Reilly v Reilly

Francis Bede Reilly (“the deceased”) died on 22 December 2012, aged 88 years, leaving:

The deceased’s son is the plaintiff. His daughters are, respectively, the second to fifth defendants.

The sixth defendant is a solicitor against whom the plaintiff makes a claim for compensation (in equity and at common law) dependent, in part, on the outcome of his claims for relief against his mother and sisters referable to the deceased estate of his father.

The estate of the deceased is not, generally, represented in the proceedings. There has been no interim grant of administration in aid of representation of the estate in the proceedings. On 26 February 2016 I did make an order, subject to further order, that the plaintiff be appointed (pursuant to the Uniform Civil Procedure Rules 2005 NSW, rule 7.10) to represent the estate for the purposes of claims for relief made by his sisters, as cross claimants, under Chapter 3 of the Succession Act 2006 NSW, for family provision relief. However, that order fell short of a general representative order.

The absence of a grant of administration, or a general representative order, is no impediment to a final determination of all questions in dispute in these proceedings binding the estate of the deceased and all who have, or may have, an interest in the estate.

All persons who have or may have an interest in the estate (namely, the widow and children of the deceased) are parties to the proceedings, and they will be bound by the Court’s orders.

There is no dispute that the will of the deceased dated 26 March 2003 is his last will, subject to an application by the plaintiff for an order that it be rectified so as to express the deceased’s true testamentary intentions.

The deceased and the first defendant (a nurse by profession) were farmers on land near Forbes, New South Wales.

Throughout their marriage they farmed two adjoining properties:

There is a dispute on the pleadings as to whether “Boronga” is 485 hectares (1200 acres) or only 408 hectares (1000 acres), but nothing turns on the difference. A formal contract dated 1 July 2009 pursuant to which the first defendant purportedly effected a transfer of the property to her daughters describes it as comprising 550.10 hectares (1,359 acres 1 rood 113/4 perches). Estimates of value placed before the Court at the final hearing proceed on the basis (as do I) that the land comprises 550 hectares or thereabouts.

The current proceedings have been conducted on the basis that the legal and beneficial title to the two properties resided in the registered proprietor in each case.

For many years before 30 June 2009 a farming business was conducted on the properties, farmed as a single unit, by the deceased and the first defendant, under the name “The FB & ML Reilly Partnership”.

On 1 July 2009 two partnership deeds were executed:

The deed relating to the Shadrack Partnership recites that the parties had agreed “to carry on as partners in the business of investment and such other activities as they may from time to time agree upon”. The terms of the deed disclose no overt connection with “Boronga” or the FB & ML Reilly Partnership.

The deed relating to the Boronga Partnership recites that the parties had agreed “to carry on as partners in the business of farming and grazing operations and such other activities as they may from time to time agree upon”. Clause 3 of the deed identified partnership assets as including “the right of grazing and farming on the property known as ‘Boronga’ Gunningbland or any other lands acquired by the partnership or any member thereof by purchase, lease agistment agreement or otherwise and also any plant and livestock acquired by the partnership and progeny of the livestock held from time to time.”

Assets of the FB & ML Reilly Partnership appear to have been transferred to the Shadrack Partnership on the basis that the farming business conducted on “Malaya” and “Boronga” was, from 1 July 2009, conducted by the Shadrack Partnership. Financial statements prepared for each of the years ended 30 June in 2010, 2011, 2012, 2013 and 2014 are consistent with that having occurred. However, the value of any assets thus transferred is not clear on the evidence.

The pleadings contain no claim for relief directed towards having the partners in the Shadrack Partnership (the children of the first defendant and the deceased) account to the FB & ML Reilly Partnership (the first defendant and the estate of the deceased) for any appropriation of assets of the old partnership by the new.

With the exception of the deceased, all persons interested in both partnerships are parties to the present proceedings. Although the estate of the deceased is not represented otherwise than by an order appointing the plaintiff to represent the estate for the purpose of his sisters’ family provision claims, all persons interested in the estate are parties to the proceedings. The proceedings do not provide a vehicle for speculation about how the Shadrack Partnership came to enjoy assets of the FB & ML Reilly Partnership. The first defendant (the only surviving partner of that partnership) makes no complaint. All other parties, collectively, are the only members of the Shadrack Partnership and the only persons interested in the estate of the deceased.

The parties have agreed that the Shadrack Partnership should be dissolved by an order of the Court, with an order that the partnership be wound up and an order that accounts be taken, leaving any disputes to be submitted to a commercial arbitration in accordance with the partnership deed.

In the course of his submissions the plaintiff complains that he has not received due compensation for work done in management of the farm for the FB & ML Reilly Partnership and the Shadrack Partnership. His statement of claim makes no claim for relief bearing upon such claims, but his sisters invite the Court (with his acquiescence) to determine his claims in these proceedings.

I am not satisfied that the plaintiff’s claims for compensation have any underlying legal entitlement to remuneration. The work he did in management of the farm was done in a family setting, without any intention, in fact, that it involve a legal entitlement to remuneration (Balfour v Balfour [1919] 2 KB 571 at 578-579; Ermogenous v Greek Orthodox Community of SA Inc. (2002) 209 CLR 95 at 105[24]-106[26]) beyond what might be reflected in accounts of the partnership for the time being conducting the farming business. Any work done by him beyond that might be material to an understanding of why the first defendant may have transferred “Malaya” to him, and why the deceased may have left “Boronga” to him, or to a determination of his sisters’ family provision claims; but it was never intended by any member of the Reilly family to give rise to a separate, legal entitlement to remuneration. In my judgement, it does not do so.

The plaintiff conceded in cross examination that he had signed each of the financial statements, and the tax returns, prepared (with his personal participation) on behalf of the Shadrack Partnership.

It is not necessary to consider whether the parties are able to contest the state of accounts between them as manifested in the financial statements: cf, Commonwealth Dairy Produce Equalisation Committee Limited v McCabe (1938) 38 SR (NSW) 397 at 401-402. It is sufficient to record that the plaintiff’s claims to compensation for work done in management of the farm, insofar as not reflected in partnership accounts, are rejected; there is no demonstrated basis for a re-opening of the accounts of the Shadrack Partnership as adopted by each of the partners year by year; and (as explained by Federal Commissioner of Taxation v Everett (1980) 143 CLR 440 at 446-447 and Chan v Zacharia (1984) 154 CLR 178 at 192-193 and 205) the plaintiff’s share in the partnership consists of a right, governed by the partnership deed, to a proportion of any surplus after realisation of the assets, and payment of debts and liabilities of the partnership, upon its being wound-up.

That there may have been some informality in the establishment, and conduct of the Shadrack Partnership, is confirmed by file notes of the sixth defendant’s firm which suggest that, in causing the partnership to be established, the first defendant reserved for herself and the deceased a “right” to draw on profits of the Shadrack Partnership on the basis that those profits were derived from assets of the FB & ML Reilly Partnership.

There is no basis in these proceedings for treating such a “right”, if it ever existed, as anything more than an informal incident of family relationships. It finds no reflection in the deed governing the Shadrack Partnership or in any claims for relief made in these proceedings.

There is no evidence that the Boronga Partnershp has ever carried on business. In any event, the plaintiff is not a party to the partnership deed; his statement of claim makes no claim for relief in respect of it; and neither does the cross summons of his sisters.

The focus for attention in the statement of claim is a dispute about beneficial ownership of “Boronga”, to which are joined consequential claims for compensation.

The focus for attention in the cross summons, so far as it is controversial, is upon: first, a claim that the plaintiff deliver up possession of “Boronga” to his sisters; and secondly, claims for family provision relief made by the girls (under Chapter 3 of the Succession Act 2000 NSW) as an alternative to their claim of ownership of “Boronga”.

It has not been suggested that the existence of the FB & ML Reilly Partnership constrained the ability of the deceased and the first defendant to dispose of the parcels of land registered in their respective names.

The deceased (born in 1924) and the first defendant (born in 1929) were married in 1961. The first defendant is now aged 88 years.

The children of the marriage between the deceased and the first defendant, all parties to the proceedings, comprise the following:

The present proceedings arise out of failures in the management of inter-generational change in a farming family, with miscarriages in succession plans involving (to use neutral expressions):

From a date no later than 2008 the deceased, suffering from dementia, began a descent into mental incapacity. There is no dispute that he was mentally incapable of managing his affairs in, throughout and after 2009.

In preparation for such a contingency the deceased executed, in favour of the first defendant and the plaintiff jointly and severally, an enduring power of attorney (in a form prescribed for the purpose of section 163B of the Conveyancing Act 1919 NSW) dated 7 June 2000.

The authority conferred by the instrument, paraphrasing section 163B, was an authority “to do on [behalf of the deceased] anything [the deceased] may lawfully authorise an attorney to do”.

The instrument was not expressed to be subject to specified “conditions and limitations”; but the printed form adapted for the deceased’s execution contained a deletion of a provision which would otherwise have conferred on his attorneys authority “to execute an assurance or other document, or do any other act, whereby a benefit is conferred” on the attorneys.

The certificate required under section 163F(2) of the Conveyancing Act 1919 for the instrument to take effect as an enduring power of attorney was given by the deceased’s solicitor, Mr PJ Buckley.

The power of attorney was not immediately, or on the deceased’s instructions, registered in the office of the Registrar General.

It came to be registered (as Book 4570 No. 954) on 6 July 2009 when the first defendant caused a solicitor (Duncan Maccallum) in the employ of the sixth defendant (Dennis McGroder) to register it as a step (taken at a time after the deceased had lost mental capacity) towards her unilateral transfer (by a memorandum of transfer dated 1 July 2009) of “Boronga” to her daughters (the second, third, fourth and fifth defendants), as a gift, for a nominal consideration of $1.00.

At the time of transfer, “Boronga” had a market value of not less than $815,000 or thereabouts. A formal market appraisal dated 18 May 2009 estimated its value at $815,000. A valuation report obtained for the purpose of these proceedings (which include claims for family provision relief) suggests that it may have been worth more than that estimate. That report attributes to “Boronga” as at 4 March 2015 a fair market value of $1,275,000, assuming vacant possession.

The memorandum of transfer, which provided for the daughters to hold the property as joint tenants, was registered on 2 December 2009 as dealing No. AF155999. Subject to a caveat (dealing No. AI358646) lodged by the plaintiff against 3 of the five parcels of land comprising the property, title to “Boronga” remains in the deceased’s daughters as joint tenants.

Why the property was transferred to the girls as joint tenants, rather than as tenants in common, appears to have been related to a desire on the part of the first defendant and her daughters to keep the property in the Reilly family. There were hints in the evidence, and a suggestion in the plaintiff’s final submissions, that the property was transferred to his sisters on a secret trust for the deceased as a means of facilitating a future claim by the deceased for pension entitlements. However, the statement of claim does not plead such a case, and I put it to one side.

The first defendant felt justified in transferring “Boronga” to her daughters because, she says:

The plaintiff does not accept that there was any agreement between his parents that might deny him a right to inherit “Boronga”.

A hurdle to his establishment of such a right is the defective character of the will executed by the deceased on 26 March 2003.

The will, prepared and witnessed by Mr Buckley, is defective because the words of gift in clause 3 of the document purport to dispose of “Boronga” (and the deceased’s share of stock and plant on “Boronga”) without naming a beneficiary.

Omitting formal parts, the will is in the following terms:

Leaving aside his speculation about how such an error could possibly have been made by him, or in his office, Mr Buckley’s evidence is to the effect that clause 3 is defective because it contains a clerical error (omission of the name of the plaintiff as beneficiary) which renders it not in accord with the instructions given to him by the deceased for its preparation.

The principal support for this evidence is found in handwritten notes (dated 18 March 2003, eight days before the date of the will) written by Mr Buckley at or about the time he personally took instructions from the deceased.

Those notes are in the following terms:

The word “lengthy” is a reference to the duration of Mr Buckley’s conference with the deceased, which he estimates to have been 40 minutes.

The notes do not accord precisely with the scheme of the deceased’s will insofar as: (a) they include no identification of an executor; and (b) whereas the notes contemplated a share in the deceased’s farming partnership accompanying a disposition of “Boronga”, clause 3 of the will refers instead “my share of the stock and plant” on the property.

In a letter dated 24 July 2014, written in response to a formal inquiry by the plaintiff’s solicitors, and in an affidavit sworn 5 February 2015 relied upon by the plaintiff, Mr Buckley disclaimed any independent recollection of his preparation of the deceased’s will, but affirmed that, through an oversight on his part, clause 3 of the will was incomplete.

Mr Buckley and his clerk, Carla Peden attested the deceased’s execution of the will.

Although Ms Peden remained in the employ of Mr Buckley’s firm at the time of the final hearing, no evidence was adduced from her. A fair inference, conforming to that discussed in Jones v Dunkel (1959) 101 CLR 298, is that she could give no evidence of assistance to the plaintiff.

Mr Buckley was cross examined on his affidavit. Invited to speculate about how, and why, clause 3 of the deceased’s will takes the form it does, he accepted that his handwritten notes do not fully detail any conversation he had with the deceased at the time of taking instructions, and he could not exclude the possibility that there was an undocumented change of the deceased’s instructions at or about the time the will was executed. He acknowledged that a change of instructions might have been communicated to a member of his staff, rather than to him, and that, when witnessing a will, it was not his practice to proof read the will, before or after execution.

Section 27 of the Succession Act 2006 is in the following terms:

A convenient exposition of the text of section 27 is found in Hallen AsJ’s judgment in Lockey v Ferris [2011] NSWSC 179 at [63]-[73]:

An order for rectification under section 27(1) cannot be made without an order under section 27(3) for an extension of the time limited by section 27(2) of the Succession Act. The deceased died on 22 December 2012. The current proceedings were commenced by a summons filed on 1 October 2014, directed principally to obtaining an extension of the operation of a caveat lodged by the plaintiff over “Boronga”. An order for proceedings on the summons to proceed by way of pleadings having been made on 8 October 2014, the plaintiff filed a statement of claim on 20 October 2014. It was by that pleading that the plaintiff applied for relief under section 27, including a prayer for an extension of time within which to apply for an order for rectification.

The plaintiff’s caveat (which, after earlier interlocutory extensions, was on 27 October 2014 extended until further order) was lodged on “Boronga” on 11 February 2014. Implicit in the estate or interest claimed by the plaintiff in the caveat is an assertion of an entitlement to “Boronga” via the will of the deceased. He claimed that the land is held by his sisters upon trust for him, a claim which can be sustained only if clause 3 of the deceased’s will is rectified in his favour.

In cross examination, the plaintiff confirmed that he first saw the deceased’s will in February 2013; and that he had a copy of Mr Buckley’s file note when he verified his caveat by a statutory declaration made on 20 November 2013. That he had access to legal advice at the time he verified the caveat is confirmed by the fact that his solicitor witnessed his execution of the statutory declaration.

The plaintiff’s delay in making an application for rectification is not fully explained by the course of events following the death of the deceased. However, no application was made for a grant of representation in respect of the estate of the deceased until the plaintiff himself, in his statement of claim, applied for a grant of letters of administration; there has been no final distribution of the deceased’s estate; and, in my opinion, an order for rectification (and an associated grant of extension of time) is necessary for the purpose of giving effect to the deceased’s testamentary intentions.

I am satisfied that the prerequisites, in section 27(3), for an extension of time have been satisfied and that a rectification order should be made pursuant to section 27(1).

