Barter v Barter - [2021] WASC 198

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   BARTER -v- BARTER [2021] WASC 198
CORAM:   REGISTRAR GRIFFIN
HEARD:   ON THE PAPERS
DELIVERED          :   23 JUNE 2021
FILE NO/S:   PRO 5527 of 2017
MATTER:   The Estate of Shirley Mary Barter late of Midland Nursing Home, 44 John Street, Midland, Western Australia, (dec)
BETWEEN:   STEVEN CRAIG BARTER
Applicant

AND

GREGORY JAMES BARTER
Respondent

Catchwords:

Wills - Probate - Passing of accounts - Costs orders - Whether executor's costs can be paid out of the estate - Whether executor entitled to solicitor-client costs to be paid out of the estate

Legislation:

Family Provision Act 1972 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Costs order permitted executor's costs to be paid out of the estate on a solicitor-client basis

Category: B

Representation:

Counsel:

Applicant	:	No appearance
Respondent	:	No appearance

Solicitors:

Applicant	:	Fort Knox Legal
Respondent	:	Lewis Blyth & Hooper

Case(s) referred to in decision(s):

Kirwan v Cresvale Far East Ltd (in liq) (2002) 44 ACSR 21

REGISTRAR GRIFFIN:

Introduction

This is an application to determine the meaning of a costs order made by consent with respect to contested Family Provision Act 1972 (WA) proceedings (the Proceedings) in matter CIV 2956 of 2017.
Background
I refer to the parties by their first names for convenience only and intend no disrespect by doing so.
The Proceedings concerned a claim by Gregory James Barter (Gregory) with respect to the will of his late mother Shirley Mary Barter (Shirley).[1] Gregory's brother Steven Craig Barter is the executor of Shirley's will.[2] Steven and Gregory are the only two beneficiaries of the will.[3] Gregory was the plaintiff and Steven, as executor of Shirley's will, the defendant in the Proceedings.
[1] Writ of summons (SOC) filed on 17 November 2017 in CIV 2956/2017.
[2] Writ of summons (SOC) filed on 17 November 2017 in CIV 2956/2017 [38].
[3] Will of Shirley Mary Barter dated 28 January 1992.
The Proceedings were listed to be heard before his Honour Justice Curthoys in a trial commencing on 28 October 2019.
The Proceedings did not continue to a substantive hearing. I was informed by counsel on 18 May 2021 that shortly prior to the commencement of the hearing, Gregory withdrew his claim, and that the Proceedings were dismissed by consent. Pursuant to consent orders, his Honour Justice Curthoys made the following orders of 28 October 2019.
(i)The plaintiff's [Gregory's] action be dismissed.
(ii)The plaintiff pay his own costs of the action, including costs reserved.
(iii)The defendant's [Steven's] costs of the action be paid out of the estate, including costs reserved.[4] (the Costs Order)
[4] Order of Justice Curthoys dated 28 October 2019 in CIV 2956/2017.
For the reasons given below, I find that the Costs Order was intended to operate as an order that Steven be paid his costs out of the estate on a solicitor-client basis.
Reasons
The court ordered the accounts of the estate be taken on 15 January 2021.[5]
[5] Amended notice to pass accounts dated 15 January 2021 in PRO 5527/2017.
Pursuant to that order, Steven, through his solicitors, filed accounts of the estate. The accounts include amounts for the legal expenses incurred by Steven, as executor, in the Proceedings, on a solicitor-client basis.[6]
[6] Executor's accounts filed 8 February 2021 in PRO 5527/2017.
Gregory, through his solicitors, objects to those accounts.[7]
[7] Respondent's objections to the passing of accounts filed 26 February 2021 in PRO 5527/2017; affidavit of Steven John Blyth filed 26 February 2021 in PRO 5527/2017.
One of the grounds of objection, and the matter which falls for determination in this instance, is whether Steven is entitled to the costs of the Proceedings on a solicitor-client basis or whether Steven is entitled to costs only on a party-party basis and must tax his costs.[8]
[8] Respondent's objections to the passing of accounts filed 26 February 2021 in PRO 5527/2017 [3], [4].
The parties are in agreement that, ordinarily, the general principle in relation to the administration of a trust estate is that unless a trustee has been guilty of some misconduct, the trustee is entitled as of right to costs out of the estate as between solicitor and client. In that regard, both parties refer to and rely upon Jacobs' Law of Trusts in Australia (8th ed).[9]
