Gorman v Gorman - [2004] NSWSC 741

No judgment structure available for this case.

CITATION: Gorman v Gorman [2004] NSWSC 741

HEARING DATE(S): 05/04/04, 06/04/04, 07/04/04
Written submissions ordered
Judgment reserved: 28/04/04

JUDGMENT DATE:
17 August 2004

JURISDICTION:
Equity Division

JUDGMENT OF: Barrett J

DECISION: Appeals of first and second defendants against decision of Acting Master allowed. Cross-appeal of plaintiff dismissed. Costs orders of Acting Master set aside. In lieu, order that first and second defendants as executors have costs out of estate; and no order as to costs of plaintiff

CATCHWORDS: PROCEDURE - costs - appeal from Acting Master where no substantive orders were made and the only matter in contention was costs - defendants executors to whom Part 52A rule 42 applied - no evidence to warrant Acting Master's findings of unreasonable conduct

LEGISLATION CITED: Supreme Court Act 1970 ss.75A, 76(1)
Supreme Court Rules Part 52A rule 42, Part 60 rule 10

CASES CITED: Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409
Gorman v Gorman; Estate late Jeanette Mary Gorman [2003] NSWSC 647
House v The King (1936) 55 CLR 499
Re Minister for Immigaration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Ross v Internet Wines Pty Ltd [2004] NSWCA 195

PARTIES :
John Justin Gorman - Plaintiff
John Patrick Gorman - First Defendant
Lisa Bernadette McGuire - Second Defendant

FILE NUMBER(S): SC 2862/00

COUNSEL: Mr M S Willmott SC - Plaintiff
Mr T G R Parker - First Defendant
Mr C F Hodgson - Second Defendant

SOLICITORS: Turnbull Hill Lawyers - Plaintiff
Maurice Blackburn Cashman Lawyers - First Defendant
Nagle & McGuire - Second Defendant

LOWER COURTJURISDICTION: Supreme Court (Master)

LOWER COURT FILE NUMBER(S): 2862/00

LOWER COURT
JUDICIAL OFFICER : Acting Master Berecry

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

TUESDAY, 17 AUGUST 2004

2862/00 – JOHN JUSTIN GORMAN v JOHN PATRICK GORMAN & ANOR

JUDGMENT

Background

1 On 5, 6 and 7 April 2004, I heard two appeals and a cross-appeal in respect of a decision given by Acting Master Berecry on 25 November 2002. It is necessary to recount some background.

2 Jeanette Mary Gorman died on 8 or 9 February 1999. She was survived by her husband, John Justin Gorman (known as “Justin”), and four children, John Patrick Gorman (known as “John”), Mary Katharine Salvat, Andrena Leonie Gorman and Lisa Bernadette McGuire. For ease of reference, and having regard to the roles they later came to play, it is convenient to refer to the husband, Justin Gorman, as “the plaintiff”, the son, John Gorman, as “the first defendant” and the daughter, Lisa McGuire, as “the second defendant”.

3 Two of the children, being the first defendant and the second defendant, were named as executors in the deceased’s will dated 2 July 1993. Probate of that will and of a codicil dated 28 July 1998 was granted to them on 29 December 1999. The effect of the will and codicil, briefly stated, was to grant to the plaintiff (husband) a right to occupy the residence on Farm 550, Coleambally, to devise that farm to the four children in equal shares, to devise to the first defendant (son) the deceased’s interest in another property at Coleambally (being a property owned by the deceased and the first defendant in common in connection with a farming business carried on by them in partnership), to devise to the daughter Andrena and to the plaintiff in equal shares a property at Potts Point and to give the residue of the estate to the four children in equal shares.

4 In mid-2000, the plaintiff instituted proceedings under the Family Provision Act 1982 seeking further provision out of the estate of his late wife. The first defendant and the second defendant, being the legal personal representatives, were the defendants in those proceedings. On 8 December 2000, Master McLaughlin ordered that the plaintiff receive, in lieu of the provision made for him in the will and codicil, a lump sum payment of $270,000 or 40% of the net distributable estate as realised by the executors (whichever was the greater) plus one-half of the net value of the assets of the farming partnership known as “J P and J M Gorman”, being the partnership between the deceased and the first defendant. The orders made by Master McLaughlin also noted “the agreement between the plaintiff and the defendants contained in the Deed dated 26 October, 2000”.

5 The deed dated 26 October 2000 had in fact contained an agreement that the orders ultimately made by Master McLaughlin be sought. This was provided for in clause 1. Clause 2 obliged the parties to do everything necessary to sell Farm 550, the deceased’s interest in a property in Graham Road Coleambally and the Potts Point property by private treaty or public auction, acknowledging the plaintiff’s right to offer to buy any or all of these. Clause 3 said that sale prices were to be agreed by the parties to the deed, failing which the price (or reserve) would be determined by valuation. Clause 4 addressed the possibility that the properties would not be sold by 18 February 2001. In that event, they were to be submitted to public auction. Clause 7 provided for the proceeds of sale to be applied, first, in meeting expenses of sale, second, in meeting 75% of sums needed to discharge encumbrances (with the first defendant personally providing the other 25%) and for the proceeds of the Potts Point sale to be paid in certain ways not immediately relevant. There was an acknowledgment in clause 7(i) that the plaintiff was to receive one half of the net value of the assets of the J P and J M Gorman partnership (that being one of the orders it was agreed should be sought under the Family Provision Act) but that clause added a rider to the effect that the plaint and machinery was subject to an encumbrance, that the estate’s outlay towards discharge of this should be limited to $8,500 and that the balance should be borne by the plaintiff and the first defendant. Clause 7(ii) provided for forgiveness of a debt owing to the deceased by Keith Salvat, the husband of the daughter Mary Salvat. Clause 7(iii) stated that, following payment to the plaintiff in accordance with the orders to be sought under the Act, the balance of the estate should be divided equally among the four children.

The proceedings before the Acting Master

6 On 14 December 2001, the plaintiff filed a notice of motion in the Family Provision Act proceedings in which Master McLaughlin had made orders more than a year earlier, on 8 December 2000. The first defendant and second defendant (being the executors and the defendants in those proceedings) were named as respondents to the motion. The substantive relief sought by the plaintiff as applicant in that notice of motion was orders as follows:

“1. That the defendants do all things necessary to call in and to realise the assets in the estate of JEANETTE MARY GORMAN, now deceased, and to give effect to the Orders of this Honourable Court made in proceedings No. 2862 of 2000 on 8 December, 2000.

2. That the defendants be directed to furnish and verify their accounts relating to their administration of the said estate from 8 February, 1999 to 2 December, 2001.”

7 The notice of motion was heard by Acting Master Berecry on 18 November 2002. He gave judgment on 25 November 2002. The following were the only orders made:

“1. The first and second defendants pay three-quarters of the plaintiff’s costs personally.

2. Half the second defendant’s costs be paid personally by the first defendant.

3. The first defendant pay his own costs personally.

8 I record at this point the fact that, on 13 November 2002 (five days before the hearing before Acting Master Berecry), orders made by Palmer J had caused the first defendant to cease being one of the executors of the will of the deceased and left the second defendant as sole executrix.

9 It is necessary to refer also to a subsequent event. The matter was re-listed before the Acting Master on 12 December 2002. I was informed from the bar table that this was so that a variation of the earlier orders might be sought and that, in the result, the Acting Master had declined to vary the orders of 25 November 2002. There is, in the court file, an Associate’s Record of Proceedings for 12 December 2002 which does not record either the making of any such application or the fate of it but does record an order as follows:

“1) 2nd defendant pay 1st defendant’s & plaintiff’s costs and her own costs personally without indemnity from the Estate.”

Ross v Internet Wines Pty Ltd

10 I am, however, content to proceed on the basis of the assurance of all three counsel who appeared before me (and who also appeared on 12 December 2002) that the Acting Master dismissed an application by the second defendant for variation of the orders of 25 November 2002 and that the order recorded as having been made on 12 December 2002 was an order with respect to the costs of that application.

The appeals and cross-appeal

11 The first defendant and the second defendant, by separate and independent notices of appeal, appeal from the Acting Master’s orders of 25 November 2002. The first defendant appeals from order 1 so far as it applies to him and from orders 2 and 4. The second defendant appeals from order 1 so far as it applies to her and from order 4. The orders sought by the first defendant on appeal are:

“1. An order that order 1 so far as it applies to the First Defendant and orders 2 and 3 made by Acting Master Berecry on 25 November 2002 be set aside, and in lieu thereof it be ordered that:

(a) the Plaintiff’s Notice of Motion filed 14 December 2001 be dismissed;

(b) the Plaintiff pay the First Defendant’s costs of the Notice of Motion, or alternatively there be such order for costs of the Notice of Motion between the Plaintiff and the First Defendant as the Court sees fit;

(c) the First Defendant’s costs up to 13 November 2002, to the extent not recovered under order (b), be paid out of the estate.

2. An order that the Plaintiff and the Second Defendant pay the First Defendant’s costs of this appeal.”

“1. An order that order 1 so far as it applies to the Second Defendant and order 4 made by Acting Master Berecry on 25 November 2002 be set aside, and in lieu thereof it be ordered that:

(a) the Plaintiff’s Notice of Motion filed 14 December 2001 be dismissed;

(b) the Plaintiff and/or the First Defendant pay the Second Defendant’s costs of the Notice of Motion;

(c) the Second Defendant’s costs to the extent not recovered under order (b), or alternatively, from the First Defendant, be paid out of the estate.

