will deal with the standing of Angelina and the reasons for my conclusions on the merits of the issue below.
The result will be that, putting aside all of the other developments since Nada's death that ultimately have thwarted her testamentary intentions, Nada's objective in the distribution of the properties that were acquired through her efforts will have belatedly been achieved. However, Steven has made a claim for family provision orders the need for which is no longer obviated by the roughly equal distribution of the properties as between Steven and Robert. That is partly a result of changes in Steven's circumstances following Nada's death, but it will also be seen that Robert's circumstances have also changed in material ways. However, a singular feature of this matter is that the course of the litigation itself has become a paramount factor in determining the material circumstances of Steven and the other members of the Stojanovski family in ways that are relevant to Steven's claim for further family provision.

[12]

Enforceability of testamentary agreement

Steven's claim for an order enforcing the testamentary agreement remains a distinct claim in these proceedings and must be dealt with separately. It will be convenient to deal with that claim now.
Steven's third further amended statement of claim was the operative pleading at the commencement of the first stage of the hearing of these proceedings. In practical terms, the forensic contest concerning the enforceability of the testamentary agreement was completed in that part of the hearing. The completion of submissions was left to the second stage of the hearing.
In prayer 9A of his third further amended statement of claim, Steven claimed a declaration that Robert holds his half-interest as joint tenant in Jersey on a constructive trust for the benefit of Steven.
Steven pleaded the basis of this claim in pars 2C and 2CA of his pleading. He alleged an agreement on 3 January 2006 between Nada, Robert and himself, or alternatively Nada and Robert, which was partly oral and partly in writing. No particulars were given or evidence tendered that Steven was present at or involved in this arrangement. The written part of the agreement was the document that I have called the testamentary agreement. Steven also relied upon the discussion that took place at the time between Nada and Robert in the presence of Messrs Fuzevski and Dunevski.
In his defence to the third further amended statement of claim, Robert simply denied the allegations in pars 2C and 2CA. Angelina's defence was in the same terms.
It is appropriate at this point to deal with the issue of Steven's standing to enforce the testamentary agreement. The agreement was made between Robert and Nada. Strictly, the only person who has standing to enforce the testamentary agreement is Jordan, as Nada's executor. Steven apparently ignored the issue of standing when he amended his statement of claim in these proceedings to seek an order enforcing the testamentary agreement. In prayer 6 of his fourth further amended statement of claim filed on 16 March 2017, Steven applied under Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 7.10(2)(b) for an order appointing him as the representative of Nada's estate for the purpose of the claim for the enforcement of the testamentary agreement against Robert. During the course of a number of preliminary hearings that took place before the second stage of the hearing, I indicated that I would make the order sought by Steven. I did so as an expedient, as Jordan had apparently become incompetent, although there was no evidence that proved Jordan's incapacity to represent Nada's estate in the proceedings. The transcripts show that I and the parties had thought that an order was formally made that Steven be given leave to represent the estate. I have not been able to find a record of that order in the Court's file. Accordingly, for more abundant precaution, I will make that order when I deliver this judgment. No party opposed that course of action being taken by the Court.

[14]

Angelina's standing to resist the testamentary agreement claim

As Robert's half-interest in Jersey has vested in the trustees, it might have been thought that they had the sole right to contest Steven's claim, and that, as they had elected not to do so, Steven was entitled to the relief sought. Robert, being bankrupt, did not take part in the second stage of the hearing, although he gave evidence. However, Angelina claimed that she had a sufficient interest to resist Steven's claim and she did so.
Steven's position was that Angelina did not have standing to resist Steven's claim in respect of the transfer of Robert's half-interest in Jersey to Steven, and that the Court should not hear her on the issue. Steven submitted that Angelina did not have standing because she did not have any proprietary interest in Jersey. Her only potential interest was as a former wife of Robert who, as a result of subsisting proceedings in the Family Court for orders in relation to the matrimonial property, could potentially gain a proprietary interest in Robert's share in Jersey as a result of such an order, or alternatively, the order eventually made by the Family Court may be more favourable to Angelina if Robert continued to own his share in Jersey at the time that order was made. Steven submitted that these interests were not sufficient to give Angelina standing to contest Steven's beneficial entitlement to Robert's half-share in Jersey. The trustees, properly, were neutral on this issue.
The Court attempted to resolve all issues of standing at a hearing of motions that took place before the beginning of the second stage of the hearing. For practical reasons, it was not feasible for the Court to decide the issue of Angelina's standing before the resumption of the hearing. Also for practical reasons, it became necessary to permit Angelina in fact to contest the issue, as if she had standing, on the basis that the Court would reserve its decision on the question until it delivered these reasons for judgment. Consequently, Angelina has in fact had the opportunity to resist this aspect of Steven's claim.
The question is whether, in deciding whether Steven is entitled to enforce the testamentary agreement, the Court should ignore Angelina's opposition to that claim, and the submissions she made in support of her opposition.
The issue is not whether Angelina was entitled to be joined as a party to Steven's claim to enforce the testamentary agreement. Angelina is already a party to these proceedings. She was joined as fourth defendant by an order made by Pembroke J on 9 August 2013, following Steven's discovery that Robert had transferred his remaining interests in Breakwell, Kemp and Morts to Angelina. She was properly joined because Steven seeks proprietary relief against those properties in these proceedings. It is important to note that Angelina's joinder was not conditional, and did not restrict her standing to participate in these proceedings to any particular issues. Consequently, Angelina in her defence denied Steven's entitlement to enforce the testamentary agreement.
As Angelina is already a party, the question is whether she has standing to resist the enforcement of the testamentary agreement, given that the trustees, as the only persons other than Steven with a present proprietary interest in Jersey, have admitted his entitlement to the relief that he claims on the pleadings.
It is relevant to this question that, without opposition from Steven, at the beginning of the first stage of the hearing, the counsel and solicitor who originally represented Robert were given leave to represent Angelina instead. From that point, Angelina has already conducted the defence of Steven's testamentary agreement claim in the interests of herself and Robert. This is therefore a special case, where the question of standing raised by Steven requires the Court to consider whether the Court should decline to entertain Angelina's submissions on the testamentary agreement issue for the reason that Robert lost whatever interest he had in Jersey as a result of his bankruptcy and that the trustees became entitled to that interest.
Further, in some respects, Steven's testamentary agreement case and his family provision case are intertwined, in that the outcome of the former may affect Steven's chances of succeeding on the latter case. It may be that the defence of the family provision case may be enhanced if Steven succeeds on his testamentary agreement case, because his need for further provision will thereby be reduced. But it remains true that the Court cannot readily separate the two claims made by Steven.
It will also be appropriate to consider the nature of Angelina's personal interest in resisting Steven's testamentary agreement case.
It is not necessary for the Court to decide whether Angelina would have had a right to be joined as a party to the testamentary agreement case, if she had not in fact been joined as a party. It may be that Angelina would not have had a right to be joined, as Angelina does not have a present right or interest in Jersey: see News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 523-525; Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56 at [76]-[81; and]. John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [131]. Angelina also does not have any present right or interest in property associated with Jersey that would be affected by the making of an order that the trustees' interest in Jersey is held on trust for Steven: see Boyd v Thorn (as Executrix of Estate of McAuley) [2016] NSWSC 588; (2016) 18 BPR 35,941. The issue of when a person has a right to be joined as a party to a claim is not without difficulty, and is best not pursued given that Angelina is already a party.
However, Angelina's interest in Jersey is not as remote as may have been the interests of Robert's unsecured creditors, whose rights consisted of proving Robert's indebtedness and obtaining a sequestration order against him, for the purpose of obtaining a benefit through the actions of the trustees.
Angelina is a party to existing proceedings in the Family Court for the making of a property settlement order under s 79 of the Family Law Act 1975 (Cth) (Family Law Act). The effect of s 79(1) is that, in property settlement proceedings, the Family Court "may make such order as it considers appropriate…(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage - altering the interests of the bankruptcy trustee in the vested bankruptcy property; including…(d) an order requiring…(ii) the relevant bankruptcy trustee (if any); to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines." "Vested bankruptcy property" is defined as property of the bankrupt that has vested in the bankruptcy trustee under the Bankruptcy Act 1966 (Cth).
Further, the general notion of property that may be the subject of a property settlement order has been held to include the interest of a bankrupt in the surplus after payment of creditors and administration of the bankrupt's estate: see for example In the marriage of Reed (1989) 98 FLR 268; 13 Fam LR 566.
Although the detail and possible outcomes of the Family Court proceedings between Angelina and Robert were not explored in these proceedings, as I understand it, it was accepted that the Family Court had jurisdiction to make a property settlement order that disturbed the effect of the Bankruptcy Act investing Robert's half-interest in Jersey in the trustees. It would follow that, if this Court made an order that the trustees transfer the half-share in Jersey vested in them to Steven, that might have the effect of defeating a claim that is legitimately open to Angelina under the Family Law Act in her subsisting proceedings against Robert in the Family Court.
In my view, given that Angelina is an existing party, who was the party that actively defended Steven's testamentary agreement claim up to the point when Robert was made bankrupt and his interest in Jersey vested in the trustees, and is accordingly at risk for an adverse costs order if that claim succeeds, the question of her standing to make submissions in resistance to the testamentary agreement claim depends upon considerations of procedural fairness and natural justice, and not strict notions of entitlement to joinder based upon the nature and existence of any right in Angelina to an interest in Jersey. In simple terms, the question is whether, on the particular facts of this case as considered above, natural justice and procedural fairness justify the Court permitting Angelina to finish her defence of the testamentary agreement claim in which she engaged before Robert's bankruptcy.
The parties did not refer the Court to any authority that is of assistance in answering this question. The decision of Mason CJ and Deane and McHugh JJ in Annetts v McCann (1990) 170 CLR 596 at 599-601; [1990] HCA 57 may be of some guidance. That case concerned whether a coroner was required to give the parents of two boys who had died a right to make submissions at the inquest, after the parents had been granted a right to be represented. The plurality held, at 599, that the grant of representation "created a legitimate expectation that the Coroner would not make any finding adverse to the interests which they represent without giving them the opportunity to be heard in opposition to that finding", and that, accordingly, the parents had a limited common law right to be heard. Their Honours held, however, at 601, that the parents' entitlement to make submissions only extended to matters which were identified as a possible source of adverse findings concerning their interests. While this context is relatively remote from the present one, I consider that the reasoning of the plurality supports a conclusion in this case that the consequences of Robert's bankruptcy should not include the Court depriving Angelina of the right to make submissions in opposition to Steven's testamentary agreement case, in conclusion of the defence that she had previously been allowed to conduct, and given the real interest she has in Jersey, albeit that it is an interest that is contingent on a particular exercise by the Family Court of its jurisdiction in the existing proceedings. Put another way, I consider that principles of natural justice and procedural fairness, in all of the complicated and inextricable circumstances of these unusual proceedings, require that Angelina have or otherwise be granted a right to make submissions, and a right to have this Court actually consider those submissions, in relation to the testamentary agreement case.

[15]

Consideration of the merits of the testamentary agreement claim

I will now consider Steven's claim to enforce the testamentary agreement on its merits.
It will be convenient to set out again the terms of the statutory declaration signed by Robert which is said by Steven, by reason of the circumstances in which it was signed and its reference to Nada's will, to give rise to the testamentary agreement: TO WHOM IT MAY CONCERN I Robert Stojanovski of [redacted] Morts Road Mortdale 2223 solemnly declare and give my share of the property known as [redacted] Jersey Avenue Mortdale 2223, (ref: Lot [redacted]) to my eldest brother Steven Stojanovski of [redacted] Milsop Place Mortdale 2223 in line with my mother[']s last will.
The document refers to Nada's will, which specifically stated the following in clause 4A in respect of Nada's stated intention that Jersey would be given to Steven: …[This property is currently under three (3) names, namely myself Nada Stojanovski, my son Robert Stojanovski and my other son Steven Stojanovski.] In line with my wishes Robert Stojanovski is to transfer his share in this property to his brother Steven Stojanovski.
In his submissions, Steven founded his claim to enforcement of the testamentary agreement on the decision of the High Court in Birmingham v Renfrew (1937) 57 CLR 666; [1937] HCA 52. That is a seminal Australian case dealing with the enforceability of mutual wills and the consequences of a person making a binding agreement not to change his or her will once made. It is not directly applicable in the present situation. While it is true that it is Steven's case that Nada agreed to make a will giving specific benefits to Robert in return for Robert's agreement to transfer a specific interest in his property to Steven following Nada's death, Nada complied with her end of the bargain. She made a will that gave Robert the promised benefits and there is no issue in this case of a testator not having honoured a promise in respect of the testator's will. The present case is, more simply, that Robert made a promise by means of his signing the statutory declaration to Nada to transfer to Steven on Nada's death the interest that he would have in Jersey following Nada's death, by reason of his existing joint tenancy and the acquisition of half of Nada's interest by survivorship. That promise was supported by the consideration provided by Nada's executed promise to leave her interests in Breakwell and Kemp to Robert in her will.
Properly, no suggestion was made in this case that Robert's promise to transfer his interest in Jersey was not sufficiently evidenced by writing, as the terms of the statutory declaration were sufficiently clear, and were cross- referenced to the will, which provided evidence of the balance of the essential terms of the contract.
There is no doubt that Robert signed the statutory declaration, as he ultimately gave evidence of the circumstances in which he did so. I will deal with that evidence below.
Steven called as witnesses to the circumstances in which Robert signed the statutory declaration and Nada executed her will the witnesses who were present and signed one or both of the two documents. 1. Mr Dunevski's evidence
Mr Jonce (John) Dunevski is a member of the Australian Macedonian community who was, with his wife, a friend of Nada. He provided a brief affidavit dated 11 March 2013, concerning the circumstances in which he came to be a witness to the statutory declaration signed by Robert as well as Nada's will. Mr Dunevski said that he was a Justice of the Peace for about 15 years until 2007 or 2008.
According to Mr Dunevski, he learned that Nada was very ill with cancer and, on 3 January 2006, he and his wife made an unplanned visit to Nada in hospital. They had flowers and chocolate for Nada.
When Mr Dunevski and his wife entered Nada's hospital room, Nada was in bed and her brother Pande (Peter) Fuzevski and his wife were in the room with her. While they were talking, Robert entered the room. After some introductions and discussion, Nada took a paper from her handbag and passed it to Robert. She said, according to par 8 of Mr Dunevski's affidavit: "Robert, I want to give you my house and I want to give Steven the other house he is living in. If you agree with this, please sign it"
Mr Dunevski, at par 9, said that he saw Robert read the paper and say words to the effect of: "O.K, I will sign this".
Nada then asked Mr Dunevski whether he would witness Robert's signature. Mr Dunevski agreed. Mr Dunevski said that it was his invariable practice to carry with him his Justice of the Peace stamp in his pocket. He asked Robert whether he had read and understood the paper, and Robert answered yes. Robert then signed the statutory declaration and Mr Dunevski applied his Justice of the Peace stamp and witnessed the document.
Mr Dunevski said that he believed that Robert signed the paper of his own free will and that he was not forced to sign the statutory declaration.
After Robert left the room, Nada asked Mr Dunevski to witness her will and he did so.
Mr Dunevski was thoroughly cross-examined by counsel for Angelina. Even though he had apparently lived in Australia for many years, Mr Dunevski spoke in broken English. It was suggested to him that he could not really have a recollection of the matters the subject of his affidavit, which was prepared about seven years after the statutory declaration was signed. It was also suggested that Mr Dunevski did not make an unplanned visit to the hospital, as that would have been too great a coincidence, given that Mr Dunevski was a Justice of the Peace and had his stamp with him.
In some ways Mr Dunevski's evidence was unsatisfactory, as he appeared not to understand simple questions, which had to be repeated. He also seemed to resist giving straightforward responses, as he appeared to take exception to the suggestion made by the cross-examiner that his evidence was untrue or his recollection imperfect. However, Mr Dunevski appeared to me to be a candid witness, and I did not view his evidence as being evasive. Rather, I considered that he appeared to be overwhelmed by the circumstances and the consequences of his lack of fluency in responding in English to the questions.
Mr Dunevski adhered to his evidence and his repetitions of that evidence were in my view consistent. Mr Dunevski adhered to a recollection of the events which was in my view plausible given the simplicity of what occurred.
On a number of occasions, the cross-examiner suggested to Mr Dunevski that Robert resisted signing the statutory declaration on the ground that the subject was an important legal matter for which Nada needed legal advice, and that there was an argument between Robert and Mr Fuzevski as to whether it was appropriate for Robert to sign the document. Mr Dunevski denied the suggestion.
Eventually, Steven's counsel objected to this line of questioning, on the reasonable ground that Robert and Angelina had not pleaded that his will was overborne when he signed the statutory declaration, that his defence was a simple denial of the allegation that he had entered into the testamentary agreement, and his own evidence was limited to the statement that he could not recall the events deposed to by Mr Dunevski.
A discussion then ensued between the bench and counsel for the parties in which, in brief, Angelina's counsel said that he was cross-examining in reliance upon evidence given by Robert in an affidavit dated 29 October 2012 in these proceedings that had not been included in the Court Book. Counsel said that Steven had notice of the contents of the affidavit, and there would need to be an argument about whether Robert would be given leave to rely upon it.
In brief, after further discussion, I said to counsel that he would have to apply to rely upon the affidavit, given that Robert had not given notice to Steven that he would seek at the hearing to rely upon an affidavit that had not been included in the Court Book. Counsel then stated that he had no further questions. (2) Mr Fuzevski's evidence
Mr Pande (Peter) Fuzevski was Nada's brother. He said that he had a close relationship with Nada from his childhood until the day Nada died. Mr Fuzevski migrated to Australia in about 1966.
In relation to the circumstances in which Robert signed the statutory declaration on 3 January 2006, Mr Fuzevski said, in his 11 March 2013 affidavit, that he was visiting Nada in hospital with his wife, when a man he recognised as Mr Dunevski entered the room. Robert arrived after about a half an hour or so.
After some discussion, the following occurred, according to Mr Fuzevski: [22]…Nada pulled out an envelope from the bag. She then looked at Robert and said words to the effect of: Nada said: "Robert, please read this paperwork, I want to give Steve Milsop, so that he has a nice house and I want to give you Breakwell, so that you have a nice house and Steve will get George Street and you will get Kemp Street. That way, you both get the same thing. I do not want to mix both of you in Milsop". Robert said: "Mum, we already worked out months ago who's gonna get what and we already know". I then said to Robert: "Well Robert, just look at the paperwork your mum's prepared and see if that's right". Robert said: "We already know who's gonna get what properties". Robert then picked up the paperwork and started reading it. After he read the paperwork, Robert said words to the effect of: "Okay, no problems, I'll sign it". Robert then signed the paperwork and then my sister asked John to witness the paperwork. John witnessed the paperwork. My sister then took the paperwork and put them [sic] back in the envelope.
Mr Fuzevski said that, at the time Robert signed the paper, he did not appear concerned about it. The signing of the document was very casual and very normal. Mr Fuzevski did not observe or notice that Robert was uncomfortable with signing the paperwork.
Mr Fuzevski said, at par 25, that he recalled Nada saying the following: "I just want to make sure that everything is divided equally between my sons. I want Stephen [sic] to have a nice house and I want Robert to have a nice house. Stephen [sic] can have the house he built at Milsop and Robert can have Breakwell. Robert can have Kemp Street and Stephen [sic] can have George Street. That way, everything is equal".
Mr Fuzevski's English was also not entirely fluent. Mr Fuzevski claimed to have a good recollection of the events described in his affidavit, even though he acknowledged they had happened about 10 years before he gave his evidence, and he had refreshed his memory by looking at his affidavit a few days before he gave evidence.
The suggestion was made to Mr Fuzevski in cross-examination that he had understated his relationship with Mr Dunevski, when he said that he only saw Mr Dunevski on special occasions in the Macedonian community about once every three months. The basis of this suggestion was that Mr Dunevski must have been a close family friend, because Mr Dunevski had been the best man at Mr Fuzevski's son's wedding. Mr Fuzevski adhered to his evidence.
Mr Fuzevski denied the suggestion that he asked Mr Dunevski to visit the hospital because he knew that Mr Dunevski was a Justice of the Peace.
The cross-examiner put to Mr Fuzevski that he called Robert to ask him to go to the hospital because Mr Fuzevski wanted Robert to sign the statutory declaration. Mr Fuzevski responded by saying that Nada probably called Robert, and that Mr Fuzevski had not seen the document before he went to the hospital.
It was put to Mr Fuzevski that he told Robert to sign the statutory declaration. Counsel for Steven objected to the question, on the same grounds as have been outlined above in relation to the cross-examination of Mr Dunevski; being that Robert had not given evidence that he signed the statutory declaration under compulsion. The Court allowed the question, after it was told by Angelina's counsel that he had advised counsel for Steven that he intended to apply to read five paragraphs of Robert's 29 October 2012 affidavit. The Court ruled that the significance of Mr Fuzevski's response to the proposition put to him would be affected by whether or not the Court allowed Robert to rely upon the relevant part of the 29 October 2012 affidavit.
Mr Fuzevski's response was as follows (TA97.31): "My sister said, "Read it carefully," and nobody force[d] him to sign it." The cross-examination continued briefly, but Mr Fuzevski denied that he had an argument with Robert about signing the statutory declaration.
Although Mr Fuzevski had some difficulty in responding to the questions put to him in cross-examination because of his somewhat broken English, I considered Mr Fuzevski to be a satisfactory witness. I accept that he was telling the truth about the essential elements of the events that happened in Nada's hospital room on 3 January 2006. I find that his evidence was consistent with that given by Mr Dunevski, and no suggestion was made to either witness that they had cooperated in formulating the evidence that they gave. (3) Robert's evidence
Robert was ultimately permitted to read pars 3 to 6 of an affidavit made by him on 29 October 2012, without objection (see TA282.44). Relevantly, Robert's evidence was as follows: 4. Prior to her death my mother already had an existing Will. Despite this she said to me words to the following effect: Mother: "I need a solicitor to draw me up a Will." I contacted a number of solicitors prior to her death. They were prepared to come to the hospital to speak to my mother about her Will. 5. On 3 January 2006, I received a call from my uncle, Pande Fuzevski ("Peter"). I attended the hospital on the day to visit my mother and my uncle. On arriving at the hospital, my Uncle Peter produced a document. I had never seen that document prior to that moment and he said to me words to the following effect: Uncle: "Sign this document." 6. At that time, my uncle also produced another document. He said to me words to the following effect: Uncle: "This is your mother's Will that I have drawn up. I have a Justice of the Peace here who can sign after your mother signs. He can also witness your signature." Me: "I am not going to sign anything. Mum should have a solicitor handle these matters. Not you or your friend." Uncle: "Sign the document." My uncle and I argued. At that time, my mother became very agitated and was crying. I did not want to see her more upset. I knew she was dying. I signed the document and walked out. My uncle said to me words to the following effect: Uncle: "Don't tell anyone about this. Don't tell your wife." The Will and the document signed by me on 3 January 2006 have been provided to the Court.
Robert's 29 October 2012 affidavit was then handed up to the Court and included in the Court Book in due course. The affidavit was sworn in the present proceedings, and it is not clear why Robert did not notify Steven that he would seek to rely upon the affidavit at the hearing. It appears that the oral evidence of Mr Dunevski and Mr Fuzevski was given in circumstances where Steven did not appreciate that Robert would seek to rely upon the evidence that is set out above.
In cross-examination, Robert substantially adhered to his version of the events that occurred in Nada's hospital room on 3 January 2006 (TA322.37-328.50). Robert claimed that, when he signed the statutory declaration, he had no knowledge that Nada was waiting to make her will dependent upon whether he did sign it (TA328.6).
I do not think that it is necessary for the Court to decide on the basis of credit whether or not there was any resistance by Robert to his signing the statutory declaration. It is clear that he signed it. Given the passage of time and the possible difference in perspective of the witnesses, it is possible that they could honestly have had different recollections about Robert's reaction to the request that he signed the statutory declaration.
I should record, however, that I consider that the credibility of Robert's version of the events is diminished by his responses to Mr Dunevski's and Mr Fuzevski's evidence, in pars 42 and 51 of his 17 November 2016 affidavit, in which he did no more than "deny that the conversation alleged there took place".

[16]

Conclusion on enforceability of testamentary agreement

It remains the case that the Court has received Robert's evidence in his 29 October 2012 affidavit in circumstances where Robert's only pleaded response to Steven's testamentary agreement case was to deny the allegation that he entered into the testamentary agreement. Robert has not pleaded any conventional basis for the setting aside of the testamentary agreement, if it is proved to have been made by him. The evidence belatedly tendered by Robert appears to be most consistent with a claim that he signed the statutory declaration under some emotional duress. However, the evidence appears to fall far short of circumstances that would vitiate the testamentary agreement.
Even if Mr Fuzevski produced the document to Robert rather than Nada, I would infer, from Robert's evidence that Nada started to cry when Robert resisted signing the document as demanded by Mr Fuzevski, that Nada wanted Robert to sign it. I would find as a fact, if I accepted Robert's affidavit, that Nada wanted Robert to sign the document to complete her testamentary arrangements. Although Robert said: "I signed the document and walked out", he did not say that he did not read it. In the absence of evidence to the contrary, if I were to accept Robert's evidence, I would infer that he read the statutory declaration before he signed it. He gave evidence that Mr Fuzevski had produced Nada's will in circumstances that would suggest that Mr Fuzevski gave Robert both the will and the draft statutory declaration. I would infer that Robert read both documents, at least sufficiently to know that one effect of both of them was that Steven would ultimately receive Jersey and George. If Robert had not read the documents sufficiently to learn this fact, there would have been no reason for him to have objected as strongly to signing the statutory declaration as he claims to have done.
This evidence is sufficient to establish that, even if under protest, Robert signed the statutory declaration knowing that the effect of the will and the testamentary agreement was that he would be left Breakwell and Kemp under the will, and Steven would receive George under the will and Robert's interest in Jersey by reason of the performance of the testamentary agreement.
As Robert said in his 29 October 2012 affidavit that, after Mr Fuzevski had produced and asked him to sign the statutory declaration, Mr Fuzevski "produced another document" and said "This is your mother's Will that I have drawn up", I would not accept Robert's evidence in cross-examination (at TA328.6 and 328.22) that Robert did not know that Nada intended to make her will following upon Robert's signing the statutory declaration.
Robert's own evidence shows that he did nothing to challenge the testamentary agreement before Nada's death, and was content to receive the gifts made to him under the will in circumstances where he knew that Nada had believed that Robert would honour his obligation under the testamentary agreement. Even if Robert did sign the statutory declaration under some emotional pressure from Nada, I do not think that this affects the validity of the testamentary agreement in all the circumstances.
I therefore find that the testamentary agreement remains binding and Steven, as the representative in these proceedings of Nada's estate, is entitled to an order that Robert (through the trustees) specifically perform his promise to transfer the whole of his interest in Jersey to Steven.

