HORWOOD -v- DAVENPORT [2014] WASC 436 (26 November 2014)

2 The Deceased's three daughters do not consider that the disposition of their father's estate effected by his will makes adequate provision for their proper maintenance, support, education and advancement in life. They have commenced proceedings in the Supreme Court seeking orders for further provision to be made to them from the Deceased's estate pursuant to the Family Provision Act 1971 (WA). However, in order to progress this action, they consider that they need to know the value of their father's estate. On the material before me, they appear to have had extensive communications with other family members, the Deceased's accountant and lawyers acting for Ms Davenport, and have obtained a considerable amount of information.

3 The daughters, whom I will refer to as the Applicants, have concerns about the manner in which trust distributions were made by one of the trusts through which the Deceased conducted his affairs. The distributions in question were made by The F J (Angus) Horwood Trust (F J Trust), the trustee of which is Aeges Pty Ltd (Aeges). Under his will, Mr Horwood bequeathed his shares in Aeges to the Applicants. He also bequeathed to them any loan or unpaid entitlement owing to him by the F J Trust.

4 The Applicants are considering whether to commence litigation against Ms Davenport as executrix of the Deceased's estate and Aeges in relation their concerns. However, they are not satisfied that they have been provided with the documentation they require in order make this decision. Accordingly, by application dated 20 May 2014 the Applicants sought orders that Ms Davenport (both in her own right and as executrix) and Aeges (collectively, the Respondents) provide pre‑action discovery pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 26A r 4. The documents sought are set out later in these reasons ([102], [116]). In summary terms the documents comprise financial and corporate governance information for Aeges, and for the Deceased and entities he is said to have controlled, in some cases going back to 1979.

5 By application dated 23 June 2014, Aeges sought an order that the Applicants' application be summarily dismissed pursuant to RSC O 16 r 1. This application and the Applicants' application were listed to be heard together. However, at the commencement of the hearing before me, counsel for Aeges stated that he did not press its summary judgment application.

6 RSC O 26A r 4 empowers the court to make orders requiring an entity against whom an applicant may have a cause of action to provide pre-action discovery to assist the applicant to decide whether to institute proceedings against the entity. Specifically, it provides:

(1) This rule applies if a person who may have a cause of action against a person whose description has been ascertained (the potential party) wants -

(a) to commence proceedings against the potential party; or

(b) to take proceedings against the potential party in the course of an action to which the person is a party,

but the person, after reasonable enquiries, has not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take the proceedings.

(2) If there are reasonable grounds for believing that the potential party had, has, or is likely to have had or to have, possession of documents that may assist in making the decision, the person may apply for an order under this rule.

(3) The application shall be supported by an affidavit and a copy of both shall be served on the potential party.

(4) On the application the Court may order the potential party to give discovery of all documents that are or have been in the potential party's possession and that may assist the applicant in making the decision.

7 The Applicants filed and served the following affidavits in support of the application:

(a) Ms Algie, sworn 19 May 2014;

(b) Ms L Horwood, sworn 25 July 2014;

(c) Ms Algie, sworn 25 July 2014; and

(d) Ms L Horwood sworn 8 September 2014.

The requirement in RSC O 26A r 4(3) is thus complied with.

8 Applying RSC O 26A r 4 to the present application, to succeed the Applicants must establish that:

(a) they 'may have a cause of action';

(b) the potential cause of action is against a person whose description has been ascertained;

(c) they want to commence proceedings against the potential party;

(d) they have made 'reasonable inquiries';

(e) after making 'reasonable enquiries' they have not been able to obtain sufficient information to decide whether or not to commence proceedings;

(f) as a necessary concomitant to (e), at the time of making the application, they have not reached a decision about whether or not to take proceedings; and

(g) there are reasonable grounds for believing that the potential party has in its possession documents that may assist in making the decision.

See generally: ANSA Enterprises Pty Ltd v Commonwealth Bank of Australia [2014] WASC 314 [8] ‑ [13] (Master Sanderson); Henderson v Fenwick [2014] WASC 176 (Acting Master Gething); Goodman v The State of Western Australia [2013] WASC 316 [23] (Master Sanderson); GLR Injection Technologies Pty Ltd v Forton Automotive Treatments Pty Ltd [2009] WASC 131 [2] (Master Sanderson); The New South Wales Solicitors Mutual Indemnity Fund v The Hancock Family Memorial Foundation Ltd [No 2] [2009] WASCA 146 [12] (McLure JA), [28] (Miller JA agreeing); The Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147 [19] (Le Miere J).

9 The description of the people against whom the Applicants assert a cause of action may exist has been ascertained, namely Ms Davenport in her capacity as executrix and Aeges.

10 In her affidavit sworn 19 May 2014, Ms Algie makes it clear that the Applicants want to commence proceedings against Ms Davenport in her capacity as executrix of the Deceased's estate and Aeges. Any causes of action subsisting against the Deceased survive against his estate: Law Reform (Miscellaneous Provisions) Act 1941 (WA) s 4.

