Carr v Larussa - [2018] WASC 176

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   CARR -v- LARUSSA [2018] WASC 176
CORAM:   ACTING MASTER STRK
HEARD:   12 APRIL, 18 MAY, 27 JUNE 2017, AND ON ADDITIONAL PAPERS FILED BETWEEN 30 JUNE & 6 OCTOBER 2017
DELIVERED          :   12 JUNE 2018
PUBLISHED           :   13 JUNE 2018
FILE NO/S:   CIV 1237 of 2017
MATTER:   The Estate of Giuseppe Larussa of Gracefield Park Farms, Beermullah West Road, Beermullah, Western Australia, deceased
BETWEEN:   ANNA CARR
Plaintiff
AND
TONY LARUSSA
First Defendant
LARUSSA PASTORAL HOLDINGS PTY LTD as trustee for THE LARUSSA PASTORAL TRUST
Second Defendant
LARUSSA CUSTODIAN SERVICES AUSTRALIA PTY LTD as trustee for THE LARUSSA PASTORAL TRUST
Third Defendant
MARIA ANGELINA GENNARINA LARUSSA
Fourth Defendant

Catchwords:

Executors and trustees - Private advice application - Directions sought as to whether an administratrix of an estate is justified in maintaining and pursuing proceedings

Application by beneficiary for production of document for inspection - Trustee claimed legal professional privilege in respect of document - Whether trustee and beneficiary entitled to joint privilege - Claim for legal professional privilege established

Legislation:

Criminal Property Confiscation Act 2000 (WA), s 135, s 161
Property Law Act 1969 (WA)
Rules of the Supreme Court 1971 (WA), O 58 r 2
Trustees Act 1962 (WA), s 6, s 71, s 92, s 95

Result:

Application for production of document for inspection dismissed
Legal professional privilege established
Direction given

Category: B

Representation:

Counsel:

Plaintiff	:	Mr S M Standing
First Defendant	:	Mr D J Garnsworthy
Second Defendant	:	No appearance
Third Defendant	:	Mr M T Mckenna
Fourth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Friedman Lurie Singh & D'Angelo
First Defendant	:	Corporate Counsel Lawyers
Second Defendant	:	No appearance
Third Defendant	:	Gilbert + Tobin
Fourth Defendant	:	No appearance

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

Adenan v Bruise [1984] WAR 61
AG v Hayden and others [1984] 156 CLR 532
ANZ v Dzienciol [2001] WASC 305
Avanes v Marshall [2007] NSWSC 191; (2007) 78 NSWLR 595
Blomley v Ryan [1954-1956] 99 CLR 362
Bridgewater v Leahy [1998] HCA 66
Carr v Larussa [2016] WASC 13
Carr v Larussa Custodian Services Australia Pty Ltd [2017] WASC 42
Carr v Larussa Pastoral Holdings Pty Ltd [2015] WASC 300
Commonwealth Bank v Amadio [1982-3] 151 CLR 447
Johnson v Buttress [1936] 56 CLR 113
Krok v Szaintop Homes Pty Ltd & Ors (No 1) [2011] VSC 16
Larussa Pastoral Holdings Pty Ltd v Carr [2015] WASCA 194
Larussa v Anna Carr as administratrix of the estate of Giuseppe Larussa [2016] WASC 332
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66
Mercanti v Mercanti [2015] WASC 297
Plan B Trustees Ltd v Parker [No 2] [2013] WASC 216
Property Law Act 1969 (WA)
Property Law Act 1969 (WA)
Re Estate of Anastasios Keriacules Challis (Dec) [2010] WASC 333
Re Estate of Anastasios Keriacules Challis (Sec) [2010] WASC 333
Schreuder v Murray [No 2] [2009] WASCA 145; (2009) 41 WAR 169
Talbot v Marshfield (1865) 62 ER 728
Wilkinson v Osborne (1915) 21 CLR 89
Wood (As Co-Executor and Trustee of the Will of the Deceased) v Wood [No 4] [2014] WASC 393
Wood (as Co-executor and Trustee of the Will of the Deceased) v Wood [No.2] [2014] WASC 387
Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410
Ziverts v City of Albany [2016] WASC 94

ACTING MASTER STRK:

Guiseppe Larussa died between 27 November 2013 and 28 November 2013. He was survived by his widow, Maria Angelina Gennarina Larussa, his son Tony Larussa, and his daughter Anna Carr.
The deceased separated from Maria Larussa sometime in 1990 but they never divorced. Tony Larussa and Anna Carr are the children of that marriage.
In about September 2014, Ms Carr applied for a grant of letters of administration on the basis that the Deceased died intestate. The beneficiaries of the estate of the Deceased in intestacy are Maria Larussa, Tony Larussa and Anna Carr. In October 2014, a grant was made in favour of Ms Carr.
Various proceedings and claims have since been commenced and agitated as between Tony Larussa and Anna Carr, and related entities. The proceedings mainly concern the estate and its distribution, such as whether the Deceased died intestate and the question of who should administer the estate.[1]
[1] Carr v Larussa Pastoral Holdings Pty Ltd [2015] WASC 300 (Master Sanderson); Carr v Larussa [2016] WASC 13 (Acting Master Gething); Larussa Pastoral Holdings Pty Ltd v Carr [2015] WASCA 194 (Murphy JA); Larussa v Anna Carr as administratrix of the estate of Giuseppe Larussa [2016] WASC 332; and Carr v Larussa Custodian Services Australia Pty Ltd [2017] WASC 42 (Chaney J).
Relevant to this application is the proceeding commenced in this court by Ms Carr in her capacity as administratrix, known as CIV 2162 of 2016 (the debt proceedings); and the question of what assets comprise the estate.
This is an application by Ms Carr for private advice from the court pursuant to s 92 of the Trustees Act 1962 (WA) and O 58 r 2 of the Rules of the Supreme Court 1971 (WA) (RSC).[2]
[2] Sections 92 and 95 of the Trustees Act (WA) and RSC O 58 r 2 are set out in full at Schedule A to these reasons.
Ms Carr sought directions from the court in relation to whether she was justified as the plaintiff in the debt proceedings in maintaining and pursuing that action. After making the application for private advice, Ms Carr sought to amend the originating process, to seek direction as to whether she was justified in commencing and pursuing the debt proceedings. The application to amend was not opposed and, in the circumstances, it is appropriate that leave to amend be given.
In determining the application for private advice, I am required to resolve whether it is appropriate to provide Ms Carr with a direction, and if so, in what terms.
By reason of the definitions of 'trust', 'trustees' and 'personal representative' in s 6 of the Trustees Act (WA), s 92 of that Act applies to an administrator.[3] Mr Larussa, Larussa Pastoral Holdings, Larussa Custodian Services and Ms Larussa are all 'persons interested in the application' for the purpose of s 92(2) of the Trustees Act (WA).
[3] See Wood (As Co-Executor and Trustee of the Will of the Deceased) v Wood [No 4] [2014] WASC 393; and Re Estate of Anastasios Keriacules Challis (Dec) [2010] WASC 333 [17], referred to with approval in Carr v Larussa [2016] WASC 13 [16].
The application for private advice is opposed by Mr Larussa and Larussa Custodian Services Australia Pty Ltd, the current trustee of the Larussa Pastoral Trust. Ms Larussa and Larussa Pastoral Holdings Pty Ltd, the former trustee of the Larussa Pastoral Trust elected not to participate in these proceedings.
Mr Larussa and Larussa Custodian Services are not 'parties' to these proceedings. They are participants, albeit ones that are 'permitted to be heard and allowed to participate in the proceeding, to some extent.'[4]
[4] Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [103 (h)]; Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66 [65]; Carr v Larussa [2016] WASC 13 [17].
Judicial advice proceedings are summary in nature and are not for the purpose of deciding the issues that are to be agitated in the principal proceedings.[5]
[5] Macedonian Church [74].
The application has had a difficult procedural history, with additional issues raised as the matter progressed, some of which were resolved by the filing of further affidavits.[6] Affidavits, submissions, amended submissions, responsive submissions and revised submissions were filed. Set out in Schedule B to these reasons is a list of the relevant materials before the court.
[6] For example, the issue raised concerning for access to estate accounts: see affidavit of FJ Mestichelli filed 20 March 2017; and the provision of interim provisional accounts on or about 5 May 2017: see the affidavit of A Carr filed 12 May 2017.
I have not acceded to the requests that I exclude certain affidavits or outlines of submissions from my consideration due to a failure to meet the various timetables set. No party was without fault in this regard.
Among the affidavits filed in support of the application for private advice was the affidavit sworn by Ms Carr and filed on 13 February 2017 (the first Carr affidavit).
The substantive hearing of the private advice application had been adjourned from 12 April 2018 to 19 May 2017. By a chamber summons filed on 12 May 2017 on behalf of Mr Larussa, an order was sought that Ms Carr be required to produce to Mr Larussa for inspection legal advice referred to at [25] of the first Carr affidavit. The application for inspection of the legal advice was opposed by Ms Carr.
The hearing on 19 May 2017 proceeded on the basis that counsel would make submissions in relation to the private advice application, but that the application for production of legal advice would be programmed and determined on the papers. It was contemplated that should the application for production of legal advice succeed, then the matter would be relisted for directions; whereas if the application for production of legal advice failed, then I would deliver by decision in relation to the private advice application.
For the reasons set out below, I am satisfied that the evidence before me establishes the claim for legal professional privilege in the legal advice referred to at [25] of the first Carr Affidavit, and that the privilege is maintained against Mr Larussa. I am also satisfied that, in all of the circumstances, it is appropriate to provide Ms Carr with a direction.