[17]

Family provision claim - statutory regime

Although the making by this Court of an order against the trustees that they specifically perform the testamentary agreement will have the nominal effect that Nada's testamentary intentions have been implemented, that will not be the end of the matter. Because of events that have happened since Nada's death, Steven now pursues his family provision claim in addition to his claim for the enforcement of the testamentary agreement.
As Nada died before 1 March 2009, Steven's application for further family provision is required to be dealt with under the Family Provision Act 1982 (NSW) (Family Provision Act), rather than the present Succession Act 2006 (NSW) (Succession Act).
As a child of Nada, Steven has standing to bring this application as an "eligible person" under par (b) of the definition of that term in s 6 of the Family Provision Act.
It is not necessary for the Court to consider the debate that has arisen under Chapter 3 of the Succession Act concerning whether or not the Court is required to determine Steven's application for a family provision order in one or two stages, as it is accepted that the decisions of the High Court in Singer v Berghouse (1994) 181 CLR 201 at 209, 210 and 211; [1994] HCA 40 and Vigolo v Bostin (2005) 221 CLR 191 at 202, 203, 212 and 213; [2005] HCA 11 establish that, in the case of an application for further family provision under the Family Provision Act, the Court must first decide whether it has jurisdiction to make a family provision order by applying s 9 (which involves the determination of an objective fact, although one that involves the making of value judgments), followed where jurisdiction has been found by the exercise of a discretion under s 7 concerning the family provision order that ought to be made.
Section 16 of the Family Provision Act governs the time after the death of the deceased within which applications for orders for further provision must be made. Relevantly, it provides: (1) In this section, prescribed period in respect of an application in relation to a deceased person, means: (a) where the Court has, in an order made under section 17, specified a period in relation to the application - that period, or (b) in any other case - the period of 18 months after the death of the deceased person. (2) An order under section 7 shall not be made unless the application for the order is made within the prescribed period in respect of that application or within such further period as the Court may, having regard to all the circumstances of the case but subject to subsection (3), by order, allow. (3) The Court may not make an order under subsection (2) allowing an application in relation to a deceased person to be made after the end of the prescribed period unless: (a) the parties to the proceedings concerned have consented to the application being made after the end of that period, or (b) sufficient cause is shown for the application not having been made within that period. (4) The Court may make an order under subsection (2) with respect to an application in relation to a deceased person whether or not: (a) the prescribed period in respect of the application in relation to the deceased person has expired, (b) the application for the order under that subsection was made before that period expired, or (c) the application in relation to the deceased person has been made. …
As will be seen below, Steven initially commenced an application for further provision within time, but he discontinued those proceedings. Subsequently, but outside the 18-month period prescribed in s 16(1)(b), Steven was given leave to reinstate his claim for further provision, but on a basis that required him to persuade the Court that the period in which he would be permitted to commence his application should be extended under s 16(2) of the Family Provision Act. Although the determination of that question was at one time set down to be heard by Pembroke J, for reasons that will be explained below, that hearing was vacated. The question still remains to be decided, more than 13 years after Nada's death.
The circumstances are that the Court has been required to hear Steven's claim for further provision, at the same time as his request to be able to make that claim out of time, and without that request having first been dealt with. As sometimes happens in this state of affairs, it will be most convenient to deal with the evidence relevant to the merits of the claim for further provision, before a decision is made as to whether Steven ought to be permitted to make his claim out of time. Although that approach lacks some logic, it is convenient because the Court must rule on the merits of Steven's claim, even if it ultimately declines the leave sought by Steven. Otherwise, the proceedings might miscarry if a different view were taken on appeal as to whether the leave ought to have been given.
As Steven is an eligible person who is a child of the deceased, s 9 of the Family Provision Act relevantly provides as follows: … (2) The Court shall not make an order under section 7 or 8 in favour of an eligible person out of the estate or notional estate of a deceased person unless it is satisfied that: (a) the provision (if any) made in favour of the eligible person by the deceased person either during the person's lifetime or out of the person's estate, or … (i) if no provision was made in favour of the eligible person by the deceased person, the provision made in favour of the eligible person under this Act out of the estate or notional estate, or both, of the deceased person, or (ii) the provision made in favour of the eligible person by the deceased person either during the person's lifetime or out of the person's estate as well as the provision made in favour of the eligible person under this Act out of the estate or notional estate, or both, of the deceased person, is, at the time the Court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the eligible person. (3) In determining what provision (if any) ought to be made in favour of an eligible person out of the estate or notional estate of a deceased person, the Court may take into consideration: (a) any contribution made by the eligible person, whether of a financial nature or not and whether by way of providing services of any kind or in any other manner, being a contribution directly or indirectly to: (i) the acquisition, conservation or improvement of property of the deceased person, or (ii) the welfare of the deceased person, including a contribution as a homemaker, (b) the character and conduct of the eligible person before and after the death of the deceased person, (c) circumstances existing before and after the death of the deceased person, and (d) any other matter which it considers relevant in the circumstances. (4) Nothing in subsection (3)(a) limits the generality of subsection (3)(b), (c) and (d) and the Court may consider a contribution of the same nature as that referred to in subsection (3)(a) or of a different nature in so far as it considers it relevant under subsection (3)(b), (c) or (d). …
The Court may therefore not make an order in favour of Steven under s 7 unless it is first satisfied that the provision made by Nada in favour of Steven by Nada either during her lifetime or out of her estate is, at the time of determination by the Court, inadequate for the proper maintenance, education and advancement in life of Steven. In the present case, there may be a question about how Nada has made provision for Steven, as she arranged for him to acquire a joint interest in Jersey, and she entered into the testamentary agreement during her lifetime to require Robert to transfer his interest in Jersey to Steven, and then she left George to Steven in her will.
If the jurisdictional question is answered favourably to Steven, then s 7 provides that: Subject to section 9, on an application in relation to a deceased person in respect of whom administration has been granted, being an application made by or on behalf of a person in whose favour an order for provision out of the estate or notional estate of the deceased person has not previously been made, if the Court is satisfied that the person is an eligible person, it may order that such provision be made out of the estate or notional estate, or both, of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person.
Again, the Court is required to have regard to circumstances at the time the order is made.
As will be seen, Jordan has transmitted Nada's interest in Breakwell to Robert, and, following Robert having acquired sole ownership of Kemp by survivorship, Jordan has transmitted the notional interest of Nada in that property to Robert. Jordan has also transmitted Nada's notional interest in Jersey to Steven and Robert, who acquired equal joint interests in that property by survivorship. Jordan has not yet transmitted George to Steven, and in that respect Nada's will remains unadministered. At all relevant times, Morts has been in Robert's sole name.
Consequently, Jordan does not retain any assets of Nada's estate in his name as executor that are available to meet any family provision order that the Court may make in Steven's favour, or in respect of any costs order that the estate is required to meet. Steven recognises that his only avenue to recovery will require that the Court designate assets as being part of Nada's notional estate. For completeness, Jordan does retain title to George, but Steven is entitled to have that property transmitted to him, so it is not available to meet his claim for further provision, or for costs. Nada's share in Jersey that passed to Steven and Robert by survivorship on her death could also have been the subject of a designation under s 22 of the Family Provision Act, but that is a matter that no longer arises given Steven's success in enforcing the testamentary agreement made by Robert.
Section 23 of the Family Provision Act relevantly provides as follows: On an application in relation to a deceased person made by or on behalf of an eligible person, if the Court is satisfied: (a) that an order for provision ought to be made on the application, and (b) that, at any time before death, the deceased person entered into a prescribed transaction: (i) which took effect within the period of 3 years before death and was entered into with the intention, wholly or in part, of denying or limiting, wholly or in part, provision for the maintenance, education or advancement in life of that or any other eligible person out of the deceased person's estate or otherwise, (ii) which took effect within the period of 1 year before death, and was entered into at a time when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education and advancement in life of that or any other eligible person which was substantially greater than any moral obligation of the deceased person to enter into the prescribed transaction, or (iii) which took effect or is to take effect on or after the death of the deceased person, the Court may, subject to sections 26, 27 and 28, make an order designating as notional estate of the deceased person such property as it may specify, being property which is held by, or on trust for the disponee or, where there is more than one disponee, any of the disponees, whether or not that property was the subject of the prescribed transaction.
The application of s 23 depends upon whether or not there has been a prescribed transaction. That term is relevantly defined in s 22 of the Family Provision Act as follows: (1) A person shall be deemed to enter into a prescribed transaction if: (a) on or after the appointed day the person does, directly or indirectly, or omits to do, any act, as a result of which: (i) property becomes held by another person (whether or not as trustee), or … whether or not the property becomes in either case so held immediately, and (b) full valuable consideration in money or money's worth for the first-mentioned person's doing, or omitting to do, that act is not given. (2) Except as provided in subsections (5) and (6), a prescribed transaction referred to in subsection (1) shall, for the purposes of this Act, be deemed to take effect at the time property becomes held by a person or subject to a trust as referred to in subsection (1)(a). … (4) In particular and without limiting the generality of subsection (1), a person shall, for the purposes of subsection (1)(a), be deemed to do, or omit to do, an act, as a result of which property becomes held by another person or subject to a trust if: … (b) holding an interest in property which would, on the person's death, become, by survivorship, held by another person (whether or not as trustee) or subject to a trust, the person is entitled, on or after the appointed day, to exercise a power to prevent the person's interest in the property becoming, on the person's death, so held or subject to that trust but the power is not exercised before the person ceases (by reason of death or the occurrence of any other event) to be so entitled, … (5) Except as provided in subsection (6), a prescribed transaction involving the doing of, or omitting to do, an act as referred to in subsection (4) (paragraph (f) excepted) shall be deemed to be entered into immediately before, and to take effect on, the death or the occurrence of the other event referred to in that subsection in relation to that act or omission. …
As Nada's joint interest in Kemp passed to Robert by survivorship on her death, and as Nada could have prevented that occurrence by severing the joint tenancy before her death, the effect of s 22 is that a prescribed transaction happened immediately before Nada's death, which is capable of supporting the designation of Nada's half-share in Kemp as being notional property of her estate.
Under s 24 of the Family Provision Act: On an application in relation to a deceased person, if the Court: (a) is satisfied that an order for provision ought to be made on the application, and (b) finds that, as a result of a distribution from the estate of the deceased person, property became held by a person (whether or not as trustee) or subject to a trust, the Court may, subject to sections 27 and 28, make an order designating as notional estate of the deceased person such property as it may specify, being property which is held by, or on trust for, the person or the object of the trust, whether or not that property is the property distributed.
As Breakwell was an asset in Nada's estate that was distributed from that estate by Jordan to Robert after Nada's death, Breakwell is a candidate for designation as notional estate of Nada under this section.
The designation of property as part of a deceased person's notional estate must take place having regard to the requirements in ss 26 to 28 of the Family Provision Act. It will be convenient to defer the consideration of those provisions until it is necessary to do so, if they arise.
Finally, it will be convenient at this point to set out s 33 of the Family Provision Act, which provides for circumstances in which a party's costs may be ordered to be paid out of the estate or notional estate of the deceased person: (1) Except as provided in subsections (2) and (3), the Court may order that the costs, charges and expenses of or incidental to proceedings under this Act in relation to the estate or notional estate of a deceased person be paid out of the estate or notional estate, or both, in such manner as the Court thinks fit. (2) The Court shall not order that the whole or any part of the costs, charges or expenses of or incidental to proceedings in respect of an application in relation to a deceased person made by an eligible person who is such a person by reason only of paragraph (c) or (d) of the definition of eligible person in section 6(1) be paid out of the estate or notional estate of the deceased person unless: (a) the Court has made an order for provision in favour of the eligible person on the application, or (b) there are special circumstances which make it just and equitable for the Court to do so. (3) The Court shall not order that the whole or any part of the costs, charges and expenses of or incidental to proceedings in respect of an application in relation to a deceased person made by an eligible person be paid out of the estate or notional estate of the deceased person by reason only of the fact that the eligible person is a person described in paragraph (a) or (b) of the definition of eligible person in section 6(1) or the fact that the Court has made an order for provision in favour of the eligible person on the application.

[18]

Family provision claim - introduction

It will be necessary to examine the course of the litigation in some detail, partly to provide an explanation of the background against which the issues that require determination in this judgment have arisen, and partly because the litigation is substantially the direct source of material disadvantage to Steven and the other parties, which is relevant to a consideration of Steven's family provision claim.
As has been noted above, s 7 of the Family Provision Act empowers the Court to "order that such provision be made out of the estate or notional estate, or both, of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person" (emphasis added). Similarly, as already mentioned, s 9 must be applied on the basis of the present circumstances.
The part of these provisions that requires the Court to have regard to the circumstances at the present time is of unusual significance in the present case. As I have explained in outline above, the effect of the Court making orders for the implementation of the testamentary agreement will be to achieve Nada's testamentary intentions in a manner that could not likely have been challenged under the Family Provision Act if those intentions had been given effect shortly after Nada's death. However, Nada died on 20 January 2006 and effect will be given to the testamentary agreement in the latter half of 2019, more than 13 years later. The result has been that Steven has sought to make out a case for further family provision substantially on the basis of events that have occurred after Nada's death. The Court is frequently required to determine family provision applications having regard to circumstances that have occurred after the death of the relevant deceased, as is required by s 7 of the Act, and its successor legislation. However, usually the events subsequent to the deceased's death only provide an adjunct to the relevant circumstances as they arose during the deceased's lifetime. The unusual features of the present case give rise to difficult considerations that will be examined below.
One consequence of the fact that Steven's claim for further family provision is substantially based upon events that have occurred after Nada's death is that Steven has sought to demonstrate that much, if not all, of the financial disadvantage that he has suffered as a result of litigation has been caused by the fault of Robert and Angelina. Fault as between beneficiaries has not usually been considered relevant to the determination of applications for family provision relief. However, in this case, Steven has sought to demonstrate that his financial disadvantage has been caused by the fault of Robert and Angelina, apparently as a justification for Steven's submission that he should be given substantial additional provision out of Nada's actual and notional estate, even if the necessary consequence is that the provision made under Nada's will in favour of Robert, and consequently Angelina by reason of her marriage to Robert, is substantially exhausted. Consequently, in the examination of the course of the litigation, it will be necessary to consider Steven's claims that the litigation was almost entirely the fault of Robert and Angelina. Although I acknowledge that need, it will be convenient to defer consideration of the issue of whether, and if so how, fault is relevant in this context.

[19]

First proceedings instituted by Steven

Now that the Court has found that Robert breached the testamentary agreement by refusing to transfer his half-interest in Jersey to Steven, it follows that Robert was at fault, and that fault was the initial cause of all of the litigation that followed. However, it does not necessarily follow that Robert bears responsibility for all of the consequences of the litigation.
It seems obvious, in retrospect, that the sensible course for Steven to have taken would have been to institute proceedings for the enforcement of the testamentary agreement, with or without the cooperation of Jordan. Steven did not do so. The reasons for this are not known.
Instead, Steven commenced proceedings in this Court by summons filed on 19 July 2007, for an order that provision be made for his maintenance, education and advancement in life pursuant to s 7 of the Family Provision Act out of the estate or the notional estate of Nada. The only defendant named in the summons was Robert, when, obviously, the proper defendant was Jordan, as the executor of Nada's estate.
This claim for further family provision appears to have been a proxy for enforcement of the testamentary agreement.
It appears from the Court's file that no affidavit evidence was filed in the proceedings.
Steven's family provision claim was commenced within the 18 months period required by s 16(1)(b) of the Family Provision Act, although it may have been arguable that the proceedings were not properly commenced as the correct defendant was not made a party.
The Court's file shows that the proceedings were adjourned on numerous occasions with only procedural orders being made, and that, on 21 July 2008, the Court made an order by consent that Jordan, as the executor of Nada's estate, be substituted as the defendant in place of Robert.
After a number of other adjournments of directions hearings without any procedural orders being made, on 1 July 2009 Steven filed a notice of discontinuance with the consent of Jordan.

[20]

Deed of release settling the first proceedings

On 30 June 2009, Steven, Robert and Jordan signed a deed of release to compromise the proceedings commenced by Steven (the deed of release). The document was prepared by Robert's solicitors.
The operative part of the deed of release is contained in cl 3. Clause 3.1 provided as follows: That on or before 30 September 2009 Robert will transfer to Steven (the Transfer) his interest in Jersey Avenue.
Clause 3.2 provided that: Within 7 days of the date of this Deed, Steven will Discharge in full Mortgage number I327981 registered on the title of Jersey Avenue (mortgage) including the principal, interest, arrears and associated costs (if any) and will pay all costs associated with the discharge of mortgage.
According to recital K(b) of the deed of release, Jersey was purchased by Nada, Robert and Steven on 7 May 1993 as joint tenants for a price of $220,000. The property was therefore acquired after the introduction of capital gains tax (CGT) on 20 September 1985. It was also recited in recital K(d) that a mortgage in the sum of $220,000 had been acquired from the Commonwealth Bank by Nada, Steven and Robert to purchase Jersey. That was the full purchase price, and a mortgage over Kemp had been given by Nada and Robert as collateral security. Recital K(i) recited that a mortgage to the Commonwealth Bank of Australia subsisted on the title to Jersey, and that the mortgage payments were in arrears and interest had accrued.
Clause 3.3 provided as follows: Contemporaneously with the transfer of Jersey Avenue, Steven will pay to the trust account of Robert[']s lawyer the sum of $76,666.00 as security for the payment of Capital Gains Tax in respect of the transfer referred to in Clause 3.1 of this Deed.
The Court was informed that Robert had required the inclusion of this provision because of the possibility that he would be required to pay CGT as a consequence of his transfer of his interest in Jersey to Steven. The term apparently used the expression "as security", because it was hoped that Robert would be able to persuade the Commissioner of Taxation that the testamentary promise operated as if it was a codicil to the will, in which case the CGT would not be payable, and Robert's lawyer could return the amount to Steven.
Clause 3.4 imposed a number of obligations upon Steven that were required to be performed before the transfer occurred. It provided that: Steven will, before the transfer referred to in paragraph 3.1 of this Deed: (a) Produce to Robert a written release from CBA of Robert[']s liability pursuant to the personal guarantee provided by Robert to CBA in respect of the mortgage; (b) And within 7 days of the date of this Deed pay all moneys owed to Hurstville City Council in respect of Jersey Avenue from the date of death including all council rates to the date of transfer, arrears of council rates and interest accrued and costs on the judgment obtained by Hurstville Council and produce documentary evidence of payment to Robert before the transfer; (c) Pay all statutory charges including land tax and water rates charged against Jersey Avenue at the date of transfer and produce documentary evidence of payment to Robert before the transfer.
It was recited in recital K(j) that Hurstville Council (the Council) rates remained unpaid from the date of Nada's death. The Council had entered judgment against Steven, Robert and the estate of Nada for arrears of council rates, legal fees and interest. The judgment debt remained unpaid.
The apparent intent of cl 3.4 was that, if Steven was to receive the whole of Jersey by means of the transfer, he should also be responsible for all rates and the effect of the judgment in favour of the Council since the date of Nada's death, and also that he should procure a release of the personal guarantee given by Robert to the relevant bank.
Clause 3.5 obliged Steven to bear the cost of the preparation of a notice of death in relation to Jersey, and further provided that Steven would pay all of the costs associated with the transfer.
Under cl 3.6, following the transfer of Jersey: "…Steven will assume responsibility for the conclusion of the subdivision of Jersey Avenue and will pay all costs of and associated with the completion of the sale of the subdivision of Jersey Avenue and hereby indemnifies Robert in respect of such costs." Recital K(e) stated that, in 1995, Nada, Steven and Robert had taken steps to subdivide the property into two lots, and recital K(f) stated that the subdivision remained incomplete.
It may be noted that Steven submitted strongly at the hearing that there was insufficient evidence for the Court to find that there was any real likelihood that, if Jersey is transferred to Steven as a result of these proceedings, he will be able to subdivide it into two lots. As will be seen, this Court has made a declaration that the deed of release is void ab initio. That declaration may have deprived the deed of any legal effect, but it does not diminish the effect of the deed of release as a document recording the mutual understanding and intentions of Steven and Robert. The document is some evidence that the owners of Jersey had commenced the process of subdividing the property, and that the intention was that, after Jersey was transferred to Steven, he would conclude the subdivision.
Clause 3.7 gave Steven an entitlement to all income from Jersey from the date of Nada's death. It was recited in recital K(h) that Jersey had been tenanted and that the rent received had been retained by Steven.
Clause 3.8 obliged Steven to pay all reasonable costs incurred by Jordan in concluding the administration of the estate.
Under cl 3.9, Steven was required to pay the costs of a valuer in obtaining a valuation of Jersey and the costs of an accountant who had provided advice in estimating the CGT implications of the transfer.
Clause 3.10 established a regime for Steven and Robert to cooperate in the sale of Jersey in default of compliance with cll 3.2 and 3.3 of the deed. The effect of cl 3.10(b) was that, after all relevant costs and expenses were deducted from the proceeds of sale, including the amount to cover CGT; the balance of the proceeds of sale was to be paid to Steven.
Clause 3.11 required Jordan to transfer Breakwell to Robert, and cll 3.12 and 3.13 entitled Robert to all income from Breakwell from the date of Nada's death and obliged him to bear all outgoings.
Under cl 3.14, Jordan was required to transfer George to Steven at Steven's cost within seven days.
Clause 3.15 obliged Steven to discontinue the proceedings that he had commenced in this Court by 30 June 2009.
Clause 3.16 obliged Jordan forthwith to take all steps necessary to conclude the administration of the estate, and cll 3.17 and 3.18 contained certain releases.
Clause 3.19 was in the following terms: This Deed is subject to and conditional upon Steven procuring the removal of the Caveat or the consent of the Caveator to the lodgement of the transfer referred to in Clause 3.1 of this Deed on or before 30 September 2009: (a) Steven will use his best endeavours to procure the removal of the Caveat or the consent of the Caveator to the lodgement of the transfer referred to in Clause 3.1 of this Deed; (b) If by 30 September 2009 the Caveat is not removed or the consent of the Caveator to the lodgement of the transfer referred to in Clause 3.1 of this Deed is not obtained, this Deed will be void and of no effect.
The caveat referred to in cl 3.19 had been lodged by Jovanka in order to protect her interests in the matrimonial property.
Steven sought, in his submissions to the Court, to characterise the terms of the deed of release as being evidence of Robert having taken improper advantage of Steven, by failing to have simply performed the testamentary agreement. It may be accepted that Robert was originally at fault, but there is room for debate about the degree of that fault. Robert seems to have thought that only he and Nada had contributed to the acquisition of Jersey, and covered the costs relevant to that acquisition. The evidence is not clear on that subject, and no finding is made. It may be observed that, whether or not Robert's belief was correct, he nonetheless executed the testamentary agreement. However, the evidence was not clear as to whether the possible need to pay $76,666 in CGT was attributable to the period from the date of the original acquisition of Jersey, or only covered the period from Nada's death to the date of the deed of release. In any event, the property remained subject to a mortgage in favour of the Commonwealth Bank at the date of the deed. As recited in the deed, Jersey was subject to accumulated rates and taxes, and a judgment had been obtained by the Council. Robert had the liability to pay any CGT that was payable, and he was liable under the mortgage and in respect of the rates, taxes and the judgment. If Robert's interest in Jersey had been transferred to Steven without any provision being made for these matters, Robert would have retained that liability.
It appears that Nada may not have taken these matters into account when she arranged for the preparation of the testamentary agreement, given the simplicity of its terms, which did not provide for these various costs and expenses. The evidence does not disclose Nada's intention in respect of these matters, and it is possible that she did not take them into account at all.
Quite apart from the possible consequences of these issues being raised in the family provision application commenced by Steven, rather than Steven having sought to enforce the testamentary agreement directly, it is possible that Robert may have had an argument that, either in the making of judgments required in determining whether a family provision order should be made, or on the basis of some term to be implied in the testamentary agreement, he should not be required to transfer his interest in Jersey to Steven, and then have to bear himself all of the residual costs. In any event, it seems reasonable for Robert to have required Steven to pay all of the accumulated costs from the date of Nada's death, given that Steven would have become the sole owner of Jersey, and in fact he had enjoyed the benefit of that ownership since that time.
The fact is that Steven settled his family provision application on the advice of his lawyers. The Court should infer that Steven regarded the terms of the deed of release as being acceptable, having regard to all of the issues raised by the proceedings. The Court should not treat the fact of the deed of release having been agreed as involving material fault on Robert's part. That is an issue that is not properly justiciable on the evidence that was put before the Court in these proceedings.

