New South Wales Court of Appeal CITATION: Juul v Northey [2010] NSWCA 211 HEARING DATE(S): 11/11/09 JUDGMENT DATE: 26 August 2010 JUDGMENT OF: McColl JA at 1; Basten JA at 251; Campbell JA at 260 DECISION: See paragraph 250 CATCHWORDS: EQUITY – order for accounts on wilful default basis – whether evidence supported order - MONEY COUNTS – claim for money had and received – whether evidence estate had a claim – defences – whether retention of payment unjust - WILLS AND ESTATES – will – executor – removal – where allegation of wilful default personal to executor made out - PROCEDURE – pleadings – obligation to plead and particularise allegation of wilful default - PROCEDURE – effect of interlocutory orders – issue estoppel – whether open to judge to review matter decided in earlier proceedings between same parties - PROCEDURE – notice of judgment – where judgment affects rights or interest of person who is not a party – giving of notice under UCPR 46.12 to enable non-party interests to be protected - PROCEDURE – documents – cross-claim – out of time for filing cross-claim under rules of court – application for extension of time – delay caused by party's decision where on notice of potential liability – CPA 2005 (NSW) ss 56-60 – duties of parties in the conduct of litigation – just and efficient determination of proceedings - EVIDENCE – witnesses – credibility – whether basis established to challenge primary judge's finding on credibility Civil Procedure Act 2005 (NSW) LEGISLATION CITED: Limitations Act 1969 (NSW) Trustee Act 1925 (NSW) Uniform Civil Procedure Rules 2005 CATEGORY: Principal judgment Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 Adamson v Ede [2009] NSWCA 379 Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. Australian Hardboards Limited v Hudson Investment Group Ltd [2007] NSWCA 104; (2007) 70 NSWLR 201 Bahin v Hughes (1886) 31 Ch D 390 Bartlett v Barclays Bank Trust Co Ltd (Nos 1 & 2) [1980] 1 Ch 515 Caldar v Public Trustee [2003] NSWCA 187 Carantinos v Magafas [2008] NSWCA 304 Commissioner of Police v Tanos [1958] HCA 6; (1958) 98 CLR 383 David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472 Dowse v Gorton [1891] AC 190 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Gava v Grljusich [1999] WASC 13 Glazier Holdings Pty Ltd v Australian Men's Health Pty Ltd (No 2) [2001] NSWSC 6 Gray v Guardian Trust Australia [2003] NSWSC 704 Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; (2003) 56 NSWLR 298 House v R [1936] HCA 40; (1936) 55 CLR 499 International Advisor Systems Pty Ltd v XYYX Pty Ltd (No 3) [2008] NSWSC 430 Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207 Job v Job (1877) 6 Ch D 562 Jones v Morrall (1852) 2 Sim (NS) 241; 61 ER 333 Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 Letterstedt v Broers (1884) 9 App Cas 371 Levy v State of Victoria [1997] HCA 31; (1997) 189 CLR 579 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 Mavrideros v Mack (1998) 45 NSWLR 80 Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146 Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572. Milltec Australia Pty Ltd v Burnes [2006] NSWCA 13 CASES CITED: Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676 Northey v Juul [2005] NSWSC 933 Northey v Juul [2008] NSWSC 275 Northey v Juul (Supreme Court of New South Wales, Macready AsJ, 13 June 2008, unreported) Northey v Juul (Supreme Court of New South Wales, Macready AsJ, 23 July 2008, unreported) Osborne v Smith [1960] HCA 89; (1960) 105 CLR 153 Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6; (2006) V Conv R 54-713 Perpetual Trustee Co v Watson (No 1) (1927) 28 SR (NSW) 39 Pit v Cholmondeley (1754) 2 Ves Sen 565; 28 ER 360 Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 Ramsay v Pigram [1968] HCA 34; (1968) 118 CLR 271 Re Beddoe [1893] 1 Ch 547 Re Brier (1884) 26 Ch D 238 Re Brogden (1888) 38 Ch D 546 Re Dallaway [1982] 1 WLR 756; [1982] 3 All ER 118 Re Stevens [1897] 1 Ch 422 Re Stevens [1898] 1 Ch 162 Re Symons (1882) 21 Ch D 757 Re Tebbs [1976] 2 All ER 858 Re Wrightson [1908] 1 Ch 789 Re Youngs (1885) 30 Ch D 421 Richards v Cornford (No 3) [2010] NSWCA 134 Richardson v Rearden [2006] NSWSC 1252 Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 Royal Bank of Canada v The King [1913] AC 283 Seltsam Pty Ltd v Gahleb [2005] NSWCA 208; (2005) 3 DDCR 1 Sleight v Lawson (1857) 3 K & J 292; 69 ER 1119 Smith v Armitage (1883) 24 Ch D 727 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 73 ALJR 306 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 Young v Holloway [1895] P 87 Australian Law Reform Commission, Evidence (Interim), Report No 26 (1985) Bullen & Leake, Precedents of Pleadings, 3rd ed (1868) Stevens & Sons H G Hanbury, "Forms of Account against Executors and Trustees" (1936) 108 Law Quarterly Review 365 TEXTS CITED: Heydon & Leeming, Jacobs' Law of Trusts in Australia, 7th ed (2006) LexisNexis Butterworths Australia Martyn & Caddicks (eds), Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 19th ed (2008) Sweet & Maxwell Meagher, Gummow & Lehane, Equity Doctrines and Remedies, 4th ed (2002) LexisNexis GP Stuckey & CD Irwin, Parker's Practice in Equity (New South Wales), 2nd Ed (1949) Law Book Company Jennifer Frances Juul - Appellant Henry John Northey - First Respondent James Knight Northey - Second Respondent PARTIES: John Stewart Hunter & Richard John Booker as Trustees of the Estate of the late Betty Frances Northey - Third Respondents Henry John Northey - Cross Appellant Jennifer Frances Juul - First Cross Respondent James Knight Northey - Second Cross Respondent John Stewart Hunter & Richard John Booker as Trustees of the Estate of the late Betty Frances Northey - Third Cross Respondents FILE NUMBER(S): CA 2008/290201; 2008/290202 R Lovas for the Appellant COUNSEL: R Winfield for the First Respondent J M Baxter for the Second Respondent Murphy's Lawyers Civil - for the Appellant SOLICITORS: Delwyn A Bishop Solicitor - for the First Respondent Small Business Legal Services - for the Second Respondent E H Tebutt & Sons Lawyers - for the Third Respondent (submitting appearance) LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): SC 4408/2004 LOWER COURT JUDICIAL OFFICER: Macready AsJ 16/09/05 LOWER COURT DATE OF DECISION: 01/04/08 13/06/08 23/07/08 LOWER COURT MEDIUM NEUTRAL CITATION: [2005]NSWSC 933; [2008] NSWSC 275 - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 2008/290201 2008/290202 McColl JA Basten JA Campbell JA 26 August 2010 Juul v Northey Headnote [This headnote is not to be read as part of the judgment] Betty Frances Northey (the "deceased") died on 7 December 2003 aged 90 years. She made her last will on 17 August 2003 pursuant to which she appointed her daughter, Jennifer Juul (the appellant), and another of her children, James Knight Northey (the second respondent), executors and trustees of her estate. The first respondent, another of the deceased's children, commenced proceedings against the appellant and the second respondent seeking an order for the taking of accounts in common form in the deceased's estate. On the first day of the hearing, he was given leave to amend his summons to seek the taking of accounts on a wilful default basis. On 23 July 2008, in the course of the proceedings which give rise to the appeal, the appellant and the second respondent were removed as executors of the estate by consent. John Stewart Hunter and Richard John Booker (the third respondents) were appointed trustees of the deceased's estate. They filed a submitting appearance in the appeal. The deceased was widowed in 1996. She wanted to remain in the family home built by her husband. She decided to subdivide the tennis courts in order to provide, in part, the funds needed to renovate her house. The renovations were done with the help of the appellant and her husband, a former builder. Pursuant to a Deed they entered into with the deceased, Mr and Mrs Juul were to pay all the costs of the subdivision and to receive one block in the subdivision. The deceased also had conversations with the appellant and Mr Juul in which the cost of renovating the house was estimated to be $515,000 – a sum, it was agreed, could be met from the proceeds of the subdivision. Between 1997 and 2001 Mr Juul organised and supervised the subdivision and the renovations. The deceased made payments totalling $515,000 to the appellant and Mr Juul respectively in late 1998 and early 1999. Each payment was made shortly after she received the proceeds of the sale of a lot in the subdivision. The first respondent said he first became aware of the proceeds received on the sale of the lots in the subdivision after his mother's death. He asserted these proceeds were not reflected in the deceased's bank accounts, and that he had commenced the proceedings to ascertain how those proceeds had been expended. There were four hearings: one on the issue of whether accounts should be taken on a wilful default basis, one on the taking of accounts on a that basis, one on the issue of costs and the last on the question whether the second respondent should be permitted to file a cross-claim seeking orders to the effect that the appellant and Mr Juul indemnify him for his liability to the estate as by then adjudged. The hearings gave rise to four judgments: Northey v Juul [2005] NSWSC 933 (the "wilful default" judgment), Northey v Juul [2008] NSWSC 275 (the "accounting judgment"), Northey v Juul (13 June 2008) (the "costs judgment") and Northey v Juul (23 July 2008) (the "cross-claim judgment"). During the hearing on the question of wilful default, the first respondent advanced the case that the conversations in which the deceased agreed that the appellant and her husband would undertake the renovations, in which the $515,000 estimate was provided, did not occur. The money received by the appellant and her husband was said by the first respondent to therefore be money had and received to the use of the estate. The executors contended the monies were paid as a result of bona fide inter vivos transactions and/or pursuant to an agreement with the deceased to pay $515,000 for the renovations. The primary judge accepted the conversations took place, but found they did not evidence any agreement that the appellant's husband would be reimbursed for the time and effort he expended on the renovations (the "reimbursement finding"). His Honour held that only monies expended by the appellant's husband on the renovations should have been paid out of the proceeds of the sale of the lots in the subdivision. He found the first respondent had established one instance of wilful default which concerned the failure of the executors to get in the amount which was due to be refunded by the appellant and her husband to the estate representing the difference between the actual monies the executors had established had been spent ($370,839.62) and the $515,000. Accordingly he ordered the taking of accounts on a wilful default basis. On the taking of accounts, the trial judge ordered that the appellant and second respondent account to the estate for $165,493.72; less an amount of up to $137,348.45 representing a just allowance to the appellant and her husband for their efforts and labour. He rejected evidence the executors sought to lead from Mr Juul to the effect that the deceased had agreed to reimburse him for his time and effort in subdividing and renovating the property, holding that an issue estoppel arose out of his findings to the contrary effect in the wilful default judgment. However he held that having regard to the evidence that Mr Juul undertook a substantial amount of organising and building work himself to complete the renovations of the deceased's house, it was appropriate there be a just allowance for that work. Following the accounting hearing the primary judge gave the second respondent leave to file the cross-claim referred to above. That cross-claim had not been heard at the time the appeal was heard. The appellant appealed from the first three judgments and sought leave to appeal from the cross-claim judgment. The first respondent cross-appealed from parts of the accounting and costs judgments. The appeal raised multiple issues, including the following In relation to the wilful default judgment (i) Whether there was evidence to support the order that accounts should be taken on a wilful default basis. (ii) Whether the primary judge decided the case on issues of which the executors had no notice, resulting in a denial of procedural fairness. (iii) Whether the primary judge erred in making findings that adversely affected the interests of a non-party, Mr Juul. In relation to the accounting judgment (iv) Whether the primary judge erred in concluding that he was bound by the principles of issue estoppel not to admit evidence which contradicted the reimbursement finding he had made in the wilful default judgment. (v) Whether findings the primary judge made in the accounting judgment revealed that his Honour had erred in the wilful default judgment in overlooking evidence to the effect that the deceased did not expect Mr Juul and the appellant to repay any part of the moneys she had paid them. In relation to the cross-claim judgment (vi) Whether the primary judge erred in granting the second respondent leave to file the cross-claim against the appellant for contribution, particularly in the light of evidence that he deliberately allowed the time period in which that cross-claim should have been filed to expire. The cross-appeal also raised multiple issues, including the following (vii) Whether the primary judge erred in accepting the appellant's husband as a credible witness. Held, allowing the appeal, setting aside the orders made below and dismissing the summons, granting leave to appeal from the cross-claim judgment and dismissing the motion to file a cross-claim and dismissing the cross-appeal: Per McColl JA, Basten and Campbell JJA agreeing: As to issue (i) 1. The party seeking an order against executors for the taking of accounts on a wilful default basis must establish at the primary hearing at least one allegation of wilful default, namely the failure by the executors to get in an estate asset which, but for their wilful neglect or default might have been received: (at [190], [192]). Sleight v Lawson (1857) 3 K & J 292; 69 ER 1119; Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146 applied Gava v Grljusich [1999] WASC 13; Glazier v Australian Men's Health (No 2) [2001] NSWSC 6; Milltec Australia Pty Ltd v Burnes [2006] NSWCA 13 referred to 2. In an action for money had and received, the defendant is entitled to raise by way of answer any matter or circumstance which shows that his or her receipt (or retention) of the payment is not unjust: (at [218]). David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 applied; Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 referred to 3. The primary judge erred in finding that the conversations between the deceased, the appellant and Mr Juul did not extend to Mr Juul himself being paid for the work: (at [222] – [223]). 4. The evidence did not support the conclusion that the estate had an action for money had and received which the executors had failed to pursue: (at [224] – [226], [234]). As to issue (ii) 5. An allegation of wilful default should be pleaded and particularised: (at [191], [204] – [206]). Perpetual Trustee Co v Watson (No 1) (1927) 28 SR (NSW) 39; Re Wrightson [1908] 1 Ch 789; GP Stuckey and CD Irwin, Parker's Practice in Equity (New South Wales), 2 nd Ed (1949) Law Book Company referred to 6. Once the first respondent apprehended that he might wish to seek an accounting on a wilful default basis it was incumbent upon him to plead such a case, in particular that the wilful default case was put on the basis that that case was advanced either as to the entire sum of $515,000 or in respect of any amount over and above the amount of $370,839.62. The failure to plead such a case led to the primary judge making adverse findings against the appellant of which she had no notice: (at [205], [209] – [210]). As to issue (iii) 7. The primary judge erred in making findings adverse to a non-party, Mr Juul, which findings directly and indirectly affected his interests. He should have been given notice of the wilful default judgment pursuant to UCPR 46.12 so as to have the opportunity to seek to intervene to protect his interests: (at [211] – [215]). Young v Holloway [1895] P 87; Osborne v Smith [1960] HCA 89; (1960) 105 CLR 153 referred to As to issue (iv) 8. The order made at the conclusion of the wilful default hearing for the taking of accounts, under which the proceedings were adjourned for further consideration, was an interlocutory order: (at [194]). Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146; Carantinos v Magafas [2008] NSWCA 304 applied 9. Where issues have been reserved for further consideration the judge cannot review and reconsider what he or she has decided at an earlier hearing, at least insofar as that precise matter has already been necessarily and directly decided by a competent tribunal in resolving rights or obligations between the same parties in the same respective interests or capacities: (at [194] – [195]). Ramsay v Pigram [1968] HCA 34; (1968) 118 CLR 271; Kuligowski v Metrobus [2004] HCA 34; 220 CLR 363; Carantinos v Magafas [2008] NSWCA 304 applied Australian Hardboards Limited v Hudson Investment Group Ltd [2007] NSWCA 104; (2007) 70 NSWLR 201 referred to As to issue (v) 10. The primary judge erred in failing to take into account in the wilful default judgment Mr Juul's evidence to the effect that the extent there was any balance of the $515,000 when the renovations were complete, the deceased intended Mr Juul and/or the appellant to retain it. That evidence was material to the question whether the estate may have had an action for money had and received in respect of any part of that sum: (at [225]). As to issue (vi) 11. The primary judge erred in giving the second respondent leave to file a cross-claim in circumstances where the second respondent had been given clear notice in the wilful default judgment that he was at risk of being held liable to account personally yet did not seek to file a cross-claim at the end of the day. The grant of leave was inconsistent with the principles set out in the Civil Procedure Act 2005 (NSW) (ss 56-60) dealing with the just and efficient determination of proceedings: (at [247]). Richards v Cornford (No 3) [2010] NSWCA 134; Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 referred to As to issue (vii) 12. The first respondent did not establish any basis on which the Court could set aside the primary judge's finding that Mr Juul was a credible witness: (at [228] – [233]). Generally 13. If a court concludes that executors have been guilty of wilful default, and that the occasion of wilful default relates to matters personal to an executor, that person ought to be removed from that role to ensure independent legal personal representatives can consider whether in the light of that finding they should take proceedings to recover the funds found to be owing to the estate: (at [239] – [240]). Letterstedt v Broers (1884) 9 App Cas 371; Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572; Heydon and Leeming, Jacobs' Law of Trusts in Australia , 7 th ed (2006) LexisNexis Butterworths Australia referred to Orders A In matter No 40327/08 (the appeal of Jennifer Francis Juul): (1) Set aside the finding and orders made by the Court on 23 July 2008 in the plaintiff's summons filed on 10 August 2004 and numbered 1-11 inclusive. (2) In place thereof order that: (i) subject to orders (ii) and (iii), the summons brought by the plaintiff (Henry John Northey) against the defendants (Jennifer Francis Juul and James Knight Northey) be dismissed; (ii) order 1 is made without prejudice to orders 12-15 made on 23 July 2008 on the plaintiff's motion of 7 April 2008 and the first defendant's motion of 7 July 2008; (iii) order 1 is made subject to the orders made in matter No 40328/08 (the summons for leave to appeal); (iv) order that the plaintiff pay the defendants' costs of the summons. (3) In respect of the costs of the appeal: (i) order that the first respondent (Henry John Northey) pay the appellant's costs of the appeal; (ii) order that the second respondent (James Knight Northey) bear his own costs of the appeal; (iii) order that the third respondents (the current trustees) be entitled to payment of their costs of the appeal (if any) from the Estate of the Late Betty Francis Northey on an indemnity basis. (4) Grant the second respondent a certificate under the Suitor's Fund Act 1951 (NSW) in respect of his costs of the appeal. B In respect of matter No 40328/08 (the summons seeking leave to appeal): (1) Grant the applicant (Jennifer Francis Juul) leave to appeal. (2) Direct that the applicant file her notice of appeal within 7 days. (3) Allow the appeal and set aside orders 16-19 made on 23 July 2008 on the motion (as amended) of the second defendant (James Knight Northey) seeking leave to file a cross-claim against the first defendant (Jennifer Francis Juul) for contribution. (4) In place of the orders made below: (i) dismiss the motion (as amended); (ii) order that the second defendant pay the costs of the first defendant of the motion. (5) Order that the respondent (James Knight Northey) pay the applicant's costs of the proceedings in this Court; (6) Grant the respondent a certificate under the Suitor's Fund Act 1951 (NSW). C In respect of the cross-appeal in matter No 40327/08: (1) Dismiss the cross-appeal. (2) Order the cross-appellant (Henry John Northey) to pay the costs of the first cross-respondent (Jennifer Francis Juul) of the cross-appeal. (3) No order as to the costs of James Knight Northey of the cross-appeal. (4) Order that the third cross-respondents (the trustees) be entitled to their costs of the cross-appeal (if any) to be paid from the Estate of the Late Betty Francis Northey on an indemnity basis. ********** - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA No: 2008/290201, 2008/290202 McColl JA Basten JA Campbell JA Thursday 26 August 2010 Juul v Northey Judgment Index Headings Para Statement of the case 8 The proceedings: wilful default hearing 13 Wilful default judgment: written submissions at trial 55 The wilful default judgment 62 Wilful default judgment: short minutes of order 78 The accounting judgment 80 (a) items said to be not relevant to the building work 89 (b) executors' claim for a just allowance for work done by Mr Juul 90 (c) cash payments for which vouchers were not held 101 (d) items not identified or not sufficiently identified with the deceased's property 102 The costs judgment 104 The cross-claim judgment 112 Accounting judgment: short minutes of order 119 Issue on appeal 121 Issues on cross-appeal 123 Appellant's submissions 126 (a) The wilful default judgment 126 (b) The accounting judgment 141 (c) The costs judgment 154 (d) The cross-claim judgment 155 First respondent's submissions 161 Submissions on the cross-appeal 166 Cross-appeal: appellant's response 175 Meaning of wilful default 180 Taking accounts on a wilful default basis: pleading and proof 185 Pleading issues 196 The problem with parties 211 The count for money had and received 216 Removal of executors and trustees 236 Procedural fairness 241 The cross-claim 247 Conclusion 248 Orders 250 1 McCOLL JA: This appeal concerns the proper administration of the estate of Betty Frances Northey (the "deceased") who died on 7 December 2003 aged 90 years. The deceased made her last will on 17 August 2003 pursuant to which she appointed her daughter, Jennifer Juul (the appellant), and another of her children, James Knight Northey (the second respondent), executors and trustees of her estate. Probate of the will in common form was granted to them on 8 January 2004. Where it is unnecessary to differentiate between them, I will refer to the appellant and the second respondent as "the executors". 