Re Estate of the Late Gerhard Anthony Haberl (also known as Gary Anthony Haberl)

In the course of hearing separate proceedings, the Court became aware of conduct that appeared to be in breach of trust by Andrea Haberl in her role as administrator of the estate of her late ex-husband, who had died intestate. The sole beneficiary of that estate is the minor daughter of the marriage. Without intending any disrespect, Andrea and others shall be referred to by their given names in these reasons, which represent the outcome of the Court’s exercise on its own motion of its supervisory jurisdiction over trusts and trustees.

These probate proceedings were initially commenced by Andrea in May 2020 for letters of administration of the Estate of Gerhard (known as Gary) Haberl (the Estate). On 24 March 2021, letters of administration were granted to Andrea.

Gary was Andrea’s former husband. At the time of his death, they had a young daughter, Isabella, who was born in 2015. Isabella is the sole beneficiary of the Estate.

It later emerged from separate proceedings between Andrea and Gary’s siblings, Robert and Karin Haberl, that Andrea had engaged in a course of conduct as administrator which cast serious doubt on her ability to manage the Estate on behalf of Isabella (see: Haberl v Haberl [2022] NSWSC 192 (“Haberl (No 1)”). Accordingly, I made orders on 16 March 2022 which had the effect of relisting the probate proceedings for the purpose of considering Andrea’s suitability as administrator of the Estate.

The Court’s initial hope was that the interested parties would reach agreement as to how it could be ensured that the Estate would be applied for Isabella’s benefit. This would avoid the need for any third party to be appointed if the Court could not be satisfied that Andrea remained a suitable administrator. Unfortunately, agreement could not be reached on critical matters.

For the reasons that follow, the Court has determined that Andrea is not an appropriate person to continue to manage the Estate on Isabella’s behalf. This is because she has demonstrated that she is either unwilling or incapable of separating Isabella’s interests from her own. She also exhibits a troubling lack of insight into her conduct. Accordingly, the Court has determined that, despite any misgivings regarding the associated fees, the NSW Trustee and Guardian should be appointed to administer the Estate.

Andrea was represented by Mr N Simpson of Counsel. The Court appointed Mr P Bambagiotti as amicus curiae in the interest of Isabella. Anthony Campbell (Andrea’s brother), who had purportedly been appointed by Andrea as the trustee of the Estate, was not represented in the proceedings and only appeared in person on one occasion. Robert and Karin Haberl were also present throughout the proceedings as interested parties but did not have leave to participate in any substantive way.

Many of the relevant facts in this matter unfolded in a non-linear fashion. There was much that came to light as a result of the Court’s own inquiries of the parties, without which many of the true circumstances would have remained unknown. For ease of understanding, I will set out the Court’s findings of fact chronologically in what follows.

Gary and Andrea divorced in July 2019. As part of the divorce proceedings, they obtained orders by consent (the Family Law Orders) under s 79 of the Family Law Act 1975 (Cth) (“Family Law Act”) that stipulated:

The Family Law Orders also included this notation:

Gary also paid maintenance for Isabella and the former couple shared other expenses for her (such as the costs of her education).

In May 2019, Andrea commenced IVF treatment and vacated the Property with Isabella, in accordance with the Family Law Orders. Gary paid 50% of their rent.

Tragically, Gary died by suicide in November 2019. Because Gary died intestate, Isabella inherited the Estate in its entirety. This included Gary’s share of the proceeds from the sale of the matrimonial home.

In addition to the Estate, Isabella was entitled to funds from Gary’s life insurance policy in the amount of $157,790.

Immediately following Gary’s death, his siblings, Robert and Karin, took on responsibility for managing the Estate as executors de son tort, including making funeral arrangements.

Andrea gave affidavit evidence that, immediately following Gary’s death, she struggled financially. She was unemployed and her main source of finance was rental assistance and a single parent payment from Centrelink.

In January 2020, solicitors on behalf of Andrea sent an email to Karin which stated:

In May 2020, Andrea commenced these probate proceedings seeking letters of administration.

In June 2020, Andrea made arrangements for the Property to be put on the market.

On 9 October 2020, the Property was sold resulting in net proceeds of $912,356.70 and the Estate was entitled, prima facie, to 44% of that amount (being approximately $402,000 excluding liabilities for Council and water rates). Andrea was entitled to 56% for her own benefit. The proceeds, along with the other assets of the Estate, were held in the trust account of Tranter Lawyers.

