[2025] VSCA 145
General information, not legal advice.
Court of Appeal (Vic)
2025-06-27
Gorton J
Original judgment source is linked above.
In Re Buckton, Kekewich J set out a tripartite classification of disputes involving trustees and explained the costs consequences that typically flow from cases in each category. The first is an action brought by trustees relating to the construction of a trust instrument or some other question arising in the course of the administration of a trust, in which case the costs of all parties are treated as necessarily incurred for the benefit of the estate and are ordered to be paid out of the fund on an indemnity basis. The second is where a dispute involves an application which is made by a party other than the trustee, but raises the same issues as the first category and would have justified an application by the trustee. In this instance, the same rule applies in relation to a trustee's costs, because the application is considered to be for the benefit of the trust estate. The final category of trustee dispute involves the bringing of a hostile claim against a trustee (or another beneficiary) by a beneficiary. Costs in this type of case are treated in the same way as in ordinary litigation, that is, they follow the event. As was observed by his Honour:
- It is often difficult to discriminate between cases of the second and third classes, but when once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs.
However, in such cases, a trustee that properly, albeit not necessarily successfully, defends a claim for the benefit of the estate will be entitled to their costs out of the estate, to the extent that they are not recovered from another party.[122]
I conclude that the so-called rule in probate cases does not apply in the case before us. The probate rule is rooted in the inquisitorial exercise that was conducted by the ecclesiastical courts and the Probate Division where the court had to be satisfied of the validity of the will before it could pronounce for the will and admit it to probate. The effect of mutual wills upon the distribution of the estate under a later will which is admitted to probate is a matter for the Chancery Division applying the law of trusts; it is not a matter of probate law and practice. The nature of that litigation is not inquisitorial: it is adversarial and, not infrequently, very adversarial as the two families disunited by death battle for their perceived true inheritance. That is exactly what has happened here. It may be unfortunate that the two sides of the family have locked horns in battle with no quarter given. In my judgment the judge was entitled to find, indeed right to find, that 'the contention between the parties was not unlike any other hostile litigation and not such that would enable the court to move away from the general rule'. The reasons she gave in para 39 of her judgment ... [are] beyond challenge: there would be a plain injustice if the claimants were deprived of any benefit of their success. The challenge by the defendants as to what had been said and done and the legal consequences of that behaviour do not provide a reason for departing from the general rule that costs follow the event.[127]
[1] Without disrespect, we will refer to the principals in this case by their first names.
[2] We will refer to Kurt's children as 'the respondents', notwithstanding Ms Kallweit's status as the third respondent. Ms Kallweit took no active role in the proceedings.
[3] Re Miglic [2014] VSC 20 [5] (Gorton J) ('Reasons').
[5] Ibid 683. See also Baird v Smee [2000] NSWCA 253 [65] (Giles JA, Mason P agreeing at [1]) ('Baird').
[6] Birmingham v Renfrew [1937] HCA 52; (1937) 57 CLR 666, 685 (Dixon J) citing Francis Hargrave, Juridical Arguments and Collections (GG & J Robinson, 1797-99) vol 2, 295.
[7] Osborne v Osborne [2001] VSCA 228 [24] (Buchanan JA, Winneke P agreeing at [19], Vincent JA agreeing at [30]) ('Osborne').
[8] Birmingham v Renfrew [1937] HCA 52; (1937) 57 CLR 666, 681 (Dixon J).
[9] Ibid 674-5 (Latham CJ) (citations omitted).
[11] Ibid 683; see also 674-5 (Latham CJ), 692 (Evatt J); Osborne [2001] VSCA 228 [24]-[25] (Buchanan JA, Winneke P agreeing at [19], Vincent JA agreeing at [30]), citing Re Dale [1994] Ch 31, 48-9 (Morritt J).
