Harpur & Ors v Levy & Ors

[2007] HCATrans 808

[2007] HCATrans 808

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M76 of 2007

B e t w e e n -

PAUL HENRY HARPUR

First Applicant

PAMELA FAYE RAND HARPUR

Second Applicant

KAI TAK PTY LTD

Third Applicant

and

FRANK ERNEST WILLIAM LEVY, LEON MOSCOVITCH, ANGELO TESORIERO (IN THEIR CAPACITY AS THE EXECUTORS OF THE ESTATE OF PETER THOMAS EVAN RAND)

First to Third Respondents

MICHAEL AQUILINA

Fourth Respondent

Application for special leave to appeal

KIRBY J
HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 14 DECEMBER 2007, AT 10.00 AM

Copyright in the High Court of Australia

__________________

MR J.D. MERRALLS, QC:   May it please the Court, I appear with my learned friend, MR S.G.E. McLEISH, SC, for the applicants.  (instructed by Mills Oakley Lawyers)

MR A.J. MYERS, QC:   May it please the Court, I appear with MR R.I. ROSENBERG for the first, second and third respondents.  (instructed by Sackville Wilks & Co)

MR D. WEINBERGER:   May it please the Court, I appear for the fourth respondent.  (instructed by Nathan Kuperholz, Solicitors)

KIRBY J:   Yes, thank you very much.  Yes, Mr Merralls.

MR MERRALLS:   If the Court pleases.  This case is perhaps a little unusual in these times in the High Court.  It is a case of a kind that the Court considered regularly some years ago when trust principles were clarified and guidance was given to courts of construction, often by three justices, but nevertheless that was done.

HAYNE J:   What you are telling us is all the principles are settled, is that what you are telling us, Mr Merralls?

MR MERRALLS:   No fear.  But the principles are from time to time, and indeed after 50 years, required to be restated for the benefit of intermediate courts and courts of construction.  There are two main problems here.  One concerns the method to be adopted in ascertaining the intention of a person to create a trust by an instrument in writing, whether it is necessary to look to the document as a whole, including recitals, except where the remainder of the document is capable of only one meaning.  That is one problem that occurs and it occurs quite clearly in the difference of opinion between the learned President who dissented and the other two members of the Court of Appeal.

The second question concerns whether an interest which is to arise in the future can be created in the present where there is no express creation of an intermediate interest, or in the old language of real property law, a particular state.  May I refer to the first question.  The majority precluded itself from looking at part of the deed in which the intention of Mr Rand was quite clearly disclosed.  The recitals in fact set out almost in an essay form his reasons for doing what he did.  The majority did so ‑ ‑ ‑

KIRBY J:   I wonder who did the first draft of those recitals?  I do not think that was disclosed, was it?

MR MERRALLS:   I do not think that appears.  This was pleading summonses, your Honours will be aware, and so the court was confined to matters pleaded.  Anyway, the document contains in a narrative form the reasons of Mr Rand for doing what he did.

KIRBY J:   Yes, it does.

MR MERRALLS:   That is that he is fearful of undue influence being placed upon him to make a will which was contrary to his intentions that are exemplified by the deed of trust.  The court did so by adopting a constrictive approach to interpretation, adopting ambiguity as the criterion for recourse to recitals and then, at least in some part of the document, by adopting a very odd standard of the balance of probabilities.  That is found in the judgment of Justice Neave in paragraph 60, a very odd standard indeed bearing in mind the statements in 19th century cases about the reconciliation of various provisions of a trust deed.

They adopted a test of ambiguity which differed markedly from that posed by Lord Macnaghten in the leading case of Orr v Mitchell which is summarised in paragraph 16 of our outline of argument where his Lordship says that:

When those words are susceptible of two constructions the context may properly be referred to for the purpose of determining which of the two constructions is the true meaning.  In order to justify a reference to the context for this purpose, it is not necessary that the language of the dispositive or operative clause should be ambiguous in the sense that without some help you cannot tell which of two meanings should be taken.  The rule applies though one of the two meanings is the more obvious one, and would necessarily be preferred if no light could be derived from the rest of the deed.  For the purpose of construing the dispositive or operative clause, the whole of the instrument may be referred to though the introductory narrative or recitals leading up to that clause are, perhaps, more likely to furnish the key to its true construction than the subsidiary clauses of the deed.

