Construction of Will and Family Provision Relief in NSW Supreme Court

The court decided on the construction of a will and granted family provision relief to the claimant. The residuary estate was distributed to the beneficiaries as tenants in common in equal shares.

Supreme Court New South Wales

Medium Neutral Citation: Re Estate [NAME] [2021] NSWSC 1156 Hearing dates: 3,4 and 5 February and 26 August 2021 Decision date: 10 September 2021 Jurisdiction: Equity Before: Lindsay J Decision: (1) [NAME] is to pay equitable compensation to the estate of [NAME] in the sum of $68,706.44 (2) Upon the proper construction of the will of [NAME] and [NAME] are entitled to the whole of the residuary estate of [NAME] as tenants in common in equal shares. (3) With an extension of time within which to claim family provision relief, [NAME] is to be forgiven a debt of $101,021 owed to the estate of [NAME] and awarded a legacy of $50,000. (4) [NAME]'s cross claim is to be dismissed. (5) Various costs orders are to be made, with the administrator to be indemnified by the estate, [NAME] to have limited recourse to the estate for his costs, and for [NAME] to bear the costs of the proceedings. Catchwords: SUCCESSION — Administration of estates — Construction of residuary clause in [NAME]'s will SUCCESSION — Family provision — Claim by adult child — Proceedings not commenced within time Legislation Cited: Probate and Administration Act 1898 NSW Succession Act 2006 NSW Cases Cited: Warren v McKnight (1996) 40 NSWLR 390 Category: Principal judgment Parties: In proceedings numbered 2017/00221078

Plaintiff: [redacted] First Defendant: [redacted] Second Defendant: [redacted]

In proceedings numbered 2018/00272913

Plaintiff: [redacted] First Defendant: [redacted] Second Defendant: [redacted] Defendant: [redacted] claimant: [redacted] First cross defendant: [redacted] defendant: [redacted] Representation: In proceedings numbered 2017/00221078

Counsel: [redacted] First Defendant: [redacted] Second Defendant: [redacted]

Solicitors: [redacted] First Defendant: [redacted] Defendant: [redacted]

In proceedings numbered 2018/00272913

Counsel: [redacted] First Defendant: [redacted] Second Defendant: [redacted] Defendant: [redacted] Cross claimant: [redacted] Cross defendant: [redacted] defendant: [redacted]

Solicitors: [redacted] First Defendant: [redacted] Defendant: [redacted] Defendant: [redacted] claimant: [redacted] First cross defendant: [redacted] defendant: [redacted] 2018/00272913

Judgment

INTRODUCTION 1. These proceedings relate to competing claims for relief in the course of administration of the estate of the late [NAME] ("[NAME]") who was born in [DATE] and who died in Waratah in NSW, aged 85 years, on 26 May 2013, leaving a will dated 22 December 2009 which has been admitted to probate.

2. The will was admitted to probate by a grant of probate made on 16 May 2014 to [NAME]'s son [NAME], described in these proceedings as "[NAME]" in order to distinguish him from his own son of the same name (a grandson of [NAME]) here described as "[NAME]". 3. [NAME] failed in his duty to administer [NAME]'s estate according to law, or with due dispatch, with the consequence that on 7 March 2018, on the application of his brother [NAME], the grant of probate made in his favour was revoked, and letters of administration, with the will annexed, were issued that same day to a solicitor, [NAME] ("the administrator").

4. The principal claims for relief made in the proceedings comprise claims for construction or rectification of [NAME]'s will; an accounting for estate assets; and a family provision order sought by [NAME]. 5. [NAME]'s application for a family provision order is what remains to be determined in proceedings numbered 2017/00221078 after he succeeded in having [NAME]'s grant of probate revoked and securing the appointment of the administrator. See order 19 of the orders made on 7 March 2018 and order 5 of the orders made on 30 April 2018. The balance of the claims for relief that require the Court's determination were made in proceedings numbered 2018/00272913 in which the administrator is plaintiff; [NAME] and [NAME]'s company, [COMPANY] are defendants; and [NAME] is a cross claimant against the administrator and [NAME]. By orders made on 2 December 2020 in each set of proceedings, the two sets of proceedings were heard together.

6. The estate of [NAME], as disclosed in the inventory of property attached to the grant of probate made in favour of [NAME], comprised [NAME]'s residence in [ADDRESS], Medowie in the State of NSW (with an estimated value of $450,000) together with $25,000 in a [COMPANY] account, with a total estimated value of $475,000.

