Turnbull v Fleming

Solicitors: Boom Lawyers (Plaintiffs) Wotton + Kearney (Defendant) File Number(s): 2022/32155 Publication restriction: N/A

Introduction

1. These proceedings concern the estate of the late Thomas John Brooks, who died on 26 December 2018 (the deceased).
2. The deceased is survived by: 1. his daughter Julieann Groat, who is a child of the deceased's first marriage with Marilyn Brooks; 2. his daughter Sonya Afflick, who is a child of his second marriage with Maria Brooks; 3. his daughter Tanya Brooks, who is also a child of the deceased's second marriage; 4. his stepson Hans Brooks; 5. his stepdaughter Barbara Van Luin; and 6. his stepdaughter Regina Turnbull.
3. The deceased executed a will dated 24 February 2017, under which he appointed his solicitor, Ms Elizabeth Fleming, as his executor and trustee. Ms Fleming is the principal of the firm Elizabeth Fleming & Associates (EFA).
4. According to the inventory of property attached to Ms Fleming's application for probate, the deceased owned the following assets at the time of his death: 1. real property at 35 Dunns Creek Road, Woodlands, New South Wales, with an estimated value of $995,000 (the Woodlands property); 2. real property at 32 Lagoon Street, Moruya, New South Wales, with an estimated value of $375,000 (the Moruya property); 3. real property at Dolphin Avenue, Batemans Bay, New South Wales on which a motel business was trading under the name the Hanging Rock Family Motel, with an estimated value of $2,200,000 (the motel property); 4. shares in TJ Brooks Pty Limited with an estimated value of $622,000, of which $600,000 was attributed to the value of the Hanging Rock Family Motel business that the company operated from the motel property (the motel business); 5. cash of $425,265.10 in various bank accounts; 6. eleven motor vehicles with a total estimated value of $109,500; and 7. shares in Tansony Investments Pty Ltd, which operated a painting business, with an estimated value of $3,000.
5. By clause 5 of his will, the deceased requested his trustee to take note that his daughter, Ms Van Luin, had built a house on the Woodlands property at her own expense, and that the house was "not to be included as part of my assets, but it is to be separately valued and treated as her asset".
6. By clause 6 of the will, the deceased directed his trustee to discharge any mortgage debt secured against certain property of his brother-in-law, Johannes Pieter Slinger.
7. By clause 7 of the will, the deceased authorised, empowered and directed his trustee to finalise the transfer of the property at 50 Dunns Creek Road, Woodlands, to his daughter, Ms Afflick, at no cost to her, if that transfer had not been finalised prior to his death. That transfer was in fact finalised in May 2017, prior to the death of the deceased.
8. By clause 8 of the will, the deceased gave the residue of his estate to his trustee to pay all debts, legacies, funeral and testamentary expenses and any death, estate or succession duties, and to hold the balance equally for such of his children and stepchildren who survive him by 30 days.
9. Clause 9 of the will provides: "My Trustee may, on such terms and for such purposes as my Trustee thinks appropriate, without being liable for loss: (a) sell; (b) postpone the sale of; (c) lease; (d) borrow, give a guarantee and mortgage; and (e) manage, the whole or any part of my estate."
10. As I have mentioned, the deceased died on 26 December 2018. On 11 January 2019, this Court made orders granting to Ms Fleming special letters of administration ad collingenda with specific powers, including to continue to operate and manage the motel business and to undertake any works in relation to the motel business or the motel property as required by Eurobodalla Shire Council. Probate was granted to Ms Fleming on 5 June 2019.
11. The deceased's estate has largely been administered.
12. A clearing sale of the deceased's vehicles, farming equipment, painting business equipment and other chattels was conducted by Elders Limited (Elders) on instructions from Ms Fleming on 6 July 2019.
13. The motel property and motel business were sold as a going concern on 20 January 2020 for $2,550,000.
14. Ms Fleming arranged for the mortgage debt secured against Mr Slinger's property to be paid, and the mortgage to be discharged, on 12 July 2020.
15. On 14 September 2020, Ms Fleming paid the sum of $172,861 out of the deceased's estate to Ms Van Luin, being the estimated value of the house built by Ms Van Luin on the Woodlands property.
16. In about January or February 2021, the Woodlands property was sold to Ms Turnbull for $1,200,000.
17. On 16 March 2021, the Moruya property was sold for $375,000 to Hans Brooks.
18. Ms Fleming has paid interim distributions to the beneficiaries totalling $3,300,000 to date. Those distributions were paid on 19 November 2020, 24 February 2021, 15 April 2021 and 30 March 2022.
19. Ms Fleming tendered the accounts of her administration of the deceased's estate for the period from 26 December 2018 to 30 June 2022, together with primary records such as receipts, invoices, settlement statements for the sale of properties, bank statements, and a bank reconciliation statement. As at the date of the hearing, Ms Fleming continued to hold $454,764.73 to be distributed to the beneficiaries after completion of tax returns.

Overview of the claims and defences

1. These proceedings were commenced on 3 February 2022. The plaintiffs are the deceased's three stepchildren - Ms Turnbull, Mr Brooks, and Ms Van Luin - and the deceased's daughter from his first marriage, Ms Groat. Ms Fleming is the defendant.
2. In their amended statement of claim filed on 3 March 2023, the plaintiffs claim: 1. a declaration that clause 9 of the will is void or unenforceable; 2. an order for the taking of an account on a wilful default basis; 3. alternatively, an order that Ms Fleming pay equitable compensation for the alleged breaches of duty on which the plaintiffs rely as instances of wilful default; and 4. orders revoking the grant of probate to Ms Fleming on 5 June 2019 and granting letters of administration to Ms Lisa Stone, solicitor, or to a qualified solicitor approved by the plaintiffs, and vesting the deceased's estate in the administrator so appointed.
3. The alleged instances of wilful default on which the plaintiffs rely fall into three categories: 1. acting imprudently in the sale of the motel property and motel business in January 2020, including by selling the motel in a compressed time frame and without obtaining an up to date valuation report, resulting in a sale at a price that the plaintiffs allege was below the market value by approximately $400,000 (the motel claim); 2. acting imprudently in delegating to Elders the sale of grain stored in silos on the Woodlands property immediately prior to the clearing sale in July 2019, resulting in the grain being sold at a price that the plaintiffs allege was almost $10,000 less than its market value (the grain claim);and 3. failing to recover stockyards that had been in use at the Woodlands property, which were removed and relocated to the neighbouring property of Ms Afflick and her husband in early 2020 (the stockyards claim).
4. In relation to each of these alleged defaults, the plaintiffs contend that Ms Fleming acted so imprudently as to display a want of honesty and good faith.
5. The precise terms of the orders sought by the plaintiffs for the taking of an account, as articulated at the hearing, are: 1. an order for an account to be taken by a Registrar of the Court on a wilful default basis, limited to such of the alleged wilful defaults referred to above that may be found to be established following the hearing before me, with a direction that the account be charged with the specific amount of the loss that the Court has found flowed to the estate by reason of the default; 2. an order that an account be taken otherwise in common form but with liberty to the Registrar to certify any further instances of wilful default identified in the taking of the account; and 3. an order that Ms Fleming pay to the plaintiffs such amount as may be determined to be due on the taking of the account.
6. Alternatively, the plaintiffs invite the Court to order Ms Fleming to pay equitable compensation in lieu of an order for the taking of accounts if the Court considers that equitable compensation is a form of relief that can make good the losses to the estate from the alleged wilful defaults without the need to subject the parties to the cost and delay of the process of taking an account.
7. Ms Fleming denies each allegation of wilful default, and therefore denies that she is liable to account on a wilful default basis or to pay equitable compensation.
8. If and to the extent that any of the alleged instances of wilful default are established, it will become necessary to determine whether clause 9 of the will is valid and enforceable. If so, then further questions arise from the parties' submissions about the proper construction of clause 9 and its application in the circumstances of this case.
9. Presumed undue influence arising from the solicitor and client relationship between Ms Fleming and the deceased is the sole basis on which the plaintiffs contend that clause 9 of the will is void or unenforceable.
10. If clause 9 is not void or unenforceable by reason of presumed undue influence, then the plaintiffs contend that, properly construed, the words "without being liable for loss" in clause 9 of the will do not extend to liability for an equitable debt that arises from an obligation to account to the beneficiaries, or liability to pay equitable compensation as a remedy selected by the Court as a more efficient means of giving effect to such an obligation to account on a wilful default basis in circumstances where the defaults and the value of the assets of which the estate has thereby been deprived are known. The plaintiffs contend that clause 9 of the will therefore does not apply to any of the alleged instances of wilful default.
11. If the words "liable for loss" are construed as including a liability of the kind referred to immediately above, contrary to the plaintiffs' submissions, then the plaintiffs contend that clause 9 of the will is void for repugnancy to the concept of a trust, or on the basis that it is contrary to public policy, because it impermissibly seeks to exclude the core obligations of an executor and trustee. This contention was not pleaded, but no objection was taken on behalf of Ms Fleming.
12. Ms Fleming submits that presumed undue influence does not apply in the probate context.
13. Ms Fleming further submits that the irreducible core obligations of an executor and trustee are honesty and good faith. Clause 9 of the will, properly construed, does not exclude liability for breach of those core obligations, and is therefore neither repugnant nor contrary to public policy. Ms Fleming further submits that the "loss" to which clause 9 applies does not include liability for "substitutive" compensation that is payable in order to discharge an obligation to account for any unauthorised disbursement of trust funds or assets. The remedy of equitable compensation in those circumstances is not dependent on any loss being established beyond the fact of the unauthorised disbursement. Ms Fleming submits that the plaintiffs' claims in the present case are claims for "loss" in the "restorative" sense rather than the "substitutive" sense. That is to say, the plaintiffs seek to have restored to the trust the value that they contend would have been obtained but for Ms Fleming's alleged failure to act in accordance with the requisite diligence and care in selling the motel property and business, in selling the grain, and her failure to recover the stockyards. Ms Fleming therefore contends that, if and to the extent that the plaintiffs establish the alleged instances of wilful default (which Ms Fleming denies), clause 9 is a complete answer to the plaintiffs' claims.
14. In reply, the plaintiffs submit that the irreducible core obligations of an executor are not limited to honesty and good faith, and extend to the duty of diligence and prudence.
15. If and to the extent that the alleged instances of wilful default are established and liability for such default is not excluded by clause 9 of the will, Ms Fleming asks the Court to relieve her from personal liability pursuant to s 85 of the Trustee Act 1925 (NSW) on the basis that she acted honestly and reasonably and ought fairly to be excused. The plaintiffs deny that Ms Fleming acted honestly and reasonably in relation to the sale of the motel property and business, the sale of the grain, and the recovery of the stockyards.
16. The plaintiffs did not make any submissions in support of their claim for orders revoking the grant of probate to Ms Fleming and granting letters of administration to Ms Stone, or another, solicitor. Nor did the plaintiffs tender any consent of Ms Stone, or any other solicitor, to be appointed as administrator of the deceased's estate. Those claims for relief are therefore taken to have been abandoned.

