H Stanke & Sons Pty Ltd v Frederick John Von Stanke - [2007] SASC 282

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
H STANKE & SONS PTY LTD & ANOR v FREDERICK JOHN VON STANKE & ORS
[2007] SASC 282
Judgment of The Honourable Justice Sulan
25 July 2007
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PLEADINGS - GENERALLY
CONTRIBUTION NOTICES
Plaintiffs claim beneficial interest in land held by various defendants and consequential orders - contribution notice seeks relief against first defendant arising from his conduct relating to the administration of estates - whether questions or issues arising on contribution notice are substantially similar to those arising in the action - whether questions or issues arising on contribution notice should be determined as between all parties to the action.
Contribution notice seeks removal of first defendant as trustee of the assets of the estate - whether defendant is acting as executor or trustee - question is one of fact.

PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - DECLARATIONS
Contribution notice seeks declarations that the first defendant is unfit to act in the role of executor or trustee - whether declaratory relief is available in these circumstances - whether appropriate to preclude prayer for relief seeking declaratory relief at this stage of proceedings.
Supreme Court Act 1935 s 27, s 31; Trustee Act 1936 s 4(1), s 36; Supreme Court Rules 1987 r 27, 37.01, 37.05, 37.07, 37.09; Trustees Act 1962 - 1978 (WA); Supreme Court Rules 2006 r 205, referred to.
Canyon (Australia) Pty Ltd & Ors v Aktieselskabet Dampskibsselskabet Svendborg & Ors [2004] SASC 36; Imagecolor (SA) Pty Ltd (In Liq) & Anor v Curtis & Ors [2000] SASC 316; J N Taylor Holdings (In Liq) & Ors v Bond & Ors (No 13) (Debelle J, 15 September 1995, unreported); J N Taylor Holdings Ltd (In Liq) & Anor v Bond & Ors (1993) 59 SASR 432; Kenny v Gumpl (Debelle J, 14 January 1997, unreported); Mullett & Anor v Gabriel & Anor (1989) 52 SASR 330; Porteous v Rinehart (1998) 19 WAR 495; Mulvaney v Commissioner of Taxation (Cth) [2004] SASC 166, applied.
Starmaker (No 51) Pty Ltd v Majda & Ors [2005] SASC 234, distinguished.
Re Burford; Burford v Clifford [1932] 2 Ch 122, discussed.
Barclays Bank v Tom [1923] 1 KB 221; Harper v Gray & Walker [1985] 2 All ER 507; H Stanke & Sons Pty Ltd & Anor v Frederick John von Stanke & Ors [2007] SASC 51; H Stanke & Sons Pty Ltd & Anor v Frederick John von Stanke & Ors [2007] SASC 130; Morgan v MacRae [2007] NSWSC 1017; O'Sullivan v Challenger Managed Investments Ltd [2007] NSWSC 383; Pope v DRP Nominees Pty Ltd & Ors (1999) 74 SASR 78; Stott v West Yorkshire Road Car Co Ltd & Anor [1971] 3 All ER 534; Williams v Williams [2005] 1 Qd R 105, considered.

H STANKE & SONS PTY LTD & ANOR v FREDERICK JOHN VON STANKE & ORS
[2007] SASC 282
Civil
SULAN J:

The present action is a long and complex action that is currently in its pre-trial stages. The plaintiffs are two companies each incorporated in the latter part of 1965. Frederick John von Stanke (“John”) is the son of Frederick William von Stanke (“Fred”), who died on 12 November 1995. John is the executor of Fred’s estate and, in his capacity as such, is the first defendant. In his personal capacity, he is named as the third defendant. Leonie Marie O’Meara (“Mrs O’Meara”) is the sister of John and is the second defendant. The first and second defendants are the sole living beneficiaries of Fred’s estate. Gwendoline Mary von Stanke (“Gwen”) was the wife of Fred and the mother of John and Mrs O’Meara. Gwen died on 3 April 2001. John is also the executor of Gwen’s estate, and John and Mrs O’Meara are the sole living beneficiaries of the estate.
In 1948, Fred moved to Carpenter Rocks which, at that time, was a deserted area south-west of Mount Gambier, which is in the south-east of South Australia. Fred acquired an area of land referred to in the pleadings as the “Base Block”, which is on the foreshore of Bucks Bay. He commenced a fishing business. Fred’s brothers, Robert (“Bob”), and John (“Jack”), later joined him in the business and the three brothers incorporated the plaintiff companies. Other members of the family also moved to the area and became involved in the business. Family members operated as sole traders and in various partnerships. The fishing business (referred to in the pleadings as the family business) has grown over the years.
The plaintiffs allege that, up to the date of the incorporation of the plaintiffs, the family business was conducted by Fred, Bob and Jack, in partnership. Thereafter, the plaintiffs conducted it as a joint enterprise and then as a partnership.
After the death of Fred, John, in his capacity as executor of Fred’s estate, became the registered proprietor of the Base Block.
The plaintiff companies seek declarations that:
(a)     it would be unconscionable for Fred, by the first defendant as executor, or any person claiming under Fred, to assert a position contrary to the beneficial ownership of the Base Block by the plaintiffs;
(b)     Fred, by the first defendant, is estopped from denying that the plaintiffs hold an equitable estate in fee simple in the land;
(c)     Fred, by the first defendant, as the registered proprietor of the Base Block, holds the legal estate in the Base Block on trust for the plaintiffs.
In the alternative, the plaintiffs seek substantially the same orders, but limited to the period of time for which the family business continues.
There was additional land acquired after the Base Block was acquired. That land is referred to in the pleadings as the “Further Land” and the plaintiffs seek declarations in respect of the Further Land, which are similar to those declarations sought in respect of the Base Block.
Mrs O’Meara has denied that the plaintiffs are entitled to the declarations sought. In her defence, she alleges that the Base Block and the Further Land have always been treated as personal assets of Fred and his brothers, and it was never contemplated that the plaintiffs would hold the land beneficially.
Mrs O’Meara, in her Amended Contribution Notice and proposed further amendments, alleges inter alia that John has acted contrary to the interests of the estates, that he is in breach of his duties as executor and trustee, that he has a conflict of interest and that he is unfit to continue to act as an executor or trustee in respect of the estates of Fred and Gwen. Mrs O’Meara’s claims span a number of years, over which she alleges that John, and various family members who have received benefits from the running of the family business over many years, have acted contrary to the interests of other family members, including Mrs O’Meara.
The first and second defendants filed various notices in the action, on which I heard argument on 17 and 18 May 2007. They were:
1.      An appeal by the first defendant against the orders and judgment made by a Master of this Court on 20 February and 19 April 2007;
2.      An application by the second defendant to amend further her Amended Contribution Notice; and
3.      An application by the first defendant to strike out the Amended Contribution Notice of the second defendant.
I shall deal with each of these in turn.
I note at this point that the only parties present at the appeal and applications were the first defendant and the second defendant. The third defendant was not represented. John was therefore represented only his capacity as the executor of Fred’s estate, notwithstanding that the Amended Contribution Notice is directed simply to John and makes reference in paragraph 1 to both his executorial and personal capacities. I will comment further on the significance of this fact later in these reasons. For convenience, I will refer to John as “the first defendant” in these reasons, as that was the capacity in which he was represented.
Appeal against orders and judgment of the Master
On 8 May 2007, the first defendant filed a notice of appeal against the orders and judgment of the Master made on 20 February and 19 April 2007. The notice of appeal disclosed four grounds of appeal.
On 11 April 2007, the Full Court heard an appeal by the plaintiffs against the judgment of the Master of 20 February 2007. The notice of appeal filed by the plaintiffs appealed some aspects of the decision of 20 February 2007 that are common to the present appeal. The decision of the Full Court, which was delivered on 4 July 2007, resolved several of the grounds of appeal disclosed by the first defendant in its notice. Consequently, the appeal before me proceeded only on the fourth ground of appeal, as that was the only ground of appeal that was not resolved by the judgment of the Full Court.
The fourth ground of appeal stated:
4. The Learned Master:
4.1erred in holding that any of the question (sic) or issues relating to the Amended Contribution Notice were substantially the same as those arising between the Plaintiffs and any of the Defendants for the purpose of r 37.07(1)(c) of the 1987 Rules;
4.2ought to have held that the issues or questions arising from the from the (sic) Amended Contribution Notice were not substantially the same as those arising between the Plaintiffs and any of the Defendants; and
4.3ought to have held that the Amended Contribution Notice did not comply with r 37.07(1)(c) of the 1987 Rules and should be struck out.
Rule 37.07 of the 1987 Rules provides:
(1) A defendant within 7 days of filing the defence may without leave issue a contribution notice in Form 14 against any person who is already a defendant or a third or subsequent party to the action claiming:
(a) An entitlement to contribution or indemnity;
(b) Relief related to or connected with the original subject matter of the action and substantially the same as some other relief or remedy claimed by the plaintiff; or
(c) The determination of any question or issue relating to or connected with the original subject matter which is substantially the same as some question or issue arising between the plaintiff and a defendant and which should also be properly determined as between other parties.
It was not in dispute between the parties that the Amended Contribution Notice did not satisfy the requirements of paragraphs 37.07(1)(a) or (b). The question before the Master, which was in issue in the appeal before me, was whether the second defendant’s Amended Contribution Notice satisfied the requirements of paragraph 37.07(1)(c).
Reasons of the Master
The Master noted that the criteria under paragraph 37.07(1)(c) were “very similar” to those under paragraph 37.01(1), which addresses the circumstances in which a third party may be joined. Consequently, the Master was of the opinion that the authorities on paragraph 37.01(1) were “equally applicable” to paragraph 37.07(1)(c). He noted that there was no authority in relation to either paragraph in which a party had satisfied the criteria for issuing a contribution notice or third party notice solely by satisfying the criteria of paragraph (1)(c).
