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Dixon v Dixon (No 2)

Dixon v Dixon (No 2)

Case [2022] NSWSC 944 15 July 2022

Costs

Family Provision Claim

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Supreme Court

New South Wales

Medium Neutral Citation: Dixon v Dixon (No 2) [2022] NSWSC 944
Hearing dates: 7 June 2022
Date of orders: 15 July 2022
Decision date: 15 July 2022
Jurisdiction: Equity
Before: Parker J
Decision:
See [90]

Catchwords:
COSTS – estate proceedings – discontinued family provision claim – executor entitled to costs against plaintiff and indemnity out of the estate – successful application for appointment of new trustee of testamentary trust for benefit of plaintiff – plaintiff entitled to costs – trustee’s right of indemnity out of the estate – failure to obtain judicial advice – indemnity refused

Legislation Cited:
Civil Procedure Act 2005, s 76
Trustee Act 1925, ss 6, 59, 63, 70, 85, 93
Uniform Civil Procedure Rules 2005, rr 20.26, 42.25, Pt 54

Cases Cited:
Bovaird v Frost [2009] NSWSC 917
Dixon v Dixon [2022] NSWSC 721
Fay v Moramba Services Pty Ltd [2010] NSWSC 725
Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (No 3) [2017] NSWCA 109
Gatsios Holdings Pty Ltd v Kritharas Holdings Pty Ltd [2002] NSWCA 29
Grizonic v Suttor [2011] NSWSC 471
In re Beddoe [1893] 1 Ch 547
Ludwig v Jeffrey (No 4) [2021] NSWCA 256
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66
Miller v Cameron (1936) 54 CLR 572
Olsen v James [2020] NSWSC 1015
Wales v Wales [2014] VSCA 101

Category: Principal judgment
Parties: Lois Ruth Dixon (Plaintiff)
James Robert Dixon (First Defendant)
Eunice Helen Morgan (Second Defendant)
Representation:
Counsel:
AM Combe (Plaintiff)
C Birtles (Defendants)
Solicitors:
QV Law (Plaintiff)
O’Neill Solicitors (Defendants)

File Number(s): 2020/359326
Publication restriction: Nil

Judgment

These are estate proceedings in which I delivered judgment on 1 June: Dixon v Dixon [2022] NSWSC 721. I found that the trustee of the testamentary trust established for the benefit of the plaintiff should be removed and replaced by the plaintiff’s brother (who is her tutor in the proceedings). I adjourned the proceedings for the parties to agree on orders giving effect to my conclusions and dealing with costs.
The parties have agreed on the form of the removal order, and I will make an order in that form in due course. Costs remain in dispute.
This judgment assumes familiarity with my earlier judgment (“J1”). It also uses abbreviations used in that judgment.

Background and procedural history

The background to the proceedings is set out at J1 [3]-[7]. The deceased and his wife, who predeceased him, had four children, two daughters and two sons. The plaintiff (“Lois”) is the older daughter. She is disabled and in these proceedings her older brother (“Stephen”) is her tutor. The younger son (“James”), who is the first defendant, is the deceased’s executor.
The deceased divided his estate into four shares, one for each of his children. The plaintiff’s share was made the subject of a trust…

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 Dixon v Dixon (No 2)

Details

AGLC: Dixon v Dixon (No 2) [2022] NSWSC 944
Case: [2022] NSWSC 944
Decision Date: 15 July 2022

CaseChat Overview and Summary

The case of Dixon v Dixon (No 2) involved a dispute within a family over the distribution of an estate. The executor of the estate, the defendant, had initially commenced proceedings against the plaintiff, seeking to have a family provision claim discontinued. The plaintiff had also made an application to the court for the appointment of a new trustee of a testamentary trust for their benefit. The matter was heard in the Supreme Court of New South Wales. The central legal issues revolved around the entitlement of the parties to costs and the right of the trustee to seek indemnity out of the estate.

The court was required to determine whether the executor was entitled to costs against the plaintiff and indemnity out of the estate for the discontinued family provision claim. Additionally, the court had to decide if the plaintiff was entitled to their own costs and whether the trustee's right of indemnity out of the estate was valid. The plaintiff argued that the executor had failed to obtain judicial advice before commencing the family provision claim, thereby abusing the court process. The court considered the principles governing costs in estate proceedings, including the circumstances under which costs may be awarded and whether a party had acted unreasonably or vexatiously.

The court found that the executor was entitled to costs against the plaintiff and indemnity out of the estate for the discontinued family provision claim. The plaintiff was also awarded their own costs. However, the court refused the trustee's right of indemnity out of the estate, holding that the executor had failed to obtain judicial advice before initiating the family provision claim, which was a significant factor in the decision. The court's reasoning was based on the need to prevent the abuse of court process and to ensure that parties act reasonably and in good faith in estate proceedings. The court's decision highlighted the importance of obtaining judicial advice and the consequences of failing to do so.

The final orders of the court included the executor being entitled to costs against the plaintiff and indemnity out of the estate for the discontinued family provision claim. The plaintiff was awarded their own costs. The court refused the trustee's right of indemnity out of the estate, finding that the executor had acted unreasonably by not obtaining judicial advice before commencing the family provision claim. The case underscores the importance of acting in good faith and obtaining necessary advice in estate proceedings, as well as the consequences of failing to do so.

Orders