Also in October 2020, Andrea gave birth to a daughter, Ruby, who was conceived by IVF. Gary was not biologically related to Ruby. The matter of Ruby’s birth is largely peripheral to the proceedings except insofar as she was also under Andrea’s care, but was very rarely mentioned by Andrea.

Andrea was granted letters of administration for the Estate on 24 March 2021.

Sometime in early 2021, presumably after the grant of letters of administration, Andrea met with solicitors for the purpose of ascertaining whether she could obtain further funds from the sale of the Property. In her sworn affidavit dated 11 March 2022, Andrea made the following admissions:

On 6 May 2021, in her capacity as administrator of Gary’s estate, Andrea commenced the proceedings in Haberl (No 1). Andrea sought to recover from Robert and Karin monies they had expended as executors de son tort, including funeral expenses. By the time the case was heard, Andrea was seeking an amount of $15,838.39 and the return of an Olympic torch belonging to Gary that was displayed in the home of his mother.

On 9 June 2021, while the proceedings in Haberl (No 1) were on foot, a deed of retirement of trustee and appointment of new trustee (the Deed) was signed by Andrea and Anthony. The Deed purported to confer upon Anthony the status of trustee of the Estate, to hold “the assets, monies and property subject to the trusts contained in and imposed by the Will of the deceased to hold the said assets, monies and property upon the terms and conditions set out in the Will of the deceased”. It should be noted that, as stated above at [13], Gary died intestate. In the Court’s view, the Deed was a nullity or of no effect because there was no “Will of the deceased”.

On 22 June 2021, shortly after the Deed was signed, Andrea and Anthony lodged an application at Maitland Local Court to vary the Family Law Orders. In that application, Andrea sought 100% of the proceeds of sale of the Property transferred to her.

Andrea justified the application on the basis that, had Gary not passed away, he would have contributed equally to Isabella’s maintenance until she attained her majority. What Andrea failed to appreciate is that, upon Gary’s death, she was not left without any additional source of funds for Isabella’s maintenance. Any money received from Gary in the form of child support had effectively been replaced by the Estate, the funds of which were available to Andrea to apply as administrator for Isabella’s benefit.

Andrea claimed that she intended to use the additional proceeds obtained from the application to purchase a plot of land in Wagga Wagga, where her family resides, and build a house on it for herself and Isabella (and presumably Ruby, though she was not explicitly mentioned).

Although it bore his signature, the application did not refer to Anthony by name. The forms stated only that the proceedings were between Andrea Haberl and the Estate (as opposed to Anthony as trustee for the Estate). Nor did it include any mention of the circumstances of his appointment as trustee. On its face the application gave the impression that it was between completely independent parties.

The application also appeared to misstate the proportion that each party was to receive from the sale of the matrimonial home, incorrectly claiming that Andrea and Gary had each been entitled to a 50% share.

Critically, the application omitted that Andrea remained administrator of the Estate at the time of the application and therefore had obligations to manage the Estate for Isabella’s benefit.

Notwithstanding these matters, the application did excite some concern in the Local Court. On 5 July 2021, correspondence on behalf of Magistrate Chicken was sent to Andrea which stated:

On 2 September 2021, joint written submissions were made by Chris White and Sarah Young on behalf of Andrea and Anthony to the effect that it was open to the Local Court to vary orders under s 79A(1C) of the Family Law Act where one party had died.

On 23 September 2021, the Local Court made orders varying the earlier Family Law Orders (the Local Court Orders). Order 1(a) stated that, subsequent to the finalisation of any liabilities of the Estate, “the balance of the net proceeds [for the sale of the Property] shall be paid wholly to ANDREA MARY HABERL”.

The Local Court Orders noted that, in bringing the application, the “Trustee of the Estate of the husband agrees with the wife”.

Andrea’s signature appeared for herself as the applicant on the consent orders. Anthony’s signature appeared on behalf of the Estate. The signature of Sarah Young of Tranter Lawyers, who assisted Andrea in the proceedings to obtain letters of administration, proceedings in Haberl (No 1) and these proceedings, appeared as solicitor for the Estate.