The Master considered that paragraph 37.07(1)(c) has two “legs”, both of which were necessary to be satisfied. He described the test as follows:
The first leg is the defendant bringing the contribution notice must be claiming “the determination of any question or issue relating to or connected with the original subject matter which is substantially the same as some question or issue arising between the plaintiff and a defendant”. The second leg is that such question or issue “should also be properly determined as between other parties”.
The Master considered that the first leg of the test was easily satisfied. He stated that although only one issue or question was required to be common between the contribution notice and the action between plaintiff and defendant, there were, in this case, “literally hundreds of issues” in the main action, many of which involved the same or similar subject matter as were raised in the contribution notice. He drew attention in particular to three substantially similar questions or issues: the beneficial ownership of the land claimed by the plaintiff and registered in the name of the first defendant; the ownership structure of the “family business”; and the ownership of the crayfish pot licences.
The Master considered that the second leg of the paragraph enabled judicial discretion. He said:
The meaning of the second leg is somewhat unclear. It presumably means “properly determined” in the action. It is not that the issues in the contribution notice cannot be properly determined in other separate proceedings between the defendants who are parties to it. The meaning of “as between other parties” is also unclear. Presumably it means the parties to the action other than the defendants who are the parties to the contribution notice. This would suggest that it has to be thought proper that the plaintiff, any other defendants who are not parties to the contribution notice and any third or subsequent parties should be subjected to the consequences of the issues on the contribution notice being dealt with as part of the whole action. It means that the Court has a broad judicial discretion whether to allow such contribution proceedings or not.
In exercising this discretion, the Master referred to s 27 of the Supreme Court Act and J N Taylor Holdings Ltd (In Liq) & Anor v Bond & Ors[1] (which dealt with a joinder application) for the proposition that there was an overriding principle that multiplicity of proceedings should be avoided. He considered that it was likely that the second defendant would initiate a separate action against the first defendant if she were unable to do so by means of the contribution notice, and there would then likely be applications for that action to be joined with the present action. Given the number of similar issues between the contribution notice and the action, and the likely complexity of the trial, the Master considered that the overriding principle of avoiding a multiplicity of actions was not outweighed in the present case by other factors. Consequently, he ordered that the Amended Contribution Notice should not be struck out pursuant to this discretion.
[1] (1993) 59 SASR 432.
Submissions of First Defendant
Counsel for the first defendant submitted that the Master erred in identifying particular issues as being substantially similar for the purpose of the first leg. She contended that the issues identified by the Amended Contribution Notice and the Claim were either not common, or were not substantially similar. Counsel submitted that the Claim alleges a proprietary interest in land, whereas the Amended Contribution Notice alleges misconduct and breach of duty by the first defendant. Counsel did not dispute the legal test propounded by the Master that there are two “legs” to paragraph 37.07(1)(c).
Counsel for the first defendant addressed the three particular questions or issues identified by the Master as being substantially similar. In relation to the beneficial ownership of the land, she contended that although the issue arose on the Claim, it did not arise on the Notice. She contended that the issue on the Notice could be construed at its highest as being whether the executor should be subject to orders for compensation because of his conduct relating to that land. She submitted that there was no connection with the Claim apart from the fact that the land was registered in part in the name of Fred’s estate.
Counsel for the first defendant contended that the fact that the plaintiffs’ claim related to an asset presently administered by him did not mean that the allegations in the Notice were related to the Claim. Counsel submitted that the plaintiffs’ claims were independent of the administration of the estate and independent of the construction of the wills. She contended that as they presently stood, the plaintiffs’ claims relied upon events preceding the deaths of Fred and Gwen and that the claims could be made after the completion of the administration of the estates.
Counsel for the first defendant submitted that the first defendant was only a party to the claim because he was presently the registered proprietor of parts of the Land. She stated that if the estate were fully administered, he would be disjoined from the Claim and that consequently only a broad construction of paragraph 37.07(1)(c) would enable the issues in the Notice and the Claim to be resolved concurrently.
Counsel submitted that even if there could be said to be similarity between the issues, this was insufficient to satisfy the test of “substantial similarity”.
In relation to the second issue of the ownership of the “family business”, counsel for the first defendant submitted that the Master had erred in his characterisation of the issues arising. She claimed that the issue arising from the Claim was whether the contributions alleged by the plaintiffs to have occurred give rise to a proprietary interest via the doctrine of estoppel. Counsel contended that the contributions were alleged by the plaintiffs to be in the form of the conduct of the family business, not the ownership thereof.
It is unnecessary to recount the submissions of either party in relation to the third issue of the ownership of the crayfish pot licences. Paragraph 12.3 of the Amended Contribution Notice alleges that in breach of certain of his duties as executor and trustee, the first defendant has, in concert with the directors of the plaintiff companies, conferred financial benefits upon themselves at the expense of, inter alia, the beneficiaries of Fred’s estate, including providing the directors and their children with an inequitable number of fishing licences and craypots. The second defendant also claims in paragraph 32 of her Amended Contribution Notice that the first defendant has failed in his obligations to keep proper records and particularises that claim, in part, by alleging that the affidavit of assets and liabilities is false and misleading, in its failure, inter alia, to refer to the need to clarify the ownership of the crayfish licences and allocations.
The plaintiffs’ use of the crayfish pot allocations and licences was pleaded as part of the defence of unclean hands in the second defendant’s Amended Defence. That sub-paragraph was struck out by the Full Court in its judgment of 4 July 2007. The question of the ownership of the licences and allocations no longer arises on the pleadings in the action. It cannot, therefore, support an argument of substantial similarity.
Submissions of Second Defendant
Counsel for the second defendant submitted that the Master did not err in relying upon the authorities relating to r 37.01 in interpreting r 37.07 as the two rules were similarly expressed. He submitted that there were many connections between the subject matter of the proceedings and the questions or issues raised by the Amended Contribution Notice, such that there could be said to be substantial similarity. Counsel drew attention in particular to the questions which had been identified by the Master as particular areas of substantial similarity. He further drew attention to the questions or issues of the history of the Stanke Brothers partnership, the conferral of financial benefits by the plaintiff companies on the directors and others, and the executor’s alignment of his personal interests with those of the companies.
I note that the question or issue of the conferral of financial benefits by the plaintiff companies on the directors and others was raised in sub-paragraph 111.1 of the second defendant’s Amended Defence for the purpose of particularising her defence of unclean hands. That sub-paragraph was struck out by the Full Court in its decision of 4 July 2007. This question or issue now does not arise on the pleadings in the action and therefore cannot support an argument of substantial similarity.

In relation to the question whether the questions or issues arising from the Amended Contribution Notice ought properly to be tried as between the parties to the action, counsel for the second defendant drew attention to some features of the action and Notice which, in his submission, led to the conclusion that the issues ought to be tried together. In particular, he contended inter alia that there were few issues other than the common issues, and that the issues not in common would occupy relatively little time at the trial. Counsel further submitted that it would be highly desirable to have one hearing for the determination of all issues. He drew attention in particular to the desirability of preventing opposing findings of fact on the question whether the land was an asset of Fred’s estate.
In support of his submissions, counsel for the second defendant referred to the pleadings in action number 05-1565, in which the first defendant is also presently a party in his capacity as a director of the companies, the plaintiffs in this action. As the first defendant has not yet filed a defence in the present action, counsel submitted that I should have regard to the first defendant’s defence in action number 05-1565 as an indication of his position, and the likely position he will adopt at trial in the present action.
The submissions of counsel for the second defendant gave rise to the question whether the pleadings in another action could be considered in this appeal. I gave both parties leave to file written submissions on this question following the hearing of the appeal.
For the reasons that follow, I have found it unnecessary to have regard to the pleadings in action number 05-1565. I consider that an examination of the pleadings and the Amended Contribution Notice in the present action is sufficient to support the conclusion that the appeal should be dismissed. Consequently, it is unnecessary for me to decide whether the pleadings in action number 05-1565 can be referred to in the determination of an appeal in this action.
Relevant Principles
In J N Taylor Holdings (In Liq) and Ors v Bond and Ors (No 13),[2] Debelle J identified the factors relevant to the exercise of his discretion in refusing an application to file a contribution notice. Many of the factors identified by Debelle J arose from the fact that the application had been made at what he described as an “extraordinarily late stage”, which was the primary basis for the opposition to the application, and are thus not relevant to the present action. One factor, however, was that:
The purpose and intent of rule 37 is to avoid multiplicity of proceedings and to prevent the same question being determined in two actions with possibly two different results. Plainly, if this application is refused, it will be necessary for [the applicant] to institute a separate action if he seeks to pursue an indemnity. It is unlikely, however, that there is a real risk of two different results. If the plaintiffs succeed in this action and [the applicant] is held to be liable, it is unlikely that those issues will be litigated again in any later action which [the applicant] might institute. The likelihood is that the issues in that action will be confined to issues arising out of the policy of insurance. Those issues will be of much narrower scope than the issues in this action. Any prejudice to either [the applicant] or [the respondent to the application] must be weighed against the fact that the hearing of that action will, in all likelihood, be considerably shorter than the hearing of this action.[3]
Debelle J in that case also had regard to principles of case flow management, although he considered that these could not override the interests of justice.[4]
[2]    (Debelle J, 15 September 1995, unreported).
[3]    J N Taylor Holdings (In Liq) & Ors v Bond & Ors (No 13) (Debelle J, 15 September 1995, unreported 5).
[4]    J N Taylor Holdings (In Liq) & Ors v Bond & Ors (No 13) (Debelle J, 15 September 1995, unreported 7).
The objects of avoiding multiplicity of actions and avoiding the same issues being determined twice with potentially different results provide a rationale not only for Rule 37, but also Rule 27.[5] It has been held that both rules are to be given a liberal construction.[6]
[5] J N Taylor Holdings Ltd (In Liq) & Anor v Bond & Ors (1993) 59 SASR 432, 442; Canyon (Australia) Pty Ltd & Ors v Aktieselskabet Dampskibsselskabet Svendborg & Ors [2004] SASC 36, 4, 6.
