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Highland v Labraga (No 3)

Highland v Labraga (No 3)

Case [2006] NSWSC 871 31 August 2006

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CITATION: Highland v Labraga (No 3) [2006] NSWSC 871

HEARING DATE(S): 02/05/06

JUDGMENT DATE :
31 August 2006

JURISDICTION: Equity Division

JUDGMENT OF: Young CJ in Eq

DECISION: Motion to reopen costs order dismissed.

CATCHWORDS: PROCEDURE [585]- Costs- Proceedings to remove executor- Commenced by principal object of discretionary trust where discretionary trust was beneficiary under the will- Proceedings amended- Order made that first defendant pay whole costs of suit- Application made under slip rule that no order for costs should be made before amendment or at all as after amendment, first defendant filed submitting appearance- There is a guideline that normally a submitting party is immune from any liability for costs, however it is significant here that this litigation was part of a complex set of proceedings heard together- First defendant took a more active role than is usual for a submitting appearance- The order that the first defendant pay the plaintiffs' costs should not be varied.

LEGISLATION CITED: Uniform Civil Procedure Act 2005, Pt 36 r17

CASES CITED: Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47
Sakr v Mercantile Mutual Insurance (Australia) Ltd [2000] NSWCA 266

PARTIES: Penelope Louise Highland (P1)
Philip Edward Pomfret (P2)
Julio Cesar Labraga (D1)
Nowhere In Particular Pty Limited (D2)

FILE NUMBER(S): SC 2466/05

COUNSEL: G K Burton SC (P1)
M Ashhurst (D1)

SOLICITORS: Dibbs Abbott Stillman (P1)
Kemp Strang (D1)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Thursday 31 August 2006

2466/05 – HIGHLAND v LABRAGA (NO 3)

JUDGMENT

1 HIS HONOUR: The background to this further judgment is that prior to March 2003, three gentlemen, sometimes through family trusts controlled by them, held equal interests in a group of companies. Each of the three gentlemen had particular skills. None of them had the same skills, but their skills were complementary.

2 In March 2003, one of them, Richard Highland, died and he made a will naming the other two, Messrs Labraga and Pomfret as his executors, and left all his property to his discretionary trust.

3 Messrs Pomfret and Labraga fell out and there were a number of pieces of litigation in which they sought remedies from the court which would put one of them in a better position with respect to the former joint enterprise.

4 The widow of Mr Highland, Penelope Louise Highland, was not happy with what was going on and she commenced these proceedings to remove Mr Labraga as an executor of the estate: she was happy with Mr Pomfret.

5 The proceedings were amended by order of Barrett J on 6 June 2005 by adding Mr Pomfret as a co-plaintiff and seeking an order that the grant be revoked and a fresh grant made.

6 I believe the first serious judgment I gave in these various proceedings was Exception Holdings Pty Ltd v Albarran [2005] NSWSC 677 delivered on 30 June 2005 after a hearing that day, then there was Exception Holdings Pty Ltd v Albarran…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Highland v Labraga (No 3)

Details

AGLC: Highland v Labraga (No 3) [2006] NSWSC 871
Case: [2006] NSWSC 871
Decision Date: 31 August 2006

CaseChat Overview and Summary

In the case of Highland v Labraga (No 3), the plaintiff, Highland, commenced proceedings against Labraga, the executor of a will, to remove Labraga as executor. The case involved complex litigation concerning the beneficiaries of a discretionary trust, which was itself a beneficiary under the will. The proceedings were amended to reflect this complexity, and an order was made that Labraga should pay the whole costs of the suit. Labraga subsequently applied for the order for costs to be set aside, arguing that the order should not have been made before the amendment or at all, as after the amendment, Labraga filed a submitting appearance. The court had to determine whether the order for costs should be varied.

The legal issues before the court included the effect of a submitting appearance on the liability for costs in a complex litigation scenario. The guideline is that normally, a party who submits to the jurisdiction of the court is immune from any liability for costs. However, the court had to consider whether Labraga's active role in the litigation, which was more than typically expected of a submitting party, affected this immunity. Additionally, the court had to assess whether the unique nature of the proceedings, being part of a larger set of interconnected cases, warranted a departure from the usual rule regarding costs and submitting appearances.

The court held that the order that Labraga pay the plaintiffs' costs should not be varied. The court recognised that while there is a guideline that a submitting party is usually immune from costs, this was a complex case where Labraga had taken a more active role than usual. However, the court found that this did not warrant a departure from the general rule, particularly given the interconnected nature of the litigation. The court emphasised that the costs order should stand, as it was appropriate given the circumstances of the case.

No further orders were made, and the decision stands as is.

Orders