2. An order that the Plaintiff pay the Second Defendant’s costs of the appeal.”

12 A notice of cross-appeal was filed by the plaintiff. The orders sought therein are:

“1. An order that the defendants pay to the plaintiff his entitlement in the estate in accordance with the provision given to him pursuant to Order 2 in the Orders made by Master McLaughlin on 8 December, 2000.

2. An order that the defendants furnish and verify their accounts relating to their several administration of the estate of Jeanette Mary Gorman, deceased, as and from 8 February, 1999 until the date of the making of this Order.

3. An order that the defendants pay the costs of this appeal.”

13 By the end of the hearing of the proceedings before me, however, Mr Willmott SC, who appeared for the plaintiff, had indicated that orders 1 and 2 were not, for the time being, pressed and that the plaintiff sought only to preserve the pendency of his notice of motion filed on 14 December 2001 (or, in other words, to resist the contention of the first defendant and the second defendant that it should be dismissed) and to maintain the costs orders made by the Acting Master.

14 Before turning to the matters relevant to the appeals and cross-appeal, I should note that the question whether, in the circumstances at hand, the correct avenue of appeal is to a single judge or to the Court of Appeal became the subject of a judgment of Young CJ in Eq delivered on 14 July 2003: Gorman v Gorman; Estate late Jeanette Mary Gorman [2003] NSWSC 647. His Honour held that any appeal was properly an appeal to the court constituted by a judge. No step was taken with a view to obtaining review of that decision and I proceeded to hear the appeals and the cross-appeal accordingly.

Determining the course of proceedings before the Acting Master

15 In the course of argument before me, all counsel had occasion to refer to the course of proceedings before Acting Master Berecry. It is common ground that the hearing began at 10.00am and concluded at about 3.20pm, with the usual intervals. The court transcript, however, is remarkably brief and uninformative – one might say quite unacceptably so. It covers a little more than one page. I set it out in full:

“MONDAY 18 NOVEMBER 2002

2862/00 – JOHN JUSTIN GORMAN v JOHN PATRICK GORMAN & ANOR – ESTATE OF THE LATE JEANETTE MARY GORMAN

Mr M S Willmott for the Plaintiff and Applicant on the Motion

Mr T G R Parker for the First Defendant

Mr R Hughes for the Second Defendant

- - -

MR WILLMOTT OPENED

EXHIBIT #1 SHORT MINUTES OF ORDER MADE 13 NOVEMBER 2002 TENDERED, ADMITTED WITHOUT OBJECTION

EXHIBIT #2 BUNDLE OF DOCUMENTS MARKED PV1 [scil EB1]; EXHIBIT NOTE, AFFIDAVIT OF ERIC RICHARD LESLIE BUTLER TENDERED AND ADMITTED

EXHIBIT #3 LETTER FROM NAGLE & MCGUIRE TO ERIC BUTLER DATED 13 NOVEMBER 2002 TENDERED, ADMITTED WITHOUT OBJECTION

(Leave was sought to file and to rely upon affidavit of John Christopher Gazecki sworn 18 November 2002. Not read.)

SHORT ADJOURNMENT

(Mr Hughes sought leave to tender affidavit of Lisa McGuire dated 13 November 2002. Objection by first defendant as conflict of interests.)

MASTER: For the same reasons I rejected Mr Parker’s affidavit, non-compliance of the timetable, and the parties had the matter placed in the short notice of lists, I reject this affidavit. Most of the material that is annexed to this material is material that came into being prior to the first direction having been made by the Court.

The second defendant’s first affidavit is evidence that there is an issue between the second defendant and the first defendant concerning the realisation of the assets of the estate generally and in particular to meet the order that was approved by the Court. I therefore decline to read the affidavit. (Affidavit returned to Mr Parker.)

COUNSEL ADDRESSED

LUNCHEON ADJOURNMENT

(Discussion regarding costs.)

(Mr Hughes indicated that the second defendant never considered approaching the Court for the type of order that the first defendant sought.)

HIS HONOUR: I will reserve and let you know when the decision is ready.

MATTER ADJOURNED.”

16 This transcript does very little beyond identify the three documents tendered and admitted into evidence, record certain matters concerning an affidavit of J C Gazecki sworn on 18 November 2002 (which the Acting Master apparently would not allow to be read) and an affidavit of Lisa McGuire sworn on 13 November 2002 (which met with the same fate) and refer to one thing said about costs.

17 It is accepted by the parties that six affidavits were read before the Acting Master, being

(a) by the plaintiff – the affidavit of Eric Richard Butler sworn 13 November 2001;

(b) by the plaintiff – an affidavit of Eric Richard Butler sworn 23 January 2002;

(c) by the plaintiff – a second affidavit of Eric Richard Butler sworn 23 January 2002;

(d) by the plaintiff – his own affidavit of 29 July 2002;

(e) by the plaintiff – the affidavit of Eric Richard Butler sworn 26 September 2002; and

(f) by the first defendant – the affidavit of John Christopher Gazecki sworn 14 November 2002.

18 It is also accepted by the parties that three documents were tendered, admitted and marked as exhibits before the Acting Master, being:

(a) the orders made by Master McLaughlin on 8 December 2000 (Exhibit 1);

(b) a bundle of correspondence exhibited to Mr Butler’s shorter affidavit of 23 January 2002 (Exhibit 2); and

(c) a letter from Mr McGuire, the solicitor for the second defendant, to Mr Butler, the solicitor for the plaintiff, dated 13 November 2002 (Exhibit 3).

19 Beyond this agreement as to material before the Acting Master and the scant information available from the woefully inadequate transcript, it is not possible to determine the course of proceedings without further evidence. Before me, the parties consented to a course that saw evidence adduced by each of them in an attempt to show what actually happened before the Acting Master. I had before me, in that connection, two affidavits of Mr Gazecki, a solicitor who, at the time, was employed by the first defendant’s solicitors and was present at the hearing throughout, a letter from Mr Hughes (a solicitor who appeared as city agent for the solicitors for the second defendant) reporting to his principals in Nowra on the hearing and oral evidence from both Mr Gazecki and Mr Hughes, as well as oral evidence of Mr Butler, the solicitor for the plaintiff, who, on the morning of 18 November 2002, was in court instructing Mr Willmott and, in the afternoon, appeared for the plaintiff after Mr Willmott had been granted leave to withdraw to attend to other business when the matter exceeded its expected duration. One of Mr Gazecki’s affidavits has annexed to it detailed handwritten notes he took throughout the hearing. Annexed to his other affidavit is a typescript of the notes.

20 There are two contentious matters on which I must make findings concerning the course of proceedings on 18 November 2002. The first is whether an affidavit of the second defendant sworn on 14 March 2002 was read. The second is as to the applications that were made in relation to costs.

Was the affidavit of 14 March 2002 read?

21 As to the first matter, I am satisfied that the second defendant’s affidavit of 14 March 2002 was read and that its content was put into evidence. The transcript shows the Acting Master to have referred to “the second defendant’s first affidavit” as being evidence of the existence of a particular issue. It is not in dispute that this could only have been a reference to the second defendant’s affidavit of 14 March 2002. Mr Gazecki’s notes record a question to Mr Hughes (for the second defendant) – presumably from the Acting Master - “Any material?”; followed by “14 March 02 & 13 Nov 02 aff’s” – from which I infer that Mr Hughes stated he wished to read affidavits of those dates sworn by the second defendant. Mr Hughes said, in examination in chief, that he said to the Acting Master that the second defendant relied on her affidavit of March 2002 and:

“There was no objection to that affidavit. As I recall, the Master said words to the effect he would read the affidavit.”

22 There is, in Mr Gazecki’s notes, a long record of argument on objection to Ms McGuire’s affidavit of 13 November 2002 being read, culminating in the Acting Master’s ruling that it was not to be read. Nothing is there said about the affidavit of 14 March 2002. In cross-examination before me, Mr Gazecki said that his notes appear to indicate that no objection was taken to the reading of the first affidavit, although he could not be certain that it was read.

23 With the evidence in this state, I am satisfied that the second defendant’s affidavit of 14 March 2002 formed part of the evidence before the Acting Master. Such indications as there are on the subject point positively to that conclusion. There is no evidence to the contrary.

What submissions were made on costs?

24 The second matter of uncertainty concerning the course of the proceedings on 18 November 2002 is more difficult. I refer to the question of the applications made in respect of costs. The transcript is uninformative. It merely records, “Discussion regarding costs”, followed by:

“(Mr Hughes indicated that the second defendant never considered approaching the Court for the type of order that the first defendant sought.)”

25 The first matter to be mentioned here is what the Acting Master said on the subject in his judgment (at paragraph 6):

“The first defendant sought … an order for costs against the plaintiff. The second defendant and the plaintiff also sought an order for costs and in particular that the first defendant pay both their costs and that those costs be paid personally by the first defendant with no right of indemnity from the Estate.”