11 At the hearing, counsel for Ms Davenport and counsel for Aeges each accepted that the Applicants have made reasonable inquiries to obtain the documents the subject of the present application.

13 Two further issues arise for determination. The first stems from the fact that the power in RSC O 26A r 4 is discretionary. The Applicants must establish that it is appropriate for the court to exercise its discretion to make the order for pre-action discovery: Waller v Waller [2009] WASCA 61 [72] (Le Miere AJA), [1] (Martin CJ generally agreeing), [24] ‑ [25] (Pullin JA generally agreeing).

14 Finally, any order made is to be limited to documents 'in the potential party's possession ... that may assist the applicant in making the decision': RSC O 26A r 4(4). The order made should be no wider than is necessary: GLR Injection Technologies [4]; McCarthy v Dolpag Pty Ltd [2000] WASCA 106 [15] (Reasons of the Court).

15 Within this framework, and on the materials and submissions before me, six issues arise for determination:

• Do the Applicants have a potential cause of action against Ms Davenport as executrix and Aeges?
• Have the Applicants been able to obtain sufficient information to decide whether or not to commence proceedings?
• Are there reasonable grounds for believing that Ms Davenport and Aeges have in their possession documents that may assist in making the decision?
• Ought the discretion be exercised in favour of the Applicants?
• If so, what documents ought to be discovered?
• What final orders should be made?

Do the Applicants have a potential cause of action against Ms Davenport and Aeges? 'may have a cause of action'

16 The nature of the threshold which the Applicants must cross to establish that they 'may have a cause of action' for the purposes of RSC O 26A r 4 is drawn from the purpose of the rule. As Martin CJ observed in Waller:

The nature of the jurisdictional threshold which an applicant is required to cross under that rule is illuminated by its evident purpose, which is to enable a prospective litigant to obtain discovery of documents that may assist in making a decision as to whether to commence proceedings. It would entirely defeat the purpose of the rule to require an applicant to demonstrate the present existence of a cause of action as a condition to the exercise of the court's jurisdiction.

Observations made by Burchett J in Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 500; (1990) 99 ALR 728 at 733 in relation to the similar (but not identical) rule of the Federal Court are pertinent:

'It would be unfortunate if a rule designed to amplify the court's power to penetrate obscurities and uncertainties in the interests of justice were to be weakened by restrictive and unnecessary glosses. I think the rule is of a beneficial kind within the meaning of the well known principle of interpretation, and should be given the fullest scope its language will reasonably allow. The proper brake on any excesses and in its use is the discretion of the court, which is required to be exercised in the particular circumstances of each case.'

As Burchett J points out in that case, rules of this kind specifically authorise applications which might otherwise be pejoratively described as 'fishing expeditions'. It would be contrary to the evident purpose of such a rule to require an applicant to demonstrate the elements of a good cause of action as a condition of the exercise of a power which is intended to enable the applicant to assess whether or not he or she does in fact have a good cause of action. It would therefore be wrong in principle to approach the rule with an undue focus or emphasis upon the demonstration of the prospective cause of action. Thus, the jurisdictional question is whether there might be a cause of action which could be demonstrated by the provision of the documents sought. However, something more than mere assertion, conjecture or suspicion is required to enable the court to conclude that there might be such a cause of action [2] ‑ [4].

17 The test is objective, as to which Le Miere AJA observed in Waller:

The court must form an opinion as to whether there is sufficient evidence before it that the applicant may have a cause of action against the potential party. The court must make its own evaluation of the circumstances which ground the applicant's belief that he may have a cause of action against the potential party. The test is objective in the sense that it is not sufficient that the applicant believes that he may have a cause of action against a potential party; the court might determine this belief to be unfounded. It is not necessary that the applicant have a prima facie case. However, there must be material to establish that the applicant may have a cause of action against the potential party. There must be some tangible backing, or objective foundation, that takes the existence of the cause of action beyond a mere allegation, suspicion or assertion [75].

This approach was affirmed in New South Wales Solicitors Mutual Indemnity Fund [13], [28].

18 The Applicants place emphasis on the following sentence from the decision of the Chief Justice in Waller which I have quoted in its context above [16]: 'Thus, the jurisdictional question is whether there might be a cause of action which could be demonstrated by the provision of the documents sought' [4]. The Applicants in their supplementary submissions refer to causes of action that the Applicants may have '[d]epending on the nature of the information produced pursuant to any discovery ordered in these proceedings' (submissions dated 20 October 2014 [23], also [29]). I do not read the comments of the Chief Justice in this way. The opening words of RSC O 26A r 4(1) make it clear that the power may only be exercised on the application of 'a person who may have a cause of action'. The existence of the potential cause of action must be demonstrated independently of the documents sought; hence the Chief Justice immediately goes on to observe that 'something more than mere assertion, conjecture or suspicion is required to enable the court to conclude that there might be such a cause of action' [4]. The comments of Justice Pullin [22] and Justice Le Miere (quoted above) are to the same effect.

19 The causes of action identified by the Applicants relate to the F J Trust. In the trust deed for the F J Trust dated 26 May 1977 (F J Trust Deed), Aeges was named the trustee. It continued as the trustee from this date to the date of the death of the Deceased, and continues to the trustee.