2 Henry John Northey, the first respondent is another of the deceased's children. On 10 August 2004, within 9 months of the deceased's death, he commenced proceedings in the Equity Division of this Court against the appellant and the second respondent seeking an order for the taking of accounts in common form in the deceased's estate. The summons as originally framed sought, relevantly: "1. An order that an account be taken of all moneys received and disbursed by the Defendants or any other person on his or her behalf in respect of the property comprised in the estate of [the deceased] and of the dealings and transactions of the Defendants therewith. … 3. An order that an inquiry be held as to whether any, and if so what, property being part of the estate of the Deceased, has been lost or is appropriated [sic, misappropriated] and when and by whom and under what circumstances." 3 Associate Justice Macready heard the proceedings. They led to four judgments: Northey v Juul [2005] NSWSC 933 (the "wilful default" judgment), Northey v Juul [2008] NSWSC 275 (the "accounting judgment"), Northey v Juul (13 June 2008) (the "costs judgment") and Northey v Juul (23 July 2008) (the "cross-claim judgment"). The effect of the cross-claim judgment was to give the second respondent leave to file a cross-claim seeking orders to the effect that the appellant and her husband, Mr Ole Juul, indemnify him for his liability to the estate as then adjudged. The cross-claim has not yet been heard. 4 The appellant challenges the first three judgments as of right and seeks leave to appeal to challenge the cross-claim judgment. The first respondent by notice of cross-appeal challenges parts of the accounting and costs judgments. It will be convenient to refer to the parties by their appeal nomenclature throughout. 5 On 23 July 2008, in the course of the proceedings which give rise to the appeal, the appellant and the second respondent were removed as executors of the deceased's estate (the "estate") by consent. John Stewart Hunter and Richard John Booker (the third respondents) were appointed trustees of the deceased's estate. They have filed a submitting appearance in the appeal. 6 The appellant appeals from orders made by Associate Justice Macready that accounts be taken of the deceased's estate on a wilful default basis, that there be judgment against the executors jointly and severally in favour of the estate in the sum of $165,493.72 plus interest of $109, 203.18, and as to costs. She also seeks leave to appeal from an order giving the second respondent leave to file a cross-claim against her. 7 The second respondent has filed an appearance submitting to the making of the orders sought in the notice of appeal, save as to costs. He resists the application for leave to appeal and, in the event that leave is granted, seeks to uphold that part of the cross-claim judgment giving him leave to file a cross-claim. Statement of the case 8 The deceased's husband had died in 1996 leaving her to live in a run down house on a large block of land which also contained some unused tennis courts (the "property"). The deceased wanted to stay in the house her husband had built for her and in which they had lived for 40 years. She decided to subdivide the tennis courts in order to provide, in part, the funds needed to renovate her house. The renovations were done with the help of the appellant and her husband, a former builder. Pursuant to a Deed they entered into with the deceased, Mr and Mrs Juul were to pay all the costs of the subdivision and to receive one block in the subdivision. The deceased also had conversations with the appellant and Mr Juul in which the cost of renovating the house was estimated to be $515,000 which it was agreed could be met from the proceeds of the subdivision. 9 Over the ensuing years the property was subdivided into five lots, on one of which the deceased's house stood. Of the others, three blocks were sold and the proceeds of the sales were remitted to the deceased's bank accounts. In accordance with the Deed, the appellant and Mr Juul received one lot. 10 The renovation work was undertaken over the period 1997 – 2001. The deceased took out an owner-builder's licence, but Mr Juul organised and supervised all the work. In October 1998 the deceased told Mr Juul she wanted to pay him $250,000 for the work he had done to her home. She withdrew that sum from her bank account and paid it to him. In February 1999, the deceased withdrew $265,000 from her bank account in two amounts of $100,000 and $165,000 and paid it to the appellant. 11 The deceased had seven children to whom she left her estate in equal shares. Following her death, the first respondent to the appeal, said he first became aware of the Deed, and of the proceeds received on the sale of the lots in the subdivision, which he asserted were not reflected in the deceased's bank accounts. He commenced these proceedings to ascertain how those proceeds had been expended. 12 There was no suggestion that the deceased was other than of sound mind during the events which gave rise to the proceedings, nor that her will had been in any way overborne by the appellant or Mr Juul. During the period in question at least one or more of her other children lived with her in her home, while the first respondent had almost daily contact with her. There was no evidence that she ever sought repayment of any of the monies she had paid to the appellant and Mr Juul in 1998 and 1999 respectively. Indeed, as I have said, in August 2003 she appointed the appellant one of the executors of her estate. The proceedings: wilful default hearing 13 The primary judge recorded (wilful default judgment (at [17])) that: "At the commencement of the hearing an amended form of order was handed up seeking that the account be on the basis of wilful neglect and default and seeking the removal of the defendants as Executors and trustees of the estate of the deceased. I gave leave for an amended summons to be filed which excluded the claim for removal of the defendants as Executors as this was a fresh matter and the defendants did not have time to consider the claim. If circumstances arise during the taking of any accounts which would justify the removal of the trustee that could be dealt with on further consideration of the matter after the taking of accounts." 14 The amended form of order the first respondent was given leave to file relevantly sought: "1. An order that the Parties be referred to an Associate Judge, Equity Division to take accounts of and enquire into: (a) All moneys received and disbursed by the Defendants or any other person on her or his or their behalf in respect of the property comprised in the estate of Betty Frances Northey (Deceased) and of the dealings and transactions of the Defendants therewith. (b) All the dealings and transactions of the said Defendants or either of them in relation thereto; (c) What are the assets and liabilities of the said Estate; (d) Whether any, and if so what, property being part of the estate of the Deceased has been lost or misappropriated and when and by whom and under what circumstances. (e) Whether any funds or assets of the Deceased, other than those disclosed in the Inventory attached to Probate, are held on trust by the Defendants or either of them or by any other person. 2. Order that such account be upon the footing of wilful neglect and default by the First and Second Defendants or either of them. 3. In the alternative to 2, such accounts be taken in common form. 4. An order that the Defendants or either of them pay to the Estate of the Deceased the amount, if any, which shall be found to be due to it upon the taking of such account together with interest thereon." 15 The application the primary judge deferred for possible further consideration at an appropriate stage sought the following order: "6. In the event that [sic, of] a finding of wilful neglect or default by the Defendants or with [sic, either] of them, and [sic, an] order that the Defendants be removed as executors and trustees of the Estate of the Deceased and the Plaintiff be appointed as executor and trustee in their stead." 16 So far as the papers reveal, the first respondent did not file an amended summons in exercise of the leave granted to do so. Nevertheless, it is apparent that the wilful default hearing was conducted on the basis that the first respondent was seeking an order for account on the basis of wilful default. 17 It is necessary to deal more closely with the procedural history. 18 The originating summons sought an order for taking accounts in common form, that is to say an order that an account be taken of all monies received and disbursed by the executors in respect of the property comprised in the deceased's estate and of their dealings and transactions therewith and consequential orders that they pay to the beneficiaries of the estate the amount, if any, found to be due to them on the taking of such accounts together with interest thereon. The summons also sought: "3. An order that an inquiry be held as to whether any, and if so, what, property being part of the estate of the Deceased has been lost or is appropriated [sic, misappropriated] and when and by whom and under what circumstances." 19 As is apparent, order 3 did not identify any person into whose conduct the inquiry sought should enquire to determine the question posed. 20 The summons was supported by an affidavit of the first respondent dated 29 July 2004. He annexed to his affidavit the Deed made between the deceased, the appellant and Mr Juul on 24 February 1997. He said he was not aware of the Deed prior to January 2004. 21 The first respondent also annexed to his affidavit various documents dealing with the subdivision. Those included a copy of the transfer by the deceased of lot 52 in the subdivided property to the appellant and Mr Juul. He also attached the transfers for lots 51, 53 and 54. Insofar as lot 51 was concerned, which was transferred to the appellant's son on 9 April 2003 for consideration stated in the transfer of $300,000, the first respondent stated that he believed that lot to have been worth $475,000 – $480,000 as at the date of transfer and $520,000 at the time he prepared his affidavit. 22 The first respondent also attached to his affidavit a copy of the Probate of the deceased's will which included an affidavit sworn by the appellant to which was annexed an inventory of the deceased's property. That inventory disclosed the estate's assets as being the property with an estimated value of $1 million and monies in banks totalling $343,607.67. 23 The appellant and the second respondent filed four affidavits, one from their solicitor, Mr Marshall, two from the appellant and one from Mr Juul. The solicitor's affidavit relevantly annexed and/or exhibited that firm's files relating to the sales of lots 51 – 54 in the subdivision. Insofar as lots 51, 53 and 54 were concerned, the solicitor deposed that the sums received on settlement, which totalled $882,905.64, had been forwarded to the deceased. 24 Some details of the circumstances in which the settlement sums were forwarded to the deceased should be noted. By letter dated 23 October 1998 forwarded to the deceased care of the appellant at her home address, Mr Marshall's firm confirmed that the sale of Lot 54 was completed on 21 October 1998. The letter set out the details of settlement and enclosed two cheques totalling $321,640.73. 25 On 28 October 1998 the deceased paid Mr Juul the sum of $250,000 to which I have earlier referred. 26 Settlement of the sale of Lot 53 took place on 11 February 1999. On 15 February 1999 Mr Marshall's firm wrote to the deceased, on this occasion care of Mr Juul at his home address, confirming completion and setting out details of the settlement and enclosing a statement of account. The latter advised that the amount of $267,530.11 had been paid to the deceased's credit in her bank account. On 24 February 1999 there was a debit of $315,000 from the deceased's bank account which the appellant explained was disbursed on 1 March 1999 into three different accounts as follows: $50,000 into an account in the deceased's name, $165,000 into a bank account in the appellant's name and $100,000 into a management trust again in the appellant's name. A further account of the circumstances in which the deceased paid the $265,000 to the appellant was given in cross-examination and is referred to later in these reasons. 27 The appellant's first affidavit was dated 3 November 2004. Relevantly, she deposed to the fact that the deceased had granted her a Power of Attorney, but stated that she had never used that Power to operate on, or otherwise use it in connection with, the deceased's bank accounts. She stated that the deceased did all her own banking and never sought or obtained her assistance in that respect. Next, the appellant deposed to matters concerning the transfer of lot 52 to Mr Juul and herself and their construction of a house on that lot with their own finances. 28 The appellant then deposed to the improvements made to the deceased's house described as comprising "supply of various items and the carrying out of works by contactors", the acquisition of which and the provision of which work she said Mr Juul organised. She then stated: "To my knowledge, he paid for those items and contractual amounts as they fell due from time to time and subsequently was reimbursed by the deceased. Annexed and marked 'D' is a schedule of expenses relating to the improvements to the deceased's house at 62 Rose Avenue Collaroy Plateau prepared by my husband. The schedule discloses a total expenditure in relation to items acquired of $238,259.62 and an amount of $132,580.00 paid to contractors. The total of the items acquired and contractual amounts paid is accordingly $370,839.62. Exhibited to me at the time of swearing this Affidavit and marked 'JFJ 1' is a folder containing such invoices, receipts and other documentation relating to the items and contractual work as are available to me." 29 Finally, the appellant sought to explain how the deceased had disbursed the amounts representing the difference between the sums she had received on account of the settlement of the sale of lots 51, 53 and 54 and that amount standing to her credit in her bank accounts at the date of her death. The only explanations which were admitted were her statement that $21,000 was applied by the deceased in buying the appellant and Mr Juul new appliances for their home and in paying $12,000 to Westpac being a debt owed to that bank by her late father. 30 The first respondent then swore an affidavit dated 24 November 2004 dealing with aspects of the affidavits of Mr Marshall and the appellant's first affidavit. 31 Insofar as Mr Marshall's affidavit was concerned, the first respondent said he could not ascertain "the precise nature of the transactions referred to, the parties involved in those transactions, the relationship between the parties, the legal authority upon which acts were carried out, and the accounting and disbursement of monies." Insofar as annexure D to the appellant's first affidavit was concerned, he said he could not "ascertain from it the link between the items set out in the said summary and any work carried [sic, out] on my mother's house." This paragraph was admitted as submission material only. 32 The first respondent then deposed as to the construction work carried out between 1998 and 2003 by the appellant and Mr Juul on a property they owned, which appears to have been adjacent to the deceased's property (but not lot 52), construction work carried out on the deceased's house and construction work done on another property jointly owned by the appellant and Mr Juul. The first respondent deposed that the builder on all three properties was Mr Juul and that he "did most of the carpentry, brick work, labouring, tiling and supervision of all subcontractors…". 33 Next, the first respondent deposed in paragraphs which were admitted as submission material only: "8. My mother Betty Frances Northey, received an amount in the order of about $900,000.00 from 1998 to 2003. I have perused Affidavit of Jennifer Frances Juul. I cannot ascertain from that Affidavit how some $900,000.00 was disbursed. 9. I refer to paragraph 8 of the Affidavit of Jennifer Frances Juul and the Power of Attorney for my mother, Betty Frances Northey held by the Deponent. I cannot ascertain from that Affidavit what transactions on behalf of my mother and the Estate both before and after the death of my mother, Betty Frances Northey were conducted by the Deponent, Jennifer Frances Juul. … 15. I refer to paragraph 12 of Jennifer Frances Juul and say that I cannot ascertain from that paragraph any breakdown of the amounts expended on the sub-division as opposed to the construction of the house located on Lot 52 owned by Jennifer Frances Juul and her husband. 16. The Plaintiff in these proceedings seeks full disclosure of all matters relating to the management of my mother's assets, including a detailed explanation about all transactions carried out by the deponents, Neale Stuart Marshall and Jennifer Frances Juul and by any other party acting on the instructions or in the interests of the deponents, Neale Marshall and Jennifer Juul." 34 The appellant's second affidavit was sworn on 11 April 2005. In that affidavit she deposed to conversations following her father's death between the deceased, Mr Juul and herself on the topic of where the deceased would live and what would happen to her home on the property. She set out the conversation she had with the deceased which the primary judge accepted: see wilful default judgment (at [35], [44]). Next, the appellant referred to what she called a "passbook reconstruction" of the deceased's bank account for the period 1 July 1998 to December 2003. Relevantly, she deposed to the debit to that account of $250,000 on 28 October 1998 of which she said she first became aware in early December 2004 and said she had previously been unaware "that these monies had been paid by the deceased in part by way of a payment to my husband". 35 Mr Juul swore an affidavit dated 11 April 2005. He deposed, relevantly, to the conversations he had with the deceased, which I set out later in these reasons (at [67]) and which the primary judge accepted were the circumstances in which an agreement was made as to the basis upon which Mr Juul would carry out the renovations to the deceased's house: wilful default judgment (at [32], [33], [44]). It is relevant to note at this stage that Mr Juul said, in substance, that in October 1998 the deceased said she wanted to pay him $250,000 for the work done on her home and that although he protested he had not spent that amount yet, she persisted. After the conversation he took her to her bank, she withdrew the $250,000 which he then deposited into a joint account he held with his wife. 36 Mr Juul also explained that from about the middle of 1997 to April 2001 he renovated and extended the deceased's home, enlarging it from 220 m2 to 420 m2. He said he paid for the renovations by drawing on part of the funds he and the appellant borrowed in September 1997 to fund the cost of subdivision and the cost of building on lot 52. Mr Juul also sought to depose to the time he himself had spent on the renovations. It is unclear from either the transcript or the index to the Blue Book whether Mr Juul's estimate of the hours he had spent on that work was admitted. Nevertheless it appears clear that the sentence in which he explained that if those hours were charged out at a rate of $65 per hour they totalled $137,475 was admitted as "submission material". Those figures reveal that Mr Juul said he spent 2,115 hours on the renovation work. 37 The transcript of the wilful default hearing is regrettably brief. On the first day, after stating that Ms Winfield, who appeared for the first respondent, handed to the Court a chronology and draft orders, it recorded that she then opened, but did not transcribe her opening. Insofar as the draft orders Ms Winfield handed to the court were concerned, the transcript recorded that Mr R Wilson, who appeared for the executors had not come to Court to meet a request for an order that they be removed as executors and that he sought and was granted leave to reserve his position in that regard. 38 After the affidavits to which I have referred were read, the first respondent was called. He briefly described the changes which had been made to the deceased's house since his father died. He was not cross-examined on any issue relevant to the appeal. 39 The appellant was then called. She was cross-examined about a number of withdrawals from her mother's bank account and, in particular, in respect of withdrawal documents on that account which she appears to have signed. The withdrawal documents do not appear in the Blue Books, although they appear to have been tendered as exhibit D. However as far as the cross-examination reveals, none of the withdrawal documents related to the $265,000 the deceased gave the appellant in 1999. Whatever the purpose of this cross-examination was, it assumed no significance to the first respondent's written submissions, or in any of the four judgments. The appellant said that Mr Juul looked after all their "loans and … finances." 40 As to the sum of $265,000 deposited into her accounts in 1999, the appellant said her understanding was that it was a payment "from the agreement that was made amongst my mother, my husband and myself." The agreement to which she appears to have been referring was exposed shortly after when, in response to a question relating to the $250,000 Mr Juul received in 1998 and of which she said she was unaware until early 2004, she said: "[I]t was a payment of part of the agreement. He had an agreement with my mother to do the building work and both of those, of December '04, I now know that my mother paid two payments to work back with that agreement of $515,000, which I think is in my husband's affidavit and my own." 41 Save as to this evidence and the brief statement about the $265,000 in her second affidavit, there is no evidence as to the circumstances in which the deceased actually withdrew the $265,000 from her bank account and paid it to the appellant. There is no suggestion that any third person was present when those monies were withdrawn. 42 The appellant was cross-examined as to whether, when she applied for probate, she had asked any questions about why "there was only $340,000 there" (presumably being a reference to the balance in the deceased's bank accounts), to which she responded that she had not. She was then asked: "Q. Well, you knew that three blocks of lands had been sold, totalling over $900,000; didn't you? A. That's correct. Q. And you never asked one question about where the other $600,000 went? A. No, I didn't think it was my money to – for my business. It was my mother's money and it was my mother's business. Q. What did you understand your role was as an executor? A. As executor, it was – I have to tell you I really didn't know and I was very much guided by the solicitors, which I appreciated. …. Q. So, the $265,000, you say that was consideration for work done on your mother's house? A. It was part of the payment of the agreement of 515 ." (emphasis added) 43 The appellant was challenged about the agreement as follows: "Q. Mrs Juul, nobody ever agreed on $515,000; did they? A. That is incorrect. Q. Your mother never knew that renovations were going to cost $515,000? A. I'm sorry, that is incorrect. Q. In fact, you have reconstructed it. When you found out in December last year, you reconstructed it to say that the renovations had cost $515,000? A. That is totally incorrect. Q. Because when you swore your affidavit in November you said they had cost about $370,000; didn't you? A. I said what was – I went on what was available to me at the time, which was the what [sic] had been calculated by my husband as regards contractors and the items on hand, the documentation for the items." 