BLENKINSOP -v- HERBERT [2020] WASC 196 (8 June 2020)

(c) requiring the parties to file a joint list of issues three days prior to the strategic conference, indicating each parties' position on any unresolved pleading issues.

1. On 14 April 2020, the plaintiff filed an amended substituted statement of claim adding a prayer for relief and deleting some disputed matters.
2. On 16 April 2020, the defendant filed a request for further and better particulars of the plaintiff's substituted statement of claim as to [5(b)], [88] and [95].
3. On 5 May 2020, the parties filed a joint list of issues indicating the defendant's position in respect of each of the paragraphs it disputed by item number and stating the reasons why it sought particulars in respect of other paragraphs, the plaintiff's position in response in respect of each item number and the defendant's reply.
4. After hearing parties at the strategic conference, an order was made on 8 May 2020:

(a) striking out parts of the plaintiff's amended substituted statement of claim from [26], [79], [96] and [109] and striking out the whole of [27], [84], [89(a)], [90], [97], [100], [112], [114] and [116];

(b) granting leave to the plaintiff to file and serve a minute of proposed further amended substituted statement of claim re‑pleading [111];

(c) requiring the plaintiff to file and serve further and better particulars of [5(b)], [88], [95] ‑ [97], [110] and requiring the plaintiff to provide copies of particular documents referred to in [32] and [95];

(d) requiring the parties to file written submissions on the issues of without prejudice privilege in respect of the matters pleaded in [51] ‑ [71] and whether the court should make an order to amend its orders of 22 June 2018 under the slip rule to clarify that the action is to be treated as if commenced by a writ of summons.

1. On 16 May 2020, the plaintiff filed his submissions, and on 25 May 2020, the defendant filed his submissions, on without prejudice privilege and the slip rule.
2. Following the filing of written submissions by the parties, for the reasons that follow, I am of the opinion that [51] ‑ [71] of the amended substituted statement of claim should be struck out, and an order made pursuant to O 21 r 10 of the Rules of the Supreme Court 1971 (WA) to correct the order made by the court on 22 June 2018 requiring the plaintiff to file a statement of claim.
3. These reasons set out the reasons why the orders were made on 8 May 2020 and why [51] ‑ [71] of the amended substituted statement of claim dated 8 May 2020 should be struck out, and the order made on 22 June 2018 corrected.

1. The principles relevant to the application are as follows:

(a) a statement of claim must state specifically the relief or remedy claimed;[1]

(b) the essential requirements for a plea are to define and limit the issues for decision, provide the basis for decisions on relevance for trial, and ensure a fair trial by putting the other side on notice of the case they must meet;[2]

(c) the court should proceed with caution before striking out a pleading on the ground that it does not disclose a reasonable cause of action.[3] While the court may determine a difficult question in law on such an application, it would usually be appropriate to leave the determination of such questions for trial;[4]

(i) the question to be decided is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action. Rather the question is whether it would be open to the party (on its pleadings) to prove facts at the trial which would constitute a cause of action;[5]

(ii) 'reasonable' means reasonable according to law. If the facts conceivably give rise to relief, then the cause of action should be held to be reasonable;[6]

(e) the mere fact that a case appears weak is not of itself sufficient to strike out the action;[7]

(f) in considering a strike out application, it is now necessary to consider the role of pleadings in the context of case management techniques. Case management considerations are not, however, necessarily antithetical to the observance of pleading rules. The objects of O 1 r 4A and r 4B are often promoted by a clear and precise statement of the issues for decision;[8]

(g) in Barclay Mowlem Construction Ltd v Dampier Port Authority, Martin CJ stated that providing a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleading rules that evolved in and derive from a very different case management environment;[9]

(h) a statement of claim must not plead allegations at too high a level of generality. A pleading must be sufficiently particular to conform with one of the primary objects of pleadings, to inform the opposing party the case that it must meet;[10]

(i) pleadings may be struck out on the ground that they may prejudice, embarrass or delay the fair trial of the action because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general;[11] and

(j) a strike out application will not succeed merely because the statement of claim raises some unnecessary matter. However, irrelevant or unnecessary pleas in a statement of claim will be struck out where they prejudice, embarrass or delay the fair trial of the action where the defendant must traverse the allegations and, thereby, raise false issues.[12]

1. The defendant's position is that [51] to [71] of the plaintiff's amended substituted statement of claim should be struck out as an abuse of process, on grounds that the matters pleaded arise out of or pertaining to mediations and the conduct of the mediations between the plaintiff and the defendant seeking to achieve a resolution of not only this matter but other proceedings involving the defendant and the trusts with the other beneficiaries in other proceedings.
2. The defendant also contends that the matters pleaded have been ventilated before in Herbert v Blenkinsop [No 2].[13]
3. The general principles that apply to the determination of whether proceedings constitute an abuse of the process of the court were summarised by Vaughan J in Patrick Jebb as trustee for The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd:[14]

What amounts to an abuse of the court's process is insusceptible of a formulation comprising closed categories. It extends to all categories of case in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Abuse of process occurs in any circumstance in which the use of the court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. However, the onus of satisfying the court that there is an abuse of process is a heavy one. The power to dismiss proceedings as an abuse of process should be exercised with caution and only in the most exceptional or extreme case.

1. The principles which are of particular relevance to where claims that have been either brought in earlier proceedings or should have been resolved in earlier proceedings were referred to by Vaughan J in Patrick Jebb as trustee for The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd as follows:[15]

The doctrine of abuse of process is informed in part by considerations of finality and fairness. The underlying public interest is twofold: there should be finality in litigation and a party should not be twice vexed in the same matter. Thus abuse of process may exist where a person seeks to re-litigate an issue already decided. There is a general public interest in the same issue not being litigated over again. It has been said that it would be a 'scandal to the administration of justice' if, a question having been disposed of by one case, the litigant were permitted to set up the case again by changing the form of proceedings.

