David Resler Walton by his tutor John Mann v Terence Hartman as executor of the estate of Wanda Resler

Judgment (5 paragraphs)

[1]

Solicitors: Turner Freeman (plaintiff/tutor) Hartmann & Associates (defendants) Russo & Partners Pty Ltd (for the applicant on the motion) File Number(s): 2016/98010 & 2016/318514

[2]

Procedural background

These proceedings first came before me in October 2016, when Mr Daniel Resler Walton sought to commence proceedings against the executors (Mr Terence Hartmann and Elizabeth Svenne) of the estate of his late grandmother, Wanda Resler.
By Notice of Motion filed 26 June 2017, Mr Hartman sought that the proceedings be dismissed on the basis that Mr Walton lacked legal capacity to commence the proceedings.
During the proceedings and in defending the motion, Mr Russo, acted as Mr Walton's solicitor. He had been a long-time friend of Mr Walton and gave evidence in the proceedings to the effect that he believed that Mr Walton was capable, at least some of the time, of giving adequate instructions. I found that Mr Walton was not incapacitated at October 2016, but that the appointment of a tutor was appropriate going forward. I refer to my decision in Daniel Walton v Terence George Hartmann as executor of the Estate of Wanda Resler [2017] NSWSC 1432.
Mr Mann was subsequently appointed as tutor for Mr Walton in early 2018. At a directions hearing on 9 February 2018, I made the following comment in relation to Mr Russo (T2/44-48): May I say this: …He's going to be in a position to monitor what Mr Mann does, any costs that may be incurred by Mr Mann or if he chooses to retain counsel. I'm hoping that common sense prevails and that people co-operate in the interest of Mr Walton.