[21]

Performance of the deed of release

Steven also submitted that Robert was at fault in respect of the manner in which the deed of release was implemented, and the circumstances in which this Court eventually declared that the deed of release was void for failure of the condition in cl 3.19. It is necessary to consider the evidence going to these issues closely, as, on balance, the evidence justifies a conclusion that Steven's allegation of fault on Robert's part is not substantiated, and Steven himself can be criticised for entering into the deed of release containing the terms that it did, and in respect of his attempt to implement the deed and to satisfy the condition.
On 2 July 2009, a representative of Steven's former solicitor asked Robert's solicitor to provide a copy of the transfer for Jersey so that he could forward it to the solicitor acting for Jovanka, to assist in obtaining Jovanka's consent to the transfer of the property. Robert's solicitor forwarded the transfer, on that date, "for the sole purpose of providing a copy to Mrs Stojanovski's lawyers as advised in your email below". The attached transfer is from Robert and Steven to Steven and appears to be signed by both of them, and witnessed by Steven's former solicitor. The signed transfer was stamped with the word "COPY". That evidence appears to establish that Robert was ready willing and able to perform his obligation to transfer his interest in Jersey to Steven, and the only impediment to that happening was the need for Steven to obtain Jovanka's consent or the removal of the caveat.
It appears that Breakwell was transmitted to Robert with the consent of Jordan. That was in accordance with Nada's will and cl 3.11 of the deed of release. The date is not stated on the transmission application that is in evidence. On 13 July 2009, Robert transferred Breakwell to himself and Angelina as joint tenants for nil consideration. It also appears that it was necessary for Jordan, on 14 July 2009, to make an application for a replacement certificate of title in respect of Breakwell.
The various documents lodged with the Registrar General in relation to Breakwell contained a statement that they were lodged by Robert.
Jordan signed all of the documents that he was required to sign in order to make the documents effective.
Robert had already become the sole beneficial owner of Kemp by survivorship on the death of Nada.
As noted above, the title to George remains solely in the name of Nada.
There is in evidence (Exhibit 5) a transmission application in respect of George dated 30 June 2009 that is apparently signed by Jordan and witnessed by Steven's solicitor at the time. It is a mystery why Steven did not take the steps necessary to cause George to be transmitted into his name. A suggestion was made at the hearing that the problem was that the certificate of title could not be found. However, that did not prevent Robert taking the steps necessary to have Breakwell transmitted to him.
Steven suggested at the hearing that the steps that were taken after the date of the deed of release to cause the properties to which Robert was entitled to be transmitted to him, before it was known on 30 September 2009 whether or not the deed had become unconditional, was in some way nefarious. Steven pointed to the fact that Robert was named as the lodging party, and suggested that Jordan was incompetent and was prevailed upon to sign the necessary documents.
However, cl 3.16 of the deed of release expressly required Jordan to forthwith take all steps necessary to conclude the administration of the estate. Steven agreed to that provision being included in the deed, and must have expected that it would be performed.
Clause 3.14 required Jordan to attend to the documents necessary for the transmission of George to Steven within seven days.
The position is not so clear under cl 3.11 in relation to the transmission by Jordan of Breakwell to Robert, but it is implicit that it was to happen straightaway.
There may have been a risk in requiring Jordan to complete the administration of the estate forthwith, given that there was a possibility that the condition to the effectiveness of the deed of release may not have been satisfied by 30 September 2009. However, the deed was professionally prepared and that is what it provided.
It is likely that all parties thought that the satisfaction of the condition was a mere formality. Obviously, it was in Jovanka's interests not to impede the transmission of Jersey to Steven, as that would increase the matrimonial property available to be the subject of the matrimonial property orders to be made by the Family Court. It would have been a simple matter for Jovanka to consent to the transfer or otherwise agree to withdraw the caveat on appropriate terms to ensure that Jersey remained available to be the subject of any family property order after the transmission.
On 15 July 2009, Steven's solicitor wrote a letter to Jovanka's family law solicitor, in which he referred to the caveat. The solicitor enclosed a transfer and observed that he thought that Jovanka would not take objection to the proposal and sought Jovanka's consent. The solicitor said: "If the Transfer is not lodged by 30 September, 2009, then the proposed arrangements in respect of the transfer of the property into our client's name alone will be voided." The solicitor said that Steven reserved the right to seek a mandatory injunction that Jovanka give her consent unless he received a response within 10 days.
By letter dated 24 July 2008, Jovanka's solicitor advised Steven's solicitor that she would have difficulty getting instructions, and said she hoped to respond by Friday, 31 July 2009.
On 3 August 2009, Jovanka's solicitor wrote to Steven's solicitor, and observed that her client had very little knowledge of Steven's financial circumstances and his entitlements under the estate of his mother. She referred to correspondence in which she had sought information on this subject from Steven. The letter concluded: In order to advance this matter our client requests again that the husband give the written undertakings sought and undertake to comply with the disclosure provisions in Schedule 1 of the Family Law Rules. In return our client will cause the relevant caveat to be removed. Further we would respectfully request that you point out to your client that his obligation of disclosure outlined in Chapter 13 of the Family Law Rules is not optional. We would appreciate your response within 7 days.
Jovanka's solicitor wrote a substantive response to Steven's family law solicitors on 11 September 2009. The letter enclosed copies of correspondence between Jovanka's solicitor and Steven's solicitor in the litigation, including the 15 and 24 July and 3 August 2009 letters.
The letter referred to a request for undertakings from Steven, and stated that, in the absence of receiving those undertakings, the solicitor lodged a caveat on behalf of Jovanka.
Jovanka's solicitor set out again the undertakings that were apparently sought in her letter dated 28 May 2009. In substance, the undertakings were to the effect that Steven would not deal with Jersey, George or Breakwell without first giving Jovanka 21 days' notice in writing.
The solicitor again requested that Steven comply with his disclosure obligations under the Family Law Rules, and suggested that, after full disclosure had taken place, the parties and their legal representatives should have an informal roundtable discussion in order to facilitate a fair and transparent settlement. The solicitor asked for a response within seven days.
Jovanka's solicitor wrote a further letter to Steven's present solicitor on 29 September 2009, with a copy to Steven's former solicitor.
She began by noting that she had not received any response to her 11 September 2009 letter. The letter included the following statement: …Despite several requests to date, the Husband has refused to provide our client with any undertaking that he will refrain from dealing with any of the properties (including [redacted] Milsop Place, [redacted] Jersey Avenue, [redacted] George Street, and [redacted] Breakwell Street) without first giving our client 21 days['] notice. In these circumstances we are concerned that the Husband will alienate his entitlement to any of those properties and thereby prevent our client from obtaining her right to a share of the marital assets. … If the Husband requires the Wife to remove the caveat from [redacted] Jersey Avenue, can you please advise us in unambiguous terms about his intentions for the property; i.e: whether he proposes to sell it, mortgage it, or otherwise alienate or reduce his interest in it. In that case please provide full particulars.
On 30 September 2009, the period by which the condition in the deed of release was required to be satisfied passed, without Steven having procured the removal of the caveat or Jovanka's consent to the lodgement of the transfer.
It could not be said that, by Steven's solicitors' response to the communications from Jovanka's solicitor, Steven had used his best endeavours to procure the removal of the caveat or the consent of the caveator as required by cl 3.19(a) of the deed of release. Jovanka offered to withdraw the caveat and consent to the transfer of Robert's interest in Jersey to Steven on reasonable terms, but Steven did not respond appropriately within the limited time available. It is as plain as it can be that Steven, in his own interests, ought to have given the undertaking requested by Jovanka, and provided her with the information that she sought (to which she was apparently entitled anyway under the Family Law Rules).
Steven's present solicitor responded to Jovanka's solicitor on 2 October 2009. He offered on behalf of Steven to give an undertaking as required by Jovanka, but that offer was subject to a condition.
The condition was that Jovanka agree to a charge on George Street to a Mr Karout for an amount of $440,000, being a further advance of $100,000 and an amount of $340,000 that was claimed to have been previously advanced to Steven. Alternatively, Steven would sell George to Mr Karout for $440,000, with a deposit of $100,000 to enable Steven to comply with his obligations under the deed of release. The letter enclosed a copy of the deed of release.
I interpolate here that Steven claims that his family provision application in these proceedings should be determined on the basis that he owed Mr Karout $440,000 as of October 2009, and that the debt has continued to attract interest since that time. The existence of that debt is contested by Angelina and the trustees. I will return to this issue below.
On 12 October 2009, Jovanka's solicitor sought a straightforward explanation of the reasons for Steven entering into the deed of release, and requested particulars of the loan from Mr Karout.
Jovanka's solicitor said that she was not in a position to advise Jovanka, who did not consent to the proposal and could not do so until she was in possession of all of the relevant information.
Following further correspondence, on 14 October 2009, Jovanka's solicitor wrote a letter to Steven's present solicitor, in which she stated that Jovanka would consent to Steven encumbering George Street with a mortgage of $440,000, subject to Steven providing the undertakings sought in the letters of 28 May and 11 September 2009, Steven agreeing that the amount of $440,000 was not a liability that would be included for the purposes of the net asset pool, and would be Steven's debt only, and that, immediately upon his receipt of the $100,000, Steven would make the payments under the judgment obtained by the Council.
Apparently Steven's present solicitor responded by email dated 15 October 2009. The email is referred to in a letter of that date from Jovanka's solicitor to Steven's solicitor, but is not in evidence.
Jovanka's solicitor's next letter, dated 16 October 2009, recorded that Steven had agreed to conditions 1 and 2 of Jovanka's consent to the mortgage on George. It asked for Steven's written undertakings to be forwarded by Tuesday, 20 October 2009.
Following further correspondence, by email of 20 October 2009, Jovanka's solicitor confirmed that the proposed arrangements were satisfactory, and stated that she was looking forward to receiving the proposed loan documents shortly.
The next communication that is in evidence is a letter from Robert's solicitor dated 21 January 2010 to Steven's former solicitor, which referred to a letter of 2 November 2009, and said that Robert agreed to an extension of time for compliance with the deed of release for a further 21 days, on condition that Steven pay Robert's legal costs caused by the delay.
The 21 days extension elapsed without the deed of release being performed, and, on 28 April 2010, Steven's former solicitor advised Robert's solicitor that Steven proposed to mortgage George in order to borrow approximately $100,000 to meet the CGT and other obligations, which were stated to be an amount owing to the CBA of $5,000-$10,000, and council rates of $5,000-$10,000.
Robert's solicitor responded on 27 May 2010, stating Robert's requirements to settle the matter, including receipt of Jovanka's written consent to the discharge of the mortgage (by which the writer apparently intended to refer to the caveat lodged by Jovanka), and the transfer of Jersey within seven days. The letter advised the solicitor's understanding that the Council proposed to, or had, sought a warrant for the possession of Jersey.
On 4 June 2010, Steven's present solicitor wrote a letter to Jovanka's solicitor enclosing a copy of Robert's solicitor's 27 May 2010 letter. Steven's solicitor asked for Jovanka's written consent to the discharge of mortgage (which again appears to be a reference to the caveat) and the transfer of Jersey, and also Jovanka's written consent to Steven executing a mortgage in favour of Mr Karout in the amount of $450,000 over George, $100,000 of which would be used to discharge Steven's obligations under the deed of release.
Robert's solicitor apparently wrote a letter to Steven's former solicitor on 11 June 2010, as, on 16 June 2010, that solicitor forwarded a copy of the letter to Steven's present solicitor. Robert's solicitor's letter is not in evidence.
It is helpful here to note that, earlier, on 11 March 2010, Jovanka commenced proceedings in the then Federal Magistrates Court of Australia by filing an initiating application. The respondents to the application were Steven and Robert. By order 1, Jovanka sought an order that Steven and Robert transfer Jersey to themselves and Jovanka, so that they would become registered proprietors as tenants-in-common as to 40% with Jovanka as to 60%. Jovanka also sought orders that Steven discharge the mortgage and all other monies charged on Jersey.
Jovanka also sought injunctions, including that, pending final orders, Jovanka have exclusive use of the part of Jersey that is known as Milsop Place, Mortdale.
Steven's present solicitor apparently wrote to Jovanka's solicitor on 9 August 2010, as there is a reference to that letter in Jovanka's solicitor's 13 August 2010 reply. Only the reply is in evidence. The reply suggests that Steven had requested Jovanka to consent to the registration of a mortgage in the amount of $440,000 over George, and to transfer a Suzuki motorbike to Steven.
As to the proposed mortgage, Jovanka's solicitor referred to information provided by Steven's solicitor about the origins and purpose of Steven's outstanding $340,000 debt to Mr Karout. It recorded instructions apparently given by Steven that the loan was originally for $140,000 and was lent to Steven for the purpose of constructing the former matrimonial home at Milsop Place Mortdale, and that the $340,000 currently owed to Mr Karout included interest at 10% per annum since 1995.
Jovanka's solicitor stated: "On the basis of the explanation provided to our client by the Husband in relation to the debt to Mr. Karout to date, the Wife does not consent to the registration of a mortgage in the amount of $440,000.00 over George Street Mortdale…"
Jovanka's solicitor then gave the reasons for Jovanka reaching that decision, including that there were no documents evidencing the loan, Steven had not substantiated his claim that the house cost approximately $280,000 to construct, given that (according to Jovanka) the contract price was $135,000, the builder had confirmed that he was only paid $135,000, and Steven's claim had not been substantiated by bank records or tax invoices.
Contrary to Steven's claim, Jovanka's solicitor stated that the construction of the home was paid for with $20,000 from Jovanka's parents, a loan of $100,000 from the Commonwealth Bank of Australia, and $15,000 paid by Jovanka.
Steven filed a response to Jovanka's initiating application in the Federal Magistrates Court of Australia on 21 July 2011. Among other relief, he sought, by order 1, an order that Jovanka forthwith withdraw the caveat over Jersey.
It is of note that, by order 5, Steven sought an order that he be appointed trustee for himself and Jovanka to complete the subdivision of Jersey and to sell each of the subdivided properties. This claim is also material to the validity of the submission by Steven in these proceedings that the evidence does not justify a finding by the Court that it is probable that Jersey will be able to be subdivided into two separate lots.
It is not clear whether, when Steven entered into the deed of release, he had Mr Karout's binding agreement to lend him the approximately $100,000 that he needed to fund his obligations under the deed. The Court should infer that, if Mr Karout had agreed to lend Steven an additional $100,000, that agreement was on terms that Steven would provide a mortgage over George to cover the whole of the alleged debt of $440,000. As Steven did not have Jovanka's prior, informed consent, it seems that Steven entered into the deed of release without having a proper basis for being sure that he would be able to perform his obligations in a way that would cause the condition in cl 3.19 to be satisfied.
There was no evidence that Steven made any attempt to borrow an amount limited to the money needed to fund Steven's performance of his obligations under the deed of release from any commercial lender. In the absence of any relevant evidence, it cannot safely be concluded that Steven's financial circumstances would have precluded him from borrowing the necessary amount from a commercial lender. If the amount required had been borrowed, it could, if necessary, have been repaid quickly from the sale of George, in an arrangement that should have satisfied the security requirement of the lender.
Reference to George in this context directs attention to the fact that George remained in Nada's name, in any event, and nothing seems to have been done to have the title to George transmitted to Steven to enable him to grant a mortgage over George in favour of Mr Karout.
Steven did not respond to Jovanka's reasonable requests that would have enabled Jovanka to withdraw the caveat over Jersey and consent to the registration of the transfer of Robert's interest in that property to Steven, in a timely manner, or at all. Steven did not apparently offer the undertakings required by Jovanka in a timely way. He did not even avail himself of Jovanka's offer to consent to a mortgage being granted to Mr Karout over George to secure the full $440,000. While the evidence does not make all of the relevant circumstances clear, in my view it warrants a finding that either Steven should not have entered into the deed of release in the manner that he did, or, having entered into it, he should have acted with more alacrity to satisfy the condition in cl 3.19. I find that, if Steven had done so, the condition would have been satisfied and Robert's interest in Jersey would have been transferred to Steven by no later than 30 September 2009. That result would have obviated Steven incurring all of the costs of proceedings following that date. It is possible that the amount of the CGT would have been imposed upon Steven when it was not his just cost, but it is not in fact known whether the Commissioner of Taxation would have required the CGT to have been paid. As explained above, it would not have been unreasonable for Steven to have been required to bear the outstanding mortgage, as well as the rates and taxes on Jersey since Nada's death.
Steven made an explicit and somewhat colourful submission at the hearing that Robert was entirely at fault because he ultimately claimed successfully, as will be seen below, that the deed of release was void for failure of the condition in cl 3.19. The claim was repeatedly made on behalf of Steven that Robert had plunged "a stake through the heart" of the deed of release. Steven submitted that the condition in cl 3.19 was for Steven's benefit alone, so that Robert should have been satisfied by providing Steven with a transfer of Robert's interest in Jersey in registrable form, and leaving it to Steven to worry about how he could remove the caveat or obtain Jovanka's consent to the registration of the transfer.
I reject that submission. I consider that the condition was as much for the benefit of Robert as it was for Steven, if not more so. That is implied in the terms of cl 3.19(a), which obliged Steven to use his best endeavours to procure the removal of the caveat or the consent of the caveator by 30 September 2009. Robert's obligation under cl 3.1 was to actually transfer his interest in Jersey to Steven, not just to deliver a transfer in registrable form. Under cl 3.3, Robert could only get the benefit of Steven's payment of the $76,666 as security for the CGT "contemporaneously with the transfer of Jersey".

[22]

Commencement of present proceedings by summons

These proceedings were commenced by Steven filing a summons against Robert, as defendant, on 20 March 2012.
Steven said, in his 30 December 2015 affidavit, that he commenced these proceedings as a result of Robert making his claim for a half-interest in Jersey in the family law proceedings commenced by Jovanka against Steven.
The relief claimed by Steven in his summons was broadly in two parts. By the first, Steven sought relief that would give effect to the deed of release dated 30 June 2009. By prayer 1, Steven sought a declaration that the deed of release was valid and enforceable. By prayer 2, Steven sought a declaration that Robert's purported rescission of the deed was unconscionable and that Steven was entitled to relief against that rescission. Prayer 3 sought a declaration that Robert's delay in seeking to avoid the deed involved laches and unconscionable conduct, so that he was not entitled to avoid the deed. Finally, by prayer 4, Steven sought a declaration that Robert was estopped from relying on clause 3.19 of the deed.
Alternatively to this relief, Steven sought leave to continue his original family provision claim (wrongly described as being under s 59 of the Succession Act), or alternatively leave to commence a new claim. Prayer 6 sought an order for further provision out of Nada's estate under s 59 of the Succession Act.
It will be important to bear in mind that these claims were made in the alternative, so that, if Steven received Robert's share in Jersey by enforcement of the deed of release, he would not seek to maintain a claim for further family provision.
Further, in so far as whether one or other party has been at fault in respect of the accumulation of legal costs in this and related proceedings may ultimately be relevant, it will need to be remembered that Steven chose, when he initially commenced these proceedings, to attempt to establish the continuing validity of the deed of release, notwithstanding the apparent failure of the condition, and the circumstances of his own conduct, which have been discussed above, which suggest that he failed, in breach of cl 3.19(a), to use his best endeavours to procure the removal of the caveat or Jovanka's consent to the transfer by 30 September 2009.
Steven did not in his summons include any prayers that any properties be designated as notional estate of Nada. The need for such designations was implied as, if Steven failed in his claim to enforce the testamentary agreement made by Robert, there did not remain in Nada's actual estate sufficient property to fund an order for further provision in favour of Steven equal in value to Robert's half-interest in Jersey. That is because Robert had a one-third interest in Jersey on his own account, so that it would be necessary for a designation to be made in relation to the half of Nada's share that went to Robert (i.e. 1/6 of Jersey) and to designate other property equal in value to 2/6 of Jersey, plus some other property to cover costs.
These observations have some relevance because it is implied in Steven's case that, in the manner that will be explained below, Robert transferred his interests in Breakwell, Kemp and Morts to Angelina to defeat the ability of the Court to make orders designating those properties as parts of Nada's notional estate. The transfers may have had that effect, but they may have been done to defeat Robert's other creditors, rather than Steven. It is simply not clear on the evidence that Robert and Angelina understood the process of designation under the Family Provision Act. In fact, Robert only transferred to Angelina property that he owned or was given by Nada's will. He did not transfer his interest in Jersey, which was the subject of the testamentary agreement claim.
It is still true that this transaction was almost certainly entered into in order to defeat Robert's creditors, but it is not clear whether it was done to put the properties beyond the reach of a designation. This is relevant to Steven's claim that he is entitled to an order for further provision under the Family Provision Act, as recompense for costs incurred because of the wrongful conduct of Robert and Angelina.

[23]

Statement of claim

Steven filed a statement of claim on 2 August 2012. Steven joined Jovanka as the second defendant, and also Jordan, the executor of Nada's will, as the third defendant.
The prayers for relief concerning the validity of the deed of release were the same as in the summons. Steven improved the drafting of his alternative claim for leave to withdraw his notice of discontinuance of the first proceedings, or leave to commence similar proceedings. Steven made a further alternative claim for equitable damages of $600,000 for Steven's loss of the value of Robert's half-interest in Jersey, together with consequential loss.
In outline, Steven pleaded the following matters: 1. Nada's will, the grant of probate to Jordan, and the assets in Nada's estate: pars 2 to 4. 2. The institution by Steven of the initial family provision proceedings in 2007, and that those proceedings were consequent upon a dispute between Steven and Robert about Nada's intention that Robert was to take his entitlements under the will subject to the transfer of his interest in Jersey to Steven and not otherwise: pars 5 and 6. 3. The making of the deed of release and its relevant terms: pars 7 to 11. 4. The steps taken by Steven to comply with his obligations under the deed of release, including his failure by 30 September 2009 to obtain the consent of, or the withdrawal of the caveat lodged by, Jovanka, as required by cl 3.19 of the deed: pars 11 to 15 and 18. 5. Notwithstanding the failure of Steven to cause the removal of the caveat, Steven and Robert continued to treat the deed of release as remaining on foot, and Robert granted an extension to 21 February 2010; and that from September 2010 to May 2011, Robert represented that he would continue to treat the deed of release as remaining on foot until the end of family law proceedings between Steven and Jovanka: pars 17 and 22. 6. Steven obtained Jovanka's consent to the steps necessary for the transfer of Robert's interest in Jersey to Steven, but the consent was withdrawn on 16 August 2010: par 19. 7. Steven performed his obligations under the deed of release, by reason of which Jordan transferred to Robert the properties left to him under Nada's will, being Nada's interest in Breakwell and Kemp, and one-half of the cash in the estate: pars 24 and 25. 8. Robert intervened in the family law proceedings commenced by Jovanka against Steven to claim a one-half share of the net equity of Jersey: pars 20 to 23 and 26. 9. Steven should be entitled either to the setting aside of the discontinuance of the earlier family provision proceedings, or be granted leave to institute proceedings of an identical nature: par 27. 10. By reason of part performance of the deed of release and Robert's acceptance of the benefit of performance of that deed, while retaining the interest in Jersey, Steven was entitled to elect to treat the deed as valid and enforceable, except for the effect of cl 3.19; or treat the deed of release as void and require the re-conveyance of Breakwell and Kemp by Robert and George by Steven to Jordan as executor of the estate of Nada, pending the determination of the original family provision proceedings for family provision relief: par 28. 11. Robert is estopped from denying that the deed of release is valid and enforceable: par 29. 12. Alternatively, Steven is entitled as against Jordan, as executor of Nada's estate, to provision from the estate for his maintenance and advancement in life: par 30.
It should be noted from pars 27 to 30 that Steven's claim for a family provision order was made in the alternative to the relief claimed concerning the validity of the deed of release.

[24]

Amended statement of claim

Pembroke J gave Steven leave to file an amended statement of claim in Court on 31 October 2012, which was the final day of a three-day hearing during which his Honour decided two preliminary questions.
In essence, by his amended statement of claim, Steven abandoned his estoppel, laches, unconscionable conduct and equitable damages claims. He also abandoned his alternative claim to be permitted to withdraw his notice of discontinuance of the original family provision proceedings, or have leave to commence new such proceedings. The abandoned claims have been described above.
Steven deleted his original prayers seeking declarations concerning the validity and performance of the deed of release, and replaced those prayers with the following: 5. An order that the first defendant specifically perform, and carry into effect, the promises made by him in cl. 3.1 of the Deed within 28 days of the date of this order. 5A. Alternatively, an order that the first defendant specifically perform, and carry into effect, the promises made by him in cl 3.10 of the Deed within 28 days of this order. 5B. In the event that the Court determines that the Deed is rendered null and void by operation of clause 3.19, or is otherwise not capable of complete performance: (a) an order that accounts be taken by a Judge or an Associate Judge in respect of the benefits derived by the first defendant by reason of the part-performance of the terms of the Deed by the plaintiff and the third defendant; and (b) such other orders as the Court thinks just by way of restitution to restore the parties to their positions quo ante the making of the Deed or to give restitution for the unjust enrichment of the first defendant in consequence of the part-performance of the terms of the Deed by the plaintiff and the third defendant.
It is important to restate here that clause 3.10 of the deed of release operated in the event that Robert's interest in Jersey was not transferred to Steven under clause 3.1, and other aspects of the deed were not performed, and required Steven and Robert to act jointly to sell Jersey and apply the proceeds of sale in a particular way.

[25]

Judgments of Pembroke J

Pembroke J ordered that a separate question be determined under Uniform Civil Procedure Rules 2005 (NSW) (UCPR) rule 28.2, and by order made on 30 October 2012, with an unreported judgment given on 16 November 2012, held that Jovanka had not consented to the lodgement of the transfer of Robert's interest in Jersey to Steven referred to in cl 3.1 of the deed of release.
By a separate decision given on 16 November 2012, Pembroke J dismissed the claims made by Steven in prayers 5 and 5A of the amended statement of claim filed on 31 October 2012: Stojanovski v Stojanovski [2012] NSWSC 1338. In effect, his Honour held that cl 3.19 was a condition to the validity of the deed of release, and that the effect of the failure of the condition to be satisfied by 30 September 2009 was that the deed was void ab initio: see [16].
At [17], Pembroke J noted that the parties had agreed that, if he held that the deed of release was void, orders should be made by the Court that accounts be taken in respect of the benefits derived by Robert by reason of the part-performance of the terms of the deed of release, and as to what orders should be made by way of restitution to restore the parties to the position they were in before the making of the deed of release, or otherwise to give restitution for unjust enrichment.
As to this proposal, Pembroke J made the following ruling: [18] Notwithstanding the parties' agreement, I am not convinced that such an elaborate and potentially costly process is appropriate. With one qualification, it is not immediately obvious that the first defendant has received any material benefit pursuant to the Deed for which he should give restitution. However, the discontinuation of the plaintiff's family provision claim is in a separate category. It clearly provided a benefit to the first defendant. I have already mentioned that on 30 June 2009, pursuant to the Deed, the plaintiff discontinued his proceedings under the Family Provision Act. When the hearing commenced, the summons claimed an order that, if the plaintiff failed in his case on the construction of the Deed, he should be granted an extension of time within which to bring, or reinstate, his family provision claim. This was necessary because, absent special circumstances, a family provision claim must be commenced within twelve months of the date of death of the deceased.
Pembroke J did not explain in his judgment why he was not convinced that the process agreed to by the parties was appropriate, save for his observation that it was elaborate and potentially costly.
It may be that his Honour was influenced by the fact that the performance of the deed by Jordan in favour of Robert largely involved transferring to Robert the property in Nada's estate that she had given him by her will, and, further, it is not clear that any of the steps taken by Steven to perform his obligations under the deed of release would not be obligations that he would be required to meet anyway if Robert's half-interest in Jersey was eventually transferred to Steven.
As to the original proceedings for family provision orders that Steven had discontinued, ultimately Pembroke J gave Steven leave to add those claims to these proceedings: Stojanovski v Stojanovski (No 2) [2012] NSWSC 1547.
Pembroke J has not yet made an order for the costs of the proceedings up to the judgments given by his Honour. As will be seen, Steven initially adopted the position in the proceedings before me that I should make an order for the reserved costs in Steven's favour, and that the Court should take into account Steven's own costs on a solicitor and client basis as a liability that justifies a family provision order being made in his favour to the extent of those costs (together with many other similar liabilities to which reference will be made below). In the course of final submissions, Steven changed his position to one in which he should be left to pursue his claim for the reserved costs against Robert. Of course, Robert is now bankrupt. This change of position gave rise to the question of which judge should decide what order should be made in respect of the reserved costs. Steven's ultimate position was, as shall be seen, that reserved costs in this, and other, applications should be decided by the judges who heard the various applications.
In taking this course, Steven referred to the following aspect of the judgment of Pembroke J given on 16 November 2012: [21] For the time being, the only order that I will make is to dismiss the claims sought by prayers 5 and 5A of the Amended Statement of Claim filed on 31 October 2012. The proceedings should stand over for further directions before me on 30 November 2012. The parties should consider these reasons. In particular the first defendant should carefully consider his position. This litigation has only become necessary because he resiled from the solemn promise that he made to his mother and his brother on 3 January 2006. If the ultimate outcome is that the plaintiff receives the half interest in Jersey Avenue which the first defendant has denied to him, I will hear submissions about an appropriate costs order against him that reflects that final result.
The final part of this paragraph contains a suggestion that, if Pembroke J were to decide the reserved costs, he would be open to making an order for costs against Robert, if the Court ultimately decided that the testamentary agreement was enforceable against Robert. If I am required to decide the reserved costs, I would need submissions on this issue. Steven could have accepted that the deed of release had been avoidedby operation of the condition in cl 3.19, and sued to enforce the testamentary agreement. He did not do so. He chose to sue to establish the continuing validity of the deed of release, and to gain the benefit of the enforcement of cl 3.10, or alternatively for orders restoring the status quo ante the deed of release. Having made this choice, he failed. He was given an indulgence by Pembroke J, which enabled Steven ultimately to constitute his claims in the manner required to be determined by these reasons. In my view, it is not at all clear that Steven is entitled to an order against Robert for the costs of the proceedings up to the point where Pembroke J gave him leave to further amend his claims.