For a step in a proceeding to amount to an abuse of process by reason of impermissible re-litigation of a dispute it is not necessary that one of res judicata, issue estoppel or Anshun estoppel be applicable.

The court is not only concerned with the effect of conduct on the parties but with 'the public interest which is in the maintenance of public confidence in the administration of justice'. The court acts to prevent misuse of its procedure which would 'bring the administration of justice into disrepute among right-thinking people'. Accordingly, as noted, the court may stay or dismiss matters as an abuse of process where a party seeks to re-litigate controversies which have already been decided. Similarly, there may be an abuse of process where a party seeks to re‑litigate an issue decided between it and a third party. There may also be an abuse of process where a defendant seeks to re-litigate an issue that was decided adversely to the defendant. The doctrine does not require identity of parties or mutuality. In short, the fact that the parties may not be identical, or the relief different, does not necessarily disentitle a party to relief under the doctrine of abuse of process.

In applying the principles of abuse of process the focus is on matters of substance rather than form.

Factors relevant to determining whether an attempt to re-litigate is an abuse of process were discussed in State Bank of New South Wales Ltd v Stenhouse Ltd. Those factors have been reproduced with apparent approval in a number of intermediate appellate court decisions. The task necessitates an evaluative judgment sensitive to all the facts and circumstances and informed by the public interest in preventing re‑litigation of disputes. The court conducts an 'overall balancing of justice' having regard, among other things, to the extent of the oppression and unfairness to the other party if the issue was re-litigated and the impact of the re-litigation on the principle of finality and public confidence in the administration of justice.

Abuse of process may arise beyond the circumstance where a person seeks to re-litigate an issue already decided. There may be an abuse of the process of the court in seeking to litigate matters which could and should have been litigated in earlier proceedings.

Determination - joint list of issues for strategic conference Item 3

1. The defendant did not press his objection to [1] of the amended substituted statement of claim.

1. In [5(b)], the plaintiff pleads that the defendant (at all material times prior to 1 August 2018) was acting for and on behalf of, as an employee of, and with the authority of, PPB Pty Ltd (PPBPL) in all his dealings with matters concerning the trusts (Trustee Services). The defendant seeks particulars of how it acted, in particular, whether:

(b) if it was express, whether it was written or oral;

(c) if it was express and written, the document said to give rise to it;

(d) if it was express and oral, to identify the conversations that gave rise to it; or

(e) if the authority was implied, the facts and matters to support the implication.

1. The defendant claims that he requires particulars before he files his defence to properly understand the case he has to meet, that is, whether the plaintiff pleads that the authority of PPBPL was express or implied in the relationship of employee.
2. The plaintiff made a submission, which I accepted, that until the defendant provides discovery of documents relevant to this issue of whether the authority is express or implied is not a matter within his knowledge. In these circumstances, I was satisfied that the provision of the further and better particulars could be deferred as it is obvious that such documents would be an exclusive possession of the defendant.

1. In [20] and in [28], the plaintiff in effect pleads that in November 2018, the defendant instructed his solicitors to send a letter to the guardians, appointors and heads of each family of the beneficiaries of the trusts to ascertain support for his position and that only two beneficiaries supported the defendant defending this action. The defendant objected to these paragraphs on grounds they disclose no reasonable cause of action and are irrelevant. Further, that [20] contains vague allegations regarding the defendant's support from beneficiaries. The defendant points out that he is a court‑appointed trustee[16] and that pursuant to the terms of the trusts, the plaintiff correctly pleads in [21] unanimous consent of the appointors is required to remove a trustee and appoint a new trustee.
2. The plaintiff claims the poll is relevant to the matters pleaded in respect of the attitude of the majority of the beneficiaries, guardians and appointors to the defendant continuing to act as trustee, including by reason of lack of impartiality, bias against the majority beneficiaries, guardians and appointors, failure to provide information, keep accounts, perform the trusts according to its terms, substantial overcharges and wasting of trust assets.
3. The plaintiff also claims that the poll shows it is expedient for the court to appoint a new trustee for the purposes of s 77 of the Trustees Act 1962 (WA) as only two of the appointors oppose the defendant being replaced. Whilst, success on this point may be unlikely in light of the express terms of the trusts, the plaintiff also points out that there is authority for the proposition that in circumstances where there is beneficiary hostility grounded on the mode in which a trust has been administered, or where beneficiary hostility has been caused wholly or partially by substantial overcharges against the trust estate, beneficiary hostility is not to be disregarded.[17] However, it is to be noted that friction or hostility between the trustee and the beneficiaries is not of itself a reason for removal of the trustee.[18]
4. In circumstances where the plaintiff has pleaded that the continuation of the trustee would be detrimental to maintenance of the assets of the trusts, I was not satisfied that these paragraphs of the amended substituted statement of claim should be struck out.

1. In [26] (by the words objected to) and in [27], the plaintiff in effect pleads that the plaintiff's sister, Christine (one of the beneficiaries), assumed carriage of the plaintiff in the proceedings to appoint the defendant as trustee, and to remove the guardians of the trusts. Further, that Christine and her husband financed Christine's participation in those proceedings. The defendant claimed that the pleading of these matters are irrelevant, and will prejudice, embarrass or delay this matter. The plaintiff contended that the pleading of these matters is relevant to show the lack of impartiality on behalf of the defendant. In particular, bias shown by the defendant to Christine by the payment of legal costs (without an order of the court) is pleaded in [111].
2. I formed the opinion that the matters pleaded in these items should be struck out. As the defendant points out, the matters pleaded in these items relate to matters that predate the defendant's appointment to the court and relate to the conduct of Christine and her husband in respect of which no relief is sought against either of them by the plaintiff. More importantly, no allegation is made in [26] and [27] that relates to the conduct of the defendant.