20 The Deceased was a director of Aeges from shortly after its incorporation in 1977 to the date of his death. The Deceased's father (and the Applicants' grandfather), Mr Francis Joel Horwood, was a director of Aeges from shortly after its incorporation in 1977 until his death on 8 September 1982. Between 1977 and the early 2000s the four other directors of Aeges were the Deceased and his three brothers, Peter David Horwood (known as David), John McGowan Horwood and James Kentish Horwood. Mr J M Horwood and Mr J K Horwood predeceased the Deceased.

• Mr P D Horwood.
• Peter Horwood (the son of Mr P D Horwood, a cousin of the Applicants and grandchild of Mr F J Horwood), who was appointed in 2006.
• Genevieve Robinson (the daughter of Mr J K Horwood, another cousin of the Applicants and grandchild of Mr F J Horwood), who was appointed on 21 August 2012, that is four days after the death of the Deceased.

Ms Robinson was also a director of Aeges between 13 November 2003 and 20 March 2006.

22 The three issued shares in Aeges are held by Mr P D Horwood, Ms Robinson and the Applicants (who received their shares pursuant to the Deceased's will).

23 As initially constituted, the 'Primary Beneficiaries' for the F J Trust were: 'The children of ANGUS HORWOOD of Dress Circle Farm Dayrell Road, Neerabup in the said State'. There was a section in the schedule for the identification of 'Additional Members of the Class of General Beneficiaries', against which the word 'Nil' appeared. Clause 14 of the F J Trust Deed granted the trustee the power to vary the beneficiaries.

24 The Guardian and Appointor of the F J Trust, 'during his lifetime' was Mr F J Horwood. These roles then passed to the Deceased, again 'during his lifetime' and then to Christine Elizabeth Horwood. Ms C E Horwood was Mr Horwood's first wife and is the mother of the Applicants.

25 By a deed of variation to the F J Trust dated 7 December 1979 (1979 Deed), the Deceased was added as an additional member of the class of 'General Beneficiaries'. The circumstances in which this deed was executed give rise to one of the areas of concern held by the Applicants.

26 Ms Davenport swore an affidavit dated 29 August 2014 in opposition to the application. Her evidence is that:

(a) Four trust deeds were executed in 1977 establishing the following trusts:

(although it is not expressly stated, I understand that, in each case, Aeges was appointed trustee);

(b) each of the four original trust deeds are in the same terms with:

(1) Mr F J Horwood executing each trust deed as the guardian;

(2) the children of the son identified in the name of the trust as the primary beneficiaries;

(3) either Mr J M Horwood or Mr P D Horwood signing as director of Aeges; and

(c) the deeds have been varied from time to time, as set out in a schedule which she annexes to her affidavit;

(d) there is a deed of variation executed on 7 December 1979 in relation to each of the F J Trust, The F J (James) Horwood Trust and The F J (David) Horwood Trust;

(e) the deeds in (d) are in exactly the same terms with Mr J M Horwood executing as director of Aeges, the Deceased executing as secretary, with the consent of Mr F J Horwood as guardian, save that each adds the relevant son as an additional member of the class of General Beneficiaries of the relevant trust; and

(f) in relation to the F J (John) Horwood Trust, Ms Davenport does not have a copy of the equivalent deed of variation dated 7 December 1979, though it is mentioned in the deed of variation for that trust dated 26 June 1996.

27 From the information received by the Applicants to date, and set out in the materials before me, it appears that from 1979 when the Deceased became entitled to receive distributions from the F J Trust until the date of his death in 2012 the Deceased, or entities he controlled, received virtually all distributions from the F J Trust. The Applicants' case appears to be that the F J Trust was established by Mr F J Horwood for their benefit as his grandchildren, and that the Deceased by becoming a beneficiary, and procuring distributions to be made in his favour, appropriated the income of that trust at their expense. Further, as set out in the Applicants' written submissions, it 'is clear by the proliferation of trusts and companies referred to in the Will and affidavits of the First and Third named [Applicants] ... the affairs of the Deceased, during his life, were characterised by a sophisticated corporate and trust structure to which the [Applicants] were not privy during the life of the Deceased' (submissions dated 26 September 2014 [23]).

28 In this context, Ms Algie, describes the potential causes of action that the Applicants would like to commence against Ms Davenport as executrix and Aeges in the following terms:

1. My sisters and I want to commence or take proceedings against the defendants in relation to the variation of the FJ Trust whereby our father was made a general beneficiary of that trust. Although we have made numerous attempts to obtain further information, it has not been possible for us to make a decision whether or not to proceed against the defendants because we have not been able to obtain sufficient information to do so.
2. My sisters and I believe that the defendants had, have, or are likely to have had, or to have, possession of documents that may assist in making the decision whether to take the proceedings.
3. My sisters and I are trying to obtain sufficient information to enable us to make a carefully considered decision as to whether legal proceedings should be commenced. If the missing information supports our claim, my sisters and I will commence proceedings against the defendants. Those proceedings will raise at least two causes of action.
4. The first cause of action involves a claim against my father's estate for breach of fiduciary duties owed by my father to my sisters and I as beneficiaries of the FJ Trust by his conduct in (i) accepting an appointment as a General Beneficiary of the FJ Trust and (ii) receiving benefits distributed to him in that capacity by the corporate trustee Aeges Pty Ltd (of which he was, at all material times, a director). Those duties arose from his role as a director of the corporate trustee and his appointment as a beneficiary in circumstances where he effectively controlled the trust.
5. The second cause of action involves a claim against the corporate trustee, Aeges Pty Ltd, for breach of fiduciary duties owed by it to my sisters and I as beneficiaries of the FJ Trust by allowing my father such control and to permit him to have himself appointed as a General Beneficiary and receive distributions to the exclusion of all other beneficiaries (including my sisters and I). As a result, my sisters and I contend that our father was also liable because he was a party to these breaches in the sense that he was both 'knowingly concerned' in the breaches and was in 'knowing receipt' of trust property (being distributions from the FJ Trust).
6. The object and focus of the actions is not limited to the assets of my father and the assets of Aeges Pty Ltd, but rather seeks to identify any cash or assets acquired by improper trust distributions by Aeges Pty Ltd made to my father (and/or his related entities) outside the terms of the trust and in breach of the trust (because they were acquired upon breaches of fiduciary duties owed to my sisters and I).

29 From this passage, I discern five causes of action that the Applicants assert are sufficient for the purposes of RSC O 26A r 4. They are set out in the order in which I propose to analyse them:

• Aeges breached its fiduciary duties as the trustee of the F J Trust.
• The Deceased received property of the F J Trust, with sufficient knowledge that it was transferred in breach of trust.
• The Deceased knowingly assisted Aeges in a breach of the F J Trust.
• The Deceased owed fiduciary duties as a director of Aeges to the Applicants as beneficiaries of the F J Trust, which he breached.
• The Deceased effectively controlled the F J Trust, and thereby assumed fiduciary duties towards the Applicants as beneficiaries, which he breached.

Did Aeges breach its fiduciary duties as trustee of the F J Trust

30 The Applicants are entitled to the due administration of the F J Trust: Elovalis v Elovalis [2008] WASCA 141 [50] ‑ [51] (Martin CJ, Newnes AJA agreeing), [61] (Buss JA); R & I Bank of Western Australia Ltd v Anchorage Investments Pty Ltd (1993) 10 WAR 59, 79 (Owen J). It is clear that Aeges, as trustee, is a fiduciary. However, as Buss JA has observed: merely 'to describe someone as a fiduciary, without more, is meaningless': Elovalis [65]. His Honour went on to state that where 'a fiduciary relationship is constituted by, or arises out of, a trust instrument which specifies the fiduciary's powers and duties, the terms of the instrument must be examined for the purpose of determining the nature and scope of the fiduciary's undertaking' [66]. See also: Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 97 (Mason J); Streeter v Western Areas Exploration Pty Ltd [No 2] [2011] WASCA 17; (2011) 278 ALR 291 [70] (McLure P). The nature and scope of the fiduciary duties of a trustee may be limited by the terms of the trust deed: Elovalis [50], [67]; Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963 [276] ‑ [281] (Jacobson J). While the provisions of a trust deed can modify 'the precise content of the duties and obligations to which the trustee is subject, they [may] not alter the fundamentally fiduciary nature of the trustee's role': Elovalis [50].

31 The Applicants have two areas of concern. The first relates to the 1979 Deed by which the Deceased was appointed a 'General Beneficiary'. The second relates to the pattern of distributions of income to the Deceased and two entities he controlled, and not to the Applicants.

32 The starting point is to determine whether Aeges, as trustee, had the power to amend the F J Trust Deed to appoint the Deceased as a further 'General Beneficiary' and had the power to make distributions to him. The 1979 Deed appointing the Deceased as a 'General Beneficiary' purported to do so pursuant to cl 14.1 of the F J Trust Deed. Clause 14.1 provides, in exercising its power of variation, the variation:

1. (l) Insofar as the beneficial interests created by this Deed are revoked added to or varied shall be for the benefit of all or any one or more of the General Beneficiaries or any one or more persons born or unborn being lineal descendants of whatever degree or the spouse of any lineal descendant of any grandparent of any General Beneficiary.

33 The term 'General Beneficiaries' is relevantly defined in cl 1(2) to include the 'Primary Beneficiaries', that is, the Applicants. The Deceased is one of 'the lineal descendants of whatever degree or the spouse of any lineal descendant of any grandparent of any General Beneficiary', being the son of Mr F J Horwood, a grandparent of the Primary Beneficiaries.

34 The power to appoint further beneficiaries in cl 14 is subject to cl 13.2 which provides that Aeges as trustee is not to exercise the power in cl 14 without the consent of the Guardian. At the time at which the 1979 Deed was executed Mr F J Horwood was the Guardian. He signed the deed to record his consent.

35 It is thus clear that Aeges had the power to appoint the Deceased as an additional 'General Beneficiary' as it purported to do.