[27]

Transfers by Robert to Angelina on 31 May 2013

As at 31 May 2013, Robert held the title to Kemp and a half-interest in Breakwell and Morts as joint tenant with Angelina. That situation had come about because Nada's interest in Kemp passed to Robert by survivorship on her death, and a Notice of Death was lodged on 20 January 2006. As Nada left Breakwell solely to Robert, a Transmission was lodged on 14 July 2009, and, on the same date, a Transfer was lodged whereby Robert transferred Breakwell to himself and Angelina as joint tenants. Morts had been acquired in the sole name of Robert and, on 28 November 2002, a Transfer was lodged whereby Robert transferred Morts to himself and Angelina as joint tenants.
Relevantly, on 1 February 2013, Pembroke J set down an application by Steven and Jovanka to bring family provision claims out of time for a four-day hearing commencing on 27 May 2013. The Court's records do not appear to record formally what occurred in relation to that hearing, although the Court was informed on behalf of Steven that the hearing did not go ahead because it had been discovered that Robert had transferred his interests in Breakwell, Kemp and Morts to Angelina. As Steven's success on any family provision claim against Nada's estate, as it was contemplated at that time, required that Breakwell and a half-interest in Kemp be included in Nada's notional estate, and title to Morts be included in the actual estate, the transfer of the title in the three properties solely to Angelina could have had the effect of nullifying Steven's claim.
On 31 May 2013, Robert executed further transfers in favour of Angelina, whereby Robert transferred the whole of his remaining interests in Breakwell, Kemp and Morts to Angelina. Those transfers were made for nil consideration payable by Angelina and in performance of orders made by consent of Robert and Angelina by a Registrar of the Family Court on 7 May 2013. As will be seen, on 30 July 2014, the consent order was set aside by order of Foster J of the Family Court. I have not been able to resolve the apparent inconsistency between the hearing being fixed by Pembroke J to commence on 27 May 2013, it seemingly not going ahead because it was discovered that Robert had transferred his relevant interests to Angelina, and the transfers being executed later, on 31 May 2013.
Be that as it may, Pembroke J made an order on 9 August 2013 joining Angelina as the fourth defendant to the proceedings.

[28]

Caveat proceedings before Slattery J

After Steven learned of the transfer of Robert's interests in the three properties to Angelina, he lodged caveats against the titles to Breakwell and Kemp to protect his family provision claim, pending the taking of steps in the Family Court to have the consent order and the transfers set aside.
Angelina then lodged lapsing notices in respect of the caveats, which were served on Steven.
On 30 September 2013, Steven commenced new proceedings against Angelina, by summons filed by leave of Slattery J sitting as duty judge.
Apart from the orders that are commonly sought to bring the summons back before the duty judge on short notice, Steven sought an order pursuant to s 74K(2) of the Real Property Act 1900 (NSW) that the operation of the caveats in respect of Breakwell and Kemp be extended until further order of the Court.
The summons did not comply with the general requirement that a plaintiff who seeks an order extending a caveat should claim as final relief orders that are appropriate to establish that the plaintiff has the interest that is sought to be protected by the caveat.
By an amended summons, filed by leave of Slattery J on 2 October 2013, Steven added an alternative claim that Angelina be restrained from dealing in various specified ways with Breakwell and Kemp until further order of the Court.
The amended summons did not correct the defect of failing to identify the interests sought to be protected by the caveats, and seeking relief to establish Steven's entitlement to those interests.
An affidavit filed in support of Steven's application by Ms Tina Mai, who was a solicitor acting for Steven, affirmed on 27 September 2013, described the interests claimed in the two caveats lodged against the titles for Breakwell and Kemp as being equitable interests arising out of Steven's claim in the principal proceeding under the Family Provision Act.
The affidavit made it clear that Steven had filed the summons in support of his claim in the principal proceedings. Steven's operative pleading at that stage was his further amended statement of claim, described above, in which he made a claim for a family provision order.
Slattery J handed down his judgment on 11 October 2013: Stojanovski v Stojanovski [2013] NSWSC 1491.
The judgment indicates that the hearing took place over a period of four days, starting on 30 September 2013. Counsel appeared for Steven and Angelina represented herself. As Slattery J explained, at [23]-[27], although the proceedings were heard over four days, the actual hearing did not occupy all of those days. Because of the short notice, Angelina was given a number of adjournments. The matter appears to have occupied some hours on the first day, and some time on the third day, after which Angelina was given a further opportunity to put on evidence, and then about 40 minutes on the fourth day.
It appears that Slattery J formed the understanding that Nada's estate was fully administered by 2009: see [17]. This finding may have been influenced by the belief, noted at [4], that George had been transferred by Jordan to Steven. Slattery J found, at [33], that Steven was not entitled to an extension of the caveats on the basis of the interests claimed in them because Jordan, as executor, no longer held Breakwell and Kemp, as he had distributed them. His Honour said at [33]: "…[Jordan] does not any longer have an equitable or a legal interest in the estate's property, which has been fully administered…" More importantly, Slattery J based his ruling on the principle that any claim by Steven to have Breakwell and Kemp designated as notional estate under the Family Provision Act did not give rise to a caveatable interest in the properties.
However, in the result, Slattery J made an order permitting Steven to lodge new caveats against the title to the two properties, and to claim that he was entitled to the benefit of constructive trusts owed by Robert, of which Angelina had notice when she acquired apparent title to the properties. Steven had not claimed this relief in his amended summons. As his Honour stated, at [34], the arguable basis for the existence of the constructive trust was as follows: But Steven does have an arguable claim to an equitable interest in the Breakwell and Kent properties. The Breakwell and Kemp properties were arguably held on constructive trust by Robert for the estate. And in turn Angelina may in the circumstances of the May 2013 settlement have taken them subject to that constructive trust. The alleged constructive trust arises from the three-way arrangements between Nada, Robert and Steven made just before Nada's death in which they all agreed to the distribution of her property in a particular way. It seems clearly arguable that Nada, and Steven, received a promise from Robert that he would relinquish his interest in the Jersey property at the same time as taking the Breakwell and Kent [sic] properties. He has done the latter but not the former. Nada arguably made her will with the dispositions contained within it in reliance upon Robert's promise to her. She has now died and her estate has been distributed in performance of her side of the promise from Robert which is evidenced in writing in relation to the Jersey property. The situation is analogous to parties making mutual wills, where the survivor may be held to hold property on constructive trust, so that the survivor is held to a promise to the deceased which has been given in exchange for the operation of the deceased's will: Birmingham v Renfrew (1937) 57 CLR 666. Ordinarily the constructive trust would attach to Robert's interest in the Jersey property on these doctrines. But these caveats have been lodged in respect of the Breakwell and Kent [sic] properties. But it seems to me that equity's remedial jurisdiction in constructive trust, to ensure that Robert is held to the agreement he made before Nada died, would extend to him posing an equitable charge on the Breakwell and Kent [sic] properties which are distributed to Robert as part of the deceased's performance of her side of the bargain, if for example, Steven's interest in the Jersey property were not available any longer or had lost value: Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78, at 615. Thus, the constructive trust remedy may warrant the finding of Steven's interest in the Jersey property, the Breakwell property or the Kent [sic] property. I should add that although this claim is more than six years old an extension of the limitation period is also clearly arguable by reason of Robert's conduct in relation to the 2009 Deed of Release.
That finding was apparently made on the basis of evidence before his Honour, referred to at [6] of his Honour's judgment. It appears that Slattery J may have intended there to refer to an affidavit by Steven, although he refers to an affidavit by Robert. He said: "…[Steven] explains that the intention that emerged from a family conference between Nada, Robert and Steven before Nada's death was that "I (Steven) would have Jersey Avenue, being a property that I could subdivide and that I would also receive George St…""
I interpolate that it appears that Steven obtained orders favourable to him from Slattery J in part on the basis of evidence that the intent of the testamentary agreement was that Steven would subdivide Jersey following the transfer of Robert's interest in that property to Steven. That may be relevant to the question, raised in outline above, as to whether Jersey is capable of being subdivided into two separate lots.
Thus, Slattery J did not proceed solely on the basis that any possible obligation by Robert to transfer his interest in Jersey to Steven could only arise out of the testamentary agreement. He acted, at the interlocutory stage of the proceedings, upon some evidence that there was an agreement to which Steven was privy, between himself, Nada and Robert, that Robert would transfer his interest in Jersey to Steven.
Slattery J appears also, to some extent, to have taken into account the testamentary agreement. That was a promise made by Robert to Nada. Steven was not privy to that agreement. If it was enforceable, it was enforceable by Jordan, as Nada's executor. His Honour recognised that Steven's claim was primarily for an interest in Jersey, but concluded that, at the interlocutory stage, Steven had a sufficiently arguable case that he may be able to assert a constructive trust or a charge against Breakwell and Kemp, "…if for example, Steven's interest in the Jersey property were not available any longer or had lost value…" (at [34]).
Slattery J said, at [36], that the pleadings in the "existing proceedings before Pembroke J", which are the present proceedings, were wide enough generally to encompass the claim identified by his Honour.
Slattery J also observed that the circumstances would warrant the grant of an injunction in the nature of a freezing order: see [37]. That possibility was apparently not explored, and indeed there appears to have been no consideration of the monetary limit that would be appropriate for such an order. Slattery J did not make a freezing order, because he deemed it unnecessary to decide that question given that he also gave leave to file further caveats.
In conformity with the leave granted by Slattery J to Steven to lodge fresh caveats against the titles to the Breakwell and Kemp properties, on 11 October 2013, Steven lodged caveats in materially identical terms, which gave particulars of the estate or interest claimed by Steven, and stated the facts, as follows: Particulars of the Estate or Interest Claimed in the abovementioned land: Equitable interest of Steven Stojanovski arising under a constructive trust arising pursuant to an agreement made between the late Nada Stojanovski, Steven Stojanovski and Robert Stojanovski on about 3 January 2006, and the equitable charge imposed on the subject land in consequence of the creation of that constructive trust to protect the equitable interest of Steven Stojanovski in it, in conformity with the findings made by the Supreme Court of New South Wales in Stojanovski v Stojanovski, 11 October 2013, Equity Division, Slattery J, no. 2013/294278, unreported, at [34], [35], [36] and [43]. By virtue of the facts stated below: Equitable interest of Steven Stojanovski arising under a constructive trust arising pursuant to an agreement made between the late Nada Stojanovski, Steven Stojanovski and Robert Stojanovski on about 3 January 2006, and the equitable charge imposed on the subject land in consequence of the creation of that constructive trust to protect the equitable interest of Steven Stojanovski in it, in conformity with the findings made by the Supreme Court of New South Wales in Stojanovski v Stojanovski, 11 October 2013, Equity Division, Slattery J, no. 2013/294278, unreported, at [34], [35], [36] and [43].
The description of the equitable interest claimed by Steven explicitly relies upon an apparent tripartite agreement between Steven, Nada and Robert.
Just as was the case concerning the costs of the hearing before Pembroke J that have been considered above, Steven initially adopted the position that his solicitor and client costs for the hearing before Slattery J should be taken into account as a financial obligation of Steven for the purpose of making the judgments required of the Court, for the purpose of deciding whether a family provision order should be made in Steven's favour. However, Steven also changed his position in relation to these costs, and submitted that the appropriate course was for Steven to pursue an order for the costs of the hearing before Slattery J, and then to obtain relief by enforcing that costs order. Steven informed the Court that the course that he preferred was to seek an order for costs from Slattery J, rather than for this Court to decide that issue.
The following matters are material to the question of the costs order that is appropriate concerning the proceedings before Slattery J: 1. Steven did not succeed in obtaining an order extending the caveats, or an injunction against Angelina, which was the relief that he sought by his amended summons. Instead, Steven was given leave to lodge new caveats to support arguable interests in the terms recognised by Slattery J in his judgment. 2. Slattery J rejected Steven's submission that he had a caveatable interest to protect the possibility that he would succeed in obtaining orders designating Breakwell and Kemp as notional estate. 3. Slattery J granted the leave to lodge the new caveats to protect possible interests in Breakwell and Kemp in the nature of a constructive trust or equitable charge, based in part upon the suggested tripartite agreement between Steven, Nada and Robert, and the possibility that Jersey would cease to be available as the primary subject of Steven's relief, or would lose value. 4. Although, at the hearing of these proceedings, Steven prosecuted his claim against Jersey, based upon the testamentary agreement, he has not pleaded or prosecuted a claim against Breakwell or Kemp based upon the alleged tripartite agreement, or the disposition or loss in value of Jersey, and consequently the Court has not found that Steven had the interests in Breakwell and Kemp that are sought to be protected by the caveats.
As I have explained above, during the hearing in this Court, discussion between counsel for Steven and the Court proceeded on the basis that the costs of the proceedings before Slattery J had been reserved, and it would be necessary for the Court, either through me or Slattery J, to determine what costs order is appropriate.
However, after I reserved judgment, when I reviewed the Court's file concerning the proceedings before Slattery J, I discovered that, on 11 October 2013, Slattery J also made the following order: 2. The costs of this proceeding become the parties' costs in proceeding no. 2012/89349.
The proceedings referred to by Slattery J are the present proceedings the subject of these reasons for judgment.
I have since also noticed that, in the affidavit of a solicitor employed by Steven's solicitor, Ms Jamie Antonopoulos, sworn 29 May 2019 (No 2), at item 3 in the table in par 29, reference is made to the costs order that the costs of the proceedings before Slattery J be the parties' costs in this cause.
The issue of the costs order that should be made in relation to the proceedings before Slattery J, or the consequences of that order in respect of the amount of costs that should be paid by the appropriate party, and the amount of costs payable by Steven to his lawyers, might usually be considered to be of little relative importance in a case as complex as the present one. That is, the costs of obtaining an interlocutory order granting leave to lodge fresh caveats, in the context of the need for relatively brief appearances to obtain leave to file the summons, and then to deal with the application over parts of three days, would not usually be expected to be substantial.
However, in the affidavit of Ms Antonopoulos referred to above, at item 3 in the table in par 29, Steven's costs of the proceedings before Slattery J are stated to be $161,857.
I will defer further consideration of the significance of the costs order made by Slattery J on 11 October 2013. However, I observe that it is not a straightforward issue as to whether his Honour's order settles the matter. The only party who resisted the order extending the two caveats before Slattery J was Angelina. If an order is made in these proceedings enforcing the testamentary agreement, it will be made against the trustees, standing in the shoes of Robert. Angelina's involvement has been in resisting orders that part of her interests in Breakwell and Kemp be designated as notional estate of Nada. Steven has abandoned his claim relating to Morts. As will be seen, orders have been made by this Court that Robert's interests in Breakwell, Kemp and Morts that were transferred to Angelina on 31 May 2013 be vested in the trustees. The trustees have been the primary opponent at the second stage of the hearing to the notional estate designations being made. In these circumstances, depending upon the precise outcome of these reasons for judgment, Slattery J's order that the costs of the hearing before him become the parties' costs in these proceedings may not be adequate or effective in practical terms. It may be relevant that this Court has not been asked by Steven to find that he in fact has the interests in Breakwell and Kemp the arguable existence of which led Slattery J to make the orders giving leave to Steven to lodge the new caveats against the titles to those properties.
The better view of the meaning of Slattery J's order as to the costs of the application before him is not that the costs were to be any particular party's costs in the present cause, but rather that those costs were simply to be dealt with by the judge who determines these proceedings, as part of the overall costs of these proceedings. His Honour did not say that the costs were to be costs in this cause, but rather said that the costs were to be "the parties' costs in" these proceedings. It appears that Ward CJ in Eq took the same view on this issue, in a judgment in these proceedings that I will consider below: see Stojanovski v Stojanovski [2018] NSWSC 1967 at [24].

[29]

Second further amended statement of claim

On 28 March 2014, Pembroke J gave Steven leave to file a second further amended statement of claim, which was filed on 7 April 2014.
In that pleading, prayer 5B sought that accounts be taken on the basis that the deed of release had been held to be void by operation of cl 3.19.
Apart from minor amendments to the way that the prayers for family provision relief and equitable damages were drawn, Steven claimed new relief in prayers 9A to 9G to enforce a constructive trust over Robert's one-half interest in Jersey in favour of Steven, as well as to establish or recognise interests in Breakwell, Kemp and Morts.
As recorded above, by this stage Robert had transferred the interest received under Nada's will in Breakwell and his title to Kemp (as to half received by survivorship on Nada's death) to Angelina on 31 May 2013. Steven sought a declaration that the transfers constituted alienations of property by Robert with intent to defraud his creditors, namely Steven and Jovanka, within the meaning of s 37A of the Conveyancing Act 1919 (NSW) (Conveyancing Act).
Steven sought an order that Angelina transfer her interest in Breakwell and Kemp to Steven by way of provision from Nada's estate for his maintenance and further advancement in life pursuant to s 7 of the Family Provision Act.
Consequential orders were sought for the purpose of securing the interest claimed by Steven over Breakwell and Kemp.
In par 2C of the pleading, Steven introduced specifically a claim that, on 3 January 2006, Nada, Robert and Steven, or alternatively Nada and Robert, made an agreement in terms of what I have called the testamentary agreement.
It may be noted that the particulars to par 2C of the pleading were the written memorandum dated 3 January 2006 signed by Robert in the presence of Nada and the two witnesses, and an oral discussion held on the same day between Nada and Robert in the presence of the witnesses. Nothing was said about Steven being a party to the discussion.
Steven added to the pleading a claim in par 26A that, on 16 November 2012, the Court had found that the deed of release was void for non-fulfilment of a condition precedent, and also "that all payments of money and transfers of property including land effected pursuant to it should be repaid, reversed and retransferred". Steven gave as particulars the decision of Pembroke J of that date.
I do not read Pembroke J's judgment as including any finding or order that any transfers of property under the deed of release should be reversed.
Then, in par 26B, Steven added a claim that, by reason of the nullity of the deed of release, Robert became obliged to re-transfer Breakwell and Kemp to Jordan to hold as executor, and was also required to repay to Steven Robert's share of all monies paid on his behalf, by way of restitution.
In pars 28B to 28F, Steven pleaded in detail the basis of his claim that the transfers of the properties by Robert to Angelina constituted an alienation of property with intent to defraud Robert's creditors within the meaning of s 37A of the Conveyancing Act.
In par 28D, Steven appears to put his and Jovanka's title to have the transfers set aside on the basis that they were contingent creditors of Robert.
One change as between the further and second further amended statement of claim should be noted. In the further amended statement of claim, prayer 7 made it clear that Steven's family provision claim was an alternative to the enforcement of the deed of release. The effect of Steven failing on prayers 5 and 5A before Pembroke J is that Steven deleted the prayers that he had formally made seeking to enforce the deed of release. Steven's family provision claim was still expressed to be in the alternative, but the alternative had been deleted. Steven's claim for an account as a result of the deed of release being void remained in the prayers, but it would be difficult to read the claim for family provision relief in prayers 7 and 8 as being intended to be in the alternative to that claim.
As prayers 9A and 9B, apparently based upon the testamentary agreement, seeking relief to enforce a constructive trust in favour of Steven over Robert's half-share in Jersey, were inserted as new prayers after prayers 7 and 8, an appearance is created that the family provision claim was no longer made in the alternative to any other claim (except possibly the claim for an account).
Steven did not plead the factual basis of the family provision claim in the second further amended statement of claim. That is consistent with conventional family provision practice, whereby claims for family provision orders are made by summons. Consequently, the previously pleaded position, whereby Steven only sought additional family provision as an alternative to the transfer to him of Robert's half-share in Jersey, has been rendered uncertain by the course of amendments to the statement of claim.
This complicated change to Steven's pleaded case may be a reflection of the fact that Steven originally would apparently have been satisfied if he had been able to enforce the testamentary agreement. That would have put him in a position of rough equality with Robert, and there would be no real basis for Steven to maintain an additional family provision claim. However, in a manner that I will consider in more detail below, Steven's substantial and accumulating liability to his lawyers on a solicitor and client basis appears to have changed Steven's perception of his case, so that he came to claim both the performance of the testamentary agreement and the making of a family provision order. The purpose of Steven's family provision claim appeared to have changed from being a practical substitute for the enforcement of the testamentary agreement, to a mechanism that would permit him to pay to his lawyers all of the money that he owed to them on a solicitor and client basis as well as achieving the enforcement of the testamentary agreement. In this way, the purpose of the case appears to have changed, and become instead to provide Steven with a manner in which to meet his ever-increasing liabilities to his lawyers.
It should also be noted that, although Steven introduced a claim that an order for the taking of account should be made because the deed of release had been declared void, and that Robert should be ordered to re-transfer Breakwell and a half-share in Kemp to Jordan for the same reason, Steven did not ultimately pursue those claims at the hearing.
The history of the pleadings in these proceedings, and the inclusion of claims that have subsequently been abandoned, is relevant to Steven's case that Robert and Angelina have in some wrongful way been the cause of the accumulation of all of Steven's obligations to pay costs to his lawyers. It is also likely to be relevant to the consideration of any costs orders that should be made in the proceedings. It will be seen that, at various stages, Steven has amended his pleadings to make new claims for relief, and then abandoned those claims.
It should be noted that Steven has also abandoned the claim for orders setting aside the transactions that took place on 31 May 2013. That abandonment is, however, in a different position to other claims introduced and abandoned by Steven, because the trustees have obtained orders that had the effect of setting aside those transactions, thus obviating the need for Steven to pursue his claim under s 37A of the Conveyancing Act.

[30]

Family Court proceedings to set aside consent order

A hearing occurred in the Family Court of Australia at Parramatta, on 21 July 2014, of Steven's application to set aside the consent orders entered by Robert and Angelina. Foster J gave judgment on 30 July 2014 setting aside the orders made on 7 May 2013. The medium neutral citation for his Honour's judgment does not appear on the copy provided to the Court. The judgment records that neither Robert nor Angelina appeared at the hearing. Steven was represented by his present counsel.
Foster J recorded, at [31(e)], that the application for consent orders made by Angelina and Robert asserted that there was no person who may be entitled to become a party under s 79(10) of the Family Law Act 1975 (Cth) (the Family Law Act). Foster J noted, at [39], that s 79A of the Family Law Act provided that the Family Court may, on the application of a party affected by an order in property settlement proceedings, set aside or vary the order in certain circumstances, including under s 79A(1)(a), where there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including the failure to disclose relevant information), and the giving of false evidence or any other circumstances.
The basis of Foster J's decision to set aside the consent orders is contained at [42] in the following terms: As discussed above, it is abundantly clear that Robert and Angelina sought by subterfuge to obtain orders by consent as to property knowing full well that the subject properties were very much in dispute. They deceitfully failed to disclose the prospective and pending third party interest of Steven and Jovanka in the Application for Consent Orders and sought to undermine proceedings in the Supreme Court of New South Wales. The observations of Slattery J are most apposite.
Foster J reserved the costs of the application.
The decision of Foster J to set aside the consent orders is relevant to a claim made by Steven that Robert and Angelina are estopped from denying that they had acted fraudulently in attempting to thwart the ability of this Court to designate any of the interests in the properties transferred by Robert to Angelina under the consent orders as notional estate of Nada. Steven's reliance on the estoppel is in support of his initial argument that a family provision order should be made in his favour to recompense him for the costs of having the consent orders set aside.
Relevantly, the issue decided by Foster J was whether Robert and Angelina acted deceitfully in failing to disclose the potential interests of Steven and Jovanka in Breakwell and Kemp by reason of applications that Foster J understood they had both made in this Court for family provision, which could lead to those properties being designated as notional estate of Nada.

[32]

Third further amended statement of claim

Steven's third further amended statement of claim was filed on 16 October 2015 by leave of Young AJA.
The principal change in the relief claimed, by new pars 1 to 5A, was for orders designating Breakwell, Kemp and Jersey as notional estate of Nada; and an order that Morts was held by Angelina on a resulting or constructive trust for the estate, and constituted residuary estate to which Steven and Robert were entitled in equal shares under Nada's will.
This was the first time that Steven specifically made a claim that Nada's interests in Breakwell, Kemp and Jersey should be designated as notional estate of Nada.
It may be that, in a general way, Robert and Angelina participated in the transfer on 31 May 2013 of Robert's interests in Breakwell, Kemp and Morts to Angelina for the purpose of protecting those interests from Steven's family provision claim, which had been reintroduced into the litigation by the further amended statement of claim filed on 14 December 2012. It is not clear whether they, as laypersons, appreciated that implicit in Steven's claim for family provision was a claim that the interests of Nada in Breakwell and Kemp that had been transferred to Robert should be designated as notional estate of Nada, and how the complicated provisions in ss 22 to 24 of the Family Provision Act worked.
Steven also sought, by prayer 9CA, a declaration that the transfer by Robert to Angelina of Morts on 31 May 2013 constituted an alienation of property by Robert and Angelina with intent to defraud their creditors within the meaning of s 37A of the Conveyancing Act, and, by prayer 9DA, an order that Angelina transfer her interest in Morts to Jordan, as executor of Nada's estate, to hold upon the terms of Nada's will. As explained above, this claim had been introduced by the second further amended statement of claim.
By prayer 9EA, Steven sought an order that Robert and Angelina swear an affidavit giving an account of the rents and profits of, or from the occupation of, Kemp, Breakwell and Morts from stated dates, and that they pay equitable compensation for the amount of rents and profits or the value of the occupation so determined.
Steven also claimed, by prayer 9BE, that the amount of rents and profits or value of the occupation payable as equitable compensation by Robert shall be set off against his beneficial interest in the estate of Nada under her will.
The pleading in the third further amended statement of claim introduced allegations, in pars 2BA to 2BX, concerning the circumstances in which Nada acquired the properties in the names of herself and her two sons. These allegations led to a claim, in par 2BL, that Robert held his joint interest in Kemp on a resulting or constructive trust for the benefit of Nada, and in par 2BP that, by agreement made on or about 23 July 1999 between Nada and Robert, Robert held Morts on an express, or alternatively a resulting, trust for Nada. The effect of these allegations was summarised in par 2BS, to the effect that Nada's estate was beneficially entitled to Kemp, Breakwell, George and Morts, so that the only property owned by Nada, Steven and Robert was Jersey.
Steven then alleged, in pars 2BT to 2BX, that, by reason of their knowledge of the true arrangements between Nada and her sons, Jovanka and Angelina had reason to believe that the properties registered in the names of their respective husbands were beneficially owned by their husbands, contrary to the fact, because their respective husbands had failed to disabuse them about the true state of affairs regarding beneficial ownership of the properties.
Steven added a series of allegations, in pars 4BA to 4BG, concerning Nada's expectations at the time of her death about the disposal of her estate. In par 4BA, Steven described Nada's intention to divide her estate equally between Steven and Robert as Nada's "equal entitlement testamentary intentions". Steven alleged that Jordan, as Nada's executor, had a duty to administer the estate in accordance with Nada's equal entitlement testamentary intentions. Steven alleged that Jordan contravened those intentions, by distributing properties to Robert in accordance with the will, but failing to transfer George and Jersey to Steven; by failing to require Robert and Angelina to transfer a half-interest in Morts to Steven as a gift of Nada's residuary estate; and in failing to give notice of the transfers of Kemp, Breakwell and Jersey to Steven, to enable Steven to apply to restrain the transfers or to make an application for provision under the Family Provision Act. Steven described these defaults as "Jordan's testamentary contraventions".
Steven alleged that Jordan committed the testamentary conventions at the behest of Robert and Angelina, by surrendering or delegating his duties as executor to Robert and Angelina and their solicitors, and by executing whatever executorial documents were submitted by Robert, Angelina and their solicitors, without regard to Nada's true testamentary intentions as he knew them, and without regard to the legitimate general law and statutory rights of Steven under the will.
Then, Steven pleaded that, in consequence of Jordan's testamentary contraventions, Steven had suffered loss, and that Robert and Angelina were liable to Steven for the losses, because those contraventions were procured by Robert and Angelina and their solicitors as their agents.
Steven pleaded, in pars 29 and 30, issue estoppels arising out of pars 39 to 44 of the decision of the Family Court on 30 July 2014, which findings amounted to deceit and fraud against Robert and Angelina.
Finally, in pars 30A to 30V, Steven pleaded his case for provision out of Nada's estate under the Family Provision Act.
It must be noted that, just as Steven ultimately abandoned some of the claims that he introduced by his second amended statement of claim, he has ultimately done the same in relation to claims introduced by his third amended statement of claim. Steven did not ultimately pursue the claim that Robert and Angelina should be ordered to pay equitable compensation to Steven for the rents and profits and the benefits of occupation of Kemp, Breakwell and Morts. Steven did not pursue the complicated and obscure claim which involved allegations that Robert held Kemp and Morts on a constructive trust for Nada, so that half of the value of those properties had been left to Steven as part of the residuary estate of Nada's will. Steven did not pursue the claim based upon the so-called "equal entitlement testamentary intentions" or "Jordan's testamentary contraventions" or Robert's and Angelina's alleged ancillary liability for Jordan's contraventions. Steven abandoned his claims concerning Robert's ownership of Morts completely.