1. The plaintiff conceded that he should provide copies of the relevant emails pleaded in [32].

1. The effect of the plaintiff's pleadings in [44], [47] ‑ [49] is that it is alleged that in the proceedings which resulted in the appointment of the defendant as trustee, the defendant's sworn affidavit attaching his curriculum vitae showing his current position as Partner PPB Advisory and Managing Partner of the Perth office did not disclose his status as an employee of PPBPL. It is also alleged that no orders were made authorising PPBPL to charge fees for acting as trustee when the defendant was appointed trustee by the court on 15 December 2015. The defendant contended that these pleaded matters are irrelevant.
2. However, the plaintiff explained that the relevance of these pleaded matters go to the issue pleaded in [76] that PPBPL is not a licensed trustee company under the Corporations Act 2001 (Cth). This is said to be a consequence of law (thus a conclusion of law). Further, that the trust deeds contemplate that only a partner of a firm (that is a partnership, not a corporation) may act as a trustee and receive payment. For these reasons, I was not persuaded that the paragraphs of the substituted statement of claim relevant to this item should be struck out.

1. In [51] ‑ [71], the plaintiff pleads matters relating to four mediations held in relation to these proceedings and for other proceedings being, CACV 118 of 2018 (being an appeal by the plaintiff's mother, Judith, against a decision by Allanson J, to which the defendant became a respondent), TRU 4 of 2018 (an application by the defendant for directions in relation to his participation in this matter), CIV 1537 of 2014 (Loan Account Proceedings commenced by the plaintiff's mother, Judith, claiming amounts owed to her by Blenkinsop Nominees and Silverglade) and CIV 2825 of 2017 (an application by the defendant for directions in relation to the Loan Account Proceedings).
2. In [53], the plaintiff pleads that the third mediation resulted in an in principle agreement between the plaintiff and the defendant which effected an in principle settlement of all of the proceedings. In [56] the plaintiff pleads that the defendant emailed to each of the guardians of the trusts, a binding heads of agreement to form the basis for a deed of settlement, and in [59] to [66] the plaintiff pleads that his brother, Ross, would not sign the heads of agreement.
3. In [67], the plaintiff pleads that following mediation, the defendant emailed the guardians advising the global settlement negotiations had ended without success due to the refusal to provide the releases.
4. The plaintiff claims that that the matters pleaded in [51] to [71] do not disclose the content of the mediations and:[19]
   1. As Mr Herbert notes in the Joint List of Issues, the substance of paragraph [51] ‑ [71] was ventilated in the second application involving CIV 2825 of 2017 (2825.2).
   2. The issues were first raised by Mr Herbert in his affidavit sworn 8 August 2019 in 2825. (JLH 4th Affidavit) which affidavit:

1. Attached an email from Mr Herbert sent 25 February 2019 to the guardians of the trusts (Guardians) being the plaintiff's mother (Judith) and siblings Kim, Tracey, Ross, and Christine (Siblings). 2. The above referenced email attached a copy of the 'In Principle Agreement' (IPA) agreed between Mr Herbert and Mr Scott Blenkinsop at the third mediation in this matter.

1. Attached an email from Mr Herbert sent 27 February 2019 to the Guardians discussing an 'amended process'.

1. Attached a copy of a Heads of Agreement (HOA) prepared by Mr Herbert's solicitors, purportedly in furtherance of the IPA and circulated to the Guardians. 2. Alleged 'Scott and Ross refused to sign the Heads of Agreement ...'. It is the uncontroverted evidence of Mr Scott Blenkinsop he did not 'refuse to sign'. 3. In light of [2] ‑ [3] above, what privilege (if any) existed in the IPA and other documents referred to in [3] has been waived or lost by virtue of the documents being included in JLH 4th Affidavit, which was read by Mr Herbert in 2825.2, without demur from Mr Scott Blenkinsop or Judith, being the other participant parties in 2825.2. 4. Further, by virtue of the allegation at [3.e] above, Mr Herbert 'pleaded into evidence' the documents referred to in [3] above and [6] below. 5. Mr Scott Blenkinsop also filed an affidavit in 2825.2 which affidavit attached the emails and letters referred to at [59] ‑ [60, [62] ‑ [65] and [67] (Correspondence) of the ASSOC. The SB 14 Feb Affidavit was read and the emails and letters were raised by Mr Scott Blenkinsop in submissions, both written and oral. At no time was without prejudice privilege asserted by Mr Herbert in relation to the affidavit or the submissions. 6. As regards the Correspondence with Kim and Ross, it is not covered by without prejudice privilege as there was no litigation or dispute on foot, or reasonably in contemplation, between Mr Herbert or Mr Scott Blenkinsop and any of the Siblings, either as Guardians or in any other capacity (Appointor or primary beneficiary) in relation to the Trusts.
2. Consequently, the thrust of the plaintiff's written submissions is that if he has pleaded without prejudice communications, the defendant has waived the privilege because the communications had been introduced into evidence in CIV 2825 of 2017 by the parties to these proceedings.
3. In response to the plaintiff's submission, the defendant points out that in CIV 2825 of 2017, the plaintiff raised the defendant's request for a release in the settlement deed in a failed attempt to disentitle the defendant from recovering costs under the trustee's right of indemnity. This was a discrete and confined issue raised by the plaintiff in a cost dispute in the proceedings before Allanson J. The defendant says that he answered that discrete and confined issue as a matter of law without needing to put before the court the factual context arising from the mediations. The defendant contends that the plaintiff now seeks to rely upon the factual context of the mediations to make vague (but serious) allegations in [51] ‑ [71], including that the defendant threatened beneficiaries and engaged in conduct that is wilful, improper, unconscionable, in bad faith and unreasonable (in seeking to obtain releases in his favour).
4. The defendant does not accept that all the matters referred to in [51] ‑ [71] were introduced into evidence in CIV 2825 of 2017. Further, even if the defendant consented to the waiver of the privilege, without prejudice privilege cannot be waived without the consent of all negotiating parties and the plaintiff has not demonstrated to the court that he has the consent of the five other guardians to plead these matters.
5. The defendant also raises an argument that the plaintiff should not be entitled to plead facts arising after the commencement of the proceedings. However, for reasons that follow, I do not find it necessary to deal with this point.
6. Having considered the submissions made at the strategic conference on 8 May 2020 and the written submissions filed by the parties on 16 and 25 May 2020, I formed the opinion that [51] ‑ [71] should be struck out on grounds that:

(a) on the matters pleaded it appears that the in principle agreement and the pleaded correspondence that followed the in principle agreement between the parties to these proceedings and the other proceedings arose from matters discussed in the mediations, and in these circumstances it would appear that the in principle agreement and the pleaded correspondence would be subject to without prejudice privilege; and

(b) even if this privilege could be properly found to be waived by the plaintiff and the defendant, there is nothing before the court in these proceedings upon which it could be found that the other parties to those proceedings have waived that privilege. Further, even if it could be found that insofar as waiver of the privilege has occurred or that the privilege is not absolute, the issues pleaded in [51] ‑ [71] were raised and determined by Allanson J in CIV 2825 of 2017.

In these circumstances, to plead the matters in [51] ‑ [71] in these proceedings is an abuse of process.

1. Each of the mediations referred to by the plaintiff were mediations convened by the court. The court offers a confidential mediation program to all litigants who bring proceedings in the court. It is important for all parties who participate in the court's mediation program that all discussions by the parties and the exchange of documents within a mediation be kept confidential so as to encourage open, frank and without prejudice communications. Consequently, anything that is said or done in a mediation is strictly confidential so that no person who participates in the mediation should disclose any information to others disclosed during the mediation unless all parties to the mediation agree, or are required or authorised to do so by law. This includes any settlement or draft offers or counter offers between the parties to the mediation and their legal representatives. Such documents are confidential and privileged, unless the privilege has been waived.
2. Without prejudice privilege in communications arising out of settlement negotiations is a joint privilege. As the defendant points out in his written submissions, without prejudice privilege cannot be waived without the consent of all negotiating parties. However, the privilege is not absolute. In Woodings as liquidator of The Bell Group Ltd and the Bell Group Finance Pty Ltd v WA Glendinning & Associates Pty Ltd, I referred to the relevant principles as follows:[20]

In Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd, McLure J summarised the relevant principles to establish a claim of without prejudice privilege and some of the exceptions as follows:

'Statements made without prejudice in an attempt to settle a dispute or action are privileged. Without prejudice privilege is a joint privilege and thus cannot be waived without the consent of the negotiating parties. The mere fact that a document is or is not marked 'without prejudice' is not decisive. The test is whether the communication was part of a genuine attempt to settle a dispute: Rodgers v Rodgers (1964) 114 CLR 608 at 614. If so, the whole course of the negotiations is privileged: South Shropshire District Council v Amos [1987] 1 All ER 340.

A binding contract brought into existence as a result of without prejudice negotiations is not protected by the privilege. Although the resulting contract is not privileged, the negotiations leading to the agreement remain privileged: Biala Pty Ltd v Mallina Holdings Ltd (1990) WAR 174 at 180; Bentley v Nelson [1963] WAR 89 at 93.

However, without prejudice negotiations leading to an agreement can be considered where there is a dispute as to whether or not an agreement to settle was made: Tomlin v Standard Telephones & Cables Ltd [1969] 1 WLR 1378; Unilever Plc v Procter & Gamble Co [1999] EWCA Civ 3027; [2000] 1 WLR 2436 at 2444.

The authorities establish that the without prejudice rule is not absolute and resort may be had to without prejudice material for a variety of reasons when the justice of the case requires it: Rush & Tompkins Ltd v Greater London Council [1988] UKHL 7; [1989] AC 1280 per Lord Griffiths at 1300.

Thus, without prejudice negotiations may be "pleaded into evidence" in such a way that the privilege is no longer available, by analogy with the rule concerning legal professional privilege: Western Australia v Southern Equities Corp Ltd (in liq) (1996) 142 ALR 597 at 601-602. The principle is not confined to the case where the party seeking to assert privilege raises a positive case: Data Access Corp v Powerflex Services Pty Ltd (1994) AIPC 91-112.'

In Insurance Commission of Western Australia v Woodings [No 2], Pritchard J applied these principles when considering whether to strike out a number of paragraphs in ICWA's statement of issues, facts and contentions in CIV 2666 of 2016. Her Honour observed that:

'The operation of the privilege was also discussed by the Queensland Court of Appeal in Glengallen Investments Pty Ltd v Arthur Andersen. Williams JA, with whom McPherson JA and Ambrose J agreed, noted that the two essential prerequisites for the operation of the rule are:

(1) a genuine attempt to reach a settlement of a dispute the subject of litigation or which will become so if the dispute is not resolved; and

(2) the making of an express or implied admission in so doing. The rule then operates to prevent the use of such admissions in subsequent litigation.