26 It is clear that the Acting Master had before him a letter of 13 November 2002 from the second defendant’s solicitors, Nagle & McGuire, to the plaintiff’s solicitor, Mr Butler, being the letter that became Exhibit 3 before the Acting Master. The hearing before me proceeded on the basis (agreed by the plaintiff and the second defendant) that that letter recorded matters on which those parties were at that time agreed in relation to the then imminent hearing scheduled for 18 November 2002. The agreement was, first, that the plaintiff would press for order 1 in the notice of motion only in relation to plant and machinery as an offer to purchase the properties had been accepted and an exchange of contracts was expected the following week; second, that the claim for order 2 would not be pressed; and, third, that, as to costs, the plaintiff would be seeking an order against the first defendant personally and, in the alternative, against the estate. The clear implication, as to costs, is that the plaintiff would not be seeking costs against the second defendant. Mr Butler, the plaintiff’s solicitor, said in evidence before me that the Acting Master had been informed that the plaintiff did not seek costs against the second defendant. In addition, there was in evidence, as part of Exhibit 2 (the bundle of correspondence exhibited to Mr Butler’s affidavit of 26 September 2002) a letter from Mr Butler to Nagle & McGuire containing the following paragraph:

“I have now received instructions from my client that he will not be seeking costs against Lisa McGuire personally however he will be continuing to seek costs against John Gorman personally and if that is not successful then against the estate for costs.”

27 The matter is also dealt with to some extent in Mr Gazecki’s handwritten notes, although in a passage which presents certain difficulties of legibility. Piecing together what appears in the handwriiten version, Mr Gazecki’s own typescript (where two words in the relevant passage are recorded by Mr Gazecki as “[illegible]”) and cross-examination of Mr Gazecki, I am satisfied that all but one word can be made out with a satisfactory degree of certainty and that the passage attributes to Mr Hughes a statement as follows:

“2nd Def unsure what orders being sought. Re costs. 2nd def sole executrix > not in physical control of estate assets. 2nd def had acted reasonably at all times re motion. 2nd def would [doubtful word] of costs borne by estate.”

28 Mr Gazecki could not read or recall what I have designated “doubtful word”. It is clear to me, however, that its second and third letters are both “p”, since each corresponds closely in appearance with the first letter of “physical” earlier in the quoted passage – also with the “p” in “pressed” earlier on the same page and the “pp” of “stopped” in the last line on the page. The likelihood, to my mind, is that the word in question is “approve” which, of course, would fit the context.

29 Mr Butler had no recollection of submissions made by Mr Hughes on behalf of the second defendant as to costs. He did, however, recall having made a submission or statement himself on behalf of the plaintiff that “we wouldn’t be claiming costs against Lisa”.

30 The other source of information on the claims and submissions about costs is the evidence of Mr Hughes who appeared for the second defendant. Mr Hughes deposes in an affidavit of 10 March 2004 that he made a submission to the following effect on costs:

“If the Plaintiff’s motion is dismissed, then the Second Defendant is entitled to an order for costs. Conversely if the Plaintiff is successful then noting the agreement between the Plaintiff and the Second Defendant the Second Defendant should not have to bear the costs of the Plaintiff but should be indemnified by the First Defendant as the First Defendant’s actions in obstructing the administration of the estate have brought about this hearing. Alternatively, the Second Defendant who is now the sole executrix, having acted reasonably at all times, is entitled to be indemnified from the Estate.”

31 Mr Hughes was cross-examined about the means by which he refreshed his memory before swearing the affidavit in which this statement appeared. He said he had no contemporaneous notes and, apart from recollection, had relied on a letter he sent to his principals (the second defendant’s solicitors, based in Nowra) reporting on the proceedings on 18 November 2002. That letter was dated 19 November 2002. The preparation of it began on 18 November after the hearing ended and was completed the next day. The letter is in evidence. It runs to three and a half closely typed pages. As to costs, the letter reports:

“As to costs, the plaintiff should pay if the motion does not succeed and if the motion succeeds, then the order for costs should be against the defendants personally to work out between themselves (a submission which somewhat surprised me) rather than the estate.”;

“As discussed with you at lunchtime as agreed I submitted the Motion was a matter for the court to decide and that as to costs, the second defendant had done what she reasonably could to carry out her executorial duties and had acted reasonably at all times as executor.”

32 Mr Hughes described the letter as “a summary of what happened in court that day” containing “what I thought at that particular time was necessary to be advised to my principals”, adding that it “was never a total transcript of what was said in court that day” and that it did not contain every detail of what was said. Mr Hughes was cross-examined by reference to the part of Mr Gazecki’s notes to which I have referred in this connection. He agreed that he said the things about costs attributed to him in the notes. He was asked whether he could recall having said anything about costs beyond what was recorded by Mr Gazecki. The cross-examination continued:

“A. Yes I can. In relation to the costs for the second defendant, I said that the second defendant at the time of that hearing being the sole executrix would be entitled to indemnification from the estate for her costs. I have also said that the second defendant should be indemnified by the first defendant as to her costs.

Q. You didn't say that when you reported to your principals on 19 November 2002, did you?
A. I may not have, I am not sure.

Q. What you said to your principals on 19 November 2002 was ‘As discussed with you at lunch time, as agreed, I submitted the motion was a matter for the court to decide and that as to costs the second defendant did whatever she reasonably could to carry out her executorial duties and had acted responsibly and was reasonable at all times as executor’. Was that an accurate and complete report to your principals about what you said on the question of costs?
A. It was accurate, but I am not sure that it was complete.

33 It was then put to Mr Hughes that the statement in his affidavit about indemnification of the second defendant by the first defendant for costs because of the first defendant’s obstruction of the administration of the estate was a product of his unaided recollection at the time of the swearing of his affidavit on 10 March 2004. He disagreed, saying:

34 Mr Parker elicited from Mr Hughes a statement that the evidence on which he intended to base any submission based on the first defendant’s obstructiveness was mainly evidence in the second defendant’s affidavit of 13 November 2002, which affidavit was, however, rejected by the Acting Master. Otherwise, the only evidence tendered by Mr Hughes was that in the second defendant’s affidavit of 14 March 2002 of which Mr Hughes did not hold a copy, although he was able to look briefly at someone else’s copy during the hearing. The latter affidavit does not contain material going to the first defendant’s delinquency in administration of the estate.

35 The contemporaneous documents (Mr Gazecki’s notes and Mr Hughes’ letter to his principals) do not refer to any submission by Mr Hughes on costs referring to the first defendant’s delinquency. Nor was Mr Hughes successful in his attempt to put evidence before the Acting Master as a foundation for such a submission, in the form of the second defendant’s affidavit of 13 November 2002. In those circumstances, I am not satisfied that Mr Hughes made such a submission. Had he done so (or attempted to do so), it is most likely that there would have been a complaint by Mr Parker about the absence of any basis for the submission and that that would have been recorded at least in Mr Gazecki’s notes – particularly since the debate which culminated in the rejection of the second defendant’s affidavit of 13 November 2002 played a large part in Mr Hughes’ report to his principals and was described by him as “acrimonious”. But there is no record of any such complaint. Despite Mr Hughes’ having said that it had been necessary for him to turn his mind to the matter within a month after the hearing (at which time he no doubt had the Acting Master’s judgment), I consider that the recollection recorded in his affidavit of 10 March 2004 was faulty to the extent that it included a memory of his having made the submission based on obstruction of the administration of the estate by the first defendant.

36 There is also the question of what submissions were made on behalf of the first defendant as to costs. These are recorded in Mr Gazecki’s transcript and attributed to Mr Parker. The substance of Mr Gazecki’s note is as follows:

“Parker: Plaintiff’s costs – Suggest these be paid out of the estate – the costs to be assessed on inter-partes basis. But if succeeds, not right that estate should bear. Costs would need to be awarded against defendants, then up to defendants to deal with estate re costs.

52A r 42 of rules provides that where person in proceedings as trustee or mortgagee he shall unless otherwise ordered by entitled to costs from trust. Court may otherwise order (a) trustee [scil. acted] unreasonably (b) acted his own benefit.

Unless satisfied he acted unreasonably, must be satisfied acted unreasonably, then costs against defendants personally.”

37 Mr Parker then appears to have canvassed a number of matters with a view to establishing that there was no relevant delinquency by the defendants as executors. Unfortunately, Mr Gazecki’s notes do not permit findings as to what these submissions actually were.

38 In summary, therefore:

1. The Acting Master had before him the letter of 13 November 2002 from the second defendant’s solicitors to the plaintiff’s solicitor (Exhibit 3 before the Acting Master) recording an agreement that the plaintiff would seek a costs order against the first defendant personally and, in the alternative, against the estate, the clear implication being that the plaintiff would not seek costs against the second defendant.

2. The Acting Master also had before him, as part of Exhibit 2, Mr Butler’s letter of 5 September 2002 to Nagle & McGuire saying in explicit terms that his instructions were not to seek costs against the second defendant personally and that the plaintiff would be seeking costs against the first defendant personally and, failing that, out of the estate.

3. Mr Butler, solicitor for the plaintiff, said in the course of the hearing that the plaintiff would not be claiming costs against the second defendant. However, he did seek on the plaintiff’s behalf an order for costs against the first defendant personally. This was in accord with the letters of 5 September 2002 and 13 November 2002 just mentioned.

4. Mr Parker, speaking for the first defendant, submitted that the plaintiff should be ordered to pay costs if his motion failed; and that, if the plaintiff succeeded, the plaintiff should have a costs order on the basis that the costs were payable out of the estate, unless it was shown that the defendants as executors had acted unreasonably, as to which Mr Parker submitted that they had not.

Nature of the appeal

39 Having referred to the orders made by the Acting Master and made such findings as appear to me to be available as to the material the Acting Master had before him, I turn to the present appeal.

40 The appeal is brought under Part 60 rule 10 of the Supreme Court Rules. Section 75A of the Supreme Court Act 1970 says that the appeal is by way of rehearing. But where the decision under appeal involves an exercise of discretion, the same principles apply to the appeal as apply to an appeal from a single judge to the Court of Appeal: Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409.