What the majority did in this case was quite contrary to that clear direction, or statement of principle by Lord Macnaghten.

CRENNAN J:   I suppose on one view Justice Neave, paragraphs 61 and 62, takes the view that there are two possible constructions.

MR MERRALLS:   Yes, she did, but she had Mr President Maxwell’s judgment which was flatly contrary to hers, so unless she is saying that he was off his head, there must be two.

KIRBY J:   No, I do not think that is entirely fair, Mr Merralls.  I mean, you do get differences in courts.  Two people can look at the same problem and see it differently.  It is not off their heads, it is just a different perception.

MR MERRALLS:   No, I agree with your Honour.  I was perhaps using hyperbole to explain my point, but there were obviously two possible interpretations.  She would have to say that the learned President’s interpretation was impossible because of difference; it is flatly different.

HAYNE J:   Can I take you to the deed itself at 104 to 106?  Is recital 13 the high point of your contention?

MR MERRALLS:   Yes.

HAYNE J:   How does that sit with clause 5 of 106?

MR MERRALLS:   It is a question of interpretation what the commencement date is.  Of course, the commencement date of the deed is the date that it signed, sealed and delivered, unless it was placed in escrow, but if it were placed in escrow it would still be a deed.

HAYNE J:   Is not the effect of clause 5 whether read in the light of recital 13 or not read in the light of recital 13 that the maker of the deed could have torn the instrument up before 1 October 1997 with no consequence having been achieved in respect of the property?

MR MERRALLS:   No, that is wrong in law, with respect, your Honour, he could not.

HAYNE J:   Why?

MR MERRALLS:   Because he has signed, sealed and delivered the deed, so the deed is in existence, it has commenced.

HAYNE J:   Despite its explicit term “The commencement date of this deed shall be the 1st October 1997”?

MR MERRALLS:   It would not matter a fig, no.  That is not the law, with great respect, and that is the fallacy of my learned friend’s argument, that somehow the whole thing remains in suspension until 1 October.  We say that the commencement date of the deed is really the commencement date of the trust.  Indeed, the deed is not entirely consistent in that in clause 5 the expression “commencement date” is used and in clause 1 and elsewhere it is “commencement day”.  The irrevocable declaration is that, as from the commencement day the property was to be held for the beneficiary in the schedule.

KIRBY J:   That requires a bit of surgery on the deed too, does it not, to replace the commencement date of this deed, which has been the formula that is used elsewhere on several occasions in the deed, is to be taken to mean not the commencement date of the deed but the commencement date of the trust?

MR MERRALLS:   Yes, that is the day from which the future trust was to commence, the future interest was to commence.  But the deed was ‑ ‑ ‑

KIRBY J:   Why was it necessary ‑ ‑ ‑

MR MERRALLS:   The declaration was irrevocable from the time of making it and irrevocability in the circumstances of this case indicates that it could not have been destroyed or revoked before the commencement day because after the commencement day there was nothing that could be revoked.  The trust took immediate effect in possession.  It was not a successory trust that was being created, so there would be nothing to revoke.  The only thing that could be revoked would be the trust prospectively from the making of the deed.  So the reference to irrevocability is very significant.

KIRBY J:   Why was it necessary to have a commencement date of the deed?  Why should it not have simply taken effect from its own date or the date of its execution?

MR MERRALLS:   It did.

KIRBY J:   But I am saying, why was that formulation used when it was not necessary on your theory?

MR MERRALLS:   We say that the use of the word “date” in clause 5 was simply mistaken for “day”.

HAYNE J:   What is the purpose then of clause 5?

MR MERRALLS:   The purpose of clause 5 is it identifies the date, 1 October, from which the ‑ ‑ ‑

KIRBY J:   Your theory is that it takes effect as from execution?

MR MERRALLS:   It does.