[33]

The first stage of the hearing

The proceedings were set down for hearing before me commencing on Monday, 28 November 2016. I interpolate here that the transcripts for each of the two stages of the hearing commence at page 1. Consequently, I have given and will continue to give transcript references which identify pages for the first stage as TA and the second stage as TB followed by the relevant page number.
In accordance with the usual order for hearing, Steven delivered to the Court brief outline submissions prepared by his counsel, Mr Bevan and Mr Zmood, dated 21 November 2016. Those submissions set out the orders sought by Steven as follows (paraphrased for brevity): 1. Robert should transfer a half-interest in Jersey in performance of the testamentary agreement. 2. Robert should be ordered to account to Steven on oath for the benefits received by Robert in performance of the deed of release dated 30 June 2009 as a result of the deed being declared void. 3. Morts should be declared to be part of the residuary estate of Nada held on trust by Angelina. 4. Morts should be transferred to Steven by way of provision under s 7 of the Family Provision Act. 5. Alternatively to (4), Robert's half-share in Kemp acquired from Nada's estate should be declared notional estate, and, after the property is sold by judicial sale, half of the proceeds should be paid to Steven by way of provision under s 7 of the Family Provision Act. 6. A referee should take accounts on oath of the rents and profits derived by Robert and Angelina from Kemp and/or Morts and the amount determined should be paid to Steven. 7. Jordan should be ordered to transfer George to Steven, and administrative steps taken by the Court if Jordan lacks capacity to comply with the order. 8. Robert and Angelina should be ordered to pay the costs of the proceedings and the caveat proceedings on the indemnity basis.
For the purposes of his family provision claim, Steven's financial circumstances were set out in a document called Schedule 2 that was handed to the Court. Steven's assets were said to be $1.665 million, constituted by his half share in Jersey ($650,000), his entitlement to receive George ($800,000), his superannuation ($15,000), and his lump sum settlement monies from his work accident (that will be explained below) of $200,000.
Steven's current liabilities were said to be $1,261,315.42. This sum was comprised of personal loans from Mr Kaldon Karout (total $452,697.50); a personal loan from Marie (a former partner - $48,375.05); legal fees for the various proceedings considered above (total $734,642.87); and additional debts (total $25,600).
Note 1 to Schedule 2 claimed that Steven was subject to an agreement to sell George to Mr Karout for $450,000 in satisfaction of the loan referred to in the preceding paragraph.
It was also claimed that Steven had contingent liabilities, primarily in respect of his family law property proceedings with Jovanka. Steven estimated that he would become liable to pay Jovanka $1,300,000, and that his legal costs of those proceedings would be $110,000, giving a total of $1,410,000. Steven estimated his future legal costs of these proceedings at $110,000. Steven made a somewhat obscure allowance for back rent payable upon judgment in these proceedings of $46,800. The total of Steven's estimated contingent liabilities was $1,566,800.
In the manner explained in Schedule 2, Steven's financial position was said to be in deficit to the amount of about $1,630,000. The calculations used to come to this figure are opaque, as it does not match the figure arrived at when the current and contingent liabilities are subtracted from the current assets (which is $1,162,115.42). The difference between these figures is $467,884.58. This may mean that the Karout debt was double-counted, but, in the absence of any workings out provided in Schedule 2, the Court can only speculate. In any case, the figure calculated for the total deficit, of $1,630,000, appears to be wrong.
The hearing was adjourned part-heard at the end of the five hearing days on 2 December 2016, because the parties had not succeeded in completing the evidence in the time that the Court was informed at the time the proceedings were set down for hearing would be sufficient to dispose of the case completely, including the making of appropriate submissions to the Court. Steven's case was closed and Steven's counsel had not finished cross-examining Robert.
For reasons that are not clear, at the beginning of the hearing, counsel who had been briefed to appear for Robert sought, and, in the absence of opposition from Steven, was granted, leave to withdraw as counsel for Robert, and to continue to appear at the hearing for Angelina. That was apparently done on the basis that the interests of Robert and Angelina were congruent.
The proceedings were listed for further hearing for two days commencing 31 August 2017, and if necessary for a further day on 20 November 2017 for the delivery of closing addresses. These were the earliest dates suitable to the Court and to the parties.

[35]

Robert's bankruptcy

Robert's bankruptcy intervened, when a sequestration order was made against his estate on 30 June 2017. It is not necessary to relate the procedural consequences in detail, but it may be noted that, on 31 August 2017, at the request of the parties, the Court vacated the hearings listed for 1 September 2017 and 20 November 2017. On the same date, the Court made an order joining the trustees as the fifth and sixth defendants, and made case management orders relevant to their participation in the proceedings.
According to Mr Micheletto's 29 May 2019 affidavit, Robert has not provided the trustees with a statement of affairs, and has proved difficult for the trustees to contact, by reason of the impermanency or inadequacy of the contact details that he has given the trustees.
The assets of Robert's bankrupt estate currently comprise of Kemp, a half-interest as tenants in common with Angelina in Breakwell, and a half-interest as tenants in common with Angelina in Morts. Mr Micheletto noted that the trustees have admitted that Steven is entitled to receive a transfer from Robert of Robert's interest in Jersey.
It appears from the trustees' report to creditors that Swaab Attorneys, who I understand were the solicitors acting for Robert in the proceedings up to the point of the judgments delivered by Pembroke J, were the petitioning creditor. They have lodged a proof of debt in Robert's bankruptcy for $188,651.81, plus a certificate of taxation in the sum of $56,670, in respect of their costs as petitioning creditor.
Another firm of lawyers who acted for Robert, Foulsham & Geddes, have advised that they intend to make a claim in the bankruptcy in the sum of $122,320.51. I believe that firm acted for Robert in respect of the first stage of the hearing.
In addition, Steven has an order for the payment of costs against Robert and Angelina jointly as made by Le Poer Trench J on 18 May 2015, as referred to above. Those costs have not yet been quantified.
Mr Micheletto deposed to the unbilled legal costs of the trustees being approximately $550,000, plus disbursements of about $18,571.84.
The trustees' estimated costs of the second stage of the hearing before me are $100,000 plus GST, giving $110,000. Mr Micheletto estimated the trustees' legal costs of selling any properties required to be sold to comply with the orders that this Court may make in these proceedings as being $50,000 plus GST, or $55,000.
The trustees will also have to respond to proceedings in the Family Court instituted against them by Angelina, for which the trustees' future legal costs may exceed $100,000.
Mr Micheletto gave a rough estimate of the trustees' future entitlement to remuneration as falling within a range of $50,000 to $100,000.
According to the approximate values of the properties given in par 28 of Mr Micheletto's affidavit, the assets in the bankrupt estate of Robert have a value of around $2,250,000.
The total known claims by creditors is $367,642.32. That does not include an allowance for the costs order in favour of Steven made by the Family Court.
The presently estimated costs of the administration of the bankruptcy total, at the higher range, $933,571.84. Further, I am not sure that Mr Micheletto has provided all of the trustees' remuneration entitlement to date.
Mr Micheletto is by no means suggesting that the estimates given by him are definite, and it is clear that the ultimate costs of the bankruptcy will depend upon the future course of this and other litigation. However, in order to understand the ambit of the effect of Robert's bankruptcy, it may be seen that the total of the creditors and costs will be greater than $1,301,214.16, when Robert's share of the costs payable to Steven are taken into account. If those unqualified costs are ignored for the moment, there will be an almost one million-dollar surplus in the administration of Robert's bankrupt estate.
Had Robert not transferred his interests in the properties to Angelina on 31 May 2013, which put the payment of his solicitors beyond his power, he could have paid his solicitors the amounts owed, and saved himself almost $1,000,000.

[36]

Grant of leave to continue proceedings in Supreme Court

Steven made an application, by originating process filed on 4 December 2017, for a grant of leave pursuant to s 58(3) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) to continue to prosecute the part-heard proceedings before this Court, given that some of the property the subject of Steven's claims had become vested in the trustees, and it would be necessary to join the trustees as defendants.
Section 58(3) of the Bankruptcy Act has the effect that it is not competent for a creditor to commence any legal proceeding in respect of a provable debt, or to take any fresh step in such a proceeding, except with the leave of the Federal Court, which may be given on such terms as that Court thinks fit. Leave of the Federal Court was therefore only necessary in so far as Steven sought to obtain relief in this Court against Robert in respect of a provable debt.
On 27 April 2018, Flick J, of the Federal Court of Australia, made an order granting leave to Steven to continue these proceedings on certain conditions: Stojanovski v Stojanovski [2018] FCA 580. Apart from a requirement that Steven's proposed fifth further amended statement of claim be amended in a number of minor respects, the principal condition imposed by his Honour had the effect that Steven may not, without the leave of the Federal Court, enforce a judgment made by this Court against Robert except by proving the debt in Robert's bankruptcy.
Flick J specifically noted that there would be no order as to costs, and recorded an agreement made between the parties that "the costs of the present proceeding in this Court will be their costs in the Supreme Court".
It appears that the effect of this order is that the Federal Court has made no order for the costs of the proceedings before it. Any action by this Court to quantify the amount of the costs will, therefore, I would think, not involve an attempt by this Court to exercise any jurisdiction given to the Federal Court, which is an action that would probably fall foul of Chapter III of the Constitution. The agreement made between the parties appears to contemplate that this Court will include in the costs orders that it makes, as a result of these proceedings, an amount appropriate to compensate the successful party in these proceedings for his or her costs of the proceedings in the Federal Court.
There may be problems with this approach, as a matter of principle and practice. It is not clear that this Court has power to make a costs order under its inherent power or under statute in respect of a party's costs of proceedings in another court. The fact that the other court is a Chapter III court may compound the difficulty. Further, it is not clear what is to happen if the parties to these proceedings both succeed and fail in part in respect of the various claims.
It is possible that the only way that this Court could give effect to the agreement recorded by Flick J is to treat the agreement as a contract inter partes that they will pay the costs of the Federal Court application, as if payable in accordance with an order of that Court, in the amount that the Federal Court would have ordered to be paid, but payable only in favour of the successful parties in the proceedings in this Court, to the extent that those parties have succeeded. There may still be an issue as to the enforceability of such an agreement on the grounds of uncertainty. In case of dispute, the agreement would have to be enforced by contractual remedy, and not by means of the apparatus available to this Court for the making, quantification and enforcement of costs orders.
Although this problem was raised by the Court in final submissions, the parties have not yet, in my view, adequately grappled with the difficulties. The course that the parties followed in the Federal Court does not appear to me to be convenient.
Further, although Steven responded to the Court's inquiries by suggesting that his costs of the Federal Court application were a relatively inconsequential proportion of Steven's total costs of all of the proceedings, the actual amount incurred by Steven was $46,741.35. That can only be considered to be inconsequential in proportion to the enormous total of the costs incurred by Steven. The Court does not know what, if any, costs were incurred by the other parties to the application.

[38]

Trustees' claim against Angelina

On 17 December 2018, Ward CJ in Eq gave judgment on a motion filed on 15 October 2018 in these proceedings by the trustees for summary judgment on an application by them for orders under s 120(1) of the Bankruptcy Act, declaring void as against the trustees the transfers by Robert to Angelina on 31 May 2013 of Robert's whole interest in Kemp and half-interest in Breakwell and Morts: Stojanovski v Stojanovski [2018] NSWSC 1967.
Her Honour made the orders sought by the trustees, together with associated relief, as s 120(1) of the Bankruptcy Act made void against the trustee in the transferor's bankruptcy any transfer to another person that took place in the period beginning five years before the commencement of the bankruptcy and ending on the date of the bankruptcy, where the transferee gave no consideration for the transfer or gave consideration of less value than the market value of the property. It is not necessary for the purposes of this judgment to canvass her Honour's reasons.
Ward CJ in Eq also made orders appointing the trustees as receivers of the rents of Morts, Breakwell and Kemp for the period since 25 March 2016, requiring Angelina to provide affidavit evidence of all rents, profits and benefits derived by her from the use of the properties since that date, and stood over the trustees' application for an account, pending the determination of any application that is brought by Angelina under s 79 of the Family Law Act. Her Honour also ordered Angelina to pay the costs of the application on the ordinary basis.
A singular feature of these proceedings is that they do not seem to have the capacity to come to an end. It is not necessary for the purpose of these reasons to do more than to note that there is apparently a continuing dispute between the trustees and Angelina concerning the entitlement of the trustees to receive the rents of the properties, and that the trustees have made an application for the punishment of Angelina for contempt.
On 10 January 2019, Angelina lodged a notice of intention to appeal from the orders made by the Chief Judge on 17 December 2018. Apparently, no appeal has been filed.

[40]

Claims abandoned by Steven

At the commencement of the second stage of the hearing, Steven provided to the Court a marked up copy of the fifth further amended statement of claim that indicated the prayers for relief that Steven no longer sought to pursue. The changes made were as follows: 1. Steven abandoned all of his claims in respect of Morts, by deleting prayers 4 to 5A and 9DA, 9F and 9G. 2. The claim in prayer 5B for an accounting as a result of the deed of release dated 30 June 2009 having been declared void was abandoned. 3. Steven abandoned the claim in prayer 9 that he is entitled to equitable compensation which is to constitute a provable debt in Robert's bankrupt estate. 4. Steven deleted the claims in prayers 9C and 9CA for orders under s 37A of the Conveyancing Act 1919 (NSW) declaring the transfers of Robert's interests in Breakwell, Kemp and Morts that took place on 31 May 2013 void, as the need for that relief had been superseded by the orders made by the Chief Judge in favour of the trustees on 17 December 2018. 5. The claims for an accounting by Robert and Angelina in respect of the rents and profits from Kemp, Breakwell and Morts in prayers 9EA, 9EB and 9EC were abandoned. 6. Finally, although Steven maintained his claim in prayer 10 for an order for costs on the indemnity basis against Robert and Angelina for himself and Jovanka, he deleted that part of the prayer that sought to establish that the order for costs against Robert would be a provable debt in Robert's bankrupt estate. This part of the prayer was apparently deleted on the basis of the decision of the High Court in Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52; [2007] HCA 56 (Foots v Southern Cross), to the effect that an order for costs made after the date of a sequestration order is not a provable debt in the bankruptcy, but is a personal debt of the bankrupt that may be enforced against the bankrupt after his or her discharge from bankruptcy.
As mentioned above, it appears that, as Steven abandoned prayer 9 and that part of prayer 10 that sought to establish that an order for costs against Steven would be provable in his bankrupt estate, Steven has abandoned the only claims that were the subject of the prohibition in s 58(3) of the Bankruptcy Act in respect of which Steven sought leave from Flick J to proceed in this Court. If that is true, then Steven's application in the Federal Court that led to the judgment of Flick J has retrospectively proved to have been unnecessary.
Steven provided detailed written submissions to the Court dated 28 May 2019, before the commencement of the second stage of the hearing. He also provided additional submissions concerning the claims in respect of probate and equitable relief dated 2 June 2019, and, by leave, provided written submissions dated 14 June 2019 in answer to the written submissions made by Angelina.
I will deal first with the claims the subject of Steven's first set of submissions, which dealt with his claim to enforce the testamentary agreement and his claim for a family provision order that Steven now maintains in addition to his attempt to enforce the testamentary agreement. The additional submissions dealt with subsidiary questions, that are best considered separately at the end of these reasons.
In the manner that I will now explain, Steven's case changed over the course of the second stage of the hearing.

[41]

Claims initially maintained by Steven

The appropriate place to start is to analyse Steven's final written submissions dated 28 May 2019. Paragraph 5 of those submissions summarises Steven's view of the issues that remained for determination by the Court, as follows: 1. As the trustees had admitted Steven's claim for an order that they specifically perform the testamentary agreement, Steven pressed that claim in lieu of the claim propounded at the first stage of the hearing that he receive Robert's interest in Jersey as part of the relief under the Family Provision Act: see sub-par (a). Therefore, Steven no longer sought the designation of Nada's interest in Jersey as notional estate. 2. Steven claimed that Breakwell and the trustees' one half-interest in Kemp should be designated as notional estate of Nada to support an order for further provision in favour of Steven under s 7 of the Family Provision Act: see sub-par (b). 3. Steven then dealt with the issue of his costs in sub-pars (c) to (j). He first dealt with the payment of his costs out of designated notional estate in sub-pars (c) to (f). Steven seems to have acknowledged that the power of the Court, under s 33 of the Family Provision Act, to order that Steven's costs of these proceedings be paid out of the estate or notional estate of Nada is limited to so much of the costs of the proceedings as relate to Steven's claim for further family provision. Steven referred to "his legal costs over the last 13 ½ years relating to administration of the estate of [N]ada and the various pieces of litigation in which Steven has become involved in three courts in seeking to enforce" Nada's testamentary arrangements. Steven referred to his claim for the recovery of all of his costs as "a principal case", and submitted that "the only viable avenue for Steven to obtain recompense for the liabilities he has incurred in securing the due administration of the estate of Nada is to have it recognised as need for his provision out of her estate pursuant to s. 7 of the FP Act, and his need for provision funded by designation of Breakwell and Kemp as notional estate to the extent of his need". Thus, Steven made a claim that a family provision order should be made in his favour to cover all of the costs that he has incurred, and, to the extent necessary, Breakwell and Kemp should be designated as notional estate for that purpose. 4. Steven made an alternative claim, if the claim outlined in (3) above does not succeed, that his costs of the proceedings be paid by Robert personally after his discharge from bankruptcy: see sub-par (g). 5. Steven claimed that Angelina should personally be ordered to pay his costs of the caveat proceedings in any event, as those costs cannot be made payable out of Nada's estate: see sub-par (h). Steven based this claim on Angelina's alleged dishonesty in participating in Robert's transfer of his interests in Breakwell, Kemp and Morts to Angelina on 31 May 2013. 6. If Angelina was permitted to defend Steven's claim to enforce the testamentary agreement, the costs of that issue should be ordered to be paid by Angelina personally: see sub-par (i). 7. If Steven does not succeed in obtaining an order that his costs of these proceedings be paid out of Nada's estate, at least the costs incurred as a result of Angelina resisting the designation of Breakwell and Kemp as notional estate of Nada should be ordered to be paid personally by Angelina: see sub-par (j).
The claim advanced by Steven that is outlined in sub-par (3) immediately above raises a number of difficult questions. During the course of the second stage of the hearing, Steven substantially altered his position in relation to this claim. It is necessary first to summarise the evidence concerning the obligations that Steven has incurred to pay legal costs to his own lawyers.
The evidence is primarily to be found in the second affidavit of Ms Jamie Antonopoulos, a solicitor employed by Steven's solicitor, sworn on 29 May 2019. Some level of interpretation of the information provided in that affidavit has been required, particularly where it has been appropriate to attempt to dissect the costs in a manner different to the way Ms Antonopoulos has presented them. My references to costs in what follows are intended to capture Steven's costs and disbursements as well as the fees charged by his lawyers. 1. Costs of original family provision application
Steven's original solicitors rendered a tax invoice for their services dated 30 July 2010 for $27,155.20.
That amount appears to cover Steven's legal costs of the original proceedings, up to and including the making of the deed of release on 30 June 2009, and for the attempt to implement that deed up to 30 July 2010.
Although, as I have observed above, the commencement of a claim for further family provision against Robert was a strange proxy for an attempt to enforce the testamentary agreement, the approach was nonetheless successful in obliging Robert to transfer his interest in Jersey to Steven under the deed of release, albeit at the cost to Steven of the various obligations that he assumed in the deed of release.
The initial proceedings were relatively economically conducted, and, on its face, the original solicitors' tax invoice appears to be reasonable.
Although Steven incurred the costs in the tax invoice, and appears to have already paid the amount claimed, no order for costs was made at the time the original proceedings were discontinued. Thus, Steven settled those proceedings on the basis that no other party was obliged to pay his costs. (2) Costs up to the declaration that the deed of release was void
Steven incurred costs payable to his present solicitors up to the time when Pembroke J declared the deed of release to be void in the amount of $75,941.31 and counsel's costs of $86,542.50. The total was $162,483.81.
The evidence suggests that Steven's present solicitors took over from his former solicitors part-way through the attempted implementation of the deed of release.
As I have explained above, when the condition in cl 3.19 of the deed of release failed, Steven chose to commence the present proceedings by seeking various orders to enforce the deed of release. Steven failed in that claim.
Pembroke J did not make any costs order, and effectively reserved the costs. As I have explained above, Pembroke J intimated that he might make an order for the costs of the proceedings against Robert, if it were subsequently established that Robert was in breach of the testamentary agreement. I have outlined above some difficulty that I have with that approach, not the least of which is that Steven sued to enforce the deed of release, and not the testamentary agreement, and he failed.
The evidence before the Court does not provide any objective basis for the Court to judge the reasonableness of this aspect of Steven's legal costs, or to estimate the amount that Steven would be obliged to pay if he were to seek an assessment of his solicitor and client costs. Steven did not provide any evidentiary estimate of what his liability would be. The question of whether it still remains open for Steven to require these costs to be assessed was not explored. Steven may not have been advised by his present lawyers to commence a timely assessment of these costs, as a means of being able to present to the Court in these proceedings precise evidence of the reasonable amount payable by Steven to his present lawyers in respect of this work.
As with most of the other costs that will be dealt with below, the amount of these costs appears to be excessive, given that the principal component of the work done appears to be a three-day case before Pembroke J. It must be accepted that there were the usual related appearances and preparation required. It must also be accepted that the Court cannot properly judge the reasonableness of costs claimed without a proper evidentiary basis. Consequently, the Court cannot act on the appearance that this aspect of Steven's costs does not plainly appear to be reasonable. (3) Costs of the present proceedings
The evidence concerning Steven's costs of these proceedings has been divided into three components, being: (a) the costs of the proceedings until December 2016; (b) the costs of these proceedings since Steven's costs were last estimated in December 2016, including the first stage of the hearing; and (c) an estimate of the un-billed costs of preparing for the resumed hearing. From the description in Ms Antonopoulos' affidavit of component (c), it is not clear whether those costs only cover preparation, or also include an estimate of the costs of the second stage of the hearing. I would hope from the amount involved that the latter possibility applies.
The evidence given by Ms Antonopoulos is summarised in the following table, in respect of the three components of the costs referred to above: Item Solicitor's costs Counsel's costs Total a $177,000 $159,435 $336,435 b $101,847 $282,645 $384,492 c $30,000 $108,900 $138,900 Total $308,847 $550,980 $859,827

[44]

Change in the basis of Steven's claim

The proposition that the Court should make a family provision order where the subject of the further provision is legal costs incurred by the applicant on a solicitor and client basis raises questions of principle. It is a matter for concern that proceedings that ought to have started out as an application to enforce the testamentary agreement, so that Nada's testamentary intentions could be implemented, evolved, by reason of tactical decisions taken by Steven and his lawyers, to the point where success in enforcing the testamentary agreement would not be a sufficient remedy to Steven, and that Steven requires further provision substantially for the purpose of enabling him to pay to his lawyers his own accumulated legal costs. This might give rise to a compounding problem, where Steven incurs more and more legal costs in order to pursue an ever greater order for further family provision, which ultimately must reduce the provision for Robert out of Nada's estate.
Moreover, the ever-increasing legal costs incurred by Steven have included the costs of proceedings other than the present proceedings, which means that, initially, Steven's lawyers were acting for him in the prosecution of these proceedings for the purpose of obtaining an order for further family provision that would enable Steven to pay in whole the legal costs that he owes his lawyers for representing him in those other proceedings. During the second stage of the hearing, I became concerned about the consequences of this state of affairs, given the professional restrictions on lawyers accepting or retaining instructions where the lawyer has a financial interest in the outcome of the case, apart from the prospect of a fee: see for example Legal Profession Uniform Conduct (Barristers) Rules 2015 r 101(g). I make no definitive finding of inappropriate conduct on the part of Steven's lawyers, but I did raise my concern early in the course of the second stage of the hearing.
Eventually, in final submissions, Steven's lawyers changed the basis of their claim concerning the orders that should be made to enable him to pay his accumulated legal costs. Steven abandoned his claim for an order for family provision that included an amount sufficient to enable him to pay all of his legal costs that could not be recovered under s 33 of the Family Provision Act from the designation of property as notional estate of Nada. Instead, Steven submitted that he should be able to recover his costs in the following manner: (a) his costs of his family provision claim by an order under s 33 of the Family Provision Act; (b) his costs of enforcing the testamentary agreement by a costs order against Nada's estate, because the whole of the proceedings were in some way Nada's fault because of her decision to enter into the testamentary agreement with Robert (although these costs could not be recovered under s 33 of the Family Provision Act); (c) alternatively to (b), the costs of enforcing the testamentary agreement should be payable by Robert and Angelina in respect of different periods; and finally (d) his costs of all other proceedings, whether in this or other courts, by prosecuting a claim for costs against relevant defendants under the applicable rules of court.
Steven specifically stated that, in respect of the costs referred to in sub-par (d) above, he wished to make the application to the judge who determined the particular application, rather than for the issue of costs to be decided by this Court.
Although Steven no longer claims that a family provision order should be made in his favour which in a precise way will equal the entire amount that he now owes to his lawyers, and although Steven hopes to recover costs in the manner outlined above, as I understand his final position, Steven submits that the Court should determine his family provision claim in a way that makes some general allowance for the probability that Steven will suffer an overall shortfall in his ability to pay his accumulated legal fees, and make some appropriate allowance on the basis that the outstanding obligation is one of the factors to be taken into account in the application of both of ss 7 and 9 of the Family Provision Act.
Although the manner in which Steven ultimately sought to recover his costs of the various proceedings evolved over the second stage of the hearing, it did so in two steps. 1. First step - draft short minutes of order
Steven annexed to his 2 June 2019 final written submissions, which he submitted to the Court before embarking upon his final oral submissions, draft short minutes of the orders that he proposed that the Court should make in these proceedings. The orders that he asked the Court to make concerning his costs were as follows: 26. The costs of the plaintiff of an [sic] incidental to these proceedings, including all reserved costs and costs of proceeding no. NSD 2146 of 2017 in the Federal Court of Australia at Sydney which have, by agreement between the parties, become their costs in these proceedings, be paid out of the estate (including the distributed property of the estate) or the notional estate of the deceased represented by the designation of the Breakwell property and the net proceeds of sale of the deceased's interest in the Kemp property as the notional estate of the deceased, subject to paragraphs 10-12 above, on the indemnity basis pursuant to section 33 of the Family Provision Act 1982. 27. The costs of the plaintiff of and incidental to proceeding no. 2013/294278 in this Court between the plaintiff and the fourth defendant be paid by the fourth defendant on the indemnity basis pursuant to section 98 of the Civil Procedure Act 2005.
If made, order 26 would have the effect that the whole of Steven's costs of these proceedings, whether for the enforcement of the testamentary agreement or the prosecution of his family provision claim, as well as Steven's costs of the application in the Federal Court decided by Flick J, would be paid on the indemnity basis under s 33 of the Family Provision Act, by way of the designation of the whole of Breakwell and Nada's half-share in Kemp as notional estate of Nada.
Order 27 would oblige Angelina to pay the whole of Steven's costs of his application determined by Slattery J on the indemnity basis, as a costs order under the Civil Procedure Act 2005 (NSW). (2) Second step - position adopted in final oral submissions
As I understand it, the ultimate position adopted by Steven, whereby he abandoned his claim for further family provision equal to his outstanding liability to pay legal costs, and instead claimed that he should be given a sum assessed generally by reference to the likely shortfall in his ability to pay his lawyers, has superseded the costs orders sought by Steven in his draft short minutes of order.
Steven appears to have disclosed his final position on the costs issue in submissions on 5 June 2019, which on my calculation was the 13th day of the hearing: see generally TB320.10 to 336.5.
I propose to state my understanding of Steven's final position concerning the significance of the various legal costs obligations he has incurred, together with my understanding or findings concerning the recoverability of those costs by Steven. It has been necessary for me to explore above the nature and circumstances of the proceedings that have caused Steven to incur the costs obligations that he now has. It was convenient to deal in that context with various matters relevant to the costs orders that may ultimately be made in the various proceedings. Some degree of repetition may be necessary to explain the extent to which it appears likely that Steven will have to bear or may be entitled to recover those costs.