The duties of executors and trustees and liability to account on a wilful default basis

1. It is convenient to begin with a summary of the legal principles relating to the scope and content of the duties owed by executors and trustees, and the circumstances in which an executor and trustee becomes liable to account on a wilful default basis.
2. An administrator is required to administer the deceased estate for the benefit of the beneficiaries in accordance with the will. [1]
3. It is uncontroversial that the principal duties of an executor are to identify and get in the assets of the deceased's estate, to pay the deceased's expenses and liabilities, to pay the legacies given by the will, and to distribute the residue of the estate in accordance with the will. The executor holds the assets of the estate for the purpose of carrying out the functions of administration, and not for the executor's own benefit. [2]
4. The law requires executors to adhere to the same standards as are required of trustees in carrying out their duties. Executors and trustees are required to act prudently and properly in the management of the estate as a whole. The standard of prudence required is that of an ordinary prudent person or, in the case of an executor or trustee acting in a professional capacity, the minimum standard required of persons acting in that profession. The executor's conduct is to be assessed against the standard objectively. As both the plaintiffs and the defendant emphasised in the present case, that is a factually sensitive inquiry which must be undertaken having regard to the circumstances in which the defendant carried out her duties. [3] The duty to act prudently and properly is also referred to as a duty of diligence and prudence, or a duty of diligence and care. The standard of prudence is sometimes referred to as a standard of care. However, the duty owed by executors and trustees, and the standard that they are required to meet, are not to be confused with the similarly named duty and standard of care that are relevant to common law actions for negligence. [4]
5. The discharge of the duty to identify and get in the assets of the estate may require the executor to enforce, by legal proceedings if necessary, any right, title or interest of the deceased in specific assets, provided that the estate has sufficient assets to fund such legal proceedings or the beneficiaries indemnify the executor for the costs of such proceedings. [5]
6. Contrary to the submissions made on behalf of the plaintiffs, the executor's duty to get in assets does not require the executor to commence proceedings to recover property if the estate has sufficient funds to cover the executor's costs of the proceedings, or the beneficiaries indemnify the executor in respect of those costs. In support of that submission, the plaintiffs relied on the following passage from the judgment of Doyle J in Tschirn v Australian Executor Trustees Limited: [6] "While accepting that this duty will on occasion extend to commencing legal proceedings in order to recover assets or monies said to form part of the deceased estate, the authorities also recognise, at least where those proceedings are likely to be controversial or contested, that the executor is not bound to use their own funds to pursue those legal proceedings. If there are no trust assets from which to fund the proceedings, and no indemnity from a beneficiary or beneficiaries is forthcoming, then it would generally be appropriate for the executor to refrain from commencing the contemplated proceedings. …"
7. That passage does not support the plaintiffs' submission that, if the estate has sufficient funds to cover the costs of the proceedings, then the executor's duty to get in the assets necessarily requires the executor to commence the proceedings. The executor's duty to get in the assets is to be exercised prudently in accordance with the standards discussed above. [7] The question whether it is prudent to commence proceedings to recover property claimed by the estate will depend on all the circumstances. Relevant factors include the nature and value of the relevant property, the nature and strength of the competing claims to the relevant asset, the level of risk attending the proposed proceedings, and the likely cost to the estate if the proceedings are unsuccessful.
8. If in doubt about whether to commence proceedings to prosecute the estate's claim to specific property in all the circumstances, it is open to an executor to seek judicial advice about whether they would be justified in commencing proceedings. [8] Indeed, it may be prudent to do so. [9] However, the executor is not under any legal obligation to seek judicial advice. [10] If the executor does not commence the relevant proceedings, and a beneficiary contends that the executor is under a duty to do so, that beneficiary may sue the executor to compel them to protect the beneficiary's interest in the estate. Alternatively, if there are special circumstances, the beneficiary may commence proceedings in their own name against the defendant to prosecute the estate's claim to the particular asset, joining the executor and other beneficiaries as additional defendants. [11]
9. I accept the plaintiffs' submission that the standard of care required of an executor selling assets for the purpose of administration is the standard described by Barrett J (as his Honour then was) in Halfhide v Beaven: [12] "44. … the standard of care to be exercised by an administrator in effecting a sale for purposes of administration may be regarded as the equivalent of that expected of a trustee exercising a power of sale, although considerations relevant to the competing interests of classes of beneficiaries will not intrude in the case of a legal personal representative. The standard of care includes the exercise of diligence in inviting competition and in pursuing a course of conduct of the kind that an ordinary prudent person would apply in managing his or her own affairs. Formulations based on a supposed duty to 'obtain the best price' or 'not to sell at an undervalue' must, I think, be approached with care. Such absolutes tend to be illusory. The emphasis is on responsible, methodical and prudent behaviour undertaken according to an informed appreciation of the subject matter and the market environment in which it is to be sold. …"
10. Importantly, as Barrett J stated in that case, the beneficiaries' right to have the deceased's estate properly and duly administered does not entail a right to determine how, for what price or to whom a sale is made. [13]
11. The office of executor is a personal one which cannot be delegated. However, an executor cannot do everything themselves in the administration of the estate. An executor may engage agents where it is in the ordinary course of business to use others to do the work that the agent is engaged to do, and provided that the executor runs no needless risk in doing so. The executor must exercise care to select an agent who is suitable and competent in the relevant field, and in supervising the work undertaken by the agent. [14]
12. Beneficiaries of a deceased estate are entitled to an account in common form. An account on the basis of wilful default may be ordered at the suit of a beneficiary who establishes at least one instance of wilful default. Not every breach of trust is a wilful default. In an accounting context, wilful default means "a passive breach of trust, an omission by a trustee to do something which, as a prudent trustee, he ought to have done - as distinct from an active breach of trust, that is to say something which the trustee ought not to have done". [15] The underlying concept is that "through breach of trust the trustee has failed to obtain for the trust that which would have been obtained if the trustee's duties had been discharged". [16] Examples include the failure by an executor or trustee to get in an asset of the estate or the trust, or the sale of an estate or trust asset at an undervalue (resulting in the estate or trust not receiving the full value of the asset). It is not necessary to demonstrate conscious wrongdoing on the part of the executor or trustee in order to establish wilful default. [17]
13. In the taking of an account on the basis of wilful default, the executor must account not only for the assets that have actually been received, but also for assets that would have been received if the executor had properly discharged their duties. [18]
14. A court will only order an account on the basis of wilful default where the default that constitutes the basis of the application is proved, and gives rise to a prima facie inference that other defaults have occurred albeit that they are not yet known. [19] As the plaintiffs submitted, where there are only a few likely instances of default, an account on the basis of wilful default may be limited to those instances. As I have already mentioned, the plaintiffs submitted that, where a limited number of wilful defaults, and the value of the assets not received by the estate as a result of those defaults, have been proved at trial, the Court may order equitable compensation as an alternative and more efficient means of the executor making good that lost value rather than making an order for the taking of an account on the wilful default basis.