44 In the course of the cross-examination, Ms Winfield sought to ask the appellant questions concerning a will the deceased had made which pre-dated that which had been admitted to probate. The primary judge asked what the relevance of that line of cross-examination was to the first respondent's case which he described as "predicated upon there being some failure to account for monies which you say were due by the first defendant to the estate… [and which] involve[d] looking at the transactions to see whether there has been a failure to account." He asked counsel if he was wrong to "disabuse" him. She did not. 45 The appellant was also cross-examined about the funds the deceased had available when her husband died. It appears that the deceased was living on a war service pension but, according to the appellant, "was in need of money", an observation which appeared to relate to a need for funds to deal with her house which, at the time her late husband died, "was in so much disrepair that [she] didn't have a water system working [and] [t]he electricals had to be completed." According to the appellant the deceased's lack of funds was "one of the main reasons she decided to subdivide, to obtain funds for herself." 46 The appellant denied that it was she and Mr Juul who had decided to subdivide. In response to the suggestion that the deceased had been "talked into" the subdivision, the appellant said that her late father had been "in the process of subdividing" prior to his death "because he was running out of funds." She rejected the proposition that that statement was not correct. 47 The following exchange took place: "Q. You didn't keep any of those receipts in any logical order for future reference did you? A. I say to tell you I didn't think three years after my – the property was completed and something like seven years after – before my mother died – that we would ever have to speak about what personal business my mother had regarding the renovation of her property, that's correct. Q. You see it was not her personal business was it? A. It was her personal business, it as her home, her money, her decision. Q. It was your business because you and your husband profited from it? A. No we did not profit from it, not at all. 48 Mr Juul was then called. Relevantly, he said: "Q. Mrs Northey never agreed to pay you on any hourly basis for any work done, did she? A. We had an agreement for a fixed price but she wanted to make sure that I was paid for the work that I did for her. ……. WINFIELD: Q. See, Mr Juul, isn't this the case, that you had that conversation, $515,000, in which you say you put $515,000 to the deceased, that never took place, did it? A. It did take place, yes. Q. Mrs Northey would never have agreed to spend $515,000 on that house, would she? A. Yes, she would. Q. You see, in 1996 Mrs Northey did not have $515,000 in cash, did she? A. That is correct. And what we did was we – she needed an improvement to her quality of life. She was living in an old house and it badly needed renovations. So we took her around to various places to see where she would like to live, if she wanted to sell the property, or whether she wanted to subdivide it, whether she wanted to build a new house on it or whether she wanted the house renovated. ……. Q. Even that work did not cost $515,000 did it? A. To my recollection it did, yes. Q. You have not produced receipts for $515,000 have you? A. That is correct, because at the end, in April 2001 we agreed that our agreement was finished and all parties were perfectly happy with the arrangements and, therefore, it was finished…" (emphasis added) 49 At the conclusion of Mr Juul's evidence, Ms Winfield made an application to tender a report prepared by Mr Clifford Ventris, a Chartered Quantity Surveyor. The primary judge at that stage pointed out that he had not received "any explanation from [her] as to how [she] took [sic, put] this case" and expressed concern that "we are getting a whole lot of information that may not really be relevant." At that stage his Honour suggested he ought hear from counsel for the executors. Mr R Wilson, who appeared for the appellant and the second respondent at the wilful default hearing, then said: "WILSON: The first enquiry, one has to look at what happened to the two relevant transactions. The documentation was tendered, it was signed by the deceased. On one view that is the end of it. They were transactions made by her which on the evidence the only conclusion you could come to was there was no incapacity, she knew what she was doing and we say that is the end of it. Alternatively we say there was an agreement for payment of a certain amount but irrespective of the agreement one has to enquire what happened to the monies when they were paid. It is our case this witness, whether or not the value of the work was $100,000 or $140,000 or $515,000, makes no difference having regard to an inquiry as to what happened at the time the payments were made and in the context of the arrangement between the parties. If the deceased was happy to pay the money to Mrs Juul and her husband for the work they did, that is the end of it." 50 The primary judge then asked Ms Winfield, again, why Mr Ventris' report was relevant. Relevantly, she said: "WINFIELD: To prove if the work was not worth $500,000 or anything like it then the amount the first defendant should recover from herself or her husband or put back into the estate is the difference between the value - HIS HONOUR: What is the basis upon why they should put it back in? WINFIELD: Because they didn't do $515,000 worth of work. On Mrs Juul's evidence in November last year the best she came up with was the schedule annexure D. Even with all its estimates and inconsistencies that was only $350,000. So that Mrs Northey even if she paid that amount of money was clearly over charged for the work done. The first defendant and her husband can't be believed when they say they reached an agreement about $515,000." 51 Mr Ventris' report was admitted with the excision of one paragraph. He was subsequently called and cross-examined. 52 The plaintiff's case was then closed. Ms Winfield sought to commence her address but, before she did so, the primary judge asked whether there were any amendments to the summons. Her response was that the amended summons should be read in accordance with a "document" which, it appears to have been understood by Mr Wilson, was a reference to the document headed "Plaintiff's draft order" handed up on the first day of the hearing which his Honour appears to have initialled on the third day, 1 September 2005. 53 Ms Winfield then appears to have sought to renew the application to remove the executors on the basis that the appellant had a conflict of interest because the evidence revealed she owed money to the estate, while the second respondent had done nothing in discharge of his executorial duties and had left everything to the appellant. In the course of submissions on this issue she said: "The reason the proceedings have been taken in the way they have is because they simply have no information on which to form a view as to what happened to the money. Mr Northey did not know until he saw the probate that all the deceased had left was the block of land on which the family home stood which was one block out of the whole lot and the proceeds of sale of another block of land. He knew it had been divided up into five blocks on a rough calculation and he wrote to my friend's instructing solicitor but it came up about $726,000 short on his calculation of what should have been there from the proceeds of sale. Of course, there is only $346,000. So the plaintiff and the other beneficiaries had no information as to where that money had gone and they needed to make inquiries before they could form a view as to whether there were other funds owed to the estate. It is properly the duty of an executor to inquire into whether there are any funds owing to the estate. There has been no allegation of fraud pleaded and the plaintiff was no[t] in a position at any point to plead fraud because the plaintiff and the other beneficiaries did not know what the particulars of that might be, since this inquiry there is at least substantial evidence that the monies were received by Mrs Juul and her husband and that is on the first defendant and her husband's own evidence that that conclusion can be made." …………….. The other beneficiaries could do the simple arithmetic and realise funds were missing and then each of the executors should also have been able to do that simple arithmetic and say there must be some funds there that have not been accounted for." 54 The primary judge did not accede to the renewed application. He gave leave to file the amended summons and orders in accordance with the document handed up on the first day of hearing, but deleting the order seeking the removal of the executors. The transcript then merely records that counsel then addressed. Wilful default hearing: written submissions at trial 55 It appears that counsel for the first respondent and the executors both handed written submissions to the primary judge on the last day of the wilful default hearing. The transcript does not record their oral addresses. 56 The first respondent's written submissions relevantly asserted that he was not aware until he saw the inventory attached to probate as to the extent of the deceased's assets at the date of her death. They said he had sought a taking of accounts "in order to ascertain what, if anything, is owing to the Estate [and] submitted that the present inquiry has demonstrated that funds are owing to the Estate." They submitted that a case of wilful default had been made "on both Defendants' own affidavits". That expression was intended to include the second respondent who, although he had sworn an affidavit had declined to attend for cross-examination upon it, so that the primary judge had ultimately rejected it. Accordingly, the first respondent's written submissions contended that there was no evidence that he had taken any step in administering the estate or any meaningful interest in his duties as executor of the estate. 57 The first respondent's written submissions referred to Giles JA's statement in Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146 (at [65]) concerning an accounting by a trustee: "[T]he underlying concept is that through breach of trust the trustee has failed to obtain for the trust that which would have been obtained if the trustee's duties had been discharged. There may be simple failure to get in an asset of the trust; sale of a trust asset at an undervalue has been treated as wilful default…" 58 The written submissions then contended that the appellant's affidavit revealed "many instances of wilful default" falling into Giles JA's categories. The first was "simple failure to get in an asset of the trust" represented by: (a) the appellant's admission that she was unaware that Mr Juul had obtained $250,000 from the deceased notwithstanding it was deposited into their joint account. The written submissions contended that "an accounting will demonstrate that these are funds of the Estate and are held on trust for it or alternatively are had and received by [the appellant] and [Mr Juul]"; I note that no details were given of the nature of the claim which it was alleged it was open to the estate to bring against those persons; (b) that the sale of lot 51 on 9 April 2003 to the appellant's son was at an undervalue and was "a transaction which should be considered as a deficiency in the Estate" [and that the appellant] has a clear conflict of duty and interest in having obtained benefit for her son to the detriment of her siblings"; (c) it was further contended that the transfer of lot 52 to the appellant and Mr Juul in 1998 was at an undervalue; a similar contention appears to have been made in relation to the other lots in the subdivision; (d) that the deceased's house being left empty from the date of her death to the date of trial was an example of wilful default; (e) that the appellant's inability to produce adequate records of the work done on the deceased's property amounted to wilful neglect; (f) finally, it was contended, in substance, that the first defendant and Mr Juul's evidence concerning the $515,000 should not be accepted having regard to the absence of any reference to any such agreement in the appellant's first affidavit and what were said to be inconsistencies between the appellant's second affidavit and Mr Juul's affidavit concerning the disclosure of an amount of $515,000 to the deceased and the fact that neither deposed that the deceased agreed to such an amount. The submissions also drew attention to the fact that the receipts the appellant and Mr Juul had produced did not amount to $515,000. 59 The executors' outline of submissions recognised that the first respondent's case was that they had committed a wilful default in that they had "failed to get in an estate asset in the form of monies paid to [them]" being all or part of the three tranches of money paid, first, as to the $250,000 to Mr Juul on 28 October 1998 and secondly the two amounts totalling $265,000 paid to the appellant on 24 February 1999. They identified the real issues for consideration in determining whether there had been wilful default in this respect as: "…whether there was anything concerning the payments…made by the deceased which would suggest that [they] were not bona fide inter vivos transactions, and second, whether the payments were made by the deceased pursuant to an agreement or an informal arrangement by which the first defendant and her husband would renovate or supervise the restoration of the property…for the sum of $515,000." 60 The executors' written submissions then drew attention to the bank documents signed by the deceased pursuant to which the three tranches of monies were paid. They submitted that there was nothing in the circumstances of those payments which would suggest that "the monies are in truth estate assets which the defendants ought to have got in in the performance of their executorial duties." 61 Next, the written submissions contended that even if the Court was not persuaded there was a binding agreement between the deceased and the appellant and Mr Juul for the renovation of the property for $515,000, the payments "continue to retain the status of bona fide inter vivos transactions" as reflected in the conversation at the time the deceased paid the $250,000 to Mr Juul. Finally, relevantly, the written submissions contended that if the two payments were made by the deceased voluntarily in return for the appellant and Mr Juul arranging for the renovation of her home, it could not be said that all or some of the monies constituted estate assets which were liable to be accounted for by the executors. The executors contended the summons should be dismissed with costs. The wilful default judgment 62 The primary judge gave a short history of the events leading up to the proceedings in the wilful default judgment (at [6] - [14]): "6 In late 1996 Mrs Juul and her husband said that they had a conversation with Betty Northey about the subdivision of the large property which she then owned and a renovation of her house. After looking at alternative accommodation Betty Northey decided that she would prefer to continue living in the house where she had lived with her husband. According to Mrs Juul and her husband there was an estimate for the cost of renovating the house at $515,000. 7 On 24 February 1997 Betty Northey and Mr and Mrs Juul entered into a Deed which provided that Mr and Mrs Juul would do all the work necessary at their expense to enable a subdivision of the property into five allotments. In return they were to receive one of the lots in the sub-division. The Deed itself provided that deceased appoint Mr and Mrs Juul as her Attorneys to sign any documents and, in addition, Betty Northey gave a separate power of Attorney to Mrs Juul. Between mid 1997 and August 2001 substantial renovations took place to the deceased's property at 62 Rose Avenue, Collaroy, which was situated on Lot 55 in the new subdivision. The amount that was spent on the renovation was the subject of some dispute. 8 Mr and Mrs Juul borrowed $460,000 secured on other properties they owned to commence the subdivision and the renovation work on 62 Rose Avenue, Collaroy. 9 On 2 February 1998 Lot 52 in the subdivision was transferred to Mr and Mrs Juul in accordance with the arrangement set out in the Deed. The transfer was stamped on the basis of a value of $175,000 being the consideration for the transfer. The deceased personally signed the transfer. 10 It seems that the subdivision was finally approved in September 1998. In October 1998 Lot 54 was sold to a Mr and Mrs Webster for $320,000 which amount was paid to the deceased. Mrs Juul, as Attorney for the deceased, signed the transfer to the Websters. On 28 October 1998, in what Mr Juul said was a discussion between him and the deceased, the deceased indicated that she wished to pay him $250,000 for the work he had done. The deceased went to the Commonwealth Bank and withdrew $250,000 and paid it to him. According to Mrs Juul her husband did not tell her about this withdrawal until December 2004. 11 Between late 1998 and October 1999 Mr and Mrs Juul constructed two townhouses on Lot 52 which became known as 62B Rose Avenue, Collaroy. 12 In January 1999 Lot 53 was transferred to Mr and Mrs Briggs for $305,000 which was paid to the deceased. Mrs Juul, as Attorney for the deceased, signed the transfer to the Briggs. A few days later, on 24 February 1999, the deceased withdrew amounts of $165,000 and $100,000 and paid them into Mrs Juul's accounts. 13 On 9 April 2003 Lot 51 in the subdivision was transferred to Gaetan Juul, the son of Mr and Mrs Juul for $300,000. The duty paid indicates a value of the property at that time for stamp duty purposes of $475,000. The purchase price of $300,000 was paid into the deceased's account on 28 April 2003. The deceased personally signed the transfer. 14 Betty Northey died on 7 December 2003 and at that stage she had in her bank accounts sums totalling $341,503.75. She still retained Lot 55 which was her home 62 Rose Avenue, Collaroy. That property is on the market for sale by the Executors for a price in excess of $900,000." 63 As I have said, the first respondent sought to establish the appellant and the second respondent had been guilty of wilful default in four respects. The primary judge rejected the first three matters relied upon: see wilful default judgment (at [20] – [29]). However he found the first respondent had established one instance of wilful default which concerned the failure of the executors to get in the amount which was due to be refunded by the appellant and her husband to the estate in respect of the appellant's involvement in the renovation of the deceased's property with the proceeds of the sale of two of the blocks in the subdivision: see wilful default judgment (at [30] – [51]). 64 It is relevant to note the basis upon which the primary judge rejected the first respondent's allegation of wilful default in respect of the alleged sale of trust assets at an undervalue, being two of the lots in the subdivision, one bought by the appellant's son and the other which was transferred to the appellant and Mr Juul: wilful default judgment (at [20]). 65 Insofar as the sale to the appellant's son was concerned, his Honour noted (wilful default judgment (at [22])) that the transaction was "not a sale of a trust asset [but] ... an inter vivos disposition made by the deceased." The deceased had "signed the transfer and … there [was] no evidence that Mrs Juul used any authority under the Power of Attorney to deal with the property of the deceased in respect of this sale" (at [23]). His Honour concluded (at [24]) "[i]n these circumstances it is not a matter which can be a wilful default in respect of the defendants' position as Executors and trustees because they did not deal with the property." 66 Insofar as the transfer of lot 52 to the appellant and Mr Juul was concerned, the primary judge concluded that on the evidence there was not a sale at an undervalue, nor evidence of any dealing with the property by the appellant pursuant to the Power of Attorney. In addition "plainly the sale was not a sale of any estate asset". Accordingly his Honour concluded it was not a wilful default: see wilful default judgment (at [25] – [27]). 67 The primary judge accepted (wilful default judgment (at [44])) the following evidence from the appellant and Mr Juul concerning their conversations with the deceased about the renovations: (a) Mr Juul as to a conversation with the deceased in the latter part of 1996: wilful default judgment (at [32]): "Deceased: 'I have decided that I want to live in the house Jim built for me and in which we lived for the past 40 years. Ole, would you help me with renovating and extending the home?' I: 'Of course I will Betty.' Deceased: 'Have you any idea how much it will cost?' I: 'The cost of the new building work will be approximately $1,500 per m2 and $750 for per m2 for renovations. Additional costs will also be incurred for outside work such as retaining walls, driveway, fencing, lawn, paving and other things. As you are looking to nearly double the size of the home you should count on a total cost of around $515,000 for the work.' Deceased: 'Will we be able to cover the costs of this from the subdivision of the land?' My wife: 'Yes, we should.'" (b) Mrs Juul as to a conversation with the deceased in late 1996: wilful default judgment (at [35]): "Deceased: 'How much will it cost to renovate and extend the home?' Husband: 'You can count on it costing roughly $1,500 per square metre for new building work and $750 per square metre for the existing building. You can also count on spending $50,000 for work to the outside of the house.' Deceased: 'Will we get enough money from the land to pay for the work?' I: 'Yes.' Husband: 'The best way to calculate it is to work on the total figure of about $515,000 which is the best part of the sale of two blocks of land in the subdivision.' Deceased: 'Ole, will you do the work?' Husband: 'Yes, I will do the work.' Deceased: 'I hope there will be enough for you to be paid for the work.'" (c) Mr Juul as to a conversation with the deceased in about 28 October 1998 after the first of the two blocks of land had been sold: wilful default judgment (at [33]): "Deceased: 'I want to pay you $250,000 for the work you have done to the home.' I: 'You don't have to pay me that much as this stage. I haven't spent $250,000.' Deceased: 'I want to give it to you anyway.'" (emphasis added) It will be recalled that the renovation work was undertaken over the period 1997 – 2001. 68 Following the October 1998 conversation $250,000 was withdrawn from the deceased's bank account, and deposited in a joint account of Mr and Mrs Juul: wilful default judgment (at [34]). The primary judge found (at [37]) that, between them, Mr and Mrs Juul had been paid $515,000 for the work involved in renovating the deceased's house. The amount of $515,000 was made up of the $250,000 Mr Juul received in October 1998 and the $265,000 which the deceased withdrew from her bank account in two tranches of $165,000 and $100,000 on 24 February 1999 and paid into the appellant's bank account: wilful default judgment (at [12]). 