In Pihiga Pty Ltd v Roche, Lander J explained that there are two bases for the rule. The first lies in public policy, in that the existence of the rule encourages parties to engage in full and frank discussions aimed at settling their disputes without recourse to the courts. The second is that the rule is founded on the express or implied agreement of the parties that the communications between them should not be admissible in evidence if those communications do not lead to a settlement. Accordingly, the rule protects admissions in the form of an offer to settle, and communications between parties generally in respect of issues in the dispute including assertions made of the strength and weakness of a party's case or an opponent's case.'

1. In CIV 2825 of 2017, the parties referred to a proposal by the defendant for a global settlement of all actions and potential actions involving the trusts and to vest the trusts early. In that matter, Allanson J found that the trustee (the defendant in these proceedings) was justified in settling the Loan Account Proceedings by Judith. His Honour observed that the proposal did not currently have the unanimous support of the beneficiaries, with only four of the six signing a heads of agreement and that the merits of the proposed settlement were not the subject of the application before him.[21]
2. However, in the determination of the costs of the application in CIV 2825 of 2017, the plaintiff (in these proceedings) raised the merits of the proposed settlement, in particular, whether the defendant was justified in seeking the releases now pleaded by the plaintiff in [51] ‑ [71] in these proceedings. In the determination of the costs application, Allanson J found:[22]

Mr Blenkinsop continues to raise the failure of the proposed global settlement. On 19 March 2019, following discussions between the relevant parties, Mr Herbert proposed a heads of agreement which, if executed, would:

(1) settle the claims that Judith Blenkinsop had made against the estate (and which have now been settled following the advice and directions in this application);

(2) distribute the capital of the Blenkinsop Family Trust to each of Judith and her five children, the guardians under the trust, and vest the Blenkinsop Family Trust on or about 31 March 2019;

(3) issue an interim capital distribution of Blenkinsop Family Trust No 2 on or about 31 March 2019;

(4) manage the affairs of Blenkinsop Family Trust No 2 in accordance with the agreement for the duration of an existing claim against Main Road Western Australia;

(5) after the resolution of that claim, issue a final capital distribution of the net assets of Blenkinsop Family Trust No 2 and vest the trust; and

(6) dismiss all legal actions with mutual releases.

The mutual releases included releases in favour of 'Mr Herbert and his principals, employees, professional advisers, consultants and agents' in regards to past and present actions taken in relation to the trusts; and releases by Mr Herbert and the former trustees of each of the Guardians for both past and present actions.

The proposed global settlement failed because it did not have the unanimous support of the beneficiaries. Mr Blenkinsop argued that the reason was the inclusion of the mutual releases, which he argued were unnecessary.

Without a global settlement, it was proper for Mr Herbert to proceed with the application for judicial advice regarding the specific settlement with Judith Blenkinsop. In the application for judicial advice, the proposed global settlement was relevant as background to the financial position of the trusts. But its merits, and why it did not proceed, were not the subject of the application before the court. The attribution of blame for the failure of the proposed settlement to proceed is immaterial to the question of costs on the application for advice.

Because of the extent to which Mr Blenkinsop relied on the failure of the global settlement, I make the following additional comments and findings.

I do not accept the allegation that, in insisting on the mutual releases, Mr Herbert failed to act in the best interests of the beneficiaries, and was concerned only to benefit himself and other members of the 'Herbert group'.

The present case is clearly distinguishable from Plimsoll v Drake (No 2), on which Mr Blenkinsop relied. The principle replied upon in that case is well established: a personal representative or trustee is not entitled as a matter of right to costs out of the estate in an application in which they merely seek to obtain a personal benefit.

Regard should be had to the primary decision to establish the circumstances before Zeeman J. The court was considering an application to replace the personal representative of a deceased estate who had largely completed the administration of the estate, but refused to complete the administration and distribute the undistributed portion of the estate unless and until the residuary beneficiaries executed a deed of release. Zeeman J held that the matters relied upon by the personal representative did not constitute variations of, or departures from, the trusts created by the will, and he had no entitlement to a release under seal. His Honour contrasted that with a trustee who is asked to act otherwise than in accordance with the trusts upon which he holds trust property, in circumstances where he may but is not required to accede to the request ‑ a situation more aligned to that now before me. The decision does not assist Mr Blenkinsop.

1. In circumstances where the matters pleaded in [51] ‑ [71] relate to the defendant's attempt to reach a settlement of proceedings, including in these proceedings and where the issues now sought to be pleaded in these proceedings were ventilated before Allanson J in his costs decision, and in particular, where his Honour specifically found that he did not accept that the defendant in insisting on mutual releases had failed (as trustee) to act in the best interests of the beneficiaries, I am not satisfied that the justice of the case is raised so that resort should be had to the communications pleaded in [51] to [71]. To the contrary, to allow the matters pleaded in these paragraphs to be litigated would clearly constitute an abuse of process, as to do so would allow a controversy that has already been determined to be re‑litigated.
2. For these reasons, [51] ‑ [71] should be struck out.

1. The second sentence in [79], plainly, is a submission not a pleading of material fact. The plaintiff conceded that the second sentence in [79] should be struck out.

