“Her maladministration of the estate has now left only a residue of a little under $170,000 for distribution.”
The judge said the woman objected to answering questions in court but was compelled to do so after being granted a certificate under the NSW Evidence Act, which prevents the evidence being used against her in subsequent proceedings.
“She admitted under examination that she had misappropriated a total of $1,141,286.15 (after payment of estate expenses),” the judge said.
Asked if she needed the money, she said: “I didn’t need it. I wanted it”. When it was put to her that she knew what she was doing was wrong, she replied: “Yes, I knew I was going to get in trouble.”
“She spent it on a range of personal expenditure, living expenses, entertainment, gambling, legal expenses and on gifts for her [family],” Slattery said.
The judge said the woman’s admitted misconduct disqualified her from continuing as administrator of the estate, but it was “not realistic” for an independent administrator to step in because there were insufficient funds to cover their costs.
He invited the other family members “to discuss among themselves which of them should be appointed”. If they can’t agree, the court will appoint an administrator.
‘This case shows what can happen when professional oversight disappears: beneficiaries can lose their inheritance overnight.’
Mary-Ann de Mestre, lawyer
Slattery ordered that the evidence in the case and his decision be referred to NSW Attorney-General Michael Daley for “consideration … as to whether any, and if so what, criminal action may be warranted”.
However, he said that his order “does not of itself indicate that this court has reached the view that [a] criminal offence has been committed”.
The judge also referred his decision to the Law Society of NSW for consideration of potential law reform to ensure beneficiaries are told if lawyers are going to cease acting for an estate with no replacement organised.
Mary-Ann de Mestre, principal of Sydney law firm M de Mestre Lawyers, is a lecturer in succession law at Macquarie University.
She said the case should serve as a “wake-up call” that “estates are vulnerable when left without professional supervision”.
“People are under enormous financial strain. We are seeing a rise in ‘inheritance impatience’ where beneficiaries under pressure try to access estate funds before they are entitled to them,” de Mestre said.
“This case shows what can happen when professional oversight disappears: beneficiaries can lose their inheritance overnight.”
She said the decision was “a stark illustration of the dangers of having an estate administrator who is also a beneficiary and who operates without adequate oversight”.
“There is a clear gap in the law: once solicitors step out, no one is required to tell the beneficiaries. That lack of transparency puts estates at real risk,” de Mestre said.
She said that in many estates “solicitor supervision ensures funds are held in trust accounts, payments are scrutinised, and distributions are properly authorised”.
“Without that supervision, the risk profile shifts dramatically, but beneficiaries are usually not told,” she said.
She said it was rare for a judge in a civil case to refer an administrator to the attorney-general for possible criminal investigation and it “sends a very clear message that the conduct crossed a line”.
“The court was minded to recommend a simple but important reform: a rule requiring that when an estate’s solicitor intends to cease acting, and no new solicitor is taking over, the outgoing practitioner must notify all beneficiaries in advance,” de Mestre said.
“This would give beneficiaries the opportunity to ask the court to keep funds protected.”
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