7. Upon investigation, the administrator established that [NAME]'s assets as at the date of his death in fact comprised: 1. the [NAME]; 2. funds totalling $105,683.70 standing to the credit of [NAME] in accounts with the [COMPANY] or a bank; and 3. 964 IAG shares with an estimated value of $5,360.48, with a total estimated value of $561,053.18. 1. [NAME] claims that [NAME] in his lifetime gave the IAG shares to him. This claim is disputed.

2. Evidence establishes that, after [NAME]'s death, [NAME] procured his registration as owner of the shares by falsely holding himself out to be [NAME]. I am not persuaded that [NAME] gave the shares to [NAME] or that any gift (if made) was perfected by the time of [NAME]'s death. In my opinion, the shares remained part of [NAME]'s estate at the time of his death, and [NAME] is required to account to [NAME]'s estate for the proceeds of their sale and dividends received in respect of them.

3. For the purpose of these proceedings, it is agreed between the parties that [NAME] sold the shares for $7,320 on 8 October 2019 and applied the proceeds of sale for his own personal benefit.

4. During his administration of the estate, [NAME] intermingled the affairs of the estate with his own, mixing estate funds and income with his own in a manner that (because of his failure to maintain proper records) renders a precise accounting beyond practical reach.

5. The [NAME] was sold by the administrator (by a contract dated 23 December 2020, completed on 21 April 2021) for $680,000, realising net proceeds of sale in the sum of $667,153.30.

6. After payment of costs of the administrator in probate and family provision proceedings to date (in the sum of approximately $231,050.62) and income tax for the years ending 30 June 2016-2020 (in the sum of $14,100), the administrator's evidence is that, subject to qualifications set out hereunder, he presently holds in his trust account on behalf of the estate $450,551.68 for distribution.

7. The qualifications identified by the administrator are as follows:

1. The administrator estimates that further costs presently due to him but unpaid total $8,734 and counsel's fees of $8,910 are due to be paid, representing a charge on the funds held in trust in the sum of $17,644.38.

2. An application has been made by the administrator to the Australian Taxation Office for a private ruling seeking an extension of the 2-year capital gains tax exemption for sale of the principal place of residence of [NAME], but that application has not yet been determined. If the application is successful then the estate's tax liability for the year ending 30 June 2021 and the capital gains tax payable by the estate is estimated at $2,000. If the application is refused, the estate's taxation liability for that year is estimated to be approximately $55,000.

3. The administrator submits that equitable compensation is recoverable from [NAME] for his misapplication of estate funds, which I estimate, prima facie, to be $152,512.44, including an allowance against him of $7,320 for the proceeds of his sale of the IAG shares and a credit in his favour for $18,000 spent by him on legitimate estate expenses.

4. That sum of $152,512.44 includes an amount of $101,021 paid by [NAME] to his brother, [NAME], on the estate's account, without authority during the period between 5 June 2014 and 16 February 2017 or thereabouts. 5. [NAME] concedes that he received the sum of $101,021 without an entitlement to retain it, and that he is required to restore it to [NAME]'s estate, subject only to the Court's determination of his application for a family provision order from the estate of [NAME] under Chapter 3 of the Succession Act 2006 NSW.

6. The administrator's estimate of the current value of the net distributable estate does not include an allowance for what he submits is recoverable from [NAME] or [NAME], and it assumes that the cross claim of [NAME] for compensation for construction work on the [NAME] during the time of his administration of [NAME]'s estate is dismissed.

1. The administrator's costs to date, to the extent they have been paid out of the estate, have been paid out of the estate of the authority of an order earlier made, on 6 August 2018. In the ordinary course, to be followed in these proceedings, he is entitled to an order that his costs be paid out of the estate on the indemnity basis. 2. [NAME] (the only other party legally represented) has no such entitlement. When, on 7 March 2018, he succeeded in obtaining orders for revocation of [NAME]'s grant of probate and the appointment the administrator (in the proceedings numbered 2017/00221078) [NAME] obtained an order that his costs, to that date, be paid by [NAME] on the indemnity basis. The substantive orders he obtained on 7 March 2018 for due administration of [NAME]'s estate upon an exercise of probate jurisdiction were sought, and obtained, for the benefit of [NAME]'s estate. For that reason, costs were awarded to him on the indemnity basis. His conduct of proceedings after 7 March 2018 was for his own benefit and, so, any entitlement he may have for costs incurred after 7 March 2018 should be assessed on the ordinary basis.