1. In [83] and [85] to [89], the plaintiff pleads the facts upon which he claims that the defendant failed to correct errors in the accounts and tax returns of the trusts (resulting in tax consequences) in respect of the assets of a claimed Ten Pin Bowls Partnership that were transferred to the Blenkinsop Family Trust in 1985.
2. The plaintiff made a submission that the matters pleaded in [84] go to the hostility in the relationship between the majority of the beneficiaries, guardians and appointors of the trusts and the defendant, and the bias of the defendant shown to his mother, Judith.
3. In the first sentence of [84], the plaintiff pleads that the beneficiaries had no knowledge of the Ten Pin Bowls Partnership. Plainly, this sentence is irrelevant as to whether the defendant failed to correct errors in the accounts and tax returns of the trusts in respect of these assets. Consequently, I formed the view that this part of [84] should be struck out.
4. In the second sentence of [84], the plaintiff pleads that in the Loan Account Proceedings instituted by his mother, Judith, in CIV 1537 of 2014 (being an action brought by Judith against the defendant as trustee of the trusts, which action was dismissed on 29 November 2019 by consent, following orders being made in CIV 2825 of 2017 to approve the settlement of that action)[23] the defendant preferred Judith's case, claiming an amount owed to her in excess of $650,000 which on the defendant's case became an amount of more than $1,000,000 arising from the transfer of the Ten Pin Bowls Partnership assets to Blenkinsop Nominees ATF BFT.
5. Plainly, the matters pleaded in [84] do not relate to errors in the accounts and tax returns of the trusts. For this reason, I struck out the second sentence of [84].

1. The defendant seeks further better particulars of when and how (in writing or orally) the plaintiff claims in [88] that he raised 'these anomalies and the tax consequences with the defendant'. The plaintiff conceded that he should provide the particulars sought by the defendant.

1. In [89(a)] and [90], the effect of the matters pleaded are that the defendant failed to correct his submissions to the court in CIV 2825 of 2017 and if he does not do so this will expose the primary beneficiaries to significant tax consequences in circumstances where they would not receive the income on which they were taxed due to funds of the Blenkinsop Family Trust (in respect of the accounts and taxation treatment of the assets of the Ten Pin Bowls Partnership) being wasted by the defendant. Further, that it would be open to a new trustee to have the s 92 of the Trustees Act 1962 (WA) direction by the court (that the defendant was justified in settling Judith's claims in CIV 1537 of 2014) set aside, pursuant to s 95 of the Trustees Act (in CIV 2825 of 2017).[24]
2. The defendant submitted that the allegations are vague, irrelevant and scandalous. In circumstances where it would have been open to the plaintiff to raise these allegations in CIV 2825 of 2017 (as he was the third respondent to those proceedings and the only beneficiary [apart from his mother Judith] who appeared in the proceedings on the application and opposed the settlement of Judith's claims) it is an abuse of process to raise these allegations in these proceedings.

1. The plaintiff agreed to provide particulars of when and how (in writing or orally) the plaintiff says he had raised the matters referred to in [95].
2. The plaintiff also agreed that if the words, 'The defendant did not apply the default provisions but ex post facto purported to retain funds in the trusts' in [96] are retained, he would provide further and better particulars of the document or documents relied upon in this paragraph of the substituted statement of claim. It was agreed that the remaining words in [96] were to be struck out.
3. There were a number objections to [97]. However, the plaintiff agreed that [97] could be struck out.

1. In [100], the plaintiff pleads that on 13 February 2019, the defendant observed near all the plant and equipment from the Gingin farm on the property of Christine and her husband. This paragraph appears in a section of the substituted statement of claim concerning a sale of assets of the trusts by the defendant at less than valuation.
2. The defendant argues that this paragraph raises an irrelevant matter and will prejudice, embarrass or delay the proceedings. The plaintiff contends that the property referred to had been removed from the Gingin property without the authority of the defendant and that it is alleged that the defendant did not make a proper record of the plant and equipment. However, as none of these matters are pleaded it was clearly apparent that the matters stated in [100] are irrelevant and should be struck out

1. The defendant claimed that [106] to [109] should be struck out on grounds that these paragraphs disclosed no reasonable cause of action and appeared to concern alleged inadequate reporting to beneficiaries by the defendant, but it is not possible to discern from these paragraphs what the plaintiff alleges the contraventions to have been. I did not agree.
2. The effect of [106] and [107] is that the plaintiff pleads that at the commencement of these proceedings, the defendant had not prepared financial statements or tax returns for the trusts for the 2013 to 2017 financial years, and it was not possible for the beneficiaries to lodge final tax returns for those years, resulting in the beneficiaries incurring additional accounting fees, penalty and interest charges from the Australian Taxation Office.
3. The effect of the matters pleaded in [108] and [109], with the exception of the words, 'which is all the more alarming given the defendant is employed by a global accounting giant', is that the information provided by the defendant in an email sent on 13 September 2019 was wholly inadequate to meet a trustee's obligation to stand ready to provide accounts to beneficiaries. These words should be struck out as they do not constitute a plea of material facts but is a statement of an opinion in the nature of a submission.
4. Except for the words referred to in [109], I was not satisfied that the matters stated in these paragraphs should be struck out.

1. In [110], the plaintiff pleads that the defendant breached his duty to provide accounts and information by refusing to provide information or resisting to provide information, or provide redacted information to verify the accounts. In the two last sentences of the particulars to [110], the plaintiff pleads that the provision of tax invoices from the defendant's solicitors (HWLE) was resisted for a period of seven months and statements of receipts and payments were resisted for a period of nine months.
2. As the defendant properly pointed out, these paragraphs of the particulars to [110] are vague and without further particularisation should be struck out. Following discussion, the plaintiff agreed to provide proper particulars of the matters that are alleged.