I am satisfied that the will does not carry out the testator’s intentions insofar as it omits from clause 3 the name of the plaintiff as the deceased’s intended beneficiary. I am satisfied that that omission represents a clerical error on the part of Mr Buckley, as draughtsman of the will. I am satisfied that, to give effect to the deceased’s instructions to Mr Buckley, clause 3 of the will should be rectified by inserting after the word “thereon” the words “to my Son Joseph Thomas Reilly”.

The scheme of the will favours identification of the plaintiff as the intended beneficiary of clause 3. If the plaintiff were not the, or an, intended beneficiary of clause 3, the will would have made no provision for him whilst providing for his siblings as residuary beneficiaries in the subsequent, contrasting clause 4. The fact that the deceased named the plaintiff as his alternate executor is also consistent with an intention that the plaintiff be the recipient of a major asset, “Boronga”. These considerations reinforce a finding, open on a reading of Mr Buckley’s notes, that the plaintiff was intended by the deceased to be named in clause 3.

The plaintiff’s long term residence on “Boronga” (as an adult, since 1995), his close personal association with farming operations on “Boronga” , his ownership (courtesy of his parents) of the adjoining property “Malaya” and the subject matter of clause 3 (the deceased’s “farming property”, together with his “share of the stock and plant thereon”) all point in the same direction, towards identification of the plaintiff as the intended beneficiary of the gift for which clause 3 imperfectly provides.

No alternative thesis about the deceased’s testamentary intentions fits so neatly with the text or context of the will.

The Court’s order for rectification is to be accompanied by an order that letters of administration with the will (as rectified) annexed be granted to the plaintiff. His is the only application for a grant of administration. His interest in the estate of the deceased is greater than the interest of any other person.

The deceased’s primary nominee for the role of executor was the first defendant. However, although she has executed no formal renunciation of probate, she refrained from applying for a grant before the plaintiff’s commencement of these proceedings, and she has refrained from applying for a grant in the proceedings. She has effectively abandoned her role as executrix. She cannot now be relied upon to administer the estate impartially or in an orderly manner.

The probate jurisdiction looks to the due and proper administration of an estate, having regard to any duly expressed testamentary intentions of the deceased, and the respective interests of parties beneficially entitled to the estate. The object of the Court upon an exercise of probate jurisdiction is to carry out the deceased’s testamentary intentions, and to see that beneficiaries get what is due to them: In the Goods of William Loveday [1900] P 154 at 156; Bates v Messner (1967) 67 SR (NSW) 187 at 189 at 191-192; Estate Kouvakis [2014] NSWSC 786 at [211]; Parsons v Davison [2016] NSWSC 1491 at [8]-[9]. That object can best be served in these proceedings by a grant of administration to the plaintiff. There is no practical alternative available.

A grant of administration in favour of the plaintiff is consistent with the order made on 26 February 2016 that, subject to further order, the plaintiff be appointed (pursuant to rule 7.10 of the Uniform Civil Procedure Rules 2005 NSW) to represent the estate of the deceased for the purposes of claims for family provision relief made by his sisters on their cross summons.

The plaintiff’s sisters contend that, “Boronga” having been transferred to them in 2009 by the first defendant acting as attorney for the deceased, the gift of that property for which clause 3 of the deceased’s will provides must be taken to have adeemed.

The principles governing equitable ademption (authoritatively explained in RL v NSW Trustee and Guardian (2012) 84 NSWLR 263 at 292-293) were recently reviewed in Reynolds v Bonnici [2017] NSWSC 828 at [34]-[45], drawing upon In Re Everett; Executor Trustee and Agency Company of South Australia Limited v Everett [1917] SALR 52 at 65-66. The form of ademption contended for by the plaintiff’s sisters in these proceedings is that which occurs when (because it has been destroyed or transferred out of the ownership of the will-maker) property no longer exists in the will-maker at the time, upon his or her death, a will becomes effective. It does not depend on the intention of the will-maker vis a vis the destruction or alienation of property during his or her lifetime.

The fallacy of the defendants’ contention is that, if (as I find) the plaintiff is successful in his contention that “Boronga” should be restored to the estate of the deceased in these proceedings, it will not have been lost to the estate. There remains, in substance, an identity beteen the property “Boronga” the subject of the deceased’s specific testamentary gift in favour of the plaintiff and the property “Boronga” forming part of the deceased’s estate. On my findings, beneficial ownership of “Boronga” never left the deceased; but, critically, title to the property is recoverable by the deceased’s estate. There is no material foundation for a finding of ademption.

For completeness, and tending in the same direction as this conclusion, I note (with elaboration of his Honour’s source text) the following observations by Young CJ in Eq in Johnston v MacLarn [2001] NSWSC 932 at paragraphs [22]-[24]:

The reference to “Roper” is more correctly a reference to RSD Roper and HH White, A Treatise on the Law of Legacies (4th ed, 1847).

Roper’s statement of a “general rule” in terms paraphrased by Young CJ in Eq is made in his treatment of legacies of stock, leaving gifts of other forms of property to be treated (in substantially similar terms) separately.

In terms stated by Roper (at pages 329-334), “the general rule” and four “qualifications” to that rule (described by Young CJ in Eq as “exceptions”) focus on whether there is an exact agreement between the terms in which the property the subject of a specific legacy is described in a testator’s will and property of which the testator is possessed at the time of death.

The four “qualifications” elaborated by Roper focus on cases in which, although there is not an exact agreement between the will and a testator’s extant property, there is in substance a correspondence between the property described in the will and the property to which, at the time of death, the testator is beneficially entitled.

The first “qualification” is said to occur when property possessed by a testator at the time of death takes a different form from that described in his will by a mere act or operation of law. The second “qualification” (specifically referred to by Young CJ in Eq) concerns a change arising from a transaction unauthorised by the testator or a breach of trust. The third “qualification” is said to occur when a fund, instead of being “annihilated”, remains the same or in substance the same, as at the date of the testator’s will, “with some unimportant alterations”, so as not materially to change the interest which the testator then had; an example identified by Roper in a marginal note is when there is a change by a mere transfer from trustees to the testator, or from old to new trustees, or upon fresh securities under powers so to do. The fourth “qualification” occurs in instances where a testator lends stock, specifically bequeathed, on condition of its being replaced so that a legatee is entitled to have the subject property (which the trustee substantially and beneficially continues to possess) redeemed so as to pass by will.

The four “qualifications” or “exceptions” set out by Roper are, at page 331, introduced by a marginal note in the following terms: “Qualifications of the rule, requiring an exact agreement between the subject and its specification”.

The second “qualification” is introduced by a marginal note in the following terms: “When changed without testator’s concurrence or authority, or fraudulently, or in breach of trust”.

Omitting footnotes, the second “qualification” or “exception” is expressed by Roper (at pages 332-333) in the following terms:

Shaftesbury v Shaftesbury, referred to by Young CJ in Eq, is not dealt with in Roper’s treatment of the ademption of stock (at pages 329-334) but it is cited, in a similar context, at page 344 in dealing with “ademption of specific legacies of goods, etc.”

Whether “Boronga” should be restored to the estate depends on: (a) whether the first defendant acted without power, or in breach of her fiduciary obligations to the deceased, in transferring it to her daughters; (b) whether, the property having been transferred to them, section 42 of the Real Property Act 1900 NSW gives the daughters an indefeasible title to the property; and (c) whether, in equity, the sisters are bound to hold the property on trust for the estate of the deceased.

Before those, and associated, questions are addressed there is a need to address the first defendant’s foundational assertions of fact: (a) that, in 2000, she and the deceased made an oral agreement that, if she transferred “Malaya” to the plaintiff, he would leave “Boronga” to their daughters; (b) that she transferred “Malaya” to the plaintiff in reliance on that agreement; and (c) that she transferred “Boronga” to her daughters in performance of the deceased’s “obligation” to leave that property to them.

I am not satisfied that there was ever an agreement, or any informal arrangement, between the deceased and the first defendant to the effect that, if the first defendant transferred “Malaya” to the plaintiff, the deceased would leave “Boronga” to the girls. That is because:

In disbelieving the first defendant’s evidence about the existence of an agreement between the deceased and herself, it is not necessary to go so far as to find that she is a person of doubtful credit. It is sufficient to note, as McLelland CJ in Eq did in Watson v Foxman (1995) 49 CLR 315 at 318-319, the fallibility of human memory and the capacity of the human mind for ex poste rationalisation of events long since passed. To this might be added the Court’s customary caution (often signposted with a reference to Plunkett v Bull (1915) 19 CLR 544 at 548-549) in the assessment of evidence of oral statements attributed to a deceased person.

Just as I am not satisfied that there was ever any agreement between the deceased and the first defendant to the effect that, if the first defendant transferred “Malaya” to the plaintiff, the deceased would leave “Boronga” to their daughters, so I am not satisfied that the first defendant, in 2009, effected a transfer of “Boronga” to the daughters in reliance upon (or even by reference to) such an agreement.

In final submissions counsel for the plaintiff was criticised for not (it was said) sufficiently, or formally, confronting the first defendant in cross examination with an explicit refutation of her evidence about the existence of, and reliance upon, an informal agreement between herself and the deceased about her entitlement to transfer “Boronga” to their daughters. I do not accept that criticism.

Throughout the hearing there was never any doubt that the first defendant’s assertion of such an entitlement was under challenge. A cross examiner of the first defendant was not obliged to create sympathy in her favour by a robust confrontation. There was nothing unfair in a more subtle cross examination. The first defendant, represented by competent counsel, was on notice that her evidence was under challenge. The so-called “rule” in Browne v Dunn (1894) 6 R 67 requires no more: Allied Pastoral Holdings Pty Limited v Commissioner of Taxation [1983] 1 NSWLR 1.

Although each of the defendants submits that I should accept the first defendant’s evidence about a justification for her conduct grounded in an informal agreement with the deceased, nobody contends that I am bound to accept that evidence. As it happens, for the reasons I have explained, I do not accept it.

In my assessment, more probably than not the first defendant effected the 2009 transfer primarily because of her strong, personal, subjective opinion that that is what “fairness” between her children required she do, encouraged in that opinion by the fifth defendant who assisted her in instructions given to the sixth defendant (as solicitor for all parties to the transaction), with the acquiescence of each of the second, third and fourth defendants (each of whom, with the fifth defendant, made a declaration under the Duties Act 1997 NSW in support of an application for exemption from stamp duty on the transfer).

The first defendant denies location of her motivation in the possibility that a divestiture of “Boronga” would, in time, assist her to have the deceased’s ongoing nursing home fees ($50,000 per year which, she says, she personally paid) met by social security. That denial cannot be accepted in light of a file note dated 16 April 2009 prepared by the sixth defendant’s employee as a contemporaneous record of instructions given to him by the first and fifth defendants as a preliminary to the 2009 transfer. There appears to have been a clear connection between the proposed transfer and a purpose of moving the deceased towards pension entitlements by reducing the value of assets in his name. Accordingly, I infer, a secondary motivation of the first defendant in effecting the 2009 transfer was to relieve herself of costs associated with the deceased’s nursing home care.

The first defendant’s 2009 transfer of “Boronga” to her daughters was not in accordance with the intentions of the deceased (testamentary or otherwise), and not for his benefit, but, essentially, to give immediate effect to the first defendant’s personal preference for what should be done with the property and, possibly, at future time, to relieve her of costs associated with his maintenance.

She had no authority to transfer the property to her daughters unless it be located in the power of attorney dated 7 June 2000, upon which instrument she expressly purported to rely in her execution of the memorandum of transfer dated 1 July 2009 as attorney for the deceased. There is no general rule of agency between married, or cohabiting, couples; whether there is a relationship of agency between such couples depends on the facts of the particular case: Pollard v Wilson [2010] NSWCA 68 at [113]. In this case, the power of attorney dated 7 June 2000 is the only identified source of the first defendant’s actual authority.

The memorandum of transfer was accompanied by a “contract for the sale of land” (expressed to be between the deceased as vendor and his daughters as purchasers), also dated 1 July 2009, which purported to sell “Boronga”, including the house and other improvements on the property, with vacant possession, for the price of $1.00. That contract was signed by the first defendant on behalf of the deceased as vendor.

The power of attorney dated 7 June 2000 took the form of an adaptation of a printed form.

At the time of its creation, the instrument was governed by Part 16 (sections 158-163H) of the Conveyancing Act 1919 NSW, since repealed by the Powers of Attorney Act 2003 NSW, section 6(3) of which preserved the operation of the repealed provisions vis a vis the instrument.

Omitting the execution clause and the accompanying certificate given by Mr Buckley under section 163F(2) of the Conveyancing Act 1919, the power of attorney was in the following terms:

Clause 2 of the printed form, adapted by deletion, formerly read as follows:

No “condition” or “limitation” was recorded in Part 2 of the instrument signed by the deceased.

At the time the power of attorney was executed, section 163B of the Conveyancing Act 1919 was in the following terms:

The power of attorney granted by the deceased was “in or to the effect of the form of Schedule 7” as required by section 163B.

Section 163F(2) of the Conveyancing Act (pursuant to which Mr Buckley executed a certificate in support of the power of attorney at the time of its execution) was in the following terms:

So far as is material, section 163 of the Conveyancing Act provided as follows:

The deceased’s power of attorney was not registered by the deceased or by Mr Buckley acting on his instructions.

It was registered on 6 July 2009 by the sixth defendant’s firm, acting on the instructions of the first defendant, without express notice to the plaintiff, for the purpose of giving effect to the memorandum of transfer dated 1 July 2009 executed by her in favour of her daughters.

Although not given express notice of the first defendant’s intention to register the power of attorney, the plaintiff deposed to a conversation with her “in about mid-2009” in which she told him that she proposed to transfer “Boronga” to “the kids” and he would have no say in that transaction. He was, to that extent, implicitly on notice of both an intention to register the power of attorney and an intention to transfer “Boronga”, or at least an interest in “Boronga”, to his sisters.

The effect of section 163B(2)(b) of the Conveyancing Act, given the deletion of clause 2 from the printed form, was that the deceased’s power of attorney did not confer on the first defendant (or, for that matter, the plaintiff) “authority to execute an assurance or other document, or do any other act, as a result of which a benefit would be conferred on the attorney appointed by the instrument”. No party contends otherwise.

Whatever the precise limits of the first defendant’s powers as the deceased’s attorney, the relationship between them, as principal and attorney, was a fiduciary one, a consequence of which was that the first defendant was obliged not to place herself in a position of conflict, nor to obtain a profit or benefit from her fiduciary position, without first obtaining the fully informed consent of the deceased: Taheri v Vitek (2014) 87 NSWLR 403 at 427(115); Downie v Langham [2017] NSWSC 113 at [8]; Hospital Products Pty Limited v United States Surgical Corporation (1984) 156 CLR 41 at 68, 96 and 141; Chan v Zacharia (1984) 154 CLR 178 at 198-199; Maguire v Makaronis (1997) 188 CLR 449 at 466-467. These obligations flowed from the obligation of loyalty owed by the first defendant (to act, bona fide, only in the interests, and for the benefit, of the deceased as her principal) when she accepted her appointment, and thereafter purported to act, as an attorney.

