Carmody v June Anstee and Associates &Ors

[2001] QSC 93

SUPREME COURT OF QUEENSLAND

CITATION:

Carmody v June Anstee & Associates &Ors [2001] QSC 093

PARTIES:

MICHAEL CARMODY
(plaintiff)
v
JUNE ANSTEE & ASSOCIATES SOLICITORS
(AS TRUSTEE OF MONEY HELD ON BEHALF OF THE ESTATE OF FAUSTINA DOSSI)
(first defendant)
and
GUGLIELMO DOSSI
(second defendant)
and
RICCARDO ANTONIO DOSSI
(third defendant)
and
ANNA-MARIA NARCISSA ROBSON
(fourth defendant)
and
ANTONIO EMANUELLE DOSSI
(fifth defendant)

FILE NO:

637 of 2001

DIVISION:

Trial Division

DELIVERED ON:

 29 May 2001

DELIVERED AT:

Brisbane

HEARING DATE:

27 February 2001

JUDGE:

Mackenzie J

ORDER:

1.  It is ordered that the first, fourth and fifth defendants pay the costs (including reserved costs) of the plaintiff and the second and third defendants of and incidental to the plaintiff's application and the first defendant's application, to be assessed on a standard basis.

CATCHWORDS:

PROCEDURE – COSTS – GENERAL RULE – DEPARTURE FROM GENERAL RULE – ORDER FOR COSTS ON AN INDEMNITY BASIS – where, subsequent to judgment being delivered, parties given liberty to make written submissions as to costs – whether costs are to be assessed on a standard basis - whether r 701, r 704 or r 705 of the Uniform Civil Procedure Rules  are applicable

Child Support (Registration and Collection) Act 1988 s 72A, s 72C
Succession Act 1981
Trusts Act 1973
Uniform Civil Procedure Rules r 701, r 704, r 705

COUNSEL:

ME Eliadis for applicant
PF Grey for first defendant
RT Whitford for second and third defendants
J Shepley for fourth and fifth defendants

SOLICITORS:

Australian Government Solicitor for applicant
Robertson O'Gorman for first defendant
de Groot and Co for second and third defendant
June Anstee and Associates for fourth and fifth defendants

1. MACKENZIE J:  When judgment was delivered in this matter the parties were given liberty to make written submissions as to costs.  The essential facts are set out in that judgment and I will not repeat them except if necessary.

1. The plaintiff's primary submission was that the order should be as follows:

1.On the plaintiff's application, the first, fourth and fifth defendants pay the costs of the plaintiff and the second and third defendants; and

2.On the first defendant's application the first defendant pay the costs of the plaintiff and the second and third defendants. 

1. The following matters were advanced in support of such orders. If the first defendant had complied with the obligation imposed by s 72A of the Child Support (Registration and Collection) Act 1988 or given an undertaking not to distribute the disputed moneys the proceedings would have been unnecessary. Further, the first defendant actively resisted complying with the notice by bringing its own application. The first defendant could not claim to be an innocent party caught up in a dispute between the plaintiff and the fifth defendant. The first defendant could have taken advantage of the indemnity under s 72A(9) of the Act. The first defendant ought not to be able to have costs paid from the estate. There was an independent obligation to comply with the s 72A notice. With respect to the costs of the second and third defendants, they were not originally involved but had to be joined as parties because they would have an interest in the estate if the disclosure was valid. The order should therefore be made as proposed in their favour.

1. Alternatively, the plaintiff submitted that appropriate orders might be the following:

1.          On the plaintiff's application:

(a)the fourth and fifth defendants pay the costs of the plaintiff and the second and third defendants;      

(b)the first defendant bear its own costs of the application. 

2.        On the first defendant's application:

(a)the fourth and fifth defendants pay the costs of the plaintiff and the second and third defendants;

(b)the first defendant pay its own costs of the application.

