Orlanski v Spiegel (No 2)
[2015] VSC 709
•9 December 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROBATE LIST
S CI 2015 000730
IN THE MATTER of the Will and Estate of JACOB MOSZKOWICZ, deceased
AND IN THE MATTER of the MOSZKOWICZ FAMILY TRUST NO 2 and the MOSZKOWICZ FAMILY TRUST NO 3
AND IN THE MATTER of an application pursuant to Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2005 for the determination of questions arising in the administration of the said estate and the said trusts
BETWEEN:
| HENRY JOSEPH ORLANSKI (who sues as the Executor of the Will and Estate of JACOB MOSZKOWICZ, deceased) and others (according to the attached schedule) | Plaintiffs |
| v | |
| DINA SPIEGEL and others (according to the attached schedule) | Defendants |
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JUDGE: | Ginnane J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 9 December 2015 |
DATE OF JUDGMENT: | 9 December 2015 |
CASE MAY BE CITED AS: | Orlanski v Spiegel (No 2) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 709 |
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TRUSTS – Discretionary trust – Questions asked by executor – Whether person had assumed office as guardian of trust – Evidence that person had not assumed office – Questions answered accordingly – Supreme Court (General Civil Procedure) Rules 2005 R 54.02.
COSTS – Executor’s proceeding seeking answers to questions concerning estate – Entitlement of beneficiaries to order for legal costs – Fund from which costs to be paid.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr V Ruta | Jack Bock Lawyers |
| For the first and second Defendants | Mr R Boaden | Strongman & Crouch |
| For the third defendant | Mr L Glick QC | SBA Law |
| For the fourth defendant | In person | |
| For the fifth defendant | Mr A J Verspaandonk | HWL Ebsworth Lawyers |
SCHEDULE OF PARTIES
S CI 2015 00730 BETWEEN: HENRY JOSEPH ORLANSKI (who sues as the Executor of the Will and Estate of JACOB MOSZKOWICZ, deceased) Firstnamed Plaintiff - and - JAKEN NOMINEES PTY LTD (ACN 005 107 059) (as Trustee of the Moszkowicz Family Trust No 2) Secondnamed Plaintiff - and - GETEMA PTY LTD (ACN 005 117 591) (as Trustee of the Moszkowicz Family Trust No 3) Thirdnamed Plaintiff - and - DINA SPIEGEL Firstnamed Defendant - and - REBECCA MOSZKOWICZ Secondnamed Defendant - and - RAPHAEL MOSZKOWICZ Thirdnamed Defendant - and - JULIA MOSZKOWICZ Fourthnamed Defendant - and - ESTHER FELDMAN Fifthnamed Defendant
HIS HONOUR:
I delivered judgment in this matter on 25 November 2015 (‘the first judgment’).[1] However, some issues remained for determination.
[1]Orlanksi v Spiegel [2015] VSC 662.
Was Ms Eschell a guardian or appointor of the Moskowicz Family Trust No 3?
I deferred answering questions 8 and 11 to 13, which were asked by the plaintiffs pursuant to Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2005, because the question of whether Ms Gina Eschell had taken up office as a guardian and appointor under the Moskowicz Family Trust No 3 (‘the No 3 Trust’) was uncertain following the filing of an affidavit by the solicitor for the first and second defendants containing an account of his conversation with Ms Eschell, who lives in Israel. I gave the parties the opportunity of providing further evidence and submissions on that matter. The first and second defendants filed an affidavit by Ms Eschell that, in essence, stated that she had never become an appointor or guardian. No party submitted that her assertions should not be accepted. I accept the contents of Ms Eschell’s affidavit. I am satisfied that, in accordance with the principles of law and equity that I discussed in the first judgment, that Ms Eschell did not assume the position of guardian and appointor of the No 3 Trust. As a result, her consent was not required to any of the relevant transactions that were connected with the questions concerning the No 3 Trust. I can therefore answer those questions. The parties have agreed, or not opposed, the answers to the questions that I have set out below.
The answers to questions 8, 11, 12 and 13
Question 8
From 2 November 2009, was the Trust Instrument that governed the Moszkowicz Family Trust No 3 the:
(a) Trust Deed dated 1 July 1979; or
(b) Trust Deed dated 11 June 1975; or
(c) Trust Deed dated 10 December 1981; or
(d)Annexure to the Deed of Confirmation dated 2 November 2009 in respect of the Moszkowicz Family Trust No 3; or
(e) some other Trust Instrument and, if so, what other Trust Instrument?
Answer: (d) Annexure to the Deed of Confirmation dated 2 November 2009 in respect of the Moskowicz Family Trust No 3.