36 The second power that the Applicants contend has been misused is the power distribute the income of the trust. Pursuant to cl 3.1(b) Aeges had the power to distribute income to 'all or such one or more exclusive of the other or others of the General Beneficiaries living or in existence at that time in such proportions and in such manner as the Trustee in his absolute discretion and without being bound to assign any reason therefor thinks fit'. It is again clear that Aeges had the power to make distributions of income to the Deceased and not to the Applicants.

37 The F J Trust also made distributions to two entities: Deepdale (2010) Pty Ltd (Deepdale) and Kuku Pty Ltd (Kuku). Ms Algie deposes that the Deceased was 'closely associated with' both Deepdale and Kuku (19 May 2014 affidavit [31]). The Deceased was a director of Kuku from 2004 until his death. The other director during this time was Ms Davenport, who continues to be a director. In relation to Deepdale and Kuku, although Ms Davenport's affidavit contains information that the F J Trust was varied on a number of occasions, there is no information before me to the effect that Deepdale and Kuku were entities to which distributions could be made. However, it is not necessary for me to resolve this issue in order to determine the present application as the Applicants do not directly seek any documents from either company. Given that these entities were controlled by the Deceased, if I am otherwise satisfied that the Applicants may have a cause of action in relation to distributions to the Deceased, and that an order for pre‑action discovery was appropriate, I would also consider it appropriate for the discovery order to include documents relating to these two entities in the possession, custody or control of Ms Davenport.

38 The Applicants complain that the Deceased had a conflict of interest between his role as a director of Aeges and as a potential beneficiary in relation to both the execution of the 1979 Deed and the subsequent decisions to distribute income to him. However, cl 7.29 expressly empowers Aeges to 'exercise ... all powers and discretions hereby ... given to the Trustee and to enter into transactions of all kinds notwithstanding that ... any director ... of a Trustee being a company may be directly or indirectly interested in mode or result of exercising any power or discretion or in the transaction'. There is thus no breach of trust by reason only of the conflict of interest that would otherwise arise by reason of the Deceased acting as both a director of Aeges and a beneficiary: Elovalis [67] ‑ [70]; Nicholls v Louisville Investments Pty Ltd (1991) 10 ACSR 723, 728 ‑ 729 (Needham J); In Re Beatty (decd) [1990] 1 WLR 1503, 1506 (Hoffmann J).

39 The issue then arises as to whether Applicants may have a cause of action based on the manner in which Aeges exercised the relevant discretionary powers.

40 Counsel for the Respondents each identified a number of other clauses in the F J Trust Deed conditioning the exercise of the powers by Aeges. Clause 13 provides that the discretion and powers of the trustee may be exercised in its 'absolute and uncontrolled discretion'. The opening part of cl 7 empowers Aeges to act 'as if [it] were the absolute and beneficial owner of the Trust Fund':

1. Notwithstanding the Trusts hereinbefore declared and in addition to and without limiting the power and discretion vested in the Trustee by law the Trustee shall have the power to deal with the Trust Fund and attend to matters and act in such manner for the purpose of benefit of the Trust as if the Trustee were the absolute and beneficial owner of the Trust Fund and without limiting the generality of the foregoing shall have the following powers and discretions which may be exercised by the Trustee at any time and from time to time in the Trustee's uncontrolled discretion ...

41 The decision in Elovalis makes it clear that provisions of this kind 'do not alter the fundamentally fiduciary nature of the trustee's role' [50], [63]. Rather, the trustee must still:

(a) exercise its discretionary powers in good faith and for the purposes for which the power was given, including giving proper consideration to matters which are relevant and without taking into account improper, irrelevant or irrational considerations: Elovalis [50] ‑ [51], [63] ‑ [70]; Scaffidi v Montevento Holdings Pty Ltd [2011] WASCA 146 [150] (Murphy JA & Hall J);

(b) not exercise its discretionary powers so as to arrive at a decision that can be said to be so unreasonable that no body of trustees properly directing themselves could have arrived at that conclusion: Elovalis [51], [63]; and

(c) exercise its discretionary powers personally and not in conjunction with, or under the direction of, somebody else: Elovalis [51]; Scaffidi [150].

42 In relation to the decision to add the Deceased as a 'General Beneficiary', the material before me does not raise anything more than 'a mere allegation, suspicion or assertion' that Aeges did not exercise its discretionary power in good faith or reasonably. On the contrary, the evidence is to the effect that at least two of the Deceased's other brothers (and probably the third) were also added as a beneficiary to the trust for which their children were the primary beneficiaries, and that this occurred with the express consent of their father (the Applicants' grandfather). This suggests an orderly and planned restructuring of the financial affairs of the family as a whole. Further, given the involvement of all directors of Aeges in this restructuring, I am not satisfied that Aeges may have breached its fiduciary duty by failing to exercise the discretionary power to vary the trust deed personally; there is no foundation for the inference that the Deceased exercised any more influence than any of the other directors.