The effect of those orders was to transfer almost the entirety of the funds of the Estate to Andrea absolutely, which she could then apply however she saw fit and without any binding legal obligation to act solely in the interests of Isabella.

On 14 October 2021, Westpac wrote to Sarah Young of Tranter Lawyers that Gary’s life insurance claim had been paid by two cheques for $157,500 and $290. This money is currently held on trust for Isabella in a Westpac Life bank account. A trust deed between Andrea and Westpac Life Insurance Services Ltd for the “Isabella Sophia Haberl Trust Fund” appointing Andrea as trustee was executed. Although the proceeds of the insurance policy did not fall into the Estate, in the exercise of its supervisory jurisdiction the Court will make some orders to offer Isabella a measure of protection in relation to Andrea’s future management of that fund, given the reasons why the Court has determined to remove Andrea as administrator of the Estate.

On 4 November 2021, Andrea authorised Tranter Lawyers to disburse the proceeds from the sale of the Property from their trust account. Three transfers were made out of the account to separate accounts in Andrea’s name under the description “Distribution of Estate”. These transfers were in the amounts of:

Bank account statements for separate accounts with Westpac, St George and the Commonwealth Bank held in Andrea’s name showed corresponding deposits to those above at [39].

In accordance with her undertaking to the Court, Andrea has refrained from dealing with those funds. She provided evidence that she is preparing to purchase a block of land for $250,000 and construct a house on it for $510,000 but has not yet done so.

After the transfers were made, the trust account retained a balance of $48,423.41 which was ostensibly what was leftover in the Estate.

On 24 February 2022, the Court delivered an ex tempore judgment in Haberl (No 1). Andrea’s case against Robert and Karin was largely unsuccessful. She ultimately obtained repayment of only $3,000 plus interest of less than $200, and the return of the Olympic torch. In bringing the proceedings, she accrued legal costs totalling more than $55,000.

After the Court had delivered its judgment, I had the following exchange with Mr Simpson on the issue of costs (Tcpt, 24 February 2022, p 79(9-17)):

I understood Mr Simpson’s answer to mean that the Estate, as at 24 February 2022, comprised approximately $460,000.

The following day, on 25 February 2022, the Court made orders in chambers disposing of Haberl (No 1), including that Andrea was not entitled to indemnity from the Estate for her legal costs incurred after 6 August 2021.

At 3:59pm on the same day the order relating to costs was made, Mr Simpson sent an email to my Associate which stated:

Attached to Mr Simpson’s email was a copy of the Local Court Orders which had not previously been brought to this Court’s attention and which suggested that there was little, if anything, left in the Estate. I should make clear that I am not suggesting that the Local Court Orders should have been brought to attention earlier. They were not relevant to the issues in Haberl (No 1). However, it was solely due to Mr Simpson’s entirely proper withdrawal of his submission that the Court became aware of the conduct that has given rise to this judgment.

On 28 February 2022, in light of this new information, the Court made orders requiring Andrea to provide a complete accounting of the Estate. She was also required to provide further information pertaining to the location of any of the funds of the Estate, the circumstances in which the Local Court Orders were obtained, and the details of any funds she had received pursuant to those orders.

Finally, the Court invited Andrea to undertake to the Court that she would not deal with, transfer or dispose of any part of the Estate or any funds of the Estate that she had received pursuant to the Local Court Orders. On 28 February 2022, Andrea provided the undertaking by way of an email from Sarah Young of Tranter Lawyers.

On 11 March 2022, Andrea provided an account of the funds remaining in the Estate (less those funds which had been converted for her benefit pursuant to the Local Court Orders). As at that date, the Estate comprised $12,578.48 with an additional $8,449.06 plus interest to be quantified.

On the basis of a Trust Account Statement from Tranter Lawyers dated 10 March 2022, it appears that legal fees totalling $35,550.91 were paid by the Estate on 4 November 2021 and 2 March 2022. Pursuant to this Court’s orders related to costs, if these monies have been paid using the funds of the Estate then they will have to be reimbursed. That will be a matter for the NSW Trustee and Guardian (TAG) to pursue.

On 14 March 2022, the Court contacted Mr Luke Williams, who is a principal solicitor at TAG, by email to ascertain whether TAG was prepared to accept an appointment as administrator of the Estate. By way of reply email on the same day, Mr Williams confirmed that TAG would be prepared to accept such an appointment if the Court saw fit to do so.

