Lawrence v Cox

[2005] NSWCA 307

CITATION:	Lawrence v Cox & Ors [2005] NSWCA 307
HEARING DATE(S):	2 September 2005
JUDGMENT DATE:	2 September 2005
JUDGMENT OF:	Handley JA at 1, 19; Tobias JA at 18
DECISION:	Summons for leave to appeal dismissed with costs.

CATCHWORDS:	TRUSTS - costs of trustee - indemnity disallowed - no question of principle - ND
CASES CITED:	Re Media Entertainment and Arts Alliance v Theatre Managers Association Ex Parte Hoyts Corporation [1994] 68 ALJR 179
PARTIES:	Wayne Lawrence (Claimant) Alison Cox (First Opponent) Julie Cox (Second Opponent) Stewart Cox (Third Opponent) Coral Majorie Hatzantonis (Fourth Opponent) Roma Rachael Lawrence (Fifth Opponent)
FILE NUMBER(S):	CA 41124 of 2004
COUNSEL:	B M Zipser (Claimant) M S Willmott SC (Fourth and Fifth Opponent)
SOLICITORS:	N/A (Claimant) Ramensky Lawyers (Fourth and Fifth Opponent)

LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	SC 1898 of 2003 SC 3324 of 2003
LOWER COURT JUDICIAL OFFICER:	Bryson J

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 41124 of 2004

HANDLEY JA
TOBIAS JA

2 SEPTEMBER 2005
WAYNE LAWRENCE v ALISON COX & ORS
Judgment

1 HANDLEY JA : Mr Wayne Lawrence, the executor of the last will of the late James Lawrence, seeks leave to appeal from costs orders made by Bryson J on 29 November 2004. His Honour settled a draft plan of distribution for the winding up of the estate and made orders dealing with the costs of proceedings to enforce a proper administration commenced some ten years or so after the grant of probate.

2 The summons for leave to appeal, filed on 16 March 2005, followed an earlier holding summons filed within time after the judge’s costs orders of 29 November. The summons, the draft notice of appeal, and the written submissions lodged in support challenge the orders made by the judge which directed that the costs ordered in favour of the remaining opponents, Coral Marjorie Hatzantonis and Roma Rachel Lawrence, be paid by the executor personally and that he not be entitled to reimburse himself in respect of those costs out of the assets of the estate. At that stage there was no challenge to the orders for costs made in favour of the remaining opponents or the other three opponents. The challenge was to the orders of the judge, which directed that the executor be not entitled to reimbursement for those costs out of the estate.

3 It became apparent during argument that the plan of distribution of the estate which the judge settled on 29 November 2004, which had been carried into effect under the order of the court, was based on the costs orders now under challenge. It also became clear that there are no longer any assets of the estate in the hands of the executor to which he could resort to reimburse himself for the costs ordered to be paid to the remaining opponents. The orders sought would therefore be futile and a court endeavours to avoid making futile orders.

4 When this state of affairs became apparent during argument, Mr Zipser, appearing for the claimant today, who did not prepare the documents or the original submissions filed on behalf of the claimant, sought and was granted a short adjournment to obtain instructions. Following the adjournment, Mr Zipser sought leave to amend the summons for leave to appeal and the draft notice of appeal in order to attack the orders for costs in favour of the remaining opponents. The proposed attack would not lead to futile orders. The Judge in his reasons for judgment of 29 November assessed the balance of success and failure for these opponents as against the executor, and the other opponents as against the executor, and said at p 4 of his reasons that in his view the success of the plaintiffs should lead to the ordinary consequence of an order for costs.

5 There is no reason to doubt the propriety of the orders that the plaintiffs in the Equity Division receive their costs. The question really is, and the only question is, whether those costs should have been paid out of the estate or should be borne by the executor personally. Since the orders for costs are not open to reasonable objection, there would be no point in granting leave to amend to enable the claimant to attack them. The court therefore refused leave to amend. What remains is an attack on the order which the judge made directing that the executor be not entitled to indemnify himself out of the estate.