69 The primary judge held (wilful default judgment (at [46])) that the conversations between the deceased and Mr and Mrs Juul did not disclose any agreement that Mr and Mrs Juul would do the work for a fixed price. Rather: "What in fact was happening was that Mr Juul was agreeing to assist with the work and that his best estimate of what it would cost the deceased was around $515,000 and that this would be covered by the sale of the two blocks of land." 70 His Honour also found (wilful default judgment (at [47])): "47 There is nothing in the conversation with Mr Juul to indicate that he was to be reimbursed for his time and effort. In the conversation with Mrs Juul there is a reference to him being paid for the work although that is expressed more as a hope. Certainly there was no agreement on the basis of that conversation with the deceased that she would reimburse Mr Juul for the time he spent organising and supervising the work." This finding (which was in substance repeated (at [50])) assumed particular importance in the accounting judgment. 71 Insofar as the payment of $250,000 in October 2008 is concerned, the primary judge found (wilful default judgment (at [48])): "48 It was the defendants' submission that the payment of $250,000 and $265,000 were payments which the deceased voluntarily made in return for Mrs Juul and Mr Juul arranging the renovation of her home. On this basis it was submitted that none of the money constituted estate assets and were liable to be accounted for by the defendants. Certainly the first payment which was made by the deceased to Mr Juul of $250,000 in the conversation which I accept occurred at the time has elements of making a gift. There is no doubt that during the renovation the first block of land had been sold and, indeed, at that stage $250,000 of work had not taken place. However, there has been no suggestion that the $250,000 was to be for any other purpose than the house renovation. There was evidence of other small gifts made by the deceased to Mrs Juul in recompense for other help and assistance extended to the deceased." (emphasis added) 72 Insofar as the payment of $265,000 in January 1999 is concerned, the primary judge found (wilful default judgment (at [49])): "49 However, when one comes to the second payment of $265,000 to Mrs Juul no evidence was given as to the deceased's intention when giving those monies. In absence of any such evidence I would not conclude that the arrangements were as characterised by Mr and Mrs Juul. In substance the payment of the further $265,000 was nothing more than a further payment on account probably without any real discussion having taken place. Mrs Juul stated that she believed the payment was for work done on the house. In these circumstances I would not characterise the payments that have been made as gifts in a family setting rather than payments received on account for the renovation." (emphasis added) 73 The primary judge held (wilful default judgment (at [50])) that "prima facie the upper amount expended by Mr and Mrs Juul [on the renovation] was $370,839.62." He found: "50 …It is also apparent from my conclusions above that there was no agreement to pay Mr Juul for his time and effort although plainly he did spend a lot of time doing what the deceased had requested. In these circumstances Mr and Mrs Juul are obliged to account to the estate for the difference between $515,000 and the amount spent and this amount will be at least $144,160.38. This is subject to a question which has not been debated before me and that is whether on the taking of the accounts there should be a just allowance for the work involved in assisting with the renovation. This may raise question of whether there was any fiduciary relationship at the time. The extent of any such just allowance cannot be determined on the present evidence. 51 In these circumstances one instance of wilful default has been demonstrated, namely, the failure of the executors to get in the amount which was due to be refunded by one of the Executors and her husband to the estate." (emphasis added) 74 The primary judge then considered whether he should order the taking of accounts on the basis of wilful default in circumstances where only one such default had been demonstrated. In holding that he should (at [55]), his Honour applied Re Tebbs [1976] 2 All ER 858, a case where there was also one clear area of wilful default and no grounds for assuming that other improper transactions occurred. The Court there decided (at 864), summarised by the primary judge (at [55]), that "an account be taken on the basis of wilful default in respect of the one clear area and that an account be taken of the rest of the testator's real and personal estate in common form with liberty to apply in the event of further wilful default being produced." 75 Accordingly his Honour said (at [56]) that he proposed to make a similar order and reserve further consideration after the taking of the account. He directed the parties to bring in short minutes of order (at [57]). 76 Before leaving the wilful default judgment, two other matters should be noted. First, the primary judge noted (at [53]) that Mr Juul was not a party to the proceedings and: "… the account is technically given by the defendants who are the two Executors. The fact that Mr Juul was not a party to the proceedings may, of course, be a complete answer to any claim for a just allowance on his part." 77 Secondly, his Honour noted (at [54]) that although an affidavit by the second respondent was read he had refused to be cross-examined and accordingly he had rejected the affidavit. His Honour added that in the circumstances which have transpired the second respondent was "likely to have a joint liability to account and he may now wish to play an active role in any further hearing." Wilful default judgment: short minutes of order 78 A document entitled "Short minutes of order and direction" apparently intended to give effect to the wilful default judgment were filed in court on 27 September 2005. Relevantly it provided: "1 Direct that the Defendants or either of them on or before 28 November 2005 file and serve on the Plaintiff his, her or their detailed account verified by his, her or their affidavit of: (a) all moneys received and disbursed by the Defendants or either of them; and (b) and all moneys received and disbursed by any other person on his, her or their behalf in respect of: (i) the property comprised in the Estate of the late Betty Frances Northey Deceased; and (ii) of all dealings and transactions of the Defendant/s therewith. (c) What amount of money is owed to the estate of the late Betty Northey. … 3 Direct that on a wilful default basis the Defendants or either of them on or before 28 November 2005 file and serve upon the Plaintiff his, her or their detailed statement verified by his affidavit specifying: (a) All moneys received and disbursed by the said Ole Juul and Jennifer Frances Juul or any other person on her or his or their behalf in respect of the renovations carried out to the real property of the Deceased at 62 Rose Avenue, Collaroy by the said Ole Juul and/or Jennifer Frances Juul from 1996 to date; (b) All the dealings and transactions of the said Ole Juul and Jennifer Frances Juul or either of them in relation thereto; (c) What amount, if any, is owed to the Estate of the late Betty Frances Northey. … 10 Matter stood over to 10 February 2005 for the purpose of (a) fixing a date for the hearing of the inquiry into the said account and statement; (b) for the further hearing of the Plaintiff's summons; (c) for further conduct of the proceedings in the event of further wilful default being produced; (d) for further consideration after the taking of account, including but not limited to: (i) for the making of any order for payment whether by Jennifer Frances Juul, James Knight Northey, Ole Juul or any other person consequent upon the taking of account (ii) hearing of any application by the plaintiff to amend his summons to seek removal of the executors." As is apparent, the short minutes did not, in terms, evidence the making of any order. Rather they constituted a series of directions. They were recorded in the court's computerised court record system the same day: cf Uniform Civil Procedure Rules 2005 ("UCPR") 36.11. 79 On 27 September 2005, the primary judge reserved the costs of the wilful default hearing for further consideration after the taking of accounts. He also reserved the costs of the further taking of accounts. The accounting judgment 80 The first respondent sought to recover $430,000 in the accounting proceedings but was successful only in making good a requirement to account on behalf of the appellant and the second respondent in the amount of $161,000. 81 Pursuant to the first and third directions in the wilful default judgment short minutes of order, the first appellant filed an affidavit dated 28 November 2005 setting out a chronological table of 533 items being the monies received and disbursed by Mr Juul and her in respect of the renovations carried out at the property. Those items revealed, in sum, (affidavit, Jennifer Frances Juul, 28.11.05, page 21) (accounting judgment (at [8] - [9])): "$383,091.87 in disbursements; and $137,475.00 in labour costs, $520,566.87 in total." 82 The first respondent served a "Notice of Surcharges and Falsifications" dated 3 February 2006 taking issue with most of the 533 items and alleging that the disputed items were falsifications; that is he alleged "that the disputed items were wrongly inserted and ought not to be charged against the $515,000.00 advanced by the deceased to Mr and Mrs Juul": accounting judgment (at [10]). 83 The primary judge noted (accounting judgment (at [23])) that it was the executors who had to account, not Mr Juul and the appellant. He added that, in this respect, the second respondent took different positions during the hearing, initially supporting the first respondent's case and "[n]otwithstanding opportunities to do so … did not seek to file any cross-claim seeking indemnity from Mrs Juul his coexecutor." 84 The primary judge identified the following issues as arising in the accounting (accounting judgment (at [24])): "1 Items said to be not relevant to the building work, 2 The claim by the executors for a just allowance for work done by Mr Juul, 3 Cash payments for which vouchers were not held, 4 Items that were not identified or not sufficiently identified with the deceased's property." 85 Prior to dealing with those issues, the primary judge dealt with issues of credit and onus of proof. 86 The first respondent challenged Mr Juul's credit by reference to the inclusion of a number of items in the statement of disbursements – which he, rather than the appellant to whose affidavit the statement was annexed, appears to have been principally responsible for preparing: (accounting judgment (at [38], [40])). The primary judge (at [26]) noted that in the wilful default judgement he had found "Mr Juul calm and dispassionate and he seemed to give his evidence as accurately as possible." After detailed consideration, his Honour (at [36]) concluded that Mr Juul was "trying to give his evidence before me in an accurate and reliable way [and] [o]n occasions he made concessions and he was endeavouring to be helpful in his evidence." 87 Insofar as the onus of proof was concerned, the primary judge directed himself (accounting judgment (at [43] – [44])) that the appellant bore the onus of proving the allegations of falsification in the Notice of Surcharges and Falsifications, applying Pit v Cholmondeley (1754) 2 Ves Sen 565; 28 ER 360 (at 566; 360), however in respect of that part of the accounting directed to be conducted on a "wilful default" basis, the onus was on the accounting parties: Glazier Holdings Pty Ltd v Australian Men's Health Pty Ltd (No 2) [2001] NSWSC 6 (at [42]). 88 The primary judge dealt with the four identified issues as follows. (a) items said to be not relevant to the building work 89 The primary judge held (at [46]) that provided amounts set out in the statement of disbursements fell within order 1 of 27 September 2005 they were allowable. Applying that test, he disallowed items objected to by the first respondent, save for items identified by their numerical reference in the statement of disbursements relating to "rates and the like" (at [47]) and "items of household goods and furniture" (at [48]). (b) executors' claim for a just allowance for work done by Mr Juul 90 The claim by the executors for a just allowance for work done by Mr Juul raised an issue concerning the primary judge's statements in the wilful default judgment (at [47], [50]) set out above to the effect that the conversations the deceased had with Mr Juul did not indicate that he was to be reimbursed for his time and effort in subdividing and renovating the property. 91 During the accounting proceedings, Mr Juul gave affidavit evidence of a discussion about whether or not the deceased would have to move from her house while the renovations took place (accounting judgment (at [54])): "17. And discussion to the following effect: Deceased: I do not want you to do anything for nothing. I want you to get paid for the job. Me: The best way I can cost the job of renovating your home is to calculate the square metres of the building work and apply a general estimate per square metre. That is a common method used by builders to calculate the cost of a project including the materials, the cost of sub-contractors and their own time and energy. I then said words to the effect of those set out at paragraph 6 of my affidavit sworn on 11 April 2005. 18. In early 1997 and before entering the deed dated 24 February 1997, in the course of discussing with the deceased whether the deceased would stay in her house for the rest of her life or move elsewhere, the Deceased and I had several conversations to the following effect: Deceased: If you renovate the house so that I can stay here, I want to make sure you get paid. I don't want you doing all this work for me, for nothing. Me: My earlier calculations [that is, new areas $1,500 per m2 and $750 for per m2 renovations, leading to my figure of $515,000.00] would cover my labour, the people I need to hire to assist me, as well as the materials. Deceased: Will you get enough money out of it? Me: Those calculations include getting paid in a range of about $60.00 to $80.00 per hour. How about we agree that I will get $65.00 per hour. Deceased: OK." 92 The first respondent submitted that this evidence should be rejected because it was contrary to the primary judge's findings in the wilful default judgement concerning Mr Juul not being reimbursed for his time and effort in subdividing and renovating the property. He contended that an issue estoppel arose out of those earlier findings. The appellant submitted that the wilful default proceedings were in the nature of an interlocutory application and not a final determination which could give rise to an issue estoppel. 93 The primary judge rejected the appellant's submission (accounting judgment (at [57])) that a hearing in which a plaintiff obtains an order for inquiries or account is "wholly interlocutory in character", because "by considering whether to order such a remedy and in particular whether to award an order for account of administration in common form or on the basis of wilful default, involves matters of judgment and ultimate findings of fact." 94 His Honour held (accounting judgment (at [62])) that his conclusion in para 47 of the wilful default judgment was a fundamental part of his reason for decision, such that he should reject "the new evidence of Mrs [sic, should be Mr] Juul." 95 The primary judge also dealt with, and rejected, a submission by the first respondent (at [63]) that the conversation to which Mr Juul deposed in the accounting trial affidavit was inconsistent with "the case presented by Mr and Mrs Juul at the [wilful default] hearing which was that they had an agreement with the deceased that they would receive $515,000 for the work which had been discussed." His Honour did not think "the new evidence [was] inconsistent with the earlier evidence", but described it as "a further explanation for how a particular figure was determined, namely, the per metre rates upon which Mr Juul based his calculations": (accounting judgment (at [64])). He said that given the view he had formed of Mr Juul's credit, he "would have been prepared to accept that the conversation with the deceased occurred [although] … [w]hat effect the conversation has is another matter": (accounting judgment (at [65])). 96 His Honour then turned to consider the appellant's claim for a just allowance for the time and effort which the deceased asked Mr Juul to carry out for her benefit, which claim, he observed (accounting judgment (at [66])) if allowed would be for the benefit of the two executors. He reviewed authorities on the principle of just allowances, noting (accounting judgment (at [72])) Spigelman CJ's observation in Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; (2003) 56 NSWLR 298 (at [52] – [53]) that: "Equity is concerned with the conscience of both parties, so that a balancing exercise is always required … On the one hand, it is oppressive to impose burdens on a defaulting fiduciary which go beyond any benefit that he or she has received or any detriment suffered by the beneficiary. On the other hand, it is not just for a beneficiary to receive a benefit in the nature of a windfall not reflecting any detriment suffered or benefit which the beneficiary ought to have received." 97 The primary judge observed (accounting judgment (at [73])) that the principle of which the Chief Justice spoke: "… is … most commonly manifested in the rights of executors to recover expenses properly incurred by them in improving the estate: see Re Walden (1903) 3 SR (NSW) 375. This will include expenses properly incurred by an executor in engaging a third party to perform such work: Re Bennett [1896] 1 Ch 778. If the beneficiaries were able to take the benefit of such works without providing allowances it would, in effect, be granting them a windfall at the expense of the executor, an unjust enrichment which Courts have not been willing to countenance." 98 Applying those principles to the instant case, his Honour held: "74 There is no doubt that Mr Juul did a substantial amount of organising and building work himself to complete the renovations of the deceased's house. The fact that such work came about was because of the familial relationship between Mr and Mrs Juul and the deceased. It was because he was the deceased's son-in-law that he was prepared to do the work for the deceased and no doubt for his wife who became an executor. It is a situation where an executor was instrumental in having her husband, through familial ties during the deceased's lifetime, carry out extensive work for the deceased. 75 These circumstances indicate that in the present case it is appropriate that there be a just allowance for the work undertaken by Mr Juul. If such an allowance is not made the plaintiff and the other beneficiaries will receive a windfall gain which the deceased did not intend to occur. The deceased did not expect Mr Juul and his wife to repay any part of the sums paid. I do not the regard the conversation with the deceased, even if it did amount to an agreement and was admissible, as binding in the determination of what amount should be allowed. That is a matter for the Court to determine." 99 His Honour accepted (accounting judgment (at [76])) evidence from Mr Ventris that the appropriate rate for the relevant years in 1999 according to the Rawlings Cost Guide was about $50 per hour and held that as 1999 "was when the arrangement was made" the just allowance for the hours worked should be based on $50 per hour as being "a reasonable rate". He also held that allowances claimed by Mr Juul for travelling allowances "seem to be reasonable and should stand." 100 After observing that both executors were jointly liable for any amount found to be due, the primary judge again referred to the fact that the second respondent had not brought a cross-claim against the appellant for indemnity and said he did "not express a view about what might happen on this aspect if such a claim were made": accounting judgment (at [77]). (c) cash payments for which vouchers were not held 101 The primary judge then dealt with the first respondent's objections to cash payments for which vouchers were not held. He disallowed some where there were no records, but allowed others where Mr Juul gave evidence as to the work involved and, in his Honour's view it was likely that his recollection was correct: accounting judgment (at [80] – [88]). (d) items not identified or not sufficiently identified with the deceased's property 102 Finally, the primary judge dealt with the first respondent's objections to items that were said to be not identified or not sufficiently identified with the deceased's property. Again, his Honour variously allowed or disallowed these items: accounting judgment (at [89] – [151]). 103 The primary judge repeated that in the absence of a cross-claim by the second respondent against the appellant the two executors were jointly liable for any money that is to be repaid. He directed the parties to bring in short minutes to reflect his reasons: accounting judgment (at [152] - [153]). The costs judgment 104 On 13 June 2008 the primary judge delivered his reasons as to the costs consequences which should follow as a result of both the wilful default and the accounting judgments. The first respondent sought costs against both the appellant and the second respondent in respect of both proceedings on an indemnity basis including certification for two legal counsel and an order that there be no indemnity out of the estate of the deceased. 105 The primary judge determined that it was appropriate to consider the costs consequences of the two hearings separately because of their outcome and nature: costs judgment (at [6]). 106 Insofar as the wilful default hearing was concerned, his Honour observed that the first respondent lost on three of the four aspects in respect of which he sought to establish wilful default. However the fourth aspect, on which the first respondent had succeeded, was, in his Honour's view, the most important. He concluded (costs judgment (at [7])) that having regard to the amount of material involved in all matters, an appropriate order would be that there would be no order as to costs with the intent that each party should bear their own costs. 107 Insofar as the accounting hearing was concerned, the appellant and the second respondent submitted that the first respondent had not succeeded because the amount ultimately recovered was only a proportion of the amount claimed. His Honour observed (costs judgment (at [8])) that "[t]he problem with this is … that the [appellant] and her husband, Mr Juul, were in control of all the records in respect of the expenditure." He concluded that the first respondent had been successful because there was a "substantial sum which has to be repaid." Accordingly he determined it was appropriate that there be an order that the appellant and the second respondent should jointly and severally pay the first respondent's costs of the accounting hearing on the ordinary basis commencing from 27 September 2005, the date when his Honour had made the declarations consequential upon the wilful default judgment. 108 His Honour then said (costs judgment (at [9])): "So far as the second defendant is concerned he took a stance during the proceedings which I have referred to in my earlier judgments and there is no reason why he should not be jointly liable as he was an executor in the estate. Although I suggested during the trial that he may wish to bring a cross-claim against the first defendant this has not been done to date and accordingly it is not appropriate that I consider any apportionment between the defendants. At some stage in the future, if a cross claim is brought, appropriate orders for indemnity may be considered on that cross-claim." 109 The primary judge rejected the first respondent's claim for indemnity costs and, insofar as he was asked to certify for two counsel, concluded that this was a matter which should be dealt with by a costs assessor: costs judgment (at [10]). 