On 16 March 2022, the parties appeared before this Court. Present on that day was Mr Simpson on behalf of Andrea, Mr Williams on behalf of TAG, and Anthony on behalf of himself as purported trustee of the Estate. Robert and Karin Haberl were also present.

For all that various persons at that hearing did not agree with each other, they were united in their concern regarding any fees to be charged by TAG if it was appointed administrator, and how this might diminish the value of the Estate.

On 17 March 2022, at the request of the Court, Mr Williams provided a written estimate of TAG’s fees to administer the Estate. Presuming the Estate would be worth $559,226.94 (being a combination of the proceeds from the sale of the Property and the life insurance policy), the fees would include:

Following the hearing on 16 March 2022, the Court was not satisfied that Isabella’s interests were properly represented. On 17 March 2022, my Associate wrote to the NSW Bar Association asking whether a member of the Bar might volunteer to appear pro bono as amicus curiae in the interest of Isabella. On 20 March 2022, Mr P Bambagiotti of Counsel was granted leave to appear in that capacity by the Court.

By affidavit made on 23 March 2022, Andrea attested that she had used some of the Estate funds, and funds from the Isabella Sophia Haberl Trust, to pay Isabella’s school fees and other expenses related to her maintenance.

At a directions hearing on 25 March 2022, it was further disclosed that Andrea had used funds from the Isabella Sophia Haberl Trust to purchase a new car for $39,500. This information had allegedly not been included in her earlier affidavit because Andrea feared that it would incite criticism from Robert and Karin Haberl.

As at 28 April 2022, Andrea attested that there was a total of $114,693.66 remaining in the Isabella Sophia Haberl Trust.

In the hope that what should be done could be determined by consent, the Court invited the parties to discuss their positions and, in default of agreement, to provide their respective proposals to the Court. There were several proposals put before the Court on behalf of Andrea. Karin Haberl also put forward a proposal, but as she was not a party to the matter this was not taken into account.

On 23 March 2022, through her affidavit, Andrea proposed:

On 28 April 2022, by way of draft orders, Andrea proposed:

On 28 April 2022, Mr Bambagiotti as amicus curiae for Isabella, proposed these alternative orders:

On 3 May 2022, the parties having been unable to reach a consensus between them, Andrea made a final proposal:

It was clear from the proposals put forward that there was at least some agreement between the parties on the need to revoke the Local Court Orders and the Deed on which they were premised. This left in dispute the question of who was to administer the Estate once it had been restored to its former position.

The submissions on behalf of Andrea may be summarised as:

Overall, it was submitted by Mr Simpson that Andrea had acted honestly and reasonably. In such a case, revocation of the letters of administration was unnecessary and she should be released from any potential liability.

Andrea took the opportunity to address the Court on her own behalf. She explained that she had obtained the Local Court Orders on the basis that she wanted to provide for Isabella, and believed the Local Court was cheaper than relitigating the Family Law Orders in the Family Court.

She also expressed that the current proceedings were, in her view, a punitive act against her for pursuing the legal action in Haberl (No 1) which she maintained had been the right thing to do. The extensive legal costs she incurred to the Estate as a result of that litigation were the fault of Robert and Karin Haberl.

She maintained that she did not think she had done anything wrong in her role as administrator. As a (now) sole parent, she was only seeking to buy a house and to provide for Isabella. She had not applied the funds for frivolous things such as taking overseas trips or purchasing luxury vehicles.

The submissions made on behalf of Isabella may be summarised as:

Initially, Anthony was not a party to the present proceedings. His position as trustee of the Estate was entirely unknown to the Court until the Local Court Orders came to light. He is now joined to these proceedings by consent.

Anthony spoke briefly on his own behalf at the hearing before me on 16 March 2022. He explained the process of obtaining the Local Court Orders in these terms (Tcpt, 16 March 2022, p 16(1-17)):

Anthony did not appear in person at the hearing on 29 April 2022. By an email from Sarah Young at Tranter Lawyers on that day, he consented to the Court setting aside the Deed under which he had been appointed.

Mr Williams stated that TAG took no view on what had occurred in the administration of the Estate by Andrea but would accept an appointment as administrator if the Court saw fit to do so.