[NAME]'S WILL 1. Omitting formalities, [NAME]'s will dated 22 December 2009 was in the following terms: "THIS IS THE LAST WILL AND TESTAMENT of me [NAME] of [ADDRESS], Medowie 2318 in the State of New South Wales, Australia, Retired Carpenter.

1. I HEREBY REVOKE all former Wills and testamentary dispositions previously made by me, and declare this to be my last Will.

2. I APPOINT my son [NAME] of … Gerringong to be the Executor of this my Will.

3. I DIRECT that my Estate be divided as follows: a) to my son [NAME] the sum of $1000 b) to my son [NAME] the sum of $1000 c) as to the entire balance and residue of my estate after payment of all my just debts, funeral and testamentary expenses as follows: as to one half share between my grandson [NAME] and my granddaughter [NAME]"

1. Clauses 2 and 3(a) of the will refer to [NAME].

2. Clause 3(b) refers to [NAME]'s son [NAME], the brother of [NAME].

3. Clause 3(c) refers to the children of [NAME]: namely, [NAME] and [NAME].

4. Clause 3(c) is ambiguous on its face because it purports to dispose of "the entire balance and residue" of [NAME]'s estate but (on one view) proceeds then to divide a "one half share between" [NAME] and [NAME], leaving a "one half share" to be dealt with on a partial intestacy according to Chapter 4 of the Succession Act 2006.

5. The alternative construction of clause 3(c) is that "the entire balance and reside" of [NAME]'s estate passes to [NAME] "as to [a] one half share" and to [NAME] "as to [a] one half share", to the intent that "the entire balance and residue" of the estate is shared "between" them and, accordingly, passes to them as tenants in common in equal shares.

6. By virtue of section 32 of the Succession Act, evidence (including evidence of [NAME]'s intention) is admissible to assist in the interpretation of the language used in the will.

7. The evidence of [NAME] is that he prepared the will at the request of [NAME] in order to correct clerical errors in [NAME]'s last preceding will, a document prepared for [NAME] by a solicitor and since destroyed. He says that, in reproducing a corrected form of the earlier will for [NAME]'s execution, he did not add or omit the name of any beneficiary. He says it was the expressed intention of [NAME] to give the bulk of his estate to [NAME] and [NAME], the only grandchildren with whom he had an active relationship at the time the will dated 22 December 2009 was executed.

8. The will was executed in the presence of a Justice of the Peace (a pharmacist by profession) and another person described as a "Pharmacy Assistant". Neither of them gave evidence in the current proceedings.

9. There is no evidence that contradicts the evidence of [NAME] as to [NAME]'s intention.

10. An intention to benefit [NAME] and [NAME] is consistent with the close relationship they had with [NAME] at the time of execution of the will and between that time and his death.

11. If a "one half share" in [NAME]'s residuary estate were to pass, on intestacy, in accordance with Chapter 4 of the Succession Act, then, by virtue of section 127 of the Act: 1. a one [NAME] share of that one half share (a one sixth share of the residue) would pass to [NAME]; 2. another one [NAME] share would pass to [NAME]; and 3. the remaining one [NAME] share would pass to the children of [NAME] (a son of [NAME] who predeceased him) per stirpes.

1. Those grandchildren ([NAME] and [NAME]), on the evidence of [NAME], had no active, personal relationship with [NAME] at the time he executed his will or thereafter.

2. Their mother ([NAME]'s de facto wife), [NAME], died in July 2013, survived by both girls. [NAME] died without issue in November 2019, survived by a de facto partner, [NAME], who himself died in May 2020.

3. The administrator served notice of these proceedings on [NAME]'s former wives, [NAME]; [NAME]; and the mother of [NAME]'s de facto partner, as well as upon [NAME] and [NAME]. 4. [NAME] (a party to the proceedings) and [NAME] personally attended the hearing of the proceedings.

5. I am satisfied that sufficient notice has been given to persons with an interest in the outcome of these proceedings to justify a determination of them without further notice.

6. The evidence of [NAME] about the intention of [NAME], extrinsic to the will, is consistent with (but not a necessity for) the construction of the will which, in my opinion, is the correct one. In my opinion, clause 3(c) of the will, properly construed, provides for "the entire balance and residue" of [NAME]'s estate to be divided between [NAME] and [NAME] as tenants in common in equal shares.