In circumstances in which the deceased no longer possessed the mental capacity to give his fully informed consent to a proscribed transaction proposed by the first defendant as his attorney, she could nevertheless have effected the transaction without a breach of her fiduciary obligations had she sought and obtained authorisation via an order of the Court, or the Guardianship Tribunal (now the Guardianship Division of the Civil and Administrative Tribunal of NSW (NCAT)), exercising protective jurisdiction, in effect, on behalf of the deceased or upon an application for advice or directions under section 38 of the Powers of Attorney Act 2003. This she did not do.

As a fiduciary, the first defendant was bound to exercise her powers as an attorney for the deceased in his interests and not otherwise: Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 at 96-97.

The primary object of a power of attorney is to enable the attorney to act in the management of his or her principal’s affairs; an attorney cannot, in the absence of a clear power so to do, make presents to himself or herself or to others of his or her principal’s property: Tobin v Broadbent (1947) 75 CLR 378 at 401 (quoting Reckitt v Barnett Pembroke and Slater Limited [1928] 2KB 244 at 268, approved in the House of Lords [1929] AC 176 at 183 and 195), recently applied by the Full Court of the Federal Court of Australia in Great Investments Limited v Warner (2016) 243 FCR 516 at 538[85].

Under the general law of agency it is a breach of duty for an agent to exercise his or her authority for the purpose of conferring a benefit on himself or herself or upon some other person to the detriment of his or her principal. But, at the same time, if his or her act is otherwise within the scope of his authority it binds the principal in favour of third parties who deal with him bona fide and without notice of his fraud: Richard Brady Franks Limited v Price (1937) 58 CLR 112 at 142.

Where a fiduciary (such as an agent) exercises a power which results in his or her obtaining some incidental benefit, there may be nothing per se improper with his or her having that benefit if the benefit itself is, in the circumstances, an inevitable consequence of his or her properly exercising the power which produces it. A beneficiary (principal) may be able to upset such an exercise of power only if he or she can show that the fiduciary (agent) exercised it with the dominant purpose in mind of obtaining that benefit irrespective of the interests of his beneficiary (principal): Paul Finn, Fiduciary Obligations (Federation Press, Sydney, 2016 reprint), paragraphs [103]-[104], citing, inter alia, Smith v Cock (1911) 12 CLR 30 at 36.

These general law principles apply in the current proceedings. They were not displaced by the Part 16 of the Conveyancing Act 1919, still less by the Powers of Attorney Act 2003 NSW: Powers of Attorney Act 2003 NSW, sections 6-7.

The plaintiff contends that the first defendant acted outside her authority as the deceased’s attorney, and in breach of fiduciary obligations owed by her to the deceased, in that she transferred assets of the deceased (principally “Boronga”, but also the deceased’s interest in the FB & ML Reilly Partnership) for her own benefit; namely:

The plaintiff contends, further, that the first defendant acted beyond her power as an attorney by unilaterally procuring registration of the deceased’s power of attorney. That contention is articulated in written submissions as follows:

For the following reasons, I do not accept that the first defendant, by procuring registration of the deceased’s power of attorney, was acting beyond power:

I do not accept that the first defendant’s secondary purpose of (possibly) relieving herself of costs associated with the deceased’s nursing home care, by effecting a transfer of “Boronga” to others, of itself involved a want of authority or a breach of her obligations as a fiduciary. If it be the fact (as she has asserted, without corroborative evidence as to her source of funds) that the first defendant paid for the deceased’s nursing home care she would have been entitled, as an agent who expended money for the benefit of her principal, to be indemnified by him or his estate: Re Clune; Ex parte Verge v Isabella Nominees Pty Limited (In Liq) (1988) 14 ACLR 261 at 266; Mega-Top Cargo Pty Limited v Moneytech Services Pty Limited [2015] NSWCA 402 at [41]-[48]. Of itself, conduct directed towards diminution of costs chargeable to the deceased or his estate would not fall outside the deceased’s general grant of authority “to do on my behalf anything I may lawfully authorise an attorney to do” or attract characterisation as an exercise of that authority for an improper purpose. There is no allegation that the first defendant’s conduct was unlawful because, for example, tainted by revenue fraud.

The gravamen of the plaintiff’s case is that, in disposing of the deceased’s assets in 2009, the first defendant preferred her own interests over those of her husband and sought, by conferral of benefits on her daughters, both to benefit herself and, by an improvident transaction (effectively, a gift), to divest the deceased of property. Foundational to this case is a contention that the first defendant (if not also each of her daughters) is liable to account to the estate of the deceased for benefits conferred on the daughters, at her direction, in breach of fiduciary obligations owed to the deceased.

The fact that the 2009 transfer of “Boronga” in favour of the daughters was, as I have found, contrary to the deceased’s testamentary intentions does not, of itself, establish that the transfer was invalid or that it involved a breach of the first defendant’s fiduciary obligations. The general grant of power “to do on my behalf anything I may lawfully authorise an attorney to do” was sufficiently broad to enable an attorney, acting bona fide and in the interests of the principal, to do an act which effected an ademption of a prospective testamentary gift of the principal.

The defendants contend, and I accept, that, although the deceased’s power of attorney denied to the first defendant power to confer a benefit on herself, it implicitly included a power to make a gift in favour of a third party.

However, the first defendant’s power to make a gift in favour of a third party was not unqualified. It was qualified in at least two respects:

The first defendant’s gift of “Boronga” (the deceased’s main asset) to their daughters, for the purpose of giving effect to her own personal view of what was fair as between her siblings, and not for the purpose of advancing the interests (or for the benefit) of the deceased, was both a fraud on the power conferred on her by the deceased’s power of attorney and a breach of her fiduciary obligations to the deceased. Cf, Cohen v Cohen [2016] NSWSC 336 at [65]-[67].

The gift was a “fraud on the power” because the first defendant exercised her power “for a purpose, or with an intention, beyond the scope of or not justified by the instrument creating the power”: Vatcher v Paull [1915] AC 372 at 378. It is not necessary for such a finding to characterise the first defendant’s conduct as “dishonest” or “immoral”. It is sufficient to characterise it as beyond the power conferred upon her.

As a “fraud on the power” the transfer of “Boronga” to the deceased’s daughters was void (Thomas on Powers (2nd ed), paragraphs [9.90]-[9.91]) or, at least, voidable (Richard Brady Franks Limited v Price (1937) 58 CLR 112 at 142) subject to:

In any event, as a defaulting fiduciary (an accounting party) the first defendant has a personal liability to restore the estate of the deceased (Re Dawson (deceased) [1966] 2 NSWR 211; 84 WN (Pt 1) (NSW) 399; Maguire v Makaronis (1997) 188 CLR 449 at 469-470; Youyang Pty Limited v Minter Ellison Morris Fletcher (2003) 212 CLR 484), by accounting for any profit or gain received by her or by compensating the deceased’s estate for any loss suffered by it, arising from her transfer of “Boronga” to her daughters. She cannot circumvent her liability to account as a fiduciary by eschewing a personal benefit deliberately directed by her to a third party by way of a gift.

If (as in the present proceedings) an attorney:

That question must be answered in the affirmative for at least two reasons. First, Equity intervenes to hold the attorney to his, her or its duties as a fiduciary; it requires restitution in kind or compensation. Secondly, it also looks to substance over form. The posited case is no different from a transfer of the principal’s property by an attorney to him, her or itself, followed immediately by a transfer by the attorney to a third party. The attorney’s conscience is no less affected by one form of transaction than it is by the other. The attorney cannot circumvent personal liability of a fiduciary to account for an estate by causing the principal’s property to be transferred to a third party of the attorney’s choice rather than to the attorney personally.

In Huguenin v Baseley (1807) 14 Ves 273 at 289; 33 ER 526 at 532 Lord Eldon paraphrased Lord Hardwicke, in Bridgeman v Green (1755) 2 Ves Sen 627 at 629; 28 ER 399 at 401, as observing “justly that, if a person could get out of the reach of the doctrine and principle of [a court of equity] by giving interests to third persons, instead of reserving them to himself, it would be almost impossible ever to reach a case of fraud.” Although this observation was directed to explaining why a transfer of property to a third party should be set aside, it is not without resonance upon an assessment of the liability of a defaulting fiduciary.

If “Boronga” is restored to the estate of the deceased by the second to fifth defendants as a consequence of these proceedings, and if (because all parties interested in the estate of the deceased have put it beyond the power of anyone to complain of loss to the estate from use of the land) there is no compensable loss recoverable by the estate arising out of “Boronga” passing for a time out of the legal ownership of the deceased, the orders to be made against the first defendant might be confined to orders providing for the costs of the proceedings.

Questions about the appropriate form of relief must await determination of the plaintiff’s case against his sisters.

By her defence the first defendant does not plead (as do her daughters) a defence of acquiescence (Orr v Ford (1989) 167 CLR 316 at 337-342; Byrnes v Kendle (2011) 243 CLR 253 at 279[79]-280[80]) based upon the plaintiff’s contemporaneous knowledge of the “Boronga” transfer and his participation in the Shadrack partnership. Consideration of that defence is best left until consideration of the plaintiff’s case against his sisters.

The Parameters of Dispute. On the first day of the final hearing the plaintiff’s sisters amended their defence to include reliance upon section 42 of the Real Property Act 1900, advancing a contention that, by reason of their registration as proprietors of “Boronga”, they hold the land free of any claim made by or on behalf of the estate of the deceased to recover it. In short, they contend that, by registration (and, as volunteers, not before registration), they acquired indefeasibility of title (Breveskar v Wall (1971) 126 CLR 376 at 385-386; Cassegrain v Gerard Cassegrain & Co Pty Limited (2015) 254 CLR 425 at 433[16]; and Corin v Patton (1990) 169 CLR 540 at 557-558), leaving the plaintiff to establish, on behalf of the estate of the deceased, a case coming within an exception to indefeasibility.

Section 42 is in the following terms (with emphasis added):

No case available to the estate of the deceased falls within the five paragraphs of exceptions set out in the latter part of section 42(1).

During the course of the hearing, the plaintiff declined an opportunity to amend his statement of claim to allege a case of “fraud” which, if established, would have enlivened the fraud exception, located in the earlier part of section 42(1). “Fraud”, in that sense, involves moral turpitude as an essential element: Bahr v Nicolay (No. 2) (1988) 164 CLR 604 at 4. The plaintiff does not allege, as he would have to establish if he pleaded “fraud” in this sense, that his sisters were guilty of moral turpitude.

The case for which the plaintiff contends is that the estate of the deceased has a personal right, in equity, enforceable against the registered proprietors, requiring them to restore the land to the estate. This “personal equities” exception to indefeasibility does not deny the title of the registered proprietors, but asserts a personal right against them: Hillpalm Pty Limited v Heaven’s Door Pty Limited (2004) 220 CLR 472 at 491[54], citing Frazer v Walker [1967] 1 AC 569 at 585.

Understandably “the rule in Barnes v Addy” featured in submissions about any accessorial or participatory liability of the plaintiff’s sisters associated with a breach by the first defendant of her fiduciary obligations. Particular reference was made to Sheahan v Thompson (No 2) [2015] NSWSC 871 at [134]-[143] (reversed, on appeal, in Crossman v Sheahan [2016] NSWCA 200) as a point of entry into discussion of Barnes v Addy [1874] LR 9 Ch App 244, Farah Constructions Pty Limited v Say-Dee Pty Limited (2007) 230 CLR 89, and Simmons v NSW Trustee and Guardian [2014] NSWCA 405 and Grimaldi v Chameleon Mining NL (No. 2) (2012) 200 FCR 296.

In Barnes v Addy (1874) LR 9 Ch App 244 at 251-252 Lord Selborne said:

The rule in Barnes v Addy is conventionally treated as involving two forms of liability, respectively described as the “first limb” (involving a “knowing receipt” of trust property) and the “second limb” (involving “knowing assistance” in a dishonest and fraudulent design on the part of a trustee).

Although the High Court of Australia, in Farah Constructions Pty Limited v Say-Dee Pty Limited (2007) 230 CLR 89 at 141 [113], left open the question whether the first limb of Barnes v Addy applies generally to persons dealing with some type of fiduciary other than a trustee, the Court of Appeal has accepted that it applies to fiduciaries (Simmons v NSW Trustee and Guardian [2014] NSWCA 405 at [86]-[92]) and, that being so, I am bound in these proceedings to do likewise.

In Simmons v NSW Trustee and Guardian, at the identified paragraphs, Gleeson JA (with whom Beazley P and Barrett JA agreed) wrote as follows:

Insofar as the plaintiff seeks, on behalf of the estate of the deceased, to establish against his sisters an entitlement based upon the first limb of Barnes v Addy (grounded in an allegation that the sisters received property of the deceased knowing that they did so as a consequence of the first defendant’s breach of fiduciary obligations owed to the deceased) an impediment to his success is that, in Farah Constructions Pty limited v Say-Dee Pty Limited (2007) 230 CLR 89 at 169-171, the High Court determined that mere notice of the fraud of another is insufficient to overcome the indefeasibility of title conferred on a registered proprietor by section 42.

The plaintiff endeavours to overcome this obstacle by alleging that his sisters actively participated in their mother’s breach of fiduciary obligations. He contends that they had more than “mere” notice of their mother’s wrongdoing. On his case, they actively embraced it.

In fairness to all parties, it should be noted that the case which the plaintiff seeks to make does not extend to an allegation that his sisters assisted their mother in a breach of her fiduciary obligations to the deceased “with knowledge in a dishonest and fraudulent design” on the part of the first defendant. That is, the plaintiff does not articulate a case based upon the second limb of Barnes v Addy.

Principles within the penumbra of Barnes v Addy. Upon a review of the plaintiff’s statement of claim and the parties’ submissions generally, I notice the following observations in Jenyns v Public Curator (Queensland) (1953) 90 CLR 113 at 118-119:

These observations were highlighted by Mahoney JA in Stivactas v Michaletos (No. 2) [1994] ANZ Conv R 252; (1993) Aust Contract R 90-031; (1993) NSW Conv R 55-683; BC 930 1874 when charged with untangling a case pleaded as involving “undue influence”.

There is an affinity (although not a precise identity) between concepts such as “a breach of fiduciary obligations” and “an exercise of undue influence” upon a consideration of a relationship of influence between a stronger and a weaker party: Johnson v Buttress (1936) 56 CLR 113 at 134-135; Meagher Gummow and Lehane, Equity : Doctrines and Remedies (5th ed, Lexis Nexis Butterworths, Australia, 2015), paragraphs [15-100] – [15-105].

The case for which the plaintiff contends has some resonance in the treatment of “undue influence” found in PW Young, C Croft and ML Smith, On Equity (Law Book Co, Sydney 2009) at paragraphs [5.450]-[5.470], here extracted (with editorial adaptation):

In the unreported judgment of Giorgi v European Asian Bank AG referred to in On Equity, Young J cited the second (1984) edition of Meagher, Gummow & Lehane, Equity : Doctrines and Remedies, paragraph [1529]; Turnbull v Duval [1902] AC 429; Bainbridge v Browne (1881) 18 Ch D 188 at 197 and Bank of New South Wales v Rogers (1941) 65 CLR 41 at 51 and 70.

