WENDT & ORS -v- ORR & ANOR [2004] WASC 28 (S)

Link to Appeal :

[2005] WASCA 199

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2004] WASC 28 (S)
Case No:	CIV:1896/2000	Heard:	29 APRIL 2004
Coram:	JOHNSON J	Delivered:	4/03/04
Supplementary Delivered:	3/05/04
No of pages:	13	Judgment Part:	1 of 1
Result:	Order that the costs of the litigation be paid to the plaintiffs and the second , defendant by the first defendant without indemnity from the estate
Category:	C
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Parties:	DOUGLAS RONALD WENDT LYNETTE DOROTHY JOHNSTON LORRAINE McCARTHY GEORGE STANLEY ORR JOAN AGNES WENDT
Catchwords:	Costs Executor's right to indemnity from the estate for costs of litigation commenced by beneficiary
Legislation:	Trustees Act 1962
Case References:	In Re Beddoe; Downes v Cottam [1893] 1 Ch 547 Nil

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : WENDT & ORS -v- ORR & ANOR [2004] WASC 28 (S) CORAM : JOHNSON J HEARD : 29 APRIL 2004 DELIVERED : 4 MARCH 2004 SUPPLEMENTARY
DECISION : 3 MAY 2004 FILE NO/S : CIV 1896 of 2000 BETWEEN : DOUGLAS RONALD WENDT

LYNETTE DOROTHY JOHNSTON

LORRAINE McCARTHY

Plaintiffs

AND

GEORGE STANLEY ORR

First Defendant

JOAN AGNES WENDT

Second Defendant

Catchwords:

Costs - Executor's right to indemnity from the estate for costs of litigation commenced by beneficiary

Legislation:

Trustees Act 1962

(Page 2)

Result:

Order that the costs of the litigation be paid to the plaintiffs and the second defendant by the first defendant without indemnity from the estate

Category: C

Representation:

Counsel:

Plaintiffs : Ms M L Van Der-Kwast

First Defendant : Mr D Jones

Second Defendant : Mr P Mendelow

Solicitors:

Plaintiffs : Dwyer Durack

First Defendant : Lewis Blyth & Hooper

Second Defendant : Edwin Abdo & Associates

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

In Re Beddoe; Downes v Cottam [1893] 1 Ch 547

Case(s) also cited:

Nil

(Page 3)

1 JOHNSON J: When my reasons for decision in this action were handed down, I addressed the issue of the costs of the action and concluded that the first defendant should meet his own costs of the action and pay the costs of the plaintiffs and the second defendant, without indemnity from the estate. This conclusion was reached in the context of a claim by the plaintiffs for reimbursement of legal costs paid by the first defendant from the estate, an issue on which submissions were made by all parties. In the course of making my findings on this issue I drew a distinction between costs of the action and other legal costs incurred in the management of the estate. Having drawn that distinction, I proceeded to state my conclusions in relation to payment of both categories of costs. However, having delivered my reasons, it occurred to me that such a distinction was not drawn by the parties in their submissions and, accordingly, the first defendant was entitled to be further heard on whether he is entitled to an indemnity from the estate…

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 Wendt v Orr

Details

AGLC: Wendt v Orr [2004] WASC 28 (S)
Case: [2004] WASC 28 (S)
Decision Date

CaseChat Overview and Summary

In Wendt v Orr, the court was required to determine whether the first defendant, as the executor of an estate, should be indemnified from the estate for the costs of litigation that arose due to his actions in administering the estate. The plaintiffs argued that the first defendant was not entitled to such indemnity as he had acted in breach of trust by not following the advice he obtained regarding the distribution of capital to one of the beneficiaries. The court had to decide if the costs of the litigation should be borne by the first defendant or if he should be indemnified from the estate.

The court held that the first defendant was not entitled to indemnity from the estate for the costs of the litigation. The court found that the first defendant had acted in breach of trust by deliberately administering the estate in a manner that benefited one class of beneficiary over another, and by distributing capital to an income beneficiary. The court also found that the first defendant acted unreasonably and dishonestly in breach of trust. The court concluded that since the first defendant had breached his fiduciary duties, he should bear the costs of the litigation without indemnity from the estate. The court further held that the second defendant's legal costs should be paid by the first defendant without indemnity to him from the estate, as the first defendant's imprudent behaviour had led to the second defendant incurring those costs.

The final orders of the court were that the costs of the litigation be paid to the plaintiffs and the second defendant by the first defendant without indemnity from the estate. This decision was based on the findings that the first defendant had acted in breach of trust, and that it would not be just for the beneficiaries to bear the costs of the litigation as a result of the first defendant's actions.

Orders