[46]

Costs of the hearings before Pembroke J

Steven's position in relation to the application determined by Pembroke J, in respect of which Steven's costs were $189,639.01, was that, as his Honour had invited the parties to ask him to deal with the costs that he reserved, that is the course that Steven wished to take (TB320.24).
The only party who could be liable to pay those costs to Steven is Robert. As any costs order would be made after the commencement of Robert's bankruptcy, the costs would remain a debt payable by Robert, after his discharge from bankruptcy: see Foots v Southern Cross.
Although there is an appearance that there may be a surplus of assets after the completion of Robert's bankruptcy, it is not clear that any surplus will be returned to Robert. The parties did not explore this possibility at all. All of the property that the trustees hold in the bankruptcy will have been transferred to them by Angelina as a result of the decision by Ward CJ in Eq that had the effect that Robert's transfers of those properties to Angelina were void under the Bankruptcy Act. Although I do not decide the question, as it has not been the subject of submissions, it is probable in my view that, in these circumstances, if there is a surplus of assets, at the end of the bankruptcy the trustees will be required to re-transfer the surplus to Angelina. I do not see how Robert would be entitled to the surplus, since he transferred the properties to Angelina under transfers that would have been valid but for the operation of the Bankruptcy Act following his later bankruptcy. If that is the correct analysis, Robert will probably not be able to pay any order for costs made against him in respect of the proceedings before Pembroke J.
Further, even if any surplus assets were returned to Robert, that property will become subject to the outcome of the Family Court proceedings between Robert and Angelina. This is another reason why it cannot now be forecast whether Robert will have sufficient assets to pay any costs order made against him in favour of Steven.
In any event, there is considerable doubt that Robert will be ordered to pay Steven's costs of the proceedings that were determined by Pembroke J. Although the need for those proceedings is found initially in Robert's refusal to perform the testamentary agreement, Steven, with the benefit of legal advice, compromised the family provision claim that he made as a proxy for enforcing the testamentary agreement. That compromise, in the form of the deed of release, miscarried, and was ultimately declared void by Pembroke J. There is a strong argument that Steven entered into the deed of release without having the means to perform it, or, if he did, that he did not act with reasonable expedition to satisfy the condition to which the deed of release was subject. Notwithstanding the intimation made by Pembroke J concerning the costs order that he might be minded to make, the fact remains that Steven's claim failed. While the Court has jurisdiction to make a costs order against a party who is wholly successful in proceedings, an order of that nature is exceptional.

[49]

Costs of the application for leave to proceed before Flick J

As recorded above, the parties to the Federal Court application decided by Flick J agreed that the costs of those proceedings would be their costs in these proceedings. The active parties in those proceedings were Steven and the trustees. The trustees' position appears to have been that they did not resist Steven being given leave to prosecute, in these proceedings, a claim for a provable debt payable by Robert, provided that the leave was subject to the condition in order 2(c) made by Flick J, which precluded Steven from enforcing any debt proved to be owed by Robert without the leave of the Federal Court. It was proper for the trustees to ensure that Robert's bankrupt estate had this protection.
Flick J recorded, at [19], that Angelina had neither consented to nor opposed the orders sought by Steven, and that no costs order should be made in her favour. As Angelina did not contest the orders sought by Steven in that case, this Court could hardly make a costs order against her.
Steven submitted (TB324.34) that the way the agreement between Steven and the trustees should be given effect is that any assessor of costs in these proceedings should "take into account as binding all the parties to any cost orders made here…because everybody is bound by that agreement as to what the costs were".
Steven's costs of the application determined by Flick J were $46,741.35. It is not clear how the agreement is to operate, if Steven and the trustees each have some measure of success and some failure in these proceedings.
It will be necessary for the Court to hear further submissions from Steven and the trustees. It may be that the Court should interpret the agreement in its context as being confined to the costs in these proceedings of Steven's attempt to get relief in the nature of what became provable debts when Robert became bankrupt. That is because the only need for the proceedings before Flick J was to obtain leave under s 58(3)(b) of the Bankruptcy Act to enable Steven to prosecute a claim against Robert for provable debts in this Court. If that is the correct analysis, and I am right in my conclusion that Steven has now abandoned the claims to enforce provable debts against Robert's estate, which were the only reasons why Steven required leave in the first place, then it would seem to follow that Steven has failed in this aspect of his claim, so that the trustees should be awarded their costs of the proceedings before Flick J.

[50]

Costs of the present proceedings since Pembroke J's orders

Steven then made submissions concerning his costs of these proceedings (starting at TB325.40). Steven started by submitting that his costs of the family provision case should be paid out of the notional estate of Nada under s 33 of the Family Provision Act. Steven submitted (TB334.34) that the trustees' interest in Breakwell should be designated as notional estate for the purpose of meeting Steven's costs of his family provision claim.
Steven then submitted that his costs of the testamentary agreement claim should be paid in one of two alternative ways. The first of the alternatives was that these costs should be paid out of Nada's estate (TB330.15) because, if Nada had seen a solicitor, Nada would have been advised not to use the device of requiring Robert to execute the testamentary agreement, as the solicitor would have said "you can't do it by statutory declaration, you need to either put it in the will or you need to sever the jointure on Kemp, and it would have all been done a different way". Steven made a number of alternative submissions as to how Nada could have achieved her testamentary intentions without the use of the testamentary agreement. One involved severing her joint tenancy with Robert of Kemp. Another involved giving Breakwell to Steven.
The alternative means of giving Steven the costs of the testamentary agreement claim was to make a costs order under s 98 of the Civil Procedure Act (TB333.41). Steven submitted that Robert should be ordered to pay the costs of the testamentary agreement case up to the date of his sequestration order, and that, thereafter, allowing for a "four-week hiatus" (TB334.9), Angelina should be ordered to pay those costs from 2 August 2017. It may be noted that Steven did not submit that Angelina should be ordered to pay the costs of the testamentary agreement claim from the time at the beginning of the first stage of the hearing when counsel was given leave to cease appearing for Robert and to continue as counsel for Angelina.
Steven's ultimate position concerning the costs of these proceedings was distilled at TB334.33 in the following terms: We would submit that the costs associated with the family provision case would be charged to part of the trustees' interest in Breakwell, because when we looked at the figures in item in [sic] Ms Antonopoulos' table and - I mean, I don't know whether that needs some discounting. I think your Honour said the normal discount is 30% for party/party costs, but somewhere between a-half and two-thirds of those costs would go to the testamentary agreement case, and somewhere between a-third and a-half would be referable to the family provision case. So that means that there would be probably somewhere in the order of $250,000, give or take $50,000, which would be charged to Breakwell as notional estate to fund costs of the family provision case under s 33. Now, that would be on the basis that Steven basically pursues his rights under the Family Law Act and the Civil Procedure Act from the judges who reserved on costs. That's Foster J and the Family Court, and Slattery J and Pembroke J in this Court. Now, that makes it somewhat less complicated case.
The evidence does not give the Court any basis for judging the reasonableness of Steven's costs of these proceedings, but it is reasonable for the Court to observe that by appearance they are enormous, and it is difficult to conceive how they could be justified.
There is no objective basis for the Court to estimate the amount that Steven would be allowed for his costs on an assessment on the ordinary basis, if a costs order were made in his favour.
The division suggested by Steven's counsel of somewhere between a half and two-thirds of the costs being attributable to the testamentary agreement case, and somewhere between a third and a half being attributable to the family provision case, is entirely arbitrary and unsubstantiated.
If consideration is given to the reasons for judgment set out above in relation to the testamentary agreement case, it becomes apparent that that case was a relatively straightforward one, and it is not readily comprehensible how Steven could have incurred the costs of prosecuting that case that have been suggested by his counsel.
I do not accept the suggestion made on behalf of Steven by his counsel that his costs of prosecuting the testamentary agreement case should be borne by Nada's estate on the basis that the need for the making of that claim arose out of inadequate testamentary arrangements made by Nada, with the result that the Court will be justified in determining what costs orders should be made in respect of that aspect of the case on the basis that the litigation was caused by Nada. The circumstances in which the Court sometimes orders that the costs of parties are to be paid out of a deceased estate when the conduct of the deceased has created the need for the litigation is considered in GE Dal Pont, Law of Costs (4th ed, 2018, LexisNexis Butterworths Australia) at [10.18]-[10.21]. In my view, Nada was entitled to decide to distribute her estate in specie, having regard to the interests in the properties that she had already caused to be conferred on her sons, and there was nothing irresponsible in Nada using the device of the testamentary agreement in respect of Robert's interest in Jersey after Nada's death. The testamentary agreement was enforceable, and the only material problems have been that Robert refused to keep his promise to his mother under it and Steven did not pursue the enforcement of it with the expedition and vigour that was obviously called for.
As Steven ultimately, albeit belatedly, sought and was given leave to represent Nada's estate for the purpose of enforcing the testamentary agreement, there is arguably a case for the Court to make an order that Nada's estate bear the costs of its representative in enforcing the agreement. However, Steven did not put his claim on this basis.
Furthermore, if in different circumstances the Court were to entertain an application by Steven for his costs out of the estate on the basis that he was the representative of the estate for the purpose of enforcing the testamentary agreement, that course might enliven a claim by Robert and the trustees that, in the absence of Jordan exercising the usual role of the executor to defend the deceased's will, Robert and the trustees have fulfilled that role in relation to the family provision claim.
The parties have not addressed the issue, which may perhaps be raised by all of them, that aspects of the costs of these proceedings should be borne by Nada's estate, on the basis that in respect of different aspects of the proceedings the parties represented the interests of the estate.

[51]

Consequences of Steven's change of position on costs

All of the complex and shifting considerations raised by Steven concerning the significance of the costs of these and other proceedings to his claim for family provision relief lead me to the following propositions.
Except in the case of the costs order made against Robert and Angelina by the Family Court, the likely outcome of all reserved costs questions is unclear and Steven has no grounds for confidence that those questions will necessarily be decided in his favour.
There is no basis for the Court even to guess at the outcome of any assessment or taxation of costs that may be available to any party in respect of any costs orders that may be made.
In absolute terms, the costs obligations that Steven has incurred to his lawyers on any objective scale appear to be enormous. The Court cannot express any considered view, but there is cause for concern about whether the costs charged to Steven have been proportionate and reasonable in amount and in respect of their being incurred for the purposes of s 172 of the Legal Profession Uniform Law (NSW).
It is not known whether Steven has been advised to challenge by assessment any of the costs charged to him, or whether he is inclined to do so, but it seems likely that much of the costs will have been incurred longer ago than the 12 month period for assessment of costs allowed by s 198 of the Legal Profession Uniform Law (NSW), and it cannot be known whether Steven will be permitted to apply for assessment of his costs outside that period.
As matters stand, the clearest aspect of Steven's legal costs is that he has a standing liability to pay almost $1.6 million, much of which may be beyond his right to apply for an assessment.
Although Steven's change of position, whereby he no longer seeks a family provision order that will directly recompense him for his legal costs, makes his claim more orthodox, it also introduces an extreme level of doubt and complexity, because as I have said the Court is entirely unable at this stage, and on the evidence before it, to make any confident judgment about the likely net effect of costs orders that may be made, or assessments or taxations in respect of those orders that may be conducted.

[52]

Extension of period for commencement of family provision claim

I will now address the question whether the Court should allow a further period under s 16 of the Family Provision Act for the commencement by Steven of his family provision application. Two related questions arise. The primary question is whether the Court should allow a further period for Steven's application for family provision relief to be made outside the prescribed 18-month period under s 16(2) of the Family Provision Act. The second question arises by reason that sub-s (2) provides that a decision to extend the period must be made subject to sub-s (3), which in turn requires, by par (b), that Steven show sufficient cause for the application not having been made within the prescribed period.
As to the second of these questions, on the unusual facts of this case, I consider that sufficient cause has been shown for the application not having been made within the 18-month period. That is because the first claim made by Steven for family provision relief was in fact made on 19 July 2007, one day before the end of the prescribed period. The present claim is a second claim for family provision relief, and could not in the circumstances practically have been made within the first 18-month period. It may or may not be appropriate for the Court to extend the period for commencing the application in answer to the primary question, but it should not decline to address that question because insufficient cause has been shown for why this application was not made within the prescribed period. I will therefore turn to a consideration of the primary question.
I consider that the following statement of the considerations concerning the grant of an extension of time by the Court by Hallen J in Stojanovski v Stojovski [2016] NSWSC 976 properly states those considerations, in so far as they are relevant to the present claim (it being immaterial that his Honour was not concerned with s 16 of the Family Provision Act, but with the equivalent provision in s 58(2) of the Succession Act): … [166] Section 58(2) of the Act provides that an application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown. If sufficient cause is shown, then the Court, having regard to all the circumstances of the case, may extend the time for making an application. [167] In Moore v Randall [2012] NSWSC 184 at [39], White J said that the expression "sufficient cause" means "sufficient explanation or sufficient justification or excuse for the application not having been made within the prescribed period." [168] In Verzar v Verzar [2014] NSWCA 45 at [24], in the Court of Appeal, Meagher JA wrote that "[t]he sufficient cause or reason to which s 58(2) is directed is that for allowing an application to be made out of time". [169] Clearly, permitting the Court to "otherwise order" was included in the Act to avoid the section becoming an instrument of injustice. Yet, "[t]he time constraint imposed by s 58(2) on the making of a family provision application is not a mere formality": Verzar v Verzar [2012] NSWSC 1380 at [98] (Lindsay J). (The equivalent section in similar UK legislation has been described as "a substantive provision laid down in the Act itself, and is not a mere procedural time limit imposed by rules of court which will be treated with the indulgence appropriate to procedural rules": Re Salmon, (Deceased) [1981] Ch 167 at 175.) [170] In Madden-Smith v Madden (Estate of late Doris Linda Madden) [2012] NSWSC 146 at [23]-[24], Pembroke J put it more strongly: "…Section 58(2) reveals a clear legislative intention to limit applications for family provision orders to those made within a defined, and strictly confined, period. An application is made by filing an originating process commencing proceedings in the registry of the court: Section 58(3). The short time period imposed by Section 58(2) reflects the judgment of parliament that the welfare of society in connection with the administration of deceased estates is best served by imposing a strictly limited time for making applications. This is not unreasonable. In most cases the putative claimant will be well aware of the testator's death and the (allegedly) insufficient provision made for him or her. There will only occasionally be a good excuse for not making a claim within time. In fact, experience indicates that the deceased's relatives usually pay uncommonly close attention to such matters. That is not to say that cases will not arise where, for legitimate reasons, a claimant is quite unaware of the death, or of his or her legal right to make a claim, and is unable to comply with the 12 month time limitation. In those circumstances, the statutory exception requiring 'sufficient cause' may well apply." [171] In Thomas v Pickering; Byrne v Pickering [2011] NSWSC 572 at [84]-[90], I set out the applicable legal principles relating to an application to extend the time, as follows: "The decision of the court to extend time is a discretionary decision. Other than "sufficient cause being shown", there are no statutory criteria that must be taken into account. There are no rigid rules in regard to the exercise of the discretion. The principles governing that exercise of discretion under the Act are clear. Apart from the reason(s) for the lateness of the claim, the factors to which the court must look, include whether beneficiaries under the Will would be unacceptably prejudiced if time were to be extended; whether there has been any unconscionable conduct by either side; and, finally what is the strength of the claim made by the party seeking an extension of time: see, for example, John v John; John v John [2010] NSWSC 937 at [37]-[51] per Ward J; Campbell v Chabert-McKay [2010] NSWSC 859 at [45]-[47] per White J; Durham v Durham [2010] NSWSC 389 at [15] per Ball J; Taylor v Farrugia [2009] NSWSC 801 at [14] per Brereton J; Burton v Moss [2010] NSWSC 163 at [31] ff, per Macready As J, in which the relevant earlier cases are referred to. The onus lies on the applicant to establish sufficient cause. It will be for the court to determine the strength of the applicant's claim. The prejudice to which the section looks is any prejudice occasioned by the delay in lodging the claim rather than any disappointment that might occur consequent upon readjustment of the interests under the will in order to make provision for the applicant: Cetojevic v Cetojevic [2006] NSWSC 431; McCann v Ward & Anor [2010] VSC 452 at [11]. Where there has been a long period since the deceased died, the lapse of time, itself, might create prejudice in any fact-finding exercise: Vasconelos v Bonetig [2011] NSWSC 1029 at [21]. … [172] To refuse to make an order extending the time for the making of an application that is devoid of merit, or otherwise cannot succeed, would not visit an injustice on the applicant. As Keane JA wrote in Hills v Chalk [2008] QCA 159; [2009] 1 Qd R 409, at [31]: "The appellants' submission was that the probability that an application for provision out of the estate will ultimately succeed is a necessary, though not sufficient, condition of the grant of an extension of time. There is support for that view. In Re Terlier, (deceased), Townley J said: 'If it is improbable that the substantive application will succeed it seems idle to grant the extension.' This statement was approved by Lush J in Re Walker, (Deceased), where his Honour went on to add that the improbability of success 'may stem either from the condition of the estate … or from the facts relevant to the [claimant's] claim, or from both ….'." … [174] Meagher JA noted in Verzar v Verzar [2014] at [33]-[35]: "There are at least two respects in which the strength of the application sought to be made out of time may be relevant to whether there is 'sufficient cause' to extend the time for making it. The first is whether the application as made has sufficient prospects of success to justify an extension. That assessment should be of the application viewed at the time it is or is likely to be heard because of the provisions of s 59(1)(c) and (2)… The second respect in which the strength of the application may be relevant is if allowing the out of time application to proceed would or may have the effect of improving the applicant's position from that which would have obtained had the application been made in a timely manner. That is the consideration referred to by Tobias JA in Durham v Durham at [24], [37] when confirming the correctness of the approach adopted by the judge in that case and by Bryson J in Davison v Staley (unreported, Supreme Court of NSW, 21 August 1996)… Because the assessment of adequacy of provision for proper maintenance, education and advancement in life is to be made at the time the Court is hearing the application (ss 59(1)(c) and (2)), when addressing this question it is necessary first to consider when the application would have been likely to have been heard if made in a timely manner and then to compare the position in that event with the position in fact, namely that the application has been made out of time. Ordinarily, this analysis would assume, as is usually the case and as happened in this proceeding, that the application for an extension of time and the application for substantive relief are made in one proceeding and dealt with in a single hearing. (That was not the case with applications for extensions of time made under the Testator's Family Maintenance and Guardianship of Infants Act 1916: see De Winter v Johnstone [1995] NSWCA 120 at p 17 per Powell JA)." [175] As well as taking into account the reasonableness of the conduct of the applicant, it will also be necessary to have regard to the history of the proceedings, the conduct of the other parties, the nature of the litigation, and the consequences for the parties of the grant, or refusal, of the application for extension of time, "the size and nature of the estate, the position of the individual applicants, the rightful expectations of those already interested under the will, and, to some extent at least, the importance that there be some finality and certainty in the administration of a deceased person's estate": Harrison v Harrison [2011] VSC 459 at [292]. [176] As I said in Butler v Morris; Butler (bht NSW Trustee & Guardian) v Morris [2012] NSWSC 748 at [117]: "Ultimately, justice is the paramount consideration in determining whether to extend the time for making an application…" …
The matters that I consider to be most relevant in the present case are: (a) the fact that the original application was made within time; (b) the events that led to the discontinuance of the original claim and the circumstances that led to the remaking of the claim; (c) the continuing denial by Robert of his obligation to implement the testamentary agreement; (d) the absolute amount of time that elapsed between the end of the prescribed period and the time when the present application was finally made; and (e) the possible prejudice that Robert may suffer if the extension is granted.

[53]

Consideration of application for extension

In deciding whether an extension of time to commence his application should be granted to Steven, I have had regard to all of the complex considerations dealt with above, but consider the following circumstances to be of particular significance.
Nada, by her will, left her estate to her sons in approximately equal proportions, given that it has now been established that the testamentary agreement is enforceable. As at the date of Nada's death, and for many years afterwards, neither Steven nor Robert had any substantial basis for seeking further family provision from the estate. One unusual feature of the present application is that, once the testamentary agreement is performed, almost all of the factors that Steven relies upon as grounds for his family provision application occurred after Nada's death, and indeed after the 18-month period prescribed by s 16(1) of the Family Provision Act elapsed. Logically, any extension of the period that permits Steven to rely on those factors will prejudice Robert, and the real question may be whether the prejudice is so great as to require the Court to refuse the application.
Steven commenced his original proceedings for a family provision order under the Family Provision Act on 19 July 2007, which was one day before the lapse of the specified 18-month period. Steven did not commence proceedings to enforce the testamentary agreement, or to take steps to oblige Jordan to do so.
Steven discontinued his initial proceedings by a notice of discontinuance filed on 1 July 2009. He did so as that was a requirement of the deed of release, which had the effect of the enforcement of the testamentary agreement against Robert, albeit at a cost to Steven. Steven evidently considered that the enforcement of the testamentary agreement was of sufficient benefit to him that he no longer needed to pursue his family provision claim, or, alternatively, Steven may have thought that, with the benefit of Robert's half of Jersey, his prospects of achieving an order for further provision were not sufficient to justify him in further pursuing his family provision claim. The terms of the deed of release suggest that the original family provision claim was a proxy for an action to enforce the testamentary agreement.
Thus, Steven made a voluntary decision, with the benefit of legal advice, to discontinue the application for family provision relief that he made within time.
One effect of the deed of release being entered into was that Jordan, the executor, administered Nada's will by either transmitting or transferring property to Robert, while inexplicably not being required to transfer George to Steven. On the basis of a justifiable belief that he was entitled to the property he received from Nada under her will, or by survivorship, Robert transferred half of his interest in Breakwell to Angelina. Robert and Angelina no doubt proceeded as if their rights in respect of this property were governed by the transfers.
The deed of release became void on 30 September 2009, as Steven had not implemented the condition for its continued validity. The invalidity of the deed of release was not actually established until the judgment of Pembroke J on 16 November 2012. In various ways, Steven's lack of diligence in implementing the condition was the primary cause of the invalidity of the deed of release.
Steven's attempt to implement the condition for the validity of the deed of release seems to have come to a halt from around mid-2010.
Steven commenced these proceedings on 20 March 2012. The trigger for the commencement of these proceedings was Robert's claim in the Federal Magistrates Court that he was entitled to a half-interest in Jersey.
Even though the condition for the validity of the deed of release failed on 30 September 2009, and Steven's attempts to implement the condition ceased around mid-2010, Steven waited more than two years to commence these proceedings. That period of itself is greater than the 18-month prescribed period. Steven has provided no explanation or justification for this delay, beyond the obvious consequences of his choosing to try to enforce the deed of release instead.
Steven did not seek directly to enforce the testamentary agreement. He sought to enforce the deed of release. As an alternative, Steven sought leave to continue his original family provision claim, or alternatively leave to commence a new claim. Were it not for subsequent events, 20 March 2012 would be the date for consideration of whether Steven should be given leave to commence his family provision claim out of time. I note that 20 March 2012 was only shortly after Steven suffered his workplace injury on 16 January 2012.
Not only did Steven make a voluntary decision to try to enforce the deed of release, notwithstanding that there appeared to have been a clear failure of a condition to the validity of that deed by reason of the fact that Steven had not procured the withdrawal of the caveat lodged by Jovanka by 30 September 2009, but Steven did not apparently seek to prosecute his second application for family provision relief in the proceedings determined by Pembroke J. Steven kept his family provision claim in reserve, so to speak.
In taking that course, Steven incurred legal costs of the proceedings before Pembroke J of $189,639.01, which Steven seeks to rely upon on this application as a factor justifying an order for further provision being made in his favour. Further, although the amount of Robert's costs has not been established, Robert must have incurred substantial legal costs in defending Steven's attempt to enforce the deed of release. Although the costs of the hearings before Pembroke J have not been determined by the Court, it must be remembered that Robert technically succeeded.
Steven filed his amended statement of claim on 31 October 2012. By that pleading, Steven abandoned his claim to be able to withdraw his notice of discontinuance of his original family provision application and his claim to have leave to commence a new application. This was the second occasion on which Steven voluntarily abandoned a claim for family provision relief.
Steven filed his further amended statement of claim on 14 December 2012. He reinstated his application for leave to withdraw the notice of discontinuance and to commence new family provision proceedings.
Consequently, 14 December 2012 is the date at which the Court must consider whether Steven ought to be granted an extension of the time in which to commence the present family provision claim. That is so because Steven does not appear to have prosecuted in these proceedings his claim to be able to withdraw his discontinuance of the original proceedings. 14 December 2012 is almost 7 years after Nada's death, and almost 5 ½ years after the expiration of the 18-month period.
By his further amended statement of claim, Steven sought to enforce the testamentary agreement. Steven's prospects of enforcing the testamentary agreement were at all times strong, in my opinion, and he has now succeeded in obtaining relief to that effect, albeit more than 13 years after Nada's death. The need for Steven to be given an extension of time to commence his family provision claim should be considered in the context that it was originally an alternative to the enforcement of the testamentary agreement.
Doing the best that can be done on the evidence before the Court by adding each item in the invoices attached to Ms Antonopoulos' affidavit dated 4 June 2019 and Mr Ayache's affidavit (and exhibit thereto) dated 30 November 2016, by 14 December 2012 Steven had paid, or accumulated a liability to pay, his lawyers in fees and disbursements an amount of about $203,473. This is, by necessity, only an approximate calculation.
It was not until 7 April 2014 that Steven filed his second further amended statement of claim. It appears that it was by this pleading that Steven first sought family provision relief in addition to the enforcement of the testamentary agreement. Although 14 December 2012, as the date when the further amended statement of claim was filed, is strictly the date as at which Steven's claim for an extension of time must be decided, it is of some relevance that at that time the family provision claim was only an alternative to the claim for the enforcement of the testamentary agreement.
By 7 April 2014, the amount of legal fees and disbursements paid or owed by Steven to his lawyers had increased to about $430,179.
Although the relevant date for the consideration of whether the period for commencing Steven's family provision claim should be extended is 14 December 2012, it is not immaterial for the Court to take into account that, at some time which cannot be fixed by the Court with precision, Steven's need to pay his lawyers became a dominant cause of his pursuit of his family provision claim, over and above his need to enforce the testamentary agreement. In the manner that I have sought to explain above, Steven's huge debt to his lawyers was the focus of his family provision claim at the hearing, until the second-last day of the hearing, when Steven changed his position to one that would involve applications for, and the enforcement of, various costs orders, with Steven's residual liability to his lawyers being merely a factor to be taken into account in determining his family provision applications.
As noted above, if Steven had accepted the testamentary arrangements made by Nada and had sought orders, by an appropriate means, enforcing the testamentary agreement against Robert, Steven would have had property assets that are now valued at about $3.275 million, and Robert would have had property assets that are now valued at $3.475 million. The difference is attributable to Robert's prior ownership of Morts which, if accepted, as Steven finally did, would mean that Steven's receipts from Nada's testamentary arrangements would have been greater than Robert's receipts by a value that is now $675,000.
Although the consequences of Steven's workplace injury before 14 December 2012 constituted a real and detrimental change in his position compared to the position of Robert, on all other relevant factors the two brothers' circumstances were broadly similar. That statement must be made subject to the possible effect of the dubious debt that Steven may owe to Mr Karout, which I will consider in more detail below in conjunction with my reasons for the observation that the brothers' circumstances would have been broadly similar.
The position in which Steven found himself as at 14 December 2012 was materially a result of voluntary decisions made by him.
In the light of the observations made by Meagher JA in Verzar v Verzar [2014] NSWCA 45 at [35] that have been set out above in the extract from Hallen J's judgment in Stojanovski v Stojovski, it is highly probable that, if Steven's original proceedings that were commenced on 19 July 2007 had been prosecuted by Steven with expedition, the hearing would have been completed long before Steven suffered his workplace injury in January 2012. Putting aside for the moment that the initial application appears to have been a proxy for enforcing the testamentary agreement, whatever the outcome of the proceedings, they could not have been influenced by the fact of Steven's subsequent injury. In that respect, Steven's delay in finally commencing his family provision application has improved Steven's position in relation to the family provision application, as the fact and consequences of his injury are the principal matters that have, in the events which have happened, significantly distinguished between the circumstances of Steven and Robert in relation to the family provision application.
In these circumstances, I have found the question whether Steven should be permitted to recommence his application for family provision relief after the end of the prescribed 18-month period a very difficult one to answer.
Steven did commence his original application within time, and he has explained the chequered circumstances that had the result that he did not finally recommence his claim until 14 December 2012. Steven, and his lawyers, arguably made a number of tactical misjudgments, and it may be suggested that he is the author of his own misfortune. However, in his favour it must be acknowledged that all the while he was attempting to enforce his right to full ownership of Jersey, albeit often by circuitous means.
Although Steven probably should have secured the title to Jersey by more effectively implementing the deed of release, it does not seem justified that his ineffectual efforts should preclude him from being given leave to recommence his family provision application, after his attempt to secure the title to Jersey through the implementation of the deed of release was finally thwarted.
With considerable hesitation, I have formed the view that Steven should be given leave to recommence his family provision application out of time.
My primary reason for reaching that conclusion is the fact of Robert's continuing refusal to honour the agreement that he made with Nada by means of the testamentary agreement. In taking that course, he denied Steven the benefit of a significant part of the estate created by Nada that she intended Steven to receive in order for her to achieve the result of approximate equality in the distribution of her estate to her sons.
Although I have found in favour of Steven on the testamentary agreement claim, and have expressed the view that Steven's claim was always strong, it cannot be said that Steven was assured of success. Robert's persistent refusal to implement the testamentary agreement justified on a continuing basis the maintenance by Steven of his alternative claim for a further family provision order. Had Steven's testamentary agreement claim failed for some technical reason, his family provision claim would have been correspondingly enhanced.
If Robert had admitted liability on the testamentary agreement claim after Steven sought to recommence his family provision claim, the justification for the Court granting Steven leave to continue out of time would have been unpersuasive.
It is also significant that Steven has largely abandoned his original family provision claim, the primary purpose of which was to obtain an additional provision sufficient to enable Steven to pay his substantial and accumulating legal fees of the various proceedings. Had Steven maintained that claim, the Court may have been driven to conclude that it would be unjust to permit Steven to recommence his family provision claim out of time, because of the prejudice that Robert would suffer by reason of the delay. A direct result of the delay would have been an increase in the amount of the claim measured by the increase in the legal costs incurred by Steven.
Once Steven reverted to the more orthodox approach of seeking to recover the legal fees incurred by him by pursuing whatever costs orders are available, the magnitude of his increasing legal costs ceased to be as significant a prejudice to Robert attributable to any decision by the Court to permit Steven to recommence his family provision claim out of time. That is true at least to the extent that the Court decides the family provision claim on the basis that all costs issues will be dealt with by the appropriate courts applying the relevant principles for the making of costs orders. The truth of the proposition would diminish in proportion to the preparedness of the Court to make a substantial family provision order in Steven's favour to cover a putative shortfall between the amount of costs recoverable by Steven and the amount that he is obliged to pay his lawyers. As will be seen below, I would not in any event make a family provision order on that basis given the level of guesswork that would be involved.
I have not lost sight of the probability that, if Steven had pursued his original family provision claim, or even recommenced it in a more timely way, the Court may have determined the proceedings before Steven suffered his industrial accident on 16 January 2012. That will give rise to prejudice to Robert to the extent that, in these proceedings, Steven's earning capacity will have to be assessed having regard to the consequences of his injury.
I consider the present case to be a marginal one, but on balance I have concluded that the considerable factors that I have listed above, which militate against Steven being given leave to recommence his family provision application out of time, do not justify refusal of that leave, but those factors may have considerable significance in the determination of whether Steven is entitled to further family provision and, if so, what that provision should be.
I will now turn to a consideration of the merits of Steven's claim for a family provision order.