[12] Legg v Burton [2017] EWHC 2088; [2017] 4 WLR 186 [20] (Matthews J), citing Lord Walpole v Lord Orford [1797] EngR 489; (1797) 3 Ves Jun 402; 30 ER 1076, 1084-5 (Lord Loughborough LC); Re Cleaver, deceased [1981] 1 WLR 939, 947 (Nourse J).
[13] Osborne [2001] VSCA 228 [15] (Winneke P); see also [29] (Buchanan JA), [30] (Vincent JA).
[14] Baird [2001] NSWCA 253 [12] (Mason P), citing Re Oldham [1925] Ch 75, 88 (Astbury J).
[15] Re Goodchild, deceased [1997] EWCA Civ 1611; [1997] 1 WLR 1216, 1225 (Leggatt LJ, Morritt LJ agreeing at 1229, Phillips LJ agreeing at 1231).
[17] Such evidence is admissible under s 63(2) of the Evidence Act 2008.
[18] Reasons [10], citing Watson v Foxman [1995] NSWCA 497; (1995) 49 NSWLR 315, 319 (McLelland CJ in Eq); Roberts-Smith v Fairfax Media Pty Ltd [No 41] (2023) 417 ALR 320-1 [162]-[166] (Besanko J); [2023] FCA 555.
[19] Reasons [11], citing Osborne [2001] VSCA 228 [29] (Buchanan JA, Vincent JA agreeing at [30]).
[20] Ibid [16]-[19], [116]-[117](a).
[29] Ibid [117](e). As set out below, the parties are in dispute as to whether this conclusion was an inference drawn from the evidence as a whole, of a finding of primary fact.
[32] Gray v The Perpetual Trustee Company Co Ltd [1928] UKPCHCA 1; (1928) 40 CLR 558, 565 (Viscount Haldane for the Privy Council); Baird [2000] NSWCA 253, [25]-[26] (Handley JA).
[33] Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, 362 (Dixon J); Osborne [2001] VSCA 228 [27] (Buchanan JA, Vincent JA agreeing at [30]).
[34] Birmingham v Renfrew [1937] HCA 52; (1937) 57 CLR 666, 674 (Latham CJ).
[35] Re Goodchild [1997] EWCA Civ 1611; [1997] 1 WLR 1216, 1225 (Leggatt LJ, Morritt LJ agreeing at 1229, Phillips LJ agreeing at 1231). The relevant passage in Leggat LJ's reasons is set out and discussed at [29] and following above.
[39] Legg v Burton [2017] EWHC 2088; [2017] 4 WLR 186 [61]-[63] (Matthews J).
[40] Baird [2000] NSWCA 253 [71] (Giles JA, Mason P agreeing at [1]).
[41] Renfrew v Birmingham [1937] VicLawRp 21; [1937] VLR 180; Low v Perpetual Trustees WA Ltd (1995) 14 WAR 35 ('Low').
[42] Birmingham v Renfrew [1937] HCA 52; (1937) 57 CLR 666, 682 (Dixon J). See also Low (1995) 14 WAR 35, 42 (Master Adams)
[43] The respondents supported this claim with reference to Renfrew v Birmingham [1937] VicLawRp 21; [1937] VLR 180.
[44] The judge did not make any findings on this point, but it appeared to be common ground amongst the parties that Marilyn consumed a lot of alcohol. At trial, senior counsel for the appellants accepted that she was 'a drinker', but sought to downplay the extent and impact of her drinking.
[47] Perronnet v Goedemans [2025] VSCA 28 [139]-[143] (Niall CJ, McLeish and Kennedy JJA).
[49] Ibid 125-6 [22]-[23] (citations omitted).
[50] [2016] HCA 22; (2016) 90 ALJR 679, 686-7 [43] (French CJ, Bell, Keane, Nettle and Gordon JJ) (citations omitted).
[51] [2019] HCA 28; (2019) 266 CLR 129, 148-9 [55] (Kiefel CJ agreeing at 134 [1]) (citations omitted).
[53] Reasons [117(e)] (emphases added).