Legal principles

The role of tutors is well established and common practice in this Court. A tutor is an officer of the Court who, during proceedings, acts for the interests of the person under the legal incapacity and is responsible for the conduct of the proceedings (Rhodes v Smithenbank (1889) 22 QBD 577).
Relevantly, the Uniform Civil Procedure Rules 2005 (NSW) provide: 7.18 Court may appoint and remove tutors (1) In any proceedings in which a party is or becomes a person under legal incapacity - (a) if the person does not have a tutor, the court may appoint a tutor, or (b) if the person has a tutor, the court may remove the party's tutor and appoint another tutor. (2) In any proceedings concerning a person under legal incapacity who is not a party, the court may appoint a tutor of the person and join the person as a party to the proceedings. (3) If the court removes a party's tutor, it may also stay the proceedings pending the appointment of a new tutor. (4) Subject to any order of the court, notice of any motion under this rule is to be served on the person under legal incapacity and, if it proposes removal of the person's tutor, on the tutor. (5) In proceedings on a motion for the appointment of a tutor, evidence in support of the motion must include - (a) evidence that the party for whom a tutor is to be appointed is a person under legal incapacity, and (b) evidence that the proposed tutor consents to being appointed and does not have any interest in the proceedings adverse to the interests of the person under legal incapacity. (6) An application for appointment as tutor under this rule may be made by the court of its own motion or on the motion of any other person, including the proposed tutor.
It is clear by r 7.18(4) that the rules clearly contemplated a motion by a person for the removal of a tutor. As became apparent, the rules do not comprehensively provide for, who may bring an application to the Court for removal as a tutor, and the precise status of that person.
I was referred by Counsel for Mr Russo to the decision of Smith v NRMA Insurance Limited [2016] NSWCA 250, as an example of a case where an application for appointment of a tutor was made by solicitors on record for the applicant who was under a legal incapacity appearing as amicus curiae.
There are in fact various ways a person can participate in proceedings without becoming a party.
As is becoming more common, persons or often organisations, can appear as either intervener or amicus curiae. It is now fairly well established that when a person is accepted as an intervener, in general, they become a party to the proceedings with all the associated privileges. That is, they may be entitled to tender evidence, cross-examine and participate in all aspects of the argument. They further may be entitled to appeal a decision (Corporate Affairs Commission v Bradley (1974) 1 NSWLR 391 at 396-397). Their precise role and level of participation is always a matter for the discretion of the Court.
An amicus curiae on the other hand, as 'friend of the court' is not a party to the proceedings and generally has no rights or interest in the litigation, but acts as an advisor to the Court to call attention to particular matters of law or practice (Corporate Affairs Commission v Bradley at 399).
Brennan J in Levy v State of Victoria (1997) 189 CLR 579, considered the role of amicus curiae (at 604-605): The hearing of an amicus curiae is entirely in the court's discretion. That discretion is exercised on a different basis from that which governs the allowance of intervention. The footing on which an amicus curiae is heard is that that person is willing to offer the court a submission on law or relevant fact which will assist the court in a way in which the court would not otherwise have been assisted. In Kruger v Commonwealth speaking for the court, I said in refusing counsel's application to appear for a person as amicus curiae: As to his application to be heard as amicus curiae, he fails to show that the parties whose cause he would support are unable or unwilling adequately to protect their own interests or to assist the court in arriving at the correct determination of the case. The court must be cautious in considering applications to be heard by persons who would be amicus curiae lest the efficient operation of the court be prejudiced. Where the court has parties before it who are willing and able to provide adequate assistance to the court it is inappropriate to grant the application. It is not possible to identify in advance the situations in which the court will be assisted by submissions that will not or may not be presented by one of the parties nor to identify the requisite capacities of an amicus who is willing to offer assistance. All that can be said is that an amicus will be heard when the court is of the opinion that it will be significantly assisted thereby, provided that any cost to the parties or any delay consequent on agreeing to hear the amicus is not disproportionate to the assistance that is expected.
In United States Tobacco Co v Minister for Consumer Affairs (1988) 83 ALR 79, Davies, Wilcox and Gummow JJ noted certain circumstances where parties may be heard as an amicus curiae (at 94): Counsel appearing as amicus curiae have been heard where the interests of an infant or other disadvantaged person might not otherwise have been protected. Counsel for the Attorney-General appearing as amicus curiae have often been heard to make submissions in the public interest. But there is no prescription of the circumstances in which it may or may not be proper for a court to hear an amicus.
I also note that a person can appear as a McKenzie Friend (McKenzie v McKenzie [1970] 3 All ER 1034). The Court can allow an individual to assist a litigant in person by taking notes, suggesting potential questions and providing moral support if the Court is of the opinion that it is in the interests of justice to do so. The Court has further considered the danger in allowing 'paid' McKenzie friends to appear (Damjanovic v Maley (2002) 55 NSWLR 149).
It is important to determine the precise status and role a new party has as it may have implications for any costs order. For example, amicus curiae are often left to bear their own costs (see e.g Attorney-General (WA) v Marquet (2003) 217 CLR 545 at [86]; Franks v Franks [2012] NSWCA 209, [24]-[27]; Campbelltown City Council v Vegan (2006) 67 NSWLR 372, [64]). However as noted by Kirby P in Breen v Williams (1994) 35 NSWLR 522, the Court maintains the power to 'impose conditions or burdens of costs if the appearance were abused or unnecessarily protracted' (at 533) (see also WHW v Commissioner of Police [2014] WASC 153 (S)). It is also important to note the Court's general discretion as to costs under s 98 of the Civil Procedure Act 2005 (NSW) subject to any other rules of Court or any other Act.
The rules of Court further govern the costs that follow when proceedings are either discontinued or dismissed. The UCPR provides: 42.19 Proceedings discontinued (1) This rule applies to proceedings that are discontinued by the plaintiff, as referred to in rule 12.1. (2) Unless the court orders otherwise or the notice referred to in rule 12.1(2) otherwise provides, the plaintiff must pay such of the defendant's costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued. … 42.20 Dismissal of proceedings etc (1) If the court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the plaintiff must pay the defendant's costs of the proceedings to the extent to which they have been dismissed. (2) If the court makes an order striking out a defence, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the defendant must pay the plaintiff's costs of the proceedings in relation to those matters in respect of which the defence has been struck out.
The Court in Fordyce v Fordham (2006) 67 NSWLR 497 noted (at [84]): It is apparent from this review of authority that the Uniform CivilProcedure Rules, r 42.19 and r 42.20 default orders do not create apresumption that the opponents ought pay the cost of the Equity Divisionproceedings. They are a relevant, but not determinative, consideration. Otherrelevant considerations were, as the primary judge concluded, usefully gathered in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin and Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, notwithstanding, as the discussion below reveals, that they were decided in a different statutory context
The Court in Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622 (at 624-625): In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extracurial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. …. Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried.
In Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, Hill J noted (at 199); "No more can, or should, I think be said than that ultimately costs in interlocutory proceedings, like costs in the main proceedings, lie in the discretion of the Court, which discretion must be exercised judicially."