Salient facts

1. The deceased died on 26 December 2018.
2. By 7 January 2019, Ms Fleming was gathering information concerning the deceased's estate, and was preparing an urgent application to the Court for a grant of special letters of administration, primarily for the purpose of enabling her to continue the operation of the motel business pending a grant of probate.
3. As I have already mentioned, the Court made an order on 11 January 2019 granting special letters of administration ad collingenda with specific powers, including to operate and manage the motel.
4. Ms Afflick had been managing the motel business since about 1997, reporting directly to the deceased who participated in all decisions relating to the business. Ms Afflick worked together with Ms Robyn Bell, who managed the motel business at nights and on weekends. Ms Afflick and Ms Bell continued to manage the motel after the death of the deceased, reporting to Ms Fleming. Ms Fleming attended the motel to monitor its management, and to inspect specific problems or issues that Ms Afflick and Ms Bell drew to her attention from time to time.
5. Those problems included a problem with the sewage disposal system at the motel property, which Ms Afflick drew to the attention of Ms Fleming.
6. Ms Afflick gave evidence that the motel was serviced by two septic systems. From about 2002, sewage failed to drain away from the motel consistently. Ms Afflick had to attempt to clear the pipes using a mop and a hose on a weekly basis. If that did not succeed, a local plumber - Mr Martin Green - was called to clear the blockage using an electric eel. Both septic systems were affected by these blockages. Ms Afflick understood that the problem was caused by the age of the pipes and the infiltration of tree roots into the pipes, based on advice from Mr Green, and based on her own observations when attempting to clear the pipes herself. However, Ms Afflick also agreed in cross-examination that the blockages that required her to clear the pipes manually with a mop and hose were principally caused by people flushing foreign objects down the toilets. Ms Afflick gave evidence that Mr Green's assistance was required on a regular basis, although she cannot now recall the precise frequency. Ms Afflick recalled occasions on which sewage flooded into some of the motel rooms. On one such occasion, the flooding was so extensive that all flooring and furniture in the affected rooms had to be replaced.
7. Ms Fleming gave evidence that she and Ms Afflick sought advice from Mr Green about what was required to rectify the problem. Mr Green advised that the motel would need to be closed in order to carry out the necessary work, because the toilets could not be flushed while the work was in progress.
8. Ms Fleming and Ms Afflick gave conflicting evidence about past subsidence of parts of the floors in some of the units in the motel.
9. Ms Afflick gave evidence that the flooring in part of two motel rooms had "collapsed" in about spring 2015, and had never been repaired because the deceased thought that the repairs would be too costly. It was Ms Afflick's understanding that the "collapse" had occurred because "the flooring piers had sunk in". There is no evidence of the basis of Ms Afflick's understanding.
10. In her affidavit sworn on 4 August 2022, Ms Fleming deposed that Ms Afflick advised her that there had been "subsidence issues with floors in the family units" in the past, that the affected floors had been rebuilt, including retiling and repainting the affected units.
11. There is no evidence of any recurrence of floor subsidence in any of the motel units at any time after the occasion referred to by Ms Afflick in 2015. Ms Fleming deposed that no subsidence issues have arisen during her administration of the deceased's estate to date. In cross-examination, however, Ms Fleming described floor subsidence as a "continuing process" at the motel property, meaning that it happened "regularly, as in every three or four years". Ms Fleming also asserted that it was "wet under that set of units".
12. Ms Fleming's evidence does not disclose any source of information about subsidence issues at the motel other than Ms Afflick. I reject Ms Fleming's evidence given in cross-examination that subsidence issues were a "continuing process" occurring every three or four years as inconsistent with Ms Afflick's evidence, and inconsistent with Ms Fleming's own affidavit. It was my impression at the time that Ms Fleming gave that evidence in cross-examination that she was overstating the subsidence "issue" in response to being challenged about her evidence that she considered subsidence to be an issue or potential issue affecting the value of the motel when she sold it for $2,550,000 in December 2019, being less than the value ascribed to the motel property and business by the valuation report that she had received in April 2019 to which I refer below, and less than the selling price estimated by the sales agent that she engaged in October 2019.
13. On 6 February 2019, Ms Fleming engaged a local valuer, Mr Wayne Riches of Riches Property Valuations, to value the Woodlands property and the Moruya property. At Mr Riches' suggestion, Ms Fleming engaged Opteon Property Group Pty Ltd (Opteon) as a specialist valuer to value the motel property and business. Ms Fleming had used Opteon's services previously and had been satisfied with their work.
14. In cross-examination, Ms Fleming initially said that she engaged Opteon to value the motel property and business solely for probate purposes, and not for the purposes of identifying the value of the motel property and business with a view to sale. I reject that evidence, which is inconsistent with the objective facts that, as recorded in the contemporaneous documents and as Ms Fleming accepted in cross-examination, she was interviewing real estate agents and brokers in February and March 2019 with the intention of appointing one of them to conduct the sale of the motel property and business, and her intention at that time was to sell the motel without trading it for any material length of time if possible.
15. On 14 February 2019, Ms Fleming obtained from the deceased's accountant, Ms Rhonda Elliott, financial statements for the motel business operated by TJ Brooks Pty Limited for the 2016 to 2018 financial years and for the period 1 July 2018 to 31 January 2019. The financial statements recorded net profits of $151,992 for the 2016 financial year, $60,630 for the 2017 financial year, $118,148 for the 2018 financial year, and $102,004 for the seven-month period to 31 January 2019. Ms Fleming caused the financial statements to be provided to Mr Gregory Mason, the valuer at Opteon who was undertaking the valuation of the motel property and business.
16. Mr Mason inspected the motel property on 22 February 2019, and prepared a valuation report that Opteon issued on 10 April 2019. Mr Mason valued the motel property and business at $2,825,000 as a going concern on a "walk in walk out" basis or, alternatively, $2,200,000 for the motel property and $600,000 for the motel business, as at 22 February 2019. Mr Mason opined that the existing use of the property as a motel was its highest and best use.
17. The report noted the strengths of the site as including its location within a growing coastal region, and its proximity to the Catalina Country Club. Noted weaknesses included the potential presence of asbestos in some buildings and the need for some repair works to be undertaken in the short to medium term. The report identified the necessary repairs as being new roofing and some external cladding repairs for the northern wing of the motel (comprising rooms 16 to 20), and repairs to soffit lining and new gutters and downpipes for the western wing of the motel (comprising rooms 7 to 15). The report stated that a preliminary allowance of $15,000 for those works had been incorporated in the valuation as representing the discount to market value that a prudent purchaser would allow for the cost of those works. However, the report emphasised that Mr Mason had not been provided with quotes or expert reports concerning the works.
18. The report recommended that audited financial statements, a building inspection report, and an asbestos report be provided to Mr Mason for review. There is no evidence that any such documents were provided to him, although an asbestos register was later prepared, as referred to below.
19. The report noted that the motel business had been managed by Ms Afflick since approximately 2002, and that it appeared to be well managed. The report stated that any decrease in the quality of management could quickly lead to a decline in trade.
20. Mr Mason opined that the tariff rates at the 27-room motel of between $70 and $120 per night during the off-peak season and between $120 and $160 per night during the peak season appeared to be at below market rates when compared with tariffs charged by other low to mid-range accommodation facilities in Batemans Bay and other nearby coastal towns on the South Coast. Mr Mason opined that "slightly higher tariff rates could be achievable", but also calculated that the motel business was achieving a slightly above average occupancy rate for the area and attributed this to the lower tariff level. The report stated that, in order to maintain and improve occupancy levels, the motel owner would need to monitor ongoing competition from approximately 27 other motels or accommodation options in the Batemans Bay area, and to implement an upgrade and refurbishment program for the motel property.
21. In valuing the motel property and business as a going concern, Mr Mason applied a capitalisation of net profit methodology, supported by a direct comparison methodology.
22. Mr Mason explained the capitalisation methodology in the following terms: "The capitalisation method is based on the concept that for income producing assets the price a prospective purchaser will be prepared to pay will be based on (amongst other things) the level of income and the return required for the investment of capital. The capitalisation method is commonly used as the primary valuation method to determine the Market Value of income producing assets such as leased properties and going concerns or specialised assets. Under the capitalisation of net profit, the net profit after adjustments is divided by the percentage return (known as the capitalisation rate) required by prospective purchasers in the market to arrive at the Capitalised Value assuming the asset was being operated under good average management. Capital adjustments may be made to the Capitalised Value, for example to reflect:

• Capital expenditure required to sustain the income;
• Lost earnings during a period of change to the operation of the business in order to achieve the adopted net profit;
• The added value of other non-incoming [sic] producing assets (e.g. surplus land)."

1. Mr Mason then referred to the evidence of sales of nine motel properties during the period from February 2017 to March 2019 in Batemans Bay, Batehaven, Mollymook, Narooma, Bega, Queanbeyan and Braemar, which indicated a range of market yields between 5.27 per cent and 14.0 per cent for properties that he considered to be similar properties. The properties that Mr Mason considered most comparable to the subject motel property had yields between 7.8 per cent and 11.87 per cent. Mr Mason opined that, based on that market evidence, the appropriate capitalisation rate for the motel property was 9.5 per cent. He then applied that capitalisation rate to an "adopted sustainable net profit figure" for the motel business of $270,000 per annum - $151,852 more than the net profit of $118,148 recorded in the financial statements for the 2018 financial year. [20] That "adopted sustainable net profit figure" represented 48.6 per cent of trading revenue, whereas net profits actually achieved by the motel business since the 2016 financial year, according to the financial statements provided to Mr Mason, represented between 10.8 per cent and 29.0 per cent of revenue. He arrived at the "adopted sustainable net profit figure" by adjusting actual expenses downwards to achieve the "adopted sustainable net profit figure" which he considered to be in line with unspecified "industry benchmarks" for a motel business of comparable size. However, he emphasised that this was not presented as a projection of the trading performance of the motel business. The capitalised value of the motel property and business, based on the "adopted sustainable net profit figure" of $270,000 and a capitalisation rate of 9.5 per cent, was $2,842,105, from which Mr Mason deducted $15,000 for the repair works described at [66] above before rounding down by a further $2,105 to arrive at a value of $2,825,000.
2. Mr Darren Austin, a certified practising valuer called by the plaintiffs as an expert witness, explained that the process of reducing the actual expenses of a business in order to achieve a net profit figure to be applied in estimating the value of the business using the capitalisation methodology is known as "adding back" or "add-backs". Mr Austin gave evidence that the objective is to remove one-off or non-recurring expenses, depreciation expenses, and any private financing expenses from the calculations. Mr Austin gave evidence that, with small motel businesses, the usual practice was to remove or "add back" all wages paid to the owners, leaving only the expense of wages paid to additional employees, in order to remove the variability that would otherwise result from the wide range of practices amongst owners in the level of salaries paid to themselves.
3. The sale prices of the nine motel properties referred to in Mr Mason's report represented between $61,538 and $243,333 per room. For the purpose of the direct comparison methodology, Mr Mason adopted a rate per room of $105,000 for the subject motel property and business, being very similar to a rate per room of $105,263 achieved for the sale of a 19-room motel in Batemans Bay in February 2017. The $105,000 room rate for the motel property and business with 27 rooms translated to an estimated market value of $2,835,000, which Mr Mason rounded down to $2,825,000 in line with the estimated value derived from the capitalisation methodology.