[55]

Relevant legal principles

While the primary requirement is that the Court apply the principles stated in ss 9 and 7 of the Family Provision Act, it is important to have regard to what Brereton J (as his Honour then was) described in Henry v Hancock [2016] NSWSC 71 at [69] as the "yardstick" against which the question whether adequate provision for the proper maintenance, education and advancement in life is to be measured. His Honour said (footnotes omitted): [69] Formerly, the yardstick which was applied was that of the wise and just testator. Nowadays, it is fashionable to couch it in terms of "community standards", although I am not at all sure that this is any different from the moral obligation of a wise and just testator and, as has not infrequently been pointed out, there is no ascertainable external community standard to guide the decision, which involves a broad evaluative judgment unconstrained by preconceptions and predispositions, and affording due respect to the judgment of a capable testator who appears to have duly considered the claims on his or her testamentary bounty - subject to the qualification that the court's determination is made having regard to the circumstances at the time of the hearing, rather than at the time of the testator's will or death. [70] Fair and reasonable members of the community may well differ as to whether a parent owes a moral or natural obligation to an able-bodied adult child such as to fetter the parent's testamentary freedom. In Taylor v Farrugia, in a passage which appears subsequently to have received general approval, I said of a claim by an adult child: These are claims by adult children. It is impossible in this area to describe in terms of universal application the moral obligation or community expectation of a parent in respect of an adult child. I think, however, it can be said that ordinarily the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, and where that is feasible; where funds allow, to provide them with a start in life - such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation [McGrath v Eves [2005] NSWSC 1006]. Generally speaking, the community does not expect a parent to look after his or her children for the rest of their lives and into retirement, especially when there is someone else, such [as] a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parents to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute. It is no longer the case, if it ever was, that an adult child has to establish a special need before obtaining provision from the estate of a deceased parent.
As to the circumstance that both Steven and Robert are adult children, see also the principles set out by Hallen J in Anderson v Hill [2017] NSWSC 1149 at [135]-[136], and many other cases.
The circumstances of the present case do not require the Court to make a choice as to whether it is preferable to couch the obligation on the deceased as being to act as a wise and just testator (see Steinmetz v Shannon [2019] NSWCA 114 at [109] and [44]), or to measure the adequacy of the provision made by the deceased against what is perceived to be contemporary accepted community standards (see Squire v Squire [2019] NSWCA 90 at [10]). The different expressions of the criteria for measurement are perhaps different ways of expressing the same judgment required to be made by the Court.
The adequacy of the provision made by Nada in favour of Steven in the present case by her will and the testamentary agreement must be considered from the perspective that she divided her considerable estate with approximate equality between her two sons on a basis that should have left each of them with about $3,000,000 in assets, and three house properties. That statement assumes the subdivision of Jersey from Milsop and ignores the subsequent destruction of the house on Jersey by fire.

[56]

Relevance of Robert's circumstances

It is necessary to deal first with a preliminary submission made by Steven to the effect that the Court should ignore the consequences that the making of the family provision order sought by Steven would have on Robert's circumstances because Robert has not made his own claim for an order under s 7 of the Family Provision Act. In par 69 of his outline of submissions provided to the Court before the commencement of the first stage of the hearing, Steven submitted that: "Although an eligible person, Robert makes no competing claims under the FPA. Accordingly, the Court may disregard his interests pursuant to s 20 FPA".
Section 20 of the Family Provision Act provided that: (1) On an application in relation to a deceased person, the Court may disregard the interests of any eligible persons who have not made an application in relation to the deceased person. (2) The Court shall not disregard the interests of an eligible person unless: (a) notice of the application before it and of the Court's power to disregard those interests has been served upon the eligible person in the manner and form prescribed by rules of court, or (b) the Court has determined that service of such a notice on that person is unnecessary, unreasonable or impracticable. (3) (Repealed) (4) The Court shall not revoke or alter an order for provision in favour of an eligible person to allow the making of a further order for provision in favour of another eligible person unless the other eligible person shows sufficient cause for not having applied for an order for provision in his or her favour before the firstmentioned order was made.
This provision is equivalent in operation to s 61 of the present Succession Act, which provides as follows: (1) In determining an application for a family provision order, the Court may disregard the interests of any other person by or in respect of whom an application for a family provision order may be made (other than a beneficiary of the deceased person's estate) but who has not made an application. (2) However, the Court may disregard any such interests only if: (a) notice of the application, and of the Court's power to disregard the interests, is served on the person concerned, in the manner and form prescribed by the regulations or rules of court, or (b) the Court determines that service of any such notice is unnecessary, unreasonable or impracticable in the circumstances of the case.
An obvious express difference between the two provisions is the inclusion of the words "(other than a beneficiary of the deceased person's estate)", which is included in the present section but not the former one.
However, as Powell J (as his Honour then was) said in Luciano v Rosenblum (1985) 2 NSWLR 65 at 68-69 (emphasis added): Section 20(2) of the Act provides that the court shall not disregard the interests of an eligible person unless it has caused notice of the application and of its intention to disregard the interests of that person to be given and served upon that person… … More to the point, however, it seems to me that the submission misconceives the function of s 20 of the Act. Although, as enacted, s 20 does not, in terms, follow the draft provision (ss 9(3), 9(4)) contained in the Draft Bill provided by the Law Reform Commission with its Report on The Testator's Family Maintenance and Guardianship of Infants Act 1916 (the Report) it is, I believe tolerably plain that s 20 is directed to fulfilling the same function as the draft provision contained in the report. That function, as the report (LRC 28 (1977) at 37-39) makes clear, is to overcome the problems which were likely to be caused, in any particular case, by the decision of Street J, as the Chief Justice then was, in Re M A Bourke [1968] 2 NSWR 453; it was not directed towards enabling the court to disregard the claims of those to whom a deceased may have had a moral obligation which obligation had been adequately discharged by the provision made for that person in the deceased's will.
The effect of s 20 of the Family Provision Act is to authorise the Court to disregard the interests of eligible persons to whom the requisite notice of the proceedings has been given, if those persons do not make their own claim for further provision than that which they have been given in the deceased's will. The section does not affect the need for the Court to have proper regard to the interests of the beneficiaries under the deceased's will to the extent of the gifts made in favour of those beneficiaries.

[57]

Factors relevant to Steven's family provision claim 1. Comparison of the present circumstances of Steven and Robert

The starting position is, as has been noted above, that if Nada's will had been executed and the testamentary agreement performed by Robert, Steven would have become the sole owner of Jersey (combined with Milsop) and George. I have adopted values for those properties of $1.8 million and $1.2 million respectively, giving a total of $3 million. As Steven was already a one-third owner of Jersey, his receipt as a result of Nada's testamentary arrangements would have been $2.4 million.
As I have said above, there was an issue between the parties as to whether Jersey should be valued on the basis that it only had a prospect of being approved for subdivision into two lots, or whether the success of the application to subdivide was so highly probable that Jersey should be treated as being two lots. The appraisal provided by Mr Micheletto suggested that the combined value was $1.8 million compared to a value as separate lots of $2.075 million. The appraisal provided by Robert suggested that the combined value was $2,000,000 compared to a value as separate lots of $2.6 million. The appraisal provided by Steven gave only a combined value of $1,250,000. It should be noted that the appraisals provided by Robert and Steven, in addition to being materially different and, perhaps coincidentally, arriving at figures that appear to materially benefit their respective cases, are three years out of date.
Regardless, the difference in value between a combined Jersey and a subdivided Jersey is clearly substantial. In final submissions, Steven submitted that Robert had the burden of proving that Jersey would in fact be subdivided, and that he had not satisfied that burden by, for example, calling the evidence of an expert planner. However, before it became tactically advantageous for Steven to deny the likelihood of Jersey being subdivided, he had apparently joined with the other members of his family in the assumption that a subdivision would be approved. I have concluded that it is more likely than not that Jersey will in fact be subdivided. Until the house on Jersey burnt down, there were houses at both the Jersey and the Milsop ends of the property, and dual occupancy was permitted. Both houses have street access. There was no positive evidence of any impediment to subdivision.
I have not, however, treated the possibility as being a certainty. I consider, given the paucity of the evidence, that it will be reasonable to allow an additional $275,000 to represent the advantage to Steven of being the sole owner of Jersey. I note that this was the additional value attributed to the subdivision by Mr Micheletto.
Robert would have become the sole owner of Kemp, Breakwell and Morts, which have a total adopted value of $3.475 million according to Mr Micheletto. However, Robert already owned half of Kemp and the whole of Morts. Under Nada's will, or by survivorship, Robert received the whole of Breakwell ($1.5 million) and half of Kemp ($0.5 million), being $2,000,000 in total. It must be remembered that Steven abandoned his claim that Robert held his half-interest in Kemp and the title to Morts on a resulting trust for Nada's estate because of the circumstances in which those properties were put in his name. It must also be remembered that Mr Fuzevski's evidence (extracted and analysed above), which I do not doubt, was that, on 3 January 2006, Nada spoke to Robert in terms that she was giving two properties to each of her sons. In taking that course, Nada appears to have accepted that Morts was already Robert's own property, which is likely to reflect her view that Robert had separately earned the right to have that property.
Consequently, even though the property holdings of the two brothers would not have been equal, the gifts that they would have received from Nada would have been approximately equal in value, being $2.675 million in Steven's case (being the $2.4 million in the value of the property, plus the $275,000 allowance for the possibility that Jersey can be subdivided) and $2 million in Robert's case. Their respective property holdings would have been $3.275 million and $3.475 million, allowing for the extra value to Steven for the actual subdivision of Jersey.
If the Court looks at the circumstances of both Steven and Robert as at the present time, the Court finds a remarkable degree of similarity.
First, notwithstanding the efforts of Nada to provide each of her sons with a home and additional properties, both Steven and Robert are homeless, are itinerant and to some degree rely upon the goodwill of others for a place to live.
In Steven's case that appears to be because of a number of factors. First, his separation from Jovanka, who lives in the residence on Milsop, secondly that the residence that previously stood on Jersey has burnt down, and attempts by Steven to build a rudimentary house on Jersey have been thwarted by planning issues and orders of the Land and Environment Court, and thirdly that Steven has not been able to use the dilapidated home on George because George has not yet been transmitted to him.
On the other hand, Robert does not have a home because he is estranged from Angelina, who presently lives at Breakwell, and he transferred all of his interests in Breakwell, Kemp and Morts to Angelina. The result of Robert's bankruptcy has been that the whole of the title in Kemp, and half-interests in Breakwell and Morts, have become vested in the trustees.
Secondly, the marriages of both Steven and Robert have broken down, and hearings in the Family Court to determine the division of the matrimonial property between the parties to each of the marriages have been deferred pending the outcome of these proceedings. Evidently, the Family Court takes the view that it needs to know the final entitlement of both Steven and Robert to the various properties before it can make sound orders as to the property entitlements of the parties to the marriages. That is, with respect, an understandable position for the Family Court to take, but it has had the result that this Court must determine Steven's family provision application in ignorance of the effect that the pending Family Court proceedings will have on the circumstances of each brother.
It may be broadly likely that the Family Court will divide the matrimonial property of both marriages with approximate equality, although the fact that Robert has two children may lead to the division being weighted in favour of Angelina.
Thirdly, for quite different reasons, Steven and Robert have taken courses which it appears inevitably will substantially diminish the assets that will be available to them. On Steven's part, as explained above, he has incurred legal costs in the order of $1.6 million, and the Court cannot estimate the amount that he will actually have to pay, having regard to any possibility that he can challenge the amount that he owes to his own lawyers, and the amount that he may recover after assessment or taxation of costs orders to which he may become entitled.
On the other hand, the result of Robert having transferred all of his property assets other than Jersey to Angelina, without first paying his own lawyers, has been his bankruptcy, which I have assessed is likely to diminish the assets that Robert started with by in the order of $1,000,000. The final effect of Robert's bankruptcy cannot now be foreseen.
Fourthly, to the extent it may be relevant, the diminution in the assets available to each of the brothers has largely been caused by improvident choices that they have made. On Steven's part, he should have sought to enforce the testamentary agreement following the breach of that agreement by Robert. Having commenced a family provision claim instead of seeking to enforce the testamentary agreement, Steven should not have entered into the deed of release if he did not have the means of performing his obligations under it, or, having entered into it, he should have ensured that the condition was satisfied, which is a result that he could have achieved had he acted reasonably and sensibly. When the deed of release was declared to be void, Steven should have pursued the enforcement of the testamentary agreement again. It seems that, at some point, Steven's outstanding obligations to pay costs to his lawyers became so great that he continued to pursue both the enforcement of the testamentary agreement and his family provision claim in these proceedings, which only compounded the problem.
In Robert's case, he imprudently divested himself in favour of Angelina of all of his assets, without paying his just debts, which he had the capacity to pay. He thereby committed himself to the consequences of his own bankruptcy. Along the way, he joined with Angelina in misleading the Family Court by not acknowledging Steven's claim for orders designating Breakwell and the former interests of Nada in Kemp as notional estate of Nada. (2) Steven's injury and work prospects
Steven's case involves a number of circumstances in which his position is claimed to be different to Robert's.
First, Steven claims that, by reason of an industrial accident that occurred on 16 January 2012, Steven has no realistic prospects of securing gainful employment in the future. Robert is employed by the railways as a customer relations officer.
Steven was born on 20 November 1967. He attended Kogarah High School until Year 9. He was then 14 years' old. He has not attained a School Certificate. He has not completed any vocational or trade training course, and believes that he does not have the ability to do so, as he finds it difficult to study. Steven has a security licence. Other than working as a security guard, Steven has had to rely upon his ability to carry out physical work in order to earn an income.
In the period up to January 2012, Steven had employment as a railway station assistant, a hospital theatre assistant, an airport baggage handler, a labourer and security guard, and a storeman. Steven also had significant periods of unemployment, when he did whatever odd jobs he could get.
On 16 January 2012, while working as a storeman in a warehouse, Steven suffered a workplace injury when he was struck by a forklift driven by a fellow worker.
Steven tendered a body of WorkCover certificates and medical reports relating to the consequences of his injury (between Tabs SS 45 and 50 of the exhibit to Steven's 30 December 2015 affidavit). On 22 February 2012, Steven was diagnosed with minor disc changes, severe osteophyte and disc material encroaching into the spinal canal at various places. Steven had severe neural foraminal narrowing and moderate neutral foraminal narrowing at various sites in his spinal column. A report of MRI imaging dated 5 March 2012 concluded that there was a left foraminal disc protrusion at L5/S1 compressing the left L5 nerve root, and a small left-sided disc protrusion at L4/5 abutting the left L5 nerve root. There was a small right foraminal disc protrusion at L3/4. Steven was the subject of a return to work plan dated 19 March 2012. The plan stated that Steven was fit for suitable duties for 4 hours per day, on 3 days per week. Separately, Steven was certified to be unfit for work until 3 February 2012, but for the week commencing on 6 February 2012 he was certified as being fit for suitable duties limited to lifting up to 2 kg, sitting for 1 hour and standing for up to 1 hour. That position continued on and off up to 27 April 2012.
Steven instituted proceedings against his employer at the time of his injury in the District Court of New South Wales in November 2013.
Steven relied upon a number of medical reports by Dr James G Bodel, an orthopaedic surgeon, dated 20 September 2012 and 13 September 2013. In the earlier report, Dr Bodel expressed the opinion that Steven's activities of daily living had been moderately compromised and that he had suffered a 12% Whole Person Impairment overall in accordance with the relevant WorkCover Guidelines, and that Steven was not fit for his pre-injury work because of the level of pain. He may have been capable of graded reintroduction to lighter duty work but would need the assistance of a rehabilitation facility, as he had always worked in fairly physical labour-intensive work. Steven required ongoing analgesic and anti-inflammatory medication and would benefit from physiotherapy. In the later report, the doctor expressed Steven's Whole Person Impairment rating as being 10%.
The latest medical report tendered by Steven is a report of Dr Thomas Rosenthal, specialist occupational physician, dated 21 December 2015. Relevantly, Dr Rosenthal expressed the following opinion (at Tab SS52): He is not fit for his pre-injury occupation which was working on the wharves at Port Botany. There would have been a lot of lifting, bending, driving forklifts, twisting of the back and he may have been required to lift greater than 20kg. In this job he would be in prolonged fixed postures particularly when driving forklifts and unloading containers. He is restricted with lifting over 20kg and he should avoid recurrent bending and twisting of the lumbar spine. He should avoid prolonged fixed postures such as prolonged sitting greater than 30 minutes continuously. The restrictions would have been required essentially from the time he sustained the injury and into the future. In terms of future occupations, he is of course restricted due to his limited education in transferring to other employment.
Steven's evidence was that, since his work accident, the only work he has performed is some casual work as a security guard. However, he cannot perform that work full-time because, due to his injuries and disabilities with his back and left leg, he is not able to stand for long periods of time and he is not fit enough to effectively arrest or restrain persons if the need arises. He believes that his earning capacity has decreased significantly and that it will not improve in the future. He expects to be unemployed for the remainder of his working life, having regard to his very limited educational abilities.
I accept that Steven's income earning capacity has been significantly compromised by his work injury, especially given his limited education and history of engaging in relatively heavy manual labour. It is probably not true that Steven will be entirely incapable of finding suitable employment for the balance of his working life even if he engaged in a conscientious attempt to find work. However, it should be accepted that his prospects have been seriously diminished, and it is probably unlikely that he could expect to find suitable full-time employment.
However, it must be remembered that Steven's predicament may not have been as serious if he had been able to enforce the testamentary agreement against Robert relatively soon after Robert refused to perform it. Steven would then have been the owner of Jersey (both Milsop and Jersey) and George, and would have had significant assets, even after the expected division of those assets by orders made by the Family Court. It is almost entirely the obligations that Steven has accumulated to his lawyers that have extinguished any buffer that Steven would have had against the consequences of his injury. (3) Fate of Steven's compensation payment
In December 2014, Steven settled his work injury claim against his former employer and received net compensation of $200,000.
Curiously, and somewhat improvidently, Steven gave evidence in his primary affidavit that he invested the whole sum on an undocumented and unsecured loan to his friend, Mr Alan Doulkeridis, to use for the purposes of the borrower's business, but on terms that the borrower would pay Steven interest of $20,000 per annum.
Asked about the $200,000 in cross-examination, Steven said that he did not give the whole amount to Mr Doulkeridis, but he did give him some money "because I owed him money" (TA143.41). Steven then said it was the "whole lot". Steven then confirmed that the payment was in repayment of a debt (TA144.1). Steven said that the debt that he owed Mr Doulkeridis was for the repair of cars (TA145.37). When asked (TA145.48): "How on earth did you end up owing Mr Doulkeridis $200,000 for the repair of cars?" Steven replied: "Well, labour's expensive; yeah, labour's expensive on cars." The arrangement with Mr Doulkeridis was not in writing. Steven confirmed that there was no loan agreement, and part of the money was for the repairing of cars and the other part was to be repaid to Steven (TA148.7). Steven appears to have resiled from the suggestion that he was entitled to receive $20,000 in interest from Mr Doulkeridis each year (TA149.46).
Later, Steven suggested that Mr Doulkeridis had repaid him $60,000-$70,000 (TA161.39). Steven spent $20,000 of that money on Jersey (TA165.19). He spent the balance on "normal living", which turned out to be gambling and drinking, as Steven said he had an "expensive lifestyle" (TA165.4).
Steven was not an impressive witness in respect of any part of his cross-examination, but the evidence that he gave concerning the fate of the $200,000 is fanciful. Plainly, Steven's affidavit evidence cannot stand with the evidence that he gave in cross-examination. There is no evidence about what happened to the $200,000, but, on the balance of Steven's evidence, whatever he did with it, it is now wholly expended. Steven did not tender any evidence of receiving $20,000 per annum from Mr Doulkeridis, and the proposition that Mr Doulkeridis borrowed $200,000 from Steven at a perpetual rate of interest of 10% per annum is incredible.
This evidence is of some significance to the determination of Steven's family provision claim, because it shows that Steven was not prudent with the compensation money he received, given his own evidence concerning his employment prospects. That conclusion must be taken with the fact that Steven has been prepared to accumulate an obligation to pay legal fees that he cannot reasonably hope to meet without reducing himself or his brother to their current state of relative poverty. This gives rise to a doubt about Steven's capacity to manage any substantial amount of money prudently. (4) Debt owed to Mr Karout
The next issue that must be considered is whether Steven is indebted to Mr Karout for an amount of about $460,000.
At par 173(a) to (c) of his primary affidavit, Steven baldly stated that he is indebted to Mr Karout for loans of $385,000, $25,000 and $42,697.05. Steven made no attempt to give precise evidence of the transactions that he claims have given rise to his indebtedness to Mr Karout. Even accepting that the loans were not documented, it should have been possible to give proper evidence of the terms of the relevant conversations. As it is, Steven's case requires the Court to accept his bare assertions.
Steven's solicitor, Mr Ayache, in his 30 November 2016 affidavit at pars 17 to 20 gave evidence that would justify the Court in accepting that, between about 4 June 2014 and 10 July 2014, Mr Karout advanced Steven the total of $42,697.05. However, Mr Ayache's evidence in pars 9 to 14 of his affidavit concerning the making of the first two loans alleged to have been made by Mr Karout is hearsay.
I have set out above the communications between Steven's and Jovanka's solicitors concerning the attempt to satisfy the condition for validity of the deed of release, in which the latter questioned the claims made by Steven's solicitors concerning the reason why Steven wanted to grant a mortgage over George to Mr Karout to secure a debt of $440,000. There is some force in Steven's counsel's submission that it is unlikely that Steven would have jeopardised the validity of the deed of release if he was not in fact indebted to Mr Karout as alleged.
As part of this proposed transaction, Mr Karout's lawyers provided Mr Ayache with a draft mortgage over George to secure a past loan of $340,000 and an additional loan of $100,000. Mr Karout's lawyers also submitted a draft loan agreement to govern the advance.
The Court received into evidence an affidavit of Mr Karout sworn on 23 October 2012 that was read at the hearing before Pembroke J, as well as the transcript of the cross-examination of Mr Karout by Robert's counsel at that hearing (see part of Exhibit B). Apart from annexing the draft mortgage and loan agreement, it really only proved that Steven had requested that Mr Karout advance him $100,000 and that Mr Karout was prepared to do so. Mr Karout gave evidence of saying to Steven: "…you still owe me money from the last loan". Mr Karout said in cross-examination that he made loans in various amounts to Steven in cash during the time that, as I understand it, Steven was building the house on Milsop, and that there was no written record of the loans. Mr Karout asserted that the amount of the loan was $140,000, and with outstanding interest at 10% per annum, was then over $300,000. I understand that the reason why Mr Karout has not given evidence in the hearing is that he is incarcerated. However, there is no absolute impediment to a party calling an incarcerated witness to give evidence. In my experience, upon proper application being made with sufficient notice, Corrective Services NSW will escort a prisoner to and from court to enable that person to give evidence, or can otherwise set up a video link if appropriate.
As Mr Karout was not called to give evidence, he could not be tested in cross-examination, and the Court has been deprived of the opportunity to measure the consistency of the recollections of the two parties. There was thus no real attempt in Steven's case to prove the alleged debt to Mr Karout properly.
It is also material to this issue that Steven has applied his $200,000 in compensation for uncertain purposes, and did not use that money or any part of it to repay Mr Karout. Further, and inexplicably, Steven has not required the title to George to be transmitted to him, and accordingly he has not been able to apply the value of George to the repayment of Mr Karout and thereby stop interest from continuing to accrue.
What is the Court to make of the evidence concerning the possibility that Steven is indebted to Mr Karout for an amount of about $460,000? The answer is elusive in the extreme. I accept that it is probable that Mr Karout has loaned money to Steven in the past. Most of those loans were probably made in cash and were undocumented. The Court does not have grounds for confidence that, as suggested by Steven, the original borrowing occurred in order to fund the construction of the residence on the Milsop end of Jersey. The Court simply does not know what any money that was loaned was used for.
The Court has been given no basis upon which it could properly assess the present enforceability of any loans made by Mr Karout to Steven. Although Steven may have an intention to pay money back to Mr Karout, whether or not the loans are enforceable, it is nonetheless relevant to Steven's family provision application to consider the enforceability of the loans, as it is problematic that the Court would make a family provision order in Steven's favour that reduced the amount that Robert would receive out of Nada's estate, in order to enable Steven to pay money to Mr Karout that Steven is not legally obliged to pay.
In the absence of any evidence to the contrary, it would be proper for the Court to infer that at least the original loans, if made, were made on terms that they were repayable on demand. If so, the six-year limitation period would have commenced to run from the date the loans were made.
Although the Court has no basis for precision, it is likely that many if not all of any loans that were made are now statute-barred unless, within the meaning of s 54 of the Limitation Act 1969 (NSW), before the expiration of the relevant limitation periods Steven confirmed his indebtedness. Such confirmations could have been given on more than one occasion, and it may be observed that the submissions made on behalf of Steven in these proceedings that he is indebted to Mr Karout could constitute confirmations. Whether or not any such confirmations have been made before relevant limitation periods have expired cannot be known.
In these circumstances, I have concluded that Steven has not satisfactorily proved that he is indebted to Mr Karout under any enforceable loan or for any particular amount, save apparently for the 2014 loan of about $42,000 referred to in Mr Ayache's evidence. If there were a surfeit of assets in the estate, it may have been reasonable for the Court to make some general allowance for Steven to be able to pay some amount to Mr Karout.

