The Estate of Helen Manning Shave

[2012] NSWSC 1459

Supreme Court

New South Wales

Medium Neutral Citation:	The Estate of Helen Manning Shave [2012] NSWSC 1459
Hearing dates:	28 November 2012
Decision date:	28 November 2012
Jurisdiction:	Equity Division - Probate List
Before:	Windeyer AJ
Decision:	See paragraph 13 for Orders made
Catchwords:	COSTS - costs where each party partly succeeded - whether orders relating to separate issues should be made
Category:	Principal judgment
Parties:	Gillian Barbara Shave - First Plaintiff David William Brown - Second Plaintiff Charles Edward Bradley Shave - Defendant
Representation:	Counsel: J.E. Armfield - First Plaintiff A.J. Bulley - Second Plaintiff S.F. Hughes - Defendant Solicitors: Maurice Buckley C T Poole & Son - First Plaintiff DLA Piper Australia - Second Plaintiff TressCox Lawyers - Defendant
File Number(s):	2008/300592

EX TEMPORE Judgment

1. HIS HONOUR: In this matter there remains to be decided the question of costs. In my judgment delivered on 23 November 2012 I set out proposed orders which, in essence, covered costs of the proceedings other than the costs of the hearing before me on 30 and 31 October 2012.

1. I have been asked to reconsider some of those proposed orders on the basis of a letter dated 8 May 2009 from Bartier Perry Solicitors to Mr Brown in which, having dealt in some length with some of the matters which have been the subject of the hearing before me, finished by making what was called a final settlement offer on behalf of Mr Charles Shave and Ms Gillian Shave to pay the sum of $31,123.71 to Mr Brown in full settlement of all his claims against the estate for "legal costs, commission and future executorial work. This amount includes the $9,783.46 which has already been retained by you towards your costs". That offer was to remain open until 22 June 2009.

1. This is, of course, an offer made before the proceedings which have been litigated in these matters commenced but that does not mean that attention cannot be given to it. The question is whether or not it was an offer which was unreasonable for Mr Brown not to accept at the time that it was made and within the time given. There is a difficulty with offers made prior to proceedings being commenced because one cannot be sure what the issues which might have to be decided are. In addition, in this matter the offer was said to cover future executorial work and at that time the estate had not been fully administered and it was clear that there was, or was likely to be, quite an amount of further work required of the executors.

1. It does not seem to me that at the time the offer was made it was unreasonable of Mr Brown not to accept it. It might seem in hindsight to have been unfortunate that the offer was not accepted because acceptance would have been to the benefit of Mr Brown but in view of the indeterminate nature of what was still involved with the estate, I do not think it unreasonable not to accept that offer.

1. The next question then is what orders for costs ought to be made in respect of the hearing on 30 and 31 October 2012. While I indicated in my judgment that it was not desirable to make costs orders on separate issues, generally it has been put to me that to a large extent the parties (who have been called Gillian and Charles in my judgment) succeeded on the issues which were really the subject of debate and of the hearing before me on the 30 and 31 October. That is because most of the time in that hearing was spent on the question of whether or not Mr Brown should reimburse the estate for the amount of the moderated costs which Gillian had been allowed out of the estate.

1. My decision was that he should reimburse the estate for 65 percent of those costs because two of the important matters on which the claim for reimbursement was made were not found in favour of those parties seeking reimbursement, but nevertheless on the main matter, being the question of conflict of duty of Mr Brown in continuing to claim costs for executorial work and continuing to seek to act as solicitor for the estate, it is reasonable to say that he lost.

1. The other matter which took some time but not much time during the hearing was the question of whether Mr Brown should be allowed commission out of the estate for his pains and trouble as an executor. The result of my decision was that I did allow commission to both executors on certain matters and to Mr Brown separately on transfers in specie to Gillian, but the amount which he was allowed separately was reduced taking into account some of the difficulties which he has caused to the estate and which to some extent overlapped with question1.

