Legal Dispute Over Deceased Man's Estate Between Wife and Adult Child Escalates with Accusations of Coercion and Financial Misuse

Bolinger v Bell (No 2); The Estate of Colin Bell [2022] NSWSC 1495 (3 November 2022)

Intro: This judgment concerns different proceedings involving the estate of Colin Morton Bell (the deceased) who died testate, on 14 March 2022, leaving the property in New South Wales.

Donna-May Bolinger, the wife of the deceased and who was appointed by the deceased as his attorney under an Enduring Power of Attorney, filed an application for an interim property order. However, the child of the deceased, Ned Bell, who is also appointed by the deceased as his attorney under an Enduring Power of Attorney opposed such application.

Facts:

Donna-May Bolinger, the wife of the deceased (although they had separated), is one of the parties in the proceedings. Ned Bell, a now adult child of the deceased from a previous marriage, is the other party. For the avoidance of confusion, and because the parties appear in different capacities in the different proceedings, I shall refer to each, and other family members, after introduction, by his, or her, first name, respectively. I do not intend any undue familiarity.

The deceased was born in December 1941, and died in March 2022, aged 80 years. He left property, both real and personal, in New South Wales.

The deceased commenced a romantic relationship with Donna-May in 2010. In 2011, they commenced living together, and they were married in December 2014. There were no children in their marriage.

The deceased had three wives prior to Donna-May, Louise Bell, Caroline Bell, and Emlen Gaudino, respectively. Louise and Caroline both predeceased the deceased. Emlen is still alive and is referred to by Ned as an “eligible person” within the meaning of that term in s 57(1)(d) of the Succession Act (a former spouse of the deceased).

The deceased and Louise had one child, Kate Perkins (nee Bell). The deceased and Caroline had one child, Ned, and Caroline also had a child from a previous marriage, who is a stepchild of the deceased, Sophie Balderstone. Those three persons are the sole residuary beneficiaries named in 2015 Will.

The deceased, as stated, also had a relationship with Gina Agathopoulos between 2008 and 2010. William was born in April 2010 and is named as an object of a testamentary discretionary trust which is formed under 2015 Will (to which reference will be made).

On 22 November 2016, the deceased appointed Donna-May as his enduring guardian.

On 8 March 2018, the deceased suffered an arterial blockage and clot in the brain, or a ‘stroke’ and presented at St Vincent’s Hospital.

In July 2018, the deceased was diagnosed with aortic valve endocarditis following which he had an Aortic Valve Replacement at the Mayo Clinic in the United States of America.

On 11 February 2019, the deceased appointed Donna-May and Ned to be his attorneys under an Enduring Power of Attorney.

On 4 August 2019, the deceased had a serious seizure, from which time he required regular assistance with his activities of daily living.

Ned alleges that on 25 September 2020, Donna-May and the deceased separated. Although the date and the circumstances of the separation are contested, with Donna-May claiming that they did not separate until 7 December 2020; in the initial written submissions filed and served on her behalf, at [3] it was written that they “had lived together from about 2010 until 25 September 2020”. Probably, nothing much will turn on the dispute of fact.

Ned alleged that Donna-May had transferred two amounts of $175,000 from the NAB Joint Account to one of her Westpac accounts on or about 28 September 2020, totaling $350,000. Ned also asserted that on 8 October 2020, she had transferred an amount of $480,035 from the NAB Joint Account, held with the deceased, to one of her own Westpac accounts. (It appears that the $35 was an overseas bank transaction fee.) The total of these three amounts is $830,035.

It appears from other evidence that there is no dispute about the transfer of the funds on or about 28 September 2020 and on 8 October 2020. However, there remains a dispute about whether the deceased had consented to Donna-May withdrawing each from the joint accounts and transferring those funds to herself: see Ex JE1/193 and Ex JE1/209. The issue of consent will be determined at the hearing. The withdrawal of funds is referred to in order to demonstrate amounts that Donna-May has received, at or about the time, or following separation.

On 13 October 2020, the deceased executed a document that revoked the appointment of Donna-May and Ned as his enduring Attorneys. On 3 November 2020, he executed a document that appointed Kate and Ned as his enduring guardians, and another document, which appointed Ned, alone, as his enduring Attorney. As earlier stated, Donna-May has disputed the validity of all of these documents.

On 10 November 2020, following the breakdown of their marriage, Donna-May initiated proceedings against the deceased in the Family Court of Australia (as it was then known) (SYCXXXX/2020) with respect to the property of the parties to the marriage, or either of them, altering the interests of the parties to the marriage in the property under s 79 of the Family Law Act. In those proceedings, she sought, amongst other things, an order that she receives 50% of the net property and superannuation entitlements belonging to her and the deceased, as well as the transfer to her, absolutely, of certain real estate in Woollahra (“the Woollahra property”), which was solely owned by the deceased.

Where, before property settlement proceedings are completed, a party to the marriage dies, the proceedings may be continued by, or against, as the case may be, the legal personal representative of the deceased party, and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings: s 79(8) of the Family Law Act.

On 30 July 2021, Donna-May commenced proceedings in the Protective List of this Court, against the deceased, Ned, and Kate Perkins, another, now adult, child of the deceased, challenging the validity of various instruments relating to the deceased’s enduring guardianship and a power of attorney over the deceased's affairs. In the alternative, she sought to be appointed as manager of the deceased's affairs.

On 8 November 2021, as stated, an application was made by Donna-May to cross-vest the family law proceedings to this Court. As the application was opposed by Ned, it came to be listed for a contested hearing on 25 March 2022 in the Federal Circuit and Family Court of Australia.