43 In relation to the pattern of income distributions to the Deceased and entities he controlled, the Applicants' case is that there are three series of facts which are sufficient for the court to find that there may have been a breach of fiduciary duty by Aeges. The first is that the minutes of the meetings of Aeges for the financial years ending 30 June 1981 to 30 June 2012 each:

• Show the Deceased as a director attending the meeting, for which the only business was the distribution of trust funds.
• Do not record the Deceased excusing himself for any part of the meeting.
• Do not record a conflict of interest declaration by him.

44 The second series of facts is that, from the information received by the Applicants to date, and set out in the materials before me, it appears that from 1979 when the Deceased became entitled to receive distributions from the F J Trust until the date of his death in 2012 the Deceased, or entities he controlled, received virtually all distributions from the F J Trust. In the financial years ending 30 June 1978, 1979 and 1980, the Applicants each received a third of the income. From then (which is just after the Deceased became a beneficiary) to the financial year ending 30 June 1984, the Deceased received some $125,751.48 in income and the Applicants received what appears to be nominal amounts. From the financial years ending 30 June 1985 until the death of the Deceased, all income was distributed to either the Deceased or an entity he then controlled, being Kuku and Deepdale. The known amount of distributions to the Deceased or entities he controlled total just over $1 million. However, in many years the distribution to the Deceased was expressed to be either '100%' or the 'surplus', in either case not identifying the amount in question. In her first affidavit, Ms L Horwood deposes that the surplus consisted of the trust's share of profits of the subdivision of the family farm at Deepdale, Geraldton.

45 The third series of facts is information about the manner in which the Deceased conducted himself as a director of Aeges in these meetings. The Respondents objected to the admissibility of this evidence.

46 The evidence comes from three sources, each in Ms L Horwood's affidavit sworn 25 July 2014. At [102], Ms L Horwood states that Mr P Horwood (the son of Mr P D Horwood, and a current director of Aeges) told her that 'the directors of Aeges were afraid of my father' and that 'he considered my father a frightening person'. This is admissible hearsay pursuant to RSC O 37 r 6, an application pursuant to RSC O 26A r 4 being appropriately characterised as an interlocutory proceeding: Waller [8], [107] ‑ [120]. It is also admissible hearsay as an admission against interest by a director of Aeges: Fraser Henleins Pty Ltd v Cody [1945] HCA 49; (1945) 70 CLR 100, 113 (Latham CJ), 123 (Starke J), 128 ‑ 129 (Dixon J), 130 (McTiernan J), 134 ‑ 136 (Williams J); Campbell v Burrows Engineering [2002] SASC 96; (2002) 82 SASR 75 [27] (Gray J, Prior & Nyland JJ agreeing).

47 The second source is at [103] ‑ [106] where Ms L Horwood sets out statements made by Ms Robinson (again a director of Aeges), the most salient of which is Ms Robinson's comment that it was 'none of our business what [the Deceased] did with his distributions and he was free to distribute them in accordance with the trust deed if he wished'. This again is admissible hearsay pursuant to RSC O 37 r 6 and as an admission against interest by a director of Aeges: Fraser Henleins (113, 123, 128 ‑ 129, 130, 134 ‑ 136); Campbell [27].

48 The third source is an unsigned draft statutory declaration of Mr P D Horwood, said by Ms L Horwood to have been prepared by 'our solicitor'. The contents of the draft statutory declaration are hearsay upon hearsay, that is, a statement of what the Applicants' solicitor told Ms L Horwood that Mr P D Horwood told him or her. It is not admissible pursuant to RSC O 37 r 6. Paragraph 37 of Ms L Horwood's affidavit and annexure LH‑19 should be struck out.

49 The hearsay observations by Mr P Horwood and Ms Robinson I am left with are of so little weight in the overall scheme of things that they do not add to the weight of the first and second series of facts.

50 I am, however, satisfied that the first and second series of facts provide sufficient tangible backing or objective foundation for there to be more than a mere allegation, suspicion or assertion that in making virtually no income distribution to the Applicants for a nearly a 20 year period in which there was clearly ample funds to make distributions of income from time to time, Aeges failed to act in good faith towards the Applicants. Further, there is also sufficient tangible backing for the allegation that Aeges exercised its discretionary powers so as to arrive at a series of decisions that can be said to be so unreasonable that no body of trustees properly directing themselves could have arrived at that conclusion: Elovalis [51], [63]. The same facts, also lead me to be satisfied that Aeges may have also failed to exercise its discretionary power to distribute income 'personally', and rather did so under the direction of the Deceased: Elovalis [51]. The facts in the present case have some similarity with those in Nicholls. In that case, Needham J held that a group of beneficiaries of a discretionary trust who had 'de facto control' of the corporate trustee breached their duties by continually making decisions favouring themselves as against other beneficiaries (728). Needham J referred to a clause in similar terms to cl 3.1(b) of the F J Trust and stated that while the clause gave 'the power to discriminate, it is, in my opinion, improper for those in control of the trustee to use that power regularly to advance their own interests' (728).

51 There is then an exclusion clause to consider. Specifically, cl 12 provides an exclusion of liability for the trustee:

1. (1) The Trustee shall not be personally liable for:-

(a) any loss or damage occasioned by the exercise of any discretion or power hereby or by law conferred on the Trustee or by failure to exercise any discretion or power or for any loss or damage accruing as a result of concurring or refusing or failing to concur in any exercise of any power or discretion;
>
> (b) the consequences of any error or forgetfulness whether of law or of fact on the part of any Trustee or his legal or other adviser; or
>
> (c) generally for any breach of duty or trust whatsoever unless it is proved to have been committed made or omitted in personal conscious fraudulent bad faith by the Trustee;

AND accordingly all persons claiming any beneficial interest in over or upon the property subject to this Deed shall be deemed to take with notice of and subject to the protection hereby conferred on the Trustee;

1. (2) The Trustee if acting in good faith shall be entitled to be indemnified out of the Trust Fund in respect of all liabilities incurred by him relating to the execution of any powers duties authorities or discretions vested in him under the provisions of this Deed and in respect of all actions proceedings costs claims and demands relating to any matter or thing done or omitted to be done concerning the Trust Fund.

52 There are limits on the extent to which an exclusion clause may operate in a trust deed. Specifically, the exclusion clause must not extend to 'the irreducible core of obligations which are fundamental to the concept of a trust': Armitage v Nurse [1998] Ch 241, 253 (Millett LJ, Hutchinson & Hirst LLJ agreeing); Wilden Pty Ltd v Green [2009] WASCA 38; (2009) 38 WAR 429 [155] ‑ [167] (McLure P, Pullin & Newnes JJA agreeing). Any attempt to do so will be void as being repugnant to the trust and/or contrary to public policy: Armitage (251 ‑ 256). As Millett LJ observed in Armitage: 'If the beneficiaries have no rights enforceable against the trustees there are no trusts' (253). See also Scaffidi [149]. However, not every instance of what may be termed equitable fraud is within this 'irreducible core of obligations', equitable fraud covering 'breach of fiduciary duty, undue influence, abuse of confidence, unconscionable bargains and frauds on powers': Armitage (252); Wilden [163]. The 'irreducible core of obligations' at least includes the duty of the trustees to perform the trusts honestly and in good faith for the benefit of the beneficiaries: Armitage (253); Scaffidi [149]. The scope of the obligations which may be described as being within the 'irreducible core' is yet to be settled (see for example, Wilden [166]). The duties to act personally and not act unreasonably set out above [41], are ones which the Chief Justice in Elovalis appears to describe as being part of the 'fundamental fiduciary nature of the trustee's role' [50]. I consider it is arguable that the obligations which Aeges is said to have breached are within the 'irreducible core of obligations' which are not able to be excluded by an exclusion clause in the trust deed.

53 Further, in the context of a strike out or summary judgment application, it is well established that a court should be careful not to risk stifling the development of the law by summarily disposing of actions where there was a reasonable possibility that, as the law develops, it will be found that a cause of action and remedy lies: Hospitals Contribution Fund of Australia v Hunt [1938] ArgusLawRp 58; (1983) 44 ALR 365, 373 ‑ 374 (Master Allen); Neilson v City of Swan [2006] WASCA 94 [18] (Buss JA, Wheeler & Pullin JJA agreeing). This approach applies with equal, if not greater, force to an inquiry pursuant to RSC O 26A r 4 in which the court is to consider the causes of action which the Applicants 'may' have. Given that the law in relation to the operation of exclusion clauses in a trust deed is still developing, I am not prepared to find that the existence of the exclusion clause in the present case deprives the Applicants of a potential cause of action against Aeges.

54 In any event, like the clause under consideration in Wilden, it is at least arguable cl 12 relates only to the trustee's personal liability, and not to liability to have a transaction set aside: Armitage (253); Wilden [163]. Nor does it appear to prevent the court making a declaration that Aeges breached its fiduciary obligations.

55 I am thus satisfied that the Applicants may have a cause of action against Aeges for breaching its obligations as the trustee of the F J Trust by:

(a) failing to act in good faith in exercising the discretionary power to distribute income;

(b) exercising its discretionary power to distribute income in a manner that can be said to be so unreasonable that no body of trustees properly directing themselves could have arrived at that conclusion; and

(c) failing to exercise its discretionary power to distribute income personally.

Did the Deceased receive property of the F J Trust, with sufficient knowledge that it was transferred in breach of trust?

56 It is well established that a person who, with sufficient knowledge, receives trust property, may be personally liable to the beneficiaries of the trust: Barnes v Addy [1874] UKLawRpCh 20; (1874) LR 9 ChApp 244, 251 ‑ 252 (Lord Selborne LC); Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 [110] ‑ [122], (Gleeson CJ, Gummow, Callinan, Heydon & Crennan JJ); Westpac Banking Corporation v The Bell Group Ltd (in liq) [No 3] [2012] WASCA 157; (2012) 44 WAR 1 [2127] ‑ [2136] (Drummond AJA, Lee AJA agreeing) (Bell); EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 3] [2013] WASC 183 [645] ‑ [653] (Beech J). Liability turns on what the recipient knew, or had reason to know, of the circumstances constituting the breach of trust: Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 [259], [280] (Judgment of the Court). Among other potential remedies, the recipient can be required to pay equitable compensation for loss arising from the misapplication of the trust property: Grimaldi [253], [280]. The funds recovered are used to restore the trust fund by way of monetary compensation for the assets that have been lost: Grimaldi [559].