6 In my judgment there is no reason to doubt the propriety of that order in the light of the findings made by the judge in his reasons for judgment on the costs question of 29 November. He pointed out that the executor’s accounts filed on 24 November 2003 were very much open to dispute. He pointed out that in dealing with the objections to those accounts and to the subsequent plans for distribution, the plaintiffs enjoyed substantial success and obtained favourable rulings on a number of objections to the receipts and the accounts. The judge said:
“this is not the way things should be. Executors and trustees should have accounts ready, whereas it was necessary to make an order for their production and time was taken on them, and they included an undue number of highly disputable steps”.
7 He then reviewed the litigation and said:
“at each stage this has been a combative process. The documents the executor has brought forward have been unduly difficult to understand and unduly open to objection and debate. This is not the way almost all estate business ... should be resolved and is resolved”.

8 I should point out that Mr Zipser informed the court at the commencement of the proceedings this morning that the claimant had settled all matters with the other three opponents, and we were given a copy of the terms of settlement.

9 Mr Zipser’s first point was that the judge in his reasons for judgment of 29 November did not refer to the relevant legal principles under which executors are prima facie entitled to be indemnified for costs properly incurred by them in the administration of the estate, and can only be deprived of this entitlement in accordance with principles codified in the rules of court. It is true that his Honour does not refer to those principles explicitly in his reasons for judgment of 29 November but he did so in his reasons for judgment of 24 February in which he made other costs orders. He then said:
“I am mindful that in the ordinary course an executor is entitled to an indemnity in respect of costs incurred in the administration of estate affairs. This entitlement is expressed in Pt 52A r 42 of the Supreme Court rules. However, his conduct has disentitled him to that protection in the present case”.

10 His Honour made orders that day that the costs incurred in obtaining the orders of 27 May 2003 be borne by the executor personally and not be charged against the estate.

11 Mr Zipser’s second point was that the judge did not properly consider the claims on which the executor lost in February, July and November 2004. We have been taken to his Honour’s reasons for judgment and to the transcript, but in my judgment there is no reason to doubt that his Honour properly considered the history of the litigation and the nature of the disputed claims on which the plaintiffs and the executor succeeded. There is no reason to doubt the correctness of the judgment on costs of 29 November 2004.

12 In any event, in view of the distribution of the estate under the orders of the judge made on 29 November 2004, there are no longer any assets of the estate in the hands of the executor to which he can resort to indemnify himself against the costs orders in favour of the remaining opponents. The proceedings have therefore become futile. There never has been any challenge to the orders for distribution in favour of the beneficiaries, including the executor, which were settled by the judge on 29 November. Moneys having been paid out to the beneficiaries pursuant to orders of the court, which have not been challenged to date, this Court would not consider allowing a challenge at this stage to those orders for the purpose of attempting to claw back from the beneficiaries moneys they received with every expectation that they could be retained, spent or invested as they saw fit.

13 The remaining grounds of appeal relate to the fact that Mr Lawrence chose to represent himself on 29 November 2004. This was not due to impecuniosity and he had been represented by a solicitor on 18 May 2004, 11 June 2004 and 2 July 2004, and on earlier occasions. The judge questioned Mr Lawrence on 29 November to ascertain that he was self represented by choice. The written submissions on behalf of the claimant assert a denial of natural justice in that the judge should have warned the executor that he faced orders for costs being made against him for which he would not be entitled to reimbursement out of the estate.

14 There is no substance in these complaints. On 24 February 2004 in his reasons for judgment and formal orders, Bryson J had ordered costs in favour of the plaintiffs and had directed that the executor pay those costs personally and not reimburse himself out of the estate. The executor was therefore on notice that such orders might be made on 29 November 2004. In those circumstances the judge was not bound to do more than he did, which was to ascertain that he was self-represented by choice and not through some misadventure or accident.

15 The legal principles are not in doubt and were stated by the High Court comprising Mason CJ and Brennan, Deane, Dawson and Gaudron JJ in Re Media Entertainment and Arts Alliance v Theatre Managers Association Ex Parte Hoyts Corporation [1994] 68 ALJR 179 at 185:
“Outside a criminal trial there is no requirement that a judge...do more than afford a party a reasonable opportunity to present his or her case. In particular there is no requirement to point to arguments or evidence that may assist in making the case, a fortiori when the evidence is not tendered and is not relied on.”

16 The judge therefore was under no obligation to advise or suggest to the executor that he seek an adjournment in order to be represented, and his function was to hear the argument that the executor wished to present and which he did present, and to rule on it in accordance with proper principles.

17 I would therefore propose that the summons for leave to appeal be dismissed with costs.

18 TOBIAS JA : I agree.

19 HANDLEY JA : That is the order of the court.
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