Libbert v Mironow [2015] NSWSC 2153

Supreme Court New South Wales

Medium Neutral Citation: Libbert v Mironow [2015] NSWSC 2153 Hearing dates: 18 December 2015 Date of orders: 18 December 2015 Decision date: 18 December 2015 Jurisdiction: Equity - Family Provision List Before: Brereton J Decision: Release of rights approved. Catchwords: SUCCESSION – family provision – release of rights to apply for family provision order – (NSW) Succession Act 2006, s 95 – deed of release – where terms of deed provide for payment of provision in defendant's personal capacity – where terms of deed provide for payment of provision out of plaintiff's assets – approval to be given to release subject to formal notations of parties' intent. Legislation Cited: (NSW) Probate and Administration Act 1898, s 84A (NSW) Succession Act 2006, s 95 Category: Procedural and other rulings Parties: Stephen Barry Libbert (plaintiff) Amanda Jane Mironow (defendant) Representation: Counsel: L Ellison SC (plaintiff) R Kako (defendant)

Solicitors: Bognar Legal (plaintiff) Elringtons Lawyers (defendant) File Number(s): 2015/318037

Judgment (ex tempore) 1. HIS HONOUR: Before the Court is an application made by summons filed on 29 October 2015 by the plaintiff Stephen Barry Libbert, the executor of the estate of the late Betty Devora Libbert, in which he claims an order approving, pursuant to (NSW) Succession Act 2006, s 95, a release by the defendant Amanda Jane Mironow of her right to seek a family provision order out of the estate and notional estate of the deceased. 2. In conjunction with that summons, the Court is asked to make orders by consent as follows: 1. By way of provision for the Defendant, Amanda Jane Mironow, from the Estate of the late Betty Devora Libbert (also known as Betty Libbert) ("the Deceased"), in addition to the provision made for her in clause 5 of the will of the deceased dated 12 January 2006, Amanda Jane Mironow receive a lump sum legacy of $500,000.00, such legacy not to bear interest if paid on or before 24 December 2015 but otherwise to bear interest (to the extent that it remains unpaid) from the date of this order at the rate prescribed for interest on unpaid legacies under (NSW) Probate and Administration Act 1898, s 84A. 2. The release of Amanda Jane Mironow of her right to seek a further family provision order out of the estate and notional estate of the Deceased is approved pursuant to (NSW) Succession Act 2006, s 95. 3. The costs of the Plaintiff be paid out of the estate of the Deceased on the indemnity basis. 4. The costs of the Defendant be paid out of the estate of the Deceased on the ordinary basis as agreed or assessed. 1. The release in question is to be found in a deed dated 28 October 2015 between the plaintiff as executor and the plaintiff and the defendant as beneficiaries and eligible persons in relation to the estate. 2. Probate of the deceased's will dated 12 January 2006 was granted to the plaintiff on 29 May 2015, the deceased having died on 10 March 2015. The inventory, together with an affidavit of additional assets and liabilities, indicates that the estate has a gross value of $1.307 million and a net value of in excess of $1.305 million. By her will, the deceased appointed the plaintiff and her solicitor, who did not survive the deceased, as executors and trustees, made a gift of jewellery to the defendant in clause 5, made other gifts of personalty, which are not of present relevance and which are not disturbed by the proposed orders, and gave the rest and residue of her estate in effect to the plaintiff absolutely. 3. I am very comfortably satisfied that, subject to some observations to which I shall come, in principle orders providing for the defendant to receive provision of $500,000 out of the estate in addition to the gift of personalty in clause 5 are proper, and ordinarily I would not hesitate to approve a s 95 release given in consideration of a settlement upon those terms. 4. The difficulties arise because of the terms of the deed of release and an affidavit of the plaintiff sworn in support of the application. The deed contains the following provisions: 2.1 In addition to the provisions of clause 5 of the Will, the Executor will cause himself in his personal capacity to pay to Amanda, on or before 24 December 2015 and in the manner stipulated in clause 2.2 of this Deed, a lump sum of $500,000.00 free from any deduction (settlement amount) by way of additional benefit for Amanda to be paid by Stephen as a consequence of Steven receiving significant provision out of the estate of the deceased. The settlement amount is charged on Stephen's share of the estate of the deceased. 