41 Decisions on costs are discretionary. Section 76(1) of the Supreme Court Act is in the following terms:

Legal Profession Act 1987

42 It has not been suggested by any of the parties that the decisions on costs made by Acting Master Berecry were compelled or influenced by any provisions of the Act or the rules of court, apart from Part 52A rule 42 of the Supreme Court Rules:

(1) Where a person is or has been a party to any proceedings in the capacity of trustee or mortgagee, he shall, unless the Court otherwise orders, be entitled to the costs of the proceedings out of the fund held by the trustee or out of the mortgaged property, as the case may be, in so far as the costs are not paid by any other person.

43 Costs being discretionary, it is necessary that a party appealing against a decision on costs establish an error of principle, that is, an error of the kind referred to in House v The King (1936) 55 CLR 499. Dixon, Evatt and McTiernan JJ there said (at 504-505):

“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”

The substantive claims before the Acting Master

44 One matter may, I think, be dealt with shortly. The Acting Master did not deal with the substantive claims in the plaintiff’s notice of motion filed on 14 December 2001, that is, the claim for an order that the defendants do all things necessary to give effect to the order of 8 December 2000 and an order that the defendants be directed to furnish and verify accounts. He proceeded on the footing stated in paragraph 6 of his judgment that “it seems that the proceedings have now in principle settled” and that “[t]he only outstanding matter was a question of costs”.

45 In the circumstances, something should have been done to dispose of the substantive claims in the notice of motion. The logical step, in light of the Acting Master’s view of how things stood, would have been, as a formal matter, to dismiss those claims as otiose or no longer pressed. The plaintiff is apparently keen to keep the notice of motion alive, although it seems to me that he has not put forward any basis for doing so, given that the first and second orders he seeks in his notice of cross-appeal differ from those in the notice of motion filed on 14 February 2001 and fail to recognise the change in circumstances which has seen the first defendant cease to be an executor and the second defendant continue as sole executrix.

46 There is no utility in keeping the plaintiff’s notice of motion filed on 14 December 2001 alive. It should be dismissed, but without prejudice to the plaintiff’s right and ability to take such further steps as he thinks fit directed towards the same ends. This, in my opinion, does not prejudice the plaintiff, given that he did not, before me, press for orders 1 and 2 in his notice of cross-appeal. He can pursue those or similar claims in the appropriate way in the future if minded to do so.

The context in which the question of costs was considered

47 As I have said, the Acting Master did not deal with the substantive claims in the plaintiff’s notice of motion, being of the view that “the proceedings have now in principle settled” and that “[t]he only outstanding matter was a question of costs”. There was no hearing on the merits, no determination of a contested claim and accordingly no “event” relevant to the application of the general principle in Part 52A rule 11 of the Supreme Court Rules that costs should follow the event.

48 In such a case, the factors relevant to the awarding of costs are those described by McHugh J in Re Minister for Immigaration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624-5:

“In an appropriate case, a court will make an order for costs even where there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical question between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. ... Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. ... But such cases are likely to be rare. ... If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion would usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases."

Further evidence

49 The parties accepted that, in the particular circumstances of this appeal, evidence in addition to that which was before the Acting Master should be admitted. Some of the additional evidence has already been mentioned. It concerns matters going to an understanding of what happened before the Acting Master.

50 I gave certain rulings on the introduction of further evidence during the hearing before me. I declined to admit into evidence paragraphs 14 and 15 of, and annexures E and F to, an affidavit of the second defendant (Ms McGuire), being the affidavit of 18 November 2002 that the Acting Master had excluded in its entirety because of lateness. Then, by agreement, I allowed paragraphs 1 to 5, 7 and 21 (and its annexure) of that affidavit to be read without qualification – that is, as against both the plaintiff and the first defendant – and paragraphs 10 to 13 and 16 (with annexures) as against the plaintiff only.

51 Otherwise, the hearing before me was conducted by reference only to the evidence that was before the Acting Master, as already identified by me, supplemented by the evidence as to the course of the proceedings before the Acting Master to which I have already referred.

The Acting Master’s observations relevant to costs

52 The Acting Master embarked upon an examination “on broad terms” of what he considered to be the history of the matter, for the purpose of addressing the question of costs. Before doing so, however, he made two relevant observations: first, that there had been no uncertainty or lack of clarity as to the relief sought by the plaintiff (paragraph 7 of the judgment); and, second, that it had not been unreasonable for the plaintiff to seek accounts from the defendants as executors (paragraph 8 of the judgment). The historical survey the Acting master then made for the purposes of addressing costs issues was to the following effect:

1. The position in relation to accounts was “wholly unsatisfactory” (paragraph 9).

2. By the second half of 2001, the first defendant had fallen out with the solicitors jointly instructed by the first and second defendants as executors, and, for a time, acted for himself, “thus further complicating proceedings” (paragraph 11).

3. By late 2001, a potential conflict of interest on the part of the first defendant had “become insoluble” (paragraph 12). This was because of his desire and ongoing attempts to negotiate a purchase of estate property pursuant to the right in that respect recognised in the deed of 26 October 2000.

4. Although there was “some justification” for the plaintiff to make the application, he was “not entirely blameless in the way in which the proceedings have progressed over the last two years” (paragraph 15).

5. There was no evidence that the executors attempted to sell the property in accordance with the agreement of December 2000.

6. The Acting Master accepted the second defendant’s evidence that she at all times wanted to perform her executorial duties in accordance with the deed (paragraph 15).

7. There was no satisfactory explanation as to why the executors did not furnish accounts as requested by the plaintiff 20 months beforehand; the executors had not performed their duties; and they had been dilatory in responding to a reasonable request (paragraph 16).

8. It was unfair to sheet home much of the blame to the second defendant in respect of the stalemate on the sale of property. This and the sale of machinery were really matters between the first defendant and the plaintiff (paragraph 17).

9. Had the administration proceeded in an orderly fashion, accounts could have been presented within six to eight weeks after the initial request and the properties could have been sold at the latest by the second half of 2001. Much of the delay was caused by conflict among the parties (paragraph 18).

10. Had the defendants, as executors, taken control and sold the property in accordance with the deed, the sale would have gone through before November 2002 (paragraph 18).

11. The plaintiff had contributed to part of the costs of the delay in the administration of the estate (paragraph 18).

12. Without the interference by the plaintiff, this would not have become an expensive and drawn out exercise. He should bear some of the costs (paragraph 19).

Submissions in relation to these findings

53 At a factual level, the first and second defendants both submit that the Acting Master erred in ordering that the first and second defendants pay three-quarters of the plaintiff’s costs in that

(a) he erred in finding (at paragraph 15) that there was no evidence that the executors attempted to achieve sale of the property in accordance with the agreement of October 2000 (item 5 at paragraph [52] above);

(b) he erred in finding that there was no satisfactory explanation given as to why the executors did not furnish accounts when requested (item 7 at paragraph [52] above); and

(c) the evidence did not support the Acting Master’s finding that accounts could have been presented within a month to six weeks of the initial request, that the properties could have been sold at the latest by the second half of 2001 and that the sales could have gone through sooner than November 2002 (items 9 and 10 at paragraph [52] above.)

54 The first and second defendants also say, with respect to the order that they pay three quarters of the plaintiff’s costs, that the Acting Master failed to give adequate reasons for concluding that the defendants should bear a proportion of the plaintiff’s costs (or for the proportion he arrived at) and, on the evidence, the conclusion was not justified. As an alternative, they submit that any such order should have been limited to the plaintiff’s costs (or a proportion of them) up to 24 July 2002 (when the plaintiff abandoned his request for accounts to be provided). As a further alternative the first defendant alone says that any such order should have been limited to the plaintiff’s costs (or a proportion of them) up to 13 November 2002 when the first defendant ceased to be an executor.

55 The second defendant also says, in relation to the order that the first and second defendants pay three-quarters of the plaintiff’s costs, that the Acting Master failed to take into account (or to take appropriately into account) the fact that the plaintiff did not seek an order for costs against the second defendant and the fact that such an order was contrary to the agreement between those parties as to the orders that the plaintiff would seek.

56 As to the order that the first defendant pay half the second defendant’s costs, the first defendant says that the Acting Master fell into error because there was no application to that effect by the second defendant; alternatively, that he failed to give adequate reasons for that conclusion which, on the evidence, was not justified.

57 As to the order that the second defendant bear half her own costs, the second defendant says that the Acting Master erred in making the order because he did not find that the second defendant had acted unreasonably, as required by Part 52A rule 42 as a condition of the making of such an order; alternatively, if there was such a finding, no reasons were given for it and the conclusion was not justified by the evidence.

What did the evidence show?

58 The shorter of Mr Butler’s affidavits of 21 January 2002 has exhibited to it a quantity of correspondence tracing events in the administration of the estate and the relationships between the parties from January 2001 to January 2002. In order to assess the submissions made about the Acting Master’s findings, it is necessary to refer to the sequence of events in some detail. I shall do so by reference to the material exhibited to the affidavit I have just mentioned as well as other material that was before the Acting Master.

59 In the description that follows, it is to be remembered that Mr Butler was the solicitor for the plaintiff and, at one time or another, also for Ms Salvat, one of the beneficiaries who was not a party to the deed dated 26 October 2000; and that Nagle & McGuire were the solicitors who acted throughout for the second defendant and, at times, for the first defendant as well. There will be reference to three other solicitors or firms – Mr McCarthy of Berrigan, McKenzie & Vardanega of Griffith and Maurice Blackburn Cashman of Sydney – each of whom, at different times, acted for the first defendant alone.