7. In my opinion, that is the correct construction because: 1. the competing construction of clause 3 would see each of [NAME] and [NAME] receive a one sixth share of the residue in addition to the nominal legacies of $1,000 for which clauses 3(a) and 3(b) provide; 2. the nominal character of the $1,000 legacies sits uncomfortably with any idea that [NAME] and [NAME] were intended to receive a larger share of [NAME]'s estate; 3. [NAME]'s expressed intention in clause 3(c) to dispose of "the entire balance and residue" of his estate sits uncomfortably with the idea that he intended one half of his estate to pass on intestacy; and 4. the expression "as to one half share between" is capable of being read as a gift of a "one half share" of the residue for each of [NAME] and [NAME], dividing the residue "between" them.

1. This construction is consistent with the law's presumption that a testator does not intend property to pass on intestacy.

2. In my opinion, it is not necessary for the Court to make an order under section 27 of the Succession Act for rectification of [NAME]'s will. If necessary, I would make orders under that section to give effect to [NAME]'s intention as I have found it to be.

3. However, it is sufficient for the day that a declaration be made to the effect that, upon the proper construction of clause 3(c) of the will, the residuary estate of [NAME] passes to [NAME] and [NAME] as tenants in common in equal shares.

FAMILY RELATIONSHIPS 1. [NAME] was twice married. Both marriages ended in divorce. The first marriage (to [NAME]) in December 1954 was dissolved in August 1989. The second marriage (to [NAME]) in December 1989 was dissolved in July 2002.

2. There were four children (all sons) of [NAME]'s first marriage. There were no children of his second marriage. 3. [NAME]'s only children were: 1. [NAME], a son who was born and died as an infant in Italy; 2. [NAME], who was born in [DATE] and is now aged nearly 61 years; 3. [NAME], who was born in [DATE] and is now aged nearly 58 years; and 4. [NAME], who was born in [DATE] and who died in October 1995. 1. [NAME], his then wife [NAME] and their sons [NAME] and [NAME] migrated to Australia in 1966. 2. [NAME] has two children, by his then wife [NAME]: 1. [NAME], who was born in [DATE] and is aged now nearly 24 years; and 2. [NAME], who was born on [DATE] and is now aged nearly 22 years. 1. [NAME], formerly married to [NAME], is currently married to [NAME]. He has no children.

FINANCIAL DEALINGS WITH [NAME]'S ESTATE 1. It is unnecessary to dwell at length on [NAME]'s maladministration of [NAME]'s estate. Having initially resisted engagement with the proceedings against him (at cost to [NAME] and [NAME]'s estate), he came to realise that he had conducted himself in breach of fiduciary obligations he owed to the estate as [NAME]'s executor.

2. Nevertheless, the following general observations inform an assessment of the course of administration of [NAME]'s estate and [NAME]'s application for a family provision order against the estate: 1. before the death of [NAME], and with knowledge of the terms of [NAME]'s will, [NAME] and [NAME] agreed between themselves that, notwithstanding the terms of the will, they would divide [NAME]'s estate between themselves; 2. that agreement (despite imprecise terms) became common knowledge within the extended [NAME]; 3. after [NAME]'s death [NAME], despite the terms of [NAME]'s will, treated estate assets as his own, recognising a discretionary "obligation" to make payments to [NAME] from time to time; 4. his self-justification for this appears to have been that, at the time of the death of [NAME] and [NAME] were both minors (respectfully aged 15 and 13 years), he was their guardian, and whatever he did with estate property would ultimately inure for their benefit; 5. that justification is not only no justification at law. It is inconsistent with the fact that, when [NAME] attained his majority and asked for his share of [NAME]'s estate, [NAME] turned him away empty handed; 6. without any authority to do so, [NAME] (personally and through [COMPANY], of which he was the sole shareholder and director) commenced construction of a secondary building on the [NAME]; 7. [NAME]'s preoccupation with that construction work may, at least in part, explain why he did not immediately perform his agreement with [NAME] to share [NAME]'s estate with [NAME] equally; 8. instead, between 5 June 2014 and 16 February 2017 or thereabouts, [NAME] made periodic payments to [NAME], totalling $101,021; 9. the fact that [NAME] held a hope that [NAME] would honour his agreement to share the estate with him equally, combined with the fact that [NAME] made periodic payments to him, explains why (despite the fact that he had earlier contemplated commencing Court proceedings about administration of the estate) he did not file his summons (for family provision relief) until 20 July 2017, more than four years after the death of [NAME] and more than three years beyond the time limited by section 58 of the Succession Act for the making of an application for a family provision order; 10. [NAME]'s construction of a secondary dwelling on the [NAME] was incomplete at the time when, on 7 March 2018, the property came under the control of the administrator; and 11. there is no evidence that the construction work undertaken by [NAME] on the [NAME] increased the value of the property, since sold.