1. In [111], the plaintiff pleads that the defendant repeatedly acts under direction and impartially to favour Judith and Christine (and Christine's husband), the parties who moved for the defendant's appointment as trustee of the trusts. The plaintiff then goes on to set out what are said to be particulars of acting under direction and partiality towards Judith, Christine and her husband. Following discussion, the plaintiff sought to re‑plead [111] by considering what was originally pleaded in [240] to [248] of the statement of claim filed on 4 October 2018.
2. Although the defendant objected to leave being granted to the plaintiff to re‑plead any part of the substituted statement of claim on grounds that the plaintiff has had ample notice that re‑pleading was necessary and has had adequate opportunities to re‑plead, I formed the view that (leaving aside the provision of particulars in [5(b)], [32], [88], [95] to [97] and [110]) given re‑pleading was only strictly necessary in respect of one paragraph of the substituted statement of claim, that leave should be granted.

1. I formed the view that [112] and [114] to [116] should be struck out as these paragraphs as amended by the plaintiff in the amended substituted statement of claim filed on 14 April 2020 do not plead material facts and are merely statements of opinion in the nature of a submission.
2. The objections to [113] and [117] fell away as these paragraphs were struck out in the amended substituted statement of claim filed on 14 April 2020.

Correction of order made on 22 June 2018 pursuant to the slip rule

1. As the plaintiff points out, this proceeding commenced by originating summons, dated 16 May 2018. The first hearing date was on 12 June 2018 and orders were made admitting the matter to my CMC list and requiring the plaintiff to serve by email a copy of the originating summons and supporting affidavit on the plaintiff's mother and brothers and sisters who are beneficiaries of the trusts.
2. On 22 June 2018, I made an order (subsequently extracted) that the plaintiff file and serve a statement of claim on the defendant and Judith Anne Blenkinsop by 13 July 2018. I also made an order requiring the defendant to file a defence within 21 days of the filing and service of the plaintiff's statement of claim. The time for compliance with the order that the plaintiff file and serve a statement of claim was extended by order on 23 July 2018 to 30 July 2018, and extended again by an order made on 27 July 2018 to 13 August 2018. On 6 September 2018, the time for compliance with the order made on 22 June 2018 was further extended to 4 October 2018.
3. In item 2 of the joint list of issues for strategic conference on 8 May 2020 filed on 5 May 2020, the plaintiff for the first time raised an argument that if the matter is to proceed as if commenced by writ, orders are required pursuant to O 58 r 27.
4. Order 58 r 27(1) provides that if an originating summons is not disposed of altogether on the first hearing thereof, the court shall give directions as to the further conduct of the proceedings as it thinks best adapted to securing the just, expeditious and economical disposal thereof.
5. The plaintiff also raises an argument for the first time that there is significant adverse consequences for him if the matter is to proceed as if commenced by writ of summons. However, the only specific issue raised as an adverse consequence is that the costs structure under the scale is different for matters commenced by originating summons and proceedings commenced by writ of summons. This issue as to differences in the scale is an issue raised by the plaintiff for the first time and follows the filing of several iterations of his statement of claim.
6. In these circumstances, it should not now be open to the plaintiff to raise such an argument in respect of the costs scale. However, in any event, the defendant concedes in his written submissions filed on 25 May 2020 that it would be open to the plaintiff to put an argument to the court about the applicability of particular items under the costs scale after the determination of these proceedings.
7. As to the power of the court to order that an application commenced by originating summons proceed as if commenced by writ of summons, in Frigger v Kitay, Allanson J observed that:[25]

The power to give directions under O 58 r 27 includes the power to order that the matter proceed as if commenced by writ of summons, and to order pleadings. When an order is made under O 58 r 27, the proceedings continue as if they had been commenced by writ: see Smith v Maloney (1998) 19 WAR 209.

1. Whilst it is arguable that it is implicit in the order made on 22 June 2018 requiring the plaintiff to file a statement of claim that the court had directed the matter to proceed as if commenced by writ, it is my view that the order should be corrected, pursuant to the slip rule.
2. Chief Justice Martin in Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 4], observed that the general principles that govern the application of the slip rule are as follows:[26]

First, the slip or omission which is said to have given rise to the error must be properly characterised as inadvertent or accidental - the product of oversight rather than afterthought. Second, the 'error' said to arise from the accidental slip or omission must be such that its correction does not require the exercise of an independent discretion nor is it a matter upon which a real difference of opinion might exist.

These principles are conveniently illustrated by some of the cases on the topic. In each of Shaddock, Gould and Orchard Holdings, orders were made under the slip rule allowing interest on the judgment sum in cases in which the legal representatives of the parties inadvertently omitted to ask for interest, and there was no doubt that interest would have been allowed if requested at the time of judgment. On the other hand, in Mandurah Enterprises, an application under the slip rule for an order setting aside the orders for costs made by the primary judge was dismissed because the arguments in favour of such an order were neither obvious nor compelling.

1. Order 1 of the order made on 22 June 2018 was made in the form proposed by the defendant in [1] of a minute of proposed orders filed on 21 June 2018.
2. The failure of the defendant to specifically seek an order, or for the court to specifically order, that the originating summons proceed as if commenced by writ is clearly an inadvertent or accidental error. Plainly, in circumstances where pleadings were to be ordered, it cannot be said that such an order would not have been made on 22 June 2018.
3. For these reasons, I will make an order that order 1 of the order made on 22 June 2018 should be corrected by adding the words:

Pursuant to O 58 r 27 of the Rules of the Supreme Court 1971, the originating summons filed on 16 May 2018 proceed as if begun by writ of summons, and

Pursuant to O 58 r 27 of the Rules of the Supreme Court 1971, the originating summons filed on 16 May 2018 proceed as if begun by writ of summons, and the plaintiff file and serve a statement of claim on the defendant and Judith Anne Blenkinsop by 13 July 2018.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Rules of the Supreme Court 1971 (WA) O 20 r 2.