Outline of the parties' submissions

1. It was submitted on behalf of the plaintiffs that Ms Fleming failed to discharge her duties as executor in respect of the sale of the motel property and business with the prudence and diligence that is required of a solicitor acting as executor in all the circumstances of this case, by: 1. failing to follow Mr Mason's recommendations to enhance the value of the motel by increasing the tariff rates; 2. requiring the selling agent, Mr Rogers, to market the motel for sale with a plan to have the sale settled by 20 December 2019, after inexplicably delaying the appointment of a selling agent and the commencement of the marketing campaign for four months after the grant of probate; and 3. selling the motel only 20 days after first advertising it for sale and at a price that was almost $300,000 less than its value estimated by Mr Mason and approximately $500,000 less than the price range estimated by Mr Rogers in circumstances where Ms Fleming had not obtained an updated valuation report, after inappropriately binding herself to that sale at that price by the terms of the Heads of Agreement before contracts had been exchanged, and without even contacting the beneficiaries to inquire whether they might be interested in purchasing the motel property and business for more than that price.
2. The plaintiffs submitted that this was compounded by Ms Fleming's failure to release Mr Rogers from her requirement that a sale be settled by 20 December 2019 after 4 November 2019 when Ms Afflick identified relief managers to step in and manage the motel pending completion of the sale. It was submitted that this would have allowed more time for Mr Rogers to endeavour to generate further interest in the motel from genuine buyers in the market, in circumstances where Mr Mason had previously advised that the selling period for the motel would likely be between three and sixth months, and Mr Rogers' firm had negotiated an exclusive agency for a period of three months. It was submitted that Ms Fleming ignored Mr Mason's advice about the selling period and ultimately accepted Mr MacLachlan's offer on 7 November 2019 simply because that was the only possible way of having a sale completed by 20 December 2019. It was submitted that, in accepting that offer and entering into the Heads of Agreement, Ms Fleming imprudently closed off the possibility of entertaining any better offer that might be received for a period of up to 30 days thereafter, during which period Mr MacLachlan was under no obligation to exchange contracts.
3. It was submitted that the Court should not accept Ms Fleming's evidence that she had concerns about the veracity of Mr Mason's valuation at the time that she made the decision to sell to Mr MacLachlan for $2,550,000, and that the concerns that she now claims to have had were merely an "after the fact rationalisation" of that decision. It was submitted that Ms Fleming did not, in fact, have any legitimate reason to be concerned about the veracity of Mr Mason's valuation when she entered into the Heads of Agreement and when she later exchanged contracts for the sale of the motel for $2,550,000. Alternatively, it was submitted that if Ms Fleming had held those concerns (which the plaintiffs deny), the prudent response to those concerns would have been to obtain an updated valuation report.
4. The plaintiffs placed particular emphasis on Ms Fleming's failure to inquire about whether the beneficiaries were interested in bidding for the motel, in circumstances where Ms Groat's solicitors had specifically asked Ms Fleming in their letter of 29 October 2019 whether beneficiaries would be given the opportunity to bid on the motel property and business. [39] It was submitted that Ms Fleming's failure to reply to that letter until 11 November 2019, and the misleading substance of that response, demonstrated that Ms Fleming had failed to act diligently in inviting competition for the motel property and business. [40] Counsel for the plaintiffs submitted that the potential for the selling price to be increased by reason of interest amongst the beneficiaries is demonstrated by the sale of the Woodlands property to Ms Turnbull for more than the valuation after Ms Fleming elicited competing bids for that property from Ms Afflick and Ms Turnbull.
5. The plaintiffs further submitted that Ms Fleming's conduct in relation to the motel, considered as a whole, displayed such a want of prudence as to constitute bad faith, and that her belated and misleading response on 11 November 2019 to Ms Groat's solicitors' inquiry made on 29 October 2019 demonstrates that bad faith. [41]
6. The plaintiffs submitted that Ms Fleming's failure to act with the requisite degree of prudence and diligence had resulted in a failure to obtain for the benefit of the estate the full value of the motel property and business. The plaintiffs relied on Mr Austin's report as evidencing that the value at the relevant time was $2,950,000, and that the value lost to the estate by reason of Ms Fleming's default was therefore $400,000.
7. It was submitted on behalf of Ms Fleming that she was personally engaged in ensuring that the motel was advertised publicly and that it was actively marketed to a wide audience, including by reviewing and approving Mr Rogers' information memorandum, by approving the placement of advertisements and by providing Mr Rogers with the contact details of persons known to her as potential purchasers of the motel. It was further submitted that Mr Rogers, as Ms Fleming's agent, did take appropriate steps to market the motel, including emailing 75 prospective buyers when the motel was first listed for sale. Senior counsel for Ms Fleming submitted that the plaintiffs' contention that Ms Fleming's efforts to sell the motel property and business were inappropriately focussed on a single prospective purchaser, being Mr MacLachlan, is incorrect.
8. Senior counsel for Ms Fleming emphasised that there was no point during the email correspondence between Mr Rogers and Ms Fleming during the marketing campaign in which Mr Rogers indicated that he needed more time to sell the motel, or that there was a prospect of achieving a better price if he had more time. It was submitted that any suggestion that the motel might have been sold at a price greater than the $2,550,000 paid by Mr MacLachlan is mere speculation. It was further submitted that not accepting Mr MacLachlan's offer on 7 November 2019 would have carried the risk of losing Mr MacLachlan as a potential purchaser and not receiving a better offer or, indeed, any other offer after a longer marketing campaign.
9. It was submitted on behalf of Ms Fleming that she acted prudently and diligently in selling the motel property and business, informed by Mr Mason's valuation but also taking into account the following matters in deciding to accept Mr MacLachlan's offer of $2,550,000: 1. the recommendation of Mr Rogers as a reputable, qualified and experienced selling agent; 2. that the motel had gone to market and no comparable offers had been made; 3. that the motel was being advertised for sale at the most optimum time to sell such a property and business; 4. the specialised nature of the asset; 5. structural and titling issues associated with the motel that Mr Mason's valuation had not taken into account; 6. the imminent departure of two managers of the motel; and 7. Ms Fleming's obligation to realise the assets of the estate in a timely manner, referring to the prima facie expectation that executors should get in the assets, pay the debts, administer the estate and distribute the funds to beneficiaries within one year of the testator's death, and to correspondence received from beneficiaries from about February 2019 onwards inquiring as to the progress of the administration of the estate.
10. It was submitted that prudence did not require Ms Fleming to obtain an updated valuation because a valuation is not "bankable" and the decision facing Ms Fleming was driven by the reality that Mr MacLachlan was the only prospective purchaser to have made any offer by 7 November 2019, and that his best offer was $2,550,000. Irrespective of the value that might be ascribed to the motel in any updated valuation report, obtaining an updated report would not have changed that reality, and would not have changed the nature of the decision to be made by Ms Fleming in deciding whether to accept the $2,550,000 offer or hold out for a better offer with the risks that this entailed. However, senior counsel for Ms Fleming accepted that it would have been prudent for Ms Fleming to obtain an updated valuation report in order to make a fully informed decision about whether to market the motel for a period of up to six months as Mr Mason had suggested in an attempt to elicit a better offer, or whether to accept the best offer of $2,550,000 following a marketing campaign of only 20 days.
11. In relation to the duration of the marketing campaign, it was submitted on behalf of Ms Fleming that she had genuine concerns about the availability of managers for the motel, without which the motel would have to be closed and could not be sold as a going concern, which Mr Austin had identified as the highest and best value of the land. It was submitted that the replacement managers that Ms Afflick identified on 4 November 2019 were relief managers only, who were able to step in on an interim basis until the sale of the motel was completed. [42] Thus, it was submitted that the appointment of those relief managers did not allay Ms Fleming's concerns that the motel might be without managers if the sale process was extended for any material period of time beyond Christmas 2019.
12. It was submitted that both Mr Mason's valuation and Mr Austin's valuation were flawed because they did not take into account the sewerage problems at the motel, in addition to the other issues and potential issues identified by Ms Fleming in her evidence. [43] It was submitted that the evidence before the Court simply does not establish how those matters might have impacted on the value of the motel property and business. In addition, it was submitted that Mr Austin's valuation evidence was flawed because there was no basis for the wages "add-back" calculated by Mr Austin in arriving at the adjusted net profit figure on which his valuation opinion was based. For those reasons, it was submitted that the plaintiffs have failed to establish that Ms Fleming committed any wilful default in respect of the sale of the motel which resulted in loss of value to the estate.