60 On 6 January 2001, Mr Butler, on behalf of the plaintiff, wrote to Nagle & McGuire, who were then acting for both the first defendant and the second defendant, saying

“What my client really seeks as this stage is simply a balance sheet. Details of the assets and liabilities and the income and expenditure of the estate. He will then be content to sit back and wait for the sale of the various assets to enable distribution to take place.”

61 On 15 March 2001, Nagle & McGuire who, it appears, had only recently begun to act for the first defendant and the second defendant, informed Mr Butler of difficulties they were having in obtaining files from the former solicitors for the first defendant and the second defendant. Mr Butler thereafter wrote several prompting letters to Nagle & McGuire. These produced a response dated 18 June 2001 to the effect that

(a) an appraisal by Wesfarmers Dalgety Ltd as to the current valuation of the Coleambally properties was awaited;

(b) the trustees had agreed to list the properties “for sale and/or lease”;

(c) the solicitors understood that the plaintiff had conferred with the first defendant as to “presenting the properties for sale”;

(d) in relation to the residential flat at Potts Point, rectification works were to be carried out and the property was to be listed for sale, contracts having been prepared and submitted to agents;

62 On 2 July 2001, Nagle & McGuire sent to Mr Butler and to the second defendant a letter from a solicitor (Mr McCarthy) separately instructed by the first defendant. That letter from Mr McCarthy outlined a proposal that the first defendant undertake farming operations on the Coleambally properties pending sale. Also sent by Nagle & McGuire was a letter from stock and station agents at Griffith submitting a sale agency agreement and a letter from a valuer of the Potts Point property, as well as other miscellaneous items concerning the estate.

63 On 12 July 2001, Mr Butler wrote to Nagle & McGuire asking for “a copy of the last estate accounts”. The letter continued:

“My client simply wants to know the current position in relation to all of the assets and liabilities of the estate and at what point the executors are at in relation to a final distribution. A set of estate accounts showing the income and outgoings since the date of death would disclose the full position.”

64 On 13 July 2001, Nagle & McGuire wrote to Mr Butler enclosing letters they had previously sent to the second defendant, Mr McCarthy (the solicitor then acting for the first defendant) and Ms Salvat outlining and seeking concurrence in certain actions directed towards the sale of the Colleambally farms and the Potts Point property and enclosing a marketing proposal for the farms from Wesfarmers. The efforts in relation to the Potts Point property bore fruit when, on 9 July 2001, Laing & Simmons of Potts Point sent to Nagle & McGuire a sales advice confirming sale of the property.

65 In their letter of 13 July 2001 to Mr McCarthy, Nagle & McGuire reported the then current position in relation to the administration of the estate as follows:

(a) The Potts Point property had been sold;

(b) An agency agreement had been received from Rawlinson & Brown and an appraisal from Wesfarmers (both of which were sent to Mr McCarthy);

(c) The plaintiff and Ms Salvat had said that the properties ought not be listed at less than $1.5 million which Nagle & McGuire said was higher than the appraisals received and earlier valuations;

(d) As to farming of the properties pending sale and the concern of the first defendant about this, it was noted that the first defendant had said some time previously that he would favour a proposal regarding farming in anticipation of the expiry of an existing lease; however that proposal raised questions to which Nagle & McGuire sought answers;

(e) A mortgage on the Coleambally properties was due to be paid off on 16 January 2002 and Nagle & McGuire asked Mr McCarthy what their client proposed in that regard.

66 On 16 July 2001, Mr Butler wrote to Nagle & McGuire saying that the plaintiff was “most upset about various matters” and “has asked for accounts to be filed within seven days otherwise he will make an application to the Court for a timetable to be set and for costs to be paid by the estate”.

67 On 17 July 2001, Nagle & McGuire wrote to Mr Butler saying that the financial position of the estate remained as shown by the probate affidavit detailing assets and liabilities, as adjusted by “the trust/office account of T J Kerr, Solicitor” – this being the solicitor who had preceded Nagle & McGuire as solicitor for the first and second defendants as executors. Nagle & McGuire continued:

“Until the assets of the Estate are sold then there is insufficient moneys to pay for liabilities.

We note that we wrote to you on 13 July 2001 and we are unsure as to whether you read or digested such information prior to despatch of your letter but, the information sets out essentially where the administration of the Estate is.

difficulty

Whilst we appreciate that your client has the benefit of a Supreme Court Order for a specific monetary sum, nonetheless the trustees have a duty to inform those beneficiaries who are entitled to the Estate and to act in good faith.”

“We therefore seek your client’s instruction as to

1. Sale price to be nominated and why.

2. A response to Mr McCarthy’s letter and the proposal put by the co-trustee.

3. What thought and/or proposal your client puts forward so far as liquidating the Cassidy mortgage as and when it falls due.”

writing

68 On 18 July 2001, Mr Butler wrote to Nagle & McGuire informing them that he had begun to act also for Ms Salvat. He went on to say that the beneficiaries had not received any meaningful accounts since the date of death. They also said:

“It appears the executors or their Solicitors have failed to properly administer the estate and have failed to account for all the assets and liabilities of the estate.”

69 Meanwhile, on 17 July 2001, Ms Salvat had written direct to Nagle & McGuire expressing concern that some estate assets did not appear to have been recorded. She demanded “swift clarification of the assets of the estate”. She continued:

“Furthermore I wish to make completely clear that I do not agree with Wesfarmers listing the properties for sale … [I]f you should proceed to list the properties with Wesfarmers I will immediately place the matter before the court.”

“They should not be auctioned and alternative arrangements should be put in place immediately to protect the assets from a fire sale, i.e. a new lease arrangement to cover the interest payments due to Mr Cassidy.”

70 On 18 July 2001, Nagle & McGuire wrote to Ms Salvat dealing with the matters in her letter. They said, in particular, that they had specific instructions from the second defendant to list the properties with Wesfarmers at $1.1 million and that this had been confirmed by Mr McCarthy, the solicitor for the first defendant. They said that they had had no written communication on this from the plaintiff.

71 On 25 July 2001, Mr Butler wrote to Nagle & McGuire conveying instructions from Ms Salvat to the following effect:

(a) Ms Salvat does not agree to the first defendant purchasing the properties unless the price “is proven to be at market value” and, in this connection, Ms Salvat was obtaining her own valuation;

(b) Ms Salvat was not a party to the deed dated 26 October 2000 and accordingly did not regard her rights as affected by it; and

(c) Ms Salvat required “a full accounting of the estate”.

72 On 17 August 2001, Nagle & McGuire sent to Mr Butler a volume of financial information. This included:

(a) the partnership tax return relating to the partnership between the deceased and the first defendant for the year ended 30 June 1997;

(b) a corresponding tax return for the year ended 30 June 1998 supplemented by reference to financial events during that year;

(c) a corresponding tax return for the period 1 July 1998 to the date of the deceased’s death at which point, it was said, a new partnership had come into existence between the estate and the first defendant with assets and engagements being assumed by the new partnership from the old at book values;

“Financial records for partnership Estate J.M. Gorman and J.P. Gorman as listed (1-11 inclusive). This is the first accounting period for this partnership, starting at the date of J.M. Gorman’s death. As previously noted, the new partnership acquired the plant from the old partnership at book value on 8 February 1999. The new partnership entered into new leases with Hardys commencing 7 March 1999, for the same total rent of $75K per year”;

(e) the first defendant’s tax return for the year ended 30 June 1998 and a profit and loss account for the period from the date of the deceased’s death to 30 June 1999 and another profit and loss account for the period 1 July 1999 to 31 January 2000, in each case with a balance sheet as at the close of the relevant period; and

(f) the deceased’s tax return for the year ended 30 June 1997 and “list of documents as shown enumerated 1-4”.

“The executors therefore say that the attached financial documentation is a reasonable summary of the estates position as presented in the accounts.”

“As indicated, the pressing question for the Estate is the sale of the Coleambally properties to meet the Estate’s debts and specifically mortgage payments. Further, if the properties are not sold then the properties need to be farmed in order to meet mortgage payments.

The Executors have therefore instructed us to:

1. List the properties for sale by way of auction.

2. Instruct the Co-Trustee Mr John Patrick Gorman to farm the properties as indicated in the attached correspondence from Mr McCarthy, Solicitor.”

73 On 21 August 2001, Nagle & McGuire wrote to Mr Butler as follows:

“We refer to our letter dated 17 August 2001 and enclose further Ledger Entries for your information.”

Enclosed were some eleven pages consisting of what was described as “detailed profit and loss statement” of the partnership for the period 1 July 2000 to 31 March 2001 together with a “ledger entries report” of the partnership for the same period.

74 On 17 September 2001, Nagle & McGuire wrote to the first defendant referring to what they regarded as his “instruction” as follows:

“There will be no sale of anything until we receive a letter of satisfaction from Butler who is acting for Justin [i.e. the plaintiff] and Mary [i.e. Ms Salvat].”

“It is timely to remind you of the Deed of Settlement and Release which provides in essence the following terms:

1. Justin receive $270,000, or 40% of the net distributable estate – whichever is the greater; and one half of the net value of the assets in the farming partnership.

