Powell v Bowen
[2015] WASC 44
•10 FEBRUARY 2015
POWELL -v- BOWEN [2015] WASC 44
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 44 | |
| Case No: | CIV:2683/2011 | 21 JANUARY 2015 | |
| Coram: | MASTER SANDERSON | 10/02/15 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Costs payable on solicitor/client basis | ||
| B | |||
| PDF Version |
| Parties: | MARIA YVONNE POWELL DAMIEN MATTHEW BOWEN as Executor of the Estate of the Late LESLIE WILLIAM LAMB SHERYL ANNE LAMB MARK IAN LAMB THE ROYAL SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS WESTERN AUSTRALIA (INC) RSPCA AUSTRALIA (INC) HELEN LAMB JESSE MARK LAMB RACHEL LEE-ANNE LAMB AMY NICOLE CORKRAN (nee LAMB) JOSHUA CHASE LAMB CHANNELLE SYDNEY LAMB (an infant) by her next friend GUARDIAN AD LITEM JUDIMA LAMB MELANIE WEBBER STEVEN WEBBER NATASHA McKEICH BRADLEY WATTERS GARY WILLIAM LAMB (an incapable person) by his GUARDIAN AD LITEM CHRISTOPHER TURTON |
Catchwords: | Costs Basis upon which costs of an executor of estate are to be paid Turns on own facts |
Legislation: | Inheritance (Family and Dependents Provision) Act 1972 (WA) Legal Profession Act 2008 (WA) |
Case References: | Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels [No 2] [2014] WASC 272 Wood (As Co-Executor and Trustee of the Will of the Deceased) v Wood [No 5] [2015] WASC 28 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
The Estate of LESLIE WILLIAM LAMB late of Annesley House, Rowethorpe, 4-10 Hayman Road, Bentley, Western Australia (dec)
- Plaintiff
AND
DAMIEN MATTHEW BOWEN as Executor of the Estate of the Late LESLIE WILLIAM LAMB
First Defendant
SHERYL ANNE LAMB
Second Defendant
MARK IAN LAMB
Third Defendant
THE ROYAL SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS WESTERN AUSTRALIA (INC)
Fourth Defendant
RSPCA AUSTRALIA (INC)
Fifth Defendant
HELEN LAMB
Sixth Defendant
JESSE MARK LAMB
Seventh Defendant
RACHEL LEE-ANNE LAMB
Eighth Defendant
AMY NICOLE CORKRAN (nee LAMB)
Ninth Defendant
JOSHUA CHASE LAMB
Tenth Defendant
CHANNELLE SYDNEY LAMB (an infant) by her next friend GUARDIAN AD LITEM JUDIMA LAMB
Eleventh Defendant
MELANIE WEBBER
Twelfth Defendant
STEVEN WEBBER
Thirteenth Defendant
NATASHA McKEICH
Fourteenth Defendant
BRADLEY WATTERS
Fifteenth Defendant
GARY WILLIAM LAMB (an incapable person) by his GUARDIAN AD LITEM CHRISTOPHER TURTON
Sixteenth Defendant
Catchwords:
Costs - Basis upon which costs of an executor of estate are to be paid - Turns on own facts
Legislation:
Inheritance (Family and Dependents Provision) Act 1972 (WA)
Legal Profession Act 2008 (WA)
Result:
Costs payable on solicitor/client basis
Category: B
Representation:
Counsel:
Plaintiff : No appearance
First Defendant : Ms M L Coulson
Second Defendant : Mr M S Macdonald
Third Defendant : Mr M S Macdonald
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Seventh Defendant : No appearance
Eighth Defendant : No appearance
Ninth Defendant : No appearance
Tenth Defendant : No appearance
Eleventh Defendant : No appearance
Twelfth Defendant : No appearance
Thirteenth Defendant : No appearance
Fourteenth Defendant : No appearance
Fifteenth Defendant : No appearance
Sixteenth Defendant : No appearance
Solicitors:
Plaintiff : No appearance
First Defendant : Bowen Buchbinder Vilensky
Second Defendant : Macdonald Rudder
Third Defendant : Macdonald Rudder
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Seventh Defendant : No appearance
Eighth Defendant : No appearance
Ninth Defendant : No appearance
Tenth Defendant : No appearance
Eleventh Defendant : No appearance
Twelfth Defendant : No appearance
Thirteenth Defendant : No appearance
Fourteenth Defendant : No appearance
Fifteenth Defendant : No appearance
Sixteenth Defendant : No appearance
Case(s) referred to in judgment(s):
Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels [No 2] [2014] WASC 272
Wood (As Co-Executor and Trustee of the Will of the Deceased) v Wood [No 5] [2015] WASC 28
1 MASTER SANDERSON: These reasons deal with an issue of costs which has arisen as between the first defendant on the one hand and the second and third defendants on the other hand. The action brought by the plaintiff under what was then the Inheritance (Family and Dependents Provisions) Act 1972 (WA) has been settled. As part of the settlement the parties agreed the executor's costs of the proceedings would be paid out of the estate of the deceased such costs to be taxed if not agreed. Essentially the argument is as to the basis upon which the costs ought to be taxed. This is a matter of real concern to the second and third defendants. The settlement of the action provides for certain discrete legacies to be paid to various parties. The second and third defendants are the residuary legatees and it is from the residuary estate the costs of the first defendant are to be paid.