1. There is no necessity to examine at length [NAME]'s receipt and application of the sum of $101,021 (particularised in a statement of claim he filed on 3 November 2017 in support of his family provision summons) because he admits that he received that money with notice of the terms of [NAME]'s will, and without any entitlement to receive or retain it, and he admits that he is obliged to restore it to the estate of [NAME], subject only to the Court's determination of his family provision application.

[NAME]'S LIABILITY TO ACCOUNT TO [NAME]'S ESTATE 1. The administrator no longer presses his claim for an order (pursuant to section 85 of the Probate and Administration Act 1898 NSW) that [NAME] verify, file and pass accounts for his administration of the estate of [NAME] between the date of [NAME]'s death (on 26 May 2013) and the date of revocation of his grant of probate (on 7 March 2018).

2. He invites the Court, instead, to order that [NAME] pay to [NAME]'s estate equitable compensation in the sum of $170,512.44, representing the sum of: 1. [NAME]'s transfer of funds from estate accounts to accounts in his own name (between 31 May 2013 and 27 May 2014 or thereabouts) in the sum of $79,855;

2. IAG dividends received, between 13 January 2014 and 9 March 2018 or thereabouts, into accounts in the name of [NAME], in the total sum of $1,696.64; 3. rental income received by [NAME] from the [NAME], between 30 July 2013 and 27 February 2018 or thereabouts, in the sum of $81,640.80; and 4. $7,320 received by [NAME] on 8 October 2019 as proceeds of his sale of the IAG shares.

1. The administrator concedes that [NAME] should be allowed a credit for $18,000 against the sum of $170,512.44 as an allowance for legitimate estate expenses, resulting in a net sum sought against [NAME] in the sum of $152,512.44, subject to what follows.

2. I proceed on the basis that the sum of $101,021 paid by [NAME] to [NAME] was funded by [NAME]'s appropriation to himself of the sum of $170,512.44. If, as is proposed hereunder, the sum of $101,021 given to [NAME] is forgiven by the estate (as a grant to [NAME] of family provision relief) that has the effect of reducing [NAME]'s indebtedness to the estate to $51,491.44, plus whatever award of interest may be made against him in favour of [NAME]'s estate.

3. I propose to dismiss [NAME]'s cross claim relating to work undertaken by him (directly or through his company, [COMPANY]) in relation to (partial) construction of a secondary dwelling on the [NAME]. That work was undertaken without authority on the part of [NAME] and in breach of fiduciary obligations owed by him to [NAME]'s estate. There is no evidence that it enhanced the value of the property upon sale.

4. Dismissal of [NAME]'s cross claim carries with it dismissal of any claim for compensation for work undertaken before the death of [NAME], performed without expectation of recompense.

[NAME]'S APPLICATION FOR FAMILY PROVISION RELIEF 1. As a son of [NAME] is an "eligible person" within the meaning of section 57(1)(c) of the Succession Act and, accordingly, he has standing (under section 59(1)(a)) to make an application for a family provision order under Chapter 3 of the Act.

2. His application for a family provision order was made more than 3 years after the expiry of the limitation period (of 12 months after the date of death of [NAME]) prescribed by section 58(2) of the Succession Act.

3.

Accordingly, he needs an order of the Court under section 58(2) permitting his application to be made "on sufficient cause being shown."

4. As explained in Warren v McKnight (1996) 40 NSWLR 390 at 394E, factors commonly regarded as relevant to an exercise of the Court's discretion are: (a) the sufficiency of any explanation for the plaintiff's delay in making an application for family provision relief; (b) the existence of prejudice to beneficiaries; (c) the existence of any unconscionable conduct on the part of the plaintiff; and (d) the strength of the plaintiff's case.