Consideration and determination

1. I reject the plaintiffs' submission that Ms Fleming failed to act with the requisite prudence and diligence by failing to increase the tariff rates charged by the motel. The submission misstates Mr Mason's advice, which was that slightly higher tariff rates could be achievable, but that this may affect the motel's occupancy rate which was slightly above average for the area on account of the lower tariff rates that were actually being charged. Mr Mason emphasised that maintaining and improving occupancy levels at increased tariff rates would require an upgrade and refurbishment program. [44] There is no evidence of the likely cost of such a program, compared to the potential increase in revenue that might have flowed from increasing tariff rates. The evidence therefore does not establish that a prudent executor in all the circumstances would have increased the tariff rates.
2. In my opinion, however, Ms Fleming did fall short of the standard of prudence and diligence in selling the motel property and business.
3. I accept the submission made on behalf of Ms Fleming that the evidence does not disclose any deficiency in the steps taken by Mr Rogers to advertise and market the motel property and business during the period from 18 October to 7 November 2019, or in Ms Fleming's supervision of and involvement in those steps. However, Ms Fleming acted imprudently by stipulating a very short time frame for that marketing campaign, contrary to Mr Mason's advice, and by maintaining that stipulation even after Ms Afflick had sourced relief managers to manage the motel pending completion of the sale, without Ms Fleming making any inquiries about whether those relief managers were willing and able and had the necessary experience to competently manage the motel for the duration of a longer marketing campaign. That was imprudent because the only offers received during the very short marketing campaign were from one potential purchaser, and the amounts of those offers were materially below the amount of Mr Mason's valuation - being the only valuation that Ms Fleming had to rely on - and even further below Mr Rogers' estimated selling price. Mr Rogers' reports to Ms Fleming at the time indicated that there were other potential buyers for the motel, but that they were not in a position to move quickly and that the sale process would likely extend into 2020 if they were to pursue offers from those potential buyers. Ms Fleming did not even ascertain whether any beneficiary was interested in purchasing the motel, notwithstanding that one beneficiary had specifically asked whether they could bid. Ms Fleming chose instead to enter into the Heads of Agreement locking in the benefit of a $2,550,000 price for Mr MacLachlan for a period of 30 days, during which Ms Fleming did not have the benefit of a binding contract for sale to Mr MacLachlan yet was precluded from accepting any better offer that might be received for the motel. Ms Fleming's evidence did not explain her reasons for agreeing to that provision in the Heads of Agreement, which was plainly for the benefit of Mr MacLachlan and to the detriment of the estate.
4. For the reasons explained at [160] to [177] above, I do not accept Ms Fleming's evidence that she had concerns about the veracity of Mr Mason's valuation at the time that she made the decision to sell to Mr MacLachlan for $2,550,000, including by reason of the "issues" and "potential issues" referred to in paragraph 75.11 of Ms Fleming's affidavit sworn on 4 August 2022, which I have found were non-issues with the exception of the sewage issue. Ms Fleming had no basis for forming any view about the impact of the sewage issue on the value of the motel, even if she had turned her mind to that issue before accepting Mr MacLachlan's offer, which I have found that she did not.
5. I reject the submission made on behalf of Ms Fleming that Mr Rogers recommended that she sell the motel for the $2,550,000 sum offered by Mr MacLachlan. As I have said at [163] above, any recommendation made by Mr Rogers to Ms Fleming in relation to that offer did not rise above advice that this was the best offer he had been able to extract from the only bidder at the time, who would commit to settlement by 20 December 2019, and who Mr Rogers believed would not "muck around". Contrary to the submissions made on behalf of Ms Fleming, it is not to the point that there is no evidence of Mr Rogers having communicated to her that he needed more time to sell the motel, or that there was a prospect of achieving a better price if he had more time. Ms Fleming had made clear to Mr Rogers that she required the sale to be completed by 20 December 2019, and there is no evidence that Mr Rogers had any reason to believe that this was open for negotiation.
6. I accept the submission made on behalf of Ms Fleming that there was a risk that any extension of the marketing campaign period might have resulted in the loss of Mr MacLachlan's offer, without any better, alternative offer being received from any other prospective purchaser. In my opinion, however, the existence of that risk did not warrant Ms Fleming simply accepting Mr MacLachlan's offer. As senior counsel for Ms Fleming ultimately accepted, the prudent course in all the circumstances would have been to obtain an updated valuation report for the motel property and business, and to rely on that report to make an informed decision whether to accept Mr MacLachlan's offer or whether to extend the marketing campaign.
7. In my opinion, Ms Fleming's failure to inquire of the beneficiaries whether they were interested in purchasing the motel was but one aspect of her course of conduct which, as a whole, failed to meet the standards of prudence and diligence required of an executor in all the circumstances. I do not consider that it has the significance which the plaintiffs' submissions attributed to it. I reject the plaintiffs' submission that the sale of the Woodlands property to one of the beneficiaries for a price in excess of the valuation of that property demonstrates that there was potential to achieve a better price for the motel by issuing a special invitation to beneficiaries to bid for the motel. The evidence does not establish that any of the beneficiaries were potential bidders for the motel, as I have explained at [124] to [129] above.
8. Contrary to the submission made on behalf of Ms Fleming, the amount of Mr MacLachlan's offer made during the compressed marketing campaign for the motel does not constitute evidence of the fair market value of the motel. I reject the submission that the compressed marketing period was required in order for Ms Fleming to realise the assets of the estate in a timely manner. To the extent that Ms Fleming was desirous of completing the sale of the motel by the end of the first executor's year, it was her failure to even begin marketing the motel for sale until mid-October 2019 that required a compressed marketing campaign.
9. Contrary to the plaintiffs' submission, I do not consider that Ms Fleming's conduct, considered as a whole, amounts to bad faith. As I have found at [107] above, Ms Fleming held a genuine concern that the sale should be completed before the resignations of Ms Afflick and Ms Bell took effect. For the reasons I have explained above, Ms Fleming did not act with the requisite prudence and diligence in failing to reconsider the marketing campaign period after the relief managers were identified on 4 November 2019 having regard to all of the circumstances to which I have referred above.
10. As explained earlier in these reasons, the plaintiffs' claims require them to demonstrate that, through her breach of duty in relation to the sale of the motel, Ms Fleming has failed to obtain for the estate the value that would have been obtained if she had discharged her duties. [45] The plaintiffs have failed to establish this. The plaintiffs relied on Mr Austin's report as evidencing that the market value of the motel property and business as at 7 November 2019 and 6 December 2019 was $2,950,000, and that the value lost to the estate by reason of Ms Fleming's breach of duty in relation to the motel was therefore $400,000. For the reasons explained at [143] to [149] above, Mr Austin's opinion concerning the market value of the motel at those times carries no weight. Nor does Mr Mason's opinion about the value of the motel in February 2019 provide a sufficient basis for making any finding on the balance of probabilities about the market value of the motel, with the sewage problems that Mr Mason did not take into account, some ten or eleven months later in November and December 2019.
11. For those reasons, the plaintiffs have failed to establish the alleged wilful default in respect of the sale of the motel property and business.

Outline of the parties' submissions

1. The plaintiffs submitted that Ms Fleming committed a wilful default in relation to the sale of the grain stored on the Woodlands property by delegating to Elders the decision to sell the grain prior to the clearing sale in order to have the silos empty and available for sale and removal by the purchaser on the day of the clearing sale, and by delegating to Elders the decision about the price at which the grain was to be sold. Counsel for the plaintiffs submitted that Ms Fleming "had no idea about the circumstances in which the grain was sold", that she failed to exercise any oversight over the sale of the grain, and that it was "simply unacceptable" to determine that the grain should be sold before the auction because the silos needed to be empty on the day of the clearing sale, which involved the "sacrifice [of] one asset for another".
2. Relying on the admitted fact that the grain was sold for $150 per tonne and Mr Turnbull's evidence that he would have had no difficulty finding a buyer for triticale grain for at least $400 per tonne, [46] the plaintiffs submitted that the grain was sold at an undervalue of $250 per tonne. The plaintiffs submitted that the volume of grain sold could be determined by dividing the total sale price recorded by Elders in respect of the two lots of grain by the sale price of $150 per tonne. [47] The resulting volume could then be multiplied by the shortfall of $250 per tonne in order to arrive at the value lost to the estate by reason of the sale of the grain at $150 per tonne.
3. Senior counsel for Ms Fleming did not disagree with this approach to calculation, but did not accept the premise of the calculation that there has been a wilful default in respect of the sale of the grain. It was submitted that Ms Fleming had acted prudently and appropriately in engaging Elders to conduct the clearing sale, and in accepting their advice that the grain should be sold before the clearing sale in order to facilitate the sale and removal of the empty silos on the day of the clearing sale, particularly in circumstances where the silos were sold for a total sum of $14,600, [48] which is greater than the shortfall calculated by the plaintiffs in respect of the grain. It was submitted that Ms Fleming had not been challenged about her appointment of Elders to conduct the clearing sale, that Elders had been charged with selling hundreds of items and that, as a matter of reality, an executor needing to clear a rural property of chattels in order to realise those assets and to prepare the property itself for sale, is acting under certain constraints in order to achieve the objective of clearing the property in a timely way. Senior counsel for Ms Fleming also referred to the contrast between the evidence of Mr Turnbull and Ms Fleming about the extent to which the grain had been damaged by weevils. [49]

