Harrison v Cox (No. 2)

Case [2025] QSC 205

SUPREME COURT OF QUEENSLAND

CITATION:

Harrison v Cox (No. 2)  [2025] QSC 205

PARTIES:

RENEE JOSEPHINE HARRISON

(applicant)
v

STEVEN PAUL COX AND SHARON MAREE TURNER AS PERSONAL REPRESENTATIVES OF THE ESTATE OF RAYMOND PAUNOVIC, DECEASED

(first respondents)

AND

STEVEN PAUL COX

(second respondent)

AND

SHARON MAREE TURNER

(third respondent)

FILE NO/S:

BS 14021 of 2024

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

25 August 2025

DELIVERED AT:

Brisbane

HEARING DATE:

Decided on written submissions without further oral argument

JUDGE:

Davis J

ORDER:

1.    The applicant’s costs of the proceeding (save as to the costs that are recovered by the applicant from the second and third respondents that are the subject of the order of Davis J made on 7 November 2024) be paid by the estate of the late Raymond Paunovic (Estate) as assessed on the indemnity basis;

2.    The respondents not be indemnified or reimbursed from the Estate for:

a.       their costs of the proceeding; or

b.       the costs that are the subject of the order of Davis J made on 7 November 2024;

3.    The second respondent and third respondent reimburse the estate in an amount commensurate to the applicant’s costs of the proceeding (save as to the costs that are the subject of the order of Davis J made on 7 November 2024) as assessed on the standard basis, but that payment be made from the second and third respondents’ share of the residue with liberty to apply to the Estate in the event that the costs exceed the sum to which the respondents are entitled under the Estate.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – COSTS OUT OF FUND OR PROPERTY – DISENTITLING CONDUCT BY PERSONAL REPRESENTATIVE, TRUSTEE ETC – where the respondents were executors and trustees of a deceased estate – where the applicant was a beneficiary – where the respondents were also beneficiaries – where the applicant gave notice of challenge to the validity of the will – where the applicant filed application for family provision – where the respondents transferred the major asset of the estate to themselves beneficially – where the applicant sought the removal of the respondents as executors and trustees – where the applicant offered not to seek costs against the respondents if they resigned as executors and trustees – where the respondents resisted the application – where the application was successful and the respondents were removed – whether the applicant should have her costs on an indemnity basis from the estate – whether the respondents should personally reimburse the estate of those costs – whether the respondents should lose their right of indemnity against the estate

Australian Securities and Investments Commission v Letten (No 17) (2011) 286 ALR 346; [2011] 87 ACSR 155, followed
Harrison v Cox [2024] QSC 311, related

COUNSEL:

A B Fraser KC made written submissions on behalf of the applicant
The respondents made written submission on their own behalf

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Details
AGLC
Harrison v Cox (No. 2) [2025] QSC 205
Case
[2025] QSC 205
Decision Date

CaseChat Overview and Summary

In the matter of Harrison v Cox (No. 2), the court was tasked with determining the issue of costs in relation to a family provision application and a challenge to the validity of a will. The case involved Renee Josephine Harrison, the daughter of the deceased Raymond Paunovic, who sought to challenge the validity of her father's will and to obtain family provision. The respondents, Stephen Paul Cox and Sharon Maree Turner, were named as executors and trustees in the will and were also beneficiaries. They transferred the principal estate asset, a house, to themselves personally, in breach of their duties as executors and trustees.

The legal issues before the court were whether Ms Harrison should have her costs on an indemnity basis from the estate, whether Mr Cox and Ms Turner should personally reimburse the estate of those costs, and whether Mr Cox and Ms Turner should lose their right of indemnity against the estate. The court found that Ms Harrison's application was reasonably made and that she should be indemnified from the estate for her costs. The court also found that Mr Cox and Ms Turner should lose their right of indemnity from the estate both for their costs of the proceedings and the costs ordered against them on 7 November 2024. The court held that the respondents should pay Ms Harrison's costs of the application by reimbursing the estate, as the application was necessary because, in breach of trust, the primary asset of the estate was transferred to Mr Cox and Ms Turner personally.