[6] Canyon (Australia) Pty Ltd & Ors v Aktieselskabet Dampskibsselskabet Svendborg & Ors [2004] SASC 36, 6; Mulvaney v Commissioner of Taxation (Cth) [2004] SASC 166; see also Barclays Bank v Tom [1923] 1 KB 221, 224.
Counsel for the first defendant referred me to the decision of Debelle J in Starmaker (No 51) Pty Ltd v Majda & Ors.[7] That decision related to an application for joinder under Rule 27. Debelle J again identified the objects of joinder, and stated that the fact that the applicant sought orders in the nature of declarations was not a bar to joinder, there being no requirement of an actual lis.[8] One relevant consideration in the case was that a party should not have to contest the same issues in two separate actions.[9] However, the Starmaker judgment arose from quite different circumstances. In particular, the applicant for joinder and the party sought to be joined were already litigating the relevant issues in another action.
[7] [2005] SASC 234.
[8] Starmaker (No 51) Pty Ltd v Majda & Ors [2005] SASC 234, 2.
[9] Starmaker (No 51) Pty Ltd v Majda & Ors [2005] SASC 234, 4.
Counsel for the first defendant also referred to the decision of Kenny v Gumpl.[10] That was an application for leave to issue a third party notice. Debelle J again stated that:
The object of Rule 37 is well settled. It is first to prevent a multiplicity of actions and to enable the Court to settle disputes between all of the parties in one action and, secondly, to prevent the same issue from being determined in different actions possibly with different results.[11]
[10] (Debelle J, 14 January 1997, unreported).
[11] Kenny v Gumpl (Debelle J, 14 January 1997, unreported) 2.
Debelle J in that case illustrated how it was necessary to evaluate carefully the issues arising in the action and in the notice to determine whether there was in fact commonality. Much of Debelle J’s reasoning addressed the issues arising on the claim and the third party proceedings, including the way in which each would likely be dealt with at trial. Debelle J also considered other factors, including whether the third party proceedings would delay the trial date, the cost implications for the plaintiff (who opposed the application), including the cost implications of the plaintiff’s presence for the litigation of issues which did not arise on his claim, and the fact that in that case, if the plaintiff was unsuccessful, there would be no issue between the defendant and the proposed third party.[12] Consequently, Debelle J considered that the application should be refused.
[12] Kenny v Gumpl (Debelle J, 14 January 1997, unreported) 3.
In Imagecolor (SA) Pty Ltd (In Liq) & Anor v Curtis & Ors,[13] Doyle CJ considered an appeal from a Master on the question whether leave should be granted to issue a third party notice. Doyle CJ considered that:
…the fact that rule 37.05 provides that third party proceedings will be tried with the trial of the plaintiffs’ action, unless the court otherwise directs, indicates that there is a presumption in favour of the concurrent disposition of the main proceedings and the third party proceedings, and this is relevant to the approach to be taken to the interpretation of rule 37.01.[14]
[13] [2000] SASC 316.
[14] [2000] SASC 316, 2.
Given the terms of rule 37.09, it would appear that this principle is apposite to the interpretation of rule 37.07. That is, the terms of rule 37.09, which are similar to those of rule 37.05, are relevant to the interpretation of rule 37.07. In Imagecolor, Doyle CJ considered that the delay to the trial in the action was a factor weighing against the grant of leave to institute third party proceedings.[15] However, he also considered that the question of overall efficiency was a relevant factor and stated that “usually it is better that all of the proceedings be heard at the one time.”[16]. He took into account the likelihood that there would be common witnesses and the risk of inconsistent findings.
[15] [2000] SASC 316, 3.
[16] [2000] SASC 316, 4.
These factors were applied by Besanko J in Mulvaney v Commissioner of Taxation (Cth).[17] In that case, Besanko J considered that although there had been a substantial delay and the trial date would likely be jeopardised by the granting of leave to issue third party notices, these factors were outweighed by the existence of an important common issue and witness, the need to avoid inconsistent findings and the interests of overall efficiency.[18]
[17] [2004] SASC 166.
[18] Mulvaney v Commissioner of Taxation (Cth) [2004] SASC 166, 8-9.
The Master noted that there is no authority in which an application has been allowed exclusively under paragraph 37.07(1)(c) or an equivalent provision. In Re Burford; Burford v Clifford,[19] the contribution notice in question was found to satisfy the equivalent provision to both paragraphs 37.07(1)(b) and (c). Lord Hanworth MR explained the utility of the rule as follows:
At an early period… the third party procedure applied only to cases of contribution and indemnity. But recent cases have once more shown that it might be wise to allow third party proceedings in cases which were not merely claims for contribution or indemnity, but also where there was a claim which arose out of the same subject-matter and where to deny that right would be to put the party to the inconvenience of proving over again the same facts for the purpose of getting the remedy to which he was entitled.[20]
[19] [1932] 2 Ch 122.
[20] [1932] 2 Ch 122,137.
He went on to consider the meaning of the words “substantially the same”:
When I come, therefore, to consider the meaning of [the equivalent provisions to paragraphs 37.07(1)(b) and (c)], I think it is plain that the words “substantially the same” which appear in both those clauses relate to the facts which have to be examined for the purpose of ascertaining what is the relief or remedy to which the parties are entitled. “Substantially” must have been put in in order to embrace within the rule something which was not exactly a repetition of the relief or remedy asked for. I think, therefore, that where the same facts have to be conned over in order to ascertain the liability and to give some relief to one or other of the parties, in such a case the rule now provides that it is unnecessary to have separate actions and separate proceedings, but that a third party notice may be served.[21]
[21] [1932] 2 Ch 122,138.
Lawrence LJ did not set down any general rules, but found that the claim in question fell within the scope of the provision. The reasons of Romer LJ appeared to be directed solely to paragraph 37.07(1)(b). All three judges favoured a liberal approach to the interpretation of the provisions. However, the facts in that case were somewhat different as it was a case in which, had the plaintiff been successful, the claim under the contribution notice would have determined which of the defendants would bear the ultimate loss. That is not the case here. The applicability of Re Burford is therefore limited.
Insofar as the second leg of the test confers discretion on the court, authority indicates that a decision made in exercise of that discretion may only be overturned if error is shown, and it is not for an appellate court merely to exercise that discretion anew.[22]
[22] Mullett & Anor v Gabriel & Anor (1989) 52 SASR 330, 333; Imagecolor (SA) Pty Ltd (In Liq) & Anor v Curtis & Ors [2000] SASC 316, 4.
Application to this Case
I will consider first whether there is substantial similarity between the questions or issues arising from the Claim and the Notice in relation to the ownership of the land. The first leg of the test under paragraph 37.07(1)(c) requires that the contribution notice claim the determination of a “question or issue relating to or connected with the original subject matter which is substantially the same as some question or issue arising between the plaintiff and a defendant”. This leg of the test does not permit the exercise of any discretion.
The plaintiff companies assert a beneficial entitlement in the land and seek orders to that effect. They claim that the defendants are subject to an estoppel precluding them from denying the existence of this beneficial entitlement. In essence, the plaintiffs claim that this beneficial interest arises as a consequence of the behaviour of Fred which, the plaintiffs claim, induced the plaintiffs to form an assumption as to their entitlement to the land.
The first defendant has not yet filed a defence to the Claim. The second defendant has filed a defence. In short, the second defendant denies that Fred said or did anything to induce the assumption claimed by the plaintiffs. Further, the second defendant asserts in paragraph 32 of her Amended Defence that the behaviour of the plaintiff companies (of which John is a director) and their directors is inconsistent with their having relied upon any such assumption. I pause here to note that paragraph 31 of the Amended Defence further alleged that Fred’s own conduct was inconsistent with the assumption claimed by the plaintiffs. This paragraph was struck out by the Full Court in its 4 July 2007 decision on the basis that it was not an assertion with pleaded particulars, but rather a denial with pleaded evidence. As the Full Court observed, however, it is clear that the second defendant denies the plaintiffs’ case that Fred by his conduct induced them to rely on the claimed assumption.
Given the equitable nature of the interest in land claimed by the plaintiffs, the conduct of the companies and of members of the Von Stanke family over a lengthy period of time can be expected to be a significant issue at trial.
The Master identified the beneficial ownership of the land as being one of the issues which was substantially the same between the Claim and the Notice. The beneficial ownership of the land is not the ultimate issue to be resolved on the Notice. However, on close analysis of the Notice, it is apparent that the assertions made are connected with the Claim.
The second defendant, inter alia, makes the following assertions in the Notice:
10.As executor and trustee of Fred’s estate, the executor assumed legal duties to act with unswerving loyalty in the best interests of the beneficiaries of Fred’s estate and to avoid situations where any personal interest of his own or of a third party, or any other duty he owed to a third party might conflict with his duties as executor and trustee.
11. In addition to the duties referred to in paragraph 10 above, the executor owes fiduciary, common law and statutory obligations to the beneficiaries of Fred’s estate which require that:
11.1   he collect and get in the assets of the estate in order to:
11.1.1        identify all assets belonging to Fred’s estate;
11.1.2collect all assets which he had identified as belonging to Fred’s estate;
11.1.3protect all assets belonging to Fred’s estate which it was intended would be held in specie;
11.1.4convert those assets belonging to Fred’s estate which it was not intended would be held in specie into appropriate and secure assets yielding income pending the distribution of Fred’s estate;
11.2   he take proceedings to defend, recover or get in assets of Fred’s estate where necessary;
11.3   he preserve the property of Fred’s estate and ensure that there was no waste of assets or improper incurring of liabilities;
….
11.5   he take all reasonable care in gathering the assets of Fred’s estate;
….
11.13 he act in the best interests of the beneficiaries at all time (sic);
11.14 he avoid any circumstances which may lead to a conflict between his interests and those of the beneficiaries;
….
11.22 he take reasonable steps to maximise the realisation value of Fred’s estate;
….
12.The executor has held and continues to hold other offices, and has acted and continues to act in other capacities, which conflict with his duties and obligations as executor and trustee pleaded in paragraphs 10 and 11 above and has thereby allowed conflicting duties and interests to prevail over his duties and obligations to the beneficiaries of Fred’s estate.