Overview - the debt proceedings

Ms Carr says that the Deceased made capital contributions by way of loan to Larussa Pastoral Holdings in its capacity as trustee of the Larussa Pastoral Trust, and amounts distributed by the Larussa Pastoral Trust to the Deceased by way of beneficiary distributions had not been taken by the Deceased as at the time of his death.[7] In her application for a grant of letters of administration, Ms Carr valued the estate of the Deceased at $7.9 million. This included an amount of $7 million said to be due to the Deceased by Larussa Pastoral Holdings in its capacity as the trustee of the Larussa Pastoral Trust.[8]
[7] Amended Writ of Summons with Statement of Claim filed in the debt proceedings on 13 July 2016, par 11, annexed to the first Carr affidavit, 'AC2'.
[8] Carr v Larussa [2016] WASC 13 [7].
From 24 July 2003 to 7 January 2014, the directors of Larussa Pastoral Holdings were the Deceased and Mr Larussa. Larussa Custodian Services replaced Larussa Pastoral Holdings as the trustee of the Larussa Pastoral Trust in early 2014.[9]
[9] First Carr affidavit par 13 - 18, 'AC5' - 'AC9'; see also the affidavit of PJ Tydde filed 12 April 2017 and 'PJT1'.
Ms Carr says that on or about 5 January 2014, Larussa Pastoral Holdings purported to discharge or write down the debt owed to the deceased in its entirety with effect from 17 October 2013 in reliance upon the terms of a document entitled 'Memorandum of Agreement Mutual Release'. The Memorandum is a document purportedly signed by the Deceased and Mr Larussa on or about 27 October 2013.[10] The terms of the Memorandum are set out in full at Schedule C to these reasons.
[10] First Carr affidavit, par 21 - 24, 'AC18' and 'AC19'; Amended Writ of Summons with Statement of Claim filed in the debt proceedings on 13 July 2016, par 12, annexed to the first Carr affidavit, 'AC2'; Defence of the Third Defendant filed in the debt proceedings on 18 November 2016, annexed to the first Carr affidavit, 'AC3'.
Excluding the alleged debt, the only significant asset of the estate was a house at Kingsway, which was sold for $872,000,[11] and entitlement to recover legal costs, to be taxed, by orders of this court in other proceedings.[12]
[11] First Carr affidavit par 53.
[12] Affidavit of D Singh filed 11 April 2017 par 8; Affidavit of D Singh filed 12 May 2017 par 5.
In her capacity as administratrix, Ms Carr commenced the debt proceedings against Larussa Pastoral Holdings, the former trustee of the Larussa Pastoral Trust; Larussa Custodian Services, the current trustee of the Larussa Pastoral Trust; and Mr Larussa. The debt proceedings are for recovery of $6,593,963 which Ms Carr contends is owed by the Larussa Pastoral Trust to the estate of the Deceased.[13]
[13] First Carr affidavit par 9.
The debt proceedings were commenced by writ of summons indorsed with a statement of claim.[14] The statement of claim was amended on 13 July 2016. An appearance has been filed by all three of the defendants in the debt proceedings. At this stage, only Mr Larussa has filed a defence.[15]
[14] A copy of the amended writ of summons is annexed to the first Carr affidavit, 'AC2'.
[15] A copy of the defence filed by Mr Larussa is annexed to the first Carr affidavit, 'AC3'.

Application for production of legal advice

At par 25 of the first Carr affidavit, Ms Carr refers to legal advice in the following terms.[16]
25After the Memorandum was produced, I sought and obtained legal advice (over which I assert legal professional privilege) regarding the claim that the Memorandum had the effect of extinguishing the Debt.
26I was satisfied that the Estate had a properly arguable claim in relation to the Debt, and in those circumstances then instructed my solicitors to write to the solicitors for the defendants stating my contention that the Memorandum was ineffective to extinguish the Debt, and demanding payment of the Debt. A copy of this correspondence, dated 21 April 2016 is attached and marked 'AC20'.
[16] At Schedule D to these reasons, pars 19 - 26 of the first Carr affidavit are reproduced in full.
The legal advice referred to at par 25 is the subject of the application for production made on behalf of Mr Larussa.
Ms Carr maintains a claim of privilege over the legal advice. The privilege claimed by Ms Carr is on the basis of legal advice privilege and litigation privilege, in circumstances where there was the reasonable contemplation of litigation.[17]
[17] Affidavit of FJ Mestichelli filed 12 May 2017, par 5 and 'FM3'.
The chamber summons filed on behalf of Mr Larussa for production of legal advice failed to state the basis for the application.
Before the application for production was filed, correspondence passed between the solicitors for Mr Larussa and Ms Carr. In that correspondence, production was pressed on behalf of Mr Larussa pursuant to RSC O 26 r 8, and conferral as between the solicitors proceeded on that basis.[18]
[18] Affidavit of FJ Mestichelli filed 12 May 2017 par 3, 'FM-1' and 'FM-2'.
However, the written submissions filed on behalf of Mr Larussa on 14 July 2017 state that the application for production is not made under RSC O 26 r 8. Instead, Mr Larussa 'asserts his right to inspect as incidental to his status as a beneficiary' of the Larussa Pastoral Trust, and a joint interest in the legal advice is asserted on the basis that Ms Carr is both trustee and beneficiary of the same estate as Mr Larussa is beneficiary.[19] As Mr Larussa does not press his application under RSC O 26 r 8, the application is not determined on that basis.

Legal Principles

[19] Responsive submissions of the first defendant to the second supplementary submissions of the plaintiff dated 3 July 2017, filed 14 July 2017, pars 7 - 17 and 25.

The legal principles concerning legal professional privilege are conveniently summarised in the decision of Beech J in Ziverts v City of Albany:[20]
[20]Ziverts v City of Albany [2016] WASC 94[2] - [11], footnotes omitted.
2Legal professional privilege protects the confidentiality of certain communications made in connection with the giving or obtaining of legal advice or the provision of legal services, including representation in proceedings in court.
3Privilege attaches to communications, not to documents as such. However, a document created for the dominant purpose of giving or seeking legal advice will be privileged.
4Litigation privilege applies to confidential communications passing between a client, the client's legal adviser and third parties for the dominant purpose of use in litigation which is either pending or in contemplation. For a claim to litigation privilege to succeed when no action was pending, evidence must establish there was a real prospect of litigation, but it is not necessary to show that litigation was considered more likely than not.
…
6The person claiming legal professional privilege must prove that the information or documents in question are privileged. While the ultimate legal onus is on the party claiming privilege, an evidential onus may be cast upon the party seeking inspection if a claim for privilege is 'apparently proper'.
7What is required for the purpose of establishing a privilege claim will vary depending on the nature of the document and the particular ground on which privilege is claimed. It may be proved by evidence as to the circumstances and context in which the communications occurred or in which the documents were brought into existence, the nature of the document, or by evidence as to the purposes of the person who made the communication, authored the document or procured its creation. A claim of privilege will not be established by verbal formula, or by mere assertion in general terms that communications were undertaken for the purpose of obtaining or giving legal advice without a statement as to the subject matter of the advice said to have been sought.
8The purpose for which a document is put into existence is a question of fact that must be determined objectively. Evidence of the intention of the document's author or the person who procured it is not necessarily conclusive. In determining whether a document was created for the dominant purpose of giving or obtaining legal advice or the provision of legal services, an appropriate starting point is to ask what was the intended use or uses of the document which account for its being brought into existence.
…
10A dominant purpose is one that predominates over other purposes; it is the prevailing or paramount purpose. Where there are two purposes of equal weight, neither can be said to be dominant. If the decision to bring the document into existence would have been made irrespective of any intention to obtain legal advice, the purpose of obtaining legal advice cannot be the dominant purpose for the making of the document.
11Joint privilege arises where two or more persons jointly communicate with a lawyer for the dominant purpose of obtaining or providing legal services. Joint privilege also arises if one of two or more persons communicate with a lawyer for the dominant purpose of obtaining or providing legal services, if the other person or persons share an interest in the subject matter of the services. In those circumstances, the communication of privileged material between them does not involve any waiver.
As observed in Schreuder v Murray [No 2] [2009] WASCA 145 at [58]; (2009) 41 WAR 169, legal professional privilege is a rule of substantive law. In that decision, the principles relating to joint privilege were described as follows:
Joint privilege
64Legal professional privilege may exist as a joint privilege. Joint privilege arises where two or more persons jointly communicate with a lawyer for the dominant purpose of obtaining or providing legal services (including giving or receiving legal advice or representation in legal proceedings). Similarly, joint privilege arises if one of two or more persons in a formal legal relationship communicates with a lawyer for the dominant purpose of obtaining or providing legal services (including giving or receiving legal advice or representation in legal proceedings) if the other person or persons share an interest in the subject matter of the services. See Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601, 608 (Sheller JA, Waddell AJA agreeing); Yunghanns v Elfic Pty Ltd (No 2) [2000] VSC 113; (2000) 1 VR 92 [22], [30], [34], [35] (Warren J); Cross on Evidence (7th Aust ed, 2004) [25265].
65Persons entitled to joint privilege may not maintain the privilege against each other. They are together entitled to maintain their privilege against third parties. Waiver by one person is insufficient to affect the privilege of the other person or persons. See Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray [2004] NSWCA 151 [41] (Mason P, Handley JA & Brownie AJA agreeing).

