Public Trustee v Bott (No 2)

[2017] TASSC 52

[2017] TASSC 52

COURT:                  SUPREME COURT OF TASMANIA

CITATION:             Public Trustee v Bott (No 2) [2017] TASSC 52

PARTIES:  PUBLIC TRUSTEE (as Executor named in the will of MELGAARD, Westley Christian Henry) 

v
  BOTT, Linda

McCONNON, Anne
LAUNCESTON CITY MISSION
CATHOLIC ARCHBISHOP OF TASMANIA
MARTIN, Kristy
MARTIN, Stephen
MARTIN, Darren
CAREY, Sharon
MELGAARD, Philip
FRENCH, Maxim
PRINS (nee FRENCH), Amanda Jane
ODOU, Joy Elizabeth
MELGAARD, Ronald Gregory
MELGAARD, Glenys Louise

FILE NO:  466/2013
DELIVERED ON:  14 September 2017
DELIVERED AT:  Hobart
HEARING DATE:  5 September 2017
JUDGMENT OF:  Tennent J

CATCHWORDS:

Procedure – Costs – Costs out of fund or property – Power of court to order – Application by trustee for declaration as to status of document which might have amounted to revocation of will – Respondents asserted trustee responsible for the preparation of that document and proceedings would not have been required but for that – Whether this disentitled trustee to costs from the estate – Whether respondents should be entitled to costs from trustee as opposed to estate.

Supreme Court Civil Procedure Act 1932 (Tas), s 12.
Supreme Court Rules 2000 (Tas), r 57.
Aust Dig Procedure [1519]

REPRESENTATION:

Counsel:

Applicant:  T J Williams
           First Respondent:  No appearance
           Second Respondent:  No appearance
           Third Respondent:  No appearance
           Fourth Respondent:  Z Nicholson
           Fifth Respondent:  Z Nicholson
           Sixth Respondent:  Z Nicholson
           Seventh Respondent:  Z Nicholson
           Eighth Respondent:  No Appearance
           Ninth Respondent:  A Walker
           Tenth Respondent:  A Walker
           Eleventh Respondent:                  A Walker
           Twelfth Respondent:  A Walker
           Thirteenth Respondent:               A Walker
           Fourteenth Respondent:              A Walker
Solicitors:
           Applicant:  Timothy Williams
           Fourth Respondent:  Page Seager
           Fifth Respondent:  Rae & Partners
           Sixth Respondent:  Rae & Partners
           Seventh Respondent:  Rae & Partners
           Ninth Respondent:  Palmer, Stevens & Renwick
           Tenth Respondent:  Palmer, Stevens & Renwick
           Eleventh Respondent:                  Palmer, Stevens & Renwick
           Twelfth Respondent:  Palmer, Stevens & Renwick
           Thirteenth Respondent:               Palmer, Stevens & Renwick
           Fourteenth Respondent:              Palmer, Stevens & Renwick

Judgment Number:  [2017] TASSC 52
Number of paragraphs:  18

Serial No 52/2017

File No 466/2013

PUBLIC TRUSTEE (as Executor named in the will of
WESTLEY CHRISTIAN HENRY MELGAARD) v
LINDA BOTT, ANNE McCONNON, LAUNCESTON CITY MISSION, CATHOLIC ARCHBISHOP OF TASMANIA, KRISTY MARTIN, STEPHEN MARTIN, DARREN MARTIN, SHARON CAREY, PHILIP MELGAARD, MAXIM FRENCH, AMANDA JANE PRINS (nee FRENCH), JOY ELIZABETH ODOU, RONALD GREGORY MELGAARD, GLENYS LOUISE MELGAARD

REASONS FOR JUDGMENT  TENNENT J

14 September 2017

1. On 13 July 2017, I published reasons following a hearing of proceedings commenced by the Public Trustee in relation to a will. I did not make final orders but invited the parties to bring in a memo of orders sought consistent with the findings I had made, and to consider the issue of costs. All parties remained silent for some weeks. On 24 August, the Court received a request from the solicitors for the Public Trustee to relist the matter for the making of final orders. Shortly thereafter, it became apparent that the parties were in dispute as to the costs of the proceedings.

2. The proceedings were relisted to finalise orders disposing of the proceedings and to hear argument relating to costs. At the resumed hearing, counsel advised that there was no dispute as to the terms of orders to give effect to my reasons. The issue which remained the subject of dispute was the issue of costs. Counsel for the Public Trustee sought what might be said to be the usual order, and that was that the costs of each party be paid out of the estate on an indemnity basis. That position was opposed by counsel for the 4^th, 5^th, 6^th, 7^th and 9^th to 14^th respondents. Each of those respondents sought orders that the Public Trustee pay their costs of and incidental to the proceedings on an indemnity basis, and that the Public Trustee not be entitled to recover any costs in relation to the proceedings from the estate.

3. The Supreme Court Civil Procedure Act 1932, s 12, relevantly provides:

   "(1)  Subject to the provisions of this Act and the Rules of Court, … the Court and every judge thereof, whether sitting in court or in chambers, shall have jurisdiction to award costs in all causes and matters whatsoever …instituted in the Court or brought before the Court or a judge thereof by or against any party or person …

   (2)  Subject as provided in subsection (1) the costs of all proceedings whatsoever in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or judge, and the Court or judge shall have full power and authority to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid."

4. The Supreme Court Rules 2000, r 57, provides:

   "(1)  The costs of the proceeding in the Court or before a judge are to be in the discretion of the Court or judge.

   (2)  Subrule (1) does not affect the entitlement of an executor or administrator, or a trustee or mortgagee, who has reasonably instituted, carried on or resisted any proceeding, to costs out of a particular estate or fund."

5. But for the fact that this case presented with some unusual features, it is unlikely the issue of costs would have come to be agitated. Counsel for the 9^th to 14^th respondents filed written submissions, and annexed to those submissions copies of three cases upon which they relied. Counsel for the 9^th to 14^th respondents also made oral submissions. Counsel for the 4^th to 7^th respondents simply endorsed the submissions made by counsel for the 9^th to 14^th respondents and said nothing more.

6. In the written submissions of counsel for the 9^th to 14^th respondents, it was asserted that the necessity for the proceedings arose from a breach of duty that the Public Trustee owed as a corporate trustee to the testator, in that it gave wrong advice to the testator. It was asserted that the Public Trustee had failed to give effect to the express instructions of the testator to effect a revocation of his will. In oral submissions, while the assertion of a breach of duty was not entirely resiled from, it was not pursued with vigour. Indeed, counsel for those respondents submitted that I did not need to make any finding of negligence against the Public Trustee in order to make the costs orders he sought. Counsel submitted that it was not asserted that the Public Trustee had acted improperly as executor, or that the institution of proceedings was in any way improper or unreasonable. The approach counsel adopted was that, were it not for the actions or inaction of the Public Trustee in the first place, the proceedings would not have been required.

7. Counsel for the 9^th to 14^th respondents referred to a decision of Merkel J in Collins v AMP Superannuation Pty Ltd (1997) 75 FCR 565. In that case, a dispute arose as to who was entitled to death benefits from a superannuation fund. The beneficiary nomination form used by the defendant was found to be invalid because of an error in the form. His Honour referred to an obligation on the trustee not to use inaccurate forms. Ultimately the trustee was required to pay the costs of the parties to the proceedings to resolve the matter on an indemnity basis. Counsel submitted there was an analogy to be drawn with the present case.

8. Counsel for the 9^th to 14^th respondents emphasised that this Court, in determining the costs issue, was not being asked to, nor did it need to, determine if the Public Trustee had been negligent in its dealings with the testator in 2009. It was asserted, however, that the Public Trustee was incompetent and inexpert in the way it dealt with the testator in 2009 and that, while that may not amount to negligence, it did justify this Court exercising its discretion as to costs in favour of the respondents.

9. Counsel for the Public Trustee submitted that these costs proceedings were not the forum for this Court to determine if the Public Trustee had acted negligently as asserted. That issue, if it were to be agitated, should be the subject of separate proceedings during which evidence addressing that issue could be led. The proceedings with which the Court has dealt up to this point did not address that issue. The Public Trustee acted properly in bringing the proceedings that it did. It could not apply for probate of any will of the testator knowing there was a document by which that will may have been revoked.