[2] EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23 [124] (Buss JA; Owen & Newnes JJA agreeing); Great Southern Finance Pty Ltd (in liq) v Rhodes [2014] WASC 431 [28] (Beech J); Betfair Pty Ltd v Racing New South Wales [2010] FCAFC 133; (2010) 273 ALR 664 [49] (Keane CJ, Lander & Buchanan JJ).

[3] Great Southern Finance Pty Ltd (in liq) v Rhodes [2014] WASC 431 [26] (Beech J); applying Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46] (Gleeson CJ, Gummow, Hayne & Crennan JJ); Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] (Gaudron, McHugh, Gummow & Hayne JJ).

[4] Great Southern Finance Pty Ltd (in liq) v Rhodes [2014] WASC 431 [26] (Beech J).

[5] Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers-Western Australian Branch v Bell-A-Bike Rottnest Pty Ltd [2005] WASCA 157 [54] (Roberts-Smith JA); Pancontinental Mining Ltd v Posgold Investments Pty Ltd [1994] FCA 983; (1994) 121 ALR 405, 414 (Beaumont J); Mutual Life & Citizens' Assurance Co Ltd v Evatt [1970] UKPCHCA 2; (1970) 122 CLR 628, 631.

[6] Automotive, Food, Metals, Engineering Printing & Kindred Industries Union of Workers-Western Australian Branch v Bell-A-Bike Rottnest Pty Ltd [2005] WASCA 157 [54] (Roberts-Smith JA).

[7] Lindon v Commonwealth of Australia (No 2) [1996] HCA 14; (1996) 136 ALR 251, 256 (Kirby J); Coe v Commonwealth of Australia [1979] HCA 68; (1979) 24 ALR 118, 127 (Gibbs J); Del Borrello v Friedman and Lurie (a firm) [2001] WASCA 348 [61] (Kennedy J).

[8] Culleton v Permanent Custodians Ltd [2018] WASC 251 [33] (Allanson J).

[9] Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 [7].

[10] DM Drainage & Constructions Pty Ltd v Karara Mining Ltd [2014] WASC 170 [32] (Beech J); applying Charlie Carter Pty Ltd v The Shop Distributive & Allied Employees Association of Western Australia [1987] FCA 135; (1987) 13 FCR 413, 417; Lonsdale Investments v OM (Manganese) Ltd [2009] WASC 188 [5].

[11] DM Drainage & Constructions Pty Ltd v Karara Mining Ltd [2014] WASC 170 [34]; applying Hart‑Roach v Public Trustee (Unreported, WASC, Library No 980044, 11 February 1998); Kidd v Mitchell Frederick Artus trading as Downings Legal [2013] WASC 264 [26].

[12] Ron Hodgson (trading) Pty Ltd v Belvedere Motors (Hurtsville) Pty Ltd [1971] 1 NSWLR 472, 477 (Asprey JA; Holmes JA agreeing & Moffett JA relevantly agreeing).

[13] Herbert as trustee for the Blenkinsop Family Trust as trustee for the Blenkinsop Family Trust No 2 v Blenkinsop [No 2] v Blenkinsop [No 2] [2019] WASC 389 (S) [18] ‑ [25].

[14] Patrick Jebb as trustee for The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [2019] WASC 121 [102]. (footnotes omitted)

[15] Patrick Jebb as trustee for The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [2019] WASC 121 [106] - [111]. (footnotes omitted)

[16] Blenkinsop v Blenkinsop Nominees Pty Ltd as Trustee for the Blenkinsop Family Trust [2015] WASC 463.

[17] Jacobs' Law of Trusts in Australia (8th ed) [15‑85].

[18] Jacobs' Law of Trusts in Australia (8th ed) [15‑85].

[19] Plaintiff's submissions, filed on 16 May 2020. (footnotes omitted)

[20] Woodings as liquidator of The Bell Group Ltd and the Bell Group Finance Pty Ltd v WA Glendinning & Associates Pty Ltd [2019] WASC 54 [121] ‑ [122]. (footnotes omitted)

[21] Herbert as trustee for the Blenkinsop Family Trust as trustee for the Blenkinsop Family Trust No 2 v Blenkinsop [No 2] [2019] WASC 389 [74] ‑ [75].

[22] Herbert as trustee for the Blenkinsop Family Trust as trustee for the Blenkinsop Family Trust No 2 v Blenkinsop [No 2] [2019] WASC 389 (S) [18] ‑ [25]. (footnotes omitted)

[23] Order made by Allanson J in CIV 1537 of 2014; and Herbert as trustee for the Blenkinsop Family Trust as trustee for the Blenkinsop Family Trust No 2 v Blenkinsop [No 2] [2019] WASC 389.

[24] Being the recent decision delivered by Allanson J on 1 November 2019 in Herbert as trustee for the Blenkinsop Family Trust as trustee for the Blenkinsop Family Trust No 2 v Blenkinsop [No 2] [2019] WASC 389.

[25] Frigger v Mervyn Jonathon Kitay in his capacity as liquidator of Computer Accounting & Tax Pty Ltd (in liq) [No 3] [2014] WASC 24 [51].

[26] Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 4] [2015] WASCA 253 [28] ‑ [29] (Buss & Newnes JJA agreeing). (footnotes omitted)