5. In my opinion, an order should be made under section 58(2) permitting [NAME]'s application for a family provision order to be made out of time because: 1. his delay is explained by his reliance upon an agreement with [NAME] as executor of the estate of [NAME] (albeit an agreement made in breach of [NAME]'s fiduciary obligations) to make provision for him out of the estate of [NAME] without a need for Court action; 2. although [NAME] did not "honour" that agreement by a transfer of a one half share in [NAME]'s estate to [NAME], he did make substantial, regular periodic payments to [NAME], upon which [NAME] relied rather than initiating Court proceedings earlier than he did; 3. although [NAME] had notice of the terms of [NAME]'s will when he received payments from [NAME], without the benefit of legal advice he did not appreciate that those payments were beyond [NAME]'s authority to make; 4. with the benefit of legal advice, he promptly acknowledged an obligation to restore funds to [NAME]'s estate and thereby neutralised an allegation of unconscionable conduct that might otherwise have barred his way; 5. the estate of [NAME] has yet to be distributed; 6. apart from the fact that a family provision order might be made, no material prejudice is suffered (by [NAME] and [NAME]) by allowing [NAME]'s application for relief to be made; and 7. having regard, inter alia, to the criteria for which section 60(2) provides, [NAME] has reasonable prospects of success on his application for a family provision order, at least to the extent necessary to relieve him of any obligation to restore to the estate the sum of $101,021 paid to him by [NAME] on the account of [NAME]'s estate and interest.

1. In my opinion, [NAME] has been left without "adequate provision for [his] proper maintenance, education [and] advancement in life" within the meaning of section 59(1)(c) by a will which provided for him to have no more than a legacy of $1,000.

2. I find that to be so because: 1. as a 58 year old, unsophisticated man, with a disability, [NAME] is not well resourced in terms of capital or income at the end of his working life, though he owns a modest home at Williamtown in need of substantial renovation or repair; 2. his wife spends most of her time outside of Australia, in Thailand, and she is unable to assist him financially; 3. despite lengthy periods of estrangement between himself and [NAME] (a difficult man with whom to relate) [NAME] was a dutiful son who suffered from tensions between his parents and disparagement by [NAME]; and 4. on the face of [NAME]'s will, [NAME] received no more than nominal recognition.

1. In my opinion, upon an exercise of the power for which section 59(2) of the Succession Act provides, an order ought to be made for the maintenance, education and advancement in life of [NAME] out of the estate of [NAME]. In lieu of the provision made for him in [NAME]'s will, that provision should take the form of: 1. a forgiveness of the debt of $101,021 [NAME] owes to the estate of [NAME] and any liability he may have to pay interest on that debt; and 2. a legacy in the sum of $50,000 charged against [NAME]'s residuary estate.

1. In my opinion, no greater provision should be made under section 59(2) in favour of [NAME] because to make greater provision for him would be to impinge unduly upon the testamentary provision made for [NAME] and [NAME]. They are both young people without substantial means. [NAME] is trying to pursue a career as a commercial pilot in Europe, not an easy path to follow. [NAME] is married with a young child. They had a close and loving relationship with [NAME]. Respect must be shown for his intention to benefit them. With the benefit of the Court's award in his favour, [NAME] will have received in excess of $150,000 from what is a small estate. His need for assistance does not rank over the needs of [NAME] and [NAME]. 2. [NAME] submits that he should have the benefit of an order that his costs (estimated to be $185,000 assessed on a solicitor and client basis) be paid out of the estate of [NAME] because of his success in obtaining a family provision order.

3. I do not accept that submission because: 1. [NAME]'s primary adversary in these proceedings has been [NAME]; 2. although [NAME] has been largely responsible for the complexity and duration of these proceedings, [NAME] played his part in obstruction of the due administration of [NAME]'s estate by his unauthorised agreement with [NAME] to divide [NAME]'s estate between them; 3. to impose upon the estate of [NAME] the burden of [NAME]'s costs would be to diminish beyond what is just the testamentary provision made for [NAME] and [NAME]; and 4. to the extent that he opposed construction of [NAME]'s will in favour of [NAME] and [NAME] (or rectification of the will in their favour), he was unsuccessful.

1. I propose to make an order that [NAME]'s costs of the proceedings (not distinguishing between the "probate" accounting proceedings and the family provision proceedings, heard together), assessed on the ordinary basis, be paid by [NAME]. [NAME] and [NAME] are both parties to both sets of proceedings before the Court. [NAME]'s primary adversary in the proceedings, viewed as a whole, has been [NAME] because of the way [NAME]'s estate was administered in the four years immediately following [NAME]'s death.