2. To effect the sale of the Coleambally farms and the Kings Cross property, either by private treaty or at auction, at a price as agreed by the parties, or in the absence thereof, by the average of two valuations made by Valuers who are members of the Australian Institute of Valuers. If a price cannot be agreed then a reserve price can be set by a Valuer nominated by the President of the Real Estate Institute of NSW and should either party neglect to sign a Contract then the Registrar of the Supreme Court of New South Wales is empowered under the Deed to do so.”

“At all times, Lisa McGuire has endeavoured to do her utmost to preserve and maximise the Estate. She can only do so on objective evidence. On the present valuations, the Wesfarmers appraisal is reasonable. The properties require sale in accordance with Supreme Court orders and the Deed of Family Arrangement.

an agenda

the meat in the sandwich

The dispute is unnecessarily involving the Estate in additional legal costs. It may be better for Justin’s and Mary’s Solicitor, Eric Butler, to liaise with your Solicitor, Gerard McCarthy and for the writer to cease participation.

Something urgently needs to be undertaken as the auction proposal is set for 16 October 2001 and we require confirmatory written instructions within seven (7) days to proceed with the auction.”

75 A copy of this letter of 17 September 2001 from Nagle & McGuire to the first defendant was, on the same date, sent by Nagle & McGuire to Mr Butler with a covering letter inviting his “consideration” and stating that his clients’ “written advice” was required within seven days. Mr Butler replied on 18 September 2001 as follows:

“I refer to your letter of 17 September 2001 and reply as follows:-

1. I am seeking instructions from my clients in respect of the matters raised in your letter.

2. From my part the issues are clear and I set them out as follows:-

a You act for the executors and their role is to administer the estate which includes the sale of property. My two clients are only beneficiaries and have no role in the administration.

b My client Mary Salvat is entitled to her interest in the estate as per the Will. If the Deed varies her entitlement the Deed is null and void as far as any change in her entitlement is concerned.

c I again put you on notice my clients do not consent or authorise John Gorman or any entity involving John Gorman to purchase any estate property.

d Estate accounts have still not been produced. My clients will require estate accounts in the proper format sooner or later.

I personally can see no reason why the executors are not simply going about their business of administering the estate. They have a job to do …. just do it.”

76 Nagle & McGuire replied to Mr Butler on 21 September 2001. They began by thanking him for the clarity with which his letter was expressed. They then went on to point out that both the plaintiff and Ms Salvat had an interest in the administration of the estate and the setting of the sale price for the properties (this was, as far as the plaintiff was concerned, something provided for in the deed of 26 October 2000) and that each had expressed views about what should and should not be done. Nagle & McGuire pointed out that the executors wished to give the plaintiff and Ms Salvat an opportunity to express their views because they were keen to avoid later allegations of sale at an undervalue. They continued:

“If the Executors do not receive comment or advice, then clearly they must proceed with the auction at a sale price in accordance with the material at hand.”

77 By letter dated 25 September 2001, Mr Butler conveyed to Nagle & McGuire instructions received from the plaintiff. He did so by means of a copy of a letter dated 19 September 2001 from the plaintiff to his solicitor Mr Butler:

“With respect to action to be taken immediately in the final settlement of my wife’s Estate:

1. A summons to be issued in the Supreme Court of NSW for the full and complete accounting of the Estate of Jeanette Mary Gorman.

2. The partnership of J J Gorman and J M Gorman be divided 50/50 and distributed.

3. That the valuation of partnership be accepted as at the time of death and J J Gorman be paid out in full at the settlement of the propertys.

4. That the propertys be sold at the earliest practicable date at the best possible price can be achieved.”

78 Two days later, on 27 September 2001, Mr Butler raised with Nagle & McGuire the question whether the first defendant was “aware that as executor and trustee of the estate he is not permitted by law to purchase any of the estate property (without consent of all the beneficiaries)”. The letter concluded:

“If John Gorman does wish to purchase any of the estate property would you please ask him to put a proposition for consideration by the beneficiaries.”

79 On 15 October 2001, Nagle & McGuire wrote to Mr Butler about a number of matters remaining from previous correspondence. They said that, on advice from Wesfarmers and based on earlier valuations, the reserve price for the properties would be $1.1 million. They made various points about the position of Ms Salvat. They then discussed the proposition that the first defendant was not permitted by law to purchase estate property without the consent of all beneficiaries and continued:

“In relation to the matter generally, we are instructed that John Gorman made an offer some years ago for $1.1m, which was refused by both Justin Gorman and Mary Salvat. The Estate could have been finalised at that time. However through their own conflicting and inconsistent demands, together with unsubstantiated allegations concerning the actions of the Executors and the market value of the Farms, the properties have not been sold sooner.”

“Mr Justin Gorman rang at 7.00 am this morning. He has instructed me that the reserve price on farms 535 & 550 will be $1.2 million. I feel that this is far too high. Where do we stand?”

80 The Coleambally properties were put to auction on or shortly before 24 October 2001. In their letter of that date to Mr Butler, Nagle & McGuire reported that there had been no bid and that the auctioneers, Wesfarmers, had suggested that the properties were probably worth $920,000 to $960,000 if a crop was sown. Nagle & McGuire then set out their intention of instructing Wesfarmers to list both properties together at $1 million and the two farms separately (Farm 550 at $510,000 and Farm 535 at $490,000). They sought confirmation that the plaintiff had no objection to listing at these prices or to the first defendant’s bidding on either of the properties. Mr Butler replied on 30 October 2001 that the plaintiff was having direct discussions with the first defendant in relation to the sale of the properties and that he would be in contact with Nagle & McGuire as soon as instructions were received. He then confirmed that he no longer acted for Ms Salvat.

81 On 1 November 2001, Mr Butler wrote to Nagle & McGuire reporting a telephone conversation with a Mr Camm of Riveragents who said he had an opportunity to sell the properties and believed that they might be sold for approximately $1.1 million. Mr Butler urged the executors to communicate with Mr Camm. By letter dated 15 November 2001, Mr Butler noted that he had had no reply to his letter of 1 November and said:

“I am instructed by my client Justin Gorman that John Gorman has instructed Neil Camm of Riveragents to continue negotiations with an American party who is interested in purchasing both properties. My client tells me that they are interested in purchasing both properties for $630,000 totalling $1,260,000.

As I understand it you are still acting for the other executor and I look forward to your confirmation that the executors are working together with a plan to assist Neil Camm in selling the property to the American party. Apparently there is a group of Americans who wish to purchase the property and settle in Australia. Obviously, this is a wonderful opportunity for the executors to sell the property.

Would you please acknowledge receipt of this letter and confirm the executors are working in an attempt to sell the two properties.”

82 On 20 November 2001, Mr Butler wrote to Nagle & McGuire enclosing a letter from McKenzie & Vardanega who, by then, were acting for the first defendant. That firm said that the first defendant would be “more than happy” if the property were sold for $1.1 million “but does not feel in the current climate that that figure could be obtained”. There was reference to the possible American purchasers. Mr Butler commented to Nagle & McGuire:

“I cannot believe that the executors, under all of the circumstances, are not rushing Mr Camm. There is no downside to a transaction with Mr Camm.”

83 It appears that nothing came of the apparent opportunity to sell through Mr Camm. On 19 December 2001, Mr Butler wrote to Nagle & McGuire enclosing, by way of service, the notice of motion which in due course came before Acting Master Berecry. On 9 January 2002, Nagle & McGuire wrote to Mr Butler referring to the statement in the plaintiff’s supporting affidavit that no money or provision of any kind out of the estate had been provided to the plaintiff and taking issue with that statement. After confirming that they, by then, acted only for the second defendant, Nagle & McGuire said:

frustrated

Additionally, your client and John Gorman were to make efforts to present the property for sale and have failed to do so.

With respect, your client now complains to the Court indicating that he has received no provision out of the Estate yet by his conduct and actions has frustrated the sale of the properties representing the only means to provide provision. It is he himself who does not accept Wesfarmers’ appraisals nor the offers for sale.

He cannot have it both ways.

Further, we note that your client and John Gorman were to split the partnership plant and machinery and we do not know what has occurred to date. Has any effort been made to clean up the properties and/or assess in practical terms the sale of machinery to provide additional provision for your client.

Our client would like to further remind her father that John Gorman offered to purchase the properties some years ago for $1.1 million but your client considered that such offer was inadequate, and furthermore, the other beneficiary Mary Salvat was insulted by the inadequacy of the offer. It has clearly transpired that such an offer was in fact both reasonable and proper given the valuations and market appraisals which the Estate has obtained.”

84 The plaintiff’s affidavit of 29 July 2002 and Mr Butler’s affidavit of 26 September 2002 both deal with attempts by the plaintiff and the first defendant to reach an accommodation regarding the division of farm plant and equipment. The plaintiff gives evidence of having gone, by appointment, from Dunedoo to Coleambally (a distance of 600 kms) to discuss the matter with the first defendant. He says that, upon arrival, the first defendant was not at the appointed place. He waited for two days. The first defendant arrived. The plaintiff said to him, “Good morning”. A few other things were said. The first defendant walked over and turned on the kettle. A short conversation as follows then occurred:

First defendant: “Let me explain it to you.”

Plaintiff: “What I want is a farming plant.”

First defendant: “If you’re not going to talk to me I’ll go.”