The equivalent passage in the 5th (2015) edition of Meagher, Gummow and Lehane is found in paragraph [15-150], which includes the following observations (omitting footnotes) :

Young J disposed of the case before him in the following manner:

Similar principles about conferral of a benefit on a third party underlie treatment of a fiduciary’s powers in the context of a transfer of property to the third party (a non-beneficiary) in breach of a fiduciary obligation. Witness Finn’s Fiduciary Obligations (2016 reprint), paragraph [107]:

The following extracts from the judgment of Romer J in Dowager Duchess of Sutherland v Duke of Sutherland [1893] 3 Ch 169 at 187 and 193-194 illustrate the broad similarity between a breach of fiduciary obligations case and an undue influence case bearing upon the question whether a transfer of property to a third party might be set aside:

These, and similar, observations are brought to attention in the context of a reminder by the High Court, in Farah Constructions Pty Limited v Say-Dee Pty Limited (2007) 230 CLR 89 at [161], that what was said by Lord Selborne in Barnes v Addy (1874) LR 9 Ch App 244 at 251-252 concerning “knowing assistance” was not an exhaustive statement of the circumstances in which, and the bases upon which, a third party’s participation in and another’s breach of trust (or a breach of fiduciary duty) could render that person accountable in equity.

The High Court noted that, before Barnes v Addy, “there was a line of cases which accepted that a third party might be treated as a participant in breach of trust where the third party had knowingly induced or immediately procured breaches of duty by a trustee where the trustee had acted with no improper purpose; these were not cases of a third party assisting the trustee in any dishonest or fraudulent design on the part of the trustee.”

That point was elaborated by the Full Court of the Federal Court of Australia (including Finn J) in Grimaldi v Chameleon Mining N L and Anor (No. 2) (2012) 200 FCR 296 at [242]-[247] and in a subsequent paper of WMC Gummow, “Knowing Assistance” (2013) 87 ALJ 311.

The Full Federal Court wrote as follows:

Professor Gummow concluded his paper with the following observations, at 87 ALJ 319:

Reference should also be made to the judgment of the Full Court of the Federal Court of Australia (including Edelman J) in Great Investments Limited v Warner (2006) 243 FCR 516 at [52]-[55], where the Court made the following observations:

The pleaded case of the plaintiff. In his statement of claim the plaintiff pleads against his sisters, inter alia, allegations to the following effect:

The allegation in paragraph 26 of the statement of claim that the defendants, “acting in unison”, procured the transfer of “Boronga” to the plaintiff’s sisters was particularised as follows:

Leaving aside a generic claim for “damages”, the statement of claim materially claims the relief to the following effect:

The Role of the Sixth Defendant. An important, if not critical allegation by the plaintiff in the statement of claim is that the sixth defendant acted as solicitor for “all parties” to the transfer of “Boronga”.

The importance of that allegation is that, whatever might have been the subjective state of knowledge of each of the plaintiff’s sisters, the sixth defendant (by the employed solicitor, Mr Maccallum, who had carriage of the transfer), from 6 May 2009 or thereabouts, had physical possession of both the power of attorney and the will of the deceased.

At some point at which the will was in the possession of the sixth defendant’s firm it bore, in the handwriting of a person unknown, the pencilled name of the plaintiff against clause 3 of the will, highlighting (if it was not otherwise apparent) the possibility that the plaintiff was the deceased’s intended beneficiary of “Boronga”. The provenance and timing of that pencilled note are too speculative to be given significant weight; but the note underscores an observation, independent of its terms, that the name of the plaintiff readily comes to mind on reading clause 3 in the context of the will as a whole, informed by knowledge of the composition of the deceased’s family.

The plaintiff invites the Court to impute to the first defendant and his sisters knowledge of the solicitor. The defendants warn the Court against assessing knowledge of the plaintiff’s sisters by aggregating knowledge of the solicitor and the sisters, each possibly unaware of impropriety, to create a notional person with dishonest intent then attributed to the sisters: Macquarie Bank Limited v Sixty-Fourth Throne Pty Limited ‘1998] 3 VR 133 at 135-136 and 151-157. That warning counsels caution about any vicarious attribution of knowledge. However, it does not displace a need, inherent in agency law, to accommodate the rights of third parties dealing with a principal through an agent where knowledge is divided between principal and agent: SJ Stojar, The Law of Agency: Its History and Present Principles (London, 1961), page 83.

The law’s solution, broadly, is to impute knowledge of an agent to the principal in cases in which the agent has actual knowledge of a fact, that knowledge is material to performance of work the agent was retained to perform, and the knowledge is of a character which the agent is bound to inform the principal in performance of that work: Sargent v ASL Developments Pty Limited (1974) 131 CLR 634 at 658-659; Ford Excavations Pty Limited v Do Carmo [1981] 2 NSWLR 253 at 266-267; Wyllie v Pollen (1863) 3 De GJ & S 596 at 601; 46 ER 767 at 770.

The sixth defendant himself, personally, played no substantial role in the transaction of business, having delegated it to Mr Maccallum. There is no denial by the sixth defendant of Mr Maccallum’s authority to perform the work delegated to him. Unqualified references hereafter to the sixth defendant can be taken to refer to the sixth defendant acting through Mr McCallum as his duly authorised servant or agent.

Mr Maccallum says that, at all times, he considered the first defendant to be his client and that the fifth defendant was assisting her. More probably, he did not really turn his mind to the identity of his client, or clients, in any critical fashion. Incidental statements made by him in correspondence suggest that, without critical analysis or reflection, he regarded the sixth defendant’s firm as simply acting for “the [Reilly] family”.

Identification of a solicitor’s “client” can, and in these proceedings does, involve layers of complexity. Care needs to be taken not to be captured by a label (“client”) capable of obscuring a correct understanding of relationships underlying use of the label.

The sixth defendant had no personal contact with the deceased, whose mental incapacity precluded any personal conduct of business. Mr Maccallum took his core instructions from the first defendant who, purporting to act as attorney for the deceased, advanced her own interests and those of her daughters in disregard of the interests of the deceased, her putative principal.

Mr Maccallum’s failure to test his instructions in a critical examination of the identity of his firm’s “client” lies at the heart of the present proceedings. By acting for the first defendant in two capacities (one personal, the other representative), as he did, without confronting an inherent ambiguity in her instructions, Mr Maccallum exposed the defendants to the dangers of fiduciary business tainted by conflicts of duty and interest.

In the transfer of “Boronga” out of the name of the deceased and into the names of his daughters, on the putative authority of the first defendant as attorney for the deceased, and to the detriment of the plaintiff without full engagement with him in any capacity (either personally or as an attorney for the deceased), the sixth defendant did not act, in fact, for either the deceased or the plaintiff. This was so notwithstanding that he purported to act for the deceased (through the first defendant) and he had personal contact with the plaintiff, limited to clarifying information about the size of “Boronga” and sending out the partnership deed for the “Shadrack Partnership” for execution.

The sixth defendant may have owed each of the deceased and the plaintiff a duty of care in tort (as is later to be considered) but, the parties agree, he did not have a contractual relationship with either of them.

The first defendant disclosed to the sixth defendant that she was purporting to act as attorney for the deceased, sufficient of itself, one might have thought, to establish a contractual relationship between the deceased and the sixth defendant. However, the parties agree otherwise.

The sixth defendant (through his employee Mr Maccallum) held the deceased’s power of attorney in his possession; he knew that the deceased lacked the mental capacity to confer additional authority on the first defendant; and he ought to have appreciated that the first defendant had no authority (actual or ostensible) to do what she sought to do in the name of the deceased. He had, at least, a duty (which he did not adequately perform) to clarify the terms of his instructions vis-a-vis the deceased and, arguably, the plaintiff: cf, Hallani v Hallani [2013] NSWSC 91, citing Geoffrey W Hill & Associates (Insurance Brokers) Pty Limited v Squash Centre (Allawah North) Pty Limited (1990) 6 ANZ Insurance Cases 61-012.

There is in the evidence no written form of “costs agreement” pursuant to which the sixth defendant was retained, although, by way of an exchange of correspondence on 22 April 2009, the sixth defendant provided a cost estimate to the fifth defendant and she instructed him that the first defendant was happy to proceed on the basis of that estimate. The work contemplated by the retainer thus confirmed was described generally as “estate planning”, incorporating the transfer of “Boronga”, a potential transfer of other investments of the deceased and the first defendant, and the preparation of two partnership agreements. The first and fifth defendants held out to the sixth defendant (via his employee) that they would were instructing him on behalf of the Reilly family but, in relation to the transfer of “Boronga”, they were doing so only on behalf of themselves and the second, third and fourth defendants.

In the contract of sale of land (dated 1 July 2009) prepared by the sixth defendant as an integral part of the documentation leading to transfer of “Boronga” to the plaintiff’s sisters, the sixth defendant’s firm was named as solicitor for the “vendor” (the deceased, purportedly represented by the first defendant as his attorney) and as solicitor for the “purchasers” (the plaintiff’s sisters). The firm acted on both sides of the conveyancing transaction from go to whoa. They attended to the provision of advice to each of the parties to the transaction (excluding the deceased, with whom they had no personal contact); to the preparation of the contract, the memorandum of transfer and applications by the purchasers for a stamp duty exemption; to the issue of replacement title deeds when those held by the deceased could not be located; to registration of the memorandum of transfer; and to the service of “notice of sale” on government authorities.

Factual Findings and Analysis. In substance, the allegations of fact made by the plaintiff in the statement of claim against his sisters have been made out by the evidence.

I do not intend, by this observation, to adopt the plaintiff’s colourisation of the facts in contentions that his mother and sisters owed him a duty of care, and that his mother was necessarily bound as an attorney to give effect to the deceased’s testamentary intentions. I do not intend, by an acceptance that underlying facts have been proved, to lose sight of a need for independent legal analysis of the facts proved.

Between 16 April 2009 and 5 February 2010 or thereabouts the sixth defendant (through his employee, Mr Maccallum) acted for “the family” in advising upon and implementing arrangements for a transfer of “Boronga” from the name of the deceased to the names of his daughters.

Mr Maccallum first conferred with the first and fifth defendants on 16 April 2009, following a preliminary inquiry as to his availability made by the fourth defendant through a member of his staff.

In the course of the conveyancing transaction, Mr Maccallum had direct personal contact with each of the first, third, fourth and fifth defendants but not, it seems, the second defendant.

Nevertheless, the second defendant did receive from the sixth defendant’s firm correspondence inviting confirmation of her instructions. The solicitor’s letter dated 12 June 2009 recorded that, on instructions from the first and fifth defendants, they provided to her the contract, the transfer, a stamp duty exemption application form, the Boronga Partnership Deed and the Shadrack Partnership Deed. The letter made a request of her in the following terms:

The second defendant executed and returned the documents without a confirmatory phone call.

The fact that the second, third and fourth defendants were content to leave most contact with the solicitors to the first defendant and, more often, the fifth defendant does not detract from the fact that they were clients of the solicitors. Nor does the fact that the sixth defendant’s account (dated 10 February 2010) was addressed to the first defendant, with a stated expectation that the fifth defendant would attend to payment.

Incidentally, the documentation provided to the plaintiff on or about 12 June 2009 was limited to a copy of the Shadrack Partnership Deed. The solicitor’s letter addressed to the plaintiff simply recorded:

The solicitors did not seek from the plaintiff, and he did not give to them, instructions concerning the transfer of “Boronga” out of the name of the deceased.

The plaintiff signed the Shadrack Partnership Deed at the request of the first defendant, and she witnessed his signature and caused it to be returned to the solicitors, thereby minimising his role.

Although the contract and memorandum of transfer each bear the date 1 July 2009, both documents were prepared and signed in June 2009. The date 1 July 2009 was inserted at the suggestion of the first defendant’s (the Reilly family’s) accountant.

When they signed the memorandum of transfer, the signatures of each of the third and fifth defendants was dated 24 June 2009.

At or about the time they signed the contract and the memorandum of transfer, each of the plaintiff’s sisters made a statutory declaration in support of an application for stamp duty exemption (granted on 13 August 2009). The second defendant’s declaration was made on 26 June 2009. The third defendant’s on 24 June 2009. The fourth defendant’s on a date in June 2009 not legible on the document in evidence, but apparently the 11th, the date upon which Mr Maccallum deposes to having given advice to the fourth defendant and witnessed her signature on documentation as she was heading overseas for a time. The fifth defendant’s declaration was made on 25 June 2009.

Each declaration identified the deceased as the transferor of “Boronga”, deposed to the deceased’s use of the property for the business of primary production and declared an intention to continue such a business after transfer of the property.

Mr Maccallum witnessed execution of the memorandum of transfer by each of the first and fourth defendants. He also, by telephone (on 16 June 2009), had a conversation with the third defendant in which, he says, he explained to her the documents to be signed by her “and her responsibilities”.

Each of the plaintiff’s sisters signed the memorandum of transfer on a separate page, facilitating their execution of the document otherwise than at the same time and place. Nevertheless, each page bore a sequential number that tied it to the first page, upon which were plainly recorded the fact that the deceased, as transferor, purportedly signed the document by the first defendant as his attorney.

The registration number of the power of attorney did not appear on the document at the time of execution of the memorandum of transfer because the power of attorney was not sent by the sixth defendant for registration until 3 July 2009, and it was not registered until 6 July 2009.

The fact of the deceased’s mental incapacity throughout the time that the sixth defendant acted on the transfer of “Boronga” (between 16 April 2009 and 10 February 2010 or thereabouts) was known by all the defendants, no less than it was known by the plaintiff.

Mr Maccallum deposed that, in his initial conference with the first and fifth defendants on 16 April 2009, he was expressly told that the deceased was then “off the air”, as a consequence of which his power of attorney was to be acted upon.

In an email exchange between Mr Maccallum and the fifth defendant on 23 April 2009, it was confirmed that the deceased then lacked the capacity to make a will. On 23 November 2009 the first defendant made a statutory declaration (in support of an application to the Registrar General for replacement certificates of title) in which she deposed to an inability to locate the title deeds sought to be replaced. She deposed: “My husband no longer has the mental capacity to advise where the [lost certificate of title] Deeds are located. I have made a thorough search of his files and records. There is no record of them ever being held by his bank and they are not held by any solicitors in the district.”

Mr Maccallum had the deceased’s power of attorney and will in his physical possession no later than about 6 May 2009. He read them when he received them. His recollection is that, at that time, he thought the will was irrelevant for reasons which included the first defendant’s possession of a power of attorney, the fact that he was acting on an inter vivos transaction, the fact that “Malaya” had been transferred to the plaintiff in his name alone, and the fact (as the solicitor understood it) that “the family” had agreed that “Boronga” should be transferred to the girls.

Even if (which I doubt) the first to fifth defendants did not see a copy of the deceased’s will in 2009, and even if (which I also doubt) the second to fifth defendants did not see a copy of the deceased’s power of attorney at that time, the sixth defendant’s knowledge (through Mr Maccallum) of the nature and terms of those documents must be imputed to each of the first to fifth defendants vis-a-vis the deceased and the plaintiff.

The sixth defendant (through Mr Maccallum) had actual knowledge of the terms of the power of attorney and the will. Those terms were material to performance of the work which the sixth defendant was retained to do. His HhIMr Maccallum actively sought production of both the power of attorney and the will in order that he might perform the firm’s retainer, the essential character of which (as he understood it) focussed upon an “intergenerational transfer” of property out of the name of the deceased, in recognition of the deceased’s present mental incapacity and in anticipation of the deceased’s death. Mr Maccallum, was bound to inform his clients of his knowledge of them.