Consideration

It is worth first noting that the motion as pressed by Mr Russo had two main questions to be determined. The first being whether in fact Mr Russo had standing to bring such an application and second whether, on the merits of the case, Mr Mann should be replaced as tutor. These matters ultimately were not fully canvassed or explored. Only part of the evidence was completed, in particular only Mr Russo was cross-examined and there remained significant factual disputes as to the particular actions of Mr Mann and the executors as well as to the credit of various parties namely Mr Russo himself.
It is inappropriate for me to form a final view on these matters, however it is worth stating that I am of the view that any person who can provide relevant information to the Court, must be entitled to raise the issue, if they become aware that an officer of the Court, in this case a tutor, is acting inappropriately or not fulfilling their duties in some way. The Court, can of course, on its own motion seek the removal of a tutor, however that is only if it comes to its attention that something untoward may be happening. Practically speaking, this will not often be the case as clearly the Court does not have the ability or capacity to monitor all such appointed tutors. Therefore, it seems to me, entirely reasonable that someone such as a friend or family member or solicitor, is able to approach the Court if they have a genuine concern about the conduct of the tutor.
The exact status of such a person however is slightly unclear. As Mr Russo argued, he could be seen as an amicus curiae, or perhaps an intervener. I do not think however this is the case. It is clear to me, that Mr Russo is best described as the applicant on the motion. He is clearly a full party on this current motion with all the rights and responsibilities that attach to the full-party status. He is clearly not a party to the main proceedings. Mr Russo, is not helping or assisting in the substantive proceedings, he is not assisting with the determination of the ultimate probate or family provision proceedings. Rather he has, on his own volition, decided to bring this motion for the removal of the tutor and is in fact a party to the motion or perhaps more accurately the issues on the motion by bringing the application.
I note the fact that on the original motion, Mr Russo did not in fact seek leave to appear as amicus curiae. I also note that although Counsel for Mr Russo on 1 November asked that the application be treated as an 'application by a friend of the Court' (T2/31) however ultimately the issue of whether Mr Russo did in fact have standing was not finally determined. It seems totally incongruous to describe Mr Russo as an amicus curiae when he has not been a bystander but rather pushing the motion forward, seeking to tender evidence, and playing an active and important role in the proceedings. He has not simply assisted the court, but at one point rather perused his own interests and sought to recover his own costs.
His ultimate status is of course important to the final costs orders that follow. I regard it appropriate to treat him as an applicant on the motion, which given the rules and the prima facie object of the motion he had in my view the standing to bring.
The rules of Court provide that if parties settle a matter, certain consequences flow. The exact form of the settlement, whether it involves a discontinuance, a dismissal or some other order, will change the costs outcomes for the parties. Parties are always entitled to cease litigating without an explanation, however in some cases, accepting a particular settlement may amount to an acknowledgement of the weaknesses in one's argument. That is not to say that capitulation should necessarily be treated that way. Capitulation can indeed, depending upon the evidence, be appropriate and the only reasonable response to the running of a trial and a recognition of the dynamic nature of litigation.
As already noted, the evidence was not fully explored before me. However, on one view, it could be said, that Mr Russo had lost the ability objectively to challenge the assertions of Mr Walton. He certainly did not provide any evidence of medical experts as the capacity of Mr Walton, rather he seemed to have unilaterally decided that he was able to receive instructions from Mr Walton. This, at best, may be a gross error in judgement. Mr Russo appeared unable to accept my decision that Mr Walton was not capable of giving instructions and proceeded to charge him significant legal fees that he expected to be paid from the estate. Leaving to one side whether in fact Mr Russo was acting genuinely in what he believed to be Mr Walton's interests, it is clear to me that monitoring and reporting to Mr Walton on Mr Mann's costs, is far removed from operating under this so call 'shadow-brief' and incurring significant costs against someone incapable of providing adequate instructions.
I note that the Court would not wish to discourage the attempt by persons to bring to the Court's attention matters of genuine concern regarding tutors, however, as put forward by the plaintiff and defendants, this application seems to me misconceived. Counsel for Mr Russo, noted in submissions that he had made a forensic choice to withdraw the motion. It is apparent prima facie that there was a dearth of evidence to support any wrongdoing on the part of the tutor.
That said, clearly someone like Mr Russo in the appropriate circumstances, has in my view standing to bring to the Court's attention genuine matters of concern about the conduct of the tutor, who is after all an officer of the Court. A person who, however, makes such an application needs honestly and genuinely to form a view or belief that there is some inappropriate conduct on the part of the tutor before such an application can be brought. It would be a serious matter here to suggest Mr Russo did not hold such a belief. He is also an officer of the Court. There is insufficient evidence and the matter did not proceed sufficiently for me to form a view about that matter one way or the other.
Although it was put that his sole motivation in bringing the motion was recoupment of his costs (which he denied) it was not put that he did not hold a genuine belief that Mr Walton had legitimate grievances about Mr Mann.
I am prepared purely on this costs argument to give Mr Russo the benefit of the doubt (Briginshaw v Briginshaw (1938) 60 CLR 336, s 140 Evidence Act 1995 (NSW)). That is principally why I do not consider an order against him or his firm for indemnity costs is, in the circumstances, the appropriate order. Nonetheless he is seeking to discontinue (which I consider to be the appropriate application) and therefore, I am of the view that he or his firm should pay the costs of the other parties on an ordinary basis. I would also order should there be in any shortfall between their costs and what they recoup from Mr Russo on an ordinary basis, they should be indemnified for any shortfall out of the estate.
I would invite the parties to bring in short minutes to reflect these reasons.

At a glance

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Judgment (5 paragraphs)

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Legislation Cited (4)

Cases Cited (15)

Cited By (1)