Perpetual Trustees WA Ltd as Executor of the Estate of Henry James Darvell v Darvell

[2001] WASC 123 (S)

PERPETUAL TRUSTEES WA LTD as Executor of the Estate of HENRY JAMES DARVELL -v- DARVELL & ORS [2001] WASC 123 (S)

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2001] WASC 123 (S)
Case No:	CIV:1448/2000	Heard:	14 MARCH 2001
Coram:	WHEELER J	Delivered:	18/05/01
Supplementary Delivered:	24/08/01
No of pages:	4	Judgment Part:	1 of 1
Result:	Plaintiff's costs to be paid out of estate
Category:	B
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Parties:	PERPETUAL TRUSTEES WA LTD as Executor of the Estate of HENRY JAMES DARVELL MARION FAITH DARVELL EDITH MARY DARVELL as Executor of the Estate of ANTHONY JOHN DARVELL DOREEN DAPHNE DARVELL PATRICIA JUNE SLIGHT
Catchwords:	Costs Recovery of Trustee's costs Loan secured against sole asset of trust Turns on own facts
Legislation:	Rules of the Supreme Court, O 66 r 9(2)
Case References:	Nil Nil

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : PERPETUAL TRUSTEES WA LTD as Executor of the Estate of HENRY JAMES DARVELL -v- DARVELL & ORS [2001] WASC 123 (S) CORAM : WHEELER J HEARD : 14 MARCH 2001 DELIVERED : 18 MAY 2001 SUPPLEMENTARY
DECISION : 24 AUGUST 2001 FILE NO/S : CIV 1448 of 2000 BETWEEN : PERPETUAL TRUSTEES WA LTD as Executor of the Estate of HENRY JAMES DARVELL

Plaintiff

AND

MARION FAITH DARVELL
First Defendant

EDITH MARY DARVELL as Executor of the Estate of ANTHONY JOHN DARVELL
Second Defendant

DOREEN DAPHNE DARVELL
Third Defendant

PATRICIA JUNE SLIGHT
Fourth Defendant

(Page 2)

Catchwords:

Costs - Recovery of Trustee's costs - Loan secured against sole asset of trust - Turns on own facts

Legislation:

Rules of the Supreme Court, O 66 r 9(2)

Result:

Plaintiff's costs to be paid out of estate

Category: B

Representation:

Counsel:

Plaintiff : Ms M R Bloch
First Defendant : Mr S M Standing
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : No appearance

Solicitors:

Plaintiff : M R Bloch
First Defendant : Freehills
Second Defendant : Muries Lawyers
Third Defendant : Muries Lawyers
Fourth Defendant : Muries Lawyers

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Nil

(Page 3)

1 WHEELER J: On 18 May 2001, for reasons which I then published, I gave certain directions in the administration of the trust settled by the will of Mr Henry James Darvell. I then indicated a preliminary view as to costs, but granted the parties leave to make written submissions. The first defendant has made submissions in relation to costs; the plaintiff has made submissions; and the first defendant has made submissions in reply.

2 The starting point in relation to costs appears to be O 66 r 9(2) of the Rules of the Supreme Court which provides that unless the court otherwise orders, the trustee is entitled to its costs out of the trust property. The court may only otherwise order if the trustee has "acted unreasonably, or … has in substance acted for his own benefit rather than the benefit of the fund".

3 It is my view that the trustee has not in this case acted unreasonably. I reached certain conclusions about the proper construction of the will of Mr Darvell without a great deal of difficulty; however, there were questions which arose and which it was appropriate for the trustee to refer to the court for advice. If one were looking for the "true cause" of the application, I remain of the view, which I indicated in my earlier reasons, that the application was made necessary by the failure of the first defendant to comply with the obligations which that will imposed on her. It is therefore appropriate that the plaintiff's costs be paid out of the trust asset.

4 Because the only asset is the property occupied by the first defendant, the appropriate order is that payment of the plaintiff's costs be raised by way of a loan secured against the trust asset and payable on the expiration of the first defendant's life tenancy. Not without hesitation, despite the view which I indicated in relation to the failure of the first defendant to comply with her obligations, it appears to me that the answering of the questions referred to by the plaintiff was in the interests of all of the remaindermen (including the first defendant), as the purpose was to elucidate the respective rights and obligations of all of the parties. In that case, it seems to me appropriate that the costs of repayment of the loan should be borne equally out of all of the defendants' interests in the capital of the estate.

5 In the usual course, the trustee is entitled to costs on an indemnity basis. It appears from the commentary in "Seaman", that the usual order in such a case is that there be taxation of the trustee's costs on a solicitor and own client basis, and I would so order.

(Page 4)

6 The order will therefore be that the costs of the plaintiff, taxed on a solicitor and own client basis, be paid out of the capital of the estate, to be effected by a loan secured against the estate and repayable equally out of all of the defendants' interests in the capital of the estate on the expiration of the first defendant's life tenancy.