110 Insofar as the question of the executors' entitlement to an indemnity out of the deceased's estate in respect of their costs was concerned, the primary judge held that it would be appropriate to allow them to have an indemnity out of the deceased's estate of an amount equal to one half of their own costs in respect of the wilful default hearing, such indemnity not to be exercised until such time as the amounts payable by the executors were paid back to the estate: costs judgment (at [12]). He held that the executors should not be entitled to an indemnity out of the estate of the deceased in respect of the accounting hearing as those costs arose out of the wilful default and failure to account: costs judgment (at [13]). 111 His Honour allowed a claim for interest on the amounts to be repaid by the executors to the estate at court rates from 1 July 2001, that being a reasonable time after completion of the renovation work on the deceased's home in April 2001 by which time any accounting in respect of amounts due to be refunded should have been done: costs judgment (at [14]). The cross-claim judgment 112 On 30 June 2008 the second respondent filed an amended notice of motion (the "cross-claim motion") seeking, relevantly, leave to file a cross-claim in the form annexed to the notice of motion. The motion also sought consequential orders including a stay of the entry of the final orders in the matter; alternatively, if the orders were entered, a stay of their execution pending determination of the cross-claims. The proposed cross-defendants were the appellant and Mr Juul. 113 The primary judge heard the cross-claim motion on 23 July 2008. On the same day he also heard two notices of motion filed by the appellant and first respondent both seeking an order that the appellant and the second respondent be removed as trustees. The appellant asked that upon removal a solicitor, Mr Hunter, be appointed trustee in the executors' place, while the first respondent nominated Mr Brooker, also a solicitor, to replace them. 114 It is unnecessary, at this stage, to set out the form of the cross-claim which the second respondent then sought leave to propound not least because, in the ultimate, the primary judge did not give the second respondent leave to file that cross-claim but, rather, to bring in a cross-claim against the appellant for contribution, being the claim he concluded may be warranted by the facts, based on what he described as the first category referred to by Cotton LJ in Bahin v Hughes (1886) 31 Ch D 390 (at 395). Pursuant to that category relief may be granted to one trustee against another trustee who has got the benefit of the breach of trust: costs judgment (cross-claim judgment at [12]). 115 The primary judge noted that the proposed cross-claim against Mr Juul stood in a different category from that against the appellant because, hitherto, the former had never been a party to the proceedings so that no res judicata arose out of those judgments insofar as he was concerned. His Honour noted that the proposed cross-claim did not allege any basis for the imposition of a trust against Mr Juul and the doctrine of contribution between trustees did not apply to Mr Juul as he was not a trustee. His Honour observed that the only claim the second respondent may have had against Mr Juul was for money had and received, a claim the second respondent had not pursued and "his failure to do so has resulted in him being liable to the beneficiaries." His Honour also observed that the claim against Mr Juul was "long since statute barred." He refused leave to the second respondent to cross-claim against Mr Juul: cross-claim judgment (at [16]). 116 The cross-claim the secondment respondent sought to file against the respondent was also out of time: UCPR 9.1. Nevertheless the primary judge considered whether, as a matter of discretion, he should extend the time fixed by UCPR 9.1 pursuant to UCPR 1.12 – even though, as he observed (cross-claim judgment (at [12] – [25])) the cross-claim in its present form did not set out the claim for contribution which he had concluded could arise in the circumstances. His Honour then considered the discretionary issues the appellant had apparently foreshadowed as arising if such a claim were sought to be propounded and which should militate against an extension of time being granted. Those discretionary issues were, relevantly, Anshun estoppel (Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589), Limitations Act 1969 (NSW) defences, delay and laches. 117 The primary judge rejected all the submissions made by the appellant as to discretionary factors. It is unnecessary at this stage to set out the detail of his reasons. As I have said, his Honour gave leave to the second respondent to bring in a cross-claim against the appellant for contribution – although he did not formally extend the time for the second respondent to do so. He determined that he would enter judgment on the accounting judgment in accordance with his findings, but would stay its execution against the second respondent pending determination of the cross-claim or until further order: cross-claim judgment (at [39]). 118 A cross-claim purporting to be in compliance with the primary judge's direction was filed on 31 July 2008. As I have said, it has not been heard. Accounting judgment: short minutes of order 119 Short minutes of order consequent upon the accounting, costs and cross-claim judgments were filed in court on 23 July 2008. They relevantly provided: " In the plaintiff's summons filed on 10 August 2004 THE COURT FINDS that: 1. There is an amount of $165,493.72 due and owing by the defendants jointly and severally to the Estate of the late Betty Francis Northey (the Estate) upon the taking of accounts. THE COURT ORDERS that: 2. There be judgment against the defendants jointly and severally in favour of the Estate in the sum of $165,493.72. 3. The defendants shall be liable for interest on the said $165,493.72 calculated from 1 July 2001 to 23 July 2008 in the sum of $109,203.18. 4. Subject to order 17 below, the enforcement of the said judgment be stayed pending the distribution of the Estate. 5. In the first instance and subject to any further order of the court upon the distribution of the Estate, the trustees shall set off the entitlement due to each of the defendants by up to $137,348.45 each, such set off being on account of and in reduction of the said judgment. … In both: a. the plaintiff's Notice of Motion dated 7 April 2008; and b. the first defendant's Notice of Motion dated 7 July 2008 By the Consent of all parties, THE COURT ORDERS that: 12. Jennifer Frances Juul and James Knight Northey be removed as trustees of the estate of the late Betty Frances Northey; 13. John Stewart Hunter of Level 16, 115 Pitt Street, Sydney, NSW, Solicitor, and Richard Brooker of 32/5 Ponderosa Parade, Warriewood, NSW, Solicitor be appointed as trustees of the estate of the late Betty Frances Northey in place of the said Jennifer Frances Juul and James Knight Northey; 14. The assets of the estate of the late Betty Frances Northey including the land comprised in Folio Identifier 55/879850 situated at 62 Rose Avenue, Collaroy Plateau, NSW vest in the said John Stewart Hunter and Richard Booker jointly upon trust. 15. The parties' respective costs of: a. the plaintiff's Notice of Motion dated 7 April 2008; and b. the first defendant's Notice of Motion dated 7 July 2008; be paid out of the assets of the said estate and assessed on a trustee basis (r 42.25). In the second defendants' Notice of Motion filed on 28 May 2008 and amended on 30 June 2008 THE COURT ORDERS that: 16. The second defendant has leave to file a Cross-Claim against the first defendant for contribution in respect of the judgment entered against the two defendants herein subject to such Cross-Claim being filed within seven days. 17. The enforcement of the judgment herein against the second defendant is stayed pending the determination of the said Cross-Claim or further Order of the Court. 18. The Notice of Motion is otherwise dismissed. 19. The second defendant is to pay the first defendant's costs of the Notice of Motion." It would appear that the amount of "up to $137,348.45" referred to in order 5 to be applied in reduction of the judgment was intended to reflect the quantification of the claim for a just allowance the primary judge had allowed in the accounting judgment. There is no explanation in any of the judgments as to why order 5 contemplates that the amount might be less than $137,348.45 and what further proceedings might ensue which might lead to its ultimate quantification. 120 The primary judge also made costs orders consequential upon the costs judgment. Issues on appeal 121 The notice of appeal contained 30 grounds of appeal including numerous sub-paragraphs. However, in my view the critical issues raised on appeal were as I have set out below (at [126]) in summarising the appellant's submissions. 122 The appellant also seeks leave to appeal from the cross-claim judgment. Essentially, she complains that the primary judge erred in holding that the cross-claim was not barred by Anshun estoppel (Ground 1), in granting an extension of time to file the cross-claim (Grounds 2-5) and in declining to exercise his discretion to refuse leave on the ground of laches and in failing to give sufficient reasons for so declining (Ground 6). She seeks to set aside the orders granting the second repondent leave to file a cross-claim and, in lieu, an order that the amended notice of motion seeking leave to file a cross-claim be dismissed. No doubt for abundant caution, she also seeks an order striking out or dismissing the cross-claim filed by the second respondent pursuant to the leave granted to do so. Issues on cross-appeal 123 The first respondent cross-appeals from parts of the accounting and costs judgments as follows. 124 He challenges those parts of the accounting judgment (at [26] – [36]) in which the primary judge made findings as to the credit of Mr Ole Juul and (at [70] – [79]) his Honour's order that the executors have a just allowance. Consequent upon that challenge, the first respondent challenges Orders 1 to 3 and 5 made on 23 July 2008 in respect of the quantum of the accounting orders. 125 The first respondent also challenges those parts of the costs judgment (at [2] – [7]) which order him to bear his own costs of the proceedings to 27 September 2005 and allow the appellant and the second respondent partial indemnity from the estate. Consequent upon that challenge, the first respondent challenges orders 6 and 7 made on 23 July 2008 in respect of the costs of the proceedings and indemnity. Appellant's submissions (a) The wilful default judgment 126 Despite the length of the notice of appeal, the appellant's primary case, as advanced by Mr R Lovas who appeared for the appellant at the accounting and subsequent hearings, but not in the wilful default hearing, is capable of succinct distillation. . He complained that there was no evidence which supported a finding that the executors had been guilty of wilful default, that the appellant had been denied procedural fairness because the primary judge had decided the case on issues which were not raised at trial and had overlooked critical evidence and engaged in erroneous and inconsistent reasoning. He also submitted the primary judge had "construed" the conversations between the deceased, the appellant and Mr Juul by reference to subsequent conduct and had reversed the onus of proof. Mr Lovas submitted that in proceedings seeking an account on a wilful default basis, it was incumbent upon the first respondent to prove that the executors had failed get in an asset of the estate. He contended that the first respondent had never identified any asset of the estate which the executors had failed to get in. 127 Next, he argued that the primary judge had gone beyond the questions he ought properly to have considered in the wilful default hearing without notice to the executors. The consequence was, he contended, that his Honour had made findings of fact in breach of principles of procedural fairness and in a manner which was prejudicial to the appellant (and Mr Juul) in the accounting proceedings. 128 The submission that the primary judge had gone beyond the questions he ought properly to have considered was based on Mr Lovas' contention that the case the executors had gone to court to meet was one which called for some explanation for the deceased's disposition of the proceeds of sale of the lots in the subdivision. The first respondent had contended that the conversations with the deceased concerning the receipt of $515,000 had never taken place. The executors' case had been that the agreement with the deceased was that the appellant and Mr Juul would receive a fixed sum for the renovations. 129 Because the first respondent's case had been, in effect, an all or nothing one, Mr Lovas contended the executors had not been on notice that they should "justify" components of the $515,000 at the wilful default hearing. Mr Lovas argued that once the primary judge found that the conversations concerning the $515,000 to which the appellant and Mr Juul had deposed had taken place, he should have dismissed the summons. 130 Accordingly, Mr Lovas argued it was a denial of natural justice and an exercise in pre-judgment of the inquiry he ordered, for the primary judge to find that the amount they could corroborate ($370,839.62) amounted to "the upper amount expended", and also to find an obligation to account for "at least $144,160.38": wilful default judgment (at [50]). 131 Mr Lovas submitted that of the four questions the primary judge posed for his consideration (wilful default judgment (at [38])), only the first (whether his Honour should accept the conversations as deposed to by Mr and Mrs Juul with regard to the renovation) related to an issue of which the executors were on notice. The other three, he contended, were raised without notice to them and, in any event, revealed the misconception under which the primary judge was labouring. 132 Alternatively, Mr Lovas submitted that the executors were taken by surprise when, having found that the conversations to which the appellant and Mr Juul deposed with regard to the renovations had taken place, the primary judge posed further questions relating to the interpretation of those conversations. He submitted that the first respondent had never contended for a construction of the conversations in the terms of the questions his Honour had posed. In any event, in posing and answering those questions Mr Lovas contended that the primary judge had failed adequately, or at all, to consider the case the executors advanced in the wilful default hearing that the circumstances under which the deceased gave the appellant and Mr Juul respectively the total of $515,000 demonstrated that the monies constituted bona fide inter vivos transactions made in circumstances where there was no intention to create legal relations, that is to say that the payments were, in substance, a gift. 133 Next, Mr Lovas complained that even if the primary judge could embark upon the exercise as to the meaning of the conversations between the deceased, the appellant and Mr Juul concerning the renovations, in undertaking that exercise his Honour overlooked critical evidence and engaged in erroneous reasoning. 134 Mr Lovas contended that the primary judge's reasons exposed inconsistencies which undermined his ultimate finding concerning the conversations. First, he pointed out that although the primary judge said that the conversations "seem to be predicated on the assumption that the deceased was going to do the work" (wilful default judgment (at [45])), this was contrary to the evidence he had accepted as to the exchange between the deceased and Mr Juul to the following effect: "Deceased: 'Ole, will you do the work?' Husband: 'Yes, I will do the work.'" 135 Secondly, Mr Lovas argued that the assumption the primary judge made that "a cost of $515,000 is the upper estimate" coupled with his remark that Mr Juul "gave his evidence on the basis that he appreciated that they had only justified part of the expenditure of $515,000" (wilful default judgment (at [42])) prejudged the issue of characterising the conversations. If the agreement was for a fixed sum, there was no need, he contended, for Mr Juul to "justify" the expenditure, in whole or in part. 136 This erroneous reasoning, Mr Lovas submitted, tainted the primary judge's ultimate finding (wilful default judgment (at [46])): "46 It seems apparent to me that having given consideration to the conversations between the deceased and Mr and Mrs Juul they do not disclose any agreement that Mr and Mrs Juul would do the work for a fixed price. What in fact was happening was that Mr Juul was agreeing to assist with the work and that his best estimate of what it would cost the deceased was around $515,000 and that this would be covered by the sale of the two blocks of land." (emphasis added) 137 Mr Lovas submitted that this finding overlooked that part of one of the conversations in which the deceased had said to Mr Juul "I hope there will be enough for you to be paid for the work": see wilful default judgment (at [35]). He contended the primary judge also overlooked the evidence Mr Juul gave that in April 2001 "we agreed that our agreement was finished and all parties were perfectly happy with the arrangements…": see [48] above. He argued that this evidence demonstrated that the deceased had paid the $515,000 voluntarily, did not expect any money in return and had expressed satisfaction with the works. In such circumstances he argued a finding that the executors had been guilty of wilful default was not open. 138 Next, Mr Lovas complained that the primary judge erred in construing the agreement made in the late 1996 conversations by speculating as to what may have been the deceased's subjective intention when she paid the amount of $265,000 in March 1999 (wilful default judgment (at [49])). He also submitted that this paragraph of the primary judgment was affected by internal errors. Insofar as his Honour said that "no evidence was given as to the deceased's intention when giving those monies", the appellant contended that his Honour had overlooked the conversations he was attempting to construe. 139 Mr Lovas also submitted that in construing the conversations by reference to what was not said (wilful default judgment (at [47], [49])), the primary judge reversed the onus of proof which, at all times, was on the first respondent, to establish that the estate had a viable chose in action to recover the monies the deceased had paid to the appellant and Mr Juul. 140 Mr Lovas criticised the primary judge's conclusions (wilful default judgment (at [50])) that Mr and Mrs Juul were obliged to account to the estate, observing that Mr Juul, at least, was not a defendant. He submitted that the confusion demonstrated by this conclusion flowed through to the order his Honour made requiring the executors to file verified accounts of a third party's (Mr Juul's) transactions. He contended that the appellant's attempt to comply with this order was hampered by the inherent impossibility of the task as exemplified in the evidence she gave at the accounting hearing to the effect that the statement of disbursements in respect of the renovation expenditure annexed to her affidavit had not been prepared by her and she had no detailed knowledge of its basis: accounting judgment (at [38]). (b) The accounting judgment 141 Turning to the accounting judgment, the appellant's submissions are, again, despite the length of the notice of appeal, capable of succinct distillation. 142 The appellant's primary complaint about the accounting judgment lies in the primary judge's conclusion that he was bound by his findings in the wilful default judgment. Mr Lovas submitted that the course the primary judge took in the wilful default judgment of construing the conversations without giving the executors notice of his intention to do so (and, in particular, finding (at [47]) that there was no agreement between the deceased and Mr Juul for the latter to be reimbursed for his time and effort (the "reimbursement finding") flowed through into the estoppel issue which arose during the accounting hearing. 143 Mr Lovas next submitted that the primary judge should have concluded that the wilful default hearing was an interlocutory proceeding and, in any event, that even if an issue estoppel could arise in relation to such proceedings, his Honour erred in holding that the reimbursement finding was a fundamental part of his decision and was conclusive insofar as the assessment of a just allowance was concerned. This error, he argued, led to the primary judge wrongly rejecting further evidence of conversations between the deceased and Mr Juul concerning payment for the renovation, including Mr Juul's evidence that he and the deceased had agreed on an hourly rate for that work. 144 Mr Lovas submitted that a contested application for an order for an accounting inquiry is primarily a contest as to whether a particular method of fact finding (the basis upon which accounts should be taken) should be employed and is not, in itself, the occasion for that fact finding. He contended that the wilful default judgment was subsidiary or collateral to the holding of the accounting hearing. 145 Mr Lovas contended it was not necessary to the primary judge's decision to order accounts be taken on the basis of wilful default for him to decide whether there was an agreement with respect to Mr Juul's remuneration or as to any dollar figures as to what might be found to be owing on the taking of accounts. Accordingly he submitted that the findings the primary judge made in pars [47], [50] and [53] of the wilful default judgment were not fundamental or necessary to the decision to order an accounting so as to give rise to an issue estoppel. 146 Next, Mr Lovas argued that in the accounting hearing the primary judge should have considered, in relation to each of the items of expenditure set out in the statement of disbursements attached to the appellant's affidavit, whether the executors had established that they need not account to the estate for having failed to "get in" that item from Mr Juul and/or the appellant, a question to be answered by asking whether the executors of the estate would have been successful in suing the appellant and/or Mr Juul to recover the amount of that item. In answering that question, Mr Lovas submitted, the primary judge should have borne in mind that the executors would have borne the onus of proving that the expenditure set out in the statement of disbursements had not, in fact, been either incurred or spent. Finally, Mr Lovas contended that in the hypothetical case the primary judge ought to have considered for the purposes of the accounting hearing, his Honour should have considered that the claims against the appellant and/or Mr Juul would have been different having regard to the fact that their dealings with the deceased differed, the basis of their activities differed, the amounts they received differed and their conduct differed. 147 Applying this approach, Mr Lovas submitted that the primary judge should have considered in the accounting hearing whether the executors, as hypothetical plaintiffs, could have proved that the appellant and Mr Juul's evidence, as hypothetical defendants, as to the amounts set out in the statement of disbursements was false. His Honour's failure to do so, he contended, constituted a fatal flaw in his conclusions as to the amounts the estate might have recovered. 