Schreuder v Murray [No 2] concerned an application by a beneficiary for production of documents for inspection, where a claim of legal professional privilege was made on the part of the trustee. The application was pressed in circumstances where the beneficiary had commenced proceedings seeking an order that the trustee be removed as trustee of the trust because of alleged breaches of trust. In that decision, Buss JA found that it was important to distinguish between:
(a)legal proceedings by a beneficiary against the trustee where the cause of action is based on the trustee's alleged breach of duty in failing to provide the beneficiary with access to 'trust documents' or information; and
(b)legal proceedings by a beneficiary against the trustee on other causes of action (that is, causes of action which are not based on the trustee's alleged breach of duty in failing to provide the beneficiary with access to 'trust documents' or information) and, in the course of the proceedings, the beneficiary makes an interlocutory application against the trustee for discovery and inspection of 'trust documents' which are relevant to the pleaded causes of action and in respect of which legal professional privilege exists as against strangers to the trust.[21]
[21] Schreuder v Murray [No 2] [92 (a) ‑ (b)].
In the context of the second category of legal proceedings, his Honour found that it will be necessary, in determining the interlocutory application, to identify and apply the relevant legal principles, which in the context of a trustee and a beneficiary who has a vested interest in the trust fund was found to include the following:
(f)The beneficiary will not be entitled to a joint privilege with the trustee if the confidential communications, information, or documents relate to legal services obtained for the benefit of the trustee personally (for example, if the trustee seeks legal advice as to his or her personal rights or liabilities in connection with an alleged breach of trust or threatened legal proceedings against him or her personally).[22]
[22] Schreuder v Murray [No 2] [94 (f)].
The application made on behalf of Mr Larussa does not fall within either category described at par 33 above. The Court of Appeal in Schreuder v Murray [No 2] did not expressly address what the position would be where (as in the present case), there are legal proceedings by a trustee against a beneficiary, and the beneficiary makes an application against the trustee for access to the legal advice relevant to the pleaded causes of action as against the beneficiary, on the basis that the legal advice is a 'trust document' and the beneficiary has a joint interest in the same.
On behalf of Mr Larussa, joint interest in the legal advice is asserted on the basis that Ms Carr is both trustee and beneficiary of the same estate as Mr Larussa is beneficiary. Mr Larussa says that when the advice was sought from counsel, Ms Carr nor Mr Larussa were adversaries in the debt proceedings; and the advice was sought by the trustee in performance of that role.[23]
[23] Submissions of the first defendant filed 27 June 2017, par 1.01.2.
Mr Larussa says that there is no suggestion in evidence that the trustee was seeking advice for her own benefit,[24] and if the advice sought related to the administration of the Trust, and not for the personal benefit of the trustee, then privilege is held jointly by the trustee and the beneficiaries.[25] Further, if the trustee charged the expense of her legal advice to the estate, then access should be granted to the document sought.[26]
[24] Submissions of the first defendant filed 27 June 2017, par 1.01.3.
[25] Submissions of the first defendant filed 27 June 2017, par 2.01.8; citing Krok v Szaintop Homes Pty Ltd & Ors (No 1) [2011] VSC 16 at [31].
[26] Submissions of the first defendant filed 27 June 2017, par 2.01.8; citing Talbot v Marshfield (1865) 62 ER 728.
It was also argued on behalf of Mr Larussa that personal animosity does not affect the right of a beneficiary to know about the administration of an estate, or expunge or diminish that right, nor does animosity amount to a conflict with the trustee in her role as trustee.[27]
[27] Responsive submissions of the first defendant to the second supplementary submissions of the plaintiff dated 3 July 2017, filed 14 July 2017 at par 20.
In Krok v Szaintop Homes Pty Ltd & Ors (No 1) [2011] VSC 16, the court considered whether a trustee was entitled to maintain a claim for client legal privilege against a discretionary beneficiary under a trust administered by the trustee. The claim for client legal privilege was made by the trustee pursuant to s 118 of the Evidence Act 2008 (Vic), in response to an application by the beneficiary for inspection of four documents seized under a search order. After considering Avanes v Marshall [2007] NSWSC 191; (2007) 68 NSWLR 595, and the argument pressed on behalf of the beneficiary that an analysis of a trustee's entitlement to withhold disclosure on the ground of client legal privilege was to be determined by reference to the beneficiary's proprietary interest in the document, Judd J found at [14] as follows:
14In my opinion, a trustee's right to withhold, in the course of litigation, disclosure of a document from a beneficiary, on the ground of client legal privilege, is not to be determined by an analysis of the beneficiary's proprietary right to trust documents. The question is to be resolved by reference to the ordinary principles applicable to the protection of privileged information and documents, and obligations of disclosure in litigation. I respectfully agree with the remarks of Pullin JA in Schreuder v Murray (No.2), [4] where his Honour drew a distinction between the issue on appeal – whether legal professional privilege may be maintained – and the question of whether a beneficiary may inspect trust documents because of a proprietary interest in them.
Wood (as co-executor and trustee of the will of the deceased) v Wood [No.2], concerned a challenge by two firms of solicitors against answering subpoenas received by them at the behest of the second defendant. The firms were the solicitors for the plaintiffs in the action, in their capacity as co-executors and trustees of a will. The subpoenas were served shortly prior to the hearing of an application made by the plaintiffs for directions under s 92 of the Trustees Act (WA). By the subpoenas, the second defendant sought production of a range of communications concerning the administration of the estate, but excluding 'Excluded Communications', defined as meaning 'Communications which contain legal advice: (a) for the benefit of Dr Wood and Mr Solomon, or either of them, personally; and (b) for which the Estate has not paid, and for which it has no liability to make payment'.[28]
[28] Wood (as Co-Executor and Trustee of the Will of the Deceased) v Wood [No.2] [2014] WASC 387 [15] ‑ [18].
The court was told that the carve-out for 'Excluded Communications' was framed by reference to certain observations in Schreuder v Murray [No 2]. Kenneth Martin J noted that a privileged category of legal proceedings was mentioned at [94(f)] of the decision of the Court of Appeal, and at [20] and [21] his Honour made the following observations:
20Arguments unfolded today in terms of whether the present subpoenas which, by the term 'Excluded Communications' exclude legal advice which the Executors have taken or obtained personally (and for which the estate had not paid), do in fact render any protection against production in respect of an abiding legal professional privilege. That formulation would not cover legal advice obtained by the Executors, albeit paid for by the estate. Hence any legal advice obtained by the Executors in the capacity of executors and trustees, given as to the merits or demerits of a claim by one or more of the beneficiaries like, such as in this case, the claims against the estate by Mr Baur, would not be privileged from production and would be caught by these subpoenas.
21These are urgent circumstances where I am determining the objections to answering upon these subpoenas. It is enough for me to say only that after hearing the arguments I would be very concerned if, in fact, any or all of an estate's beneficiaries might obtain access to executors' and trustees' confidential legal advice by reason of the beneficiary sharing in a joint or common interest in what is otherwise privileged legal advice for situations where there were adversarial proceedings on foot, as between a trustee/executor and a particular beneficiary. That would seem to me a surprising outcome, extending in its implications somewhat further than what was contemplated under the Schreuder [94(f)] formulation and there dealing with far different circumstances than manifest currently before me. A litigious dispute as between a beneficiary and trustees would also seem to remove the basis for the continuance of any level of common interest privilege.
22But, in the end, it is not necessary for me to determine that issue.
I share his Honour's concern that Mr Larussa, in his capacity as a beneficiary, might obtain access to advice secured by Ms Carr as trustee by reason of Mr Larussa sharing in a joint or common interest in what is otherwise confidential and privileged legal advice, where the advice was sought in contemplation of adversarial proceedings as between Ms Carr as trustee/executor and Mr Larussa as beneficiary. I find that in the circumstances, it is appropriate to determine the application for production by reference to the ordinary principles applicable to the protection of privileged documents, and not based on a proprietary right of a beneficiary to trust documents. The legal dispute as between beneficiary and trustee has removed the basis for the continuance of any level of common interest privilege.

Determination of application for production

I am satisfied that the evidence establishes the claim for legal professional privilege.
Ms Carr refers to the legal advice at par 25 of the first Carr affidavit, as being advice regarding the claim that the Memorandum had the effect of extinguishing the debt.
Mr Dara Singh in her affidavit filed 11 April 2017 says as follows.
1.I am the solicitor acting on behalf of the Plaintiff in this matter. Save where otherwise stated, I make this affidavit based on matters within my own knowledge and from documents within the possession of my firm, Friedman Lurie Singh & D'Angelo.
2.I have 19 years' experience in civil litigation, of which 7 years was in Singapore and the remainder in Western Australia.
3.I am the solicitor who has provided advice to the Plaintiff and acted for her in respect of the various court proceedings and issues arising in respect of the administration of the Estate of the late Guiseppe Larussa. In the course of so doing the Plaintiff has provided to me copies of documents relating to the administration of the Estate.
4.I refer to the affidavit of the Plaintiff sworn 13 February 2017 ('the Plaintiff's 1^st Affidavit'). The legal advice referred to in paragraph 25 of the Plaintiff's 1^st Affidavit was received by me in my capacity as the Plaintiff's solicitor from counsel Mr Steven Standing whom I engaged on behalf of the Plaintiff to provide such advice.
5.The advice from counsel (over which legal privilege is not waived) addressed the question of the prospects of success of the claims which are now the subject of the statement of claim in the debt proceedings.[29]
[29] Larussa Custodian Services objected to the admission of par 5 of the affidavit of D Singh filed 11 April 2017 on the basis of impermissible hearsay. Ms Carr only relies on par 5 to establish that the referenced advice was obtained and concerns the claims the subject of the statement of claim in the debt proceedings. On that basis, Larussa Custodian Servces did not press its objection and the objection did not have to be determined. See the third defendant's submissions in opposition to the plaintiff's application for directions pursuant to s 92 of the Trustees Act 1962 filed 18 May 2017, par 44.
In this case, there is more than a mere assertion of privilege. Mr Singh's evidence is that the subject matter of the legal advice concerned the prospects for success of the claims which are now the subject of the debt proceedings.
Further, the assertion of privilege is proved by the evidence of Mr Singh and Ms Carr as to the circumstances and context in which the communication was brought into existence, the nature of the communication, and by their evidence, as to the purpose in procuring its creation.

Application for private advice

As observed in Carr v Larussa [2016] WASC 13 [18], the legal principles applicable to an application pursuant to s 92 of the Trustees Act (WA) have been the subject of consideration by Kenneth Martin J in Wood (As Co-Executor and Trustee of the Will of the Deceased) v Wood [No 4],[30] Edelman J in Plan B Trustees Ltd v Parker [No 2],[31] and Allanson J in Re Estate of Anastasios Keriacules Challis (Sec).[32] I respectfully agree with and adopt the observations set out by their Honours.
[30] Wood (As Co-Executor and Trustee of the Will of the Deceased) v Wood [No 4] [2014] WASC 393 [98] ‑ [139].
[31] Plan B Trustees Ltd v Parker [No 2] [2013] WASC 216 [37] - [53].
[32] Re Estate of Anastasios Keriacules Challis (Sec) [2010] WASC 333 [17], [18], and [30].
While s 92 of the Trustees Act (WA) and RSC O 58 r 2 are broad in their terms, there is a 'jurisdictional bar' to the pursuit of relief under s 92 of the Trustees Act. The 'jurisdictional bar to a pursuit of relief under provisions like s 92 is simply that the applicant must point to an existence of a question respecting the management or administration of trust property, or a question respecting the interpretation of a trust instrument: see Macedonian Church [58]…'[33]
[33] Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4], [103 (b)]; Macedonian Church [58].
In this case, the jurisdictional bar is met. That is, the question regarding management of the trust which establishes jurisdiction is whether Ms Carr is justified in having commenced and maintaining the debt proceedings. With the benefit of the advice, Ms Carr will know whether she is entitled to protection for her actions under s 95 of the Trustees Act (WA), and whether it is proper to incur the costs of the litigation and obtain reimbursement from the estate for the costs of the proceedings under s 71 of the Trustees Act (WA): Carr v Larussa [2016] WASC 13 [22].
Mr Larussa and Larussa Custodian Services also press for the determination of a 'threshold question'. That is, can Ms Carr seek advice of the court and the protection of that advice in circumstances where the proceedings were commenced before the advice was sought?
It is common ground that if answered in the affirmative, I am to consider whether it is appropriate to provide Ms Carr with a direction, and if so, in what terms. It is also common ground that the question of whether Ms Carr is justified in having commenced and maintaining the debt proceedings involves the court being satisfied of the following two matters. First, whether the legal issues are 'properly arguable'; and secondly, whether the litigation is justified.[34]
[34] Macedonian Church [162]; Carr v Larussa [2016] WASC 13 [25].
In this case, the issues that arise for consideration when determining whether the litigation is, or is not, justified, include the following.
1.What are the prospects of success?
2.Has Ms Carr received adequate legal advice in respect of the debt proceeding?
3.Is there sufficient evidence before the court in respect of the likely costs that would be incurred by the estate in pursuing the debt proceeding?
4.Does the estate have sufficient assets to prosecute the debt proceedings?
5.Will the pursuit of the proceedings further deplete the estate assets?
6.Will the estate be in a position to pay any adverse cost order, if unsuccessful in the debt proceeding?
7.Do the costs to the estate of pursuing the debt proceedings outweigh the potential benefit to the estate, such that the Court should decline to give directions?

