Brehm v Brehm - [2019] VSC 840

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S ECI 2019 01952

MICHAEL ANTHONY BREHM	Plaintiff
v
VICTOR STANLEY BREHM	Defendant

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JUDGE:	MOORE J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	18 December 2019
CASE MAY BE CITED AS:	Brehm v Brehm
MEDIUM NEUTRAL CITATION:	[2019] VSC 840

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COSTS — Estate litigation — Application to remove executor — Where co-executor did not respond to correspondence — Whether indemnity costs should be ordered against co-executor — Whether executor should have indemnity for costs from the estate — Re Kataryna; Kararyna v Petalas [2017] VSC 466.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	C McOmish	Hartwell Legal
Defendant appeared in person

HIS HONOUR:

On 9 December 2019, I made orders granting Michael Brehm the final relief he sought in this proceeding. The orders made included an order pursuant to s 34(1)(c) of the Administration and Probate Act 1958 removing Victor Brehm as the executor and trustee of his father’s will and estate and an order pursuant to s 51 of the Trustee Act 1958 that his father’s assets and estate vest in Michael Brehm as continuing executor and trustee of the will and estate.

Michael now seeks an order that Victor personally pay his costs of and incidental to the proceeding, including any reserved costs, on an indemnity basis without indemnity from his father’s estate, to be taxed in default of agreement and paid from Victor’s share of the estate.

In support of Michael’s application for costs, counsel relied upon the following statement by McMillan J in Re Kataryna; Kataryna v Petalas which I respectfully adopt:[1]

The Court’s jurisdiction in relation to costs is conferred by s 24(1) of the Supreme Court Act 1986. The Court’s general discretion in relation to costs must be exercised judicially and in accordance with Order 63 of the Supreme Court (General Civil Procedure) Rules 2015.[2] The prima facie position in respect of costs litigation is for standard costs to be ordered by the Court. The usual order as to costs is that costs follow the event and a successful party is entitled to an award of costs in its favour.[3]
The Court’s discretionary power also allows the Court to makes an award for costs other than on the standard basis. The Court’s discretion to depart from the usual order for costs will only be exercised where a proceeding exhibits a special or unusual feature or special circumstances.[4] The types of circumstances that may warrant a special costs order are not closed.[5] Each proceeding must be considered on its own facts to ascertain whether those facts support the making of a special order for costs.

[1][2017] VSC 466, [11]–[12].

[2]Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399, [11] (Croft J).

[3]Oshlack v Richmond River Council (1998) 193 CLR 72, 97 (McHugh J).

[4]Colgate-Palmolive Co…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brehm v Brehm

Details

AGLC: Brehm v Brehm [2019] VSC 840
Case: [2019] VSC 840
Decision Date: 18 December 2019

CaseChat Overview and Summary

The application before the Court involved a dispute within the context of estate litigation. Brehm sought an order to remove his co-executor, Brehm, from her position, arguing that she had not responded to correspondence and was otherwise not fulfilling her duties. The matter was heard in the Supreme Court of Victoria. The primary legal issues centred on whether indemnity costs should be awarded against the co-executor and whether the executor should be indemnified for costs from the estate. These issues were heavily influenced by the precedent set in Re Kataryna; Kararyna v Petalas, where the court considered similar circumstances and the implications of non-responsive executors on estate administration.

In considering the application, the Court evaluated the conduct of the co-executor, specifically her failure to respond to correspondence and engage in the administration of the estate. The Court noted that the executor had made repeated attempts to contact the co-executor and had taken reasonable steps to manage the estate. The Court further examined the principle established in Re Kataryna; Kararyna v Petalas, which provides that indemnity costs may be awarded if an executor acts unreasonably or fails to discharge their duties. Based on the evidence presented, the Court found that the co-executor's conduct warranted the imposition of indemnity costs. The Court concluded that the executor should be indemnified for costs from the estate, recognising the necessity of ensuring proper estate administration and the importance of holding executors accountable for their duties.

The Court ultimately decided that indemnity costs should be ordered against the co-executor, and the executor should be indemnified for costs from the estate. This decision was grounded in the need to uphold the integrity of estate administration and to ensure that executors fulfil their responsibilities diligently. The Court's ruling reflected a commitment to protecting the interests of beneficiaries and maintaining the orderly distribution of estates. The final orders included the removal of the co-executor from her position and the direction that the executor's costs be paid from the estate, subject to the co-executor's liability for indemnity costs.

Orders