KIRBY J:   I know that is what you say, but why then have this provision in it, it was not necessary?

MR MERRALLS:   Because the trust was a future trust and it had effect from 1 October.  That was the purpose.  It is merely to identify the date of the commencement of that trust.

KIRBY J:   It was executed in August, was it not?

MR MERRALLS:   It was.

KIRBY J:   What was going to happen between August and October?

MR MERRALLS:   There was either a result in trust or the property remained in the ownership of the set law for that period.  He could not have disposed of it in such a way as to prejudice or destroy the trust that he had created that would commence on 1 October.  If I can give your Honours three examples; one of a trust to X for five years and then to Y, or to the set law for five years and then to Y, or to Y in five years.  We say that the result so far as Y’s interest is concerned is precisely the same in each case.  This is an example of the third case.

Their Honours are simply troubled by the concept of to Y in five years and they seemed to think that there had to be some express declaration of a particular estate.  I think that Justice Neave uses the expression “passing of the beneficial interest” or “full beneficial interest” as though for a future trust to arise one had to somehow move the whole beneficial interest there and then to someone else or expressly reserve it to yourself, and we say that is fallacious.  That is the second point that we make and that is a very important point in trust law.

But one does not for the creation of a future interest – the present creation in interest of a future interest which will vest in possession at a later date there is no need to expressly create a particular estate or intermediate interest.

HAYNE J:   But the consequence of your construction is, of course, that the income of the assets, the subject of the instrument, would remain with the set law until ‑ ‑ ‑

MR MERRALLS:   Yes.

HAYNE J:   Yes.

MR MERRALLS:   Yes.

HAYNE J:   Yes, yes, that is the commercial consequence that is thus achieved?  The set law retains the income stream until whatever the date is, 1 October?

MR MERRALLS:   Yes, 1 October, yes, that is right.  But the learned judges of the majority do not seem to have accepted that or they do not seem to accept that it was possible to create the trust in that way.

KIRBY J:   Where do you put your finger on the error of the majority in the Court of Appeal?  Is there a particular expression in Justice Neave’s reasons?

MR MERRALLS:   There are a number of expressions that Justice Neave used in that respect.  They appear, your Honours, in a number of paragraphs, 40, 60, 61, 62, 63 and 71.  In 63, for example, she says:

To purport to declare a trust, but to state that it will not come into operation until a later date, is inconsistent with an intention to relinquish the beneficial interest in the property from the date of execution of the deed.

Well, it is not.  She says in paragraph 61, Mr Rand “retains both the legal and beneficial interest in the property until” the commencement date.  Well, so he did, but that is not an objection to the trust in favour of what I might call subordinate trust commencing on 1 October, on the commencement date.

I can remember her Honour, in fact, asking me questions about that very point in the course of argument and I thought I had answered them but she has raised the problem without expressing the answer, or the answer that was given then, in the reasons for judgment.

HAYNE J:   Line 10 on page 62 in paragraph 61, by use of the expression “income of the trust” perhaps identifies what you say is the chief error.

MR MERRALLS:   Yes, that is, your Honour.  We say that he did have the income of the trust.  There is no need for him to expressly reserve it and that seemed to trouble Justice Neave.  We say she is wrong and we say that it is appropriate for the Court to explain the error of her Honour’s way.  It is not appropriate that a decision of an intermediate court should stand which suggests that a will or a deed which is constructed in this way is ineffective.

HAYNE J:   What do you say to the proposition that this is simply the construction of a specific instrument with its own infelicities which yields no principle that is of general application?

MR MERRALLS:   What we say is what I have said, that it in fact exemplifies the application of principles.  It is possible to say that about every contract, every will, every trust deed, except perhaps one which contains a border plate clause.  It is possible to say that about practically every case of tort that comes before the court.  Every bridge is different, every sandbar which a surfer jumps is different.

KIRBY J:   Do not go back there, please.

MR MERRALLS:   Every sign is different.

HAYNE J:   But the warning signs are always the same, Mr Merralls.

MR MERRALLS:   In another capacity I have difficulty with some of those cases in assessing whether they do raise any point of general legal principle.  It is easy to say that each document is idiosyncratic and therefore should not be the subject of an appeal to this Court.  We concede that some of the terms are not as happy as they might be, it was an unusual situation, but the two matters of principle that we have identified are universal and particularly the first, the manner in which one ascertains an intention to create a trust, not merely how to reconcile a provision which perhaps

creates an all-moneys mortgage in the operative words and yet recites that the mortgage is to be given for the purpose of particular loans or transactions, which many of the cases are, which deal with the reconciliation of operative words and recitals.

We can say that it is a principle of the law of trusts but the intention of a party to create a trust is found by the best means possible and that it is legitimate, indeed, proper to have recourse to all parts of the document.  I see the red light is flashing.

KIRBY J:   Yes, I had noticed that, Mr Merralls.

MR MERRALLS:   I simply close by referring your Honours to paragraphs 18 and 30 of our submissions.

KIRBY J:   Yes, we have read them very carefully.

MR MERRALLS:   If it please the Court.

KIRBY J:   Yes, Mr Myers.  What do you say?  We do not get these cases very often and they have an interest for the variety of life.  There is a lot of money involved in this estate.

MR MYERS:   That is true, your Honour, and because of this case ‑ ‑ ‑

KIRBY J:   You have very attractive counsel in the case.

MR MYERS:   I will take that as a reference to all of us, your Honour.  The fact of it is that the testator died more than 10 years ago.  Because of this claim that is maintained about the deed it has not been possible even to realise the assets, let alone wind up the estate, and to give special leave in a case of this kind which does not involve, we say, the issue of principle would surely just prolong the administration of the estate which ‑ ‑ ‑

KIRBY J:   I understand that argument, but the other argument on the other side is when it has gone so far with so much litigation it is as well that it be completed finally in the final court.

MR MYERS:   It may be, of course, your Honour, that that is a view that can be taken and I cannot say that that is not a view that is open.  Nonetheless, they are the facts.  It is more than 10 years that this State has been enmeshed in this litigation, arguing essentially about the terms of a deed that has five or six operative clauses.  Any question of construction of an instrument is a question upon which different people can form different views, and different judges can.

KIRBY J:   That is true.  Since this Court last looked at this type of problem in the context of deeds of this kind there has been a big development in the general law of interpretation; interpretation of statutes, interpretation of contracts and it has been, as it were, sympathetic to looking to a wider frame of reference.  If one does that in this case the wider frame of reference of the recitals gives a lot of legging up to Mr Merralls.

MR MYERS:   Your Honour, what was put below was that the Court should construe the instrument as a whole but if the operative words are clear, they should govern the matter, not the recitals, and that is the approach that the justices of the Court of Appeal took.  There was nothing in the argument that was put below or in the approach that was taken by the justices of the Court of Appeal which is inconsistent with what your Honour has described as the modern approach to the construction of instruments.

CRENNAN J:   In other words, they said you do not really have to consider context widely, a la CIC v Bankstown say, because the words themselves, they seem to suggest, were clear and unambiguous.

MR MYERS:   Well, that is the view they took and we respectfully say they are right.  I mean, one has to torture the instrument to reach the sort of conclusions about its meaning that my learned friend advances.

HAYNE J:   Why?  What do you make of the word “now” in line 2 of clause 1?

MR MYERS:   “He now irrevocably declares”?

HAYNE J:   Yes, that is right.

MR MYERS:   “Now” is simply the statement of what he is doing.  It is a superfluous word in that sense, or in a certain way, your Honour.  It is like saying, “I now say that next week I will”.

CRENNAN J:   What about the present tense of “holds”?

MR MYERS:   Well, again, this is a matter that the court below dealt with and “holds” expresses the idea that as from the date he holds.  It is not a usual form of grammar but it is not also so odd that one cannot properly understand it, or it creates a serious doubt about the meaning, especially in the context of the whole of the operative part of the deed.  He declares that “as from the commencement day he holds the property”, not now, but as from the commencement date.

Then in clause 2 as “from the commencement day” he “holds the property”.  Clause 3 as “From the commencement day the trustee will” so the tense has changed there.  I admit that there is infelicity about the use of tenses.  Your Honour has asked a question, Justice Neave says in her reasons for decision that it was the Harpur’s solicitor who prepared this instrument, by the way, to answer that question – that Mr Harpur himself prepared the instrument, I am sorry, and Mr Harpur is a solicitor.

“From the commencement day the trustee” – I am looking at clause 4 – can do various things.  So, even the machinery provisions of clauses 3 and 4 are expressed to operate from the commencement day.  There is nothing in this instrument which suggests that it is to have any legal efficacy to alter interests in property until the commencement day.

KIRBY J:   What do you say about that passage in Justice Neave’s reasons where she refers to protecting the income?

MR MYERS:   What Justice Neave is pointing out is simply this, that if the deed had the sort of operation for which Mr Merralls contends, one might expect that there would be a provision dealing with the disposition of the income in between time.

HAYNE J:   Why?  Why would you?

MR MYERS:   Because it would make it clear, your Honour.  I am not saying you necessarily have to do it, but the natural thing would be to say, “From the commencement day you have the property and in the meantime I have the income”.

HAYNE J:   The presupposition for that argument is that the deed was artfully drawn.  There are some respects in which that description may not be apt.

MR MYERS:   Yes, your Honour.  I mean, the recitals, I really do not want to go to them, but they show a very complicated situation and to try and speculate about the minds of the persons involved in the context of an arrangement of that kind, as demonstrated by the recitals, would not be profitable.  We do know that within a few days after this, and this was in evidence before the Court of Appeal, Mr Rand made a will that was completely inconsistent with this deed, completely.

KIRBY J:   It does happen from time to time.  It is in the case books that people facing death feel the demands of different interests upon them and they often stumble from one obligation to another.

MR MYERS:   Quite so, and Mr Rand may well have been reassured on that basis that there was nothing that he could not revoke if he changed his mind, but that is pure speculation.  The deed in its terms is very clear.  That has been decided by a judge at first instance and the majority in the Court of Appeal and there must be some end to debates about the construction ‑ ‑ ‑

KIRBY J:   Yes, there is an end and it is here.

MR MYERS:   ‑ ‑ ‑ of instruments, and if every instrument can come to this Court, well, then, certainly getting rid of the ‑ ‑ ‑

HAYNE J:   The floodgates are creaking open even as we speak.

MR MYERS:  Certainly getting rid of the immigration cases will not have been ‑ ‑ ‑

HAYNE J:   Are you threatening us?

MR MYERS:   ‑ ‑ ‑ the saviour it appears to be from the first order made today.  If your Honours please, we point out that the reasoning of Justice Neave in paragraphs 60 really through to 63 is unexceptionable.  My learned friend has pointed to that sentence and I have dealt with it.  He has also pointed to the expression “on the balance of probabilities” but that is in paragraph 60, but all Justice Neave is doing there is expressing the test which she has to apply.  She then goes on in the very next paragraph to say:

In my view the unequivocal meaning of the clause read as a whole is that the deceased holds the property –

et cetera, from the commencement day and she has no doubt about its meaning and it is not to the point to say that someone could take a different view.  Of course someone could take a different view and we know the learned President did take a different view.  The issue is whether there was an error of principle involved in what Justice Neave did and no error of principle has been shown.  The words of the instrument are tolerably plain. 

No criticism has been made this morning by my friend of Justice Redlich’s reasons but they commence at paragraph 101 and he says that he agrees with the reasons given by Justice Neave and then he adds some supplementary observations suggesting really that perhaps the operative clauses are not inconsistent with the recitals in any event.  But be that as it may, what we say is that there is no error of principle, this is a decision that was open to be made, indeed, it is the natural and ordinary meaning of the words and this is a matter that there is no reason for the Court to accept on special leave.  If the Court pleases.

KIRBY J:   Yes, thank you, Mr Myers.  Does the fourth respondent wish to add to what Mr Myers has said?

MR WEINBERGER:   Yes, your Honour.

KIRBY J:   We have read the written submissions of your client.

MR WEINBERGER:   Yes.  Your Honours, I wish to make a few very short and discrete points and will endeavour to do so in a maximum of five minutes, hopefully less.  The crux of Michael Aquilina’s, the fourth respondent, position is that this application is too broad and should be dismissed insofar as it seeks to overturn order 5 of Justice Harper’s judgment given on 16 November 2004 and the third applicant, Kai Tak Pty Limited, should pay the costs of Michael Aquilina regardless of the outcome of this application.

I must mention at the outset that Michael Aquilina was not originally a party to the appeal, rather, he was joined as part of the amended notice of appeal filed with leave out of time by Kai Tak.  The amended notice of appeal sought at paragraph 7, an order requiring Aquilina to pay the costs of the appeal as one of the respondents to the appeal.

Your Honours, the application is too broad.  Paragraph 13(b) of the application for special leave seeks to set aside the whole of Justice Harper’s judgments including order 5.  That is a cost order made by Justice Harper and it must not be disturbed on appeal because it is not a consequential order as Kai Tak asserts, that is to say, the order did not arise as a consequence of the granting of the motion for summary judgment and the concurrent dismissal of the counterclaim. 

This Court need only compare orders 4 and 5 made on 16 November, which is at AB 33, to see that Aquilina was the only respondent to the counterclaim to be awarded costs.  Why is that?  The answer is plain, we say, from the fourth respondent’s summary of argument at paragraphs 4, 5 and 6 which explain, Kai Tak did not file and serve the counterclaim until April 2003, some four years after the proceedings were commenced.

Significantly, when leave to file and serve the counterclaim was given the counterclaim was stayed, including appearance to it, by the order of Master Evans of the Supreme Court of Victoria.  Kai Tak then sought, shortly before the trial and almost a year later, to lift the stay of the counterclaim and that application was heard together with the application for summary judgments on 4 May 2004.  Aquilina applied for and was granted leave to appear to oppose the application and lift the stay and, following the granting of the motion for summary judgment, sought and obtained a costs order against Kai Tak for payment of his costs.

Although Aquilina is a necessary party because the counterclaim has been dismissed and Kai Tak is seen to overturn that order, it is not strictly speaking necessary for Kai Tak to appeal the discretionary costs order made against it, referred to as order 5 throughout our summary of argument.  In our submission, Kai Tak should never have appealed order 5 in the first instance when all that was required was to seek an order reversing dismissal of the counterclaim if it succeeded in its appeal of the summary judgment given against it.  As Justice Neave stated as paragraph 93, which is at AB 71:

Although Mr Aquilina was a necessary party to the appeal, his counsel’s role was limited to opposing an order that his client pay the defendants’ costs of the original proceedings below or of this appeal.  The appellants gave no reason why the costs order relating to the counterclaim, which was made by the Judge below in favour of Mr Aquilina, should be set aside, either in their outline of arguments or in their oral argument.

KIRBY J:   I assume that Mr Aquilina takes a greater benefit unde the will?

MR WEINBERGER:   He is a beneficiary under the will.

KIRBY J:   But if this Court were to grant special leave to the applicant, would Mr Aquilina in this Court wish to be heard in opposition to the applicants’ appeal or is it in effect that Mr Aquilina is submitting to the orders of the Court?

MR WEINBERGER:   Mr Aquilina would be happy to submit to the orders of this Court provided order 5 is removed from the application.

KIRBY J:   Yes, that was my understanding.  His position is to defend the cost order that has been made hitherto.

MR WEINBERGER:   Plain and simple.

KIRBY J:   But after that point his position was that he would submit to the orders of the Court in the disposition of the issue between the present applicant and the first respondent’s ‑ ‑ ‑

MR WEINBERGER:   Indeed, and Mr Aquilina has studiously avoided getting involved in the dispute between the executors.

KIRBY J:   Yes, that is how I read the material.

MR WEINBERGER:   Exactly.

KIRBY J:   Yes, all right.  We will hear what Mr Merralls has to say about that.

MR WEINBERGER:   Thank you, your Honour.

KIRBY J:   That seems a not unreasonable position.  Why do you want to reopen this cost order, or do you want to reopen it?

MR MERRALLS:   My learned friend, Mr McLeish, will address your Honours on that point.

KIRBY J:   Yes.  Could we deal with that point first and get it out of the way if we possibly can?  Why would you want to reopen that cost order?  Mr Aquilina, who if he had the funds might well cause a lot of fuss against your case as submitting to the orders and just wants to defend his position as to the cost order made hitherto.

MR McLEISH:   If the Court pleases, the reason for the order in relation to Mr Aquilina appears at page 31 of the application book in the reasons of his Honour Justice Harper.  His Honour’s reasoning in determining costs of the counterclaim was that the parties other than Mr Aquilina could have taken the step to bring the proceeding to an end much earlier.  That appears at about lines 18 to 22.

KIRBY J:   Really, I never thought I would be sitting here in the High Court of Australia dealing with a matter of this kind.

MR McLEISH:   Not at all, your Honour, therefore on the applicant’s side this is a merely consequential order and there is no independent reason for challenging the decision as to costs.  It is simply a consequential order that the third defendant must pay Mr Aquilina’s costs.  The trial judge did not order the payment of other costs because the steps could have been taken earlier.  So the applicants are not here saying that there is a special leave point at all in relation to the costs.  Simply that it is a consequence of dismissing the counterclaim.

KIRBY J:   Yes, but if you were granted special leave by this Court, would you be seeking in this Court to disturb that order on page 31, Justice Harper’s reasons?

MR McLEISH:   Only insofar as it is consequential of a dismissal of the counterclaim.

KIRBY J:   Look, answer the question.  Would you be seeking in this Court to disturb that order?

MR McLEISH:   Your Honour, I would have to get instructions about that.  As the papers stand at present, we seek an order reinstating the counterclaim and the order that the third defendant pay the – one of the respondents to counterclaims – defendant’s counterclaims orders ‑ ‑ ‑

KIRBY J:   I see.  You had better proceed with your other matters in reply.

MR McLEISH:   If your Honour pleases.

MR MERRALLS:   I do not think there is anything that I wish to say in reply that I have not said before your Honours.

KIRBY J:   Yes, very well.  We will take a few minutes to consider the course that we take in this case.

MR MERRALLS:   I am sorry, your Honours, we have some instructions about the costs.

KIRBY J:   You have instructions or you are getting them?

MR MERRALLS:   No, we have obtained them, I think.  I am instructed that we would not seek to upset the costs order.

KIRBY J:   Yes, very well.  Well, we will adjourn briefly to consider what we will do.

AT 10.40 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.46 AM:

KIRBY J:   The late Peter Rand died on 4 October 1997.  On 27 August 1997 he executed a deed of trust.  By that deed, the deceased irrevocably declared that he held specified property for identified beneficiaries and agreed to transfer the property to the beneficiaries on request.  However, the deed was expressly stated to take effect as from the “commencement day”.

In the Supreme Court of Victoria Justice Harper found that the nomination of the “commencement day” in the deed of trust was intractable and had to be given effect.  By a majority the Court of Appeal, Justices Neave and Redlich, President Maxwell dissenting, upheld his Honour’s orders and dismissed the appeal.

Although the arguments for the immediate operation of the deed of trust derived some support from the recitals and the extrinsic circumstances, we are not convinced that the actual orders of the Court of Appeal are attended by such doubt that, if special leave were granted, an appeal would enjoy reasonable prospects of success. 

The appointment of a commencement date was deliberate and there are repeated references in the text to the “commencement day”.  It is not unknown in the cases for persons facing the prospect of death to prevaricate and change their minds as to their dispositions.  The view adopted by the primary judge and the majority of the Court of Appeal appears the better one given the language of the operative provisions of the deed of trust. 

The application must therefore be dismissed and the applicants must pay the respondents’ costs.  In light of the disposition of the primary application it is not necessary for this Court to consider separately the costs orders favouring the fourth respondent.

AT 10.48 AM THE MATTER WAS CONCLUDED