As interested parties, Robert and Karin Haberl were provided with an opportunity to present their views. I note that they did so without the benefit of having obtained legal advice.

There was, unsurprisingly, a considerable degree of animosity between the Haberl siblings and Andrea. They expressed anger at the course of events that had occurred and were adamant that Andrea should not be permitted to continue as administrator. This was particularly so in light of what they perceived to be potential breaches of trust by Andrea in paying legal fees from the Estate after 6 August 2021 and purchasing a new car out of the Isabella Sophia Haberl Trust.

Given they were not parties to the matter and did not have leave to appear, I have afforded no weight to their views.

There were two matters the parties agreed on which can be immediately dealt with:

The other proposals before the Court were subject to considerable disagreement. In light of the expense already incurred to the Estate, and mindful of the burden of protracted legal proceedings on the parties, the Court intends to make a finding only with respect to the question of whether Andrea should remain as administrator of the Estate or TAG should be appointed to replace her. Because these proceedings have occurred at the prompting of the Court and have not involved a fully argued inter partes hearing, the Court will refrain from making any formal finding as to whether Andrea’s conduct amounted to breaches of her duties to the Estate as administrator. It follows that there is no need to consider whether Andrea should be relieved of any liability under s 85 of the Trustee Act.

Each of these matters is given consideration below.

Given the problems with the Deed already identified at [25] relating to references to a Will, the Court is satisfied the Deed was ineffective to begin with. Because the Deed purported to confer the powers of a trustee upon Anthony pursuant to a will and no such will ever existed, no powers were ever conferred.

Even if this was not so, the Court would set the Deed aside in light of the circumstances. Even assuming in their favour that Andrea and Anthony genuinely believed they were acting for the benefit of Isabella, the Court has no hesitation in finding that the purpose of entering into the Deed was a pretence to allow Andrea to avoid any perceived conflict with her obligations as administrator of the Estate.

This is fortified by the doubts the Court holds with regard to Anthony’s independence as trustee. He is Andrea’s brother and took the appointment as trustee after being approached by her in relation to obtaining the Local Court Orders. Notwithstanding that he received legal advice, there is no evidence that he properly understood his obligations. Like Andrea, he seemed to lack any real appreciation for the impropriety of what had occurred.

The failure to properly confer the powers of trustee upon Anthony means that he never had any authority to consent to the Local Court Orders. This fundamentally undermines those orders such that they should be set aside.

Further, the Court accepts Mr Bambagiotti’s submission at [72(1)] above that Andrea’s stated motivation in obtaining the Local Court Orders is at the very least misconceived. As administrator of the Estate, Andrea could lawfully have applied the Estate to Isabella’s maintenance, advancement and education. In practical terms, the Estate had replaced the support that would have been provided to Isabella by Gary. Additionally, Andrea had entered into the Family Law Orders under the acknowledgment that those orders took into account the possible death of either Andrea or Gary.

Finally on this point, the Court is not persuaded that, had the full circumstances of Anthony’s appointment as trustee, and Andrea’s position as administrator of the Estate, been made known to Magistrate Chicken, the Local Court Orders would have been made. That information was clearly relevant as it radically alters the perception of Andrea’s reasons for applying for the orders.

For the reasons set out immediately above at [86] to [88] the Court is satisfied that the Local Court Orders should be set aside pursuant to s 79A(1A) of the Family Law Act. That provision states:

The parties to the proceedings in the Local Court were Andrea and, purportedly, Anthony. Anthony gave his consent only to the setting aside of the Deed and not to the setting aside of the Local Court Orders (see [75] above). However, his consent is not necessary for the Court to exercise its power under s 79A(1A) because, as the Deed was ineffective, he was never a party to those proceedings in any real sense. As Andrea has given her consent under order 3 of her proposal at [65] above, the Court may make orders in accordance with s 79A(1A).

If I am wrong in that conclusion, the Court would nevertheless set aside the Local Court Orders pursuant to s 79A(1)(a) which states:

This Court is relevantly a court for the purposes of either of those sections pursuant to s 4 of the Jurisdiction (Cross-Vesting) Act 1987 (Cth) which empowers this Court to deal with matters instituted under s 79A: Young v Lalic (2006) 197 FLR 27; [2006] NSWSC 18 at [37]-[39] (Brereton J) cited in DJ Singh v DH Singh [2020] NSWCA 30 at [250] (Gleeson JA, Leeming and White JJA agreeing).