148 Mr Lovas also complained about the primary judge's conclusion (accounting judgment at [74]) that Mr Juul's involvement in the renovation project came about in circumstances "where an executor was instrumental in having her husband, through familial ties … carry out extensive work for the deceased." He submitted that that finding was tainted by error in two respects. First he contended the proposition that the appellant "was instrumental" in having Mr Juul carry out the renovations was never put to either of them and conflicted with their uncontroversial evidence that the arrangements were made primarily between the deceased and Mr Juul. He argued that the finding the appellant was "instrumental" in the circumstances displayed an unexpressed bias finding. Secondly, he contended that the finding that it was the appellant "as executor" who was "instrumental" in having Mr Juul carry out the renovations concatenated two separate temporal events. This was because nothing the appellant did in relation to the renovations occurred when she had assumed executorial duties. Although he acknowledged that it was these findings which led to his Honour concluding it was appropriate that there be a just allowance for the work Mr Juul undertook (accounting judgment (at [75])), he argued that these errors of reasoning were a function of the earlier errors concerning confusion of parties and issues to which he had already drawn attention in relation to the wilful default judgment: see [141] above. 149 Next, Mr Lovas drew attention to the primary judge's acceptance (accounting judgment (at [75])) that the "deceased did not expect Mr Juul and his wife to repay any part of the sums paid" – a finding he contended must have been based on Mr Juul's evidence (see [48] above) during cross-examination at the wilful default hearing that "in April 2001 we agreed that our agreement was finished and all parties were perfectly happy with the arrangements and, therefore, it was finished." In the light of this finding he submitted the primary judge failed to give adequate reasons as to why the executors should have accounted to the estate for not having brought an action against two people from whom the deceased expected no repayment. Mr Lovas also submitted this finding was irreconcilable with the essence of the primary judge's finding of liability to account in the wilful default judgment. It will be recalled, in this respect, that the appellant submitted that in the wilful default judgment the primary judge erroneously overlooked the same evidence. 150 As a consequence of the errors Mr Lovas submitted had been identified in the accounting judgment, he contended the primary judge had erroneously disallowed a number of items of expenditure as set out in enumerated paragraphs of his judgment. He also complained that those disallowances were variously tainted by his Honour disallowing items where Mr Juul's evidence was not corroborated by documents, notwithstanding that he accepted Mr Juul as a credible witness but also accepted other items not corroborated by documents. Mr Lovas complained that the primary judge did not explain why he took a different approach to what, prima facie, were in the same class. Mr Lovas contended that the approach his Honour ought to have taken was to uphold items because Mr Juul's evidence was "not disproved" as he did in the accounting judgment (at [93]). 151 Next, Mr Lovas contended that the primary judge should not have drawn an adverse inference from Mr Juul's inability to produce documents. This was partly because of the time which had elapsed between the circumstances giving rise to the accounting order, the fact that the accounting order required proof of events which had occurred as early as 1997 and as late as 2001 which it had not been anticipated would ever be litigated and, further, in the light of Mr Juul's evidence that he did not always get a receipt for payments to suppliers or contractors. 152 Next Mr Lovas contended the primary judge had erred in rejecting an item because Mr Juul did not have an "independent recollection". He submitted that there was no rule of law requiring an independent recollection and using such a factor as a litmus test failed to take account of the proposition that it was acceptable for a witness to reconstruct events from surrounding facts and be believed on that basis. Mr Lovas also criticised the primary judge's rejection of various aspects of Mr Juul's evidence on the basis that a particular item may not have been spent on the deceased's house. He contended there was no evidence contradicting Mr Juul's evidence that each item had been spent on the deceased's house and not on the subdivision. He contended there were no adequate reasons given for disbelieving these aspects of Mr Juul's evidence. 153 Finally, in this respect, Mr Lovas submitted that having regard to the fact that Mr Juul had been found to be a reliable witness, once he "verified an expense, whether corroborated by a document or not" the evidentiary onus shifted to the first respondent to prove that evidence false – an onus he had failed to discharge. (c) The costs judgment 154 Insofar as the costs judgment was concerned, Mr Lovas merely pointed out that the appeal in respect of that judgment was derivative, and his submissions were founded on the premise that the appeals in respect of the wilful default and accounting judgments were held to be affected by error. (d) The cross-claim judgment 155 Turning to the application for leave to appeal, Mr Lovas submitted that the primary judge erred in granting the second respondent an extension of time in which to file a cross-claim and in giving leave to file a cross-claim for a number of reasons. 156 Significant among his contentions was that the primary judge found (cross-claim judgment (at [35])) that the second respondent's failure to file a cross-claim within time was a "tactical decision" made with the benefit of legal advice. He submitted that, by analaogy with Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207 (at [91]), that where a deliberate decision to allow a time period to expire has been made, "ordinarily it will be difficult to provide an explanation for that decision sufficiently cogent to warrant the grant of leave" to extend that time period. 157 Next Mr Lovas argued, relying on International Advisor Systems Pty Ltd v XYYX Pty Ltd (No 3) [2008] NSWSC 430 (at [4]), that the discretion to permit filing of the cross-claim out of time had to be exercised judicially, with caution and in such a way as to ensure that no prejudice was suffered by a potential cross-defendant as a result of late joinder. He contended that the delay in filing the cross-claim would prejudice the appellant particularly having regard to the primary judge's finding that, for example, Mr Juul, upon whose recollection and documents the appellant was completely dependent, no longer had an independent recollection of various items set out in the statement of disbursements, the fact that documents had been lost and records had been lost. 158 Secondly, Mr Lovas contended that the primary judge ought to have found that the appellant had a defence of laches which the second respondent could not overcome. 159 Thirdly, Mr Lovas submitted that the primary judge ought to have found that the second respondent was barred from filing a cross-claim on the basis of the principles set out in Anshun. He contended that the hearing of the cross-claim would involve the determination of factual matters which could have been, but were not, litigated in the seven hearing days already devoted to the matter prior to leave being sought to file the cross-claim. In particular, insofar as success on the cross-claim turned on a finding that the appellant was required to contribute to the second respondent in relation to the order to account, he submitted that making such a finding turned on whether the appellant had had the use and/or benefit of the funds the subject of the found joint liability to the estate. This was an issue Mr Lovas submitted should have been litigated already. Its determination on the cross-claim would require recalling witnesses and undergoing a factual examination of matters already the subject of detailed evidence, albeit in a different forensic context than that which would arise upon the cross-claim. The re-litigation of such matters, Mr Lovas contended, had the potential to give rise to conflicting judgments. 160 Finally, Mr Lovas submitted that the cross-claim as filed did not disclose any cause of action for contribution. Two points were raised: one a pleading point and one a matter of substance. It is unnecessary for reasons which will become apparent to consider either complaint. First respondent's submissions 161 Ms R Winfield, who appeared for the first respondent on appeal and at the wilful default, costs and cross-claim hearings, and at the accounting hearing led by Mr J Wilson of Senior Counsel, submitted that the appellant had not been caught by surprise by the case advanced at the wilful default hearing having regard to the draft orders which were handed up on the first day of that hearing. She contended the wilful default alleged was the executors' failure to get in the money said to be owed to the estate. She drew attention, in particular, to the reference in the draft orders to a prayer for relief seeking an inquiry into whether any property which was part of the deceased estate had been "lost or misappropriated and when and by whom and under what circumstances" and the request for an order that accounts be on the footing of wilful neglect and default by the executors, or either of them. She argued the first respondent had established at the wilful default hearing that the appellant and Mr Juul had received funds which they were obliged to repay to the deceased or her estate. In oral submissions, she said that if the estate was going to sue Mr and Mrs Juul to recover the money they had received from the deceased, the cause of action pursued would have been for money had and received. She did not expand on the basis upon which, in the circumstances, such a claim was open to the estate. The notion of a trust adverted to in the first respondent's written submissions in the wilful default hearing was not repeated. 162 Ms Winfield did not dispute Mr Lovas's contention that the first respondent's case at the wilful default hearing was that the conversations for which the executors contended as explaining the payment of $515,000 to the appellant and Mr Juul were a fiction and that the first respondent had not advanced a case that some lesser amount might be recoverable by them as a debt due to the estate. 163 Insofar as the appellant seeks to challenge the primary judge's findings about Mr Juul's and her conversations with the deceased concerning the renovations, Ms Winfield submitted that there was no evidence supporting the proposition that the deceased agreed to any proposal by either the appellant or Mr Juul that there was an agreement that the renovations be undertaken for the fixed price of $515,000. She argued that it was open to the primary judge to find that the sum of $515,000 referred to in the conversations was an estimate rather than a fixed price. 164 Ms Winfield submitted that the proposition that, on an accounting on the wilful default basis, the primary judge should have considered whether the executors could have proved a claim against the hypothetical defendants was "unnecessarily complex" and unsupported by authorities. 165 Otherwise Ms Winfield's submissions are fairly summarised by saying they joined issue with the appellant's. Submissions on the cross-appeal 166 The cross-appeal sought to challenge aspects of the accounting judgment, the costs judgment and the cross-claim judgment. 167 The challenge to the accounting judgment was as to the primary judge's findings that Mr Juul was a credible witness and allowing the executors a just allowance. 168 The challenge to Mr Juul's credibility was based on the proposition that he had not included any monies received from the deceased in any income tax return in Australia. Ms Winfield submitted that if the conversations with the deceased bore the construction for which the appellant contended, then the amounts Mr Juul received should have been declared in taxation returns as income, while expenses could have been claimed as a tax deduction. She also asserted that the primary judge ought to have taken into account in assessing Mr Juul's credibility the fact that Mr Juul declined to answer questions on the basis that it might incriminate him when it was put to him that he had not included in his tax returns amounts he earned in Singapore. 169 The first respondent's challenge to the quantum of the orders made consequent upon the accounting judgment rested on a number of propositions. 170 The first was that at the time Mr Juul carried out the work on behalf of the deceased, he was not a licensed builder. Ms Winfield submitted that the primary judge should not have admitted evidence given by Mr Juul in an affidavit sworn for the purposes of the accounting hearing of a conversation with the deceased in early 1997 to the effect that he would be paid $65 an hour. 171 As to the primary judge's finding that the just allowance for Mr Juul's work should be $50 an hour (accounting judgment (at [76])), Ms Winfield submitted that that allowance ought not to have been paid in circumstances where there was evidence suggesting that Mr Juul's work was not competent as set out in the second respondent's affidavit of 7 February 2006. She also took issue with the hours Mr Juul said he had spent carrying out the work, relying on an affidavit from Mr Ventris to the effect that "such renovation work should normally take a competent builder some four months, maximum five months, assuming the work was continuous and well-organised." 172 Ms Winfield also challenged the conceptual basis for allowing the executors a just allowance where neither had been involved in the performance of the work "on the trust property". She also submitted that in order to demonstrate a just allowance should be made, it would be necessary for the executors to show that there was some benefit to the deceased or her estate from the work done. 173 Finally on this issue, Ms Winfield submitted that the primary judge was not bound in the accounting hearing by the opinion he had formed as to Mr Juul's credibility in the wilful default hearing: cf accounting judgment (at [30]). 174 Insofar as the costs judgment is concerned, Ms Winfield submitted the primary judge erred in apportioning the costs of the wilful default hearing. She argued it was not appropriate to apportion costs on the basis that the first respondent had failed on some issues and succeeded on others but, rather, the question of costs should have been approached on the basis that costs follow the event. Cross-appeal: appellant's response 175 Mr Lovas submitted that the ground of cross-appeal which challenged Mr Juul's "claim for building work" was founded on the erroneous premise that he had made a specific "claim" for payment for his labours. He reiterated his fundamental assertion on the appeal that the appellant and Mr Juul's agreement with the deceased had been as to a lump sum of $515,000. 176 Next, Mr Lovas submitted that to the extent the first respondent sought to challenge the primary judge's use of the figure of $50 an hour to calculate the value of Mr Juul's labour, he was cavilling with the case he had run at first instance. The $50 per hour figure had been adduced by the first respondent as the appropriate rate through Mr Ventris's evidence. 177 To the extent that Mr Ventris's assumption as to the hours the renovation should have taken was concerned, Mr Lovas submitted that his analysis was factually flawed because he failed to take into account matters peculiar to the job at hand including, significantly, the fact that the renovations were undertaken while the house was occupied, the work was not in fact undertaken continuously but was undertaken periodically because Mr Juul had been at times absent working overseas and, further, that Mr Juul himself had carried out much of the actual hands on work including carpentry and painting. He contended that there was no evidence, having regard to the circumstances in which Mr Juul was working and the work he actually did, that he was not working efficiently. 178 Turning to the issue of credibility, Mr Lovas submitted that it was never established that any amounts Mr Juul received from the deceased or the income he earned in Singapore should have been included in his tax return. He also contended that there was no evidence that it ever occurred to Mr Juul that the monies he received from the deceased might attract income tax. Absent evidence that he was consciously evading tax or was, arguably, wilfully blind to that issue, Mr Lovas submitted that the contents of Mr Juul's tax returns did not affect his credibility. 179 Insofar as the cross-appeal sought to challenge the proposition that the deceased received any benefit from the renovations, Mr Lovas submitted that the "benefit" was the subjective benefit to the deceased of being able to spend her last years in the home in which she had lived for many years, rather than in an aged care facility. Meaning of wilful default 180 Wilful default in the present context means "a passive breach of trust, an omission by a trustee to do something which, as a prudent trustee, he ought to have done – as distinct from an active breach of trust, that is to say something which the trustee ought not to have done": Bartlett v Barclays Bank Trust Co Ltd (Nos 1 & 2) [1980] 1 Ch 515 (at 546) per Brightman LJ. Martyn and Caddicks (eds), Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 19th ed (2008) Sweet & Maxwell ("Williams") (at [61-28]) cites this passage from Bartlett to explain the meaning of wilful default in the executorial context. Bartlett was a case concerning wilful default by trustees. However it is in my view apt for Williams to treat the duties of executors and trustees as analogous so as to apply principles concerning wilful default developed in the trust context in a work dealing with executors and administrators. 181 It is also apt to refer to a passage from Meehan (at [65]) in which Giles JA (Sheller and Beazley JJA agreeing) addressed the issue of what constitutes wilful default, again in the context of an accounting by trustees, as follows: 65 It is then necessary to return to what amounts to wilful default… In an accounting by a trustee, the underlying concept is that through breach of trust the trustee has failed to obtain for the trust that which would have been obtained if the trustee's duties had been discharged. There may be simple failure to get in an asset of the trust; sale of a trust asset at an undervalue has been treated as wilful default , presumably because of failure to obtain for the trust the full value of the asset ( Re Tebbs ); failure to obtain rent for a stranger's occupation of a trust property has been treated as wilful default ( Bartlett v Barclays Bank Trust Co Ltd (Nos 1 & 2) [1980] 1 Ch 515). The breach of duty need not be conscious wrongdoing ( Bartlett v Barclays Bank Trust Co Ltd (No 2) (at 546)). But wilful default is not co-extensive with breach of trust: there may be a breach of trust which is not wilful default ( see Re Wrightson; Wrightson v Cooke [1908] 1 Ch 789 at 799-800; Russell v Russell (1891) 17 VLR 729 at 732 ; Re Wood (decd); Ebert v Union Trustee Company of Australia Ltd [1961] Qd R 375 at 378)." (emphasis added) 182 It will be recalled the first respondent's written submissions at the wilful default hearing relied on the passage emphasised in this extract from Giles JA's judgment to support the proposition that he had established, relevantly, that the executors had been guilty of wilful default in failing to get in an asset of the trust represented by the sum of the $515,000 the deceased had given Mr Juul and the appellant. They contended that, at least insofar as the $250,000 was concerned, an accounting would demonstrate "that these are funds of the Estate and are held on trust for it or alternatively are had and received by [the appellant] and [Mr Juul]". They did not descend into greater detail as to why this should be so. The later oblique reference to the fact that the receipts the appellant and Mr Juul had produced did not amount to $515,000 did not cast any greater light on the subject. 183 In the course of the hearing in this Court, Ms Winfield submitted that the chose in action the executors failed to pursue, which supported the wilful default finding, was a cause of action against Mr Juul and the appellant for money had and received. Even then she did not clearly articulate the basis upon which, in the circumstances in which the payments were made, such a cause of action was open to the executors. 184 As the following discussion reveals, the imprecision in the way the first respondent put his case of wilful default at the first hearing led to a cascading series of errors in the disposition of the proceedings. Taking accounts on a wilful default basis: pleading and proof 185 The authors of Meagher, Gummow & Lehane, Equity Doctrines and Remedies 4th ed (2002) LexisNexis ("MGL") (at [25-025]) describe the matters the applicant for an order for accounts must establish as follows: "In any case where a plaintiff seeks the remedy of an account, he must prove, inter alia, that the defendant is an accounting party, and that he, the plaintiff, is entitled to some sum from the defendant, although he is uncertain what is the quantum of that sum. He must do more than demonstrate that he might be owed some money, or that he wants, as it were, to have a kind of general discovery. The locus classicus in this regard is the judgment in Doss v Doss (1843) 3 Moo Ind App 175 at 196-7; 18 ER 464 at 472 by Dr Lushington, who said: 'It is also fit to state, that in the course of these proceedings, issues were asked for on the part of the Appellants to try the validity of the Will and the Deeds. Again, it must be remembered that the Decree cannot stand unless it be first clearly proved that the Appellants are, if anything should be found due to the Respondents arising from the acts and dealings of Ramchund, liable to answer that demand; we cannot make a Decree, ordering them to account, without first determining that they are liable to pay if anything be found due . A Decree for an account is not, as appears to have been assumed, a mere direction to inquire and report. It proceeds, and must always proceed, upon the assumption that the party calling for it is entitled to the sum found due. It is a Decree affirming his rights, only leaving it to be inquired into, how much is due to him from the party accounting .' " (emphasis added) The primary judge quoted this passage in the accounting judgment (at [58]), in considering the proper characterisation of the hearing in which a plaintiff obtains an order for inquiries or account. 186 It will be recalled that the originating summons sought an order for the taking of accounts in common form in the deceased's estate whereas, when the wilful default hearing commenced, the first respondent was given leave to file an amended summons seeking an order that accounts be taken on the basis of wilful default. The distinction between those two forms of accounts was explained by Giles JA in Meehan (at [13] - [14]) as follows: "13…Under [an order for taking accounts in common form] the accounting party accounts only for what has actually been received and disposed of. The other party to the accounting can challenge the accounting party's account by asserting that more was received (in the old terminology, surcharging) or by asserting that less was disposed of (in the old terminology, falsifying). 