Consideration and determination

1. It is convenient to note at the outset that the plaintiffs' calculation of the shortfall between the total price for which Elders sold the grain at $150 per tonne, and the total price that would have been realised if it had been sold at a price of $400 per tonne, is wrong. The amount of the shortfall is approximately $5,500, [50] not $9,706 as the plaintiffs submitted.
2. The plaintiffs have failed to establish that Ms Fleming committed a wilful default by engaging Elders to sell the chattels on the Woodlands property, including the grain, in order to clear the property, by accepting Elders' advice to sell the grain prior to the day of the clearing sale in order to facilitate the sale and removal of the silos on the day of the clearing sale, and by relying on Elders to determine the price at which the grain would be sold under those circumstances.
3. As Ms Fleming submitted, the plaintiffs did not seek to impugn Elders' reputation, qualifications, experience or competence to act as Ms Fleming's agent for the clearing sale. [51]
4. I accept Ms Fleming's evidence that it is customary with clearing sales of this kind for the vendor's agent to have authority to fix the price at which each of the many items is to be sold. [52] The plaintiffs did not adduce any evidence to the contrary.
5. In my opinion, Ms Fleming's conduct in engaging Elders to conduct the clearing sale, and her reliance on Elders to determine the prices for which items were to be sold based on their experience and having regard to Ms Fleming's dual objectives of realising the value of the items and clearing the Woodlands property for sale, [53] was in accordance with the ordinary course of business for rural clearing sales. There is no evidence to suggest that Elders' appointment involved any needless or unacceptable risk. The evidence establishes that Ms Fleming supervised Elders' work. Specifically, Elders sought Ms Fleming's instructions in relation to their recommendation to sell the grain prior to the day of the clearing sale, and explained to her the reasons for that recommendation. Ms Fleming gave those instructions after forming her own view that Elders' reasons were sound. Ms Fleming had engaged Elders on terms which incentivised them to achieve the best price that they could in the circumstances for the grain and, indeed, the other items to be sold at the clearing sale. [54] Ultimately, the silos sold for a total price that was materially greater than the total price for which the plaintiffs contend that the grain could have been sold. This was an agency, not a delegation of Ms Flemings' duties to Elders. Ms Fleming gave Elders a scope of authority that was consistent with the ordinary course of business for rural clearing sales, and approved a strategy proposed by Elders of selling one of the sale items (the grain) in advance in order to maximise the prospects of selling the more valuable silos on satisfactory terms on the day of the clearing sale. I reject the submission made by counsel for the plaintiffs that this was "simply unacceptable".
6. I also reject counsel's submission that Ms Fleming "had no idea about the circumstances in which the grain was sold", and that she failed to exercise any oversight over the sale of the grain. That submission is contrary to the evidence to which I have referred above, and should not have been made in those terms.
7. Mr Turnbull's evidence does not provide a sufficient basis to find on the balance of probabilities that this particular grain, which had been affected by weevils to some extent, could have been sold for a price of $400 per tonne. As I have said earlier in these reasons, it is not clear whether Mr Turnbull's opinions about the ease with which he could have found a buyer for triticale grain, and the price for which he could have sold such grain, applied to triticale grain that had been damaged by weevils. [55]
8. For those reasons, the plaintiffs have failed to establish the alleged wilful default in respect of the sale of the grain.

Outline of the parties' submissions

1. The plaintiffs submitted that Ms Fleming breached her duties as executor by failing to commence proceedings for the recovery of the stockyards, in circumstances where there were competing claims to the stockyards and there were sufficient assets in the estate to cover the costs of such proceedings. The plaintiffs contend that Ms Fleming simply accepted Ms Afflick's word about the stockyards and took the matter no further, and that "it was not for the executor to place herself into the position of judge as to the merits one way or another of the competing claims with respect to that property, unless it was absolutely plain to see that the claims being made that the stockyards belonged to [the deceased] were without foundation, and they weren't."
2. The plaintiffs submitted that the Court need not decide the ownership of the stockyards in these proceedings, and need not be troubled with questions concerning the value of the stockyards about which the plaintiffs adduced no evidence. It was submitted that these questions could be determined during the accounting process that the Court will order if it is satisfied of the alleged wilful defaults in relation to the motel sale and the grain sale.
3. It was submitted on behalf of Ms Fleming that she had made inquiries about the ownership of the stockyards, following which she had been satisfied that they had not been owned by the deceased or formed part of the Woodlands property. It was submitted that Ms Fleming would have been justifiably criticised if she had spent estate funds in commencing legal proceedings to determine the ownership of the stockyards, which counsel for the plaintiffs accepted would have a nominal value, rather than forming her own view about the matter after making those appropriate inquiries.

Consideration and determination

1. The stockyards claim is, in truth, a dispute between vendor and purchaser. Ms Turnbull, who purchased the Woodlands property, contended that the stockyards were part of that property. The vendor, Ms Fleming, disputed that contention. That dispute arose before contracts for the sale of the Woodlands property were exchanged. Ms Turnbull entered into the contract knowing that the stockyards were no longer affixed to the property, assuming (without deciding) that they were once fixtures forming part of that property. There is no evidence that the price for which the Woodlands property was sold to Ms Turnbull was reduced by reason of the stockyards having been removed. [56] As I have already mentioned, there is no evidence of the value of the stockyards, or even that they had any material value. Thus, there is no evidence that Ms Fleming's failure to commence proceedings to pursue a claim to the stockyards on behalf of the estate resulted in a loss to the estate. On the contrary, as the defendant submitted, it is likely that the costs of any such proceedings would have quickly overtaken any value that the stockyards may have. It would not have been prudent for Ms Fleming to commence such proceedings, and I reject the plaintiffs' submission that she was obliged to do so in the circumstances of this case. That submission was founded on an erroneous understanding of the applicable principles. [57] I also reject the plaintiffs' submission that Ms Fleming simply relied on the word of Ms Afflick without investigating the ownership of the stockyards further. The evidence is to the contrary. [58]
2. For those reasons, the plaintiffs have failed to establish that Ms Fleming committed any breach of duty in failing to commence proceedings to recover the stockyards. Even if the plaintiffs had established the alleged breach of duty, their proposal that the stockyards claim be considered as part of a wilful default accounting process would not have been available in circumstances where the plaintiffs have failed to establish the other alleged wilful defaults.

