Verzar v Verzar
[2013] NSWCA 170
At a glance
Source factsCourt
Court of Appeal (NSW)
Decision date
2013-05-27
Before
Gleeson JA, Lindsay J
Source
Original judgment source is linked above.
Judgment (10 paragraphs)
Judgment 1GLEESON JA: The applicant, Thomas John Verzar, seeks an order extending time for the filing of a summons for leave to appeal and the notice of appeal. Further, if an extension of time is granted, the applicant seeks an order that the hearing of the summons for leave to appeal and the appeal be heard at the same time as the hearing of the appeal in related proceedings number 2012/400251 filed in this court by the applicant on 27 February 2013. 2The respondent to the application, Susan Verzar, is the executrix of the will of the late husband Stephen Verzar dated 14 June 2007, who died on 29 March 2009. Probate of that will was granted to the respondent on 21 October 2009. The applicant is the testator's son and a named beneficiary in the will. 3The indulgence sought by the applicant in terms of an extension of time arises in the following circumstances.
Two proceedings below 4On 15 March 2011, the applicant commenced proceedings below numbered 2011/88252 (the "administration proceedings"), against the respondent seeking orders that the grant of probate in favour of the respondent be revoked and a grant of letters of administration with the will annexed be made in favour of the plaintiff, or some other fit and proper person. The applicant also sought orders for an account to be taken of all moneys received and disbursed by the respondent in respect of the property comprised in the estate, and of the dealings and transactions of the respondent therewith from the date of death. 5The essential issue raised in the administration proceedings concerned the manner in which the respondent had dealt with a property known as 84 McEvoy Street, Alexandria. This property was valued at $1 million (according to the affidavit filed in support of the grant of probate), and was a commercial property generating approximately $4,800 rent per month since the death of the testator. Under cl 3 of the will, the applicant was given the McEvoy Street property. The applicant's complaint was that the respondent had failed to administer the estate in a timely manner or at all and distribute the property to the applicant, and had also failed to account to the applicant for rents received on the McEvoy Street property. 6By separate and subsequent proceedings numbered 2011/115485 commenced on 7 April 2011, Susan Verzar sought relief under the Succession Act 2006: first, an order under s 58(2) for an extension of the 12 month period, after the death of Stephen Verzar, within which an application for a family provision order must generally be made; and secondly, an order for a family provision order under s 59. 7The two proceedings were listed for hearing before Lindsay J on 17 and 18 September 2012. Judgment was delivered on 16 November 2012 and orders were made on 30 November 2012. See Verzar v Verzar [2012] NSWSC 1380. 8The orders made on 30 November 2012 dealt with both proceedings. In relation to the family provision proceedings, orders were made extending the time for the making of the application by Susan Verzar, and making further provision for her in the following terms: "2. Order that in addition to the provision received by Susan Verzar under the will of the late Stephen Verzar ('the deceased') dated 14 June 2007, Susan Verzar receive (or retain as the case may be) pursuant to s 59 of the Succession Act 2006: (a) a legacy of $100,000; and (b) income from the undistributed estate of the deceased (net of any expenses incurred in the accrual of that income), including the net rent generated by the property at 84 McEvoy Street, Alexandria up to and including 30 November 2012." 9An order was made that the legacy of $100,000 be charged on the McEvoy Street property and be paid within six months. An order was made for the payment of Susan Verzar's costs by the defendant, Thomas Verzar. A further order was made that Thomas Verzar's liability for costs in the family provision proceedings would be set off against the liability of Susan Verzar to pay or bear Thomas Verzar's costs in the administration proceedings. 10In the administration proceedings, Lindsay J made the following orders: "1. Order that the proceedings be dismissed. 2. Order that the defendant pay the plaintiff's costs (to be assessed on an indemnity basis) as agreed or assessed. 3. Order that the defendant's liability for costs in these proceedings be set off against the liability the plaintiff has to pay or bear her costs in the proceedings numbered 2011/1154845." 11It may be observed that the respondent was successful in the family provision proceedings in obtaining further provision from the estate of her late husband, comprising a legacy of $100,000 together with income from the undistributed estate including the net rent on the McEvoy Street property up until 30 November 2012 (which net rent would otherwise have been payable to the applicant to whom the McEvoy Street property was given under the will, had order 2(b) not been made). 12The applicant submits that the practical outcome of the two proceedings was that the respondent had successfully defended the relief sought by the applicant in the administration proceedings by making the successful family provision claim. 13This is contested by the respondent, who submits that the application for an extension of time should be dismissed as the prospective appeal to which the application for leave to appeal relates is doomed to failure. This is said to follow because at the hearing before the primary judge, the applicant abandoned his claim to a revocation of the grant of probate at the commencement of the hearing (in the absence of knowing the result of the related family provision proceedings) and he should not be permitted to resile from that position. 14In this regard, the respondent placed heavy emphasis on the following exchange which occurred at the beginning of the hearing on 17 September 2012 between the primary judge and counsel for the applicant, Mr Blackburn-Hart as follows: "HIS HONOUR: My concerns about the listing of two proceedings, one in Probate, the other in Equity, are pretty much assuaged, Mr Blackburn-Hart, because I take it from paragraph 10 of the document you have handed up, a draft outline of submissions dated 13 September, that no claim for relief in the statement of claim is pressed save for the question of costs? BLACKBURN-HART: That's correct. HIS HONOUR: I probably should make a formal notation about that. I wonder whether the best way forward is simply not to have a joint hearing but deal with costs at the end of the day. Is that something that is likely to lead to difficulties? BLACKBURN-HART: I don't believe so, no. ... HIS HONOUR: I will not make any formal order for the two sets of proceedings to be heard together ... . I will note that in proceedings numbered 2011/0008252 in light of the commencement of subsequent proceedings no claim for relief is pressed in those proceedings save for costs. In those circumstances I will stand over the costs application to the end of the hearing in proceedings numbered 2011/115485, and I take it there is no problem with that approach." 