[9] Applicant executor's submissions filed 28 May 2021 in PRO 5527/2017 [5]; respondent's submissions filed 27 May 2021 in PRO 5527/2017 [3].
Gregory does not contend that Steven has engaged in any disentitling misconduct. In any event, as the Proceedings were dismissed by consent, there is no evidentiary basis upon which any such contention could be established.
However, Gregory does contend that the general rule is subject to any order of the Court, and that, the Costs Order modifies that general rule. Gregory contends that: [Steven] was the only person that stood to lose if [Gregory] succeeded in [the Proceedings]. [Steven] was in substance acting for his own benefit rather than for the benefit of the estate.[10]
[10] Respondent's submissions filed 27 May 2021 in PRO 5527/2017 [4].
For that reason, says Gregory, Steven is only entitled to costs on a party-party basis. Gregory relies upon Rules of the Supreme Court 1971 (WA) (RSC) O 66 r 9 in this regard.[11] Relevantly, that rule provides that a court may only order that a personal representative be deprived of his costs from the fund where he has 'acted unreasonably, or … in substance acted for his own benefit rather than the benefit of the fund'.
[11] Respondent's submissions filed 27 May 2021 in PRO 5527/2017 [8] ‑ [10].
I cannot find that in defending and participating in the Proceedings, Steven was acting in substance for his own benefit. The dismissal of the Proceedings was by consent so there is there is no basis upon which any finding in this regard can be made.
Steven refers to a line of authority supporting the proposition that an executor (or trustee; for present purposes, an immaterial distinction) is entitled to be paid costs out of the estate, though at the same time he has defended his own character.[12] This line of authority is clearly applicable to this situation. Young CJ, in the NSW Court of Appeal, in Kirwan v Cresvale Far East Ltd (in liq) held:
[I]t is well recognised in the authorities that the trustee or a person in the role of a trustee is still entitled to be paid his costs out of the estate in a proper case where he has defended the suit for the benefit of the estate though at the same time, defended his own character.[13]
[12] Applicant executor's submissions filed 28 May 2021 in PRO 5527/2017 [8] ‑ [10].
[13] Kirwan v Cresvale Far East Ltd (in liq) (2002) 44 ACSR 21, 109 [430].
No authority is cited in contradiction of this proposition. I do not accept the submission that Steven is disentitled to his costs by reason of his involvement in the Proceedings, which had an incidental benefit for him.
Gregory contends that if it were the case that it was intended that costs be paid on a solicitor-client basis, there would be no requirement for the 'costs reserved'. That, it is said, is only necessary if costs are sought on a party-party basis.[14]
[14] Respondent's submissions filed 27 May 2021 in PRO 5527/2017 [17].
Against that, is the clear words of the order; that costs be paid out of the estate, and, that the order was made by consent.
I note that the Costs Orders were made by consent.[15] The parties are in agreement that in the normal course of events, an executor should be entitled to his or her costs on a solicitor-client basis from the estate. That being the case, if a different view was held, a different form of costs order could have been sought when the Proceedings were dismissed. It was not.
[15] Respondent's submissions filed 27 May 2021 in PRO 5527/2017 [16].
Both parties made submissions as to the 'normal form' of orders for solicitor-client costs and for costs out of the estate. No authorities were cited in support of either position.[16]
[16] Respondent's submissions filed 27 May 2021 in PRO 5527/2017 [11]; applicant executor's submissions filed 28 May 2021 in PRO 5527/2017 [13].
I find that the Costs Order intended to operate as an order that Steven be paid his costs out of the estate on a solicitor-client basis.
Accordingly, it is proper for those amounts to be claimed as part of the estate accounts.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AW
Associate
23 JUNE 2021