[58]

Conclusion as to family provision claim

The threshold question is whether Steven has satisfied the requirement in s 9 of the Family Provision Act that, having regard to present circumstances, the provision made by Nada in favour of Steven, either during Nada's lifetime or out of her estate, is inadequate for Steven's proper maintenance, education and advancement in life. It is only if that condition is satisfied that the Court may proceed to determine what order should be made for further provision for Steven out of Nada's actual or notional estate.
In deciding the manner in which Steven's family provision claim should properly be decided, it is first necessary to try to gather together the threads of the complex series of issues that have been considered above.
As Steven has succeeded on his testamentary agreement claim, he has established the outcome intended by Nada in her will and by the testamentary agreement, which has in turn established that Nada succeeded in achieving the division of her estate with approximate equality as at the date of her death.
Steven is entitled to the ownership of George, although it may be necessary for the Court to make orders to give effect to Nada's will so that Steven will be registered as proprietor of George. The Court will need to be assisted by further submissions on that subject after these reasons for judgment are delivered.
I have accepted Mr Micheletto's evidence that George has a value of about $1.2 million.
Steven is now also entitled to sole ownership of Jersey. Mr Micheletto's combined value for Jersey and Milsop was $1.8 million. I have found above that it will be appropriate to treat the possibility that the value of Jersey will be increased by reason of the subdivision of the property as having a value of $275,000. Accordingly, I will treat Jersey as being worth $2,075,000, as did Mr Micheletto.
Consequently, Steven will be entitled to real property worth approximately $3.275 million, after allowing for the subdivision potential of Jersey, and $3,000,000 if that potential is ignored.
Steven claims that the Court ought to make further provision for him out of Nada's estate or notional estate to ameliorate the consequences of the order that will ultimately likely be made by the Family Court in favour of Jovanka. Steven suggested that the likely outcome is that the Family Court will divide the matrimonial assets with approximate equality between Steven and Jovanka, given the length of their marriage and the fact that they have no children.
As noted above, one circumstance that strongly militates against the Court making such an order in favour of Steven is that Robert is virtually in the same position as Steven and that, in due course, the Family Court will likely divide the remaining matrimonial assets of Robert and Angelina between them in a similar way to the division as between Steven and Jovanka. It is not predictable how Robert's bankruptcy may influence the order that is eventually made by the Family Court.
However, a more telling response arises out of a consideration of the proper order in which this Court and the Family Court must exercise their respective jurisdictions. This Court must determine first whether a family provision order should be made in favour of Steven, and if so, what that order should be. It may be that further judicial processes may need to be implemented, such as the determination of costs orders in these and other proceedings, and the assessment of what costs are payable. It may be that Robert's financial position cannot be ascertained until the completion of his bankruptcy, and that may be relevant to Steven's financial position to the extent that Steven may need to prove for costs orders in Robert's bankruptcy (see the Family Court cost orders) or to recover against Robert costs orders made after the commencement of his bankruptcy (which would include costs orders to be made in these proceedings). When all of these processes are complete, the matrimonial assets available to be divided between Steven and Jovanka will be known. At that point, the Family Court will be able to exercise its jurisdiction without having to guess what the matrimonial assets are. This order of application of the respective jurisdictions of this Court and the Family Court appears to have been recognised by the latter Court when it stayed the matrimonial property proceedings that are pending before it.
It is not the logical or proper approach for this Court to speculate about what matrimonial property orders the Family Court will make and then make a family provision order that will have the effect of increasing Steven's assets to compensate for the consequences of the Family Court order. That approach would simply increase the matrimonial assets upon which the Family Court's order would operate, so that a greater amount of assets would be divided between Steven and Jovanka. If the approach contended for by Steven were adopted by this Court, then logically there would be an infinite regression whereby this Court would have to consider the possible effect of the Family Court order, to the extent that it operated upon the additional family provision ordered by this Court, and then to determine the additional further family provision that ought to be made to provide for the effect of the Family Court order, and so on indefinitely.
I do not suggest that this Court should never have regard to the likely effect of Family Court orders on the circumstances of an applicant for family provision relief, but in this case the proper course is for the Court to make its decision based upon the evidence of Steven's present circumstances, and to leave it to the Family Court to make its own decision as to how the assets that remain after all other court processes have been implemented should be divided between Steven and Jovanka. That Court will have to perform the same function in respect of Robert and Angelina, who appear to be in substantially the same position as Steven and Jovanka.
The next matter for which Steven seeks provision arises out of the likelihood that he has incurred legal costs that are greater than the amount that he is likely to recover from the other parties to these proceedings.
As I have explained above, after initially claiming further provision equal to the amount of his obligation to pay legal costs, Steven changed his position to seek an order for further family provision in an amount broadly sufficient to cover the shortfall in his capacity to pay his legal costs. This adjustment of position would have been necessary, in any event, because the Court could hardly have made an order that Steven be provided with sufficient funds out of Nada's estate or notional estate to pay his lawyers; leaving him free then to pursue all available costs orders against the parties to these proceedings.
However, Steven's change of position introduces new problems, both logical and practical.
I do not suggest that the obligations of a claimant for a family provision order to pay legal costs may never be a relevant factor in the determination of the application, but legal costs are a special form of obligation that has to be treated with care.
In the ordinary family provision case, the Court has regard to the likely effect of the legal costs that have been incurred in the proceedings, because if the Court were to ignore the reality of those costs the family provision orders that are made might not have their intended effect. However, in the usual case even a successful claimant is only awarded his or her costs on the ordinary basis, so that the claimant will have to bear the difference between costs awarded on that basis and the legal costs actually incurred. To that extent, legal costs are a factor that stands outside all of the other factors relevant to the financial position of the claimant.
A difficulty that the Court faces in its consideration of Steven's legal costs is that it cannot forecast the financial effect of all of the costs orders that must be made in this and other proceedings, and it was not given any evidence that would assist it to estimate the outcome.
In principle, Steven is entitled to an order in these proceedings for his costs of enforcing the testamentary agreement. The basis upon which those costs should be assessed has not been determined. It also has not yet been determined how those costs should be borne as between Robert and Angelina.
Assume, for the sake of argument, that the Court makes a costs order jointly and severally against Robert and Angelina for the whole of Steven's costs of enforcing the testamentary agreement. It is not yet known what proportion of Steven's actual costs of these proceedings relate to the testamentary agreement claim, and it is not yet known what the result of an assessment of those costs would be. Consequently, the difference is not known, and cannot reliably be estimated.
The legal principles that apply to the assessment of the costs payable by a party against whom a costs order is made have the effect that the successful party will have to bear a shortfall in the costs for which compensation is received, except in cases where costs are ordered to be paid on the indemnity basis. In practical terms, even successful parties must try to limit their exposure to shortfalls in costs by incurring those costs economically.
Putting aside the present impossibility of quantifying the amount, there is a logical difficulty in the Court making a family provision order that compensates Steven for the shortfall in the recovery of his legal costs of successfully enforcing the testamentary agreement. If the Court requires claimants to bear part of their costs in successfully prosecuting a family provision claim, why should the Court make a family provision order that compensates the claimant for the shortfall in the recovery of the claimant's costs of successfully prosecuting a different type of claim, particularly where the family provision and the other claim are prosecuted in the same proceedings?
The logical problem is more acute in respect of the claimant's costs of the family provision claim component of the proceedings. First, even assuming that the Court determines to make some family provision order, it will be necessary for the Court to address the question of what aspects of the proceeding should be covered by any conventional costs order made in favour of the claimant. Without being exhaustive, in the present case Steven has amended his statement of claim six times, he has at various stages of the proceedings introduced many new claims only to abandon them, and at the very end of the hearing Steven fundamentally changed the way he put his claim, by jettisoning his claim for a family provision order that directly compensated him for all of his legal costs incurred in the various proceedings.
Although the question of costs of these proceedings remains for further submission and determination, it is unlikely that any order made in Steven's favour for the costs of these proceedings, other than the enforcement of the testamentary agreement, would cover all of the costs incurred. There is room for doubt about the costs that would be awarded even in respect of the testamentary agreement case, for example due to the unnecessary delays caused by Steven and the fact that the default under the deed of release was largely of his own making. The Court could not properly make a family provision order in favour of Steven to compensate him for costs incurred that were not covered by any costs order in his favour. To do so would have the practical effect of reducing the provision made by Nada in favour of Robert to permit Steven to pay legal fees owed to his lawyers that neither Robert nor any other party had been ordered to pay Steven, and would cut across well-established and well-founded principles relating to costs.
The costs of the hearings in these proceedings before Pembroke J and Slattery J are yet to be determined but, for the reasons considered above, it remains a possibility that Steven will be ordered to pay some or all of those costs. If costs orders are made in favour of Steven, similar considerations will arise as have just been discussed in relation to any shortfall in Steven's recoverable costs. To the extent that Steven may be ordered to pay the costs of those applications, the Court could not justify an order that provision be made out of Robert's share in Nada's estate to cover Steven's obligation to pay his own lawyers.
Similar problems arise in relation to the existing costs orders in favour of Steven against Robert and Angelina made by the Family Court, although they are exacerbated by the unfamiliarity of this Court with the procedures adopted by the Family Court for taxing costs orders.
The position concerning the effect of the agreement as to costs noted by Flick J in the Federal Court is presently beyond consideration, as, without the assistance of detailed submissions by the parties, it is not possible for the Court even to guess as to how the costs of the application in that Court will ultimately be dealt with.
The result is that it is really not possible for the Court in these proceedings, given all of the circumstances that have been explored in detail above, and the paucity of the evidence that is presently before the Court concerning the ultimate effect of all costs orders that may be made, to make any family provision order in accordance with proper principle that provides funds to Steven to enable him to pay amounts that he owes to his lawyers over and above the amounts that he may ultimately recover under costs orders made against other parties.
The Court recognises, as it must, that Steven has incurred liabilities to his lawyers in the order of $1.6 million, and it may be that he has an unavoidable obligation to pay those debts. As explained above, the evidence before the Court is completely inadequate to enable the Court to make any reliable assessment of the true liability of Steven to his lawyers. It may be that the lawyers have a right to recover the full amount of their fees from Steven's assets, and it may be that after all of the vicissitudes to which Steven has become subject since Nada's death that little will remain for Steven's future after all legal processes have been completed. It is also possible that the true effect of any family provision order made by the Court in Steven's favour will simply be to top up the recovery of fees that can be achieved by Steven's lawyers. For the reasons that I have given, the Court cannot protect Steven from these consequences by means of the making of a family provision order, because even if it were possible to determine the order that should be made, it would be unfair to Robert for that order to be made.
Furthermore, even allowing for the requirement in both s 7 and s 9 of the Family Provision Act that the Court have regard to the circumstances as they obtain at the date of the determination of the application, I do not consider that Nada's testamentary obligations, whether considered in terms of the actions of a wise and just testator, or the application of contemporary accepted community standards, would reasonably give rise to an expectation, some 13 years after her death, for Nada to change her testamentary dispositions in favour of her adult sons, to make adjustments between them to compensate for the consequences of the decisions made by them in respect of the litigation in which they have engaged. Nada made proper provision for both of her sons, and she would be entitled to maintain the testamentary arrangements that she chose with apparent care; leaving her sons to abide the outcome of the application of the ordinary law of the land concerning the burden of costs in legal proceedings.
I am not satisfied that a different result should be reached based upon a consideration of the consequences of Steven's industrial accident, the manner in which he dealt with the compensation that he received, or the unproven possibility that he is indebted to Mr Karout for an amount of money in the order of $460,000. The amount of property to which Steven is entitled, now that it has been established that the testamentary agreement must be performed, involved a sufficiently fair division of Nada's bounty between her sons, even in the circumstances that presently abide, to avoid the Court disturbing Nada's clear and considered intentions. It was more than enough in the circumstances to provide for Steven in relation to the reduction in his earning capacity. Testamentary wisdom and community expectations do not now retrospectively require Nada to make extra provision in respect of Steven's dissipation of his compensation money. Nor do they require Nada to provide Steven with an additional amount, at the expense of Robert, to pay some dubious debt to Mr Karout, which on his own evidence Steven has allowed to grow at 10% per annum for decades.
For these reasons, I will dismiss Steven's family provision claim in these proceedings, as I am not satisfied that Steven has established the threshold condition for the making of a family provision order in his favour contained in the Family Provision Act.

[59]

Additional claims made by Steven

Steven's written submissions dated 2 June 2019 in respect of probate and equitable relief raise matters unconnected with Steven's attempt to enforce the testamentary agreement or his family provision claim, and deal with the following matters: 1. Steven seeks an order revoking the grant of probate of Nada's will made by this Court in favour of Jordan: pars 1 to 6. 2. Following the revocation of the grant of probate, Steven seeks an order granting letters of administration, with Nada's will annexed, to Steven and his solicitor, Mr Michael Ayache: pars 7 and 12. 3. An account of profits for devastavit committed by Jordan (to be performed by Robert and Angelina on Jordan's behalf) is sought: pars 13 to 27. Steven starts by relying upon the obligation of an executor to pay the testator's debts before distributing the estate. He then claims that a failure to perform this duty may make the executor liable for devastavit. The specific payments the subject of Steven's claim appear to be the local council rates, land tax and mortgage that Steven paid in respect of Jersey in the expectation that the deed of release made on 30 June 2009 would become unconditional (par 15). Steven complains that Jordan acted upon the deed of release before it became clear that the deed was unconditional. Although there was no order permitting this course to be taken by Steven, Steven sought an order on the issue of liability with quantification to be deferred, as Steven would need to issue subpoenas to the third parties who had been paid in order to quantify the payments. Steven submitted that Jordan is personally liable for the devastavit. The ambit of this claim does not appear with complete clarity from Steven's submissions, but it may be confined by the observation in par 27 of the submissions that Jordan is liable "to give an account of the benefits received by the estate from Steven's due performance of the deed of release to the extent that such performance satisfied the obligations of Nada in respect of the administration of her estate (including the performance of the testamentary agreement) in consequence of the deed of release being set aside in November 2012…" 4. Steven seeks an account of profits by Robert and Angelina on the basis that they dishonestly assisted Jordan, the executor of Nada's estate, to commit a breach of his duty: pars 28 to 33. The nature of this claim is also not entirely clear. It appears from par 33 that Steven seeks an accounting of the rents and profits of Breakwell and Kemp from the date of Nada's death on 20 January 2006, as well as compensation in respect of their rent-free occupation of Breakwell. The basis of the claim seems to be that Jordan should not have transferred any interest in these properties to Robert until Nada's estate was fully administered, including by paying all debts of the estate and any further provision that the Court finds should be made in favour of Steven under his Family Provision Act claim in these proceedings. 5. Finally, Steven seeks an order for an accounting by Jordan out of the estate of Nada in a manner that seems to overlap with some of the other claims outlined above: pars 34 to 45. Steven's claim appears to have two limbs: see par 35. First, Steven claims that Jordan is obliged to account for the benefit received by the estate by Steven's payment of estate liabilities and debts in his part performance of the deed of release dated 30 June 2009. The second aspect of the claim is "the detriment suffered by Steven to the extent that he has been obliged to engage in extensive litigation against Jordan and Jordan's agents in respect of Jordan's administration of the estate, namely, Robert and Angelina, during the intervening 13 ½ years since the death of Nada". I am unable to comprehend the basis of this second component of Steven's claim.
It will be appropriate for the Court to begin its consideration of this aspect of Steven's claims by dealing with the claims that involved Jordan.
As Ward CJ in Eq recorded in Stojanovski v Stojanovski [2018] NSWSC 1967 at [32], on 23 September 2015 Young AJA granted Steven leave to file and serve an amended statement of claim and ordered that Jovanka and Jordan be excused from appearing at the hearing of what was then the third further amended statement of claim. Apparently, Jordan has taken no further part in these proceedings.
The third further amended statement of claim does not seek any relief against Jordan personally, whether in relation to the revocation of the grant of probate to him, or in respect of any obligation on his part to account, whether for devastavit or otherwise. Relief is claimed in which Jordan had an interest in his capacity as executor of Nada's estate, in respect of proprietary issues concerning the true ownership of the various properties and as the proper defendant to Steven's Family Provision Act claim. However, Jordan's lack of participation in these proceedings is explicable on the basis that no relief was sought against him.
The fifth further amended statement of claim is no different to the third version in so far as it does not make any claim for the revocation of the grant of probate to Jordan or make any claim against him in his personal capacity. In any event, I am not aware of any evidence that the fifth further amended statement of claim was served on Jordan.
This Court cannot entertain an application for the revocation of the grant of probate to Jordan except on evidence of due notice of a proper application served on Jordan. There is none.
Although it has been claimed on behalf of Steven that Jordan is infirm and incompetent, that was not the basis upon which Steven has sought the revocation of the grant of probate to him. Steven claimed, in par 4 of his 2 June 2019 written submissions, that "Jordan's dereliction of duty in this case, since his appointment on 25 June 2009, involves a decade of a failure to properly administer the estate by abandoning his obligations as executor to Robert and Robert's wife, Angelina". This appears to be a reference to Steven's claim that Jordan was delinquent in 2009, after the deed of release was executed, by not waiting until it was certain that the deed had become unconditional, and by allegedly acting as a pawn of Robert and Angelina by cooperating with them in the premature administration of Nada's estate by their effecting the transfer or transmission of Breakwell and Nada's interest in Kemp to Robert.
For present purposes, it is not necessary for the Court to determine the complex questions that arise out of this claim. As I have explained above, when considering the effect of the deed of release, there is at least a strong argument that Jordan acted as required by the deed and in accordance with the explicit or implicit instructions of Steven and Robert as the beneficiaries which were given by means of their entering into the deed.
It is therefore premature for the Court to consider the appropriate identity of any replacement executors. Without deciding the issue, however, given the extreme amount of contention between the parties to these proceedings, I doubt that it would be appropriate to appoint Steven as an administrator, even if jointly with his solicitor. The appointment of an independent administrator would be more appropriate.
It is not yet clear what will be required of the executor of Nada's estate to complete its administration, after final orders are made in these proceedings. If any significant executorial duties remain to be satisfied, and if it be true that Jordan lacks capacity, it may be necessary for Jordan to be replaced by an appropriate administrator. If that must be done, it should be done promptly, and by a properly constituted application.
Although it is not necessary for the Court to consider further Steven's application for personal relief against Jordan, it is appropriate that the following observations be made. As I have said above, I have not found the ambit of Steven's claim to be clearly stated in his written submissions. The only consistent theme is that Steven asserts that he made payments that were for the benefit of Nada's estate on the basis of his expectation that the deed of release would become unconditional.
As Nada, Steven and Robert held their interest in Jersey as joint tenants, Nada's interest was transmitted to Steven and Robert by survivorship at the instant of her death. From that time, Nada's estate had no interest in Jersey. Any payments made by Steven in respect of Jersey in the mistaken belief that the deed of release would become unconditional were not made for the benefit of the estate. They may have been made for Robert's benefit. However, on the evidence, even that proposition is only true in a technical sense. The evidence shows that, in fact, Steven has solely enjoyed the benefit of Jersey since Nada's death. Before the house on the Jersey Street end burnt down, Steven received the rents. Either Steven or Jovanka has lived in the residence at the Milsop Place end of the property. The belated making of an order that the trustees transfer the interest that they hold in Jersey to Steven will perfect the enjoyment of Jersey that Steven has had in a practical sense since Nada's death.
This aspect of Steven's claim against Jordan is misconceived both in a legal and in a practical sense.
The remaining claim that requires consideration is Steven's claim for an account of profits from Angelina and Robert in respect of their enjoyment of rents or the benefit of occupation of Breakwell and Kemp.
As I have recorded above, at the beginning of the second stage of the hearing Steven provided the Court with a marked up copy of the fifth further amended statement of claim that deleted the personal claims in prayers 9EA to 9EC against Robert and Angelina for an accounting in respect of the rents and benefits of occupying Kemp, Breakwell and Morts.
Steven's claim appears to be based upon a premise that an executor is required to administer the deceased's estate on the basis that devises of property should not be executed until the last instant of the administration of the estate, including, where relevant, the implementation of orders made by the Court for further family provision. There is simply no basis in principle for the premise of Steven's claim. Executors are entitled to administer deceased's estates in accordance with the terms of the will in a piecemeal way, although circumstances may arise in which the executor retains rights in relation to distributed property. In the present case, Nada left her interests in Breakwell and Kemp to Robert, the latter by leaving in place her joint tenancy with Robert. In so far as Jordan participated in the transfer or transmission of interests in Breakwell and Kemp to Robert, he was performing his obligations under Nada's will. Putting aside the effect of the gifts that Robert made to Angelina, and the intervention of his bankruptcy, Robert and/or Angelina were entitled to enjoy the rents and benefit of their occupation of Breakwell and Kemp. It is true that both properties were at risk of being the subject of designations as notional estate of Nada, and, if such designations were to be made, that might have consequences in relation to the entitlement of Robert and Angelina to retain the benefit of rents and the right of occupation. However, even that would not involve Robert and Angelina being liable to account to Steven.

[61]

The result

The result of these proceedings is that Steven has succeeded on his testamentary agreement claim, but the Court will dismiss his family provision claim.
It will be necessary for the parties to confer, and to agree short minutes if possible, or if not, propose appropriate short minutes of order for the consideration of the Court.
It is probable that the orders that the Court should make will need to deal with consequential matters to give effect to the primary orders. There may also be outstanding subsidiary issues with which the Court has not yet dealt. The Court will be open to making appropriate orders to ensure that George is effectively transferred to Steven. There may be residual issues that remain to be dealt with in the administration of Nada's estate, given the apparent incapacity of Jordan. It will also be necessary for the orders that the Court makes to provide for an appropriate mechanism to deal with all costs issues that arise.
The parties should include an order under UCPR r 7.10(2)(b) appointing Steven as the representative of Nada's estate for the prosecution of the testamentary agreement claim.
I do not know whether it is necessary for the Court to make any further orders at this stage in respect of the cross-claim filed by the trustees on 15 October 2018, the substance of which has already been dealt with by the Chief Judge.
The parties are directed in the first instance to attempt to deal with the outstanding issues within the next 14 days. I appreciate that the parties may need a longer time, but I want to be able to monitor the parties' progress.
It will be apparent from the detailed consideration of the history of this dispute that I have set out above that I consider that both Steven and Robert, as well as their lawyers from time to time, have made unfortunate decisions that have led to the parlous position in which Steven and Robert, as well as Jovanka and Angelina, now find themselves.
No good will be served by my listing those decisions, and it will be sufficient to note that Robert, and then Angelina in his stead, have fought Steven's claim that Robert should honour the promise that he made to Nada in the testamentary agreement to the end. On his part, Steven did not seek to enforce the testamentary agreement in a direct and efficient way, but has pursued a family provision claim that transformed into a claim that he be given provision at Robert's expense to pay all of the crippling legal costs that Steven has incurred, only for that claim to be abandoned at virtually the last minute.
All of the parties now face the reality that the determination of the appropriate costs orders will be a complex, problematic and expensive exercise. These tortuous proceedings have not resolved the dispute between the parties. When the necessary costs orders have been made, the parties will face the expense and delay involved in the assessment or taxation of those orders. While it will be a matter for the discretion of the Family Court, it is likely that the resolution of the matrimonial property proceedings will continue to be stayed for the time that it takes for the nature and value of the matrimonial property to be ascertained.
In the meantime, the trustees will continue to do their duty, which will necessarily involve their costs and expenses eating away at Robert's estate.
The parties have reached a real impasse, given what remains to be done to resolve these proceedings, and the possibility that the viability of the exercise will be undermined by the entitlement of Steven's lawyers to take a substantial proportion of his assets in payment of his fees on the one hand, and the effect of Robert's continuing bankruptcy on the other

Stojanovski v Stojanovski

At a glance

Court

Decision date

Before

Source

Judgment (62 paragraphs)

Parties

Legislation Cited (9)

Cases Cited (48)

Cited By (7)