Question 11
If yes to any part of Question 10, was the Declaration by Trustee Vesting Assets of Trust Fund made 7 May 2010 and executed by the Third Plaintiff (‘the Getema Declaration’) valid and effectual to vest the real estate assets therein specified in the deceased notwithstanding that the Getema Declaration may have referred to the wrong Deed of Settlement in Recital A thereto?
Answer: Yes.
Question 12
If yes to Question 11, may the First Plaintiff as the legal personal representative of the Deceased lawfully lodge with the Land Titles Office an Instrument of Transfer executed on or about 10 May 2010 whereby the Third Plaintiff purported to transfer the real estate therein specified to the Deceased?
Answer: No.
Question 13
If yes to any part of Question 10 but no to question 12, may the First Plaintiff, in his capacity as executor of the Will and the estate of the Deceased, request the trustee to execute a transfer in registrable form of the real estate assets specified in the Getema Declaration?
Answer: Yes.
In respect of question 12, some discussion occurred about the effect of the incorrect reference to the Malvern property contained in the vesting declaration of the property of the No 2 Trust and the connected error in the description of the property in the transfer of property that related to the No 3 Trust. I am satisfied, as indeed counsel accepted, that that the Malvern property was included in error.
Costs
The plaintiffs commenced this proceeding seeking answers to questions concerning the administration of the estate of Jacob Moszkowicz. The first plaintiff, the executor, in particular, was facing conflicting demands as to the actions that he should take. It was appropriate for him to bring proceedings and he is entitled to his costs for doing so.
The other parties who participated in the hearing were represented by three sets of counsel, and Ms Julia Moszkowicz appeared on her own behalf. Counsel represented the first and second defendants, the third defendant and the fifth defendant.
Where executors or trustees bring an application seeking the direction of the Court in an administration proceeding, their costs and the costs of all necessary parties are usually paid from the relevant fund, on the basis that they were necessarily incurred for the benefit of the estate or the trust.[2] The Court retains a discretion whether the other parties who appear and are represented in such a proceeding should receive their costs. An exception to that general principle is where the proceeding is essentially adversarial. In that case, costs may follow the event. The fifth defendant submitted that this was such a case.
[2]Murdocca v Murdocca (No 2) [2002] NSWSC 505 [71].
The fifth defendant submitted that the first to third defendants’ positions were essentially adversarial and that they had suggested answers to critical questions that were the same as those advanced by the plaintiffs. She submitted that the positions adopted by the first to third defendants were inimical to her rights and interests and those of the fourth defendant, Ms Moszkowicz. The Court had accepted her submission that the Deeds of Confirmation could be characterised as valid amendments to the constituting Deeds of Trusts.
The fifth defendant made further submissions about whether the consent of all guardians was necessary to give effect to the Getema Declaration. Again the fifth defendants’ submissions were accepted, at least as to the law. As I have mentioned, I am satisfied that Ms Eschell’s consent was not required because she had not assumed office as a guardian or appointor. The fifth defendant pointed out that her interests and those of Ms Moszkowicz substantially coincided and that only she, and not the fourth defendant, was legally represented, thus avoiding duplication of costs. She submitted that the other defendants had duplicated costs and that the position taken by the first, second and third defendants did not justify the court ordering costs in their favour. She had succeeded on a number of issues or was the only real contradictor and should receive her costs.
Consideration of costs submissions
I will first mention the position of the third defendant, who is an adult suffering from a significant disability and who requires constant care. That circumstance makes it appropriate that he had separate representation. His need for long term care made separate representation appropriate, if not essential.
In respect of the first and second defendants, their counsel made substantial submissions that addressed all the questions to which the plaintiff executor required answers. There were significant differences between their submissions and those of the fifth defendant. The Court was assisted by the analysis of those differences in submissions. It was appropriate for the first and second defendants to be represented and to recover their costs from the trusts.
The fifth defendant, whose submissions were adopted by the fourth defendant, was entitled to be separately represented and to recover her costs from the trusts.
It was proposed by all parties, other than the fourth and fifth defendants, that the costs of all parties on a standard basis be paid or retained out of both trusts on a joint and several basis, and secondly as between the two trusts the burden of those costs be shared equally. The fourth and fifth defendants accepted that if the Court was disposed to award the first, second and third defendants their costs, then the proposed orders were in an appropriate form. I accept that it is appropriate that costs should come out of the trusts because the questions posed by the plaintiffs concerned the operation of the trusts. My only concern about the proposed orders was that it may be that the Moskowicz Family Trust No 2 has no assets remaining and therefore all of the costs would, in effect, be paid out of the No 3 Trust. The third defendant submitted that the Court should not be concerned about that, and that in any event, because the trusts were discretionary trusts it was not possible to ascertain any particular beneficiary who might be disadvantaged by such an outcome.
I accept that submission and I will make orders in the terms proposed.
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