2 The issue between the parties can be further refined by stating a few relevant facts. The first defendant is a solicitor and is a partner in the firm of Bowen Buchbinder Vilensky. The executor submits his costs ought to be assessed on an indemnity basis or in the alternative on a solicitor and client basis pursuant to the terms of a costs agreement between Bowen Buchbinder Vilensky and the executor. The second and third defendants submit the first defendant's costs ought to be assessed pursuant to the applicable legal costs determination and that the executor ought be at liberty to seek a special costs order for the limits of the scale to be lifted.
3 It is important at the outset to state clearly matters that are not dealt with in these reasons. First, this decision is not concerned with whether the second and third defendants are a 'third party payer' under s 253 of the Legal Profession Act 2008 (WA). Second this decision is not concerned with any rights the second and third defendants may have in relation to the costs agreement. Finally, this decision is not concerned with the reasonableness or otherwise of the fees charged by Bowen Buchbinder Vilensky in relation to the work that they undertook.
4 As a starting point it is generally the case that an executor is entitled to have his or her costs paid out of the deceased's estate on an indemnity basis. In Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels [No 2] [2014] WASC 272, EM Heenan J put the position as follows:
Another difference of importance in this form of proceedings is that one defendant will always be either the executor or administrator of the estate of the deceased, whose duty it is to put all material facts relating to the size and administration of the estate before the court and, subject to that obligation, to seek to uphold the will or the laws of intestate distribution as they apply to the estate, but in a manner that avoids partisanship or close alliance with either the applicant or other beneficiaries. Subject to performing this duty in an objective way, the role of the executor or administrator in appearing before the court and dealing with such an application, whether contested or otherwise, is part of that person's duty to undertake due administration of the estate. Accordingly, the executor or administrator who performs this role is usually entitled to his or her costs of the proceedings, regardless of the outcome, and on an indemnity basis, as part of the costs and expenses of the administration of the estate: compare O 66 r 9(2) [17].
5 In the recent decision of Wood (As Co-Executor and Trustee of the Will of the Deceased) v Wood [No 5] [2015] WASC 28, Kenneth Martin J determined the costs of the executor in that case ought be taxed and paid on a solicitor/client basis such costs to be paid out of the estate (see [28]). It may be in some instances there is a difference between costs taxed on a solicitor/client basis and those taxed on an indemnity basis. But at least so far as this case is concerned the two assessment methods will probably lead to the same result. The executor if his costs were taxed on a solicitor/client basis seeks to have those costs pursuant to the costs agreement he entered into. The result would be he would be fully indemnified for his costs.
6 The starting point then is to say prima facie the executor is entitled to an indemnity for the costs he has incurred. Against this counsel for the second and third defendants put three arguments.