1. It is fair to say that it was not put by Gillian that Brown should receive no commission. That was put by Charles. However, the parties cannot really separate themselves on those grounds. One of the difficulties in this matter is that while Gillian and Charles were to some extent in the same interest, to some extent they were not and although I have considered whether or not only one set of costs should be allowed, that does not seem to me to be appropriate in the rather difficult circumstances of this case.

1. Mr Bulley says that Mr Brown succeeded on the commission issue and although he failed on the reimbursement issue he had a measure of success on that issue. In essence he says that if any order for costs in favour of the beneficiaries is made on that issue then it should be limited to 65 percent. That is not the normal way of dealing with these matters unless it can be said that a great deal of time was spent on matters which did not succeed and then in some way chose to divide up that particular issue into parts, but that does not seem to me to be appropriate in this case. He also said, correctly, that Mr Brown succeeded on his claim for commission, albeit that this took less time than the reimbursement issue.

1. Thus it seems to me that the argument of counsel for Mr Brown is that he should receive his costs on the commission issue and should pay 65 per cent of the costs of the beneficiaries on the other issue. An order such as that only creates more problems between the parties and more costs and should be avoided if it is possible. I see no reason why an order cannot be framed which takes into account the relative successes of the parties. The beneficiaries have had more success than has Mr Brown and the part of the case on which they obtained partial success took more time than that part of the case on which Mr Brown was successful.

1. In an endeavour to adjust those interests in a way which is fair between the parties and bearing in mind the fact that two of the matters upon which the beneficiaries complained, namely, what was said to be a refusal to provide itemised accounts and what was said to be the improper behaviour of Mr Brown in what were called the ABN-Amro shares to be sold on behalf of Mr Charles Shave were concerned were not made out, I have come to the conclusion that Mr Brown should pay 60 percent of the costs of the first plaintiff and the defendant of and incidental to the hearing before me on 30 and 31 October and I will so order.

1. There is one other matter which needs to be resolved and which I referred to in paragraph 99 of my judgment. It is important that so far as is possible any future problems between the beneficiaries be avoided. At the present time Miss Gillian Shave has received from the estate more than her share. If she is repaid from the estate the amount of the moderated costs, then there will be an even greater imbalance. The only way to endeavour to prevent a greater imbalance occurring is to order that the amount of the moderated costs be not repaid to her but be taken into account in the final distribution of the estate between the two beneficiaries. That distribution will not be able to take place until, firstly, Mr Brown has reimbursed the estate for 65 per cent of the moderated costs and, secondly, until the costs which are ordered out of the estate have been determined and have been paid.

1. I will make orders as follows:

(1)   Order that the accounts and the supplementary accounts in the estate covering the period from 15 April 2008 to 31 August 2012 be passed.

(2)   Order that the second plaintiff reimburse the estate for the sum of $32,843.78 being sixty-five per cent of the moderated costs allowed out of the estate to the first plaintiff.

(3)   Order that the second plaintiff pay the costs of the defendant on the objections to accounts and order those costs be assessed by the Registrar in a lump sum. No orders as to costs of executors on the objections to the intent these not be paid out of the estate.

(4)   Subject to Order 3 order that the costs of preparing and passing of the accounts be assessed by the Registrar and paid out of the estate.

(5)   Order that the costs of all parties to the proceedings commenced as 115291 of 2009 be paid out of the estate.

(6)   Order that subject to there being assets in the estate commission be allowed to the executors as follows:

(a)   To the executors at the rate of two per cent on capital realisations and at the rate of 3.5 per cent on income collections and at the rate of 0.5 per cent on assets transferred in specie to the defendant.

(b)   To the second plaintiff at the rate of 0.2 per cent on assets transferred in specie to the first plaintiff

(7)   Order that the second plaintiff pay 60 per cent of the costs of the first plaintiff and the defendant of and incidental to the hearing before me on 30 and 31 October 2012.

(8)   Order that the amount of the moderated costs be not paid out of the estate to the first plaintiff but retained for the purpose of proper adjustment of the shares of the beneficiaries under the will.

(9)   Exhibits may be returned.

1. I note that all parties agree that payments will now be made out of the estate to Mr Brown in the sum of $3,956.97 and to Gillian Shave in the sum of $9,021.91.

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Decision last updated: 29 November 2012