The will bore directly upon any attribution of an “estate planning” intention to the deceased, and upon an assessment of what the deceased might regard as beneficial to himself in the context of his family. Even in its unrectified form, the will was suggestive of an intention of the part of the deceased both to involve his son in administration of his estate and to withhold “Boronga” from his daughters. The defective form of clause 3 of the will invited a clarification of instructions as to the deceased’s true testamentary intentions.

Such an invitation was reinforced by the form of the deceased’s power of attorney, which conferred upon the plaintiff a standing (as joint and several attorney) equal to that of the first defendant. Given that the first defendant purported to act on behalf of the deceased and that, as an attorney for the deceased, it was trite law that she was likely to owe fiduciary obligations to the deceased, breach of which could expose her and others to litigation by or on behalf of the deceased, the sixth defendant, through his employee, was bound, in the performance of the firm’s retainer, to ensure that “the Reilly family” (for whom Mr McCallum understood he acted) – an expression which must be taken at least to have embraced the first defendant and her daughters – were aware of the terms of the will and power of attorney. His knowledge is to be imputed to each of the first defendant and her daughters.

That knowledge is inconsistent with any entitlement the plaintiff’s sisters might otherwise have had to rely upon a representation of authority by the first defendant (and there was no holding out by the deceased able to be relied upon, independently of the power of attorney) sufficient to ground an ostensible or apparent authority in the first defendant to do what she did in effecting a transfer of “Boronga” out of the name of the deceased.

The plaintiff made no representation to his sisters that their mother was authorised to effect a transfer even if (contrary to my findings) he were to be taken to have acquiesced in her determination to transfer the property to them. Had they thought otherwise, they might reasonably be expected to have engaged him more in the transfer process. As it was, they marginalised him in a manner, and to an extent, that confirms that they did not rely upon anything emanating from him about the nature and scope of their mother’s authority. They relied simply upon the first defendant’s possession of a power of attorney and her determination to favour them.

That determination extended beyond a transfer of “Boronga”. On 24 April 2009 the fifth defendant advised the sixth defendant’s employee that the first defendant then had a handwritten will nominating her daughters (to the exclusion of the plaintiff) as beneficiaries to receive her estate because the plaintiff had already had “Malaya” signed over to him. By the time of the final hearing of the proceedings there had been a subtle shift, but no less determination, in the first defendant’s expression of her testamentary intentions: her then current will nominated her grandchildren as beneficiaries. The plaintiff has no children. His sisters do.

Each of the plaintiff’s sisters knew that the transfer of “Boronga” to them was by way of a gift – nominally for a consideration of $1.00 – in circumstances in which the object of the transfer was to divest the deceased (a vulnerable, mentally incapacitated man) of what was, to him and to the family, a significant asset.

Each of them knew, or might easily have inferred from other known facts, that the principal object of the first defendant in effecting the transfer was not to benefit the deceased, but to advance the first defendant’s own idea of what was “fair” to her daughters. Marginalisation of the plaintiff in the process of effecting any transfer of property, and limiting his involvement to establishment of the Shadrack Partnership (in which a deed prepared on instructions of the first and fifth defendants was presented to him for execution as a fait accompli), in circumstances in which he lived on “Boronga” and held the deceased’s power of attorney jointly and severally with the first defendant, was an implicit acknowledgement of the first defendant’s motive.

The plaintiff’s sisters knew, or must be taken to have known, the facts essential to a determination that, in purporting to effect a transfer of “Boronga” as the deceased’s attorney, the first defendant was acting for a purpose beyond what was proper upon an exercise of her power as attorney. They knew, or must be taken to have known, the facts essential to knowledge that the first defendant was acting in breach of her fiduciary obligations to the deceased.

On any view of the “knowledge” required to attract the operation of the first limb of Barnes v Addy (as summarised in Simmons v NSW Trustee and Guardian [2014] NSWCA 405 at [90]), the plaintiff’s sisters acquired title to “Boronga” (on registration of the memorandum of transfer dated 1 July 2009 on 2 December 2009) with notice of the first defendant’s breach of the fiduciary obligations she owed to the deceased. On a view of the facts most generous to them, they had knowledge of facts (including the incapacity of their father, their mother’s deployment of her appointment as an enduring attorney, the improvident nature of the transaction and the dominant purpose of their mother in effecting a “fair” intergenerational transfer of property) which, to an honest and reasonable person, would have indicated the existence of fiduciary obligations owed by the first defendant to the deceased, and of a misapplication of the deceased’s property upon a purported exercise by the first defendant of her powers as his enduring attorney. They must be taken to have received title to “Boronga” on notice of the first defendant’s breach of her fiduciary obligations.

Their notice of that breach was not “mere notice” of a type consistent with their acquisition of indefeasible title to “Boronga” by virtue of the Real Property Act 1900, section 42. Theirs was not a passive form of notice, but notice borne of active involvement in the process of divesting the deceased of his land.

The plaintiff does not contend, and I do not find, that that process was attended by an element of dishonesty or moral turpitude. There is no reliance on the second limb of Barnes v Addy or the fraud exception to section 42. The process of transferring “Boronga” out of the deceased’s name was, nevertheless, a process grounded upon an unconscientious disregard by the plaintiff’s sisters of a want of authority in the first defendant and an equal disregard of her obligation to serve the deceased’s interests in her exercise of power as an attorney. The first defendant and her daughters did what they did upon an unwarranted assumption that it was open to them, in the name of “the family”, to appropriate the first defendant’s assets as they saw fit.

The plaintiff’s sisters actively participated in the first defendant’s breach of her fiduciary obligations and, by securing registration of a memorandum of transfer that they had the means of knowing (if they did not know) was void as a fraud on power, they sought, as they still seek, to retain the benefit of what the first defendant, with their support, did to deprive the deceased of a significant asset, on terms patently improvident, knowing that (by reason of mental incapacity) the deceased was vulnerable to exploitation.

This is unconscientious conduct on the part of the plaintiff’s sisters sufficient to warrant the intervention of equity. It is reminiscent of the observations made by Mahoney JA in the penultimate paragraph of his judgment in Stivactas v Michaletos (No. 2) [1994] ANZ Conv R 252; 1993) Aust Contract R 90-031; (1993) NSW Conv R 55-683; BC 9301874. The plaintiff’s sisters’ liability to have the transfer of “Boronga” to them set aside is ultimately grounded, not in notice of a default on the part of the first defendant, but on fault of their own, their personal engagement in conduct against good conscience.

Subject to: (a) their discretionary defences of acquiescence; and (b) their claims for family provision relief, the plaintiff’s sisters are liable to orders in the nature of a declaration that they hold “Boronga” on trust for the estate of the deceased, coupled with consequential relief.

There is no need to pursue questions about whether they might have a liability, at law (via the tort of negligence) or in equity (by way of an order for an account of profits or an award of compensation), to pay “damages” to, or at the suit of, the plaintiff. The primary remedy he seeks is transfer of “Boronga” to the estate of the deceased. He cannot claim more, for use of the land since 1 July 2009, without the operation of the Shadrack Partnership coming into view. I have already determined that no relief should be granted in respect of the partnership beyond that, agreed between the parties, directed towards its winding up, and the taking of partnership accounts, based upon accounts voluntarily adopted by the partners in the ordinary course of conducting the partnership business.

The plaintiff’s sisters’ defence of “acquiescence” is expressed in terms to the following effect (in paragraph 14 of their amended defence) :

This defence cannot succeed without attribution to the plaintiff, ex post facto, of a greater interest in “Boronga”, and a greater knowledge about his entitlement to “Boronga”, than he had before the commencement of these proceedings or thereabouts.

Any entitlement the plaintiff has to “Boronga” remains, to the present day, an entitlement to due administration of the estate of the deceased consequent upon the death of the deceased: Livingston v Commissioner of Stamp Duties (Queensland) (1960) 107 CLR 411 (High Court), affirmed at (1964) 112 CLR 12 (Privy Council).

Not until after the death of the deceased did the plaintiff learn of the terms of the deceased’s will. The defective form of the will, and its need for rectification, added a further layer of complication justifying a period of deliberation on the part of the plaintiff.

The terms of the partnership deed dated 1 July 2009 for the Shadrack Partnership said nothing about who owned, or the terms of ownership of, “Boronga”.

The plaintiff was told by the first defendant in 2009 that she proposed unilaterally to transfer “Boronga” to his sisters, but she did not disclose to him at that time the terms of the deceased’s will.

The Reilly family’s history of conducting farming operations on “Malaya” and “Boronga” via a partnership between persons not coincident with the identity of registered proprietors of the land went back to the year 2000, when “Malaya” was transferred to the plaintiff. The conduct of farming operations, after 1 July 2009, by the Shadrack Partnership was not, in this context, inconsistent with a reservation of rights relating to ownership of “Boronga” consequent upon the will, and death, of the deceased.

There is no factual foundation for a finding that the plaintiff acquiesced in, or affirmed, the transfer of “Boronga” to his sisters. There was no calculated (that is, deliberate and informed) inaction by the plaintiff or standing by, which encouraged the defendants reasonably to believe that he accepted, or would not dispute, his sisters’ ownership of “Boronga” irrespective of any expression of testamentary intention in their father’s will: Byrnes v Kendle (2011) 243 CLR 253 at 279[79]-280[80]. There is nothing inequitable in the estate of the deceased, or in the plaintiff through the estate, asserting a claim to beneficial ownership of “Boronga”.

Conclusion. Subject to consideration of their claims for family provision relief, the plaintiff’s sisters hold “Boronga” on trust for the estate of the deceased.

The plaintiff’s sisters’ several claims for family provision relief, under chapter 3 of the Succession Act 2006 NSW, are predicated upon a determination by the Court that “Boronga” forms part of the estate of the deceased. Accordingly, any family provision relief granted to them must be understood as conditional upon their return of legal title to “Boronga” to the estate.

Although each claim must be the subject of separate evaluation, in the context of sections 59(1)(c) and 59(2) of the Succession Act 2006, some aspects of the claims can be dealt with in common.

Each of the claimants, being a child of the deceased, is an “eligible person”, entitled to make an application for family provision relief by virtue of section 57(1)(c), read with section 59(1)(a).

Each claimant requires an order under section 58(2) that the time within which an application for a family provision order may be made be extended. The cross summons, by which each claim for family provision relief was made, was filed on 9 December 2014, a fortnight or so shy of two years after the death of the deceased, almost a year outside the time limited by section 58 for the making of an application.

There is no opposition to an extension of that time, and I am satisfied that sufficient cause has been shown for an extension. The defective form of the deceased’s will, and the need for resolution of the plaintiff’s claim for an order that it be rectified, provide a core foundation for the claimants’ delay.

The absence of any application by the first defendant for family provision relief carries the consequence, for which section 61 of the Succession Act provides, that, in determining the claims for family provision relief before it, the Court may disregard the interests of the first defendant.

The plaintiff has made no application for family provision relief but, as he is a beneficiary of the deceased under the will of the deceased as rectified, section 61 does not authorise a disregard of his interests.

Upon a consideration of the evaluative questions for which sections 59(1)(c) and 59(2) of the Succession Act provide, and upon a review of the matters prescribed by section 60(2) for the Court’s consideration, I accept that each of the claimants, no less than their brother, had a loving and dutiful relationship with the deceased. I accept, also, that each child made a contribution to family life commensurate with age and experience. The Reilly family followed a pattern, not uncommonly found in rural Australia, in which the men did more of the outside work and the women did more of the inside work necessary to sustain life on a farm. As children, the deceased’s children dutifully performed what was required of them.

The life of the Reilly family during the formative years of the deceased’s children was centred squarely upon the family farm. The deceased was quintessentially a farmer. The family rarely travelled elsewhere for holidays. Everybody enjoyed rural life.

Apart from the bitterness generated by these proceedings and events leading up to them, there appear to have been close and loving relationships between all family members. I accept that, after the deceased’s descent into dementia, he made isolated statements disparaging of the plaintiff. However, I do not regard any such statements as indicative of a falling-out between father and son. There was a period of adjustment required as the deceased accommodated his declining health, and his inability to do what he once did around the farm. The plaintiff had operational responsibilities without unqualified authority within the family to discharge them. Tension between father and son in that environment was not exceptional.

In adulthood, as manager of farming operations on “Malaya” and “Boronga”, the plaintiff has had a closer association with, and (it may be accepted) he has made a larger contribution to the deceased’s estate, than his sisters (with the possible exception of the fifth defendant, who kept accounts), at least since August 2008 or thereabouts when the deceased was injured in a farm accident and the dementia, first noticed in about 2007, increasingly took hold of him. I take into account here the plaintiff’s claims to have performed work in management of “Boronga” (and “Malaya”) beyond any entitlements recognised as paid, or due, to him in the Reilly family’s formal financial statements relating to the conduct of their collective business operations.

That does not mean that the girls are not properly to be considered objects of the deceased’s bounty. Nor is the transfer of “Malaya” to the plaintiff by the first defendant in 2000 (effectively as a gift) to be disregarded in the process of evaluation attending his sisters’ claims for family provision relief.

Chapter 3 of the Succession Act must be applied by reference to its text. It is not a vehicle for a blanket determination that the deceased’s children must (or must not) be treated “equally” or for implementation of the first defendant’s subjective notion of “fairness”. That said, the views of the first defendant, as the family matriarch, are entitled to deference.

The first defendant and her daughters have a profound conviction that, as the deceased’s principal beneficiary under the rectified will, the plaintiff has received, or stands to receive, a share of the family wealth disproportionate to his contribution, and theirs. His disagreement with them about this is equally grounded in a strong conviction that he is entitled to “Boronga”.

In approaching the evaluative questions for which sections 59(1)(c) and 59(2) of the Succession Act provide the Court is required to look through a prism focused on the present time, having regard to considerations of “justice and wisdom” (The Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 20) informed by prevailing community standards of what is right and appropriate (Andrew v Andrew (2012) 81 NSWLR 656 at 661[16] and 664-665[36]).

So far as is material, sections 59(1)(c) and 59(2) are in the following terms:

What is “adequate” and “proper” in a particular case depends on the circumstances of the case; the concepts they embody are relative to those circumstances, not governed by an abstract absolute: The Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19. An application of such concepts requires an exercise of evaluative judgment, not able to be reduced to an arithmetical formula premised, for example, upon an assumption that all claimants on the bounty of a deceased person are to be treated “equally”.

Counsel for the claimants (without a dissenting voice) invited the Court to take into account, as principles material to a family provision claim by an adult child, observations made by Hallen J in Smith v Smith [2016] is NSWSC 1077 at [169]. So far as material, his Honour’s observations were as follows:

In their joint submissions, the claimants acknowledged that their several claims may require differential responses by the Court. Having suggested a range of monetary sums as appropriate by way of a grant of legacies, in addition to provision made for the claimants as residuary beneficiaries of the deceased in his will as rectified, they invited the Court to order that “Boronga” be sold (reserving a right to the plaintiff to buy it) with the net proceeds of sale to be divided between the children of the deceased in the following proportions: the plaintiff 30%; the second defendant 10 %; the third defendant 30 %; the fourth defendant 20 %; and the fifth defendant 10 %.

The plaintiff, for his part, submitted that, although the third defendant may have financial need to justify additional provision out of the estate of the deceased, the respective family provision claims of the second, fourth and fifth defendants should be dismissed.

There is common ground between the competing claimants at least to the extent of an acknowledgement that the third defendant may have a special need in light of a breakdown in her marriage and her responsibility for the care of two teenage children.

