Allen & Ors v Coffman & Ors - Estate of Prager [2008] NSWSC 1067

New South Wales Supreme Court

CITATION : Allen & Ors v Coffman & Ors - Estate of Prager [2008] NSWSC 1067

HEARING DATE(S) : 30.09.08

JUDGMENT DATE : 10 October 2008

JUDGMENT OF : Debelle AJ

DECISION : Par 23

CATCHWORDS : CONTRACT - CONSTRUCTION - compromise of contentious probate proceedings - meaning of clause relating to distribution of proceeds of realisation of estate

CATEGORY : Principal judgment

Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 CASES CITED : Estate of Szylowicz (1978) 19 SASR 263 Prenn v Simmonds [1971] 1 WLR 1381

Louise Anne Allen – first plaintiff/first cross-defendant Edda Ingeborg Lehmann – second plaintiff/second cross-defendant The Children's Hospital at Westmead – third plaintiff/third cross-defendant PARTIES : The Salvation Army (New South Wales) Property Trust – fourth plaintiff/fourth cross-defendant William John Coffman – first defendant/first cross-claimant Ian Cole Miller – second defendant/second cross-claimant Elizabeth Coffman- third defendant/third cross-claimant

FILE NUMBER(S) : SC 2052/08

COUNSEL : Mr M S Willmott SC – plaintiffs/cross defendants] Ms J A Needham SC/ Ms R Kako – defendants/cross-claimants

SOLICITORS : Champion Legal – plaintiffs/cross defendants Hunt & Hunt – defendants/cross-claimants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Debelle AJ

10 October 2008

2052/08 Allen & Ors v Coffman & Ors

JUDGMENT 1 His Honour: In these proceedings, the plaintiffs applied for a declaration as to the true construction of an agreement made between the parties on 17 October 2006 and embodied in an order made in this Court on 30 October 2006. After hearing argument, I announced my decision adding that I would later publish reasons for it. These are the reasons for that decision. A testatrix makes five wills 2 Margarete Anneleise Prager (the deceased) died on 4 March 2005. The deceased made five wills in the period 8 June 1995 to 11 March 1996, a period of a little over nine months. Some of the wills had different executors and the testamentary dispositions differed. Some persons were beneficiaries in one will but not in others. The wills were made on 8 June 1995, 14 August 1995, 29 February 1996, 1 March 1996 and 11 March 1996. The last three wills were made in less than a fortnight. The fourth and fifth wills are in the same terms but the witnesses are different. 3 At the date of her death, the deceased was the owner of a property at Castle Hill known as "Lynton Lee". I shall refer to it as "Lynton Lee". She had cash and other personal estate with a total value exceeding $6,000,000. Contentious probate proceedings 4 John Michael Burford (Mr Burford), the executor named in the last will made on 11 March 1996, applied for a grant of probate of that will. Ms Edda Lehmann, one of the executors of the will dated 29 February 1996, responded by filing a caveat. Ms Lehmann was also a beneficiary under the will dated 29 February 1995 as well as under each of the other wills. Mr Burford's application for the grant of probate became contentious. Proceedings were issued and pleadings exchanged. The essential issue in the probate proceedings was whether the deceased had testamentary capacity at the time of executing each of the five wills. A compromise of the proceedings 5 Before the matter was tried, the parties agreed to a mediation. It was held on 17 October 2006. The mediation was attended by all parties to the probate proceedings and a large number of beneficiaries. The persons at the mediation included the parties to these current proceedings. The persons at the mediation reached a compromise which was embodied in a written agreement called "terms of settlement". Short minutes of order were prepared and on 30 October 2006 Campbell J made orders in accordance with those minutes. The minutes of order were in these terms: 1. Probate, in solemn form, of the Will made and published by the deceased on 11 March 1996 be granted to the Plaintiff. 2. The matter be remitted to the Registrar to complete the grant. 3. Subject to order 4, each party will pay his or her own costs of the proceedings. 4. The Court notes the agreement of the parties that the Plaintiff: (a) will cause the assets of the estate to be realised; (b) will cause to be opened a bank account in the name of the Plaintiff and Ian Colwell Miller into which the proceeds of sales of assets and/or any cash in the estate will be placed; (c) will pay all costs and expenses of realising the assets; (d) will pay debts, funeral, testamentary and administration expenses; (e) of the amount then remaining will; (i) pay 25% to the executor named in the will of the deceased made and published by her on 29 February 1996; (ii) pay 37.5% to the executor named in the will of the deceased made and published by her on 14 August 1995; (iii) will hold the balance of 37.5% as executor of the will made and published by the deceased on 11 March 1996. (f) No claim for commission will be made by the Plaintiff but he will be entitled to charge the estate of the deceased for work done by him in administering the estate in accordance with Clause 5 of the Will and any amounts charged will be an administration expense. (g) In the event that he is able to do so, the executor will make an interim distribution as soon as he is reasonably able, as set out above in paragraph 4(e). (h) The Plaintiff will appoint Ian Colwell Miller of Hunt & Hunt Solicitors, to act as the solicitor for the Estate on the sale of the deceased's property situated at 96 Tuckwell Road, Castle Hill which property is to be sold at a price to be agreed between Ian Colwell Miller and the Plaintiff, and failing agreement by an independent valuer appointed by the President of the Law Society of New South Wales or his or her nominee. (i) The plaintiff will appoint Alexander John Wakefield of Holman Webb Solicitors to act as the solicitor for the Estate in relation to its administration. (j) Each of the Executors referred to in paragraph 4(e) above will hold the amount paid to him, or her, on trust for the beneficiaries named in the said will of which he or she is named as executor and shall distribute that amount after payment of that executor's legal costs in the proportion calculated by reference to that percentage of that beneficiaries entitlement under the said will. (k) In relation to the plaintiff as Executor, he will be entitled to receive, in addition to the amount referred to in (j) above, an amount equal to the balance of the pecuniary legacy which totals $250,000 and the costs of administering the estate prior to the date of this agreement assessed and agreed at $20,000, such amounts to be paid to him out of the share of the charities named in the will dated 11 March 1996.