7 First it is said the costs agreement entered into between the first defendant and Bowen Buchbinder Vilensky relates only to non-contentious business and therefore is not applicable to actions brought under the Inheritance (Family and Dependents Provisions) Act. A copy of the costs agreement is found at attachment DMB2 to the affidavit of the first defendant sworn 5 December 2014 in support of his application for costs orders. Counsel for the second and third defendants pointed out the front page and the first page of the costs agreement refer to 'the Agreement'. There then appears the following:
The Agreement constitutes an offer to the Client to enter into the Agreement with the Law Practice, for the Law Practice to act for the Client in relation to the services described under 'Subject Matter' at number 1 below.
- There is then a definition of 'the Subject Matter'. It reads as follows:
The Agreement sets out the terms and conditions upon which the Client retains the Law Practice to act for the Client in relation to the Estate of the Late Leslie William Lamb ('the Subject Matter').
The heading on the second page of the document is in the following form 'Retainer/Costs Agreement/Disclosure Non-Contentious Matters'.
8 It is the second and third defendant's contention the agreement entered into between the parties relates only to non-contentious matters. On that basis the agreement has no application to the litigious proceedings brought by the plaintiff. In my view that is too narrow an interpretation of the Agreement. The definition of 'the Subject Matter' is wide and clearly anticipates all matters in relation to the estate - contentious and non-contentious. To accept the submissions made on behalf of the second and third defendants would in my view place too narrow an interpretation upon the scope of the Agreement and its very broad terms.
9 The second argument put by the second and third defendants relies on cl 9 of the deceased's will. A copy of the terms of the will of the late Leslie William Lamb appear as attachment DMB1 to the first defendant's affidavit. Clause 9 is in the following terms:
Any Executor or Trustee who may be a Solicitor or Accountant or any firm or corporation in which he may be a member, shall be entitled to make all usual and proper charges for both this professional and other services in the administration of the Estate and the Trust Estate hereof and for his time and trouble that he would have been entitled to make, if not an Executor or Trustee and so employed.
10 The clause, it must be said, is slightly unusual. The reference to the trustee's 'time and trouble' makes little sense. Leaving that issue to one side on behalf of the second and third defendants it was submitted the phrase 'usual and proper charges' refers to charges which are made under the relevant costs determination made under s 275 of the Legal Profession Act. It was submitted it was not open to an executor pursuant to the terms of the will to enter into a costs agreement which allowed for charges to be rendered over and above those payable pursuant to the relevant costs determination.
11 In my view that interpretation of cl 9 is too narrow. Under the terms of the Legal Profession Act a solicitor can enter into a costs agreement with a client. Indeed on one view of the Act costs agreements are encouraged. Once a costs agreement is entered into then charges made pursuant to that agreement can be seen as 'usual and proper'. I would not read cl 9 as in any way limiting the capacity of the first defendant to enter into a costs agreement with Bowen Buchbinder Vilensky.
12 The third argument put on behalf of the second and third defendants really has to do with the appropriateness of the costs agreement. Counsel pointed out the hourly rates charged by the solicitors pursuant to the agreement were around 28% above relevant scale. The bills rendered by the solicitors do not identify the fee earner or the amount of time expended therefore making it impossible to ascertain with any certainty if the charges are in accordance with the costs agreement. Further, the costs agreement allows the solicitors to increase hourly rates at their whim. The bills rendered by the solicitors show in relation to hourly rates charged by partners an increase from $462 per hour in November 2010 to $605 per hour in October 2014 - an increase of 31% over four years.
13 As I mentioned at the outset these reasons are not concerned with the validity of the costs agreement. Having determined it was open to the first defendant to enter into an agreement with Bowen Buchbinder Vilensky the terms of that agreement may be the subject of argument on another application. But in my view there is nothing in the costs agreement itself taken together with the terms of cl 9 of the deceased's will which would prevent the first defendant having his costs paid pursuant to the Agreement.
14 In summary then I am satisfied the first defendant is entitled to a costs order in his favour. On balance I think the order should be that costs be assessed on a solicitor/client basis pursuant to the terms of the costs agreement between Bowen Buchbinder Vilensky and the executor dated 23 November 2010. This form of order brings that costs agreement sharply into focus. It may have ramifications if the second and third defendants are properly considered third party payers. Of course that remains an issue for another day.
15 I will hear the parties as to the precise form of orders and as to costs.
0