Objections to affidavit evidence

In Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4], Kenneth Martin J, after noting that no objections were raised against any of the material relied on from the other participants, observed at [18] that 'This was no doubt due to the special character of the application for private advice.' His Honour went on to observe that on this type of application the applicant trustee's evidence is usually accepted, unchallenged, but what is submitted to a court must still be factual evidence.[35]
[35] Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [94].
In this case, a large number of objections were raised on behalf of Mr Larussa and Larussa Custodian Services in relation to the material filed on behalf of by Ms Carr. After conferral as between counsel, nearly all 'substantive' objections were resolved by agreement. Passages the subject of substantive objection were struck through and not read on behalf of Ms Carr. Other objections were pressed, but it was conceded on behalf of Larussa Custodian Services that the objections went to weight.
When considering the evidence before me, if the subject of a maintained objection, I carefully considered the weight to be given to it, having regard to the nature of the objection raised and the evidence.
Very few 'substantive' objections were not resolved by agreement. For completeness, I note that no evidence the subject of a maintained 'substantive' objection forms part of my reasoning. It was therefore not necessary for me to determine the remaining ‘substantive' objections, nor whether technical objections to evidence are appropriate in non-adversarial summary advice proceedings such as these.

The 'threshold question'

Mr Larussa and Larussa Custodian Services say that a direction is properly sought before any substantive step is taken in a proceeding by the applicant party. They contend that Ms Carr cannot avail herself of the advice of the court, and the protection of that advice, in circumstances where she commenced the proceeding the subject of the advice before seeking the advice.
Counsel for Larussa Custodian Services referred to the decision of the High Court in Macedonian Church at [74], where plurality Justices, Gummow ACJ and Kirby, Hayne and Heydon JJ state as follows:
A necessary consequence of s 63 is that a trustee who is sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings. In deciding that question a judge must determine whether, on the material then available, it would be proper for the trustee to defend the proceedings. But judicial advice proceedings are not to be treated as a trial of the issues that are to be agitated in the principal proceedings.
The reference to s 63 is a reference to s 63 of the Trustee Act 1925 (NSW).
As observed by Kenneth Martin J in Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [99], s 92 and s 95 of the Trustees Act (WA) bear a close textual parallel to the New South Wales legislation, discussed by the High Court in Macedonian Church.
As to whether the application by Ms Carr must fail by reason of timing of the application, I find as follows.
While the timing of the application may be an issue that arises for consideration when determining the application,[36] I am not satisfied on the authorities and in the circumstances of this case, that timing is fatal to the application. The finding in Macedonian Church at [106] that the stage that the litigation had reached may be a relevant consideration, allows the inference that it is open to the Court to give direction during litigation.
[36] Robert Peter Campbell ATF the Joan Macpherson Trust and the Banandra Pastoral Settlement Trust [2016] NSWSC 1751, [25] and [31] (Sackar J), citing Macedonian Church [106].

The application before me is not by a trustee who is being sued.
In Macedonian Church at [55], their Honours explained that no implications should be read into s 63 and that the section must only be taken for its express words.
There is a 'jurisdictional bar'. However, the 'jurisdictional bar to a pursuit of relief under provisions like s 92 is simply that the applicants must point to an existence of a question respecting the management or administration of trust property, or a question respecting the interpretation of a trust instrument.'[37] The jurisdictional bar is not framed with respect to the timing of an application, and in this case, the 'jurisdictional bar' is clearly met.

Are the legal issues properly arguable?

[37] Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [103 (b)].

It is settled that the determination of a private advice application is 'radically different from deciding the issues that are to be agitated in the principal proceeding', and is 'not to be treated as a trial of the issues that are to be agitated in the principal proceedings.'[38]
[38] Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [103 (j)].
From the affidavits and submissions filed in this application, and the (albeit) limited pleadings filed in the debt proceedings, there appears to be no dispute that the debt existed in 2013 (the year the Deceased died) up until the point in time when the Memorandum is said to have been executed.[39] It would appear that the question to be determined by the debt proceedings is whether the debt was discharged by execution of the Memorandum.

First legal issue ‑ was there an agreement?

[39] Although Mr Laurssa in his defence denied that the debt existed as at the date of the Deceased's death (see par 12 of the defence, first Carr affidavit at p 33), he admitted par 13 of the Amended Statement of Claim, in which it was pleaded that the debt had not been purportedly discharged by the execution of the Memorandum.

The first legal issue that arises concerns whether the Deceased in fact entered into an agreement in terms of the Memorandum.
Ms Carr says that she does not know whether the Deceased and Mr Larussa entered into an agreement in the terms of the Memorandum, and does not admit that they did so.[40] Mr Larussa says that agreement was made with the Deceased in terms of the Memorandum,[41] however the original Memorandum cannot be located.[42]
[40] Amended statement of claim, par 18.1, annexed to the first Carr affidavit as 'AC2'
[41] Defence of the third defendant, par 18.1, annexed to the first Carr affidavit as 'AC3'.
[42] First Carr affidavit par 24.
On behalf of Larussa Custodian Services, it was submitted that it is not clear whether the only reason for the non-admission as to entry into the Memorandum is the allegation of non-production in par 17 of the amended statement of claim. If it is, then Ms Carr's position is weak; and if it is not, that there ought to be an expansion of the basis for the non-admission.
At this early stage, it is not clear whether the Court will be asked to make a finding as to whether the Deceased entered into the Memorandum. On the material before me, it is not possible to determine whether there will be an issue and if so, whether it is properly arguable.

Second legal issue - invalidity

The second legal issue that arises concerns whether the Memorandum, if entered into, is invalid.
The Memorandum is a document purportedly signed by the Deceased and Mr Larussa on or about 27 October 2013. Clause 6 of the Memorandum purports to allow either the Deceased or Mr Larussa to 'rescind' the provisions of the Memorandum and to 'restate' various obligations, including obligations owned by the then trustee of the Larussa Pastoral Trust:
6.The provisions of this agreement may be amended by mutual agreement or may be rescinded and the Obligations reinstated by either party by written notice given to the other in writing PROVIDED ALWAYS that a Significant Life Event has not occurred.

Submissions made on behalf of Ms Carr

It is Ms Carr's position that, if entered into, it is properly arguable that the Memorandum is invalid and unenforceable in its terms, because cl 6 of the Memorandum purported to allow either party to unilaterally rescind the Memorandum and reimpose a liability (ie, the debt) on a third party (ie, the Trust). On behalf of Ms Carr, it is submitted that although s 11(2) of the Property Law Act 1969 (WA) probably enabled the Larussa Pastoral Trust to have the benefit of the release despite not being a party to the Memorandum, that there is no equivalent provision which would allow the unilateral imposition (or re-imposition) of obligations on a third party.
Ms Carr contends that liability cannot be unilaterally imposed or reimposed on a third party, and as cl 6 of the Memorandum was not severable, the Memorandum is invalid in its entirety.
As to the question of severability, the applicable test to be applied, and the use to be made of extrinsic evidence is discussed in the written submissions filed on behalf of Ms Carr.
In oral submissions, counsel for Larussa Custodian Services suggested a construction of cl 6 of the Memorandum that would not offend the Property Law Act, when considered in light of s 11(3) of that Act.
The second legal issue is not without difficulty. However, judicial advice proceedings are summary in nature. Having carefully considered the invalidity claim as developed on behalf of Ms Carr, and the authorities relied upon in support,[43] and the submission developed on behalf of Larussa Custodian Services, I am satisfied that the second legal issue is properly arguable.

The third legal issue ‑ undue influence

[43] Plaintiff's submissions in support of application for directions filed 19 May 2017 par 29 - 25.

The third legal issue that arises concerns whether it should be presumed that the Memorandum, if duly executed and valid in accordance with its terms, was executed by the Deceased in circumstances of undue influence on the part of Mr Larussa and should be set aside.

