Cock v Aitken - [1912] HCA 70

COCK AND OTHERS

APPELLANTS; DEFENDANTS,

AITKEN AND ANOTHER

RESPONDENTS. PLAINTIFFS, Trustee-Life tenant and remainderman-Corpus and income-Costs paid by

trustee under order of High Court-Decision of High Court reversed on appeal by one party to Privy Council-Efect on rights of parties not appealing- Indemnity of truslees-Rights of assignee of life tenant.

An action was brought in the Supreme Court by a life tenant under the will of A. against the trustees of A.'s estate and the trustees of B.'s estate, claiming against the latter trustees in respect of breaches of trust whereby the income of A.'s estate was diminished, and against the former trustees the determination of the respective rights of himself and the remaindermen. The Court having dismissed the action with costs, the High Court on appeal gave relief against both sets of trustees and directed the costs of the plaintiff and the remaindermen to be provided for out of the corpus of A.'s estate.

15 CLR 374

The trustees of B.'s estate appealed to the Privy Council against so much only of the order of the High Court as applied to them. The Privy Council reversed the order of the High Court, directed the judgment of the Supreme Court to be restored and dismissed the action with costs in both Courts. The plaintiff before bringing the action had assigned his interest in A.'s estate by way of mortgage. Prior to the appeal to the Privy Council the trustees of A.'s estate, pursuant to the judgment of the High Court, had paid certain costs to the plaintiff, had retained certain of their own costs, and had incurred certain other costs in taking accounts in connection with the claim against the trustees of A.'s estate.

Held, that, notwithstanding the order of the Privy Council, the trustees of A.'s estate were entitled to be indemnified for such costs, except such of the plaintiff's costs as were attributable to the plaintiff's appeal to the High Court in respect of his claim against the trustees of B.'s estate, out of the corpus

By Griffith C.J. and Barton J., on the ground that although the order of the High Court must be treated as non-existent, the order of the Privy Council left the rights of the trustees of A.'s estate open to determination.

By Isaacs J., on the ground that the order of the Privy Council, although it authorized the trustees of A.'s estate to apply the income to the payment of the costs, did not permit the income to be SO applied to the disadvantage of the plaintiff's assignee.

Decision of the Supreme Court Aitken v. Cock, (1912) V.L.R., 433; 34 A.L.T., 81, reversed.

APPEAL from the Supreme Court of Victoria.

An originating summons was brought in the Supreme Court the parties to which were as follows :-The plaintiffs, William Aitken and James Nicolas Buzolich, were the trustees of the estate of Lucy Smith, deceased. The defendants were Charles Matthew Germain Cock, the life tenant of the residue of the income…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Cock v Aitken

Details

AGLC: Cock v Aitken [1912] HCA 70
Case: [1912] HCA 70
Decision Date: 22 October 1912

CaseChat Overview and Summary

This case concerned an appeal to the High Court of Australia following a decision of the Supreme Court of Victoria regarding the distribution of costs within a trust estate. The original action involved a life tenant, Mr. Cock, claiming against the trustees of his deceased mother's estate (the "Lucy Smith trustees") and the trustees of another estate (the "J. M. Smith trustees") for breaches of trust that diminished the income of the Lucy Smith estate. The Supreme Court initially dismissed the action, but the High Court on appeal granted relief against both sets of trustees and ordered that the costs of the plaintiff and remaindermen be paid out of the corpus of the Lucy Smith estate.

The legal issues before the High Court were complex, stemming from a subsequent Privy Council decision that reversed the High Court's earlier order. The Privy Council directed that the judgment of the Supreme Court be restored and the action dismissed with costs. This reversal raised questions about the enforceability of the High Court's cost orders, particularly concerning costs already paid or retained by the Lucy Smith trustees, and whether these costs should be borne by the corpus or the income of the estate, especially in light of an assignment of the life tenant's interest by way of mortgage.

The High Court, in its reasoning, acknowledged the difficulty in interpreting the Privy Council's order, which, taken literally, reversed the entire High Court judgment. However, the majority, comprising Griffith C.J. and Barton J., held that despite the reversal of the High Court's order, the rights of the Lucy Smith trustees to be indemnified for their costs remained open for determination. They reasoned that the Privy Council's order, while annulling the High Court's direction for costs to be paid from corpus, did not extinguish the trustees' entitlement to indemnity. Isaacs J. concurred, but on the ground that the Privy Council's order, while permitting the application of income to costs, did not allow this to prejudice the rights of the plaintiff's assignee.

The High Court allowed the appeal, varying the Supreme Court's order. It was declared that all costs should be charged to the corpus, with the exception of such portion of the plaintiff's costs of the High Court appeal as the trustees, in their discretion, deemed attributable to the plaintiff's claim against the J. M. Smith trustees, which were to be recouped from income. The costs of all parties in both the Supreme Court and the High Court were to be paid out of corpus, with the trustees' costs taxed as between solicitor and client.

Orders