85 Mr Butler reports attempts at a meeting of 4 September 2002 to resolve the matter of division of the plant and equipment. He had both the plaintiff and the first defendant attend his office for a discussion on the subject. A letter of 5 September 2002 from Mr Butler to Nagle & McGuire reported as follows:

“At the conference John told us that the Court Orders and the Deed were wrong and that he had never agreed to those conditions. He is going to tell the judge at the hearing of this matter. I asked him how he envisaged settling the whole dispute and he said ‘I will write it out for you’. He wrote for me on a piece of paper the manner in which he envisaged the matter should be finalised. I enclose herewith that piece of paper but to set it out clearly I summarise his ‘offer’ as follows.

1. The estate property to be transferred to John and he continue to service the mortgage.

2. John would pay all the estate accounts including both parties’ legal fees.

3. John would pay Justin a monthly pension.

4. (Whilst not written) John would keep all the plant and equipment.”

86 In July 2002, Nagle & McGuire ceased acting for the first defendant. It appears that he did not thereafter employ a solicitor for the purposes of the proceedings until about September 2002 when Maurice Blackburn Cashman (“MBC”) began to act for him. There is in evidence a quantity of correspondence between MBC and Mr Butler about the pending notice of motion. MBC also corresponded with Nagle & McGuire. The latter firm wrote to MBC on 16 October 2002 as follows:

“Regardless of the merits of your observations concerning the state of the Pleadings, we are most concerned at the continual attempts to delay finalisation of this matter by our client’s co-executor, Mr John Gorman.

Our client’s position is as follows:

1. All reasonable attempts to sell the properties have been made to date.

2. The farming properties are currently being leased pending receipt of an acceptable offer for sale.

3. Despite numerous requests, the co-executor, Mr John Gorman, has deliberately failed to fulfil his obligations to distribute the partnership, plant and equipment with the Plaintiff, Mr Justin Gorman.

4. It is this continual failure by your client to allow the distribution of the plant and equipment to proceed which is the real reason that the Motion continues to be on foot. We have made numerous requests for your client to respond to the offers made by Mr Justin Gorman to sort out this issue. There’s been no response and it appears clear that your client, Mr John Gorman, is determined to ensure that this issue is delayed as long as possible.

Our client of course cannot force Mr John Gorman to fulfil his obligations in this regard, only the Court can.

For this reason our client supports the Plaintiff’s actions concerning the Motion so far as the Motion relates to the forced sale of the partnership, plant and equipment. Our client will also join the Plaintiff’s application that your client personally pay the Plaintiff’s costs of the Motion.”

87 On 18 October 2002, MBC wrote to Nagle & McGuire saying that the first defendant had recently received legal advice “that his position as Executor is untenable having regard to the potential conflict of interest between his personal interest and the interests of the estate (as set out in more detail below)”. MBC then said that they had been instructed to make an application for the revocation of the grant of probate to the first defendant so that the second defendant would remain as sole executrix. The letter went on to refer to matters such as the fact that Farm 535 was partly owned by the estate and partly by the first defendant, that arrangements for sale needed to be satisfactory to both those parties, that the first defendant had continued to use estate machinery, that the first defendant alone had been making payments on a loan apparently obtained by both himself and his late mother on the security of the two farms and that the first defendant had grown a crop of rice on the estate’s property at his own expense so that “the income and expenditure relating to that crop, and other outgoings in relation to the land, need to be part of the accounting referred to above”. The letter also expressed a hope that, once the first defendant had ceased to be an executor, it would be possible for the second defendant to negotiate with the first defendant “for a satisfactory resolution of the issues which arise between our client’s personal interests and the estate’s interest”. In a separate letter also of 18 October 2002 (which appears to have been accompanied by a copy of the letter to Nagle & McGuire), MBC said to Mr Butler that they expected that the course of action outlined in that letter “will address your client’s [i.e. the plaintiff’s] concerns, so that there is no need for your client’s Notice of Motion to proceed, or at least that the only question would be costs”.

88 It is necessary to refer also to exchanges between Nagle & McGuire and Mr Butler in July and August 2002. It appears that there was a telephone conversation on 24 July 2002 in which the question whether there was any need for accounts to be filed by the executors was discussed. There was also discussion about the sale of the properties and the sharing of the plant and equipment. In a letter of 12 August 2002 to Nagle & McGuire, Mr Butler said:

“Whilst on 24 July 2002 I thought that the filing of accounts no longer be required I am now not so certain. The problem I have is that I don’t know whether John Gorman your client’s co-executor is going to make any assertions that may in fact lead to the necessity for the filing of accounts. I don’t know what he is going to assert in relation to the plant and equipment or its value. I don’t want to be put in a position where my client’s rights are prejudiced in any way. I do not know whether we will require accounts to be filed until the hearing of this matter.”

89 In a letter of 26 August 2002 to Mr Butler, Nagle & McGuire referred to having previously informed Mr Butler of negotiations pending for the lease and an option for the purchase of the properties. They said that they had expected the lease and option agreements to be executed that week with the option exercisable not later than 15 February 2003 and with settlement by 28 February 2003. They went on to say, however, that they had on the previous day been advised orally that the agreement “may not proceed”. Referring to the conversation on 24 July 2002 in which Mr Butler had apparently said that the filing of accounts was not required, Nagle & McGuire observed that Mr Butler’s “justification for now being not so certain is weak”. Nagle & McGuire then said:

“We can however confirm our prior verbal advice that Mrs McGuire consents to the filing of accounts should the Plaintiff really wish to press this order (which is still not clear).”

90 In October 2002 there appears to have been a possibility of selling the properties for $1,075,000. It appears that a contract was entered into shortly before the hearing on 25 November 2002.

Assessment

91 Several factors combined to produce complications and delays in the administration of the estate. Family members took strong positions on various matters. Some but not all of the persons interested in the estate became parties to the deed of 26 October 2000 so that different family members were working according to different sets of expectations. Ms Salvat took an active part in the stream of correspondence between July and October 2001, stating in forceful terms what she thought should happen with the properties. This led the first defendant at least, to say to his solicitors in September 2001 that there would be “no sale of anything” until “a letter of satisfaction” was received from the solicitor acting for the plaintiff and Ms Salvat. The first defendant’s position was complicated by his desire to have certain estate assets for himself; also his desire to conduct farming operations on the property. His personal interests included his interest in the partnership which farmed certain of the estate’s land. His dispute with the plaintiff over plant and machinery further complicated his position. His withdrawal as an executor was virtually inevitable. The plaintiff was not necessarily blameless in the dispute he had with the first defendant over plant and machinery. The plaintiff also injected his ideas directly into the process of fixing a selling price for the properties. The second defendant alone seems to have steered a middle course with the help of her solicitors. Otherwise, family members displayed varying degrees of assertiveness and opinionatedness not always helpful in resolving the issues at hand.

92 I mention these general matters as a preliminary to an assessment of the submissions in relation to the Acting Master’s decision set out at paragraphs [53] to [57] above.

Sale of the property

93 The first submission is that the Acting Master erred in finding that there was no evidence that the executors attempted to achieve sale of the property in accordance with the agreement of December 2000. The evidence shows that, by July 2001, an agency agreement had been received from Rawlinson & Brown and an appraisal from Wesfarmers. At that stage, the plaintiff and Ms Salvat were saying that the properties should not be sold for less than $1.5 million which was higher that the appraisals received and earlier valuations. Ms Salvat wrote to the executors’ solicitors saying that the properties should be listed at $1.45 million and sold through Riveragents alone; also that they should not be auctioned. The executors’ solicitors made attempts to discover what price would be acceptable to the plaintiff. The executors were concerned to know the wishes of the plaintiff and Ms Salvat so as to be in a position to forestall later allegations of sale at an undervalue. This was both understandable and unobjectionable. On 15 October 2001, the executors’ solicitors told the plaintiff’s solicitor that the properties would be auctioned with a reserve of $1.1 million. The plaintiff then approached the auctioneers direct and said that the reserve should be $1.2 million. An auction occurred on or shortly before 24 October 2001 but was unsuccessful, no bid being received. The following month, the executors followed up a possibility notified by the plaintiff’s solicitors of selling to American interests. A contract was provided to the relevant agents. That possibility came to nothing. In December 2001, the second defendant’s solicitors said to the plaintiff’s solicitors that, in their client’s view, the plaintiff and the first defendant had “frustrated the sale of the Colleambally farms”. A sale was eventually effected in November 2002.

94 The series of events I have recounted shows clearly that the first and second defendants are correct when they say that the Acting Master erred in finding that there was no evidence that the executors attempted to achieve sale of the property in accordance with the agreement of October 2000.

Accounts

95 I turn next to the submission of the first and second defendants that the Acting Master erred in finding that there was no satisfactory explanation given as to why the executors did not furnish accounts when requested.

96 The plaintiff’s solicitors wrote to the executors’ solicitors on 6 January 2001 asking for “simply a balance sheet” – “[d]etails of assets and liabilities and the income and expenditure of the estate”. The request was repeated on 12 July 2001. Four days afterwards, on 16 July 2001, the plaintiff’s solicitor said that the plaintiff was “most upset about various matters” and demanded that accounts be filed within seven days. This produced an immediate response: see paragraph [67] above. There was another demand for accounts on 18 July 2001. A volume of financial information was furnished on 17 August 2001: see paragraph [72] above. This was said to provide “a reasonable summary of the estate’s position”. Further financial information was sent four days later.

97 There was no riposte to the comment that the material thus submitted provided “a reasonable summary of the estate’s position”. Indeed, it must have satisfied the plaintiff’s needs, at least temporarily. This is shown by his solicitor’s letter of 18 September 2001 saying:

sooner or later

98 In my judgment, the executors were then entitled to regard the requests for accounts (eventually abandoned in July 2002) as suspended or in abeyance. That being so, I am of the opinion that the defendants are correct in submitting that the Acting Master erred in finding that there was no satisfactory explanation given as to why the executors did not furnish accounts when requested.