The court's reasoning was that Mr Cox and Ms Turner, in their submission, explained that they acted on legal advice and always acted bona fide. However, the court found that they were in serious breach of their obligations as trustees and executors of the estate. They did not accept the open offer to resign as executors and trustees and facilitate the appointment of Ms Prudence Poole. The application for their removal was resisted by them. The court held that the application for their removal as trustees and executors ought not to have been resisted, and the costs of the respondents were not reasonably incurred in the execution of the trust. Those costs could easily have been avoided by adopting the course offered in the open correspondence.

The orders of the court were that Ms Harrison's costs of the proceeding (save as to the costs that are recovered by the applicant from the second and third respondents that are the subject of the order of Davis J made on 7 November 2024) be paid by the estate of the late Raymond Paunovic as assessed on the indemnity basis; that the respondents not be indemnified or reimbursed from the estate for their costs of the proceeding or the costs that are the subject of the order of Davis J made on 7 November 2024; and that the second respondent and third respondent reimburse the estate in an amount commensurate to the applicant's costs of the proceeding (save as to the costs that are the subject of the order of Davis J made on 7 November 2024) as assessed on the standard basis, but that payment be made from the second and third respondents' share of the residue with liberty to apply to the Estate in the event that the costs exceed the sum to which the respondents are entitled under the Estate.

Orders

Orders of the court

1. The applicant’s costs of the proceeding (save as to the costs that are recovered by the applicant from the second and third respondents that are the subject of the order of Davis J made on 7 November 2024) be paid by the estate of the late Raymond Paunovic (Estate) as assessed on the indemnity basis;

2. The respondents not be indemnified or reimbursed from the Estate for:

a. their costs of the proceeding; or

b. the costs that are the subject of the order of Davis J made on 7 November 2024;

3. The second respondent and third respondent reimburse the estate in an amount commensurate to the applicant’s costs of the proceeding (save as to the costs that are the subject of the order of Davis J made on 7 November 2024) as assessed on the standard basis, but that payment be made from the second and third respondents’ share of the residue with liberty to apply to the Estate in the event that the costs exceed the sum to which the respondents are entitled under the Estate.