Construction and validity of clause 9 of the will

1. I now turn to the issues raised by the parties in relation to the construction, validity and operation of clause 9 of the deceased's will, which I address for completeness although it is not strictly necessary to do so in light of my conclusions above that the plaintiffs have failed to establish any of the alleged wilful defaults.
2. I reject the plaintiffs' submission that clause 9 of the will is void or unenforceable by reason of a presumption of undue influence arising from the solicitor and client relationship between Ms Fleming, who stands to benefit from the exclusion of liability under clause 9, and the deceased. The principles of undue influence differ in their application in probate from their application in equity. A person seeking to impugn a will, or a particular bequest or clause in a will, on the grounds of undue influence bears the onus of proving undue influence, in the sense of coercion, without the benefit of any presumption. [59]
3. That brings me to the proper construction of clause 9 and, in particular, the words "without being liable for loss".
4. The object of construing clause 9, in the context of the will as a whole, is to ascertain and give effect to the intention of the testator. That intention is to be ascertained objectively on the basis of the language of the will and the meaning that it would have conveyed to a reasonable person with knowledge of the objective circumstances surrounding the testator at the time the will was made. [60]
5. The objective circumstances surrounding the testator at the time the will was made on 24 February 2017 were: 1. the testator's assets included the motel property and the motel business, the Woodlands property and the Moruya property; 2. to the extent that those assets formed part of the testator's estate at the time of his death, the administration of his estate in accordance with his will would require his executor and trustee to sell each of those assets, which were not the subject of specific bequests, in order to distribute the residue of his estate between his children and stepchildren in accordance with clause 8 of the will, after taking the necessary steps to give effect to his wishes and directions in clauses 5, 6 and 7 of the will; 3. the executor would need to decide whether it was prudent to continue to operate the motel business pending sale to facilitate the sale of the motel property together with the business as a going concern; 4. the executor would also need to decide whether it was prudent to lease any of the properties pending sale; 5. the terms on which the properties and motel business could be sold, and the timing of their sale, would be a product of many factors, including market conditions, the course of negotiations with prospective purchasers, and decisions made by the executor during those negotiations, many of which would require evaluative judgments, all of which gave rise to an inherent risk that the negotiations in respect of any specific asset might produce an outcome less favourable to the estate than that which would have been achieved if the executor had taken a different approach to the negotiations or had made different judgments; and 6. any decision by the executor to operate and manage the motel business for a period of time to facilitate the sale of that business as a going concern would carry an inherent risk of trading losses.
6. In my opinion, at the time the will was made, clause 9 would have conveyed to a reasonable person with knowledge of those circumstances that the executor was authorised to do any of the things in sub paragraphs (a) to (e) of clause 9 on such terms and for such purposes as the executor honestly thinks appropriate for the administration of the deceased's estate for the benefit of the beneficiaries in accordance with the will. That reasonable person would not have understood the words "on such terms and for such purposes as my Trustee thinks appropriate" in clause 9 as effectively overriding the other terms of the will by authorising the executor to take actions of the kind described in subparagraphs (a) to (e) that were contrary to the terms of clauses 5 to 8 of the will. That reasonable person would have understood the word "appropriate" in the context of clause 9, and in the context of the will as a whole, as meaning "appropriate to administer the estate for the beneficiaries in accordance with the terms of the will".
7. In my opinion, at the time the will was made, the words "without being liable for loss" in the context of clause 9 would have conveyed to that reasonable person that the executor was exonerated from any liability that she might otherwise have for any adverse financial impact on the estate - "loss" - flowing from her decisions made and actions taken in respect of the sale of any asset comprising part of the estate, or any other action falling within subparagraphs (a) to (e), within the scope of the authority that I have described above. That reasonable person would not have understood clause 9 to exclude the liability of the executor for such "loss" only if the beneficiaries sued to recover the "loss" in an action for damages for devastavit or equitable compensation for breach of duty, and not if the beneficiaries sued to have the executor restore to the estate that which had been lost by reason of that waste or breach by accounting on a wilful default basis, or by paying equitable compensation in respect of specific wilful defaults in lieu of the taking of an account on the wilful default basis.
8. For those reasons, I reject the plaintiffs' submissions referred to at [29] above that the exclusion of liability for "loss" in clause 9 does not extend to a liability to account on a wilful default basis, or a liability to pay equitable compensation in order to restore to the estate an asset or the full value of an asset for which the executor would otherwise be charged if accounts were to be taken on a wilful default basis. The plaintiffs' submissions were founded on the erroneous premise that the meaning of the word "loss" in clause 9 of the will was governed not by the principles of construction to which I have referred at [241] above, but by distinctions between the precise character of the different equitable remedies which are available for a breach of trust that constitutes a wilful default - being an omission to obtain something for the trust, as opposed to an unauthorised disbursement of trust funds or assets. [61]
9. For completeness, I note that the construction of clause 9 that I have explained at [243]-[244] above does not exclude liability for "substitutive" compensation payable in order to discharge a liability to account for an unauthorised disbursement or disposal of trust funds or assets. [62] The remedy of compensation in those circumstances would not be dependent on the estate suffering any "loss" beyond the fact of the unauthorised transaction. [63] Moreover, it is difficult to see how a disbursement of funds or assets of the estate that was not authorised by the terms of the will could be characterised as a transaction that the executor honestly thinks appropriate to administer the estate for the beneficiaries in accordance with the terms of the will. For the reasons I have explained above, clause 9 applies only to transactions of that character. The breaches of trust alleged in the present case are wilful defaults, and not unauthorised dealings with estate property.
10. It remains to consider whether clause 9, properly construed in the manner explained above, is void on the basis that it is repugnant or contrary to public policy.
11. The plaintiffs submitted that clause 9 was repugnant to the concept of a trust, and contrary to public policy, because it had been inserted in the will to "alleviate [the executor] from the core fiduciary obligation to duly administer the trust". Referring to the judgments of the High Court in Maguire v Makaronis (Maguire) [64] and Youyang Pty Ltd v Minter Ellison Morris Fletcher (Youyang), [65] counsel for the plaintiffs submitted that, under Australian law, the irreducible core of obligations owed by executors and trustees that is fundamental to the concept of a trust includes the obligation to act prudently and properly (that is, to use due diligence and care) in the administration of the trust. It was submitted that clause 9 is repugnant and contrary to public policy because it is in "totally unqualified expansive terms" which purport to exclude liability for breach of the duty of diligence and prudence and, indeed, to exclude any liability whatsoever on the part of the executor, even for dishonesty and bad faith.
12. I reject the plaintiffs' submissions for two reasons.
13. First, on the proper construction of clause 9 explained at [243]-[244] above, the scope of the exclusion is not "totally unqualified" and the clause does not purport to exclude liability of the executor for dishonesty and bad faith.
14. Second, I do not accept that the irreducible core of obligations of executors and trustees includes the obligations of diligence and prudence. The phrase "the irreducible core of obligation" stems from the judgment of Millett LJ in Armitage v Nurse. [66] His Lordship construed an exclusion clause in a settlement as excluding the trustee's liability for constructive fraud or equitable fraud (as opposed to actual fraud or dishonesty) and as excluding liability for breach of trust in the absence of dishonesty. Millett LJ, with whom Hutchison and Hirst LJJ agreed, rejected a submission that the exclusion clause, so construed, was void or voidable on the grounds of repugnancy to the trust or public policy. His Lordship said: [67] "I accept the submission made on behalf of [the beneficiary] that there is an irreducible core of obligations owed by the trustees to the beneficiaries and enforceable by them which is fundamental to the concept of a trust. If the beneficiaries have no rights enforceable against the trustees there are no trusts. But I do not accept the further submission that these core obligations include the duties of skill and care, prudence and diligence. The duty of the trustees to perform the trusts honestly and in good faith for the benefit of the beneficiaries is the minimum necessary to give substance to the trusts, but in my opinion it is sufficient."
15. His Lordship's description of the irreducible core of obligations from which an executor or trustee cannot be exempted has been cited with approval and applied in Australia, including by Brereton J (as his Honour then was) in Leerac Pty Ltd v Fay (Leerac) [68] and by the New South Wales Court of Appeal in Crossman v Sheahan. [69]
16. Leerac concerned "non-contest clauses" contained in trust deeds, which provided that a beneficiary would be deemed not to be and never to have been a beneficiary under the trust, and would be incapable of taking any benefit under the trust and liable to repay any such benefit received, if they should at any time commence any action against the trustee in respect of any matter arising under or in relation to the trust "other than for wilful default" (which Brereton J construed in the context of the non-contest clauses as meaning dishonesty). The question was whether the non-contest clauses, properly construed, applied to proceedings in which a beneficiary sought to compel the due administration of the trust, and, if so, whether the non-contest clauses were valid. Brereton J recorded that much of the argument focussed on the relationship between the non-contest clause and an exoneration clause in each trust deed. Each exoneration clause provided that the trustee "shall not be liable or answerable or accountable hereunder for any loss not attributable to its own dishonesty, or the wilful commission by it of an act known to be a breach of trust …".
17. Brereton J construed the non-contest clauses as applying only to actions asserting liability against the trustee for breach of trust, and not to actions to secure the due administration of the trust. [70] In case of any determination to the contrary in any appeal, his Honour proceeded to consider the question of validity of the non-contest clauses on the assumption that they applied to actions asserting liability against the trustee. In doing so, his Honour summarised the applicable principles in the following terms: [71] "23. The position on the authorities can, I think, be summarised as follows: First, there is no general rule against the validity of conditions discouraging beneficiaries from taking proceedings to contest a Will, although there are some limits on this [Evanturel v Evanturel (1874) LR 6 PC 1; Cooke v Turner (1846) 15 M & W 727; (1846) 153 ER 1044; AN v Barclays Private Bank & Trust (Cayman) Ltd, [54]]. Secondly, however, where there can be seen in a statute conveying a beneficial right to make applications for provisions out of an estate an intention that such jurisdiction cannot be excluded by private arrangement - as, for example, under the testators family maintenance legislation - conditions which are calculated to deter the invocation of that jurisdiction are contrary to public policy and void [Leiberman v Morris (1944) 69 CLR 69; Barns v Barns [2003] HCA 9 ; (2003) 214 CLR 169; In the will of Gaynor [1960] VR 640 at 642-644 (O'Bryan J)]. This rule is based on discerning an (unexpressed) statutory policy against it being possible to contract out of the rights given by the relevant legislation [Leiberman v Morris; Smith v Smith (1986) 161 CLR 217 at 235 (Gibbs CJ, Wilson and Dawson JJ)]. Thirdly, a condition against the taking of any proceedings whatsoever having the effect of preventing any question of administration of a trust or Will, or securing the due administration of the trust or Will by the trustees, is too wide and will be void for ousting the jurisdiction of the Court, although one which merely discourages disputing the validity of the Will or trust will not offend that rule [Permanent Trustee Co v Dougall, 86-87]. Fourthly, a clause in a trust deed may validly exempt the trustee from obligations and liabilities other than those contained in that irreducible core of a trustee's obligation - namely, to act honestly and in good faith. It is not contrary to public policy to exclude a trustee's liability even for gross negligence, but it is to exclude liability for dishonesty or bad faith [Armitage v Nurse [1998] Ch 241 (CA)] 24. There is nothing irreconcilable about the observations of Harvey CJ in Eq in Permanent Trustee Co v Dougall and those of Millet LJ in Armitage v Nurse. The observations of Harvey CJ in Eq were to the effect that a condition against taking any proceedings whatever was too wide, as it would have the effect of preventing beneficiaries from securing due administration without limitation. Armitage v Nurse does not suggest that trustees may be exonerated from all obligations whatsoever, recognising that there is a reducible core of obligation to act honestly and in good faith from which they cannot be exempted."
18. In Crossman, the Court of Appeal considered the alleged repugnancy of three exoneration clauses. The primary judge had accepted that exemption clauses cannot operate to avoid the core obligations of a trustee, and described those core obligations as including the obligation to pay and transfer trust property to the persons entitled thereto and not to deal with it for personal benefit, the obligation to exercise reasonable care and skill, the obligation to act honestly and in good faith, and the obligation to exercise diligence and prudence in the performance of the trustee's duties and the exercise of the trustee's discretions. [72] Ward JA, as the President of the Court of Appeal then was, observed that not all of those obligations identified by the primary judge fell within: "307. … what have been described as the 'irreducible core of obligations owed by the trustees to the beneficiaries and enforceable by them which is fundamental to the concept of a trust' (see Armitage v Nurse at 253 per Millett LJ; language adopted in Jacobs' at [1620]). In particular, in Armitage v Nurse, Millett LJ (at 253) expressly rejected the submission that the trustee's core obligations included the duties of skill and care, prudence and diligence (this being one of the obligations that the primary judge appears to have accepted as being a 'core' obligation). 308. In Armitage v Nurse, the minimum necessary to give substance to the trusts was said to be the duty of the trustee to perform the trusts honestly and in good faith (at 253-254). That, and the duty to adhere to the terms of the trust (see Youyang Pty Ltd v Minter Ellison Morris Fletcher [2003] HCA 15; (2003) 212 CLR 484 at [32]), can readily be accepted as falling within the 'irreducible core of obligations' of the trustee…"
19. I accept the submission made on behalf of Ms Fleming that those passages from her Honour's judgment reject the notion that the duty of diligence and prudence forms part of the irreducible core of obligations owed by executors and trustees. Basten and Payne JJA agreed with her Honour.
20. Contrary to the plaintiffs' submissions, I am unable to discern from the judgments of the High Court in Maguire and Youyang any suggestion that the duty of diligence and prudence might be characterised as part of the irreducible core of obligations from which executors and trustees cannot be exempted. In Maguire, solicitors had breached fiduciary duties owed to their clients by entering into a mortgage between the clients (as mortgagors) and the solicitors (as mortgagee) in the absence of the clients' informed consent to the solicitors' interest in the transaction. In Youyang, trust moneys had been paid otherwise than in accordance with the terms of the trust. Neither of those cases concerned an alleged breach of the duty of diligence and prudence. No exclusion or exoneration clause was in issue. In obiter dicta in Youyang, the High Court referred disapprovingly to a suggestion by the English Court of Appeal and by the New Zealand Court of Appeal that equitable compensation for breach of a trustee's duty of skill and care resembled common law damages, and that there is no reason in principle why common law rules governing causation, remoteness and measure of damages should not be applied by analogy. [73] I do not understand the High Court's disapproval of that notion to speak to the question of the scope of the liabilities from which an executor or trustee may be exonerated by an express clause in the will or deed of settlement.
21. I am a bound to follow and apply the judgment of the Court of Appeal in Crossman referred to at [255]-[256] above.
22. For all of those reasons, clause 9 of the will, properly construed, is neither repugnant nor contrary to public policy. The clause is valid and enforceable. If the plaintiffs had established the alleged wilful defaults, it would have been necessary to consider whether clause 9 exempted Ms Fleming from liability to account to the estate for the value lost by reason of such defaults. I would have rejected the plaintiffs' submission that clause 9 does not apply because Ms Fleming did not honestly believe that the steps that she took in selling the motel property and business and in selling the grain, and the terms on which she sold those assets, were appropriate. For all of the reasons explained at [211] to [221] and [225]-[231] above, the evidence does not establish a want of honesty in relation to the sale of the motel, and does not even establish a want of prudence in relation to the sale of the grain.