An assessment of the adequacy of provision made for the claimants, and of what is a proper standard of maintenance, education or advancement in life for them, respectively depends upon the size and nature of the deceased’s estate.

The deceased died with assets, other than a beneficial entitlement to “Boronga”, apparently in the form of financial assets but not clearly identified or distinguished from other “family” assets.

In his statement of claim, the plaintiff alleges (in particulars to paragraph 27) that, in addition to a (contested) right to recover “Boronga” or its true market value, “the deceased’s estate was comprised of, inter alia, bank credits totalling approximately $190,000”. The pleadings of the first defendant and her daughters, and more especially the manner of their defence of the proceedings, suggests that the parties are ad idem about this.

By a letter dated 11 December 2013 the sixth defendant, acting on instructions of the first defendant, sent to the plaintiff his trust account cheque for $38,550.80, said to represent (it was said, without reference to any will) the plaintiff’s “one-fifth share” in the deceased’s estate. From that letter, an inference can be drawn that the deceased died with a distributable estate of the order of $192,754 or thereabouts.

The plaintiff’s sisters appear to have embraced that figure, submitting that the deceased’s estate had a value of less than $200,000, which (under the rectified will of the deceased) was to be divided equally between them as residuary beneficiaries. On this reckoning, the provision made for them under the will of the deceased (as rectified) was of the order of $50,000 each.

The plaintiff declined to accept the cheque (incidentally, dated 12 December 2013) proferred to him by the first defendant under cover of the sixth defendant’s letter dated 11 December 2013. Instead, he took legal advice.

In substance, the focus for attention on the family provision claims of the plaintiff’s sisters is “Boronga”.

There may need to be an accounting exercise undertaken to clarify the assets and liabilities of the deceased’s estate other than “Boronga”. The parties have, nevertheless, conducted the proceedings on the basis that the plaintiff’s sisters’ claims for family provision relief can, and should, be determined primarily by reference to “Boronga”.

The absence of an up-to-date valuation of “Boronga” is a ground upon which the plaintiff’s sisters invite the Court to make percentage orders for provision based upon an order for sale.

The evidence before the Court is that, as at 4 March 2015, the property had a fair market value of $1,275,000, assuming vacant possession. The fact is, however, that the plaintiff has long resided on “Boronga” and vacant possession is not to be had without requiring his departure from the property.

The plaintiff contends that the current market value of “Boronga” is in the vicinity of $1 million - $1.2 million. There is no need to adopt that range specifically beyond an observation that the plaintiff cannot complain if his sisters’ claims for relief are dealt with upon the footing that the property is worth not less than $1 million.

In any event, I am not persuaded that the quantum of any family provision relief to be granted to the plaintiff’s sisters is of such an order, jointly or severally, to necessitate a judicial sale of “Boronga”; or to warrant a grant of relief expressed in terms of percentage shares of proceeds of a forced sale, assuming that to be a form of relief which is otherwise appropriate.

I also take into account that, in or about April 2014, when the plaintiff complained to her of having been “shafted” and having health problems, the first defendant (implicitly, from her own resources) caused $100,000 to be transferred to his account.

In the assessment of the respective claims for family provision relief, I take into account that each of the children of the deceased is entitled to participate in the assets of the Shadrack Partnership upon its winding up. The extent of any such entitlement is not presently able to be determined with precision without up-to-date accounts. Nevertheless, a broad picture, sufficient for disposal of the family provision claims, is available based upon the partnership balance sheet as at 30 June 2015 (Exhibit 2D2).

According to the balance sheet as at 30 June 2015:

These figures do not make any allowance for, or explain, ownership of farm plant and equipment. Nor do they allow for variations in livestock (cattle) numbers after 30 June 2015. And they say nothing about the profitability of the partnership after 30 June 2015. They do, however, provide a general picture of the scale of the partnership business and the value of the partners’ respective interests.

I take into account, but without attributing any significant weight to it, the determination of the first defendant to leave her estate, in due course, to the children of her daughters, to the exclusion of the plaintiff. On 1 May 2015 the first defendant deposed to her personal ownership of financial assets and shares worth about $950,000 in total. That is consistent with observations made by her, or the fifth defendant, to the sixth defendant’s employee in 2009. However, there is no up-to-date statement of the first defendant’s financial position in evidence.

As a practical matter, the question for the Court is whether, as a charge on “Boronga”, the plaintiff’s sisters should be granted legacies to supplement their participation in the deceased’s estate as residuary beneficiaries.

In describing the particular financial circumstances of members of the Reilly family, I omit express reference to their interests in the Shadrack Partnership and any income derived from the partnership. For the most part, although the partners paid tax on income attributed to them, partnership income accrued for the ongoing benefit of the farming operations. The partners’ respective interests in the partnership – its assets and income generated – must not be disregarded; but precise quantification of the value of those interests must await an agreed process of accounting to follow the making of an order for the partnership to be wound-up.

The second defendant, born in 1962, is the eldest of the deceased’s children.

She lived at home until the completion of her secondary education, after she had completed Year 12, in 1979.

Between 1980-1983 or thereabouts she undertook secretarial studies at Canberra College of Advanced Education, training which equipped her for a career in administration.

Since that time, she has lived in Sydney (1983-1986), Adelaide (1986-1990), Brisbane (1990-1998) and the Narrabri (since 1998).

She never lost touch with her parents during her years away from “Boronga”. Her move to Narrabri facilitated regular contact with them.

When she moved to Adelaide, she was accompanied by John (“Jock”), now her husband. They married after they moved to Brisbane.

They have two sons, respectively born in 1993 and 1995. Both boys have attained their majority and are living away from home, in Sydney. The older son is pursuing a career in engineering. The younger son is in pursuit of a career as a mechanic. Both are partially dependent on their parents.

The second defendant is in generally good health. Nevertheless, she and her husband (about two years her senior) hope to retire in the next year or so. Their plan is to move to a property they jointly own, and use as a holiday house, at Laurieton. They also own a home unit at Laurieton, subject to a mortgage.

Their principal assets, apart from their Laurieton properties, comprise superannuation entitlements, two cars of modest value, a small amount of shares and a modest bank account credit.

Their net assets (after allowing for a loan of about $128,500 owed to the bank on the investment property) have a value of about $1.7 million.

As they approach retirement, the second defendant has a gross taxable income of approximately $64,000 per annum and her husband has a gross income of approximately $78,000.

Whether or not their superannuation entitlements will sustain them in retirement is a matter of concern, but not a substantial impediment to their retirement plans.

The second defendant’s self-description is that she and her husband live a simple but comfortable life focusing on their work, spending time with their children and family holidays in Laurieton. If allowed further provision out of the estate of the deceased, they would look, possibly, to an overseas holiday, renovation of the Laurieton house and purchase of new cars.

The third defendant, born in 1964, is the second eldest of the deceased’s children.

She lived at home until the completion of her secondary education at the end of year 10.

Since that time she has lived in a wide variety of places (in succession, Parkes, Melbourne, Canberra, Condobolin, Parkes again, Sydney and Orange) before settling in Brisbane with her husband, Shane.

She married Shane in 1998. They separated in 2015.

There are two children of the marriage. The older child (a son) was born in 1999, the younger child (a daughter) in 2001. Both remain at school and are dependent upon their mother.

Since leaving school herself the third defendant has worked in a variety of jobs, commencing with employment in a pharmacy at Parkes for four years immediately after she left school. She trained as a hairdresser in Melbourne and as a nurse in Sydney. With the birth of her sons she turned her focus to her family, a consequence of which is that her registration as a nurse lapsed, leaving her (following collapse of her marriage) to employment as a nursing assistant, with precarious employment prospects.

As a nursing assistant, her annual wages (assuming ongoing employment) are of the order of $55,000.

Consequent upon a property settlement with her husband (subject to court approval at the time of the hearing of the current proceedings), her assets comprise a house in suburban Brisbane (valued at about $660,000), superannuation (approximately $84,000), a car (valued at about $8,000), Medibank shares (valued at $16,000 dollars) and savings of approximately $107,000. Her liabilities are modest, but her ability to meet ordinary living expenses for herself and her sons is severely constrained, notwithstanding that her estranged husband has agreed to pay $700 per week in child support and to pay for the childrens’ education expenses and private health cover.

She does not report ill health generally, but she has suffered from a hernia requiring an operation.

The fourth defendant, born in 1965, is the middle child of the deceased’s five children.

She completed her school education in Parkes, following which she followed her mother into the nursing profession. She continues to work as a nurse, providing the primary source of her family’s income.

She married her husband Peter in 1985. They have three adult children: a son, born in 1988; a daughter, born in 1990; and a son, born in 1992. The youngest of the children suffers from a mild developmental disability which requires him to receive ongoing support from his parents.

The fourth defendant has lived all her life in the Parkes-Forbes area, the region in which “Boronga” is located.

She and her husband own (subject to a substantial mortgage, of the order of $620,000) three farming properties, farmed as one, comprising a total of 1280 acres. The farm produces only a small income or, not uncommonly, a loss. Hence it is that the fourth defendant and her husband depend significantly on her income as a nurse. Her annual income from nursing is of the order of $74,000.

The fourth defendant appears to be in good health. Her husband’s health is indifferent; he is aged about 60 years, smokes and suffers from chest pains.

The fourth defendant anticipates that, when her husband is no longer able to manage the family farm, she and he will move into a house (valued at about $480,000) he owns in Forbes. She has superannuation valued at approximately $140,000; her husband has superannuation valued at about $81,000. They have a small amount of shares (valued at about $11,400), modest savings and a car.

Their principal assets are the farm and Peter’s house in Forbes. Their aspiration is to reduce their debts so as to facilitate an intergenerational transfer of their farm to their children, and to enable them to assist each of their children in the meantime.

Their joint assets have a net value of approximately $1.5 million, to which must be added their separate assets. The fourth defendant’s assets have a value of about $140,000. Peter’s have a value of about $610,000.

The fifth defendant, born in 1969, is the youngest of the deceased’s children, ranking in age immediately after the plaintiff.

She lived at home until the completion of her secondary education at the end of Year 12 in 1986.

Between 1987-1989 or thereabouts she attended Charles Sturt University at Wagga Wagga, from which she graduated with a Bachelor of Business degree.

She moved to Canberra in January 1990 and, except for a sojourn overseas in 1995, she has lived there ever since.

She married her husband Ian (a Commonwealth public servant) in 2001. They have three teenage children: a son born in 2002, a daughter born in 2003; and a son born in 2006. All three are presently at high school.

With the benefit of her university degree, the fifth defendant earns a substantial income (approximately $175,000 per annum). Ian’s income is approximately $68,000 per annum.

They own their own home in Canberra (valued at about $1.2 million) and they have a farming property at Murrumbateman (valued at about $710,000). Their residence is subject to a mortgage debt of about $390,000.

In her own right, the fifth defendant owns assets (principally shares) worth about $950,000. She and her husband have joint net assets (principally their home and farm) with an estimated value of about $1.5 million. In his own right, Ian has assets (principally superannuation) worth about $435,000.

In about 2004 the plaintiff, the first defendant and the fifth defendant together purchased (in the names of the plaintiff and the fifth defendant only) a house in Forbes which, initially, served as an investment but which, since 2009, has served as the first defendant’s retirement residence. A fair inference from the evidence is that, although the first defendant’s name does not appear on the title to the property, she has a right of residence for life, if not a life estate, in equity.

The fifth defendant’s aspirations include hopes for the education of her children, home renovations and farm improvements. Her family must cope, also, with the ordinary vicissitudes of health in teenage children and middle-aged parents.

The plaintiff, born in 1967, is the fourth of the deceased’s five children.

After he completed high school in 1984 he spent about 16 months working full time as a farm hand on “Boronga”, after which he spent about eight years settling upon career qualifications, living for a time in Wagga Wagga, Canberra, Sydney and Orange. For a few months he studied radiography at Charles Sturt University in Wagga, before turning to the trade of a plumber. He commenced his plumbing apprenticeship in Canberra and finished it in Sydney. He completed academic work to become a Master Plumber in Orange. Between the time when he completed his apprenticeship in Sydney and when he pursued his master plumber qualifications in Orange he lived and worked at “Boronga”.

There is a perception within the family circle of the first defendant and her daughters that the plaintiff has been restlesstly torn between pursuing the trade of a plumber and devoting himself to farming. That perception is, in my assessment, a reflection of his having been given responsibilities for farmwork on “Malaya” and “Boronga” without having authority to run his own race. He has undoubtedly benefited from the transfer of “Malaya” to him in 2000, and in other ways, but the farming business has never, in a practical sense, been entirely his to run as he pleases.

Between 2000-2009 the farming business of the family was conducted by a partnership of the deceased and the first defendant. Since 2009 it has been conducted by a partnership between the plaintiff and his sisters.

In the earlier period, the plaintiff was subject specifically to the directions of his parents. In the later period he has been subject to the strong influence of his mother, the demands of his sisters to sell up “Boronga” or to buy them out, and the uncertainty of the current proceedings. He has divided his time between plumbing (first, in self employment and, subsequently, as a full time maintenance plumber at the Parkes District Hospital) and farming. He has attended to “on the property” chores relating to operation of the farm since 2009, and the fifth defendant has attended to accounting work. He says, and I accept, that he has never fully understood the financial aspects of the Shadrack Partnership, believing that the partnership was in some way conducted as a proxy for the deceased and the first defendant.

If these proceedings have achieved nothing else, they have confirmed that the farming operations on “Malaya” and “Boronga” since 1 July 2009 have been conducted by the plaintiff and his sisters, on their own account, as partners of the Shadrack Partnership. The first defendant has acquiesced in the conduct of the proceedings on that basis. So too have the plaintiff and his sisters, the partners in the partnership and the only persons beneficially entitled to the estate of the deceased.

The plaintiff has a concern, probably well founded, that, if farming operations on “Malaya” and “Boronga” are to be commercially viable, a combined area of not less than the two properties is a necessity. He apprehends that, if deprived of ownership of “Boronga”, he could not long retain “Malaya” as a viable operation, despite the fact that he has acquired a 50% interest in an adjoining 100 acre property.

In his evidence the plaintiff speaks of his partner (or spouse), Lee, without elaborating their domestic arrangements. He and Lee have no children.

The plaintiff has a long history of kidney disease which, he apprehends, will eventually require him to have a kidney transplant.

He has acquired a substantial amount of property, including investment properties, a share portfolio, cash investments and superannuation entitlements.

The precise value of his estate is not revealed by the evidence, but he is well able to cope with his indebtedness of about $270,000 to the bank.

He acknowledges receipt of a bank transfer of $100,000 from his mother in or about April 2010 but says that he did not solicit that money and he has kept it separate, invested without drawing upon it.

The proceedings having been conducted by the defendants on the basis that that money was a gift made to him by the first defendant from her own resources, he would be justified in proceeding hereafter on the basis that it belongs to him unqualified by any claim by his mother or sisters.

No “conduct disentitling”. As a preliminary to consideration of the operation of sections 59(1)(c) and 59(2) of the Succession Act, I observe that the plaintiff has not contended that a bar to success of his sisters’ respective family provision claims is an element of “conduct disentitling”, on the part of his sisters, arising from their participation in their mother’s breach of fiduciary obligations owed to the deceased.

For convenience only do I use the expression “conduct disentitling”, an echo of the long-since repealed provisions of section 3(2) of the Testator’s Family Maintenance and Guardianship of Infants Act 1916 NSW, which authorised the Court to refuse to grant an order for family provision relief “in favour of any person whose character or conduct is such as to disentitle him [sic] to the benefit of such an order”.