Background

Background to the litigation

This is the consideration of the issue of costs in relation to an application determined by orders made on each of 7 November 2024 and 10 December 2024.[1] [1]Harrison v Cox [2024] QSC 311.Background The dispute concerns the administration of the estate of Raymond Paunovic who died on 5 October 2023, leaving a will. The second and third respondents, Stephen Paul Cox and Sharon Maree Turner, were named as executors and trustees in the will.[2] Probate was granted to them on 12 March 2024. The applicant, Renee Josephine Harrison, is the daughter of Mr Paunovic.[2]They are jointly named in that capacity as the first respondents. Mr Paunovic left a house at Laidley estimated to be worth between $540,000 and $560,000. That is the principal estate asset. There is little else. Mr Paunovic’s will is a simple one. It provides for his assets (in practical terms, the house) to be sold, all expenses paid and the residue to be divided in equal shares between Mr Cox, Ms Turner, and Ms Harrison. Mr Cox and Ms Turner were placed on notice that Ms Harrison disputed the validity of the will. Ms Harrison also sought relief by way of family provision pursuant to Part IV of the Succession Act 1981 (Qld). An application was filed by her in early July 2024. Mr Cox and Ms Turner transferred the house to themselves as trustees and executors in July 2024 and then to themselves beneficially by transfer registered in September 2024. The plan, apparently, was to acquire the house from the estate and then pay Ms Harrison her share. Notwithstanding the transfer of the house, no money was forthcoming to the estate. The transfer was effected in the face of Ms Harrison’s pending family provision application. Ms Harrison objected to the transfer of the house. Her solicitors wrote to the solicitors then acting for Mr Turner and Ms Cox. In what was styled an “open offer of compromise”, Mr Cox and Ms Turner were advised of Ms Harrison’s intention to have them removed as executors and trustees in favour of the appointment of Ms Prudence Poole as administrator. Ms Poole is, as the open letter explained, an accredited specialist in succession law. The letter of offer went on to say that if Mr Cox and Ms Turner consented to the application no order as to costs would be sought against them personally. That offer was not accepted and the threatened application was made. On 7 November 2024, the application was heard and on that day the following orders were made:“1. Steven Paul Cox and Sharon Maree Turner shall not transfer, sell, lease, encumber or in any other way create any interest in or dispose of any interest in the property of 209 Lakes Drive, Laidley Heights until further order.2. Steven Paul Cox and Sharon Maree Turner pay the applicant’s costs of the application limited to the costs of the appearance today.3. Judgment reserved on:(a)The final relief sought on the application.(b)Save for the costs order made, the question of costs of the application.” On 10 December 2024, declarations were made in these terms:“1. Pursuant to section 8(1) of the Trusts Act 1973 (Qld), it is declared that:(a) the Transfer of the real property located at 209 Lakes Drive, Laidley Heights, Queensland (more particularly described as Lot 20 on Registered Plan 854930) (Property) to the Second Respondent and Third Respondent as joint tenants by transfer registered on 13 September 2024 (being dealing number 723533870) (Transfer) was made in breach of trust; (b) the Second Respondent and Third Respondent hold their legal and beneficial interest in the Property on constructive trust for the Administrator (as that term is defined below); and(c) the First Respondents are not entitled to be indemnified or reimbursed from the estate of Raymond Paunovic (Deceased) in respect of their costs and disbursements of and relating to the Transfer.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Mr Cox and Ms Turner, in their submission, explain that they acted on legal advice and always acted bona fide. They say they were in a position to purchase the house and finalise the estate from funds borrowed by mortgage. They say that they have little money and struggle financially. They both have medical conditions and high medical expenses. They resist any costs order where they are personally liable.Consideration If Mr Turner and Ms Cox received legal advice to transfer the property to themselves beneficially in the face of not only an indication of a possible challenge to the validity of the will, but also in the face of an application for family provision, then they may have some legitimate complaint against their solicitors. However, there may be reasons (which escape me at present) justifying such advice. For reasons explained in the primary judgment, Mr Cox and Ms Turner were in serious breach of their obligations as trustees and executors of the estate. They did not accept the open offer to resign as executors and trustees and facilitate the appointment of Ms Poole. The application for their removal was resisted by them. Ms Harrison’s claim for her costs to be paid on an indemnity basis from the estate ought to be granted. The application was reasonably made by Ms Harrison. She ought to be indemnified from the estate. The respondents should lose their right of indemnity from the estate both for their costs of the proceedings and the costs ordered against them on 7 November 2024. In circumstances where they had transferred the property beneficially to themselves in the face of a potential challenge to the will and an application by Ms Harrison for family provision, the application for their removal as trustees and executors ought not to have been resisted. The costs of the respondents were not reasonably incurred in the execution of the trust. Those costs could easily have been avoided by adopting the course offered in the open correspondence.[3] [3]Australian Securities and Investments Commission v Letten (No 17) (2011) 286 ALR 346 at [16]-[18]. Mr Cox and Ms Turner should pay Ms Harrison’s costs of the application by reimbursing the estate. The application was necessary because, in breach of trust the primary asset of the estate was transferred to Mr Cox and Ms Turner personally. As I have already explained, the costs of all parties could have been avoided by Mr Cox and Ms Turner resigning, voluntarily, from their positions as trustees and executors of the estate. At present, Mr Cox and Ms Turner jointly have a two-third interest in the residue of the estate. That interest may be affected and diminished if Ms Harrison succeeds in her family provision application. No practical disadvantage will be suffered by the estate if the costs ordered to be paid by Mr Cox and Ms Turner are ordered to be satisfied from their share in the residue. In light of the financial and other difficulties faced by Mr Cox and Ms Turner, hardship will be caused if they have to raise the money.