1. On behalf of the second and third defendants a primary position was put that since the second and third defendants were joined in both their personal capacities and as administrators they were entitled to costs on an indemnity basis out of the moneys representing the fifth defendant's share of the estate.  Alternatively, it was submitted that they should have their costs on an indemnity basis from the fifth defendant.  It was submitted that they had maintained a neutral position throughout the proceedings.  They had both told the first defendant's employee in a timely way that they did not want to become involved in the dispute between the plaintiff and the fifth defendant.  They had signed their own disclaimers and resignations as administrators at the urging of the fourth defendant.  They had left the conduct of the dispute to the solicitors.  They did not personally instruct the first defendant to take steps to resist the plaintiff's claim.  It may be said by way of comment that there is some dispute raised about some aspects of the factual basis for these submissions, but I do not consider it necessary to resolve them for the purpose of making the costs order.  

1. With respect to the fourth and fifth defendants it was submitted as the primary position that the plaintiff should pay their costs.  Alternatively, costs should be paid from the moneys representing the fifth defendant's share in the estate whether they be in the hands of the plaintiff or otherwise. 

1. It was submitted on their behalf that they had been joined in the proceedings in their personal capacity and as administrators at a time when there was no existing application to set aside the disclaimer.  The fourth and fifth defendants acted on advice from the first defendant that they were, as administrators, entitled to rely on the disclaimer until it was set aside.  In doing so and resisting the plaintiff's initial application they had acted reasonably especially because the relationship between the Succession Act 1981, the Trusts Act 1973 and the Child Support (Registration and Collection) Act 1988 was not settled.

1. The first defendant submitted that the costs of all parties should be paid out of the estate of Faustina Dossi.  In support of this proposition it was submitted that the first defendant had been sued as trustee in respect of the proceeds of the sale of the house.  It had acted on instructions to act on the disclaimer and to not give an undertaking.  It was proper for the first defendant to act on the disclaimer and the instructions because the disclaimer remained valid until set aside.  The ordinary rule that costs in respect of a dispute over trust moneys, that costs should be paid from the fund, should be applied.

1. With respect to the plaintiff's submissions the first defendant submitted that until the disclaimer had been set aside, it had never held moneys for a child support debtor. It had acted on instructions in resisting the claim and in bringing the cross-application. There was no "valid" notice enlivening the indemnity provision until the disclaimer had been set aside. It had indicated that it would hold the funds in trust in the early stages of the dispute. The second and third defendants had adopted a neutral position only a short time before the hearing. The plaintiff needed an order setting aside the disclaimer to succeed. In any event, s 72C does not authorise the awarding of costs against a person in the position of the first defendant.

1. Section 72C(5) of the Act provides as follows:

"(5)       The court may order:
             (a)      the payer; or

(b)if a person has colluded with the payer in the making or proposed making of the instrument or disposition-that person;

to pay the costs incurred by:

(c)the payee of the enforceable maintenance liability; or

(d)a bona fide purchaser or other person for whose protection an order is made under subsection (4); or

(e)       the Registrar;
in relation to the making, or the proposed making, of the instrument or disposition or the proceedings under this section."

1. It is not necessary to decide the precise limits of the subsection for present purposes.  The proceedings are unusual, in that they were commenced initially against the first defendant only for injunctive relief, which was consented to pending resolution of the proceedings.  The other defendants were joined later and the relief sought by the plaintiff was expanded to include setting the disclaimer aside.  Since the first defendant maintained opposition to the notion that it should retain the moneys for payment to the plaintiff, principally because its position was that the disclaimer was effective and no grounds for setting it aside could be established, the two issues were closely bound together.

1. The first defendant itself brought proceedings to establish the opposite of the plaintiff's claim.  It was a party to both proceedings and unsuccessful both in attack and defence.  The need for injunctive relief was superseded by order 2 of 6 April 2001.  In all of the circumstances, I am satisfied that an order for costs might be made against it, if appropriate, without the need to find collusion between it and the fourth and fifth defendants in making the instrument which was set aside. 

1. In making the order below I have adverted to rules 701, 704 and 705 of the Uniform Civil Procedure Rules. The situation is obviously complex.  On the basis of the view I take that, of the four family members, the fourth and fifth defendants were the driving force in resisting the claim, and of other factors which can be gleaned from the reasons for judgment delivered on 6 April 2001 and from these reasons, the following order is appropriate:

1.It is ordered that the first, fourth and fifth defendants pay the costs (including reserved costs) of the plaintiff and the second and third defendants of and incidental to the plaintiff's application and the first defendant's application, to be assessed on a standard basis.