[54] Roberts-Smith v Fairfax Media Publications Pty Ltd [2025] FCAFC 67 (Perram, Katzmann and Kennett JJ)): 'In deciding whether a trial judge erred, a court is not entitled to disregard parts of the evidence'.
[62] Re Pauling's Settlement Trusts [No 2] [1963] 1 Ch 576, 585-6 (Wilberforce J).
[63] Nocton v Lord Ashburton [1914] UKLawRpAC 31; [1914] AC 932, 952 (Viscount Haldane LC); O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262, 272 (Spigelman CJ, Priestley JA agreeing at 280, Meagher JA agreeing at 281).
[64] GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113 [71] (Warren CJ, Chernov JA agreeing at [87], Dodds-Streeton AJA agreeing at [95]).
[66] Re Hallett's Estate [1880] UKLawRpCh 38; (1879) 13 Ch D 696 (Jessel MR).
[67] Re Oatway [1903] UKLawRpCh 79; [1903] 2 Ch 356.
[68] Foskett v McKeown [2000] UKHL 29; [2001] 1 AC 102, 133 (Lord Millett, Lord Browne-Wilkinson agreeing at 111, Lord Hoffmann agreeing at 115) ('Foskett').
[69] Toksoz v Westpac Banking Corporation [2012] NSWCA 199; (2012) 289 ALR 577, 579 [8]-[10] (Allsop ACJ, Hoeben JA agreeing at 584 [32], Sackville AJA agreeing at 584 [33]); [2012] NSWCA 199 ('Toksoz').
[70] The appellants accepted that these assets could not be traced to the inheritance under Gertrude's will.
[74] The respondents did not, however, concede that there was intermingling of assets. On this point, they said there was no way to know, and noted the possibility that the amount was preserved in one of Marilyn's term deposits.
[77] The respondents said that Nestle v National Westminster Bank plc [1994] 1 All ER 118 ('Nestle') is illustrative of the type of evidence that would have been led had an equitable compensation claim been advanced. They focused, in particular, on competing expert evidence and attention to the personal circumstances of life tenants and remaindermen, as reflected at 136-7.
[78] Taylor v Plumer [1815] EngR 551; (1815) 3 M & S 562; 105 ER 721, 726 (Lord Ellenborough CJ); Re Diplock [1948] 1 Ch 465, 536-7 (Lord Greene MR, Wrottesley and Evershed LJJ).
[79] Re Hallett's Estate [1880] UKLawRpCh 38; (1879) 13 Ch D 696 (Jessel MR).
[83] The amount of $4.25 million was based on a calculation by Mr Plover which assumed that income would be reinvested.
[84] In the appeal, but it seems not at trial, reference was made in this context to Toksoz.
[85] [2000] UKHL 29; [2001] 1 AC 102, 133 (Lord Millett, Lord Browne-Wilkinson agreeing at 111, Lord Hoffmann agreeing at 115).
[87] Foskett [2000] UKHL 29; [2001] 1 AC 102, 127 (Lord Millett, Lord Browne-Wilkinson agreeing at 111, Lord Hoffmann agreeing at 115).
[89] Ibid 127 (Lord Millett, Lord Browne-Wilkinson agreeing at 111, Lord Hoffmann agreeing at 115).
[91] Ibid 130, citing James Barr Ames, 'Following Misappropriated Property into its Product' (1906) 19(7) Harvard Law Review 511.
[92] Foskett [2000] UKHL 29; [2001] 1 AC 102, 128 (Lord Millett, Lord Browne-Wilkinson agreeing at 111, Lord Hoffmann agreeing at 115).
[95] Ibid 128 (Lord Browne-Wilkinson agreeing at 111, Lord Hoffmann agreeing at 115).
[96] [2012] NSWCA 199; (2012) 289 ALR 577, 579 [8] (Allsop ACJ, Hoeben JA agreeing at 584 [32], Sackville AJA agreeing at 584 [33]); [2012] NSWCA 199.
[97] See, eg, Nestle [1994] 1 All ER 118.
