Groser v Equity Trustees Limited [2008] VSC 163

Supreme Court of Victoria|2008-05-15|Before: HABERSBERGER J

Probate - Testator's family maintenance - Unfulfilled conditions subsequent to agreement settling disputed claim - Death of claimant prior to obtaining Attorney-General's non-opposition to settlement - Attorney-General's favourable decision made in ignorance of death of claimant - Whether Attorney-General's decision invalid and a nullity - Whether Court bound to make the consent orders agreed to in the settlement - Proceeding dismissed - Costs - Administration and Probate Act 1958 Part IV.

2 Mr Groser died on 8 December 2000. Probate of his will was granted to the defendant, Equity Trustees Limited ("Equity Trustees"), on 29 March 2001. In August 2006, Mrs Groser commenced this proceeding. Pursuant to s.99 of the Act, Gillard J extended the time within which Mrs Groser could bring her application.[1]

3 In his will, after appointing Equity Trustees as his executor and trustee, Mr Groser left a number of small pecuniary legacies to five nieces and a nephew. Clause 3 of the will gave a life interest to Mrs Groser in the matrimonial home in Glen Waverley. In addition, Mrs Groser was given the power to call upon the trustee to sell the Glen Waverley property, and out of the net proceeds of sale to purchase another property as a residence and to hold the same on trust for her. Any surplus after the sale and purchase was immediately to fall into and form part of the residuary estate. The clause went on to provide that upon the death of Mrs Groser, the original or substituted property would fall into and form part of the residuary estate.

4 Clause 4 of the will dealt with the balance of the real and personal property. This was given to Equity Trustees upon trust, to be divided into ten equal parts. Six of those parts were to be held in "a separate trust fund", known as "Marjorie's Fund", and Mrs Groser was to receive the actual net income derived from that fund. Two of those parts were to be held in "a special trust fund" named after the daughter of Mr and Mrs Groser ("Christine's Fund") and the remaining two parts in "a special trust fund" named after their son ("Anthony's Fund"). By clause 5 of the will, the trustee was authorised to pay the income of each special trust fund to the particular child and her or his descendants. After the death of Mrs Groser, Marjorie's fund was to be divided into two equal parts and paid into the special trust funds created for the two children. After the death of the particular child, certain sums were to be paid to each of the surviving children of that person and the balance, if any, was then to be transferred into a charitable trust to be held in perpetuity, to be called the "Adrian C. Groser Trust". In clause 6 of the will, Mr Groser expressed the wish that the income of the charitable trust be paid equally to four named charities.

5 In mid 2001, at the request of Mrs Groser, the Glen Waverley property had been sold and a substitute property in Mt Eliza purchased. In his judgment, Gillard J said that it was a moot point whether clause 3 of the will authorised the sale of the Mt Eliza property and the purchase of another residence for Mrs Groser. His Honour expressed the view that the clause did not authorise the acquisition of a third residence or the use of the proceeds of sale of the second residence in meeting the costs of living in a nursing home, because, first, the authority to sell the Glen Waverley home referred to a power "to sell the said property" and, secondly, if there was a surplus at any time after a sale, that surplus was to fall into and form part of the residuary estate.[2] This conclusion was of some importance as Mrs Groser's health had deteriorated to the point where she needed the care and services provided by a nursing home and that potential cost formed the basis of her application nearly six years after her husband's death.