The discretion conferred by s 79(1)(a) is a wide one. Andrea’s failure to disclose the relevant fact of her status as administrator of the Estate which gave rise to a conflict of interest, and the circumstances of Anthony’s appointment as trustee for the principal purpose of evading that conflict, are sufficient to engage the Court’s power under that provision. The Court is satisfied that these circumstances caused a miscarriage of justice by converting almost the entirety of the Estate to Andrea’s personal property.

The effect of setting aside the Deed and the Local Court Orders is to restore Gary’s 44% share of the proceeds from the sale of the Property to the Estate.

The Court has concluded that Andrea has demonstrated through her conduct that she is not suitable to remain as administrator of the Estate.

Prior to Andrea’s appointment there was already some indication that she would not be an appropriate person to manage the Estate. This was evident when she wrote to Karin Haberl in January 2020, stating that she intended to commence litigation against the Estate unless she was given 90% of the proceeds from the sale of the Property (see [17] above).

Following her appointment, Andrea engaged in three further courses of conduct that cast serious doubt about her suitability to remain as administrator.

First, Andrea misconducted herself by engaging her brother, Anthony, to act as trustee. No evidence was provided to show that he plays any other substantive role in managing what remains of the Estate and the Court is not convinced that he was an independent trustee in any true sense. As such, the Court finds that his purported appointment was undertaken for the principal purpose of obviating any conflict of interest by Andrea in order to allow her to deprive the Estate of the vast majority of its funds.

Second, by obtaining the Local Court Orders, Andrea converted the funds of the Estate for her own benefit. There is little that can be added to this point which is not already obvious. It should be emphasised that the Local Court Orders were granted in circumstances where, had there been full disclosure of the circumstances, the Court is satisfied that it is likely they would never have been made.

Andrea’s explanation for having obtained the Local Court Orders is not persuasive. As was put by Mr Bambagiotti, the Family Law Orders already acknowledged the possible death of either Gary or Andrea. In any event, Gary’s death did not deprive Andrea of financial support for Isabella’s maintenance. As I have already noted at [27] and [87] above the Estate was always able to be applied for that purpose. The sole difference is that in neither case did Andrea have unfettered access to the funds as she now does.

Even again assuming in Andrea’s favour that she was acting with the best of intentions towards Isabella, the vice of converting the funds in the Estate to become her own absolutely as opposed to being held on trust for Isabella may be demonstrated by a simple example, which assumes that a large part of those funds were applied to buy a property held in Andrea’s name to be the family home. Let it be assumed that Andrea were to become bankrupt or subject to a property adjustment claim by some future de facto partner. Insofar as the funds were trust funds, equity would recognise that Andrea held a proportionate interest in the property on trust for Isabella to the extent those funds had contributed to the purchase price, even if Isabella was not on the title. Isabella would at least be able to contend that interest would not be available to a trustee in Andrea’s bankruptcy or in property adjustment proceedings. However, in the events which have happened, where in law “Isabella’s money” has become Andrea’s absolutely, the value of the money in the form of an interest in the property would be lost to Isabella in either of the eventualities I have hypothesised.

The omissions by Andrea in respect of the Local Court Orders form part of what the Court perceives to be a wider pattern of non-disclosure. The Local Court Orders were made while proceedings in Haberl (No 1) were on foot, yet the true value of the Estate was not disclosed to the Court until after the proceedings had concluded when Mr Simpson withdrew his statement to the Court as to what was left in the Estate. Additionally, Andrea failed to disclose the purchase of a vehicle for $39,500 from the Isabella Sophia Haberl Trust in her affidavits of 11 and 23 March. While it may be argued that she was not required to make such disclosure as the Isabella Sophia Haberl Trust does not form part of the Estate, it nevertheless reflects poorly on her candour as trustee.

Third, by continuing to pursue the Haberl (No 1) litigation even after it became clear that the benefit to be obtained was far outweighed by the cost of that litigation. While it is usually appropriate for an administrator to pursue the assets of the Estate, as stated at [24] above, by the time the matter reached hearing, all that remained to be sought was a claim of approximately $15,000 and the Olympic torch. The legal fees incurred were seriously disproportionate. Had the funds of the Estate (such as they had become) been applied for payment of the legal fees, the Estate would have been almost entirely depleted.