2.2 Stephen will, within 7 days after the date of this Deed, cause the company to pass a resolution for the company to be voluntarily wound up and a liquidator appointed after which Stephen will take all steps possible to cause the liquidator, within the time stipulated in clause 2.1 of this Deed, to pay to Amanda 50% of the nett (sic) funds held by the company by way of distribution on Amanda's shares in the company (distribution). Amanda acknowledges that the distribution will be free from any capital gains tax liability to her and accepts the distribution in full or partial satisfaction, as the case may be, of the settlement amount. 2.3 Stephen will, within the time stipulated in clause 2.1, pay to Amanda an amount equal to $500,000.00 less the distribution to finalise his obligation pursuant to clause 2.1. 2.4 If Stephen does not make the distribution and pay the settlement amount to Amanda within the time stipulated in clause 2.1 Amanda will be at liberty to rescind this Deed and the release and indemnity set out in clause 3 will be deemed to be void and of no effect and Amanda's rights as released by this Deed will be restored. 1. The release, which is to be found in clause 3.2 and is the subject of the application for approval, is expressed to be in consideration of the terms of the deed and the provision made in it for Amanda being affected by Stephen within the time specified in clause 2.1. 2. The difficulties, as they seem to me, are, first, whereas proposed order 1 of the consent orders provides for a legacy out of the estate of $500,000, clause 2.1 of the deed provides for a payment by Stephen "in his personal capacity" to Amanda of a sum of $500,000. Secondly, clause 2.2 envisages that Stephen would satisfy that obligation by selling Amanda's shares in a company that had been controlled by the deceased and paying the proceeds of her own shares to her and that he would then merely top up the difference to $500,000. That appeared to be the intention, as was confirmed by Stephen's affidavit. Accordingly, it seemed that the plaintiff was in fact receiving no provision out of the estate, some $40,000 odd from Stephen and some $460,000 from her own assets. 3. It has now been made clear that the executor does not intend to proceed in that way and, despite the terms of the deed, the $500,000 is to be provided from assets of the estate. There is only one sum of $500,000, and Amanda is to retain her shareholding in the company for whatever it is worth. As I have indicated to the parties, and in order to avoid future disputation, I propose to record formally as notations their common intent that that is so 4. On the basis that it is their common intent that that is the way in which the orders will be carried into effect, I am satisfied that giving the release is to the advantage financially and otherwise of the defendant, that she has been appropriately advised in that respect and that it is appropriate to approve the release. 5. Accordingly, the Court with the consent of the parties notes that: 1. Notwithstanding the provisions of paragraph 2.1 of the deed of release dated 28 October 2015, it is the intention of the parties that the defendant receive only provision pursuant to clause 1 of the consent orders from the estate and that there is no personal liability of the executor, such as referred to in clause 2.1 of the deed. 2. Notwithstanding the provisions of clause 2.2 of the said deed, it is not intended that the deed or the provision for the plaintiff under paragraph 1 of the consent orders have any effect on her shareholding in Betty Libbert Pty Limited and she is to retain for her own use and benefit her B and C class shares in that company for whatever they are worth. 1. The Court orders that: 1. By way of provision for the defendant Amanda Jane Mironow from the estate of the late Betty Devora Libbert, also known as Betty Libbert ("the deceased"), in addition to the provision made for her in clause 5 of the will of the deceased dated 12 January 2006, Amanda Jane Mironow receive a lump sum legacy of $500,000, such legacy not to bear interest if paid on or before 24 December 2015 but otherwise to bear interest to the extent that it remains unpaid from the date of this order at the rate prescribed for interest on unpaid legacies under (NSW) Probate and Administration Act 1898, s 84A. 2. The release by Amanda Jane Mironow of her right seek a further family provision order out of the estate and notional estate of the deceased be approved pursuant to Succession Act, s 95. 3. The costs of the plaintiff be paid out of the deceased's estate on an indemnity basis. 4. The costs of the defendant be paid out of the deceased's estate on the ordinary basis.