Particulars
The particulars of the executor’s conflicts of interest and duty are as follows:
12.1   The executor is and has at all material times also acted as a director of both plaintiff companies… (“the companies”) and is employed to manage the business operations carried on by those companies:
12.1.1By virtue of the executor’s role as director and manager of the companies, he has considerable control and influence over the way in which those businesses are operated and has authority over many of the employees and other Von Stanke family members who reside at Carpenter Rocks and/or work in the businesses carried on by the companies;
12.1.2It is contrary to the interests of the beneficiaries of Fred’s estate, but in the interest of the companies, to support the companies’ claims in this proceeding to ownership of the land registered in Fred’s name…;
12.1.3The companies assert that they would suffer serious detriment and would be destroyed if the executor asserted and/or exercised in the powers of ownership of the land registered in Fred’s name;
12.1.4The executor and the other directors of the companies intend and desire to maintain their present level of control and influence over all of the businesses, people and land at Carpenter Rocks, and consider that transmitting this land or shareholdings of property owning companies under Fred’s, Robert Charles Von Stanke’s (“Bob”) or John Hurtle Von Stanke’s (“Jack”) Wills to beneficiaries of their respective estates who are not directors, would diminish their level of control over the businesses, people and land at Carpenter Rocks.
….
B: The Executor’s Preferment of the Companies’ Interests Over Those of Fred’s Estate
13.In breach of the duties pleaded in paragraph 10, and in sub-paragraphs 11.2, 11.13, 11.14, 11.16, 11.19, 11.20, 11.21, 11.22 above, the executor has allowed the companies’ interests to prevail over those of Fred’s estate in numerous respects which are dealt with in the succeeding paragraphs of this contribution notice.
14. The persons who stand to benefit from any advancement of the companies’ interests are the current and former directors of the companies namely:
14.1 The executor;
14.2 Ian David Von Stanke;
14.3 Robert Denis Von Stanke;
14.4. Stephen Wayne Von Stanke;
14.5 Christopher Robin Von Stanke;
14.6 Martin Hercules Von Stanke
(collectively “the directors”)
and their respective immediate families.
I pause here to consider the effect of these paragraphs of the Notice. Paragraphs 10 and 11 make claims relating to the nature of the duties owed by the first defendant by virtue of his roles as executor and trustee. Paragraphs 12 and 14 then go on to claim, significantly, that the first defendant has breached these duties by virtue of his roles in the plaintiff companies.
I note that the second defendant goes on in paragraph 12 of her Amended Contribution Notice to make further and more specific allegations about the conduct of the first defendant which, on the second defendant’s case, give rise to breaches of duty. I will address this aspect of paragraph 12 later in these reasons.
The following paragraphs of the Amended Contribution Notice make allegations relating to the first defendant’s conduct as executor which clearly raise issues relevant to the beneficial ownership of the land:
The Recent Invention By the Companies of an Equitable Entitlement to Fred’s Land
15. In 1997, a claim to an equitable interest in a portion of the land registered in Fred’s name was asserted by the solicitor acting for one Victor McCarthy. The executor retained Judith Choate (“Ms Choate”) to advise him whether the companies or Victor McCarthy had any equitable interest to the land registered in Fred’s name.
16. In performance of the retainer referred to in paragraph 15 above, Ms Choate investigated all available evidence which related to equitable entitlements to the land registered in Fred’s name. Following this investigation, Ms Choate advised the executor that Fred’s estate was beneficially entitled to the land and that no other person had any beneficial interest in it.
17. Ms Choate, in further performance of the retainer referred to in paragraph 15 above, advised the solicitor acting for Victor McCarthy that neither the companies nor Victor McCarthy had any interest in the land, which was owned entirely by Fred’s estate.
18. In 1998, a claim to an equitable interest in a portion of the land registered in the names of Fred, Bob and Jack was asserted by the solicitor acting for one Gary McCarthy. The executor again retained Ms Choate to advise him whether the companies or Gary McCarthy had any equitable interest to the land claimed by him.
19. In performance of the retainer referred to in paragraph 18 above, Ms Choate investigated all available evidence which related to equitable entitlements to the claimed (sic) by Gary McCarthy. Following this investigation, Ms Choate advised the executor that Fred’s, Bob’s and Jack’s estates respectively were beneficially entitled to the respective parcels of land registered in their names and that no other person had any beneficial interest in it.
20. At no time after 1998 did the executor seek or obtain any legal advice to the effect that the companies have, or asserted, any interest in the land registered in the name of Fred, Bob or Jack’s estates respectively.
21.Furthermore, the executor and the companies are aware of a wide range of conduct over many years which is inconsistent with the basis of the companies’ claim.

The question of the beneficial ownership of the land depends necessarily on a consideration of the conduct and statements made by various persons over a period of time. The plaintiff companies assert, in essence, that Fred’s conduct and statements gave rise to an assumption about the beneficial ownership of the land. Significantly, the second defendant in her Amended Defence not only denies this characterisation of Fred’s behaviour, but also makes positive assertions about the conduct of the plaintiff companies and their directors, including John. It is central to the Amended Defence of the second defendant that the conduct of the plaintiffs and their directors, including John, has been inconsistent with their claimed belief in and reliance upon an assumption. The second defendant has described this issue in her Amended Contribution Notice as “The Recent Invention By the Companies of an Equitable Entitlement to Fred’s Estate”, and for convenience I will refer to this issue as “the recent invention issue”.
In paragraph 12.1.1 of her Amended Contribution Notice, the second defendant pleads that the first defendant “has considerable control and influence over the way in which those businesses are operated”. In paragraph 14.1, the second defendant pleads that the first defendant “stand[s] to benefit from any advancement of the companies’ interests”. Paragraphs 15 to 22 make assertions about the conduct of the executor which are relevant to the recent invention issue. These assertions are clearly pertinent to the question whether the first defendant has breached his duties as executor. They are also clearly pertinent to the question of whether the plaintiffs have any beneficial entitlement to the land, as the recent invention issue arises in the Amended Defence in the context of whether the conduct of the plaintiffs (of which John is a director) has been consistent with the claimed assumption. I will address further the way in which these issues arise in the Claim and second defendant’s Amended Defence subsequently in these reasons.
Counsel for the first defendant submitted that the plaintiffs’ claim related to events before the death of Fred. I do not accept that submission. It is, of course, true that to the extent that the plaintiffs’ claim relies upon Fred’s conduct and statements, it relies upon events preceding Fred’s death. However, the second defendant’s defence to that claim raises issues about conduct after Fred’s death, in particular by raising the recent invention issue. The recent invention issue arises in paragraph 32 of the Amended Defence. The assertions contained in paragraphs 15 to 22 of the Amended Contribution Notice, which relate to the recent invention issue, concern events occurring after Fred’s death. Further, events after Fred’s death are relevant to the plaintiffs’ claim in any event to establish reliance on the assumption and to establish the unconscionability of any departure from the assumption. It is therefore incorrect to assert, as counsel for the first defendant does, that the Claim relates to conduct before the death of Fred, whereas the Amended Contribution Notice relates to the administration of the estate and, necessarily therefore, to events after the death of Fred.
The substantial similarity is also demonstrated by a comparison of the claims made in the Amended Statement of Claim, the second defendant’s response in her Amended Defence, and the claims made in the Amended Contribution Notice, particularly with respect to the recent invention issue. For example, in paragraph 32 of their Amended Statement of Claim, the plaintiffs state that “The adoption of and action upon the Assumption… has continued since that time [1948]”, and in paragraph 32 of her Amended Defence, the second defendant denies that and pleads that the plaintiffs and other members of the Von Stanke family, including the first defendant as executor of Fred’s estate and as a director of the plaintiff companies, have acted inconsistently with the assumption, both before and after Fred’s death. The second defendant’s particulars in relation to this pleading are repeated in subsequent paragraphs of her Amended Defence in relation to other claims made by the plaintiffs.
In paragraph 42 of the Amended Statement of Claim, which is one of the paragraphs located under the heading “Further Aspects of Fred’s Conduct in Relation to the Base Block”, the plaintiffs plead that Fred’s conduct included making available the Base Block as security for borrowings by granting a mortgage over the land, which mortgage was registered on the title from 25 September 1991 until 23 November 2000, and his failure to make a specific devise of the Base Block in his will, the contents of which will be referred to at trial. In paragraph 42 of her Amended Defence, the second defendant pleads, inter alia, that the continued currency of the mortgage after Fred’s death was a consequence of the first defendant wrongfully preferring the interests of the first plaintiff to his duty as executor of Fred’s estate, and that Fred’s treatment of the Base Block in his will was exactly the same as for his other assets. This clearly relates to the question raised in paragraph 13 of the Amended Contribution Notice whether John has breached his duties as executor and trustee by preferring the interest of the plaintiffs to those of Fred’s estate.
In paragraph 50 of the Amended Statement of Claim, the plaintiffs claim that “the Business Owners”, as defined in the pleadings, have exercised control over the Base Block. The second defendant in paragraph 50 of her Amended Defence responds to this by pleading that Fred exercised control over the Base Block and that since Fred’s death control has been exercised by the executor of Fred’s estate. The second defendant repeats this plea in subsequent paragraphs of her Amended Defence in response to other claims of the plaintiffs.
In paragraph 111, the second defendant pleads, in answer to the whole of the plaintiffs’ claim, that the plaintiffs are disentitled to the equitable relief they seek because they have unclean hands. The second defendant then goes on in sub-paragraph 111.2 to plead matters in support of the unclean hands defence. I note that the Full Court, in its decision of 4 July 2007, struck out the particulars pleaded in sub-paragraph 111.1. The defence of unclean hands is pleaded as a defence to the whole of the plaintiffs’ claim. It is axiomatic, therefore, that it is a question arising between the plaintiffs and the second defendant, and is thus connected with the original subject matter of the action.