15The reference by the primary judge in the above exchange with Counsel for the applicant to [10] of the draft outline of submissions on behalf of Thomas Verzar dated 13 September 2012, was a reference to the following: "10. As a result of the commencement of the second proceedings, the importance of the first proceeding has diminished, the only issue remaining being costs. This is because administration appears almost complete and the plaintiff has now accounted for the rents received from McEvoy Street." 16The statement by counsel for the applicant that the respondent has now accounted for the rents received from the McEvoy Street property would appear to be a reference to the affidavit of Susan Verzar sworn 7 September 2012, which deposed to the income received and outgoings paid in respect of the McEvoy Street property for the period April 2009 to May 2012. 17Notwithstanding these statements to the Court on behalf of the applicant, his counsel did cross-examine the respondent on the topic of rents received and expenses claimed to have been paid from rents on the McEvoy Street property. This included whether some of those expenses were properly referable to the McEvoy Street property. 18At the commencement of closing submissions on 18 September 2012, counsel for the applicant sought to tender some correspondence in relation to the question of costs in the administration proceedings. The following exchange then ensued between the primary judge and counsel for the parties: "HIS HONOUR: Well, we embarked on this hearing as a separate hearing of the FPA proceedings. BLACKBURN-HART: We did. HIS HONOUR: And probably the purest approach would be to remember that's how we started and perhaps how we should finish. BLACKBURN-HART: If your Honour pleases. HIS HONOUR: If there were some agreement between you that I should receive the material, that would be one thing, but if there is no agreement then I'll deal with the two topics discretely. BLACKBURN-HART: I only tender it on that basis, your Honour. HIS HONOUR: On what basis?. BLACKBURN-HART: On the basis of the costs of the probate material. WILSON: I won't object to it at the appropriate time, your Honour. HIS HONOUR: Well, let's keep the two sets of proceedings discrete for the moment. Mr Wilson?" 19Later during closing submissions, the primary judge raised with counsel for the parties the question of what was likely to happen in relation to the costs of the family provision proceedings. His Honour suggested in this regard the Court might want to know about the administration proceedings. Counsel for the applicant responded: "I am sorry, I don't understand the question, your Honour. We are only seeking costs in relation to that. We are not seeking any formal orders." 20The accounting issue in relation to the McEvoy Street property was the subject of an exchange between the primary judge and counsel for the parties during closing submissions on 18 September 2012. The primary judge inquired of the parties as to what would be the position if no relief was granted to the respondent in the family provision proceedings. 21Counsel for the respondent responded: "If no relief were granted to her, the normal course, according to conventional principle, is that, as the executor of the estate, she's required to account for the takings and disbursements in the administration." 22The primary judge referred to s 84 of the Wills Probate Administration Act 1898 (now renamed the Probate and Administration Act 1898) as having possible application, and counsel for the respondent replied: "It's still there. It would need to be put back into the estate." 23This was clearly a reference to the net rents on the McEvoy Street property. 24The primary judge then observed that it was only in relation to rent moneys that there was a difference between the parties. Counsel for the applicant confirmed that in terms of the estate assets that was correct. He then referred to the fact that there may be adjustments to the expenses deducted from the rents, which was the subject of affidavit evidence of Susan Verzar and some cross-examination, and said: "... and by 'adjustments' I mean deductions, as to whether or not all of those deductions ought to have been made. That is not a big issue, though". 25The primary judge invited counsel for the applicant to provide a note about any possible adjustments, that is, whether any of the deductions made by the respondent in respect of the rents received by her as executrix ought to have been made. Both parties subsequently provided notes by way of written closing submissions after the primary judge reserved his decision on 18 September 2012. However, the applicant did not make any submissions in relation to the topic of "adjustments" in relation to the calculation of the net rents on the McEvoy Street property received by the respondent. 26In the applicant's written note dated 24 September 2012, a submission was made in [4] that the estate assets should be taken to include, amongst other things: "(a) net rents on McEvoy Street received by the plaintiff from 30 April 2009 to 9 December 2010 (due to defendant) - $48,247.71; (b) rental moneys from McEvoy Street in estate bank account from January 2011 (plus rent for June to date) (due to defendant) - $55,196.67." 27The applicant's submission in [4] was preceded by an explanation in [2(b)] and [2(c)] of the way in which these figures were calculated. First, [2(b)] contained a calculation of the net rents in the period April 2009 to December 2010, and it was submitted that "... it is apparent that the net income was retained by the plaintiff for her own purposes and she should account for it". 28Secondly, [2(c)] contained a calculation the net rents from the McEvoy Street property in the period January 2011 to date (being September 2011), which were held in an estate bank account and a reward saver account for the period up to May 2012 and totalled $55,196.67, and submitted that further rental income was receivable by the estate and due to the applicant for the months of June 2012 to date, which at that time was a period of 4 months. 29In [5] of the applicant's closing note the following submission was made: "It also appears to be common ground that rental income (and expenses) follow each property, once administration has been completed." 30The respondent's written submissions in reply dated 25 September 2012 addressed the issue of the size of the estate, but did not specifically reply to the applicant's submissions in [2(b)], [2(c)] and [4] relating to the net rents on the McEvoy Street property.