Submissions made on behalf of Ms Carr

On behalf of Ms Carr, it was submitted that there are two types of undue influence claim, actual undue influence or presumed undue influence. In the latter case, the complainant only has to show, in the first instance, a relationship of trust and confidence of such a nature that is fair to presume that the wrongdoer abused the relationship in procuring the other party to enter into the transaction. Once the relationship is proved, the burden shifts to the wrongdoer to prove that the complainant entered the transaction freely, for example, by showing the complainant had independent advice. See Mercanti v Mercanti [2015] WASC 297 at [152].
Ms Carr referred to Adenan v Bruise,[44] where it was held by the majority at p 68 that the question as regards undue influence was not whether the Deceased understood the deed but whether he had executed it as a result of the free exercise of his independent will, and noted that no independent advice had been given by an adviser fully informed of all material facts.
[44] [1984] WAR 61, 68.
A relationship of adult child and parent is not a category that of itself creates a presumption of undue influence,[45] but the presumption will arise if the evidence shows an antecedent relationship the nature of which as that one of them was in a position to exercise dominion, power, ascendency or influence over the other.[46]
[45] Mercanti v Mercanti at [153].
[46] Mercanti v Mercanti at [153] - [154], Johnson v Buttress [1936] 56 CLR 113, 134, 135, 138.
In Mercanti v Mercanti, the court considered at [155] the father's age and whether he was in poor health and whether his intellectual capacities had diminished or whether he was in any way dependent upon the son, and at [156] was satisfied that in any event the father understood the transactions, received independent advice from a lawyer and freely exercised his will in relation to the transactions.
In this case, Ms Carr says that the undue influence flows from the following facts as pleaded at par 24 of the amended statement of claim, namely that the Deceased:
(a)lived alone on a farm;[47]
(b)was 72 years of age, and in 2012 became physically and mentally unwell and accordingly largely unable to work his farm, and depended upon Mr Larussa (who lived on a nearby farm) for assistance in working his farm, and required greater assistance in the management of his affairs;[48] and
(c)had only a limited education and limited ability to read in the English language and required assistance from Mr Larussa or others to read documents written in the English language.[49]
[47] First Carr affidavit par 42.
[48] First Carr affidavit pars 46 - 49, and attachments at pp 236, 238, 240 - 243, 245, 251 - 252, 256 (at par 11), 275 (at par 29, 31 and 32), 276 (at par 35 - 37).
[49] First Carr affidavit par 29 - 33, 35, 38 - 39, 41, and annexures at pp 182, 228 - 9.
Ms Carr says that some of the trust documents show that Mr Larussa had for many years been heavily involved in the Deceased's affairs and was at times the point of contact with accountants.[50] Various documents are relied upon by Ms Carr to show the extent of Mr Larussa's involvement in setting up and operating the Larussa Pastoral Trust, and apparently little involvement of the Deceased after an initial meeting.
[50] Plaintiff's submissions in support of application for directions filed 19 May 2017 par 42; first Carr affidavit annexures at pp 183, 184, 187 - 211, 213, 214 ‑ 217.
Counsel for Ms Carr says that it is open to contend that, in circumstances where there is evidence that Mr Larussa attended to payment of the Deceased's bills, seemed to run the affairs of the Larussa Pastoral Trust, saw the Deceased daily, and drove him everywhere (bearing in mind the Deceased's inability to read English and the serious decline in his physical and mental health during 2013), the Deceased was in such a position of dependence upon Mr Larussa and reposed such trust and confidence in him that Mr Larussa was in a position to exercise dominion, influence, power or ascendency over the Deceased in relation to matters concerning the Larussa Pastoral Trust and the Deceased's affairs generally, and that the relationship between the Deceased and Mr Larussa gave rise to a resumptive relationship of undue influence.[51]
[51] Plaintiff's submissions in support of application for directions filed 19 May 2017 par 43.
Ms Carr also says that, at the time the Memorandum was allegedly executed, Larussa Pastoral Holdings, as the then trustee of the Larussa Pastoral Trust owed the Deceased the debt, yet owed Mr Larussa only an amount of approximately $103,872.[52] Ms Carr says that the Memorandum was of unusual effect and substantially benefitted Mr Larussa at the expense of the Deceased because:
(a)the Deceased was gifting the debt to the Larussa Pastoral Trust, whereas Mr Larussa was only gifting the sum of $103,872 to the Larussa Pastoral Trust;
(b)the debt immediately ceased to be an asset of the Deceased and become unavailable to include as part of any testamentary disposition of the Deceased, whereas only $103,872 ceased to be an asset of the Mr Larussa; and
(c)if the Deceased died, Mr Larussa would (for the reasons set on in par 28 of the amended statement of claim) effectively have sole control over the Larussa Pastoral Trust and its asset and the Deed Variation of Trust which Mr Larussa was able to execute in February 2014 by reason of his position as sole surviving appointer of the Trust and director of the trustee.
[52] Plaintiff's submissions in support of application for directions filed 19 May 2017 par 44; first Carr affidavit annexure at p 161.
Ms Carr says that as consequence, it is open to contend that the Memorandum (if duly executed and valid in accordance with its terms), was manifestly disadvantageous to the Deceased and comprised a substantial benefit to Mr Larussa, and that in such circumstances it should be presumed that the Memorandum was executed by the Deceased in circumstances of undue influence on the part of Mr Larussa.
Ms Carr says that Mr Larussa has pleaded no material facts that may overcome the presumption of undue influence. While evidence of independent advice (including translation of the Memorandum) would be relevant, none has been found, and it seems that the Deceased and Mr Larussa were given joint advice.[53]
[53] First Carr affidavit at par 50.
As to the question of whether it should be presumed that the Memorandum, if duly executed and valid in accordance with its terms, was executed by the Deceased in circumstances of undue influence on the part of Mr Larussa and should be set aside, having carefully considered the claim as developed on behalf of Ms Carr, the affidavit evidence filed and the authorities cited in support, I am satisfied that the third legal issue is properly arguable.

The fourth legal issue - unconscionability

The fourth legal issue that arises concerns whether Mr Larussa's conduct in procuring or accepting the Deceased's assent to the Memorandum, and further or alternatively in seeking to enforce or retain the benefit of the Memorandum, was and is prima facie unconscionable; and whether the Memorandum should be set aside by reason of unconscionable conduct on the part of Mr Larussa.

Submissions made on behalf of Ms Carr

On behalf of Ms Carr, it was submitted that an unconscionable conduct claim requires evidence of a special disability known to the other, stronger party, so that where the stronger party takes unconscientious advantage of the disability, the burden is cast upon it to show the transaction was fair, just and reasonable.[54]
[54] In support of this proposition, Ms Carr cited Adenan v Bruise (1984) WAR 61, 69, Blomley v Ryan [1956] 99 CLR 362, 405, 406, 415 and, in particular, 428 - 430, Commonwealth Bank v Amadio [1982-3] 151 CLR 447, 459 - 462, 476 - 477, 479.
The essential difference between unconscionable conduct and undue influence was explained in Commonwealth Bank v Amadio[55] at p 461 as being that, in the latter, the will of the innocent party is not independent and voluntary because it is overborne, whereas in the former, the will of the innocent party (even if independent and voluntary) is the result of the disadvantageous position in which he is placed and of the other party unconsciously taking advantage of that position. The remedies are not mutually exclusive.
[55] Commonwealth Bank v Amadio [1982-3] 151 CLR 447.
Inadequacy of consideration is a significant although not essential factor in determining whether the stronger party acted unconscionably.[56]
[56] ANZ v Dzienciol [2001] WASC 305 at [292] to [295].
Absence of independent advice is relevant in the context of unconscionable conduct. It is of factual relevance in determining whether special disability or weakness (i.e that the party is unable to judge for himself) exists. What matters is not what the outcome of independent advice would have been, but that the court will not allow any person to take advantage of the lack of opportunity to have had the assistance of a disinterested legal adviser.[57]
[57] ANZ v Dzienciol [296], Bridgewater v Leahy [1998] HCA 66 [41], [100].
Ms Carr says that the unconscionable conduct claim in the debt proceedings is based on the following matters:
(a)there is no evidence of the Deceased having received any independent, fully informed advice about the Memorandum, including advice as to the true effect of clause 6;
(b)the Deceased was (because of the various matters noted above in relation to the undue influence) and the absence of independent advice, clearly in a debilitated condition and hence under a special disability or disadvantage vis a vis Mr Larussa at the time of the alleged execution of the Memorandum. The Deceased was not capable of independently reading (let alone understanding) the Memorandum;
(c)the special disability or disadvantage seriously affected the Deceased's ability to make a judgment as to his best interests in relation to the Memorandum;
(d)in the above circumstances there was an absence of any reasonable degree of equality as between the Deceased and Mr Larussa;
(e)if the Memorandum was duly executed, such execution was procured by Mr Larussa in circumstances where he knew or ought to have known of the Deceased's special disability or disadvantage and the lack of equality between them and its effect on the Deceased, and took advantage of that special disability or disadvantage.
On behalf of Ms Carr, it is noted that in Bridgewater v Leahy,[58] it was regarded as relevant that the transaction in question put it out of the weaker party's power to change his testamentary arrangements regarding certain assets, that the initiative for the transaction came from the stronger party, and that the transaction was grossly improvident for the weaker party. Ms Carr says that similar considerations apply here.
[58] Bridgewater v Leahy [1998] HCA 66 [120] ‑ [125].
In the above circumstances, Ms Carr says that it is at least properly arguable that Mr Larussa's conduct in procuring or accepting the Deceased's assent to the Memorandum, and further or alternatively in seeking to enforce or retain the benefit of the Memorandum, was prima facie unconscionable, and that the Memorandum (if duly executed and otherwise valid in accordance with its terms) should be set aside because of Mr Larussa's unconscionable conduct.
Ms Carr further says that Mr Larussa has not pleaded (or adduced in these proceedings any evidence of) any matter which is capable of meeting the burden of showing that the transaction was fair, just and reasonable. In the circumstances, the court should conclude that Ms Carr's claim of unconscionable conduct in the debt proceedings is at least properly arguable.
Having carefully considered the claim as developed on behalf of Ms Carr, the weight to be given to available affidavit evidence, the authorities cited in support, and the submissions made on behalf of the defendants, I am satisfied that the fourth legal issue is properly arguable.

The fifth legal issue - illegality

A further legal issue is raised as being available to Ms Carr, although it is not presently pleaded in the debt proceedings. That is, whether the Memorandum is:
•a contract contrary to public policy as it interferes with or is prejudicial to the administration of justice; and / or
•a contract contrary to public policy in that involves unlawful conduct or purpose, or tends to defeat the relevant act.

Submissions made on behalf of Ms Carr

On behalf of Ms Carr it is submitted that a court will refuse to enforce or give effect to a contract where to do so would be contrary to public policy.
The Memorandum provides for the release of the Larussa Pastoral Trust (and its Trustee) of all and any debts held by or due to the Deceased and Mr Larussa, both when the Memorandum was executed and at the time in the future that a 'Significant Life Event' occurs. In the Memorandum, 'Significant Life Event' is defined to mean the act or occurrence of any of the following
1.1the demise of one of the Parties;
1.2an application for the appointment of a trustee in bankruptcy; or
1.3an application for the appointment of a guardian for the purposes of the Mental Health Act 1996; or
1.4an application for a freezing order or other adverse order within the meaning of the Criminal Property Confiscation Act 2000;
or equivalent, like or similar statutory provisions regulations or Acts in other jurisdiction including the Commonwealth FURTHER the act of making an application (whether granted or not) for an order under 1.2 to 1.4 shall trigger the provisions of this Agreement notwithstanding that the application for such an order may not be known at the time but shall be deemed to be a Significant Life Event for the purposes of this Agreement.'[59]
[59] First Carr affidavit 'AC19' p 165 - 166. The Memorandum is reproduced in full at Schedule C to these reasons.