14 There is an alternative basis for taking accounts. An order may be made for taking accounts on the basis of wilful default (sometimes the words are wilful neglect and default). Under such an order the accounting party must account not only for what has actually been received, but also for what should have been received: that is, for what would have been received if the relevant duties of the accounting party had been properly discharged. Thus in Partington v Reynolds (1858) 4 Drew 253 at 256; 62 ER 98 at 99 it was said that on this basis an executor or administrator must account 'not only for what he has received, but also for what he might, without his wilful neglect or default have received, although he has not received it'. 15 … An accounting on the basis of wilful default is more onerous than an accounting in common form, and can result in the accounting party having to pay more to the other party to the accounting…" 187 Some elaboration on the passage I have quoted from MGL is necessary. 188 An executor or administrator is in the position of a gratuitous bailee, who cannot be charged with the loss of his testator's assets without wilful default: Job v Job (1877) 6 Ch D 562 (at 564) per Sir George Jessel MR. 189 To make the estate's representatives account on the footing of wilful default, the plaintiff must plead that assets might have been received but for the default of the representatives and must prove at least one example of wilful default on the part of the defendant: Williams (at [61-25]) citing Sleight v Lawson (1857) 3 K & J 292; 69 ER 1119; Re Youngs (1885) 30 Ch D 421 and Re Stevens [1897] 1 Ch 422 at 432 per North J; see also MGL (at [25-035]). 190 Where a plaintiff seeks an order for accounting on a wilful default basis, the allegation of wilful default must be made good at the hearing and cannot be left for decision at some later stage of the action: Williams (at [61-29]) citing Smith v Armitage (1883) 24 Ch D 727. The burden of proof lies on the plaintiff who "must show not only such a loss, but a loss under such circumstances as to show default on the part of the executor or administrator": Williams (at [61-29]) citing Re Brier (1884) 26 Ch D 238; Re Stevens [1898] 1 Ch 162 (at 175). It is not sufficient for the plaintiff to obtain an order directing an inquiry as to wilful neglect or default merely to point to an item which the executors have not got in; rather, it is for "the Plaintiff to fix upon any item he pleases, and adduce proper evidence to shew that but for the wilful neglect or default of the Defendant, it might have been received": Sleight v Lawson (at 298; 1122) per Page Wood V-C; see also Gava v Grljusich [1999] WASC 13 (at [27]) per Kennedy J; Glazier v Australian Men's Health (No 2) (at [74] - [75]) per Austin J (a passage not adversely effected by the reversal of his Honour's judgment in Meehan). 191 It has been said to be long established "that accounts on account of wilful default cannot be taken [on an originating summons except by consent], … because a cause without pleadings does not permit the established rule of Court to be followed viz., that a beneficiary must allege in his pleadings as well as prove at the hearing one case of wilful neglect and default": Perpetual Trustee Co v Watson (No 1) (1927) 28 SR (NSW) 39 (at 41) per Harvey CJ in Equity; see also Dowse v Gorton [1891] AC 190 (at 202); Re Wrightson [1908] 1 Ch 789 (at 799) per Warrington J; GP Stuckey and CD Irwin, Parker's Practice in Equity (New South Wales), 2nd Ed (1949) Law Book Company (at 139). No doubt this is why Williams (at [61-29]) says particulars of the allegation of wilful default should be given in the pleadings. However Williams (at [61-29]) also suggests that if such particulars are not given in the pleading, they must be set out in the affidavit or witness statement alleging wilful default. MGL accepts (at [25-035]) that the allegation of wilful default can be made by amendment at trial. This contrasts with the strict pre-Judicature Act position, that if the plaintiff's pleadings did not raise the wilful neglect point, it could not be raised "either at the original hearing or on further directions": Jones v Morrall (1852) 2 Sim (NS) 241; 61 ER 333 (at 250; 336); see also Re Symons (1882) 21 Ch D 757 (further accounts and inquiries directed on wilful default basis after evidence of wilful default adduced during the taking of ordinary accounts); H G Hanbury, "Forms of Account against Executors and Trustees" (1936) 108 Law Quarterly Review 365. 192 As I have said, the plaintiff seeking an order for accounting on a wilful default basis must establish one allegation of wilful default at the primary hearing. As Handley JA (Hodgson JA and Campbell AJA agreeing) said in Milltec Australia Pty Ltd v Burnes [2006] NSWCA 13 in an analogical context: "13 The claims to a bare declaration and an inquiry as to damages were misconceived. The claim was for damages for a common law tort and the onus on a plaintiff who does not prove his damages, but seeks an inquiry for this purpose, is to establish his cause of action at the trial. A plaintiff is not entitled to an inquiry to discover whether or not he has a cause of action. The rights of the parties must be determined at the trial and any accounts or inquiries which are then ordered 'follow merely consequentially': McGrory v Alderdale Estate Co Ltd [1918] AC 503, 511 and generally Spencer Bower Turner & Handley "Res Judicata" 1996 pp 76-8." (emphasis added) 193 An accounting on the footing of wilful default leads to an order requiring the defendant to replenish funds wrongfully depleted by him or her and in that sense to make restitution for the benefit of the plaintiff: Glazier v Australian Men's Health (No 2) (at [42]) per Austin J. 194 An order that an account be taken and that the defendant pay the amount found to be due on the taking of such accounts, particularly one which has been entered, will constitute a final order which cannot thereafter be varied: Meehan (at [23], [34], [45]). However an order merely for the taking of accounts, under which the proceedings are adjourned for further consideration will not determine the plaintiff's claim for relief and is characterised as an interlocutory order – it will not be a "perfect judgment" until an order that money be paid: Meehan (at [33]); see also Carantinos v Magafas [2008] NSWCA 304 (at [145]) per Campbell JA. However, that does not mean the earlier hearing lacks any binding quality. The fact that issues have been reserved for further consideration does not mean that any such decision in so far as it decided "the rights of the parties" can be overturned or varied as a consequence of the inquiry or the further consideration of the matter; the judge cannot review and reconsider what he or she has decided at an earlier hearing: Carantinos (at [147]) per Campbell JA referring to Australian Hardboards Limited v Hudson Investment Group Ltd [2007] NSWCA 104; (2007) 70 NSWLR 201 (at [73]) and cases there cited; see also Handley AJA (at [165] – [166]). 195 Thus, the fact that the short minutes of order intended to give effect to the wilful default judgement did not order the executors to pay the amount found to be due on the taking of such accounts, but, rather reserved for consideration after the taking of accounts the making of any order for payment means the wilful default order was an interlocutory one. However, as is apparent from the previous paragraph, it was not open to the primary judge to review and reconsider what he had decided at the wilful default hearing – at least insofar as that precise matter had already been necessarily and directly decided by a competent tribunal in resolving rights or obligations between the same parties in the same respective interests or capacities: Ramsay v Pigram [1968] HCA 34; (1968) 118 CLR 271 (at 276) per Barwick CJ; Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 (at [40]). Pleading issues 196 The role of an executor is to identify the assets of the estate, to take reasonable steps to get them in and to expend those assets in the due course of administration. Where a question arises as to whether or not the estate may have a cause of action to recover an asset the executor has to determine whether it is prudent for the executor, consistently with his or her executorial duties, to pursue that cause of action. As Austin J said in Gray v Guardian Trust Australia [2003] NSWSC 704 (at [9]): "When confronted by beneficiaries who are urging them sue, personal representatives are in a difficult position. If they take proceedings, they may be held personally liable for costs if they are considered to have acted unreasonably; and if they do not, they may be held personally liable for having failed to pursue a good claim of the estate : JHG Sunnucks, JGR Martyn and N Caddick, Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (Sweet & Maxwell, 2000), paragraph [60-10]." 197 In those circumstances an executor should seek judicial advice as to whether to commence litigation, in order to avoid the possible consequence that "a trustee who, without the sanction of the Court, commences an action or defends an action unsuccessfully, does so at his own risk as regards the costs, even if he acts on counsel's opinion": Re Beddoe [1893] 1 Ch 547 (at 557) per Lindley LJ. The court has a discretion to give advice and directions (commonly referred to as a Re Beddoe order) in those circumstances even though the advice may determine substantive rights in contested proceedings: Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66. 198 If, in the circumstances, a personal representative is under a duty to litigate, the Court may give him or her and indemnity out of the assets of the estate for the costs of the litigation: Gray v Guardian Trust Australia (at [9]) referring to Re Dallaway [1982] 1 WLR 756; [1982] 3 All ER 118. 199 Where a person intends to suggest that an estate has an asset the executors should recover, it might be expected that that person would advise the executor of that asset and ask that steps be taken to recover it. In case of uncertainty, the prudent executor would proceed as suggested above (at [197]). In this case it does not appear the executors were put on notice of the first respondent's allegations before the commencement of the proceedings. No correspondence before action was before the court. As is apparent from the procedural history earlier recited, and from the matters referred to below, the first time an allegation of wilful default was made was on the first day of the hearing. 200 Ms Winfield explained that the first respondent's original purpose in commencing the proceedings was to seek to determine what had happened to the proceeds of the sales of the lots in the subdivision. If that was their original purpose, it is apparent that their inception was misconceived. The accounting in common form sought in the summons as filed could not have explored that question. As I have explained, an accounting in common form inquires as to what has actually been received and disposed of by those responsible for, for present purposes, the administration of the deceased's estate. The executors could have properly responded to the summons as filed by putting on evidence as to what had happened to the monies in the deceased's bank account and the house – being the assets of the estate disclosed in the probate documents. 201 However, it was apparent from the first respondent's affidavit that he and the plaintiffs he represented were in truth inquiring as to the disposition of the proceeds of the sale of the lots in the subdivision, and despite the form of the summons, the executors' evidence sought to address that issue. 202 It was the material the executors then put on which, according to Ms Winfield, prompted the application to amend to seek accounts on a wilful default basis. She said the fact there might be a balance outstanding became apparent to the first respondent once the appellant's affidavit was filed prior to the commencement of the wilful default hearing. She identified the executors' wilful default as their failure to get in the asset of the estate represented by the balance when the inventory for the estate was prepared which did not mention that chose in action. It should be noted, at this stage, that it is not apparent from the written submissions at trial that this was the way the first respondent sought to put his case at the wilful default hearing. Rather the tenor of the case was that the entire sum of $515,000 was recoverable. 203 However the relevant point is that once the first respondent apprehended that he might wish to seek an accounting on a wilful default basis it was incumbent upon him, in my view, to plead such a case. 204 Part 6, Division 2 of the UCPR deals with originating process. Subject to the UCPR, the practice notes, any other rules of court and any other Act or law, a person may commence proceedings in the court by filing a statement of claim or a summons: UCPR 6.2(1) and (2). UCPR 6.3 sets out the circumstances in which proceedings must be commenced by a statement of claim. None of the enumerated categories appears to apply to proceedings seeking relief in relation to the administration of an estate. UCPR 6.3(e) requires a statement of claim in "proceedings on a claim for relief in relation to a trust, other than an express trust wholly in writing". As I have said, the proceedings were started within nine months of the deceased's death and thus before the executor's year had expired. It is probable that the executors were still performing executorial rather than trustee functions at that stage. 205 UCPR 15.3 requires a pleading to give particulars of, relevantly, any breach of trust or wilful default on which a party relies. A summons is not a pleading: see UCPR 1.2 and the definition of "pleading" in the Dictionary. Thus, assuming for present purposes the proceedings were properly commenced by summons, once the first respondent sought leave to amend the summons to seek accounts on a wilful default basis he should have been required to proceed by pleading clearly the matter(s) of wilful default he sought to establish. In short, insofar as the $515,000 was concerned, the first respondent had to establish that the estate had an asset, being chose in action to recover those monies, which, having regard to the nature of their duties, the executors should have recovered but had failed to get in. He bore the legal onus in this respect. 206 Such a case was never clearly articulated – either in the proposed amended summons, or in the first respondent's written submissions. The failure to articulate that case appears to have led to the wilful default proceedings being conducted without a clear focus on what had to be established to make good the claim to accounts on a wilful default basis and at what level of specificity the finding of wilful default had to be made. 207 The executors no doubt bore an evidentiary onus in seeking to resist the finding of wilful default. In that respect they could seek to demonstrate, as they sought to do in the accounting hearing (and to some extent in the wilful default hearing), that proceedings to recover the $515,000 would be fruitless: Re Brogden (1888) 38 Ch D 546 (at 568) per Cotton LJ, (at 572 –573) per Fry LJ, (at 574) per Lopes LJ. 208 Mr Juul bore no onus of any nature. He was not a party to the proceedings. Yet comments were made about his perceptions about what he and the appellant had to justify (wilful default judgment (at [42])) which suggested that the primary judge approached the wilful default hearing as if he was a party – a matter with which I will deal in more detail below. More particularly, those remarks were made when it is apparent from the parties' written submissions at the wilful default hearing that the case the first respondent advanced and that the executors understood they had to meet even in the light of the proposed amended summons, was, as Mr Lovas submitted, an all-or-nothing one, depending upon acceptance or rejection of the conversations they alleged had taken place with the deceased concerning the renovations. 209 The primary judge's failure to appreciate this led to him making findings which went beyond the case the executors were called upon to meet. I would accept the appellant's submission that the executors were not on notice that the first respondent was advancing a case that the wilful default in respect of the failure to get in the $515,000 was put on the basis that that case was advanced in respect of any amount over and above the amount of $370, 839.62 set out in the schedule attached to the appellant's first affidavit. 210 The imprecision which, in my view flowed from the failure properly to plead the wilful default case, did, as Mr Lovas submitted, lead to the primary judge making findings of which the executors had no notice – and, more particularly which were adverse to a non-party, Mr Juul – a subject to which I now turn. The problem with parties 211 Mr Juul has never been made a party to the proceedings. However findings have been made which have directly and indirectly affected his interests. In the wilful default judgment (at [47]), a finding was made that there was no agreement between the deceased and Mr Juul as to him being reimbursed for his time and effort in undertaking the renovations. There is nothing which suggests he (or indeed the executors) was on notice that such a finding might be made. That finding then flowed though to the accounting hearing where it was held to constitute an issue estoppel when consideration was being given to whether there should be a just allowance (albeit to the executors) for the work he undertook. 212 Further, the wilful default judgment short minutes of order contemplated that following the taking of accounts, an order for payment might be made against Mr Juul. Although that did not ultimately happen, it made clear the extent to which the order for the taking of accounts affected his interests. In those circumstances he should have been given notice in accordance with the following rules so as to have the opportunity to intervene in the proceedings. 213 UCPR 46.12 relevantly provides: " 46.12 Notice of judgment (1) This rule applies to a judgment in proceedings for: (a) the administration of the estate of a deceased person, or (b) the execution of a trust,… (2) If the Supreme Court gives a judgment: (a) affecting the rights or interests of a person who is not a party, or (b) for the taking of an account or the making of an inquiry, the Court may, by the judgment or by subsequent order: (c) give directions for service of notice of the judgment on any person interested… (4) If, under this rule, notice of a judgment is served on a person, or the Supreme Court dispenses with service of notice of a judgment on a person: (a) subject to paragraph (b), he or she is bound by the judgment to the same extent as if he or she were a party at the time when the judgment was given, except where the judgment has been obtained by fraud or non-disclosure of material facts, (b) the Court may, on application by him or her on notice of motion filed within the time limited by subrule (5), discharge or vary the judgment or order, (c) he or she may attend the accounts, inquiries or other matters under the judgment…." 214 The purpose of these rules is to allow a non-party whose interests would be affected directly by a decision in the proceedings to seek to intervene to protect the interest liable to be affected: see Young v Holloway [1895] P 87 (at 89-90); Osborne v Smith [1960] HCA 89; (1960) 105 CLR 153 (at 158-9) referred to with approval: Levy v State of Victoria [1997] HCA 31; (1997) 189 CLR 579 (at 601) per Brennan CJ. 215 There is no suggestion that Mr Juul was ever served with a notice of the orders referring the matter for the taking of accounts. Had these rules been complied with, and had Mr Juul sought to intervene, he would have been entitled to argue, for example, that the wilful default judgment should be discharged to the extent that it was based on the finding that there was no agreement with the deceased as to him being reimbursed for his time and effort in undertaking the renovations. The count for money had and received 216 The cause of action for money had and received is the "most comprehensive of all the common counts [and is] applicable wherever the defendant has received money which in justice and equity belongs to the plaintiff, under circumstances which render the receipt of it a receipt by the defendant to the use of the plaintiff": Bullen & Leake, Precedents of Pleadings, 3rd ed (1868) Stevens & Sons (at 44) ("Bullen & Leake"); referred to with approval by Gummow J in Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 (at [88]) as echoing what Lord Mansfield said of the action for money had and received in Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676; see also Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6; (2006) V Conv R ¶54-713 (at [9]) per Chernov JA; also Nettle JA (at [47]). As Chernov JA explained, (Ovidio, at endnote 9), the description of the action for money had and received in the third edition of Bullen & Leake was substantially repeated in subsequent editions up to the 13th edition (1990) (at 654-665) whereas in the 14th edition of the work published in (2001) (at 1543-1559), there is no reference to that cause of action by that name and the topic is dealt with the heading of "Restitution" and in the context of unjust enrichment. In Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (at 683), Lord Goff of Chieveley referred to the "old action for money had and received – what we nowadays call a personal claim in restitution at common law." 217 The principle extends to cases where the money has been paid for a consideration that has failed: Royal Bank of Canada v The King [1913] AC 283 (at 296) per Viscount Haldane LC; referred to with apparent approval by Gummow J in his extensive consideration of the cause of action for money had and received in Roxborough (at [62]). The failure of consideration must be complete in order to entitle the plaintiff to recover the money paid for it, unless the consideration is severable: Roxborough (at [14]) per Gleeson CJ, Gaudron and Hayne JJ approving the passage to that effect in the third edition of Bullen & Leake; (at [105] – [107]) per Gummow J; cf (at [198]) per Callinan J. Failure of consideration may include, but is not limited to, non-performance of a contractual obligation: Roxborough (at [16]) per Gleeson CJ, Gaudron and Hayne JJ; (at [95]) per Gummow J. In a case where it is apparent only some part of the consideration had failed, the court must determine whether there has been a failure of a severable part of the consideration and whether, in the absence of restitution, the payee will retain money at the expense of the payer: Roxborough (at [20]). Failure of consideration can have several meanings, including failure to perform the promise: Roxborough (at [101] – [103]) per Gummow J; (at [196]) per Callinan J. 218 In defending an action for money had and received, the defendant is "entitled to raise by way of answer any matter or circumstance which shows that his or her receipt (or retention) of the payment is not unjust": David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 (at 379); Roxborough (at [91]). 219 Although not clearly articulated, one way the first respondent appeared to put the hypothetical case the estate might have brought against the appellant and Mr Juul was that the deceased paid over the $515,000 labouring under the mistaken belief that that sum represented the presumably approximate cost of the renovations and that, if it did not, the balance ought be returned. 