Delay

99 The defendants next submit that the evidence did not support the Acting Master’s finding that accounts could have been presented within a month to six weeks of the initial request, that the properties could have been sold at the latest by the second half of 2001 and that the sales could have gone through sooner than November 2002.

100 As to the first element, the submission is clearly correct. The “initial request” for accounts was the request of 6 January 2001. Just over eight weeks later, on 15 March 2001, the executors’ solicitors informed the plaintiff’s solicitors of difficulties they were having in obtaining files from solicitors who were no longer acting. From this it must be inferred that, contrary to the Acting Master’s finding, the information necessary to prepare accounts was not in the possession of the executors’ current solicitors within the period of a month to six weeks after the “initial request”.

101 As to the proposition that the properties could have been sold at the latest by the second half of 2001, the Acting Master’s finding seems to ignore or overlook the fact that the properties were put to auction on or shortly before 24 October 2001 and that no bid was received; also that, in November 2001, the executors followed up, by issuing forms of contract to the relevant agent, the possible sale to American interests which also failed to materialise. Obviously non-sale of the properties in the second half of 2001 was despite genuine efforts of the executors, not a result of their inactivity.

102 The proposition that property sales could have been achieved earlier than November 2002 finds no basis in the evidence. Taken as a whole, the evidence shows that there was little interest in these properties. The result of the abortive auction of October 2001 speaks for itself. The executors were also in a position where various family members were making very definite statements of opinion about value. There is no basis for a positive finding that the executors could and should have concluded a sale before they actually did so.

Conclusions

103 The above assessment in relation to key findings of the Acting Master serves to confirm that there was no sound basis for any view that the first defendant and second defendant, as executors, had been delinquent or guilty of unreasonable conduct warranting a departure from the ordinary expectation that they should be indemnified out of the estate for the costs of litigation in which they became involved as executors. The Acting Master, despite the findings to which I have referred (and which I do not consider to be supported by the evidence), did not express any specific conclusion in terms of Part 52A rule 42(2) of the Supreme Court Rules.

104 It is also significant that, according to my findings as to the course of the proceedings before the Acting Master, he had before him the letter of 13 November 2002 recording the agreement, by clear implication, that the plaintiff would not seek a costs order against the second defendant personally; and that Mr Butler, appearing for the plaintiff, said that he did not claim costs against the second defendant. Furthermore, on my findings, the second defendant did not seek an order for costs against the first defendant personally.

105 The court’s discretion as to costs is broad: Supreme Court Act, s.76. The powers with respect to costs must nevertheless be exercised judicially. It is probably going too far to say that that constraint means that the court can never make a particular costs order unless that order is expressly sought by a party in unequivocal terms. But the duty to act judicially in relation to costs must mean that if the court is told that, as a result of an agreement between them, one particular party does not seek costs against another party, it is not open to the court to make, with respect to those two parties, the very order they both wish to avoid. In addition, the court would not, in the ordinary course make a special costs order against a party based on the party’s delinquency or unreasonable conduct unless submissions going to the question of delinquency or unreasonableness had been made by reference to particular evidence.

106 The third and fourth orders made by the Acting Master – that is, the order that the first defendant pay his own costs personally and the order (in effect) that the second defendant bear half her own costs personally – all involved a departure from the general rule under Part 52A rule 42(1) that executors’ should be protected out of estate assets against their costs. For reasons I have stated, it was not open to the Acting Master to apply the exception in Part 52A rule 42(2) as he obviously did, although not expressly saying so.

107 The second order was an order that half the second defendant’s costs be paid by the first defendant personally. That too connotes a finding of delinquency of some kind on the part of the first defendant which, as I see it, had no firm foundation in the factual findings the Acting Master made. To the extent that there was no justification for an order that the plaintiff pay the whole or any part of the costs of the first defendant and the second defendant (a matter to which I shall come), those costs should have been borne by the estate in accordance with Part 52A rule 42(1), subject to a limitation, in the case of the first defendant, to the time before he ceased to be an executor.

108 So far as the position as between the plaintiff and the defendants was concerned, the Acting Master proceeded on the footing that the plaintiff should recover three-quarters of the plaintiff’s costs and that this should be a burden upon the defendants’ own pockets. Because no substantive relief was granted upon the plaintiff’s notice of motion (the Acting Master having proceeded on the basis that the substantive controversy had been resolved), the fact that the Acting Master awarded costs to the plaintiff can only be sustained if consistent with the approach described by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (above).

109 According to that approach, an order for costs against the defendants and in favour of the plaintiff, as actually made, is explicable only by reference to either confidence that the plaintiff would have succeeded (something which in no way appears from the Acting Master’s judgment) or unreasonable conduct on the part of the defendants. As I have already said, findings of unreasonable or unsatisfactory conduct on the part of the defendants were not consistent with the evidence. On the evidence, the case fell within the residuary category referred to by McHugh J – that is, the class of case where the opposing parties should be left to bear their own costs.

110 In the result, therefore, the Acting Master’s discretion miscarried at several levels in ways that must be remedied by reference to the principles in House v The King. The first and second defendant’s costs of the notice of motion should be paid out of the estate in accordance with Part 52A rule 42(1) (but with those of the first defendant limited to costs attributable to the period before he ceased to be an executor on 13 November 2002). The plaintiff should bear his own costs of the notice of motion.

Costs of the appeal

111 It remains to consider the costs of the appeal. The outcome is that the first and second defendants have been successful, in that the order that they pay part of the plaintiff’s costs has been replaced by an order that the plaintiff bear his own costs; and that the costs the defendants were ordered to bear personally are to be a charge on the estate. Since the defendants’ success has been at the expense, as it were, of the plaintiff and the estate, I am inclined to think that the defendants’ costs of the appeal should be paid as to one-half by the plaintiff and as to one-half out of the estate. I shall, however, hear the parties on the question of costs of the appeal.

Orders

112 The orders of the court are as follows:

1. Appeals of first defendant and second defendant allowed.

2. Cross appeal of plaintiff dismissed.

3. Dismiss the claims in prayers 1 and 2 of the plaintiff’s notice of motion filed on 14 December 2001.

4. Set aside orders 1, 2, 3 and 4 made by Acting Master Berecry on 25 November 2002.

5. Order that the costs of the first defendant of and incidental to the plaintiff’s notice of motion filed on 14 December 2001, limited to costs before he ceased to be an executor of the will of the late Jeanette Mary Gorman on 13 November 2002, be paid and defrayed out of the estate of the late Jeanette Mary Gorman; otherwise no order as to the costs of the first defendant of and incidental to the said notice of motion to the intent that the remainder thereof shall be borne by the first defendant.

6. Order that the costs of the second defendant of and incidental to the plaintiff’s notice of motion filed on 14 December 2001 be paid and defrayed out of the estate of the late Jeanette Mary Gorman.

7. No order as to the costs of the plaintiff of and incidental to the plaintiff’s notice of motion filed on 14 December 2001 to the intent that those costs shall be borne by the plaintiff.

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Last Modified: 08/17/2004

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Citations

Gorman v Gorman [2004] NSWSC 741

Most Recent Citation

Barker v Han [2025] SASC 161

Cases Citing This Decision

1

Barker v Han [2025] SASC 161

Cases Cited

4

Statutory Material Cited

2

Gorman v Gorman; Estate late Jeanette Mary Gorman [2003] NSWSC 647

Minister for Immigration and Citizenship v Li [2013] HCA 18

CITATION:	Gorman v Gorman [2004] NSWSC 741
HEARING DATE(S):	05/04/04, 06/04/04, 07/04/04 Written submissions ordered Judgment reserved: 28/04/04
JUDGMENT DATE:	17 August 2004
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
DECISION:	Appeals of first and second defendants against decision of Acting Master allowed. Cross-appeal of plaintiff dismissed. Costs orders of Acting Master set aside. In lieu, order that first and second defendants as executors have costs out of estate; and no order as to costs of plaintiff
CATCHWORDS:	PROCEDURE - costs - appeal from Acting Master where no substantive orders were made and the only matter in contention was costs - defendants executors to whom Part 52A rule 42 applied - no evidence to warrant Acting Master's findings of unreasonable conduct
LEGISLATION CITED:	Supreme Court Act 1970 ss.75A, 76(1) Supreme Court Rules Part 52A rule 42, Part 60 rule 10
CASES CITED:	Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409 Gorman v Gorman; Estate late Jeanette Mary Gorman [2003] NSWSC 647 House v The King (1936) 55 CLR 499 Re Minister for Immigaration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 Ross v Internet Wines Pty Ltd [2004] NSWCA 195
PARTIES :	John Justin Gorman - Plaintiff John Patrick Gorman - First Defendant Lisa Bernadette McGuire - Second Defendant
FILE NUMBER(S):	SC 2862/00
COUNSEL:	Mr M S Willmott SC - Plaintiff Mr T G R Parker - First Defendant Mr C F Hodgson - Second Defendant
SOLICITORS:	Turnbull Hill Lawyers - Plaintiff Maurice Blackburn Cashman Lawyers - First Defendant Nagle & McGuire - Second Defendant

LOWER COURTJURISDICTION:	Supreme Court (Master)
LOWER COURT FILE NUMBER(S):	2862/00
LOWER COURT JUDICIAL OFFICER :	Acting Master Berecry