The facts pleaded in support of the unclean hands defence in paragraph 111.2 relate to the conduct of the plaintiffs (which, according to the second defendant’s Amended Defence, are to a considerable extent controlled and influenced by the first defendant) and their directors (of which the first defendant is one). The conduct of the first defendant is likely to be an issue central to both the defence of unclean hands and the contribution notice.
In paragraph 112 of her Amended Defence, the second defendant pleads as a complete defence that the plaintiffs are disentitled to the relief sought by reason of their laches and/or acquiescence. In support of this defence, the second defendant pleads, inter alia, that:
112.2At no time between their incorporation in 1965 and the institution of this proceeding in 2005 did the plaintiffs or any of their directors assert any entitlement of the plaintiffs to any of the land to which Fred was a registered proprietor prior to the deaths of Jack, Bob, Fred or Jim;
She then goes on to plead the consequences of this alleged failing by the plaintiffs to assert ownership. I note that this sub-paragraph is not particularised.
The conduct of the first defendant is likely to be central to this. Prima facie, this defence appears to relate to the second defendant’s allegations regarding the recent invention issue, which, as I have observed above, are substantially similar between the pleadings and the Amended Contribution Notice.
The question of whether the plaintiffs can seek orders pursuant to a beneficial ownership of the land depends, in part, upon their being able to establish a reliance upon the claimed assumption which, in turn, depends on their being able to rebut the suggestion of recent invention. The questions of whether there has been a recent invention and whether the plaintiffs’ conduct gives rise to a defence of laches or acquiescence (which are central to the Claim), and the question of whether the first defendant has breached his duties (central to the Contribution Notice), are thus substantially similar.
The questions and issues arising in relation to the beneficial ownership of the land are substantially the same between the Claim and the Amended Contribution Notice. The pleaded facts in relation to the issue of the beneficial ownership of the land, in particular to the questions of inconsistent conduct by the plaintiffs and whether there has been a recent invention, are substantially the same as those pleaded in relation to whether the first defendant has breached his duties as executor and trustee by virtue of his involvement with the plaintiff companies. I have noted above the parallels between paragraph 32 of the Amended Defence and paragraphs 15 to 22 of the Amended Contribution Notice.
The fact that the allegations and claims relate to an equitable ownership in land in the Claim and a breach of executorial duties in the Amended Contribution Notice is of little moment. As I discussed above, authority indicates that a mere difference in form is not relevant to whether there is a substantial similarity between the claim and a third party proceeding or contribution notice.
There are further questions or issues arising from the Amended Contribution Notice which are substantially the same as issues in the pleadings. For example, the Master identified the structure of the family business.
The second leg of the test requires that the question or issue that is common between the contribution notice and the claim “should also be properly determined as between other parties”. I have noted above the factors that have been considered relevant in other cases to the question whether to allow parties to be joined or third party or contribution notices to be issued. Those cases indicate that the factors to be considered in the exercise of the discretion are heavily contingent on the circumstances of the case. In the present action, I consider that the following factors are relevant to considering whether the questions or issues raised by the contribution notice should also be properly determined as between the other parties:
1. There is a real likelihood, as the Master identified, that the second defendant will institute proceedings against the first defendant if her Amended Contribution Notice is struck out. There is, as I have noted above, an overriding principle that multiplicity of actions is to be avoided.
2. Given the centrality of the first defendant’s conduct to both the Claim and the Amended Contribution Notice, there is a significant risk that the same facts and evidence could be led, and the same issues agitated, in two sets of proceedings, with the potential for different and conflicting findings of fact and outcome. In particular, there is a significant risk of different findings in relation to the first defendant’s conduct if the issues arising in the Claim and the Amended Contribution Notice are litigated in separate proceedings.
3. There is likely to be much common evidence. For example, the terms of Fred’s will are likely to arise in relation to both the Claim and the Amended Contribution Notice. Evidence of the first defendant’s conduct will likely be a significant and lengthy topic of evidence in relation to both the main action and the Amended Contribution Notice.
In particular, there is likely to be an important common witness – John. Plainly, he will be a central witness to the issues arising under the contribution notice. As a director of the plaintiffs, it is to be expected that he will also be an important witness in the issues arising on the claim and defence.
There is also the related consideration that there are likely to be many common documents subject to discovery in the action and Amended Contribution Notice. If the questions arising on the Amended Contribution Notice were not resolved contemporaneously with the action, there is a real risk that there will be duplication of work relating to discovery and inspection. Similar issues are likely to arise on questions of confidentiality and privilege attaching to documents that would otherwise be subject to discovery and production. In addition to the duplication of work likely to arise in the discovery process, there is a risk that different judges or masters hearing applications during the process might make conflicting orders.
4. The issue of delay in instituting third party proceedings or contribution notices, which has been a significant issue in many of the authorities, is not an issue in the present appeal. There has been no suggestion that the admission of the contribution notice will jeopardise the conduct of the action or the date for the commencement of the trial.
5. There are other parties – namely, the plaintiffs and the fourth to sixth defendants – who would not be party to the Amended Contribution Notice, and who would therefore be required to be present for periods in the trial during which the proceedings would not affect their interests. They would in all likelihood only be entitled to costs on a party-party basis for those periods. However, this factor is mitigated to some extent by the substantial overlap which is likely to occur between evidence arising from the Claim and from the Contribution Notice. None of those parties have opposed the Amended Contribution Notice on that basis.
Counsel for the first defendant submits that if the estate were fully administered, the first defendant would be properly disjoined from the Claim, thus supporting her contention that the issues in the Notice should not be resolved at the same time as those in the Claim. I consider that even if I were to accept that the first defendant would be properly disjoined in the event that the administration were completed, that is not dispositive of the question whether the Notice can properly be brought. Contribution proceedings may be continued even after the discontinuance of the main action.[23] In J N Taylor Holdings (In Liq) & Ors v Bond & Ors (No 13),[24] Debelle J stated that this factor was insufficient, of itself, to cause the application to be refused. Counsel for the first defendant in her submissions on the amendments sought pursuant to the Trustee Act contended that the administration of the estates had not been completed. The consequences of the completion of the administration are currently, therefore, purely hypothetical.
[23] Stott v West Yorkshire Road Car Co Ltd & Anor [1971] 3 All ER 534, 537; Harper v Gray & Walker [1985] 2 All ER 507, 510.
[24] (Debelle J, 15 September 1995, unreported) 5-6.
I note that the weight of authority indicates that where a Master has exercised discretion, a decision made pursuant to that discretion should only be overturned where it has been demonstrated that the Master has erred in the exercise of that discretion.[25] It is not incumbent on an appellate court merely to re-exercise the discretion afresh. In this case, I do not consider that the Master erred in deciding, in the exercise of his discretion, that the second leg of the test was satisfied. In fact, were I to re-exercise the discretion, having regard to the factors identified above, I have no doubt that I would arrive at the same conclusion.
[25] Mullett & Anor v Gabriel & Anor (1989) 52 SASR 330, 333; Imagecolor (SA) Pty Ltd (In Liq) & Anor v Curtis & Ors [2000] SASC 316, 4.
Application to amend further the Amended Contribution Notice of the second defendant
On 27 April 2007, the second defendant filed a notice for specific directions in which she applied to the court for leave to file a Further Amended Contribution Notice. The Further Amended Contribution Notice proposed to be filed is an exhibit to the affidavit of Lisa Jane Loechel also filed on 27 April 2007.
The proposed amendments to the Amended Contribution Notice were for the purpose of responding to the orders and reasons of the Master dated 20 February and 19 April 2007.
The proposed amendments were characterised by the second defendant as “the first amendment” and “the second amendment”. I shall consider these in turn.
The first amendment
Paragraph 66 of the Amended Contribution Notice alleges that the executor has not complied with his obligations to keep proper records and preserve the assets of Gwen’s estate, in contravention of his duties as an executor. A number of particulars are pleaded, including paragraph 66.2.3.
Paragraph 66.2.3 in the Amended Contribution Notice reads as follows:
66.2.3The affidavit does not include any reference to or attribute a value to Gwen’s 1996 Ford LXI Sedan. Mrs O’Meara’s daughter asked the executor if she could purchase Gwen’s 1996 Ford LXI Sedan but the executor refused to sell it to her. The executor subsequently sold the 1996 Ford LXI Sedan and used the proceeds of $12,000 for his private benefit, namely as consideration for a motor vehicle which he acquired. The executor has not reimbursed the $12,000 to Gwen’s estate, but sought to disguise this financial benefit in conjunction with his second solicitor. (Emphasis added).
The Master considered that by alleging that there had been a “disguise”, the paragraph included a plea of fraud and was thus required to be pleaded with greater particularity. The words emphasised above were therefore struck out, with leave given for the second defendant to amend the paragraph to plead with greater particularity.
The proposed amendment to paragraph 66.2.3 contained the words which had been struck out by the Master, and gave greater detail of the transaction to which the pleading referred. However, during the course of the hearing, counsel for the first defendant made clear that the objection of the first defendant was to the use of the words “sought to disguise this financial benefit in conjunction with his second solicitor”, and the allegation of fraud that was imputed by those words. Counsel stated that the first defendant would not object to a pleading in similar terms as the proposed amendment to paragraph 66.2.3 provided that the allegation of fraud against the second solicitor was removed. Counsel for the second defendant agreed that the pleading was not intended to make an allegation against the second solicitor. The parties agreed to a pleading in the following terms:
66.2.3The affidavit does not include any reference to or attribute a value to Gwen’s 1996 Ford LXI Sedan. Mrs O’Meara’s daughter asked the executor if she could purchase Gwen’s 1996 Ford LXI Sedan but the executor refused to sell it to her. The executor subsequently sold the 1996 Ford LXI Sedan and used the proceeds of $12,000 for his private benefit, namely as consideration for a motor vehicle which he acquired. The executor has not reimbursed the $12,000 to Gwen’s estate and recorded the transaction in the trust account statement of Gwen’s estate as if that estate had received $7,000 for the Ford LXI Sedan instead of $12,000, for which the vehicle was actually sold and which sum was received by the executor as his personal financial benefit, and debited Fred’s estate by $7,000 so as to credit Gwen’s estate, thereby decreasing the overall value of Fred’s estate by $7,000.