6 Following a mediation on 21 August 2007, the proceeding was set down for trial on 6 March 2008. The solicitors for Equity Trustees then wrote to Mrs Groser's solicitors by a letter dated 11 September 2007 stating:

We are instructed to offer to settle the Proceeding on the basis that the parties seek, by consent, orders to the following effect in the proceeding:

further provision be made for Mrs Groser by treating clause 3 of the Will as if it read (the changes are marked) -

"3. I devise my property situate at and known at the date of this my Will as 35 Torwood Avenue Glen Waverley (or any other property forming my principal place of residence at my death) to my Trustee UPON TRUST for the use and enjoyment of my wife MARJORIE OLIVE GROSER for life subject to her paying all rates taxes and other outgoings on the said property and to her keeping the said property in good and tenantable repair and insured against loss to the satisfaction of my Trustee and I EMPOWER my Trustee at any time and from time to time during the lifetime of MARJORIE OLIVE GROSER upon her written request so to do to sell the said property or any substitute property either by public auction or by private treaty on such terms and conditions and for market value and to:

(a) purchase either at public auction or by private treaty and upon such terms and conditions and for such price as my Trustee in its absolute discretion shall think fit out of the said net proceeds of sale such other dwelling-house, self-contained unit, or flat or retirement village unit or other place of accommodation or residence notwithstanding that the latter may not return the full purchase price at the time of sale and to hold the same upon trust for the use and enjoyment of my said wife MARJORIE OLIVE GROSER upon the same terms hereinbefore stated in respect of my original residence; or

(b) apply the proceeds of sale to the payment of a nursing home bond or like payment or surety in respect of accommodation for my said wife MARJORIE OLIVE GROSER.

and upon the death of my said wife and the said property whether original or substituted shall fall in to and form part of my residuary estate AND IF there is a surplus at any time (after allowing for all usual expenses associated with such sale and purchase) after the sale of a property and the purchase of a substituted property the surplus shall immediately fall in to and form part of my residuary estate or interest acquired under this clause that surplus:

(a) shall be held for the use and enjoyment of my said wife MARJORIE OLIVE GROSER during her lifetime;

(b) may be applied from time to time in any manner permitted by this clause; and

a capital provision of $275,000.00 be made from Marjorie's Fund for Mrs Groser absolutely;
Mrs Groser's costs of the proceeding be paid from Marjorie's Fund on a solicitor/client basis, to be taxed if not agreed; and

4. our client's costs be paid from Marjorie's Fund.

Any agreement resulting from acceptance of this offer will be conditional on the Attorney-General indicating that he approves the Proceeding being settled on the terms outlined in this letter.

8 By a letter dated 24 September 2007, Mrs Groser's solicitors replied to Equity Trustees' solicitors with a counter offer to settle her claim for further provision on the basis set out in the letter of 11 September 2007, except that the capital sum was to be increased from $275,000 to $300.000.

9 On 3 October 2007, the solicitors for Equity Trustees faxed to Mrs Groser's solicitors a letter, incorrectly dated 11 September 2007, in which they said that they were instructed to accept the counter offer. The letter continued:

We note that the agreement constituted as a result of the acceptance in this letter is conditional on the Attorney-General indicating that he approves the Proceeding being settled on the terms outlined in our letter dated 11 September 2007 (with the sum of $275,000 increased to $300,000).

10 By a letter dated 25 October 2007, the solicitors for Equity Trustees wrote to the Victorian Government Solicitor seeking the Attorney-General's approval to the proceeding being settled on the terms set out in the above correspondence.

11 The Victorian Government Solicitor responded by a letter dated 26 November 2007, which advised Equity Trustees' solicitors that:

The Attorney-General has instructed us that he does not oppose the conditional terms of settlement agreed between the parties.[3]

That instruction was apparently given by the Attorney-General to the Victorian Government Solicitor on 23 November 2007.

12 By an email dated 5 December 2007, the solicitors for Equity Trustees advised Mrs Groser's solicitors that their client would waive the requirement for the Attorney-General's "approval" and that the advice that the Attorney-General would "not oppose" the settlement would be treated as satisfying the relevant condition. Reference was then made to initiating "the necessary application to the court" for the making of orders reflecting the settlement.

13 However, before this was done, by a letter dated 14 December 2007, the solicitors for Equity Trustees wrote to Mrs Groser's solicitors informing them that their client had ascertained that Mrs Groser had died on 31 October 2007. Subsequent inquiry by Mrs Groser's solicitors revealed that she had indeed died on that day.

14 The solicitors then exchanged correspondence putting the respective arguments about whether or not the agreement reached on 3 October 2007 was binding on the parties. Further, upon being advised of this new development, the Victorian Government Solicitor stated in a facsimile dated 15 February 2008 as follows:

We confirm that the Attorney-General has instructed us that, had he been aware at the time he made his decision that the plaintiff had died, he would not have indicated his non-opposition to the conditional terms of settlement agreed between the parties prior to the plaintiff's death (Settlement). Accordingly, we are instructed that the Attorney-General now opposes the Settlement.

15 The dispute not having been resolved, it came on for hearing before me on the limited question of whether the settlement was enforceable. By consent, I made an order at the commencement of the hearing that Mrs Groser's executor, her son Anthony Paul Groser, be substituted as the plaintiff in this proceeding. I also gave the Attorney-General for Victoria leave to intervene in his role as "the guardian of the public interest in the enforcement of charities".[4] Counsel for the plaintiff opposed this application as unnecessary because the defendant/executor had the task of upholding the will, which meant that the interests of the residuary beneficiaries would be protected. However, in the unusual circumstances of this proceeding, involving the question of the Attorney-General's consent to a settlement of a claim which impacted on charities generally, alternatively, on the preferred residuary beneficiaries, it seemed to me to be entirely appropriate to hear from counsel for the Attorney-General.[5]

16 Very briefly, the competing submissions were as follows. Mr Phillips of counsel, who appeared for the plaintiff, submitted that the correspondence between the solicitors gave rise to a concluded compromise or settlement of the proceeding. There was, he submitted, a binding and enforceable agreement which only ceased to be of effect if:

(a) the Attorney-General did not approve the proceeding being compromised in accordance with the terms of the settlement agreement, or

(b) for some reason the Court did not make the consent order required by the settlement agreement.

17 Mr Phillips submitted that the Attorney-General had satisfied the first condition when he gave instructions that he did not oppose the settlement and that the subsequent death of Mrs Groser did not change that approval. Secondly, Mr Phillips submitted that the Court should now give effect to the agreement, which had been freely negotiated by the parties, all of whom were of full legal capacity. Once the agreement was reached the proceeding ceased to be a Part IV claim and it became a contractual matter based upon the terms of the compromise.

18 Mr Flower of counsel, who appeared on behalf of the defendant, submitted that the agreement had been discharged and was of no force and effect because the agreement constituted by the terms of settlement had been frustrated by the death of Mrs Groser in that the whole object of the agreement was to provide "maintenance and support" for Mrs Groser and her death made it impossible for the defendant to fulfil that obligation.

19 Further or alternatively, Mr Flower submitted that there had been a failure of the condition to obtain the approval of the Attorney-General. As the Attorney-General's earlier decision was made in ignorance of the death of Mrs Groser, his initial consent was not a proper fulfilment of the condition of the settlement and was invalid.

20 Mr Flower further submitted that, in any event, in all the circumstances, the Court, in the exercise of its discretion, should refuse to make the consent orders. The Court had an inherent power to control its own proceedings and was not obliged to act upon the request by the parties to make orders by consent. The necessity for making such orders had now passed by reason of the death of Mrs Groser.

21 Finally, Mr Flower submitted that, apart from one limited exception not applicable in this case, a claim under Part IV of the Act did not survive the death of the claimant. If that were so, then it followed that a compromise in relation to a Part IV claim also could not survive death. As he put it, the stream could not rise above its source.