Section 161 of the Criminal Property Confiscation Act 2000 (WA) (CPCA) provides as follows.
(1)For the purposes of this Act, a person carries out a sham transaction if ‑
(a)the person carries out a transaction within the meaning of subsection (2); and
(b)the transaction was carried out for the purpose of directly or indirectly defeating, avoiding, preventing or impeding the operation of this Act in any respect.
(2)For the purposes of subsection (1), the person carries out a transaction if the person carries out, makes, gives or designs ‑
(a)any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; or
(b)any scheme, plan, proposal, action, course of action, or course of conduct.
Under s 135 of the CPCA, the Director of Public Prosecutions for Western Australia may apply for orders declaring some or all of a transaction to be void, or to vary a transaction and make ancillary orders.
In the debt proceedings, it is not possible for Ms Carr to plead a contravention of the CPCA, or to seek relief pursuant to its terms. Ms Carr does not have standing to apply under s 135 and s 161 of the CPCA to have the Memorandum declared a sham transaction or unlawful.
On behalf of Ms Carr it is submitted that a contract that is contrary to public policy is unenforceable,[60] and that one head of public policy is a contract which tends to pervert or obstruct the course of justice, or otherwise interferes with or is prejudicial to the administration of justice.[61]
[60] Plaintiff's supplementary submissions in support of application for directions filed 15 May 2017, par 3, citing the various heads of public policy in Cheshire and Fifoolt's Law of Contract 10^th Aust Ed at 18.14 ‑ 18.16.
[61] Plaintiff's supplementary submissions in support of application for directions filed 15 May 2017, par 4, citing Cheshire and Fifoolt at 18.32; and AG v Hayden and others [1984] 156 CLR 532, 543, 553, 571, 586 and 595.
Ms Carr says that the purpose and object of the CPCA is to provide for the confiscation of property in the circumstances provided for in the CPCA. Ms Carr says that it is open to argue that the Memorandum interfered with the administration of justice, because a clear purpose, and intended effect, of the Memorandum was that, if proceedings under the were commenced, property that might otherwise be subject to those proceedings would be irrevocably placed beyond the reach of the CPCA, thereby defeating, avoiding, preventing or impeding the operation of the CPCA. In the circumstances, Ms Carr says that there is a properly arguable claim that the Memorandum is contrary to public policy because it has the tendency to interfere with or be prejudicial to the administration of justice.
Ms Carr also says that that there is a properly arguable claim that the Memorandum is contrary to public policy because it is impliedly prohibited by the CPCA,[62] or tends to defeat the CPCA.[63] Courts will refuse to enforce or give effect to a contract where to do so would be contrary to public policy.[64]
[62] Plaintiff's supplementary submissions in support of application for directions filed 15 May 2017, par 10 ‑ 16, citing Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, 413, as authority for the proposition that a statutory provision may expressly or impliedly render particular conduct unlawful.
[63] Plaintiff's supplementary submissions in support of application for directions filed 15 May 2017, par 15, citing Wilkinson v Osborne (1915) 21 CLR 89, 98 as authority for the proposition that even if there is no implied prohibition on sham transactions, whatever tends to defeat an enactment is necessarily against public policy.
[64] Plaintiff's supplementary submissions in support of application for directions filed 15 May 2017, par 17, citing AG v Hayden, 557, 571, 595.
Ms Carr concedes that while the CPCA may impliedly prohibit sham transactions, having regard to s 135 of the CPCA, sham transactions are not necessarily void, but may be so when declared void by a court on an application made by the DPP.
In light of s 135 and s 161 of the CPCA, counsel for Ms Carr says that the appropriate course is for the DPP to be given notice of the debt proceedings and that one possible consequence of the DPP becoming a party to the debt proceedings is that a declaration might be made under s 135 of the CPCA to the effect that the Memorandum is void.
On behalf of Larussa Custodian Services, it is noted that the final issue falls outside of the scope of Ms Carr's pleaded case in the debt proceedings, and it is suggested that the court ought to limit its consideration to matters falling within the scope of the proceeding.[65] This submission sits uneasily with the 'threshold question' also pressed on behalf of the participating defendants.
[65] Third defendant's supplementary submissions in opposition to the plaintiff's application for directions filed 31 July 2017, par 8.
I am not persuaded that it is appropriate to limit the scope of the advice application in the manner suggested on behalf of Larussa Custodian Services – or to defer consideration of the issue until it is pleaded in the debt proceedings (and thereby inviting a second advice application).
Judicial advice proceedings are summary in nature and are not for the purpose of finally deciding the issues that are to be agitated in the principal proceedings: Macedonian Church [74]. The argument raised on behalf of Ms Carr has its difficulties. Counsel for Larussa Custodian Services raises a number of issues in submissions filed on 31 July 2017, including whether cl 1.4 of the Memorandum may be severed from the contract, leaving the underlying document on foot.
In all of the circumstances, and having regard to s 135 of the CPCA, the authorities cited and the submissions made by all parties, I find that the fifth legal issue is properly arguable.

Should the discretion be exercised and, if so, how?

In exercising the discretion to provide private advice, it is relevant to consider whether the trustee has obtained advice. As Edelman J observed in Plan B Trustees Ltd v Parker [2013] WASC 216 at [48]:
A court will usually be reluctant to exercise discretion in favour of sanctioning, as justified, a course of action by a trustee unless the trustee has taken reasonable steps necessary to form its own opinion on the subject. Where the direction sought is that legal action is justified then it will generally be necessary for the trustee to obtain a legal opinion before approaching the Court. This is because the trustee should have taken reasonable steps to form its own opinion on the subject about directions which are sought before approaching the Court for directions. Legal action should never be commenced unless the trustee is satisfied that it is properly arguable.
In this case, I am satisfied on the evidence of Ms Carr and Mr Singh,[66] that the plaintiff acted prudently and carefully and took appropriate steps, including the taking of legal advice, before commencing the debt proceedings.
[66] First Carr affidavit par 25 - 26; affidavit of D Singh filed 11 April 2017 par 1 - 5.
As to prospects of success, the prevailing view is that it should not be the practice of courts to assess prospects of success by reference to an 'expert opinion' from senior counsel,[67] and the merits can be considered based on submissions.[68]
[67] Plan B [40] - [49]; Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [119] ‑ [130].
[68] Carr v Larussa [2016] WASC 13 [65] - [66].
On the evidence and submissions before me, it would appear that at this stage, the real contest as between the parties in the debt proceedings will be whether the Memorandum, if entered into, is valid; whether the Memorandum, if duly executed and valid in accordance with its terms, was executed by the Deceased in circumstances of undue influence on the part of Mr Larussa and should be set aside; whether Mr Larussa's conduct in procuring or accepting the Deceased's assent to the Memorandum, and further or alternatively in seeking to enforce or retain the benefit of the Memorandum, was and is prima facie unconscionable; and whether the Memorandum should be set aside by reason of unconscionable conduct on the part of Mr Larussa.
The submissions filed on behalf of Ms Carr regarding the second to fourth legal issues in relation to the Memorandum establish that the plaintiff's case is properly arguable and has sufficient prospects of success to warrant the giving of a direction. Having regard to the objections made on behalf of both Mr Larussa and Larussa Custodian Services, I find that there is also sufficient factual evidence to warrant the giving of a direction.
The plurality in Macedonian Church noted, where a trustee seeks judicial advice as to the conduct of litigation, the stage that the litigation has reached may be a relevant consideration. Their Honours remarked at [106]:
[W]hile the time and cost involved in giving judicial advice at an early stage of litigation, when the issues involved in disputes about rights may not be fully sharpened and it may not be possible for the factual position to be as efficiently exposed as in a trial, may be factors relevant to a decision not the grant judicial advice but to let the matter be examined in conventional litigation, they are not factors which either automatically bar judicial advice or are so weighty as generally to compel the court not to grant the advice.
Although the debt proceedings have been initiated, they are at an early stage.
At this stage, the legal questions concerning whether the Deceased in fact executed the Memorandum (the first legal question); and whether the Memorandum, if duly executed, is illegal (the fifth legal issue), appear less developed and are 'not fully sharpened'. Ms Carr has foreshadowed an intention to further amend the statement of claim so as to plead the illegality issue canvassed in the submissions filed on 15 May 2017.
In determining whether to exercise the discretion to grant the advice, I have given careful consideration to the difficulties associated with the first and fifth legal questions. I am not satisfied that the issues are of such magnitude, when considered in light of all of the matters before me, as to compel me not to grant the advice.
The significance of the debt proceedings to the estate is a consideration which in this case, weighs in favour of the giving of a direction. If successful, the estate is increased by over $6.5 million.
The costs that will be incurred in pursuing the proceedings will be significant and it is clear that pursuit of the debt proceedings will further deplete, if not exhaust, the estate assets. Legal costs will likely be higher as a consequence of Freezing Notice (WAPFN 170053) dated 19 May 2017, having been issued to Mr Larussa.[69] However, the costs are not disproportionate to the amount of the alleged debt, particularly having regard to the significance of the debt proceedings to the estate.
[69] Affidavit of A Carr filed 23 June 2017
Larussa Custodian Services submits that there is insufficient evidence before the court in respect of the likely costs that would be incurred by the estate in pursuing the debt proceedings; that the available evidence concerning costs suggests that the estate does not have sufficient assets to prosecute the proceedings; and that the Estate will not be in a position to pay any adverse cost order, if unsuccessful in the debt proceeding.
In the first Carr affidavit, Ms Carr deposes to her belief that if all of the claims in the debt proceedings are fully litigated, then legal costs could possibly be in the range of $200,000 to $350,000.[70] Ms Carr is a solicitor and the estimated range was provided to Ms Carr by her solicitors. However, no break down or draft bill of costs in support of the range was put before the court. Further, the estimated range did not take into account the illegality argument that was later introduced and now foreshadowed to be pleaded in the debt proceedings.
[70] First Carr affidavit par 51.
On 4 May 2017, Ms Carr prepared provisional interim accounts for the estate. As at 4 May 2017, the estate has available to it a little more than $200,000 cash at bank.[71] The estate is entitled to be paid by Mr Larussa legal costs, to be taxed, pursuant to orders of the court made in other proceedings.[72] A bill of costs in the amount of $177,000 was prepared for taxation pursuant to the order made in proceedings known as CIV 1702 of 2015, which involved a 5 day trial.[73] Further, a bill of costs in the proceedings known as CIV 2638 of 2015 was provisionally assessed by the court on 3 May 2017 at $51,464.42.[74] Although, the recovery of the costs orders by the estate may be compromised by the Freezing Notice (WAPFN 170053).
[71] Affidavit of A Carr filed 12 May 2017, 'AC69'.
[72] Affidavit of D Singh filed 11 April 2017 par 8, 'DS3' and 'DS4'.
[73] Affidavit of D Singh filed 11 April 2017 par 9; affidavit of D Singh filed 12 May 2017, 'DS1'.
[74] Affidavit of D Singh filed 12 May 2017, par 5.
Although pursuit of the debt proceedings is likely to exhaust the moneys remaining in the estate, the costs are not disproportionate to the amount of the alleged debt, particularly having regard to the significance of the debt proceedings to the estate.
Whether there are assets that may be applied against any judgment in the debt proceedings is not clear.
I have had regard to the fact that a Freezing Notice (WAPFN 170053) dated 19 May 2017 was issued to Mr Larussa.^[75] The basis of the freezing notice is that Mr Larussa has been charged with an offence and could be declared to be a drug trafficker under s 32A(1) of the Misuse of Drugs Act 1981 (WA) if convicted of the offence. The property described in the schedules to the freezing notice includes the farming properties held by Larussa Custodian Services.
[75] Affidavit of A Carr filed 23 June 2017.
The effect of the freezing notice is that dealings in the property the subject of the notice are prohibited.[76] That is, the farming properties are presently unavailable to satisfy a judgment in favour of Ms Carr in the debt proceedings.
[76] CPCA s 50; affidavit of A Carr filed 23 June 2017; affidavit of A Carr filed 30 June 2017.
On behalf of Ms Carr, it is submitted that there are three possible outcomes in relation to the freezing notice, any one of which would result in the farming properties ultimately being available to satisfy a judgment in favour of the plaintiff.[77] Save for the first possible outcome, they are not straightforward.
[77] Plainitff's second supplementary submissions filed 4 July 2017 pars 44 - 47.
Counsel for Mr Larussa agreed with Ms Carr that the issue of the freezing notice is not a bar to the court deciding the private advice application. Having regard to the submissions made, I find that while the freezing notice is a complicating factor for the estate in relation to the debt proceedings, it is not a matter which should prevent the court from concluding that Ms Carr is justified in pursuing the debt proceedings.
By submissions made at the hearing on 19 May 2017, and by the second supplementary submissions filed on her behalf, Ms Carr informed the court that she did not know what the current net asset position of the Larussa Pastoral Trust was, save to note that the property searches disclosed a number of encumbrances by way of mortgage over farming properties held by Larussa Custodian Services on behalf of the Larussa Pastoral Trust.[78]
[78] Affidavit of Anna Carr 30 June 2017 'AC73'.
On the evidence available and put before the court by Ms Carr, it would appear that Larussa Custodian Services has fully drawn the mortgage loan in the amount of $10,195,000, and that the Trust's main assets (being the farming properties), have been converted into cash.[79]
[79] Affidavit of Anna Carr filed 6 October 2017; Plaintiff's third supplementary submission filed 6 October 2017 par 4.
Ms Carr does not know what has been done with the funds that were advanced.[80] She is not privy to the information, nor has the information been proffered by Larussa Custodian Services, or Mr Larussa, who together with his wife Alexandra Larussa, is a director of the same.[81]
[80] Affidavit of Anna Carr filed 6 October 2017 par 7.
[81] First Carr affidavit pars 13.4, 15 and 16.
In considering whether to give a direction, I have had regard to the fact that the plaintiff is unable to inform the court of the net positon of the Larussa Pastoral Trust. However, in the circumstances, I find that it would not be appropriate for this factor to weigh against the grant of a direction.