[NAME]'S "NET DISTRIBUTABLE ESTATE" AFTER ADJUSTMENTS 1. A final figure for the net distributable estate of [NAME] cannot be calculated with precision until: (a) the outcome of the administrator's application to the Australian Tax Office for a private ruling is known; (b) the administrator discovers whether [NAME] will satisfy the Court's judgment that he pay equitable compensation to [NAME]'s estate; and (c) the administrator's entitlement for ongoing costs crystallises upon completion of administration of the estate.

2. Upon assumptions that: 1. the amount of $450,551.68 presently held in trust by the administrator is subject to the following deductions: 1. $17,644.38 for the costs of the administrator, including counsel's fees; and 2. $55,000 payable to the ATO; 1. [NAME] is forgiven his debt of $101,021 upon an exercise of the Court's family provision jurisdiction; and 2. [NAME] does not satisfy the Court's judgment that he pay equitable compensation to the estate, the net amount available to abide the orders of the Court is $377,907.30.

1. If (as I have found) [NAME] is to receive from that amount a legacy of $50,000 but no charge against the estate for his costs, the amount available for an equal distribution between [NAME] and [NAME] as residuary beneficiaries of [NAME] can be estimated at $327,907.30 or about $163,953.65 each.

2. That amount will increase to the extent that the administrator's application to the ATO is successful and [NAME] satisfies that estate's judgment for equitable compensation.

3. Although, as a matter of form, no costs orders are to be made for or against [NAME] and [NAME] (neither of whom appeared in the proceedings by a lawyer), their inheritance will have been implicitly diminished by the entitlement of the administrator to be indemnified for his costs out of the estate to the extent that they are not recovered from [NAME]. 4. [NAME] was largely responsible for the complexity and duration of both sets of proceedings before the Court, and for the necessity for an investigation by the administrator of his dealings with estate property. Having suffered judgment against him on the administrator's claim for equitable compensation, and having failed on his cross claim, he should be ordered to indemnify the estate of [NAME] for the administrator's costs.

CONCLUSION 1. Subject to allowing the parties an opportunity to check my arithmetical calculations, and to make submissions about the form of orders to be made in disposition of these proceedings, I propose to make orders to the following effect:

1.

ORDER that [NAME] pay to the administrator, on behalf of the estate of [NAME], the sum of $68,706.44 by way of equitable compensation in the sum of $51,491.44, together with interest of $17,215 awarded under section 100 of the Civil Procedure Act 2005 NSW calculated from 16 May 2015 (the expiry of one year after the grant of probate made to him).

2.

ORDER that [NAME]'s cross claim be dismissed.

3. DECLARE that, upon the proper construction of clause 3(c) of the will of [NAME], the residuary estate of [NAME] passes to [NAME] and [NAME] as tenants in common in equal shares.

4.

ORDER that the time within which [NAME] was required to apply for a family provision order be extended up to and including 20 July 2017, the date upon which he filed his summons in the proceedings numbered 2017/00221078.

5.

ORDER that, in lieu of the provision made for him in the will of [NAME] be granted provision out of the estate of [NAME] in the form of: 1. a forgiveness of the debt of $101,021 he owes to the estate of [NAME] and any liability he may have to pay interest on that debt; and 2. a legacy in the sum of $50,000 charged against [NAME]'s residuary estate.

1.

ORDER that the costs of the administrator referrable to the proceedings respectively numbered 2017/00221078 and 2018/00272913, assessed on the indemnity basis, be retained, or paid, out of the estate of [NAME].

2.

ORDER that [NAME] indemnify the estate of [NAME] for those costs of the administrator.

3.

ORDER that [NAME] pay [NAME]'s costs of the proceedings respectively numbered 2017/00221078 and 2018/00272913 assessed on the ordinary basis.

4.

ORDER that [NAME] and [COMPANY] pay their own costs of the proceedings, if any.

5.

ORDER that the administrator's amended statement of claim (filed on 25 October 2019 in the proceedings numbered 2018/00272913) otherwise be dismissed.

6.

ORDER that [NAME]'s statement of cross claim (filed on 19 December 2019 in the proceedings numbered 2018/00272913) be dismissed.

1. Unless the parties earlier bring in draft short minutes of orders to which they all agree, the proceedings will be listed at 9:00am on 16 September 2021 for final orders to be made.

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