22 Ms MacDougall of counsel, who appeared on behalf of the Attorney-General, submitted that the Attorney-General's decision not to oppose the settlement was made in the context of a fundamental mistake of fact, he not having been notified that Mrs Groser had died. Ms MacDougall submitted that the failure to inform the Attorney-General of Mrs Groser's death on 31 October 2007 vitiated his non-opposition to the settlement. Once the Attorney-General became aware of the true factual position, he opposed the settlement because there was no longer any need to make provision for Mrs Groser's future "maintenance and support" and allowing it to proceed would not benefit Mrs Groser. Rather, it would result in a windfall for Mrs Groser's estate to the detriment of the residuary beneficiaries of Mrs Groser's estate.

23 Ms MacDougall also submitted that, apart from the question of whether the first condition subsequent had been satisfied, the Court should not make the consent orders, generally for the same reasons as were advanced on behalf of the defendant.

24 In my opinion, the most sensible way to approach the question of whether the settlement of Mrs Groser's Part IV claim is a binding and enforceable agreement, notwithstanding her death on 31 October 2007, is by considering whether each of the conditions subsequent has been or should be satisfied. This is because the settlement was, as Mr Phillips submitted, a binding agreement until there was a failure to satisfy the first or the second condition.

25 Mr Phillips referred to the case of Smallman v Smallman, in which Lord Denning MR said:

In my opinion, if the parties have reached an agreement on all essential matters, then the clause "subject to the approval of the court" does not mean there is no agreement at all. There is an agreement, but the operation of it is suspended until the court approves it. It is the duty of one party or the other to bring the agreement before the court for approval. If the court approves, it is binding on the parties. If the court does not approve, it is not binding. But, pending the application to the court, it remains a binding agreement which neither party can disavow... [6]

26 The Smallman principle was applied by Young J in Mitchell v Osborne:[7]

If the agreement is said to be subject to the approval of the court, that does not mean there is no agreement at all. There is an implied term in the agreement to present the settlement to the court for approval. In the meantime, it remains a binding agreement, which neither party can disavow.

Similar views were expressed more recently by Macready As J in Coomber v Stott.[8]

27 I do not consider that the reference to the decision of the Full Court of the Family Court of Australia in Bourke v Bourke (No2)[9] advanced the plaintiff's argument. In that case, it was held that the wife's executrix was bound by the unconditional agreement between the husband and the wife prior to the wife's death to set aside certain consent orders of the Court and therefore that the wife's executrix could not enforce the original orders against the husband. Further, it should be noted that the Court also held that it was clearly arguable that only the parties' consent was required to the setting aside of the original orders and that the Court could not refuse to make those orders when asked to do so.

28 Turning, then, to the question of whether the first condition was satisfied, I consider that the Attorney-General's initial decision not to oppose the settlement was a nullity because it was not an informed consent in the sense that he had not been provided with all relevant facts because he was not told that the person for whom provision was to be made under the settlement had died prior to him making his decision.

29 The plaintiff sought to meet this point by arguing that the Attorney-General was required to look at the question of the appropriateness of the settlement as at the date it was reached. Thus, Mr Phillips submitted that it was not relevant that the Attorney-General had now expressed a different attitude towards the settlement because he knew all of the facts about the compromise reached on 3 October 2007 and formed his favourable view based on that information. It was always possible that events could change in any number of ways after a settlement had been reached, but that did not mean that the settlement was not binding on the parties.

30 I do not agree. It seems to me that the nature of the question being asked of the Attorney-General changed when Mrs Groser died. No longer was the Attorney-General being asked to provide his consent to a settlement that provided for the proper maintenance and support of a living person, namely Mrs Groser. He had answered this question by expressing his non-opposition. But that answer was moot since the question was no longer relevant. When the Attorney-General was fully informed of the facts, he opposed the settlement. Thus, the Attorney-General's approval of, or non-opposition to, the settlement had not been obtained. The parties were agreed that if the Attorney-General's initial decision was considered to be invalid or a nullity, then the plaintiff's application must fail because the first condition subsequent had not been satisfied.

31 Nevertheless, in case I am wrong in deciding that the Attorney-General's initial decision was invalid or a nullity, I turn to the question of whether the second condition should be satisfied by the Court making the proposed consent orders. For a number of reasons, I consider that no such orders should be made.

32 Mr Phillips accepted that there was a residual discretion retained by the Court not to make consent orders. This was clearly a correct concession. In considering proposed consent orders, a court is not acting merely as a rubber stamp. It remains the duty of the judge hearing the case to consider whether, in all the circumstances, the orders sought by the parties are appropriate.

33 In Harris v Caladine,[10] the High Court of Australia considered the question of an appeal from a consent order for the settlement of property, pursuant to s.79 of the Family Law Act 1975 (Cth), by a Registrar of the Family Court of Australia. Section 79(2) of that Act provided that a court shall not make an order under the section unless it was satisfied that, in all the circumstances, it was just and equitable to do so. Section 79(4) required the Court to take a number of matters into account in considering what order should be made. Mason CJ and Deane J said:

We do not understand why the fact that a consent order was initially sought absolved the reviewing court from the need to comply with the obligation cast upon it by s.79(4).[11]

The fact that an order is sought by consent does not relieve a court, or a Registrar, from compliance with the requirements of the section, but it may render compliance much less demanding. Provided that a court, or a Registrar, is adequately informed, where the parties are at arms length and are properly represented little more than consent may be needed to establish that the requirements of the section have been met ...

And in the case of an application under s.79, even if there is consent amounting to a contract, that is not enough of itself to entitle the parties to an order. The requirements of the section must be satisfied.[12]

34 In Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc,[13] French J said that:

...the power of the Court to make orders is an exercise of power defined and conferred by public law. The Court, in exercising that power, does not merely give effect to the wishes of the parties. It exercises a public function and must have regard to the public interest in doing so. In consideration of the public interest, however, it must also weigh the desirability of non-litigious resolution of enforcement proceedings.

35 In Lewis v Combell Constructions Pty Ltd,[14] Finlay J said in respect of a compromise reached between solicitors, where the solicitor for the defendant should have realised that the offer was likely to have been a mistake:

What I perceive to be the relevant principle in the category of cases into which this matter falls is that in an appropriate case, especially before judgment is made, the overriding interests of justice and the court's concern over its own procedure may mean that the court will not enforce a contract. Of course, contracts made during the court's process to settle, if they are bona fide and not affected by any error, will normally be enforced. But I repeat my previous observation that whenever parties agree to a compromise of litigation they do so subject to the procedures of the court which include the possibility that the court may consider it unjust to enforce the terms of settlement or that it is in the interests of justice that the matter proceed to trial.

36 In Wintle v Stevedoring Industry Finance Committee (No.3),[15] Ashley J (as he then was) said that:

The Court should be jealous to protect its processes. No doubt it encourages parties to litigation to settle their differences. But it is not the necessary corollary of such encouragement that the Court should accede to an application for consent orders made in consequence of compromise arrived at by some parties to a proceeding where the effect of the orders will or may be to stifle the hearing and determination of other aspects of the proceeding which involve one of the parties to the proposed consent orders.

37 Mr Phillips nevertheless submitted that, in the circumstances of this case, the Court should uphold the settlement and make the consent orders required by its terms. He argued that the only reason why court orders were included as part of the settlement was for the protection of the defendant. Mr Phillips also referred to several New South Wales cases where a similar issue had arisen in Family Provision claims. In Hadley v McNamara,[16] Young J said:

In former times the court used to look at these applications as if they were discretionary matters and seek to work out whether the court had jurisdiction. It is now clear that that is the wrong approach under the Family Provision Act and that if parties agree to settle proceedings under the Family Provision Act, and there is no other interest involved, ordinarily the court should merely make the orders in accordance with the terms of settlement. There will, of course, be the odd exception where it clearly appears on the face of it that there is no jurisdiction in the sense that the plaintiff has no need of provision ...

His Honour repeated this view in Mitchell v Osborne:[17]

However, in more recent times, I think the judges of this Division have taken the view that where the plaintiff is sui juris, and the executor likewise, the court should merely accept a settlement of Family Provision Act proceedings in the same way as any other proceedings.

38 However, it seems to me that the exceptions mentioned by Young J in the above passage from his judgment in Hadley v McNamara are both relevant. There are other interests involved, namely charities, which is why the Attorney-General's consent was made a condition of the settlement. Also, this is now a case where "the plaintiff has no need of provision" because she has died.

39 Thus, the first reason for refusing to make the consent orders is that the Court, in considering, as it should, whether the amount of the provision to be made for Mrs Groser by the consent orders was appropriate, could not ignore the fact that she had died. This is particularly the case when s.91(4) of the Act requires the Court in determining that question to "have regard to" such matters as "the financial needs of the applicant ... at the time of the hearing and for the foreseeable future".[18] It goes without saying that since her death the applicant no longer had any financial needs.[19] In my opinion, this requirement means that the plaintiff was not correct in submitting that once the parties agreed to settle on 3 October 2007, the nature of the relationship between them changed from a Part IV application to a simple contractual dispute.

40 Secondly, although Mrs Groser's cause of action under Part IV of the Act could in certain limited circumstances survive her death, there was no basis for making any order in favour of her estate in this case. The limited exception is that if there be proof that by reason of the lack of maintenance and support the claimant has incurred debts in the period between the death of the testator and the death of the claimant, the Court has jurisdiction to make an order in favour of the estate of the claimant to the extent of those debts. However, there was no evidence of Mrs Groser incurring any such debts in the past. Her concerns had been about future expenses not past debts. The existence of this limited exception was recognised by Nettle J (as he then was) in Read v Nicholls,[20] where his Honour stated that:

Upon the evidence therefore, this is a case where the claimant died after maintaining herself without running into debt, even if perhaps on a scale less generous than she was entitled to require or expect, and the Court ought not to make an order of which the effect would be merely to swell the estate to pass under her will.

The approach of Nettle J was made clear by his approval of the following passage from the judgment of Long Innes CJ in Eq in Re Shannon:[21]

The jurisdiction of the Court is based on the statute, and is limited to making such provision for the "maintenance, education and advancement" of the persons entitled to the benefit of the Act as the Court thinks fit. The claimant having died before any order could be made, it is obvious that no provision could be properly made for her future maintenance, education or advancement; nor do I think that in a case where the claimant has died after having in fact maintained himself or herself without running into debt, even though on a scale less generous than he or she was entitled to require or expect, the Court ought to make an order after the claimant's death which would merely have the effect of swelling the estate which would pass under the claimant's will, or to his or her next-of-kin if intestate, and of benefiting persons who are not within the scope of the Act. In the present case, however, the evidence establishes that the widow died indebted in respect of board and residence to the extent of _£_23.8s.9d.; ... I think that an order should be made to that extent, notwithstanding that indirectly her legatee may be benefited to that extent.

41 Thirdly, I accept the defendant's submission that the settlement had been frustrated by Mrs Groser's death because it was an agreement reached in a Part IV claim, the essence of which was to provide "maintenance and support" for Mrs Groser, which was no longer necessary. To require the defendant to pay to her estate the agreed sum of $300,000 was to call for performance of the agreement which was radically different from that which the defendant had agreed to do.

42 In Codelfa Construction Pty Ltd v State Rail Authority of New South Wales,[22] the members of the High Court adopted with approval the formulation of the doctrine of frustration stated by Lord Radcliffe in Davis Contractors Ltd v Fareham Urban District Council:[23]

... frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract ... It was not this that I promised to do.

43 In Lobb v Vasey Housing Auxiliary (War Widows Guild),[24] Hudson J held that the death of one party whose existence was essential to the performance of the contract discharged it by frustration. His Honour upheld the plaintiff's argument that:

The contract in order that it might be performed required the continued existence of the deceased up to the date when the flat was completed and tendered to her for occupation. Her death before this date was an event neither contemplated by the parties nor provided for in the contract, and its occurrence rendered it impossible for the defendant to fulfill an essential part of its obligations, and frustrated the whole object of the contract between the parties.

Similarly, the death of Mrs Groser frustrated the whole object of the settlement, which was to provide for her "maintenance and support" and not to pay a sum of money to her estate.

44 Finally, if contrary to the view I have reached, the Attorney-General's initial decision stands, I accept the defendant's further submission that the Court should refuse to make the orders sought because it is clear that the Attorney-General would have opposed the settlement if the fact of Mrs Groser's death had been made known to him.

45 In an attempt to avoid the need for further appearances by counsel, I heard argument on the question of costs, depending on what conclusion I reached about the enforceability of the settlement. There was no dispute between the parties that, in the event that I decided that the application must fail, the only order required, apart from the question of costs, was one otherwise dismissing the proceeding, the order substituting Anthony Paul Groser, Mrs Groser's executor, as the plaintiff in the proceeding having already been made. There was, however, disagreement about the appropriate order for costs in that event.

46 By a letter dated 25 February 2008, the solicitors for Equity Trustees warned the late Mrs Groser's solicitors, who also acted for the executor of her will, that if Mrs Groser's personal representative unsuccessfully sought an order that a capital provision be made, Equity Trustees would seek an order that its costs from 21 December 2007 be paid from the late Mrs Groser's estate or personally by her personal representative if that estate had insufficient assets to meet those costs. In the circumstances, Mr Flower sought an order that the defendant's costs from 21 December 2007 be paid by the estate of the late Mrs Groser.

47 Both the plaintiff and the Attorney-General opposed this order. They submitted that there should be an order that all of the plaintiff's costs of the proceeding be paid from Marjorie's Fund on a solicitor and client basis and that the defendant's costs be paid from Marjorie's Fund on the usual complete indemnity basis.

48 In my opinion, there should be an order that the plaintiff's costs of the proceeding be paid from Marjorie's Fund on a solicitor and client basis. In all the circumstances, I consider that Mrs Groser's estate should not be penalised by having to pay the defendant's costs from 21 December 2007. Despite the substituted plaintiff being clearly warned of the potential costs consequences of persisting with the application, I do not consider that it would be correct to describe the application for the consent order as one "made frivolously, vexatiously or with no reasonable prospect of success".[25] I agree with Mr Phillips' submission that, because of the novel nature of the question of the enforceability of the settlement, it is appropriate for all of the costs incurred since the issue arose to be paid from Marjorie's Fund.

49 The second costs issue concerned the costs of the Attorney-General. Ms MacDougall sought an order that the Attorney-General's costs of the proceeding be paid from Marjorie's Fund on a solicitor and client basis. The plaintiff did not oppose this order, but the defendant, in a supplementary written outline of argument, submitted that the Attorney-General should bear his own costs regardless of the outcome. Mr Flower argued that in electing to appear the Attorney-General was performing a public function in relation to protecting the interests of the charitable gift over and that consistent with this role and his status as a "model litigant" he should bear his own costs.

50 In my opinion, there should be an order that the Attorney-General's costs of the proceeding be paid from Marjorie's Fund on a solicitor and client basis. Whilst it is true that one of the Attorney-General's public functions is to protect the interest of charities, and presumably no charge is made for generally performing that role, I consider that the situation changes when the Attorney-General seeks, and is granted, leave to intervene in a particular proceeding. I see no reason why, in that case, the Attorney-General's costs of the intervention should not be met from the estate involved in the proceeding. Moreover, I was told by Ms MacDougall that in similar situations, the normal course was that the Attorney-General's costs were paid from the estate in question. That accords with my thinking about the appropriate order in the unusual circumstances of this proceeding. I should also note that I agree with the submission on behalf of the Attorney-General, in response to the defendant's supplementary outline of argument that "the Attorney-General's status as a model litigant is irrelevant to the issue of costs".

51 Finally, there was an issue about the costs of the defendant's application for leave to submit the supplementary outline of argument. The plaintiff's consent to the defendant having such leave was given without prejudice to its submission that the parties' costs of the defendant's application should be borne by the defendant personally. It was submitted on behalf of the plaintiff that the defendant was seeking an indulgence in being allowed to make submissions not at the hearing but after the decision had been reserved. On the other hand, the defendant submitted that, in the absence of serious misconduct, a trustee such as the defendant was "entitled to be indemnified out of the trust estate against all his proper costs, charges and expenses incident to the execution of the trust".[26] In the absence of any allegation or evidence of improper conduct by the defendant, it was submitted that there was no basis for ordering the defendant to pay these costs.

52 Whilst the making of further submissions after the hearing has concluded and the decision reserved is not a practice which should be encouraged, in appropriate cases leave should be given, in my opinion. Here, the supplementary outline of argument did little more than refer the Court to relevant passages in a helpful High Court case and state the defendant's position on the Attorney-General's costs of the intervention (in respect of which leave had been given during the hearing). In the circumstances, I see no reason to treat the costs of this application any differently to the parties' costs of the proceeding generally.

53 The orders I propose to make are, therefore, as follows:

The plaintiff's costs of the proceeding, including any reserved costs, be paid out of Marjorie's Fund on a solicitor and client basis, such costs to be taxed in a default of agreement.
The defendant's costs and expenses of and incidental to the proceeding, including any reserved costs, be paid or retained out of Marjorie's Fund.
The Attorney-General's costs of intervening in the proceeding, including any reserved costs, be paid out of Marjorie's Fund on a solicitor and client basis, such costs to be taxed in default of agreement.
The proceeding be otherwise dismissed.

[1] Groser v Equity Trustees Ltd [2007] VSC 27; (2007) 16 VR 101.

[2] Groser v Equity Trustees Ltd [2007] VSC 27; (2007) 16 VR 101, [13].

[3] It appears that "not opposing" or "not objecting to" the settlement is the standard form of a favourable response from the Attorney-General to requests such as this. See Williams, Mortimer and Sunnucks Executors, Administrators and Probate, 19th ed., para 39.06, footnote 16. Counsel for the Attorney-General stated that this was the proper course because the ultimate decision was a matter for the Court.

[4] Bradshaw v University College of Wales [1988] 1 WLR 190, 192 (Hoffman J).

[5] Ware v Cumberlege [1855] EngR 686; (1855) 20 Beav 503, 510 (Romilly MR): [1855] EngR 686; 52 ER 697, 700.

[6] [1972] Fam 25, 31-32. Phillimore and Orr LJJ agreed with Lord Denning.

[7] (Unreported, Supreme Court of New South Wales, Young J, 20 May 1987) 6.

[8] [2007] NSWSC 513, [28] and [66].

[9] [1994] FamCA 61; (1994) 18 Fam LR 1, 13-15 (Ellis, Lindenmayer and Holden JJ).

[12] [1991] HCA 9; (1991) 172 CLR 84, 124. McHugh J agreed with Dawson J on this issue. See also Toohey J at 133.

[16] (Unreported, Supreme Court of New South Wales, Young J, 7 December 1995) 2.

[17] (Unreported, Supreme Court of New South Wales, Young J, 20 May 1997) 5.

[19] Re Wardle (1979) 22 SASR 139, 143-144 (Zelling J).

[22] [1982] HCA 24; (1982) 149 CLR 337, 357 (Mason J), 377 (Aickin J) and 408 (Brennan J) Stephen J at 345 and Wilson J at 392 agreed with Mason J and Aickin J.

[26] National Trustees Executors and Agency Company of Australasia Limited v Barnes [1941] HCA 3; (1941) 64 CLR 268, 277 (Williams J).

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