Sections 59(1)(c) and 59(2) of the Succession Act, read in the context of section 60 of the Act, require all the circumstances of a case to be taken into account.

The matters which section 60(2) specifically authorise the Court to take into account include (in section 60(2)(m)) “the character and conduct of the applicant [for family provision relief] before and after the death of the deceased…” and (in section 60(2)(n)) “the conduct of any other person before and after the date of the death of the deceased…”.

Those matters are found, in section 60(2), in a long list of matters bearing upon the nature, quality and duration of personal relationships; the nature and extent of obligations or responsibilities; the nature and extent of the deceased’s estate and any notional estate; available financial resources, and needs, of those who have a claim on the bounty of the deceased; the personal circumstances of such persons; any contribution made by an applicant for relief to the estate or welfare of the deceased, or to his or her family; and any provision made for the applicant by the deceased, amongst other broadly stated matters. There is, under this legislation, no narrowly focussed concept of “conduct disentitling” as there was under the 1916 Act.

Although the plaintiff has characterised the conduct of his mother, and his sisters, in transferring “Boronga” out of the name of the deceased, as “unconscionable” or “unconscientious” in the sense understood by equity lawyers, he has deliberately refrained from characterising their conduct as dishonest or the like.

I do likewise. I also take into account the fact that the plaintiff’s sisters, in common with their mother, acted in reliance upon legal services provided to them by the sixth defendant’s firm. I accept that those services were provided without ill-intent, although (as I find) negligently.

In these circumstances, I proceed on the basis that nothing in the conduct of the claimants for family provision relief, in their participation in an inter vivos transfer of “Boronga” to them, precludes relief being granted to them under Chapter 3 of the Succession Act.

Succession Act, section 59(1)(c). I am satisfied that each of the claimants for family provision relief, in varying degrees, is a person for whom (within the meaning of section 59(1)(c) of the Succession Act) adequate provision has not been made in the will of the deceased (as rectified) for her proper maintenance, education or advancement in life.

In the respective cases of the second, fourth and (especially) the fifth defendants, the extent of the inadequacy of provision made for them is a function of the obligation of the deceased to provide, out of an estate sufficiently ample for the purpose, an allowance for contingencies, additional security against adversity as they look towards retirement and managing their employment and families in the meantime. To paraphrase Blore v Lang (1960) 104 CLR 124 at 135 (commonly associated with Gorton v Parks (1989) 17 NSWLR 1 at 9), their “need is not for the bread and butter of life but for a little of the cheese or jam that a wise and just parent would appreciate should be provided if circumstances permit”.

As has been recognised on both sides of the bar table, the third defendant’s particular circumstances demonstrate a need greater than that of her sisters. She is not wholly without assets, means of earning an income or financial assistance from her estranged husband, but her domestic circumstances are less stable, her property is less valuable, her employment is more precarious and her prospects are more limited, all the while with teenage children to nurture.

The proceedings have been conducted upon an assumption that, the deceased’s will having been rectified, the claimants, as the deceased’s residuary beneficiaries, were entitled to receive $50,000 or thereabouts from his estate. If their respective interests in the Shadrack Partnership are to be taken into account as emanating, in part at least, from the deceased, their present entitlements increase by $100,000 or thereabouts. Those entitlements do not represent a charge on “Boronga”, a property with a value of not less than $1 million or thereabouts.

The deceased endeavoured to ensure that his children received an education and vocational training commensurate with each child’s personal circumstances. Afflicted by a dementia in the final years of his life, he was denied a final opportunity to marshall his resources for the benefit of his family. By contrast, the Court is required, by section 59(1)(c), to consider questions about adequacy of provision “at the time when the Court is considering” an application for family provision relief.

Succession Act, section 59(2). The power of the Court to “make such order for provision out of the estate of the deceased… as the Court thinks ought to be made for the maintenance, education or advancement in life” of each claimant for family provision relief requires that the Court have regard to the facts known to the Court at the time an order is made.

In my opinion, each of the claimants for family provision relief should receive, in addition to the provision made for them in the will of the deceased (as rectified), a legacy charged upon “Boronga”.

In the case of each of the second and fourth defendants that legacy should be fixed at $80,000. I am disinclined to adopt differential legacies because, although the claimants’ respective circumstances differ, they are not so materially different as to warrant different treatment.

The fifth defendant, on the other hand, is so much wealthier, and in such comparatively secure employment, that, in my opinion, the legacy allowed to her should be fixed at $60,000. No greater family provision relief should be granted than is necessary to address the inadequacy of provision made for the claimant. A legacy of $60,000 serves that purpose.

The third defendant differs from her sisters in both the scale and nature of her need. She should be allowed a legacy in the sum of $275,000.

These legacies, in total, provide for a sum of $495,000 to be charged against “Boronga”.

That sum represents a charge on “Boronga” which is substantial but not more than half the value attributed to the property.

I remain mindful of a need, implicit in the terms of the will of the deceased as rectified, to allow the plaintiff an opportunity to continue farming operations on “Malaya” and “Boronga” should he wish, and otherwise be able, to do so.

Given the state of the title to “Boronga” and an evident need in the plaintiff to arrange finance to fund legacies in favour of his sisters, the legacies to be ordered in favour of the claimants should be payable (and bear interest at the rate for which section 84A of the Probate and Administration Act 1898 NSW provides) only after the expiry of a reasonable time (which I presently estimate to be four months) following registration of title to “Boronga” in the plaintiff as administrator of the estate of the deceased.

Such, if any, consequential relief should be granted to the parties to ensure that the estate of the deceased is administered in a manner that moves, as expeditiously as possible, towards vesting “Boronga” in the plaintiff and securing the entitlements of his sisters in the meantime.

In his statement of claim the plaintiff pleads against the sixth defendant a personal claim to damages on a cause of action in tort. He contends that he has a cause of action in negligence that fits within a paradigm of cases defined by Hill v Van Erp (1997) 188 CLR 159, Perre Apand Pty Limited (1999) 198 CLR 180 and Badenach v Calvert (2016) 257 CLR 440. To those cases might be added a reference to Hawkins v Clayton (1988) 164 CLR 539.

The plaintiff’s claim is made in his personal capacity. It is not a claim asserted on behalf of the estate of the deceased or grounded upon the plaintiff’s status as an attorney of the deceased. It is based upon his claim to have been, throughout the sixth defendant’s performance of his retainer (particularly between about 1 July 2009, when the contract for sale and the memorandum of transfer relating to “Boronga” were executed, and 2 December 2009, when the memorandum of transfer was registered), a prospectively disappointed beneficiary of the deceased. It is, in that sense, a claim made through the deceased. The plaintiff claims that he personally was owed a duty of care incidental to, and consistent with, a duty of care owed by the sixth defendant to the deceased.

A difference between the plaintiff’s claim and each of Hawkins v Clayton, Hill v Van Erp and Badenach v Calvert (the solicitor negligence cases upon which the plaintiff relies) is that, unlike the defendant solicitor in those cases, the sixth defendant did not draw the will upon which the plaintiff relies for his status as a prospectively disappointed beneficiary. On the other hand, the sixth defendant was aware of the terms of the deceased’s will and he acted upon an inter vivos transaction which, by disposal of the deceased’s principal asset, profoundly affected the operation of the will.

If I am correct in my determination that the plaintiff’s sisters hold “Boronga” on trust for the estate of the deceased, the plaintiff’s claim against the sixth defendant largely, if not completely, falls away. An award of nominal damages may be in order. Proof of damage is an essential ingredient in a cause of action in negligence; damage is the gist of the action: Williams v Milotin (1957) 97 CLR 465 at 474; Badenach v Calvert (2016) 257 CLR 440 at 458[59], citing Hill v Van Erp (1997) 188 CLR 159 at 167-168 and 197.

In his statement of claim (paragraph 67) the plaintiff particularises his damage as the loss of an “opportunity to receive from the deceased the bequest of the land known as ‘Boronga’”. If (as I have held) the deceased’s will must be rectified and “Boronga” is held on trust for the deceased’s estate, the plaintiff will have suffered no loss as a result of a breach by the sixth defendant of any duty of care owed to him, save possibly an unpleaded loss associated with the costs and inconvenience associated with litigation with his mother and sisters.

In presentation of their respective cases, the parties gave little attention to identification of the time at which any cause of action to which the plaintiff was entitled accrued or to identification of the date at which any entitlement to damages should be assessed. The parties’ principal focus was on whether the sixth defendant owed a duty of care to the plaintiff. An assumption appears to have been made that any cause of action accrued on 2 December 2009, upon registration of the plaintiff’s sisters’ title to “Boronga”. Even if (as I find) it accrued upon the death of the deceased on 22 December 2012, a question could arise as to whether any entitlement to damages should be assessed at the time the cause of action accrued or at the time of trial and, if the former, whether (and, if so, to what extent) an assessment of damages could and should take into account the Court’s subsequent findings about rectification and beneficial ownership of “Boronga”.

The general rule that damages for tort are to be assessed as at the time a cause of action accrued is not universal in its operation; it can be accommodated in the interests of justice (Johnson v Perez (1988) 166 CLR 351 at 355-356, 367, 371 and 380), bearing in mind the compensatory purpose of an award of damages.

An award of equitable compensation (such as has been sought against the first defendant) differs from an award of common law damages because generally assessed at the time of trial: Re Dawson (deceased) [1966] 2 NSWR 211; 84 WN (Pt 1) (NSW) 399. Cf, ASA Constructions Pty Limited v Iwanov [1975] 1 NSWLR 512; Madden v Keveresky [1983] 1 NSWLR 305.

An award of pre-judgment interest (under section 100 of the Civil Procedure Act 2005 NSW) on damages assessed at “the date of breach” of a duty might, but will not necessarily, bridge any gap between that assessment and an assessment as at the time of trial.

Too late in the course of the trial to be allowed, the plaintiff applied to amend his statement of claim to include a claim against the sixth defendant based upon the second limb of Barnes v Addy. He must be held to the cause of action in negligence upon which he opened his case.

Against the possibility of an appeal challenging my primary findings as to rectification of the deceased’s will and beneficial ownership of “Boronga”, I am bound to deal with the plaintiff’s claim for damages against the sixth defendant.

In his statement of claim the plaintiff pleads against the sixth defendant, inter alia, allegations to the following effect:

The plaintiff‘s particularisation of his “loss and damage” focused, principally, on the loss of an opportunity to receive “Boronga” as a testamentary gift. That is the plaintiff’s prime case.

However, he also particularised as “loss and damage” an alleged loss of an opportunity to receive the profits earned from farming and grazing activities on “Boronga” from the time of the deceased’s death. That claim does not sit well with the plaintiff’s entry into, and active participation in, the Shadrack Partnership. It can be disregarded.

The only relief claimed in the statement of claim against the sixth defendant comprises claims for damages, interest and costs.

It is common ground between the plaintiff and the sixth defendant that there was no contractual relationship between them either generally or, more particularly, in relation to the transfer of “Boronga”. It is not suggested that, by his preparation of the partnership deed for the Shadrack Partnership or by his submission of that deed (through the first defendant) for execution, the sixth defendant had a retainer from the plaintiff.

The sixth defendant contends, in essence, that: (a) he was retained by the first defendant alone, albeit that he was retained by her in respect of the transfer of “Boronga” to her daughters, purportedly as attorney for the deceased; (b) he did not act for or owe any duty of care to the plaintiff; (c) the first defendant was the holder of a valid, enduring power of attorney granted by the deceased and she was duly authorised, in accordance with the terms of her instrument of appointment, to instruct him in the transfer of “Boronga” to her daughters; (d) to the extent that he may have been required to take into account the interests of the deceased, he was entitled to do so via the first defendant as attorney for the deceased; and (e) if the first defendant could only act as an attorney in the interests and for the benefit of the deceased, the transfer of “Boronga” to the deceased’s daughters was of benefit to the deceased in potentially relieving him of a liability for nursing home fees because of a means test governing the availability of social security.

In answer to the whole of the statement of claim the sixth defendant also contends that, if any acts or omissions on his part caused loss or damage alleged in the statement of claim (which was denied) then, by operation of section 35 of the Civil Liability Act 2002 NSW, his liability to the plaintiff is limited to an amount reflecting that proportion of the damage or loss claimed that the Court considers just, having regard to the extent of the sixth defendant’s responsibility for the plaintiff’s damage or loss.

As suggested by Hawkins v Clayton (1988) 164 CLR 539 at 544, the starting point for analysis of the plaintiff’s claim is identification of the nature and scope of the sixth defendant’s retainer: What work was he retained to perform? The scope of a solicitor’s duties is usually set by the terms of his or her retainer: Badenach v Calvert (2016) 257 CLR 440 at 449[16], 451[19], 457[57]-460[63], 462[78] and 463[81].

On my findings, the sixth defendant acted for the first defendant (in both her personal and representative capacities) and her daughters on the transfer of “Boronga” to the daughters. The fact, as I find, that he acted for the daughters as well as for the first defendant is not essential to any cause of action the plaintiff may have against him. Nevertheless, it adds colour to Mr McCallum’s understanding that he acted for “the Reilly family”, of which, incidentally, both the plaintiff and the deceased were patently members.

At a general level of abstraction, there is no dispute about the nature or scope of the sixth defendant’s retainer. He was retained, in the language of the statement of claim, to facilitate a transfer of “Boronga” by the deceased (acting through the first defendant as his attorney) to the second, third, fourth and fifth defendants. The complexity of debate arises, at a lower level of abstraction, from the facts that: (a) the sixth defendant’s retainer arose from instructions of an attorney who, as I have found, exercised her power as an attorney for a purpose of her own, foreign to the power; (b) the sixth defendant ought reasonably to have known that the attorney was acting beyond power; and (c) the plaintiff, as a prospectively disappointed beneficiary of the principal, sues the sixth defendant through, although not on behalf of, the principal’s deceased estate.

In the language of the sixth defendant’s costs estimate dated 22 April 2009, that transfer was seen by the sixth defendant as an exercise in “estate planning” involving professional services (for example, a consideration of capital gains tax implications) more sophisticated than a mechanical conveyancing transaction. The sixth defendant’s costs estimate described his retainer as: “Attending to all aspects of intergenerational transfer of land”, coupled with preparation of a partnership deed “for farm management incorporating provisions on death” and a second partnership deed “for management of investments including similar provisions”.

Although he was not named as a party in either the contract for sale of land or the memorandum of transfer, both dated 1 July 2009, the plaintiff was plainly in contemplation by the sixth defendant as a member of “the Reilly family”, as is evidenced by the form of the Shadrack Partnership deed (prepared by the sixth defendant) and express references to the plaintiff in both the deceased’s power of attorney and the will of the deceased. The sixth defendant had possession of both the power of attorney and the will, and Mr McCallum read them, at a time contemporaneous with his preparation of the contract, the memorandum of transfer and associated documents.

Critical facts, known to Mr McCallum at the time of preparation of those documents, were the following:

Mr Maccallum was also critically aware, because the first and fifth defendants told him so at an early stage of their interaction, that “the family” (that is, the first defendant and her daughters) were motivated to transfer “Boronga” out of the deceased’s name because, the plaintiff having received “Malaya”, it was only fair that the girls get “Boronga”. Mr Maccallum was, thus, aware of the first defendant’s principal purpose in effecting a transfer: a purpose that could not easily be justified as serving the interests of the deceased or as beneficial to him.