I give leave to the second defendant to amend paragraph 66.2.3 of her Amended Contribution Notice in those terms.
The second amendment

In what it described as the second amendment, the second defendant sought to add a fresh paragraph 74.1 and 74.4 to the prayer for relief and to insert additional paragraphs 72 and 73 to the body of the pleading, as follows:
H:     Legal Basis for Relief
72.As a result of the totality of the executor’s conduct pleaded herein, the executor is liable to be removed as the trustee of any asset of the estates of Fred and Gwen pursuant to section 36(1) of the Trustee Act 1936 (SA).
73.As a result of the totality of the executor’s conduct pleaded herein, the executor is unfit to hold office as an executor or trustee of either of the estates of Fred or Gwen.
III.    Orders & Declaration Sought
74.     The orders and declarations sought are:
74.1 An order pursuant to section 36(1) of the Trustee Act 1936 (SA) that Frederick John Von Stanke be removed as Trustee of the Trusts created by the Wills of Frederick William Von Stanke and Gwendoline Mary Von Stanke.
74.2   An order that the executor pay equitable compensation or equitable damages to the estates of Fred and Gwen and/or Mrs O’Meara, the quantum to be assessed.
74.3   That the executor account to Fred and Gwen’s estate and to Mrs O’Meara for all profits or other benefits derived by him and his immediate family.
74.4   A declaration that Frederick John Von Stanke is unfit to act in the office of the executor or trustee of the Estates of Frederick William Von Stanke and Gwendoline Mary Von Stanke.
In his judgment of 20 February 2007, the Master struck out paragraph 72.1 of the Amended Contribution Notice of 7 January 2007, which formed part of the prayer for relief. Paragraph 72 of the Amended Contribution Notice which the Master considered was in the following terms:
72.     The orders and declarations sought are:
72.1   An order that the executor be removed as Executor and Trustee of each of Fred and Gwen’s estates and that Bruce James Carter or some other appropriately qualified and independent person be appointed in his place.
72.2   An order that the executor pay equitable compensation or equitable damages to the estates of Fred and Gwen and/or Mrs O’Meara, the quantum to be assessed.
72.3   An order that the executor account to Fred and Gwen’s estate and to Mrs O’Meara for all profits or other benefits derived by him and his immediate family.
The second defendant submitted that the proposed further amendments cure the pleadings defects in paragraph 72.1 of the Amended Contribution Notice identified by the Master in his reasons.[26] Paragraph 72 of the Amended Contribution Notice corresponds to paragraph 74 of the proposed Further Amended Contribution Notice due to the addition of paragraphs 72 and 73 of the proposed Further Amended Contribution Notice, as set out above. Thus, paragraphs 72.2 and 72.3 of the Amended Contribution Notice have been included as paragraphs 74.2 and 74.3 in the proposed Further Amended Contribution Notice.
[26] H Stanke & Sons Pty Ltd & Anor v Frederick John von Stanke & Ors [2007] SASC 51, [34] – [40]; H Stanke & Sons Pty Ltd & Anor v Frederick John von Stanke & Ors [2007] SASC 130, [29] .
In his reasons, the Master stated that the primary relief sought in the Amended Contribution Notice was “the removal of the first defendant as the executor of the estate of Frederick William Von Stanke for misconduct or neglect of duty.” The Master considered that the central question was whether the Court had the power to remove an executor to whom probate had been granted in the testamentary causes jurisdiction, and to appoint a new executor, without also revoking the grant of probate. After considering relevant authorities, he stated that the Court had the power to remove an executor for misconduct by revoking the probate. However, the Master concluded that the second defendant had failed to make a reasonably arguable case that the Court had power to remove an executor in the absence of a revocation of probate. Accordingly, he struck out paragraph 72.1 of the Amended Contribution Notice.
The second defendant made alternative submissions before the Master in support of the removal of the first defendant pursuant to section 36 of the Trustee Act. The Master stated that any such claim would have to be pleaded by the second defendant, which at that stage it had not been, nor had pleadings in those terms been proposed. The Master noted that even if there were such power under the Trustee Act, there was no power under that Act to appoint a new executor to the estate and referred to the authority of Porteous v Rinehart[27] by way of comparison. However, the Master stated that the second defendant could apply to amend further her Amended Contribution Notice if she wished.
[27] (1998) 19 WAR 495.
The Master made some concluding remarks on the proceedings. He stated:
If the 2^nd defendant now seeks to pursue the removal of the 1^st defendant by a revocation of his probate, it will produce major procedural complications. What I now say is put forward for the consideration of the parties, but is not an adjudication by me on the points.
Any proceeding to revoke the probate would be a “probate action” under s 18 of the Supreme Court Act, R 104 of the 1987 Rules and R 205 of the Supreme Court Civil Rules 2006. If such a probate action was added into the existing contribution notice, it would be governed by R 104. Although I have not researched the point, I have serious doubts whether it is possible to pursue a probate action in a contribution notice. (S 23 of the Supreme Court Act giving the power to mount third party claims is limited to equitable and legal causes of action.) If the 2^nd defendant seeks to pursue a probate action against the 1^st defendant by a new action, it would be governed by R 205 of the 2006 Rules.
The second defendant does not appeal against the reasoning of the Master. Instead, she seeks to amend further the prayer for relief in the Amended Contribution Notice so as to seek an order pursuant to section 36(1) of the Trustee Act that the first defendant be removed as the trustee of the trusts created by the wills of Fred and Gwen, and an order that the first defendant is unfit to act as executor or trustee of either estate. This order and declaration are sought in paragraphs 74.1 and 74.4 of the proposed Further Amended Contribution Notice set out above. Paragraphs 72 and 73 of the proposed Further Amended Contribution Notice support this prayer for relief.
There are consequently two questions before me in relation to this application. The first is whether this Court has power under the Trustee Act to make the order sought in sub-paragraph 74.1. The second is whether the Court has the power to make the declaration sought in sub-paragraph 74.4. It follows that whether leave is granted to insert paragraphs 72 and 73 is contingent on the resolution of these questions. I shall consider each of these paragraphs in turn.
Does the Court have power under the Trustee Act to make the order sought in paragraph 74.1?
Section 36 of the Trustee Act provides:
36—Power of the Court to appoint new trustee
(1) The Supreme Court may, on the application of a person referred to in subsection (1c), make—
(a)     an order removing one or more of the trustees of a trust; or
(b)     an order replacing one or more of the trustees of a trust; or
(c)     an order appointing a trustee or trustees, or an additional trustee or trustees, of a trust; or
(d) any other order that in its opinion is necessary or desirable.
(1a)    The Court may make the order if it is satisfied that the order is desirable—
(a)     in the interests of the persons (whether identified or not) who are to benefit from the trust; or
(b)     to advance the purposes of the trust.
(1b) There is no need for the Court to find any fault or inadequacy on the part of the existing trustees before making an order under this section.
(1c)    The following persons may apply for an order under this section:
(a)     the Attorney-General; or
(b)     a trustee of the trust; or
(c)     a beneficiary of the trust; or
(d)     in the case of a trust established wholly or partly for charitable purposes the following persons may apply for an order in addition to those referred to in the other paragraphs of this subsection:
(i) a person who is named in the instrument establishing the trust as a person who is entitled to, or may, receive money or other property for the purposes of the trust; or
(ii) a person who is named in the instrument establishing the trust as a person who must, or may, be consulted by the trustees before distributing or applying money or other property for the purposes of the trust; or
(iii) a person who in the past has received money or other property from the trustees for the purposes of the trust; or
(iv)     a person of a class that the trust is intended to benefit; or
(e)     any other person who satisfies the Court that he or she has a proper interest in the trust.
(2) An order under this section, and any consequential vesting order or conveyance shall not operate further or otherwise as a discharge to any former or continuing trustee than an appointment of new trustees under any power for that purpose contained in any instrument would have operated.
(3) Nothing in this section shall give power to appoint an executor or administrator.
Section 4(1) of the Act contains, inter alia, the following definitions:
representative means an executor or administrator, and includes the Public Trustee in cases where the Supreme Court has authorised him to administer the estate of a deceased person;
…
trust does not include the duties incident to an estate conveyed by way of mortgage, or to the estate or interest of a mortgagee under the Real Property Act 1886 but with these exceptions the expressions trust and trustee include implied and constructive trusts, and cases where the trustee has a beneficial interest in the trust property, and the duties incident to the office of representative of a deceased person, and the expression trustee includes a representative of a deceased person;
It is clear, therefore, that s 36 enables the removal, appointment or replacement of a trustee of a trust, but not of an executor. An executor may only be removed by a revocation of the probate.[28]
[28] Porteous v Rinehart (1998) WAR 495, 506; Morgan v MacRae [2001] NSWSC 1017, [21]-[27].
Counsel for the second defendant submitted that the purpose of the amendment is to remove the first defendant from the role of trustee of the estates. He submitted that the Court has both a statutory and an inherent power to remove a trustee.
Counsel contended that the power of the Court to remove trustees was enlivened where the welfare of the beneficiaries required such a remedy, and that as a beneficiary the second defendant was entitled to make an application to that effect. He referred to the provisions of s 36 and to Porteous v Rinehart in which White J discussed the power to remove trustees. Counsel submitted that the first defendant should be removed as trustee as a consequence of his conduct pleaded in the Amended Contribution Notice, which was, he contended, inconsistent with his obligations as trustee.
The first defendant’s position was that this proposed amendment was inappropriate because the first defendant was not a trustee and the Trustee Act therefore did not apply. The first defendant did not dispute that there was wide discretion to allow amendment, nor that the second defendant should have leave to amend in a general sense; however, counsel for the first defendant objected to the particular amendment sought on the basis that the Trustee Act was inapplicable and the declaratory relief should not be granted.
Counsel for the first defendant submitted that the second defendant’s application should be dismissed on the basis that the proposed amendments did not disclose a reasonably arguable cause of action. She submitted that the proposed Further Amended Contribution Notice did not allege that the first defendant was trustee of any property of either estate. Counsel submitted that, to the contrary, the document was premised on the first defendant being an executor, and drew attention to the allegations that the first defendant had not yet administered the estate. She referred to particular paragraphs in which she contended, in effect, that it was implicit in the pleading that the first defendant was in the role of executor.
In the Trustees Act 1962 – 1978 (WA), trustee and trust were also defined to include a personal representative and the duties incidental to that office respectively. That Act also provided that the power to appoint a new trustee did not give power to appoint an administrator or executor. Issues similar to those arising in this application were discussed in the case of Porteous v Rinehart, in which White J stated:
Mr Archer, for the defendants, submitted that there is a precise turning point in an estate when an executor becomes a trustee, being the point at which his executorial duties have all been performed but he remains in possession of trust property. I think that that is correct in relation to each item of specific property in an estate. He points out that an executor can become the trustee of estate property at different times so that he may act in both capacities at the same time – in relation to different property. I accept this submission.
…
Accordingly, the situation might arise that the defendants are, simultaneously (albeit in respect of different assets of the Estate) executors and trustees under the Will.[29]
[29] Porteous v Rinehart (1998) 19 WAR 495, 503; see also Williams v Williams [2005] 1 Qd R 105, 106.
Whether a person is acting as executor or trustee is therefore a question of fact to be determined with respect to each item of property of the estate.
The second defendant in her pleadings has not asserted that the first defendant is acting in a particular role for any item of property. In her Amended Contribution Notice, she pleads in relation to the conduct of the first defendant:
C: The Executor’s Unconscionable Delay in Administering Fred’s Estate
…
Executor’s Delay in Administering Fred’s Estate
25.The executor became entrusted with the administration of Fred’s estate as at the time of Fred’s death on 12 November 1995.
26.     At no time has the executor:
26.1   called in the assets or satisfied the liabilities of Fred’s estate;
26.2   obtained legal advice upon his obligations as executor;
26.3   obtained an understanding of the nature of or administered the trust that was created by Fred’s will.
…
Executor’s Delay in Preparing an Inventory of Assets and Liabilities of Fred’s Estate
…
31.Due to a lack of information, most sources of which are under the control of the executor, Mrs O’Meara cannot determine the precise number and value of the assets or liabilities of Fred’s estate.
…
D: The Executor’s Breaches of Duty in Connection with the Affidavit of Assets & Liabilities of Fred’s Estate
…
The particulars of the executor’s failure properly to record and preserve the assets of Fred’s estate are as follows:
32.1Mrs O’Meara has not been informed what the executor has done to administer Fred’s estate, nor has she been provided with any accounts of Fred’s estate maintained by the executor.
The second defendant then makes specific allegations about the way in which the executor has behaved.
The second defendant pleads, inter alia, that the first defendant has failed to inform her as to the progress of the administration of the estates. The first defendant has not yet filed any pleadings in this action.
I accept counsel for the first defendant’s submission that there are some paragraphs of the Further Amended Contribution Notice that refer solely to the first defendant as executor, or allege that administration of the estate is incomplete. It is also correct that the second defendant has not expressly pleaded that the first defendant is an executor or trustee with respect to any particular items of property.
However, there are certain paragraphs in which it is implicit that the first defendant may have acted as a trustee. For example, paragraph 11 pleads the duties of the first defendant as executor and trustee. Various sub-paragraphs of paragraph 11 are referred to in the particulars for each of the allegations; in some instances the same conduct is said to constitute breach of duties of both executor and trustee. Some paragraphs do not clearly define one role or another; for example, the pleadings relating to the first defendant’s conduct with respect to the harness horse “Ice Pick Lucy” and to certain vehicles appear to leave open whether the first defendant was acting as executor or trustee of those items of property.
It should also be noted that paragraph 1 of the contribution notice in both its amended and proposed further amended forms denotes Frederick John Von Stanke as “the executor” for the remainder of the document, despite the acknowledgement in that paragraph that he is sued in his executorial capacity as the first defendant and in his personal capacity as third defendant. This denotation confuses matters somewhat in the present application, and is perhaps unfortunate, as it does not make clear to which capacity of Frederick John Von Stanke reference is being made when the text refers to “the executor”. However, it is clear that references in the contribution notice to “the executor” should not be interpreted as necessarily referring to the first defendant solely in his capacity as executor to the exclusion of his role as trustee, or even to the exclusion of his personal capacity.
The Amended Contribution Notice therefore does not make sufficiently clear in which capacity relief is sought from John. The second defendant in her submissions on the effect of John not being joined as the executor of Gwen’s estate stated that she considered that her Amended Contribution Notice should more appropriately be formulated against John in his personal capacity, but drew attention to the fact that the litigation had been carried out by the executor’s legal representatives.
I note that, prima facie, parts of the prayer for relief appear to be more appropriately directed to John in his personal capacity. For example, the prayer for an account of profits in paragraph 72.3 of the Amended Contribution Notice (paragraph 74.3 of the Further Amended Contribution Notice) is, prima facie, relief sought against John in his personal capacity. At present, it is not clear whether that is the case for two reasons. First, the second defendant in her contribution notice has referred compendiously to John in both his capacities as “the executor”. Secondly, the legal representatives of John in his personal capacity have not, to date, taken an active role in the litigation and the litigation has been conducted by the legal representatives of John in his capacity as executor of the estate. I do not express any views on the matter, but I would encourage the parties to consider carefully against whom relief is sought, and by whom the litigation is conducted.
The second defendant has not pleaded that the first defendant has acted exclusively as executor. Nor do the paragraphs referring to his conduct as executor contain an implicit assumption that this is his sole role.
For all these reasons, I reject the contention of counsel for the first defendant that the contribution notice is premised on the first defendant acting solely as executor.
In any event, the failure to give greater particularity to the role of the first defendant with respect to each item of estate property must be taken in light of the pleadings as a whole. The second defendant has, as noted above, pleaded repeatedly in her contribution notice as to her lack of knowledge even as to the extent of the assets of the estate. One might expect that the position with respect to individual items of property will become more clear after pleadings have closed and discovery has been made.

I accept the accuracy of counsel for the first defendant’s submissions regarding roles of the executor and trustee, and the differences between them. The role of a trustee is not synonymous with that of an executor.[30] I also accept that the Trustee Act does not authorise the appointment or removal of an executor. That is clear from the terms of s 36.
[30] Porteous v Rinehart (1998) 19 WAR 495; J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (7th ed, 2006) 34-6.
However, as counsel for the first defendant correctly identifies, whether a person is acting in the role of executor or trustee is a question of fact. It is a question to be determined with respect to each item of property in the estate, so that a person may be simultaneously acting as executor and trustee, albeit with respect to different items of property.[31]
[31] Porteous v Rinehart (1998) 19 WAR 495, 503.
The fact that the Trustee Act does not empower the Court to remove or appoint an executor is not determinative of whether the application should be allowed. The second defendant does not seek the removal of an executor. The second defendant seeks the removal of the first defendant as the trustee of the trusts created by the wills of Fred and Gwen. The Court does have the power to make such an order under s 36 of the Trustee Act and pursuant to its inherent jurisdiction.
I also note that the second defendant has pleaded that she does not have full knowledge of the assets and liabilities of the estate. Although this is not a determinative consideration, it supports the conclusion that until discovery has been completed it would be premature to preclude the second defendant from seeking this relief.
There may be some practical difficulties associated with the orders sought by the second defendant in paragraph 74.1. The comments that follow are merely for the consideration of the parties and do not represent any concluded view of the course that the proceedings should take.
There are two difficulties that may arise subsequently in the proceedings. First, whether the first defendant is executor or trustee of particular assets is likely to be a complex issue at trial, exacerbated by the second defendant’s pleaded lack of knowledge of the extent of the assets of the estate. Secondly, even if the Court were to make an order removing the first defendant as trustee, the first defendant would only cease to act as trustee in respect of that property for which he was trustee at the time of making an order. Other property, for which he was executor, would not be the subject of such an order, although the first defendant may subsequently become the trustee of other property on the conclusion of his executorial duties in respect of such property. It would appear that these difficulties could be avoided if the second defendant were to pursue a probate action seeking the removal of the first defendant as executor of the estate of Fred (and Gwen, if necessary). As the Master identified, such an action would be governed by Rule 205 of the Supreme Court Rules 2006. Subject to the ordinary principles of joinder, the second defendant could, if she wished, apply to have any such probate action joined to the present action. I emphasise again that I do not wish to suggest any concluded view of the matter, and these remarks are merely for the consideration of the parties.
Finally, counsel for the first defendant submitted that the amendment could not be allowed in any event as the second defendant did not seek the appointment of a person as trustee. Shortly stated, the submission was that the second defendant should not be allowed to seek an order that would leave the trust without a trustee, as equity would not condone such a situation.
I do not consider that this submission is of great moment. This Court has inherent jurisdiction, in addition to its jurisdiction under s 36 of the Trustee Act, to appoint persons trustee.[32] Should the order sought in paragraph 74.1 be made, the Court has jurisdiction to appoint a trustee or trustees.
[32] Pope v DRP Nominees Pty Ltd & Ors (1999) 74 SASR 78, 89-91.
Subject to the qualifications later in these reasons, I give leave to the second defendant to amend further her Amended Contribution Notice to seek the removal of the first defendant as trustee pursuant to s 36 of the Trustee Act.
Does the Court have power to make the declaration sought in paragraph 74.4?
In paragraph 74.4 of her proposed Further Amended Contribution Notice, the second defendant seeks a declaration that the first defendant is unfit to act in the office of executor or trustee of the estates of Fred or Gwen. I note that the proposed Further Amended Contribution Notice does not seek the removal of the first defendant as executor of either estate. Counsel for the second defendant stated:
Mrs O’Meara submits that in the present proceedings the court should make a declaration that the first defendant is unfit to carry on in the office of executor and trustee of the estate because we wish to have that issue finally determined in these proceedings and the effect of a declaration of course is that the matter cannot be relitigated, that stands for all time as the statement of the court with respect to these litigants and that is what is important for Mrs O’Meara, to know that there will be no revisiting of this issue, rather that there is a res judicata there.
Counsel drew an analogy between that view and the circumstances of J N Taylor Holdings in which the applicant was seeking to have the insurer joined to the action so that res judicata and issue estoppel would be available to them and there would be no need to revisit the issue in subsequent proceedings. He relied upon s 31 of the Supreme Court Act, which provides:
31 – Declaratory Orders
No action or proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby, and the court shall have power to make binding declarations of right whether any consequential relief is or could be claimed or not.
Counsel for the second defendant also referred to the decision of J N Taylor Holdings (In Liq) & Anor v Bond & Ors,[33] in which King CJ stated “the jurisdiction to grant declaratory relief is very wide” and went on to state that:
The court’s power to grant such relief is “only limited by its own discretion”, and the boundaries of judicial power [references omitted].
[33] (1993) 59 SASR 432.
However, King CJ did go on to indicate that the discretion was limited by certain “contra-indicative circumstances”, including that the determination of the question would “produce no foreseeable consequences for the parties”. Counsel for the second defendant submitted that none of King CJ’s examples of circumstances contra-indicative applied here.
Counsel for Mrs O’Meara submitted that “in the context of the present proceedings, the Court should make a declaration that the first defendant is unfit to act in the office of executor and trustee of the estates”.
The first defendant is currently executor of both estates. The only way in which he can be removed as executor is via revocation of the probate which has been granted to him. At this stage, the second defendant does not seek removal of the first defendant via revocation of the probate or any other means. A declaration that the first defendant is unsuitable to act in the office of executor, by itself, can therefore have no effect, beyond enlivening principles of res judicata and issue estoppel in any subsequent probate action.
However, the fact that a subsequent action is required to enforce a right that has been declared is not necessarily a bar to such a declaration being made. For example, in representative actions a declaration may be made in an action, following which individual plaintiffs may sue for damages in reliance upon the res judicata attaching to the declaration.[34]
[34] See, eg, O’Sullivan v Challenger Managed Investments Ltd [2007] NSWSC 383, [48].
The fact that the removal of the executor could only be effected in an action seeking revocation of the probate, and could not be effected by a declaration in this action, may ultimately be a basis for refusing to make such a declaration. However, in my view, it is not a basis for precluding the second defendant from seeking that relief in a contribution notice at a stage of proceedings when pleadings have not been completed.
As I have observed, J N Taylor Holdings makes clear that the power to make a declaration is very wide, and limited only by the Court’s discretion. Considerations relevant to the exercise of that discretion will no doubt arise later in the proceedings. For example, the application for the removal of John as trustee of the assets of the estate will require findings of fact as to whether John is acting as trustee or executor in respect of individual items of property. In my view, it would be inappropriate to preclude the second defendant from pursuing the relief sought at a stage when all the considerations relevant to the award of that relief may not be before the Court.
I would therefore grant leave to the second defendant to amend further her Amended Contribution Notice to include a prayer for relief seeking a declaration that the first defendant is unsuitable to act in the role of executor.
A declaration that the trustee is unsuitable to act in the office of trustee has more obvious consequences for the interests of the parties. I have noted above that the orders sought in paragraph 74.1 of the proposed Further Amended Contribution Notice could only be made in respect of the property for which the first defendant was trustee. It will be a question of fact whether the first defendant is in fact an executor or trustee in respect of each item of property. For those items of property for which it was found that the first defendant was executor, a declaration that the first defendant was unsuitable to act as a trustee could have the effect that the first defendant would be prevented from assuming the role of trustee with respect to that property upon the completion of his executorial duties.
I have given leave to the first defendant to amend further her Amended Contribution Notice for the purpose of seeking orders pursuant to s 36 of the Trustee Act. If the second defendant is successful in this aspect of her prayer for relief, the first defendant will be removed as trustee of those items of estate property for which it is found that he is acting as trustee. As I have noted above, there will also have to be an order appointing a new trustee.
I note that s 36 of the Trustee Act expressly allows for the Court to remove a trustee in the absence of any finding of fault or inadequacy on the part of that trustee. If the second defendant is successful in obtaining the orders sought in paragraph 74.1 of the proposed Further Amended Contribution Notice, it does not follow, therefore, that she would necessarily be successful in obtaining the declaration sought in paragraph 74.4. This would have the effect that the first defendant may be removed as trustee of those assets for which his executorial duties were complete, but would subsequently become the trustee of other assets for which the executorial duties were incomplete at the time of making the order. Ultimately, the orders made will be contingent on the findings of fact made at the trial. I give leave to the second defendant to amend her Amended Contribution Notice to seek a declaration that the first defendant is unsuitable to act in the role of trustee.
Effect of the First Defendant being a Party only in his Capacity as Executor of Fred’s Estate and in his Personal Capacity
The application of the second defendant raises another issue. A necessary feature of contribution notices is that they must be issued against persons who are presently parties to the action, either as defendants or third parties.[35] In its proposed amendments to its Amended Contribution Notice, the second defendant sought certain orders and declarations in relation to John’s dealings with Gwen’s estate. In addition, the Amended Contribution Notice, both in its original form and as amended, contains allegations regarding the conduct of the executor of Gwen’s estate.
[35] Supreme Court Rules 1987, r 37.07(1).
The first defendant is a party to the action in his capacity as the executor of Fred’s estate and his personal capacity. He is not a party to the action in his capacity as executor of Gwen’s estate.
In a letter dated 21 May 2007 sent from my Chambers to the solicitors for the first and second defendants, I asked the parties to provide written submissions on the effect, if any, of these facts on the applications before me on 17 and 18 May 2007. Neither party had addressed this issue during oral submissions.
The second defendant submitted that the fact that the first defendant, in his capacity as executor of Gwen’s estate, is not presently joined does not give rise to an error in the Master’s reasoning. It was submitted that the fact that Gwen’s estate is not a party to the proceedings would have no effect on the issue of the overlap between the contribution notice and the statement of claim. The issue of the beneficial ownership of the land registered in the name of the first defendant is the primary issue to be determined in the action. The conduct of John, in his personal capacity and in his capacity as an executor and trustee of Fred’s estate, will be the subject of evidence. The fact that he has not been joined in his capacity as executor of Gwen’s estate will have little effect upon the issue of the ownership of the land, and the first defendant’s conduct generally.
Further, counsel for the second defendant submitted that the orders sought for an account of profits and compensation are in part sought against John in his personal capacity. To this end, counsel stated that the contribution notice would more properly be formulated against the third defendant rather than the first.
I observe that the declarations sought as to John’s fitness to act as executor and trustee of the estates are also applications relating to his conduct personally. John is joined in his personal capacity. In that capacity, he has not sought to strike out any part of the Amended Contribution Notice.
I consider that there are common interests as to Fred’s estate and Gwen’s estate in respect of the issue relating to the conduct of the first defendant in his personal capacity, and in his capacity as executor of Fred’s estate. It follows that it is unnecessary, for this application, to decide the question of whether the third defendant should be joined in his capacity as executor of Gwen’s estate.
The prayer for relief in sub-paragraph 74.1, which seeks the removal of the first defendant as trustee, appears prima facie to be directed to John in his personal capacity. The relief sought is not claimed against John in his executorial capacity in respect of either estate. Similarly, the declaratory relief in sub-paragraph 74.4 sought is a declaration pertaining to John’s fitness to act. This is, prima facie, relief sought against John in his personal capacity. The fact that John is not joined in his capacity as executor if Gwen’s estate does not, therefore, affect the question whether to give leave to the second defendant to amend further her Amended Contribution Notice; nor does it affect the question whether the notice should be struck out pursuant to r 37.07.
In this context, I would again observe that the parties should consider against whom relief is sought, and by whom litigation is conducted.
Application by the first defendant to strike out the amended contribution notice of the second defendant
After striking out sub-paragraph 72.1 of the Amended Contribution Notice on 20 February 2007, the Master stated that he would hear the parties on whether any other paragraphs should be struck out consequentially. The only relief sought in the Amended Contribution Notice as it stood was the equitable compensation sought in sub-paragraph 72.2 (sub-paragraph 74.2 of the proposed Further Amended Contribution Notice) and the account of profits sought in sub-paragraph 72.3 (sub-paragraph 74.3 of the proposed Further Amended Contribution Notice). In his reasons of 19 April 2007, the Master stated that he had had in mind paragraphs 38-59, and possibly other paragraphs, as they related only to the relief sought in sub-paragraph 72.1, which had been struck out.
Counsel for the first defendant submitted to me that, as a consequence of striking out sub-paragraph 72.1, the remainder of the contribution notice ought to be struck out. In her contention, the claims for equitable compensation and an account of profits required that the contribution notice allege that the second defendant had suffered a loss and the first defendant had made a profit respectively.
For the reasons given above, I have given leave to the second defendant to amend further her Amended Contribution Notice to include prayers for relief which relate to the conduct of the first defendant as executor and trustee. The allegations in the contribution notice are clearly pertinent to those prayers for relief. I would therefore dismiss the application to strike out the contribution notice.
Summary
I would make orders as follows:
1.     The appeal by the first defendant against the Master’s reasons and orders regarding the Amended Contribution Notice is dismissed.
2.     I grant leave to the second defendant to amend paragraph 66.2.3 of her Amended Contribution Notice in the terms set out in these reasons.
3.     I grant leave to the second defendant to insert proposed paragraphs 72 and 73 into the Amended Contribution Notice.
4.     I grant leave to the second defendant to amend further sub-paragraph 72.1 of the Amended Contribution Notice (sub-paragraph 74.1 of the Further Amended Contribution Notice) in the terms proposed.
5.     I grant leave to the second defendant to insert proposed sub-paragraph 74.4 of the Further Amended Contribution Notice in the terms proposed.