220 A payer is prima facie entitled to recover on an action for money had and received if it appears that monies were paid by the payer in the mistaken belief that he or she was under a legal obligation to pay the monies or that the payee was legally entitled to payment of the monies. However the claim may fail if the payer intends that the payee should have the money at all events, whether the fact be true or false, or is deemed in law so to intend: David Securities (at 378, 380) per Mason CJ, Deane, Toohey, Gaudron and McHugh JJ. 221 With those principles in mind, I return to the wilful default judgment. The primary judge did not identify a jurisprudential basis upon which he held (wilful default judgment (at [50] – [51])) that Mr and Mrs Juul were "obliged to account to the estate for the difference between $515,000 and the amount spent" and that one instance of wilful default had been demonstrated in the executors' failure to get in the amount due to be refunded. However, the first respondent submitted at trial and, as I have said, Ms Winfield submitted in this court, that the basis for recovery was an action for money had and received. 222 It is notable that his Honour made the primary finding as to the Juuls' liability to account to the estate at the same time as recording that there had been no discussion before him as to "whether on the taking of the accounts there should be a just allowance for the work involved in assisting with the renovation": wilful default judgment (at [50]). It is clear that his Honour was conscious of the fact Mr Juul had expended considerable effort in effecting the renovations, the value of which might reduce the amount he had held should be refunded to the estate. The question as to whether a just allowance might be made only arose, in my view, because the primary judge had interpreted the conversations with the deceased as not extending to Mr Juul himself being paid for the work. In my view, in so finding, his Honour misapprehended the conversations. 223 The conversations (see [67] above) went to two matters: first, to the actual cost of the building work and secondly, to Mr Juul being reimbursed for the cost to him of doing, that is to say, managing and supervising the work. The deceased was happy for that work to be undertaken as long as it could be paid for from the sale of two lots in the subdivision. A total figure of $515,000 was agreed to cover both aspects of the renovations. 224 While, as events transpired (and assuming the primary judge had admitted at the accounting hearing Mr Juul's account of the hours he had expended on the renovation work and the hourly rate the deceased had agreed) that represented the total cost of both limbs of the agreement, it is also apparent, in my view, that the deceased was not concerned that there be a dollar-for-dollar accounting of the extent to which the $515,000 was expended. This can be seen from the following matters. 225 One is the conversation to which Mr Juul deposed in the wilful default hearing that "in April 2001 we agreed that our agreement was finished and all parties were perfectly happy with the arrangements and, therefore, it was finished." The primary judge does not appear to have given that evidence any weight in the wilful default judgment. Yet it was evidence which, in my view, indicated that to the extent there was any balance of the $515,000 when the renovations were complete, the deceased intended Mr Juul and/or the appellant to retain it. His Honour appears to have accepted as much in the accounting judgment when he said (at [75]) when holding that there should be a just allowance for the work undertaken by Mr Juul, "[t]he deceased did not expect Mr Juul and his wife to repay any part of the sums paid." That finding can only have been based on the evidence given at the wilful default hearing. It was a conclusion which, with respect, should have been made in that hearing. If it had, it would have been apparent, as, in my view is the case, that it could not be said that the appellant and Mr Juul had received money which in justice and equity belonged to the deceased (and hence was recoverable by her estate). 226 It is also relevant to observe that the objective evidence supports the arrangement for which the appellant and Mr Juul contended, including the conclusion that the deceased was happy for the work to be carried out without requiring a detailed accounting or any refund. Each component of the $515,000 was paid to Mr Juul ($250,000 in October 1998) and the appellant ($265,000 in March 1999) immediately after the sale of a lot in the subdivision. On both occasions the renovation work had only been underway for a comparatively short period. Indeed when the first payment was made, Mr Juul protested that it did not represent the value of the work done to that time – but the deceased insisted on paying. Although unstated, it is possible her anxiety to do so stemmed from knowing the Juuls had borrowed $460,000 to commence the subdivision and the renovation work (wilful default judgment (at [8])), monies on which they presumably incurred borrowing and interest costs. The deceased lived for a further four and a half years or so, yet not once does it appear she ever sought repayment of any of the monies or expressed any dissatisfaction with the absence of an accounting to any one of her other six children, one or more of whom as I have said, lived with her in the home during the period in question. 227 I should note that, on the cross-appeal Ms Winfield argued that the primary judge should not have accepted Mr Juul was a credible witness. It is relevant to consider this aspect of the cross-appeal which clearly could have an effect on the agreement with the deceased. 228 To make good that submission on appeal, the first respondent had to establish that in assessing Mr Juul's credibility the primary judge failed to use, or palpably misused, his advantage, or acted on evidence which was inconsistent with facts incontrovertibly established by the evidence, or which was glaringly improbable, or was contrary to compelling inferences: Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167; Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 73 ALJR 306; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118. 229 Two bases were advanced to support the proposition that the primary judge should have rejected Mr Juul as a credible witness. The principal matter relied upon was the fact he had not declared amounts received from the deceased in his tax returns and because he declined to answer some questions about including amounts earned in Singapore in his tax returns on the basis those answers might incriminate him. As to the first point the evidence did not establish, in my view, that any amount Mr Juul personally received should be included in his tax return. The only part of the $515,000 he personally received was $250,000. It is open on the evidence to conclude that that amount was spent on the actual costs of materials and labour, rather than representing any income he actually earned. 230 As to the second point, the transcript at the stage of the wilful default hearing when this evidence was given does not reveal that Mr Juul declined to answer a question on that basis, however that that was the basis of his refusal to answer is tolerably apparent from a passage in the transcript of the accounting hearing. However the short answer to the first respondent's submission in this respect is that no adverse inference is drawn where a person claims a privilege: see Australian Law Reform Commission, Evidence (Interim), Report No 26 (1985) (at [862]). Further, even if such an inference could be drawn, the primary judge did not consider any such inference detracted from his conclusion that Mr Juul was a credible witness on both occasions he gave evidence. 231 Ms Winfield also contended the primary judge ought to have rejected Mr Juul because he gave evasive answers. The characterisation of these answers and any effect they might have on Mr Juul's credit (assuming them to have been evasive, which is not a matter I would determine) was, in my view, peculiarly within the judge's province of decision-making. 232 Finally, I would note that Mr Juul's conversations with the deceased were substantially corroborated by the appellant's conversation with her: wilful default judgment (at [35]). No attack was made on the appellant's credibility. 233 The first respondent did not demonstrate any reason why his Honour's conclusion that Mr Juul was a credible witness should be disturbed. 234 This means that the conversations to which Mr Juul (and the appellant deposed) concerning the circumstances in which the deceased paid them the $515,000 stand. However, in my view, for the foregoing reasons, the primary judge erred in concluding that there were any monies owing to the estate and that the first respondent had established an occasion of wilful default. The finding of wilful default cannot stand. His Honour ought to have dismissed the summons. 235 In my view these reasons are sufficient to dispose of the appeal and the cross-appeal, without considering the numerous other challenges raised by both appellant and first respondent to the two principal judgments. Removal of executors and trustees 236 It is appropriate to make some observations about some other aspects of the proceedings. 237 The amended orders sought to remove the appellant and the second respondent as executors and trustees of the deceased's estate. It is not apparent whether the executors were still performing executorial duties as at 29 August 2005 when leave was given to file the amended summons (albeit excluding the prayer for this relief from immediate consideration) or had assumed their duties as trustees. There was no evidence of a declaration such as that contemplated by s 11 of the Trustee Act 1925 (NSW). Mr Lovas informed the Court on the appeal, without challenge, that although there was no evidence to this effect, the executors had become trustees by the time of the accounting hearing when the only assets, being the bank accounts and the house, were by then in their names. I observe, though, that the first respondent's contention that the executors had not got in all the estate assets would entail that they were still executors, if that contention were correct. 238 It should be noted that the procedure contemplated by the proposed amended summons seeking orders for the removal of the appellant and the first respondent as executors and trustees was inappropriate. The procedure for the removal of executors differs from that for the removal of trustees. The former step is achieved by the court, in its probate jurisdiction, revoking the grant of probate upon a proper case being established: Caldar v Public Trustee [2003] NSWCA 187 (at [5]). Although the "sorts of situation that can count as a 'proper case' are not rigidly confined" (Richardson v Rearden [2006] NSWSC 1252 (at [16] per Campbell J as his Honour then was), it has been said that the court will exercise its discretion to revoke a grant of probate if the due and proper administration of an estate has either been put in jeopardy or prevented either by reasons of acts or omissions on the part of the executor or by virtue of matters personal to the executor, for example, mental infirmity, ill health, or by virtue of the proof of other matters which established that the executor was not a fit and proper person to carry out the duties he or she had sworn to perform: Mavrideros v Mack (1998) 45 NSWLR 80 (at 108) per Sheller JA, Priestley and Beazley JJA agreeing. 239 The court has an inherent jurisdiction to remove a trustee where the welfare of the beneficiaries and of the trust estate requires such a remedy, a condition which is said to be satisfied where the court considers that the continuance of the trustee in the trust would prevent its proper execution: Heydon and Leeming, Jacobs' Law of Trusts in Australia, 7th ed (2006) LexisNexis Butterworths Australia (at [1585](4)); see also Letterstedt v Broers (1884) 9 App Cas 371; Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572. 240 In this case, assuming for present purposes that an occasion of wilful default had been properly demonstrated as found in the wilful default judgment, the primary judge ought at that stage to have removed at least the appellant as executor to ensure independent legal personal representatives could have considered whether in the light of that finding they should take proceedings to recover the funds his Honour had found to be owing to the estate. Any such newly appointed independent legal personal representatives would (because estate assets had not been got in) be administrators de bonis non administravit, rather than executors. However, as I have found that no moneys were owing to the estate, the order actually made, appointing the third respondents as trustees, was correct. Procedural fairness 241 It is also appropriate to observe that I would accept the appellant's submission that findings were made in the wilful default hearing of which the executors were not on notice. 242 The rules of natural justice apply to court proceedings: Commissioner of Police v Tanos [1958] HCA 6; (1958) 98 CLR 383 (at 396) per Dixon CJ and Webb J (with whom Taylor J agreed); see also Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 (at 186) per Handley JA; Adamson v Ede [2009] NSWCA 379 (at [53] – [63]) per Campbell JA (Giles and Hodgson JJA agreeing). 243 If a judge contemplates determining a case on a different basis to the basis on which the parties conduct the trial the parties must be informed so that they have an opportunity to address any new or changed issues that may arise. Failure so to inform the parties will ordinarily result in a denial of procedural fairness leading to a new trial order if a properly conducted trial might possibly have produced a different result. It will not ordinarily be necessary to lead evidence to prove that the denial of procedural fairness had the potential to affect the outcome; in most cases the facts will speak for themselves: Seltsam Pty Ltd v Gahleb [2005] NSWCA 208; (2005) 3 DDCR 1 (at [78]-[79]) per Ipp JA (Mason P agreeing). 244 In this case it is apparent that a different outcome would have eventuated if the executors had been on notice of the reimbursement point. They would have put on the evidence they put on for the accounting hearing concerning the conversation Mr Juul said he had had with the deceased set out in the accounting judgment (at [54]). The primary judge regarded that evidence as consistent with "the case presented by Mr and Mrs Juul at the [wilful default] hearing which was that they had an agreement with the deceased that they would receive $515,000 for the work which had been discussed " – regarding it as "a further explanation for how a particular figure was determined, namely, the per metre rates upon which Mr Juul based his calculations": accounting judgment (at [63]-[64]). He "would have been prepared to accept that the conversation with the deceased occurred [although] … [w]hat effect the conversation has is another matter": accounting judgment (at [65]). 245 Thus, in my view, the appellant is correct to submit that the finding that there was no agreement with the deceased for Mr Juul to be reimbursed for his time and effort was made in the absence of procedural fairness. It was that finding which led to the primary judge concluding (wilful default judgment (at [50] – [51])) that "Mr and Mrs Juul are obliged to account to the estate for the difference between $515,000 and the amount spent …at least $144,160.38" (although, of course, for the reasons already given, Mr Juul could never be an accounting party). It was, accordingly, a dispositive finding. 246 However, because I have already concluded the primary finding of wilful default should not have been made, it is unnecessary to take this aspect of the claim further. The cross-claim 247 In my view the primary judge erred in giving the second respondent leave to file the cross-claim. The second respondent had been given clear notice in the wilful default judgment (at [54]) that he was at risk of being held liable to account personally. He could not, in my view, stand by and let the proceedings continue then seek to file a cross-claim at the end of the day. To allow the cross-claim to be filed was inconsistent with the principles set out in the Civil Procedure Act 2005 (NSW) (ss 56-60) dealing with the just and efficient determination of proceedings: see Richards v Cornford (No 3) [2010] NSWCA 134; Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. Conclusion 248 As I said (at [5]), on 23 July 2008 the appellant and the second respondent were removed as executors of the estate by consent and the third respondents were appointed trustees of the deceased's estate. Those orders were sought by the first respondent by notice of motion dated 7 April 2008 and by the appellant by notice of motion dated 7 July 2008 The formal orders effecting that change were Orders 12 –15 set out above (at [119]). 249 No party has sought to disturb those orders on appeal. Accordingly, the orders appointing the current trustees should not be disturbed. Orders 250 I would propose the following orders: A In matter No 40327/08 (the appeal of Jennifer Francis Juul): (1) Set aside the finding and orders made by the Court on 23 July 2008 in the plaintiff's summons filed on 10 August 2004 and numbered 1-11 inclusive. (2) In place thereof order that: (i) subject to orders (ii) and (iii), the summons brought by the plaintiff (Henry John Northey) against the defendants (Jennifer Francis Juul and James Knight Northey) be dismissed; (ii) order 1 is made without prejudice to orders 12-15 made on 23 July 2008 on the plaintiff's motion of 7 April 2008 and the first defendant's motion of 7 July 2008; (iii) order 1 is made subject to the orders made in matter No 40328/08 (the summons for leave to appeal); (iv) order that the plaintiff pay the defendants' costs of the summons. (3) In respect of the costs of the appeal: (i) order that the first respondent (Henry John Northey) pay the appellant's costs of the appeal; (ii) order that the second respondent (James Knight Northey) bear his own costs of the appeal; (iii) order that the third respondents (the current trustees) be entitled to payment of their costs of the appeal (if any) from the Estate of the Late Betty Francis Northey on an indemnity basis. (4) Grant the second respondent a certificate under the Suitor's Fund Act 1951 (NSW) in respect of his costs of the appeal. B In respect of matter No 40328/08 (the summons seeking leave to appeal): (1) Grant the applicant (Jennifer Francis Juul) leave to appeal. (2) Direct that the applicant file her notice of appeal within 7 days. (3) Allow the appeal and set aside orders 16-19 made on 23 July 2008 on the motion (as amended) of the second defendant (James Knight Northey) seeking leave to file a cross-claim against the first defendant (Jennifer Francis Juul) for contribution. (4) In place of the orders made below: (i) dismiss the motion (as amended); (ii) order that the second defendant pay the costs of the first defendant of the motion. (5) Order that the respondent (James Knight Northey) pay the applicant's costs of the proceedings in this Court; (6) Grant the respondent a certificate under the Suitor's Fund Act 1951 (NSW). C In respect of the cross-appeal in matter No 40327/08: (1) Dismiss the cross-appeal. (2) Order the cross-appellant (Henry John Northey) to pay the costs of the first cross-respondent (Jennifer Francis Juul) of the cross-appeal. (3) No order as to the costs of James Knight Northey of the cross-appeal. (4) Order that the third cross-respondents (the trustees) be entitled to their costs of the cross-appeal (if any) to be paid from the Estate of the Late Betty Francis Northey on an indemnity basis. 251 BASTEN JA: The background to this appeal has been fully set out by McColl JA, with whose reasons I agree. The issue which the primary judge permitted to be agitated was whether Mr and Mrs Juul owed money to the deceased, at the date of her death, which Mrs Juul and her co-executor (Mr James Northey) had failed to recover for the benefit of the estate. If a prima facie case had been made out that one of the executors owed (but denied owing) money to the estate, the proper outcome should have been an order replacing the executors (or at least of Mrs Juul as executor) so that independent executors, not having a conflict of interest and duty, could consider whether there was indeed a debt owing to the estate which they should take steps to recover. 252 That relief was unfortunately sought only at the commencement of the hearing: Northey v Juul [2005] NSWSC 933 at [17]. Macready AsJ refused leave to file an amended summons which included this claim for relief. He then proceeded to consider whether there was a debt owing to the estate. This was inappropriate in proceedings between a beneficiary and the executors, where one of the alleged co-debtors (Mr Juul) was not a party to the proceedings. 253 His Honour's conclusion, which grounded the ensuing three years of litigation, was that there had been wilful default on the part of the executors as a result of their failure "to get in the amount which was due to be refunded by one of the executors and her husband to the estate": at [51]. 254 As appeared from the previous paragraph in the judgment, no specific amount had been held to be payable. His Honour had held that the amount owing to the estate was the difference between the amount expended by Mr and Mrs Juul and the amount paid to them by the deceased. However, he said that this amount could not be quantified without determining whether "there should be a just allowance for the work involved in assisting with the renovation", and if so the amount of that just allowance: at [50]. 255 That approach should have alerted the parties to the difficulty; it is doubtful in the light of that conclusion whether the plaintiff was entitled to an account at all: see judgment of 1 April 2008 at [58]. Further, it should have been apparent that the proceedings were constituted inappropriately to determine the entitlement of Mr Juul to payment for his work on the property. That could only be determined in proceedings between the estate and Mr Juul. However, the claim against Mr Juul was presumably not equitable and it is unclear on what basis a "just allowance" would arise, unless there was a fiduciary duty owed by Mr Juul to the deceased, as to which there was no finding. The confusion became explicit with the finding that the Court was "determining whether the executors [were] entitled to a just allowance for work which by their own efforts they procured for the benefit of the deceased and her estate": at [79] (emphasis added). 256 In so far as his Honour was entitled to deal with the question of whether there was a debt (or at least a prima facie claim for a debt) which was not being recovered his Honour made inconsistent findings. There were two payments, totalling $515,000, made by the deceased to Mr and Mrs Juul. In his first judgment he concluded at [49]: "In these circumstances I would not characterise the payments that have been made as gifts in a family setting rather than payments received on account for the renovation." 257 Payments made "on account" may envisage the possible return of any excess or that further payments may be required. These payments in fact totalled precisely the cost estimate made by Mr Juul and conveyed to the deceased. His Honour also found (second judgment) at [75]: "The deceased did not expect Mr Juul and his wife to repay any part of the sums paid." 258 The nature of such a negative expectation is unclear, but is not necessarily inconsistent with the existence of a debt. However, it must cast doubt on the conclusion of "wilful default" on the part of the executors. That conclusion cannot stand. The proceedings not having been properly constituted, the further findings in the subsequent judgments must also be set aside. The cross-appeal should be dismissed. It also follows that the cross-claim should have been dismissed. 259 For these reasons and those given by McColl JA with which I agree, orders should be made as her Honour has proposed. 260 CAMPBELL JA: I agree with McColl JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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