The sixth defendant relies upon, as I have found, the first defendant’s secondary purpose or something akin to it (prospective relief from the cost of nursing home care for the deceased by qualifying him for means tested social security benefits) to say that the “Boronga” transfer was of benefit to the deceased. However, even if that purpose be acknowledged, the fact remains that the first defendant’s dominant purpose was foreign to the purpose for which a power of attorney was conferred upon her. Moreover, depriving the deceased of his principal asset in the hope of qualifying him for social security benefits could not readily, objectively, be characterised as beneficial to him.

In his contemplation, and implementation, of business described by him as “estate planning” and an “intergenerational transfer” of property, Mr Maccallum consciously accepted that it was open to “the family” (without reference to the personal interests of the deceased or any benefit or detriment to him) to divest the deceased of his principal asset. An integral part of this deliberate programme of action was nomination of a nominal purchase price ($1.00) for the defendants’ “sale” of “Boronga”, coupled with an application by the “purchasers” for exemption from liability for the payment of stamp duty.

Mr Maccallum performed the sixth defendant’s retainer in the erroneous belief that the deceased’s will was irrelevant to the work to be performed by him. He relied upon the fact of the deceased being mentally incompetent, believing that the sixth defendant was (he thought) entitled simply to act on the instructions of the first defendant in the performance of work on behalf of “the Reilly family” and that the firm was acting on behalf of “the family”.

Mr Maccallum proceeded on the basis that he could accept, and act upon, the first defendant’s instructions without critical examination. This was far too mechanical a view of the professional function, and the duty, of a solicitor. I adopt the following observations of Barron J in McMullen v Farrell [1993] 1 IR 123 at 142-143 as extracted in Jackson & Powell On Professional Liability (Sweet and Maxwell, London, 6th edition, 2007) at paragraph [11-125]:

Local confirmation of the correctness of these observations can be found in Cockburn v GIO Finance Limited [1996] NSWCA 109, in which a solicitor was held liable for damages for breach of the contractual duty of care he owed to a client who, to the knowledge of the solicitor, was a vulnerable young person under the influence of a dominant father who prevailed upon the son to enter an improvident transaction for the benefit of the father. The Court of Appeal (constituted by Kirby ACJ, Priestley JA and Giles AJA) held (at 25-27) that, armed with knowledge of the client’s vulnerability and the dominance of the father, it was not open to the solicitor simply to act, as he did, on the instructions of the father without making enquiries sufficient for him to understand the particular transaction and to take steps to protect the interests of the vulnerable son.

Mr Maccallum’s understanding of the nature and extent of the first defendant’s authority as an attorney was not dissimilar to that of the solicitor who Hutley AP criticised, in the following terms, in Moloney v The Law Society of NSW (Court of Appeal, 13 September 1984, unreported):

The High Court refused a grant of special leave to appeal from the Court of Appeal’s judgment, although it qualified other, unrelated observations of the Court of Appeal made about the solicitor: Moloney v The Law Society of NSW [1985] HCA 77; (1985) 62 ALR 221.

Mr Maccallum evidently failed to appreciate that: (a) uncritical acceptance of the first defendant’s instructions in dealing with property of the deceased exposed her, and her daughters, as these proceedings demonstrate, to claims for relief made in equity by or on behalf of the deceased or his estate; and (b) that, insofar as the deceased’s “family” proposed to deal, or dealt, with the deceased’s property for purposes of their own, there was a conflict between their interests and the interests of the deceased and any person (such as the plaintiff) claiming through the deceased.

He failed to appreciate, also, that, in acting on instructions of the first defendant as attorney for the deceased he was effectively acting also for the deceased, to whom he owed a duty of care and the professional obligations due to a client. He failed to appreciate that he could not act (as he did) on both sides of the conveyancing transaction relating to transfer of “Boronga” without falling foul of conflicts between duty and interest emanating from the different interests of (a) the deceased and (b) the wife and daughters of the deceased. He failed to appreciate, further, that he might owe professional duties not only to the deceased but also to the plaintiff as a person claiming a prospective interest in “Boronga” as an intended beneficiary of the deceased.

In Hill v Van Erp (1997) 188 CLR 159 the High Court of Australia accepted that a solicitor who fails to use reasonable care in the preparation of a will for a testator may also be in breach of a duty of care owed to an intended beneficiary under the will who suffers foreseeable loss upon the death of the testator if the duty to the beneficiary corresponds with a duty owed by the solicitor to the testator as client of the solicitor.

In Badenach v Calvert (2016) 257 CLR 440 at 450[20] French CJ, Kiefel and Kean JJ clarified the field of operation of Hill v Van Erp by making the following observations:

In the current proceedings, although the sixth defendant’s core instructions emanated from the first defendant as attorney for the deceased Mr Maccallum was bound to consult the interests of the deceased as the firm’s ultimate client. Those interests were coincident with the interests of the plaintiff insofar as an ultra vires exercise of the deceased’s power of attorney by the first defendant was not in the interests of either of them.

Recognition that the sixth defendant owed a duty of care to the plaintiff in connection with performance of a retainer by the first defendant, as attorney for the deceased, imposes on the sixth defendant no exposure to an indeterminate liability. Mr Maccallum had actual knowledge of the deceased’s will, the existence of the plaintiff, the plaintiff’s family and commercial interest in “Boronga” and the determination of the first defendant to bypass the plaintiff by an inter vivos transfer of the property to her daughters. He ought reasonably to have known that the plaintiff was, or was likely to be, the deceased’s intended recipient of “Boronga”, although not named in clause 3 of the will. The subject matter of clause 3 was an identified, single property.

The sixth defendant was bound to exercise reasonable care in performance of his retainer, recognising that he was (relevantly) retained by the first defendant in a representative capacity that required him to protect the interests of the deceased (and, incidentally, the plaintiff as an intended beneficiary of the deceased).

In breach of a duty of care owed to the deceased, and incidentally to the plaintiff, he acted on the transfer of “Boronga” without a critical examination of the first defendant’s authority to effect the transfer, in circumstances in which the first defendant acted for a purpose foreign to her power and the effect of her so doing was to divest the deceased (and ostensibly, indirectly, the plaintiff) of substantial property.

Upon an assumption that the estate of the deceased is not entitled to recover title to “Boronga” from the plaintiff’s sisters, the sixth defendant’s breach of the duty of care he owed to the plaintiff caused damage to the plaintiff as a disappointed beneficiary of the deceased.

In light of the way these proceedings have been conducted, the true measure of that damage is the market value of “Boronga” at or about the time of the death of the deceased, allowing a reasonable time for administration of the deceased’s estate. Although the plaintiff particularises his damage as a “loss of opportunity” (Badenach v Calvert (2016) 257 CLR 440 at 448-449[14] and 454[39]) any uncertainty attaching to the plaintiff’s status as an intended beneficiary of “Boronga” on 2 December 2009 was always negligible (given the deceased’s lack of testamentary capacity and the constraints of any application for a “statutory will” under the Succession Act 2006 NSW) and, more importantly, his entitlement as such a beneficiary crystallised on the death of the deceased.

On the current state of the evidence about the value of “Boronga”, I do not speculate about quantification of the plaintiff’s entitlement to damages against the sixth defendant (assuming he has suffered damage at all) beyond an observation that it is not less than $815,000 (the value of the property in mid-2009) plus interest calculated from the time when the plaintiff might reasonably have acquired an interest in the property consequent upon due administration of the deceased’s estate.

If called upon to make a determination pursuant to section 35 of the Civil Liability Act 2002 NSW as to what share of the plaintiff’s assumed entitlement to damages should be borne by the sixth defendant, I would hold the sixth defendant 100% liable for the damages payable to the plaintiff. The sixth defendant was retained to provide legal services without which the first defendant and her daughters (who were entitled to rely upon his professional expertise) could not have done what they did in exposing the plaintiff to damage.

As it happens, if the plaintiff is able to take title to and possession of “Boronga” (subject to the family provision relief charged on the property in favour of his sisters), he will have suffered no substantial damage consequent upon the sixth defendant’s negligence, and any award of damages made in his favour could be no more than nominal.

A finding, such as I have made, that, by a want of reasonable care, the sixth defendant breached a duty of care owed to the plaintiff (a duty, it must be remembered, derived from, and ancillary to, a duty of care owed by the sixth defendant to the deceased) invites consideration of what the sixth defendant should, or could, have done had he exercised reasonable care.

A response to that invitation requires, as a starting point, an appreciation of the character of an enduring power of attorney when, the donor of the power having become mentally incapacitated, it is fully engaged as an enduring appointment. The concept of an “enduring” appointment of an attorney is a relatively recent one: Smith v Smith [2017] NSWSC 408 at [85]-[104]. But for the intervention of Parliament, the common law would, ordinarily, have held that a power of attorney lapses upon the donor’s loss of mental capacity: Drew v Nunn (1879) 4 QBD 661 at 665-666; Ghosn v Principle Focuss Pty Limited (No. 2) [2008] VSC 574 at [36].

The concept of an “enduring” appointment as an attorney needs to be viewed in the context of the protective regime it serves. Under current law and practice in NSW (similar to that operative in and throughout 2009), the appointment of an enduring attorney as a means of facilitating management of the affairs of a person who lacks the requisite mental capacity to manage his or her own affairs (Gibbons v Wright (1954) 91 CLR 423 at 434-438) is an alternative to:

The events of 2009 with which these proceedings are centrally concerned happened at a time of institutional change. The NSW Trustee and Guardian Act 2009 NSW was in the process of implementation, leading to repeal and replacement of the Protected Estates Act 1983 NSW. The Guardianship Tribunal has since been replaced by the Guardianship Division of NCAT, governed by the Civil and Administrative Tribunal Act 2013 NSW, to be read in combination with the Guardianship Act 1987. Important although these changes are, they have not materially changed the character of the protective jurisdiction as it operated in NSW in and throughout 2009.

The inherent, protective jurisdiction of the Court (the nature of which is authoritatively explained in Secretary, Department of Health and Community Services v JWB and SMB (Marion’s Case) (1992) 175 CLR 218 at 258-259) exists to enable the Court to do what is for the benefit of an incompetent person, unable to take care of himself or herself. The purposive character of the jurisdiction finds a legislative parallel in section 4 of the Guardianship Act 1987 (now matched by section 39 of the NSW Trustee and Guardian Act 2009), where can be found a statement of guiding principles which commences with the proposition that “the welfare and interests” of a person in need of protection “should be given paramount consideration”.

The Powers of Attorney Act 2003 NSW fits in with this legislative scheme (as it did, in substance, in 2009) because an application to the Court or to the Tribunal under Part 5 (sections 26-42) of the Act – for review of a power of attorney, directions or advice - can result in the incapacitated donor of an enduring power of attorney being declared a “protected person” and having his or her estate placed under protective management.

A solicitor in the position of the sixth defendant or Mr Maccallum in 2009, obliged to exercise care and skill in giving effect to a retainer agreement entered with the first defendant in her capacity as an enduring attorney for the deceased, and knowing that the deceased was no longer mentally competent to manage his own affairs, would be obliged to know these things or, at least, to understand the importance of learning about them before giving effect to the first defendant’s instructions that the deceased be divested of his principal asset for no consideration.

Such a solicitor might also be taken to have known, or to have been prudent enough to learn, about the availability of jurisdiction in the Court (under Division 2 of Part 2.2, sections 18-26, of the Succession Act 2006 NSW) to authorise the making of a will on behalf of a person (such as the deceased) who lacks testamentary capacity. The leading case in NSW (Re Fenwick; Application of JR Fenwick; re “Charles” (2009) 76 NSWLR 22) was decided on 12 June 2009, at about the same time that Mr Maccallum was turning his mind to the problem of “intergenerational transfer” of property within the Reilly family; but the legislative warrant for the Court to authorise the making of a statutory will was conferred upon commencement of the Succession Act on 1 March 2008.

A solicitor in the position of the sixth defendant and Mr Maccallum in 2009 should also have been familiar with the family provision jurisdiction of the Court (under Chapter 3 of the Succession Act 2006 NSW), including provisions (based upon the Family Provision Act 1982 NSW) governing the designation of property as the “notional estate” of a deceased person. Under those provisions property disposed of by a person within three years of his or her death may be brought indirectly, after his or her death, on an application for family provision relief. As explained by Palmer J in Re Fenwick, the availability of a potential family provision claim is one of the factors that may be weighed in the balance on an application for a statutory will.

Foundational to an understanding of the legal framework within which decisions about the deceased’s affairs would have had to be made in 2009 would have been an appreciation that the first defendant, as an agent for the deceased (and, particularly, as the donee of an enduring power of attorney exercising a power at a time when the donor was mentally incompetent) would have been likely, in accordance with equitable principles, to owe the obligations of a fiduciary towards the deceased.

Armed with this knowledge – necessary to discharge any professional obligation owed to the first defendant, no less than to the deceased or the plaintiff – a prudent solicitor standing in the shoes of the sixth defendant or Mr Maccallum in 2009 would have appreciated the fundamental necessity of recognising that the interests of the deceased could not simply be equated with the interests of the first defendant or, more particularly, the interests of the first defendant and her daughters.

Exercising reasonable care in the performance of his retainer (however viewed), a prudent solicitor would have recognised that: (a) he could not act for all parties to the proposed “sale” and “transfer” of “Boronga”; (b) given that the deceased had become mentally incompetent, an “intergenerational transfer” of “Boronga” could not be achieved effectively (if it could be achieved at all) absent invocation of the protective jurisdiction exercised by the Court, or the analogous jurisdiction exercised by the Guardianship Tribunal, or (more likely) by way of an application to the Court for a statutory will; and (c) any one of those legal procedures would have been likely to require a full engagement with the plaintiff in circumstances in which he would have had an opportunity to be heard about what was, or was not, in the interests and for the benefit of the deceased .

It was not for the sixth defendant, or Mr Maccallum, to dictate what course the first defendant, or other members of her family, should take in addressing concerns about an “intergenerational” transfer of the first defendant’s property in anticipation of his ongoing incapacity and the prospect of him dying without regaining capacity. They were, however, under a duty to warn, at least, the first defendant of risks associated with the course (unilateral transfer of property of the deceased under colour of an enduring power of attorney) she proposed to take. If, duly warned, she persisted in instructions to take that course, they were under a duty to decline to act for her. They could not act for her without exposing her and themselves to substantial risks of the nature illustrated by the current proceedings.

The solicitors’ duty to warn would have extended, prudently, to an invitation to the first defendant to consider the making of an application for a statutory will. Such an invitation would have inevitably exposed the defective form of the deceased’s will dated 26 March 2003 to view. It would have been likely, also, to expose to view any allegation of the character since made by the first defendant that she had an antecedent agreement with the deceased for disposition of “Boronga” in favour of their daughters.

I propose to allow the parties an opportunity (when they have read these reasons for judgment) to make submissions about the form of orders to be made to give effect to the judgment and submissions about costs.

Subject to any submissions made at that time, I propose to reserve for further consideration quantification of the plaintiff’s entitlement to an award of equitable compensation against the first defendant, and to an award of common law damages against the second defendant, in the event that “Boronga” is not in due course vested in him as the deceased’s administrator.

Subject to these qualifications, I propose to make orders to the following effect: