Re Schoenmakers [No 2] - [2013] VSC 658

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

PROBATE LIST

No. PRB 341 of 2012

THE TRUST COMPANY (AUSTRALIA) LIMITED (ACN 000 000 993) (formerly and in the Will called TRUST COMPANY FIDUCIARY SERVICES LIMITED)	Plaintiff
v
FRANS SCHOENMAKERS	Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 October 2013
DATE OF JUDGMENT:	29 November 2013
CASE MAY BE CITED AS:	Re Schoenmakers [No 2]
MEDIUM NEUTRAL CITATION:	[2013] VSC 658

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COSTS — Rectification of a will — Application successful — Unsuccessful trustee sought costs out of the estate — Unsuccessful trustee responsible for drafting of will — Principles of trustee’s indemnity — Where trustee cause of the litigation — Trustee to pay costs of successful defendant personally — Trustee to bear own costs

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R B Phillips	The Trust Company (Legal Services) Pty Ltd
For the Defendant	Mr S Newton	Ouwens Lawyers

HER HONOUR:

On 18 October 2013, I delivered judgment in this proceeding in favour of the defendant. The facts of this application are set out in my reasons, where I held that:

the defendant is entitled to orders extending the time for making this application pursuant to s 31(3) of the Act and rectification of the will of the deceased dated 18 June 2009, pursuant to s 31(1) of the Act, to the effect that notwithstanding the sale of the deceased’s principal place of residence, the defendant is entitled to receive that part of the estate of the deceased that represents the net proceeds of the sale of the unit.[1]

[1]Re Schoenmakers [No 1] [2013] VSC 556 (18 October 2013) [43].

Both parties agree with the appropriate form of orders, save for the question of the costs of the proceeding. I shall order, with liberty to apply reserved, that:

1.Pursuant to s 31(3) of the Wills Act 1997, the time within which the defendant may apply to the Court for an order pursuant to s 31(1) of the Wills Act 1997 be extended now for then to 27 February 2013.
2.Pursuant to s 31(1) of the Wills Act 1997, the will dated 18 June 2009 of the abovenamed deceased be rectified by deleting clause 4(a) thereof and substituting the words as a new clause 4(a):
As to the balance remaining of the net proceeds of sale of unit 151 Tudor Village, 520 Maroondah Highway, Lilydale, Victoria, or any moneys representing the same, for my brother FRANS SCHOENMAKERS should he survive me.

3.Pursuant to s 32 of the Wills Act 1997, an authenticated copy of this order be annexed to the Probate of the will of the deceased.

Plainly, the defendant is entitled to their costs of the proceeding. However, there are two questions in relation to the costs of the proceeding:

(a)Should the plaintiff be held personally liable for the defendant’s costs, or should the defendant’s costs come out of the estate?

(b) Should the plaintiff…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Schoenmakers [No 2]

Details

AGLC: Re Schoenmakers [No 2] [2013] VSC 658
Case: [2013] VSC 658
Decision Date: 29 November 2013

CaseChat Overview and Summary

The case of Re Schoenmakers [No 2] involved an application for rectification of a will, with the estate's trustee seeking to recover costs from the estate. The unsuccessful trustee, who had also drafted the will, argued for reimbursement of legal expenses. The legal issues before the court were whether the unsuccessful trustee could seek costs from the estate and, if so, under what circumstances the trustee might be liable for such costs.

The court held that the unsuccessful trustee was personally liable for the costs of the litigation because they were directly responsible for the cause of the dispute by drafting the will. The court emphasised that the principles of trustee’s indemnity applied, meaning that where the trustee's actions led to the litigation, they should bear their own costs. The court ruled that the unsuccessful trustee could not recover costs from the estate and had to personally cover the expenses incurred by the successful party. The court's reasoning was grounded in the established legal principle that a trustee who is the source of the litigation must personally bear the costs, rather than burdening the estate.

The court’s decision clarified that the unsuccessful trustee was personally liable for the costs of the litigation. It established that the trustee's personal liability extended to covering all costs incurred by the successful party, reinforcing the principle that a trustee should not be able to shift the financial burden of litigation arising from their actions onto the estate. The court's judgment thus provided a clear directive that trustees who are responsible for the cause of litigation must bear their own costs, thereby protecting the estate from undue financial strain.

Orders