Discussion

1. There were unusual aspects of this case. The Public Trustee had possession of a will which, on the face of it, was a valid will. It also had possession of a document which one of its employees created which might have amounted to a revocation of that will. In those circumstances, the Public Trustee could not properly seek probate of the will and ignore the other document. In my view, it was obliged to take the course it did which was to apply to the Court for a declaration as to whether the document it had in its possession amounted to a revocation of the will. The Court has now determined that it did not amount to a revocation, and that probate of the will of the testator should be granted to the Public Trustee. The effect of that decision is that the estate of the testator will be distributed in accordance with the terms of the will and not as if there had been an intestacy. A brief consideration of the terms of the will would suggest the range of beneficiaries will be broader with a grant of probate.

2. Counsel for the respondents do not dispute that, in the circumstances in which it found itself, the Public Trustee had no alternative but to commence the proceedings it did. However, he submitted that what sets this matter apart is that the existence of that other document and the concerns about whether it may or may not have amounted to a revocation arose because of actions of the Public Trustee in 2009. Had the 2009 events not occurred in the manner they did, the proceedings now would not have been required. Counsel for the various respondents do not assert that I have to make any finding that what the Public Trustee did or did not do in 2009 amounted to negligence for the purpose of this application for costs. All I need to do is accept that it was whatever the Public Trustee did or did not do in 2009 which has given rise to the need for these proceedings, and however characterised, it is enough to justify a departure from the usual rule as to costs in this case.

3. Counsel for the Public Trustee essentially argues that, if I were to approach the issue of costs in that way, I would be apportioning blame for the proceedings in circumstances where there has not been a full exploration of the circumstances, and that the appropriate vehicle for that exercise would be proceedings in negligence against the Public Trustee. All this Court was asked to do was determine the status of a document and whether it amounted to a revocation of the testators will and nothing more.

4. This is not a case which involves any failure to properly administer an estate or any fraud committed by a trustee.

5. There were some other matters which arose in the course of submissions as to costs. I raised with counsel for the 9^th to 14^th respondents the need for those respondents to be separately represented at all given that counsel at the hearing supported the position of the Public Trustee in seeking the relevant declaration and simply added some submissions. I also raised the fact that, after the hearing began, counsel for the 9^th to 14^th respondents raised an issue without warning to anyone about the appropriate legislation pursuant to which the proceedings should have been commenced. He suggested that the Public Trustee should have applied under the Wills Act 1992 and not the Wills Act 2008. The issue resulted in delay and further submissions. I ultimately resolved the issue by determining that the Public Trustee was correct in utilising the 2008 Act.

6. The estate in this matter is relatively small. If the orders as sought by the respondents are made, the estate will in fact remain intact for the benefit of beneficiaries. If the order sought by the Public Trustee is made, which I emphasise is the type of order which would usually be made in this sort of proceedings, the estate will be reduced.

Conclusion

1. What persuades me in relation to this application is the narrow focus of the proceedings, namely that the Court was asked to determine if a document had a particular status.  While that status had to be determined in the context of how the document came into existence, responsibility for how the document came into existence and whether those circumstances gave rise to a finding of fault as far as the Public Trustee was concerned, were not the focus of the proceedings.

2. It is therefore not, in my view, appropriate to depart from the usual rule which would allow the Public Trustee to have its costs from the estate. There is also no justification for an order requiring the Public Trustee to pay the costs of all respondents on an indemnity basis or indeed at all. The remaining issue is whether the respondents should have their costs out of the estate, and, if so, whether that should extend to all their costs or, in relation to the 9^th to 14^th respondents, that entitlement should be limited as a consequence of the jurisdictional issue their counsel raised late in the proceedings. While I am satisfied that that issue did extend the proceedings to a degree, it is not possible to determine in any realistic way by how much and whether that could be reflected in any costs order.

3. In the circumstances the orders of the Court will be as follows:

   aThat the originating application filed on 22 May 2013 as amended is dismissed.

   bThat the Public Trustee be granted probate of the will dated 26 March 1996 of Westley Christian Henry Melgaard, Deceased, Widowed, late of Mersey Community Hospital, Latrobe, Shop Keeper who died on 7 February 2012.

   cThat the Public Trustee have liberty to apply for any consequential orders necessary for it to obtain the grant of probate.

   dThat the costs of all parties to these proceedings be taxed and paid from the estate.