[98] See, eg, Sambucco v Sambucco (2023) 72 VR 121, 127-8 [29]-[30] (McLeish and Walker JJA and Gorton AJA), citing Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1, 7-8 (Gibbs CJ, Wilson, Brennan and Dawson JJ); Water Board v Moustakas (1988) 180 CLR 491, 497 (Mason CJ, Wilson, Brennan and Dawson JJ).
[99] See, eg, Trustee Act 1958 s 8(1)(d).
[100] The judge gave his reasons for his costs orders in two separate rulings, both delivered on the same day. For present purposes, there is no need to distinguish between them.
[101] Davies v Gregory (1873) LR 3 P&D 28; Re Tsaousis [2019] VSC 511 [32]-[33] (McMillan J).
[102] Shovelar v Lane [2011] EWCA Civ 802; [2012] 1 WLR 637, 652 [44] (Ward LJ, Arden LJ agreeing 656 [62], Moore-Bick LJ agreeing at 656 [63]) ('Shovelar'); Fielder v Burgess [2014] SASC 98; De Bruyne v Welstead [2022] NSWSC 886.
[103] Shovelar [2011] EWCA Civ 802; [2012] 1 WLR 637, 652 [44] (Ward LJ, Arden LJ agreeing 656 [62], Moore-Bick LJ agreeing at 656 [63]).
[104] House v The King (1936) 55 CLR 499.
[105] Alsop Wilkinson v Neary [1996] 1 WLR 1220, 1224 (Lightman J), citing McDonald v Horn [1995] ICR 685, 696 (Hoffmann LJ).
[106] Re Frosthollow Pty Ltd [2015] VSC 512 [11] (McDonald J).
[107] Re Evans [1986] 1 WLR 101, 107 (Nourse LJ, Robert Goff LJ agreeing at 108, O'Connor LJ agreeing at 108).
[109] Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164, 173 [25] (Kiefel CJ, Bell, Gageler, Keane, Nettle JJ).
[110] Cargill Australia Ltd v Viterra Malt Pty Ltd [2023] VSCA 301 [63] (Sifris, Walker and Whelan JJA) ('Cargill').
[111] In the appellants' submission, this distinguished the instant case from Reed v Smith [No 2] [2022] QSC 229, where the unsuccessful party failed to establish that the testator had breached a mutual wills agreement. It was, therefore, not a case where it could be said that the testator had caused the litigation.
[112] See, eg, Gray v Perpetual Trustee Co Ltd [1928] UKPCHCA 1; (1928) 40 CLR 558, 566 (Viscount Haldane for the Privy Council).
[113] Re Tsaousis [2019] VSC 511 [32]-[33] (McMillan J); Forsyth v Sinclair [No 2] [2010] VSCA 195; (2010) 28 VR 635, 641-2 [21]-[25] (Neave and Redlich JJA and Habersberger AJA).
[114] See, eg, Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, 401 (Woodward J); [1988] FCA 364.
[115] See, similarly, In re Buckton [1907] UKLawRpCh 98; [1907] 2 Ch 406, 416-7 (Kekewich J). Cf Re Cunningham (1914) 31 WN (NSW) 44.
[116] Shovelar [2011] EWCA Civ 802; [2012] 1 WLR 637, 652 [44] (Ward LJ, Arden LJ agreeing 656 [62], Moore-Bick LJ agreeing at 656 [63]).
[117] See, eg, Cargill [2023] VSCA 301 [63] (Sifris, Walker and Whelan JJA); United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2020] VSCA 15 [124] (Whelan, McLeish and Niall JJA); Spotless Group Ltd v Premier Building and Consulting Pty Ltd [2008] VSCA 115 [10]-[11] (Redlich JA, Dodds-Streeton JA agreeing at [47]).