Determination

In providing private advice to the trustee under s 92 of the Trustees Act (WA), I emphasise that I am not determining the ultimate merits of the underlying litigation. In all of the circumstances and for the reasons set out above, I propose to make a direction, together with orders in the following terms.
1.The plaintiff have leave to amend the originating summons filed on 13 February 2017, in the terms set out in the plaintiff's minute of proposed amended originating summons filed on 26 May 2017.
2.The first defendant's chamber summons for production of legal advice referred to at paragraph 25 of the first Carr affidavit, be dismissed.
I will hear from the parties as to the appropriate form of direction and as to costs.
Schedule A
Section 92 and s 95 of the Trustees Act (WA) provide:
92.Directions, trustee may ask Court for
(1)Any trustee may apply to the Court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee.
(2)Every application made under this section shall be served upon, and the hearing thereof may be attended by, all persons interested in the application or such of them as the Court thinks expedient.
…
95.Trustee acting under Court's direction, protection of
(1)Any trustee acting under any direction of the Court shall be deemed, so far as regards his own responsibility, to have discharged his duty as trustee in the subject matter of the direction, notwithstanding that the order giving the direction is subsequently invalidated, overruled, set aside or otherwise rendered of no effect, or varied.
(2)This section does not indemnify any trustee in respect of any act done in accordance with any direction of the Court if he has been guilty of any fraud or wilful concealment or misrepresentation in obtaining the direction or in acquiescing in the Court making the order giving the direction.

Order 58 r 2 of the Rules of the Supreme Court 1971 (WA) provides as follows:

2.Executors etc. seeking certain relief without administration
The executors or administrators of a deceased person or any of them, and the trustees under any deed or instrument or any of them, and any person claiming to be interested in the relief sought as creditor, devisee, legatee or next of kin of a deceased person, or as cestui que trust under the trust of any deed or instrument, or as claiming by assignment or otherwise under any such creditor or other person as aforesaid, may take out, as of course, an originating summons returnable in chambers for such relief of the nature or kind following, as may by the summons be specified and as the circumstances of the case may require (that is to say) the determination, without an administration of the estate or trust, of any of the following questions or matters ‑
(a)any question affecting the rights or interests of the person claiming to be creditor, devisee, legatee, next of kin or cestui que trust;
(b)the ascertainment of any class of creditors, legatees, devisees, next of kin, or others;

(c)the furnishing of any particular accounts by the executors or administrators or trustees, and the vouching (when necessary) of such accounts;
(d)the payment into court of any money in the hands of the executors or administrators or trustees;
(e)directing the executors or administrators or trustees to do or abstain from doing any particular act in their character as such executors or administrators or trustees;
(f)the approval of any sale, purchase, compromise, or other transaction;
(g)the determination of any question arising in the administration of the estate or trust.

Schedule B – Relevant Documents filed

No.	Date of Filing	Title of Document
1	13 February 2017	Originating Summons for Directions pursuant to s 92 of Trustees Act 1962 and Order 58 rule 2 of the Rules of the Supreme Court 1971
2	13 February 2017	Affidavit of A Carr + attachments "AC1" to "AC62", sworn 13.02.2017
3	20 March 2017	Affidavit of F J Mestichelli + attachments "FM1" to "FM4", sworn 20.03.2017
4	5 April 2017	First Defendant's Submissions in Opposition to Plaintiff's Application for Directions pursuant to s 92 of Trustees Act 1962
5	6 April 2017	Third Defendant's Submissions in Opposition to Plaintiff's Application for Directions pursuant to s 92 of Trustees Act 1962
6	6 April 2017	Affidavit of A Carr + attachments "AC63" to "AC68", sworn 05.04.2017
7	6 April 2017	Affidavit of D Singh + attachment "DSI", sworn 06.04.2017
8	6 April 2017	Plaintiff's Submissions in Support of Application for Directions pursuant to s 45 of Administration Act, s 92 of Trustees Act 1962 and Order 58 rule 2
9	11 April 2017	Affidavit of D Singh + attachments "DS2" to "DS6", sworn 11.04.2017
10	12 April 2017	Affidavit of P J Tydde + attachment "PJT1", sworn 11.04.2017
11	21 April 2017	Plaintiff's amended Submissions in Support of Application for Directions pursuant to s 45 of Administration Act, s 92 of Trustees Act 1962 and Order 58 rule 2
12	12 May 2017	Third Defendant's Submissions in Opposition to Plaintiff's Application for Directions pursuant to s 92 of Trustees Act 1962
13	12 May 2017	Summons for Production of Legal Advice referred to in paragraph 25 of Affidavit of A Carr sworn 13.02.17
14	12 May 2017	First Defendant's Memorandum of Conferral pursuant to Order 59 rule 9(1) ‑ Re: The First Defendant's Chamber Summons dated 12 May 2017
15	12 May 2017	Affidavit of F J Mestichelli + attachments "FM1" to "FM3", sworn 12-05-17
16	12 May 2017	Affidavit of D Singh + attachment "DSH 1", sworn 12.05.2017
17	12 May 2017	Affidavit of A Carr + attachment "AC69", sworn 12.04.2017
18	15 May 2017	First Defendant's Memorandum of Conferral pursuant to Order 59 rule 9(1) ‑ Re: The First Defendant's Chamber Summons dated 12 May 2017
19	15 May 2017	Plaintiff's Supplementary Submissions in Support of Application for Directions pursuant to s 45 of Administration Act, s 92 of Trustees Act 1962 and Order 58 rule 2
20	18 May 2017	Third Defendant's Submissions in Opposition to Plaintiff's Application for Directions pursuant to s 92 of Trustees Act 1962
21	19 May 2017	Plaintiff's Further Amended Submissions in Support of the Application for Directions pursuant to s 45 of Administration Act, s 92 of Trustees Act 1962 and Order 58 rule 2
22	23 June 2017	Affidavit of A Carr + attachments "AC70' to "AC72", sworn 23.06.2017
23	27 June 2017	Submissions of the First Defendant in Support of Application for Production of Legal Advice to the Trustee
24	30 June 2017	Affidavit of A Carr + attachment "AC73", sworn 30.06.2017
25	4 July 2017	Plaintiff's Second Supplementary Submissions in Support of Application for Directions pursuant to s 45 of Administration Act, s 92 of Trustees Act 1962 and Order 58 rule 2
26	14 July 2017	Responsive Submissions of the First Defendant to Second Supplementary Submissions of the Plaintiff dated 3 July 2017
27	31 July 2017	Third defendant's Supplementary Submissions in Opposition to Plaintiff's Application for Directions pursuant to s 92 of Trustees Act 1962
28	6 October 2017	Plaintiff's Third Supplementary Submissions in Support of Application for Directions pursuant to s 45 of Administration Act, s 92 of Trustees Act 1962 and Order 58 rule 2
29	6 October 2017	Affidavit of A Carr + attachments "AC74" to "AC76", sworn 6-10-17

Schedule C ‑ Attachment "AC19" of affidavit of A Carr sworn 13 February 2017

Schedule D

The affidavit sworn by Ms Carr and filed on 13 February 2017 (the first Carr affidavit), pars 19 to 26

The Debt
19.During his lifetime the deceased owned valuable real estate in the northern suburbs of Perth which he developed and sold.
20.Attached in a bundle marked 'AC10' are true copies of various settlement statements in relation to the sale of various residential lots by the deceased in the period in or about 2004, and the sale of a farm in 2007.
21.The documents produced by the Trust disclose the deceased lent money to the Trust, and this was reflected in the Trust accounts as a liability due to the deceased. In this regard ‑
21.1Attached and marked 'AC11' is a true copy of the 'Statement of Beneficiaries Account' page from the Trust tax return for the year ended 30 June 2004, showing that the deceased had introduced capital of $348,964 to the Trust;
21.2Attached and marked 'AC12' is a true copy of a page from what is described as the balance sheet for the Trust for the year ended 30 June 2005 showing a loan of $5,062,278 by the deceased to the Trust;
21.3Attached and marked 'AC13' is a true copy of what is described as the balance sheet of the Trust as at 30 June 2006 and showing a loan of $5,171,915 by the deceased to the Trust;
21.4Attached and marked 'AC14' is a true copy of the Trust financial statements for the year ended 30 June 2010 in which a liability of $6,595,963 to the deceased is disclosed;
21.5Attached and marked 'AC15' is a true copy of the Trust financial statements for the year ended 30 June 2011, in which a liability of $6,595,963 to the deceased is recorded;
21.6Attached and marked 'AC16' is a true copy of the Trust financial statements for the year ended 30 June 2012 in which a liability of $6,595,963 to the deceased is recorded;
21.7Attached and marked 'AC17' is a true copy of the Trust financial statements for the year ended 30 June 2013 in which a liability of $6,595,963 to the deceased is recorded;
21.8Attached and marked 'AC18' is a true copy of the Trust financial statements for the year ended 30 June 2014 in which an 'unpaid entitlement' of $6,595,963 to the deceased is recorded, but which is purportedly adjusted to $0 on the basis of what is described as 'corpus gift – 17 October 2013.'