The Court notes that both Andrea and Anthony acted with the benefit of legal advice. However, the Court accepts Mr Bambagiotti’s submission that without knowing the true substance of that advice, it cannot cure the defects in the performance of Andrea’s duties as administrator.

These matters might have been overcome if Andrea had been able to demonstrate that she would not engage in further misconduct in the future. However, based on her own statements as well as the substance of her proposals in these proceedings, the Court is not satisfied that this is so.

Andrea’s adamant assertions that she has not “done anything wrong” (as evidenced by her statements to this Court referred to at [70]-[71]) reveals a serious lack of insight regarding the impropriety of her actions. That she continues to blame the Haberls for accruing significant costs to the Estate, in spite of the fact that, as I recorded in my judgment, they had offered her a better outcome than she obtained by continuing the Haberl (No 1) proceedings, only fortifies the Court’s conclusion on this point.

While Andrea may have felt herself to always be acting in Isabella’s best interest, the Court is not satisfied that she is capable of properly separating Isabella’s interests from her own. If she is allowed to remain as administrator, the Court finds that there is a real risk that she will engage in further conduct that inappropriately diminishes the Estate. The Court’s concerns are heightened by this statement in her affidavit of 23 March 2022:

While Isabella may incidentally benefit from moneys applied to other members of her family, there is a fine distinction between the Estate being applied beneficially for Isabella and Isabella being made financially responsible for her mother and sibling. Put more simply, it is not merely that the funds of the Estate are for Isabella’s benefit – they are in fact Isabella’s own property. The Court infers from Andrea’s statement that she has failed to grasp this fundamental fact.

Andrea’s proposals further inform the Court’s finding that she is not suitable to remain as administrator. She suggests no oversight mechanism for her conduct as administrator beyond the giving of undertakings in circumstances where she has been less than forthcoming in her dealings as trustee. In the absence of a truly independent third party to oversee the Estate, there is an unacceptable likelihood that future questionable conduct might go undiscovered.

The Court’s only concern in these proceedings has been to ensure that the rights of a young child, Isabella, have been properly protected. This would not have been possible without two examples of the proper discharge by counsel of their duty towards the Court in the administration of justice, which it is appropriate that I should gratefully acknowledge in these reasons.

First, the circumstances which have given rise to these reasons only came to light because Mr Simpson fulfilled his obligation of not misleading the Court by withdrawing his submission as to the value of the Estate when he became aware it was incorrect. That obligation overrode his duty to Andrea insofar as there was a risk, which eventuated, that the withdrawal of his submission might alert the Court to matters that were not in Andrea’s interest.

Second, the Court is indebted to Mr Bambagiotti for assisting the Court by accepting a pro bono appointment as amicus curiae to represent Isabella’s interests. It is obvious that he devoted a great deal of time and skill to the task. While in an ideal world it would be unnecessary, the willingness of solicitors and barristers to provide pro bono assistance is an essential part of the obligations that characterise legal practice as a profession. In doing so, they not only assist their client, but also the Court, to ensure that justice is done.

On the basis of those matters set out at [96] to [109] above, the Court concludes that, notwithstanding the fees that will be incurred, the proper course of action in the interests of Isabella is to revoke Andrea’s letters of administration pursuant to s 66 of the Probate and Administration Act 1898 (NSW).

In her place, TAG will be appointed. Andrea will be ordered to file and serve accounts for her administration of the Estate. Furthermore, in exercise of its general supervisory jurisdiction over trustees, the Court will order that (subject to further order) Andrea must provide annual accounts for the Isabella Sophia Haberl Trust Fund to TAG and that she is not entitled to make any single expenditure out of that fund exceeding $10,000, retire as trustee, or acquiesce in the appointment of another trustee of that fund, without the consent of TAG (including upon such terms as TAG in its absolute discretion considers reasonable).

Subject to hearing any party further on the question of costs, the Court proposes that no order is to be made as to costs other than to provide that Andrea is not entitled to apply any part of the Estate to the legal or other costs she has incurred in relation to these further hearings in these proceedings.