On the first day of the hearing, the Court suggested that if the evidence in the Probate proceedings were completed promptly, dates for a hearing of 5 days duration might be able to be given this year or early in 2023. This could avoid the necessity for the determination of the application for interim relief and save the parties further delay, time and costs. The suggestion made by the Court was rejected on that occasion: Tcpt, 29 June 2022, p 16(50)-18(4).

Issue:

1.) Whether or not it is in the interests of justice to make an interim property order.

Ruling:

Yes.

I have made clear that the various proceedings involving Donna-May and Ned are hard-fought and likely to be somewhat complex. Their disputes have already continued for almost 3 years.

Having considered all of the evidence to which I have previously adverted, and also the detailed submissions of each of the protagonists, I am satisfied that, in all the circumstances, it is appropriate to exercise the power to make an interim property order, as it is in the interests of justice to do so in favour of Donna-May, but not in the terms that she seeks.

Whilst not productive of children, the relationship and marriage of Donna-May and the deceased was of reasonable duration; no doubt, there were varied contributions by each of the parties to the marriage and other matters will have to be considered in determining, on a final basis, orders that are just and equitable. Donna-May, for example, asserts that she gave up her own business, thereby becoming financially dependent upon the deceased. She also asserts that she cared for him when he became unwell. He had generously provided for her during the marriage. Spousal maintenance is not currently available to her.

I accept that a mere preference to retain assets does not make a proposed order just and equitable, the question to be answered being whether the evidence established that Donna-May is unable to meet her expenses, (which would justify an interim property adjustment order). In this regard, it is relevant that her earning capacity appears to be somewhat limited. Yet, there could very well be potential injustice caused by an outcome of the notice of motion which has the consequence of her having to sell, or mortgage, her property to pay what could be paid, at least partially, by way of interim property adjustment order.

In particular, I am satisfied that the case raised by Donna-May is sufficient, in all of the circumstances, as to its nature and prospects, to justify an interim order: Salvage & Fosse [2020] FamCAFC 144; (2020) 61 FamLR 45 at 49-50; [2020] FamCAFC 144 at [21]. However, in reaching the quantum of the interim order, amounts that she has already received must be taken into account.

In Swift & Swift [2020] FamCA 991 at [26], Gill J acknowledged that due to the inherent limitations of interim proceedings, it may not be possible to identify definitively, or even approximately, the interests of the parties or the values to be attributed to such interests.

His Honour then continued at [29]-[30], saying:

“What is then required is that the legal and equitable interests on an interim application, are sufficiently identified to both answer the question of whether it is just and equitable to make any adjustment, and just and equitable to make the particular adjustment. At times, this will be answered by the concession made by a party that the other party will ultimately be entitled to such an adjustment. At other times, although parts of the pool are unidentified, the pool is sufficiently identified such that it is plainly apparent that such an adjustment will not prejudice the ultimate exercise, whether that be by virtue of reversibility, or otherwise.

Those matters are sufficiently addressed by the concession as to reversibility, that is, that an interim payment to the wife will not prejudice the ultimate adjustment pursuant to s 79. That is, the wife is anticipated by both parties to have an ultimate entitlement that will more than cover the partial distribution that she seeks. When combined with the impetus for such an order flowing from the complex litigation the wife faces, an order should be made for the sum sought by the wife, even though that falls short of the estimated amount required.”

This is particularly the case where there are also probate proceedings that remain on foot.

However, Donna-May has adduced sufficient evidence, which, even though it is likely to be tested, is reasonably able to satisfy the Court, at this relatively early stage of the various proceedings, that this is a case in which justice and equity could require the making of an order. I make clear in stating this, I am doing no more than stating, in light of the circumstances, including the nature of the challenge to the validity of the 2020 Codicil, the duration of the marriage, her contributions thereto, the nature of the family provision proceedings, and the recoverability of any amount advanced, to which she has deposed, that each is, at least, arguable, on the current evidence, and none of which appears to be fanciful or misguided.

I have also borne in mind that Donna-May remains in occupation of the Woollahra property and that she is paying no rent or occupation fee. Whether, ultimately, she will be required to do so will be determined at another time. In addition, the amounts withdrawn by her, whether with, or without consent, totaling $830,035, together with the amounts totaling $540,000 that she received pursuant to the orders made by Lindsay J, should be taken into account as a contribution by the estate to her post-separation expenses: Grier & Malphas [2016] FamCAFC 84 at [57] (Bryant CJ, Murphy, and Kent JJ agreeing at [141]).

Any amount that Donna-May receives out of the deceased’s estate should be characterised as an interim property settlement order. In addition, as she has offered, the lump sum to be paid to her should be secured over one, other, or both, of the parcels of real estate that she owns, or otherwise. In this way, since there appears to be reasonable equity, notwithstanding the existing mortgage on the Darlinghurst Property, or the alleged equitable charge over the Redfern Property, Ned, on behalf of the estate will be able to recover any overpayment. In this way, if the order is made and satisfied, it would not defeat Ned’s legitimate claims, on behalf of the deceased’s estate, at a final hearing.

Conclusion:

Weighing all of the factors, and doing the best I can on an interim hearing, I am of the view that Donna-May should receive, by way of an interim property order, the amount of $750,000. That, taken with the amounts she has received, would total slightly more than $2.0 million. As stated, the lump sum of $750,000, should be the subject of security so that, if necessary, it can be recovered. I shall leave it to Ned, initially, to determine the question of the source of the funds to meet such payment and to the parties to agree upon the way in which the amount paid should be appropriately secured. It should be paid within 14 days of the security being provided.