22.I am now aware, from documents produced by the Trust, correspondence exchanged by my solicitors with the solicitors acting for the defendants in the debt proceedings, and the Defence dated 18 November 2016 filed by Tony in those proceedings, that the basis upon which the trustee of the Trust and Tony contend that the Debt no longer exists is a document titled 'Memorandum of Agreement – Mutual Release' ('Memorandum').
23.A true copy of the Memorandum document produced to me for inspection is attached and marked 'AC19'.
24.The original of the Memorandum has not been made available for inspection despite request. The defendants' solicitors have told my solicitors that an original cannot be located.
25.After the Memorandum was produced, I sought and obtained legal advice (over which I assert legal professional privilege) regarding the claim that the Memorandum had the effect of extinguishing the Debt.
26.I was satisfied that the Estate had a properly arguable claim in relation to the Debt, and in those circumstances then instructed my solicitors to write to the solicitors for the defendants stating my contention that the Memorandum was ineffective to extinguish the Debt, and demanding payment of the Debt. A copy of this correspondence, dated 21 April 2016 is attached and marked 'AC20'.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AI
ASSOCIATE TO ACTING MASTER STRK

13 JUNE 2018

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: CARR -v- LARUSSA [2018] WASC 176 (S)
CORAM:   ACTING MASTER STRK
HEARD:   ON THE PAPERS
DELIVERED          :   24 OCTOBER 2018
FILE NO/S:   CIV 1237 of 2017
BETWEEN:   ANNA CARR
Plaintiff
AND
TONY LARUSSA
First Defendant
LARUSSA PASTORAL HOLDINGS PTY LTD as trustee for THE LARUSSA PASTORAL TRUST
Second Defendant
LARUSSA CUSTODIAN SERVICES AUSTRALIA PTY LTD as trustee for THE LARUSSA PASTORAL TRUST
Third Defendant
MARIA ANGELINA GENNARINA LARUSSA
Fourth Defendant

Catchwords:

Executors and trustees - Private advice application - Directions sought as to whether an administratrix of an estate is justified in commencing and pursuing proceedings - Appropriate form of direction - Costs

Legislation:

Rules of the Supreme Court 1971 (WA), O 58 r 2, O 66 r 9(2)
Supreme Court Act 1935 (WA), s 37
Trustees Act 1962 (WA), s 92

Result:

Direction given
The plaintiff's costs incurred in pursuing the private advice application be taxed and paid out of the estate on an indemnity basis
The first defendant pay the plaintiff's costs incurred in defending the application for access to legal advice, to be taxed
There be no order as to the costs incurred by the first or third defendants in participating in the application for private advice

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Friedman Lurie Singh & D'Angelo
First Defendant	:	Corporate Counsel Lawyers
Second Defendant	:	No appearance
Third Defendant	:	Gilbert + Tobin
Fourth Defendant	:	No appearance

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

Carr v Larussa [2016] WASC 13
Carr v Larussa [2018] WASC 176
HPM Pty Ltd v Fear [2002] WASCA 249 (S)
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66
Re Estate of Anastasios Keriacules Challis (Dec) [2010] WASC 333
Tsaknis v Lilburne [2010] WASC 152
Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [2014] WASC 393

ACTING MASTER STRK:

143On 12 June 2018 I delivered my reasons for decision on the application made on behalf of Ms Anna Carr for private advice from the court pursuant to s 92 of the Trustees Act 1962 (WA) and O 58 r 2 of the Rules of the Supreme Court 1971 (WA), and the application for inspection of legal advice made on behalf of Mr Tony Larussa.[82] I recorded there that I would hear from the parties as to the appropriate form of direction and as to costs.
[82] Carr v Larussa [2018] WASC 176.
144Written submissions on costs were filed on behalf of Ms Carr and Larussa Custodian Services Australia Pty Ltd, the current trustee for the Larussa Pastoral Trust.[83] Mr Larussa relies, to the extent applicable, on the submissions filed on behalf of Larussa Custodian Services. No party addressed the appropriate form of direction in their written submissions.
[83] Plaintiff's costs submission filed 18 June 2018; the third defendant's submission on costs filed 19 June 2018; and the plaintiff's responsive costs submission filed 20 June 2018.
145In these reasons, I address the appropriate form of direction and costs. These reasons should be read in the context of what I have recorded in my reasons for decision on the substantive applications.

Part A - Direction

146For the reasons delivered on 12 June 2018, the appropriate direction is that Ms Carr, in her capacity as administratrix of the estate of Guiseppe Larussa (deceased), was justified in commencing the proceedings known as CIV 2162 of 2016 (the debt proceedings), and is justified in pursuing the debt proceedings.

Part B - Costs

147As an applicant administratrix seeking directions under s 92 of the Trustees Act 1962 (WA), the plaintiff is entitled to have her costs (to be taxed) paid out of the estate, on an indemnity basis.[84] Ms Carr says that the only question in relation to her costs is whether, in the circumstances of this case, all or some of her costs (which would otherwise come out of the estate as a matter of course) should be paid by Mr Larussa and Larussa Custodian Services.
[84] Tsaknis v Lilburne [2010] WASC 152 [82]; Carr v Larussa [2016] WASC 13 [82], RSC O 66 r 9(2).

Larussa Custodian Services does not dispute that Ms Carr is entitled to have her legal costs paid out of the estate, but it does dispute that it is appropriate for all or some of the costs incurred by Ms Carr to be met by it or by Mr Larussa. Further, Larussa Custodian Services says that the costs it incurred should be paid out of the estate on a solicitor-client basis. Ms Carr opposes the same.

149The application for private advice was opposed by Mr Larussa and Larussa Custodian Services. Mr Larussa and Larussa Custodian Services were participants, 'permitted to be heard and allowed to participate in the proceedings, to some extent.'[85] Ms Maria Larussa and Larussa Pastoral Holdings Pty Ltd, the former trustee of the Larussa Pastoral Trust, elected not to participate.
[85] Carr v Larussa [2018] WASC 176 [11]; Wood (as co-executor and trustee of the will of the deceased) v Wood [No 4] [2014] WASC 393 [103(h)] citing Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66 [65]; and Re Estate of Anastasios Keriacules Challis (Dec) [2010] WASC 333 [17], referred to with approval in Carr v Larussa [2016] WASC 13 [16].
150The court has the power under s 37 of the Supreme Court Act 1935 (WA) to determine by whom and to what extent costs are to be paid, including by a non-party.[86] That is, the court has the power to order that all or some of Ms Carr's costs (which would otherwise come out of the estate as a matter of course) be paid by Mr Larussa and/or Larussa Custodian Services.
[86] HPM Pty Ltd v Fear [2002] WASCA 249 (S) [3].
151Where properly and reasonably incurred, the costs of a beneficiary on an application by a trustee for directions will ordinarily be viewed as necessarily incurred for the benefit of the trust estate and be paid out of the trust estate.[87] Ms Carr accepts this general proposition,[88] but says that in situations where the beneficiary's conduct is more directed towards the advancement of his private interests than the interests of the estate as a whole and its due administration, there is an argument that the situation is more analogous to that of an adverse claim by a beneficiary against a trustee, in which case costs should ordinarily follow the event.[89]
[87] Tsaknis v Lilburne [83] - [84].
[88] Plaintiff's costs submissions filed 18 June 2018 [11].
[89] Plaintiff's costs submissions filed 18 June 2018 [12]; citing Tsaknis v Lilburne [85] - [87].
152I note that in the context of the private advice application, Mr Larussa agitated an application for inspection of legal advice referred to in an affidavit sworn by Ms Carr and filed in support of the application for private advice.

Subject to the matters dealt with below concerning the application for inspection of legal advice, on balance, I find that it is appropriate for Ms Carr to have her costs to be taxed, paid out of the estate and on an indemnity basis. I have made no finding that Ms Carr acted unreasonably and in all of the circumstances, I find that there is no proper basis to disturb Ms Carr's entitlement to have her costs, to be taxed and paid on an indemnity basis.

154Mr Larussa failed in his application for inspection of legal advice.[90] The costs of the application should follow the event and it is appropriate that Mr Larussa pay Ms Carr's costs incurred in defending the application for access to legal advice, to be taxed.
[90] Carr v Larussa [2018] WASC 176 [25] - [47].
155In all of the circumstances, I find that the conduct of Mr Larussa and Larussa Custodian Services is appropriately characterised as having been directed towards the advancement of private interests rather than the interests of the estate as a whole and its due administration. It is not appropriate that their costs of participation be paid out of the estate.

However, in all of the circumstances, I find that it is not appropriate for Mr Larussa and Larussa Custodian Services to be ordered to otherwise meet some or all of the costs incurred by Ms Carr in seeking private advice.

157In determining appropriate cost orders, I have carefully weighed the difficult procedural history,[91] the approach adopted by Ms Carr, Mr Larussa and Larussa Custodian Services to the application, the timing of the application and amendment to the originating process sought by Ms Carr, the large number of objections raised on behalf of Mr Larussa and Larussa Custodian Services in relation to the affidavit material filed on behalf of Ms Carr, that after conferral, nearly all 'substantive' objections were resolved by agreement, the issues agitated, and the outcome of the application.
[91] Carr v Larussa [2018] WASC 176 [13].

Orders

158I propose to make a direction and orders in the following terms.
1.The plaintiff have leave to amend the originating summons filed on 13 February 2017, in terms set out in the plaintiff's minute of proposed amended originating summons filed on 26 May 2017.
2.The first defendant's chamber summons for production of legal advice referred to at par 25 of the affidavit of the plaintiff sworn on 13 February 2017, be dismissed.
3.The plaintiff, in her capacity as administratrix of the Estate of Guiseppe Larussa (deceased), was justified in commencing the proceedings known as Supreme Court of Western Australia action CIV 2162 of 2016 (the debt proceedings), and is justified in pursuing the debt proceedings.
4.The plaintiff's costs incurred in pursuing the application for private advice be taxed and paid out of the Estate of Guiseppe Larussa (deceased), on an indemnity basis.
5.The first defendant pay the plaintiff's costs incurred in defending the application for access to legal advice, to be taxed.
6.There be no order as to the costs incurred by the first or third defendants' in participating in the application for private advice.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AI
ASSOCIATE TO ACTING MASTER STRK

24 OCTOBER 2018