[119] Kyne v Gerard Brandrick & Associates Pty Ltd [2025] VSCA 17 [66] (Niall CJ, McLeish and Kennedy JJA) ('Kyne'); Cargill [2023] VSCA 301 [64] (Sifris, Walker and Whelan JJA); PCCEF Pty Ltd v Geelong Football Club Ltd [No 2] [2019] VSCA 148 [40]-[41] (Whelan, McLeish and Emerton JJA); Bodycorp Repairers Pty Ltd v GDG Legal Pty Ltd [2018] VSCA 32 [18] (Ferguson CJ, Whelan and McLeish JJA); 24 Hour Fitness Pty Ltd v W & B Investment Group Pty Ltd [2015] VSCA 216 [53] (Hansen, Ferguson and McLeish JJA).
[120] Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164, 172-3 [24] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ); Kyne [2025] VSCA 17 [66] (Niall CJ, McLeish and Kennedy JJA).
[122] [2022] VSC 357 [10] (citations omitted).
[123] See, eg, Re Tsaousis [2019] VSC 511 [33] (McMillan J); Re Papavasilou; Theofanous v Aizen [No 2] [2023] VSC 118 [15] (McMillan J) ('Re Papavasilou').
[124] Re Tsaousis [2019] VSC 511 [32] (McMillan J); Re Papavasilou [2023] VSC 118 [14] (McMillan J).
[125] [2011] EWCA Civ 802; [2012] 1 WLR 637, 647 [32] (Arden LJ agreeing 656 [62], Moore-Bick LJ agreeing at 656 [63]), citing Mitchell v Gard (1863) 3 Sw & Tr 275; 164 ER 1280, 1281 (Sir James Wilde).
[126] Shovelar [2011] EWCA Civ 802; [2012] 1 WLR 637, 649 [34] (Ward LJ, Arden LJ agreeing 656 [62], Moore-Bick LJ agreeing at 656 [63]); Fielder v Burgess [2014] SASC 98 [61]-[65] (Kourakis CJ).
[127] Shovelar [2011] EWCA Civ 802; [2012] 1 WLR 637, 652 [44] (Arden LJ agreeing 656 [62], Moore-Bick LJ agreeing at 656 [63]) (citations omitted).
[128] Ibid 651 [41], citing Gray v The Perpetual Trustee Company Co Ltd [1928] UKPCHCA 1; (1928) 40 CLR 558, 565 (Viscount Haldane for the Privy Council).
Cottrell
Miglic [2025] VSCA 145
Re Miglic [2024] VSC 20; Re Miglic [Nos 2 and 3] (Supreme Court of Victoria, Gorton J, 8 February 2024)
Birmingham v Renfrew [1937] HCA 52; (1937) 57 CLR 666; Fox v Percy (2003) 214 CLR 118; Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679; Lee v Lee [2019] HCA 28; (2019) 266 CLR 129; Mantovani v Vanta Pty Ltd [No 3] [2022] VSC 357, referred to; Re Goodchild, deceased [1997] EWCA Civ 1611; [1997] 1 WLR 1216; Shovelar v Lane [2011] EWCA Civ 802; [2012] 1 WLR 637, explained; Foskett v McKeown [2000] UKHL 29; [2001] 1 AC 102; Toksoz v Westpac Banking Corporation [2012] NSWCA 199; (2012) 289 ALR 577, distinguished; Re Buckton [1907] UKLawRpCh 98; [1907] 2 Ch 406, considered; Sambucco v Sambucco (2023) 72 VR 121, applied.
(2003) 214 CLR 118
(2012) 289 ALR 577
(2023) 417 ALR 320
(1928) 40 CLR 558
(2019) 266 CLR 129
(1977) 180 CLR 266
(1995) 49 NSWLR 315
(1938) 60 CLR 336
(1995) 14 WAR 35
(1988) 180 CLR 491
(1936) 55 CLR 499
(2019) 265 CLR 164
(1988) 81 ALR 397
(2016) 90 ALJR 679
(1937) 57 CLR 666
(2023) 72 VR 121
(1998) 45 NSWLR 262
(1986) 162 CLR 1
(2010) 28 VR 635