Relief from liability under s 85 of the Trustee Act

1. Ms Fleming's claim for relief under s 85 of the Trustee Act does not arise for consideration.

Conclusion and orders

1. For all of the foregoing reasons, the orders of the Court are: 1. Proceedings dismissed.
2. I am not aware of any reason why the plaintiffs should not be ordered to pay Ms Fleming's costs of the proceedings, but I will hear the parties in relation to costs.

Endnotes

1. Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12; [1965] AC 694 at 707 (Viscount Radcliffe, Lords Reid, Evershed, Pearce and Upjohn) (Livingston); Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484; [2003] HCA 15 (Youyang) at [32] (Gleeson CJ, McHugh, Gummow, Kirby and Hayne JJ); G E Dal Pont, Law of Succession (3rd ed, 2021, LexisNexis) at [12.22].
2. Livingston at 707 (Viscount Radcliffe, Lords Reid, Evershed, Pearce and Upjohn); Juul v Northey [2010] NSWCA 211 (Juul) at [196] (McColl JA, Basten and Campbell JJA agreeing).
3. Re Charteris [1917] 2 Ch 379 at 388-389 (Swinfen Eady LJ); Re Speight [1883] 22 Ch D 727 at 739-740 and 762 (Jessel MR and Lindley LJ); Austin v Austin (1906) 3 CLR 516 at 525; [1906] HCA 5 (Griffith CJ, Barton and O'Connor JJ).
4. Youyang at [38]-[40] (Gleeson CJ, McHugh, Gummow, Kirby and Hayne JJ).
5. Re Atkinson, deceased [1971] VR 612 at 615 (Gillard J); Tschirn v Australian Executor Trustees Limited [2016] SASC 149 at [58]-[59] (Doyle J).
6. [2016] SASC 149 at [59].
7. Juul at [196] (McColl JA, Basten and Campbell JJA agreeing).
8. Re Atkinson, deceased [1971] VR 612 at 615 (Gillard J); Tschirn v Australian Executor Trustees Ltd [2016] SASC 149 at [58]-[59] (Doyle J).
9. Juul at [197]-[199] (McColl JA, Basten and Campbell JJA agreeing).
10. Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 at [54]-[76] (Gummow ACJ, Kirby, Hayne and Heydon JJ); Ludwig v Jeffrey (No. 4) (2021) 394 ALR 360; [2021] NSWCA 256 at [82]-[84] (Emmett AJA, Meagher and Brereton JJA agreeing).
11. Alexander v Perpetual Trustees WA Limited (2004) 216 CLR 109; [2004] HCA 7 at [55] (Gleeson CJ, Gummow and Hayne JJ), approving Ramage v Waclaw (1998) 12 NSWLR 84 at 91-93 (Powell J, as his Honour then was) and the authorities there referred to; J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis) at [23-03]; G E Dal Pont, Law of Succession (3rd ed, 2021, LexisNexis) at [12.14]; see also Re Atkinson, deceased [1971] VR 612 at 616-617 (Gillard J); Bird v Bird (No. 4) [2012] NSWSC 648 at [15] and [124] (Rein J); Grace v Grace [2012] NSWSC 976 at [129] (Brereton J, as his Honour then was); Spillane v Hall [2013] NSWSC 229 at [23] (Sackar J).
12. [2003] NSWSC 1207 at [44].
13. Ibid at [45].
14. Re Speight (1883) 22 Ch D 727 at 762-764 (Lindley and Bowen LJ); G E Dal Pont, Law of Succession (3rd ed, 2021, LexisNexis) at [12.28]-[12.31].
15. Juul at [180] (McColl JA, Basten and Campbell JJA agreeing), referring to Bartlett v Barclays Bank Trust Co Ltd (Nos 1 & 2) [1980] 1 Ch 515 at 546 (Brightman LJ).
16. Juul at [181] (McColl JA, Basten and Campbell JJA agreeing), referring to Meehan and Others v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146; [2002] NSWCA 22 (Meehan v Glazier) at [65] (Giles JA, Sheller and Beazley JJA, as Her Excellency then was, agreeing).
17. Meehan v Glazier at [65]-[66] (Giles JA, Sheller and Beazley JJA agreeing); Juul at [180]-[195] (McColl JA, Basten and Campbell JJA agreeing).
18. Meehan v Glazier at [13]-[15] (Giles JA, with the concurrence of Sheller JA and Beazley JA, as Her Excellency then was).
19. Meehan v Glazier at [46] (Giles JA, Sheller and Beazley JJA agreeing); G E Dal Pont, Law of Succession (3rd ed, 2021, LexisNexis) at [12.49].
20. See [64] above.
21. See [96] below.
22. See [7] above.
23. See [63] and [80] above.
24. See [77] above.
25. See [5]-[8] above.
26. See [183] below.
27. See [64], [72] and [101] above.
28. Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21, especially at [41]-[43] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); Menz v Wagga Wagga Show Society Inc (2020) 103 NSWLR 103; [2020] NSWCA 65 at [108] (Leeming JA, Payne and White JJA agreeing); Lang v The Queen (2023) 413 ALR 389; [2023] HCA 29 at [1]-[19] (Kiefel CJ and Gageler J, as the Chief Justice then was) and [428]-[437] (Jagot J).
29. See [54]-[56] above.
30. T143.3-144.20.
31. See [105]-[141] above.
32. See [99] above.
33. See [153] above.
34. See [149] above.
35. See [75] above.
36. See [92]-[93] above.
37. See [150]-[151] above.
38. See [20]-[49] above.
39. See [124] above.
40. See [150]-[151] above.
41. See [124] and [150]-[151] above.
42. See [134] above.
43. See [160] above.
44. See [69] above.
45. See [47] and [196] above.
46. See [90] above.
47. See [88] above.
48. See [92] above.
49. See [86] and [90] above.
50. See [88] above. Total actual sale price of $3,314 (excluding GST) at a price of $150 per tonne indicates a volume of approximately 22 tonnes. The shortfall of $250 per tonne therefore amounts to a total shortfall of approximately $5,500.
51. See [83] above.
52. See [85] above.
53. See [83]-[88] above.
54. See [87]-[88] above.
55. See [90] above.
56. See [93]-[94], [186]-[189] and [194] above.
57. See [40]-[43] above.
58. See [190]-[191] and [193] above.
59. Schwanke v Alexakis [2024] NSWCA 118 at [1] (Ward P) and [183]-[224] (Adamson JA).
60. Fell v Fell (1922) 31 CLR 268 at 273-276; [1922] HCA 55 (Issacs J); Marley v Rawlings [2015] AC 129; [2014] UKSC 2 at [17]-[26] (Lord Neuberger P, Lords Clarke, Sumption and Carnwath agreeing); Farrelly v Phillips (2017) 128 SASR 502; [2017] SASCFC 111 at [23]-[24] (Stanley J, Kourakis CJ agreeing and Nicholson J also agreeing as to the principles of construction at [60]); Wright v Stevens [2018] NSWSC 548 at [177]-[185] (Hallen J) and the authorities there referred to; P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thomson Reuters) at [31.20]-[31.40].
61. See [47] above.
62. See the defendant's submissions at [32] above.
63. Crossman v Sheahan (2016) 115 ACSR 130; [2016] NSWCA 200 at [313] (Ward JA, as her Honour then was, Basten and Payne JJA agreeing).
64. (1997) 188 CLR 449; [1997] HCA 23 (Maguire).
65. (2003) 212 CLR 484; [2003] HCA 15 (Youyang).
66. [1998] Ch 241; [1997] EWCA Civ 1279.
67. Ibid at 253-254.
68. [2008] NSWSC 1082 (Leerac).
69. (2016) 115 ACSR 130; [2016] NSWCA 200 (Crossman).
70. Leerac at [13]-[21].
71. Ibid at [23]-[24] (my emphasis).
72. Crossman at [304]-[305] (my emphasis) (Ward JA, as the President of the NSW Court of Appeal then was).
73. Youyang at [36]-[40] (Gleeson CJ, McHugh, Gummow, Kirby and Hayne JJ). DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 July 2024