57 The level of knowledge required of the recipient is defined by reference to the five categories identified in Baden Delvaux & Lecuit v Sociéte Générale pour Favoriser le Développement du Commerce et de L'Industrie en France SA [1993] 1 WLR 509 [250] (Peter Gibson J), being: '(i) actual knowledge; (ii) wilfully shutting one's eyes to the obvious; (iii) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make; (iv) knowledge of circumstances which would indicate the facts to an honest and reasonable man; (v) knowledge of circumstances which would put an honest and reasonable man on inquiry'. The level of knowledge required of the recipient is (i) to (iv), but not (v): Bell [2128] ‑ [2130]; Grimaldi [268] ‑ [270]; EC Dawson [647].

58 Given the Deceased's involvement in executing the 1979 Deed (as the secretary of Aeges) by which he was appointed a 'General Beneficiary' and his involvement as a director of Aeges in deciding the distributions made by the F J Trust between 1978 and 2012 as recorded in the minutes, for present purposes the Deceased's knowledge may be regarded as being co‑extensive with that of the trustee, Aeges. I am satisfied that the Deceased may have known that any distributions he received were of trust property transferred in breach of trust in the sense described above [57].

59 Turning to the exclusion clause, in addition to the arguments set out above [52] ‑ [54], it is also arguable that the clause does not have the effect that Aeges does not breach the F J Trust Deed unless it acts with 'personal conscious fraudulent bad faith' as set out in cl 12.1(c). Significantly, it does not, in my view, require the Applicants to prove Aeges acted with 'personal conscious fraudulent bad faith' before being able to commence a cause of action against the Deceased for receiving trust property transferred in breach of trust. It may be that at trial a different view is taken; however, for the purposes of RSC O 26A r 4, the existence of cl 12 does not prevent the Applicants from having a potential cause of action against the Deceased for knowingly receiving trust property.

60 I therefore conclude that the Applicants may have a cause of action against Ms Davenport as executrix of the Deceased's estate as a result of the Deceased receiving trust property with sufficient knowledge of a breach of trust. This conclusion is sufficient to establish that the Applicants 'may have a cause of action' for the purposes of RSC O 26A r 4.

Did the Deceased knowingly assist Aeges in a breach of the F J Trust?

61 It is also well established that a person who assists a trustee with knowledge of a dishonest and fraudulent design on the part of the trustee, may be personally liable to the beneficiaries of the trust: Barnes v Addy (251 ‑ 252); Farah Constructions [159] ‑ [186]; Bell [2104] ‑ [2126]; EC Dawson [654] ‑ [657]. Liability turns on what the recipient knew, or had reason to know, of the dishonest and fraudulent design: Grimaldi [259]. As with liability for knowing receipt, among other potential remedies, the assisting third party can be required to pay equitable compensation for loss arising from the misapplication of the trust property: Grimaldi [280].

62 As has been recently observed in this court, the meaning of the requirement that there be a 'dishonest and fraudulent design' is not settled in Australian law: EC Dawson [659]; Nicholson v Morgan [No 3] [2013] WASC 110 [56] (Edelman J). There is a divergence in the understanding of the decision in Farah Constructions on this point. In Bell Drummond AJA (Lee AJA agreeing) held that it was not necessary to show moral reprehensibility on the part of the trustee; rather it will be sufficient that the conduct of the trustee involves a breach of duty more serious that a trivial breach: [2119] ‑ [2125]. In Hasler v Singtel Optus Pty Ltd [2014] NSWCA 266; (2014) 101 ACSR 167, the New South Wales Court of Appeal declined to follow the decision in Bell on this point, instead requiring there to be transgression of ordinary standards of honest behaviour: [2] (Barrett JA), [6] (Gleeson JA), [121] ‑ [125] (Leeming JA). It is the decision in Bell which is binding on me.

63 For the reasons set out above, I am satisfied that there is more than an allegation, suspicion or assertion that Aeges breached its duty as a trustee in the manner in which it made income distributions to the beneficiaries of the F J Trust in the period from 1979 when the Deceased became entitled to receive distributions from the F J Trust until the date of his death in 2012. Given that more than $1 million was distributed to the Deceased or entities he controlled, this is more serious than a trivial breach. On the authority of the decision in Bell the breach is capable of being characterised as a 'dishonest and fraudulent design'.

64 The level of knowledge required of the third party is, however, settled. The third party must have knowledge falling within categories (i) to (iv) of the Baden categories: Farah Constructions [177] ‑ [178]. For the reasons set out above [58] the knowledge of the Deceased may be regarded as being coextensive with that of Aeges. I am satisfied that the Deceased may have known of the dishonest and fraudulent design on the part of Aeges.

65 I am therefore satisfied that the Applicants may have a cause of action against Ms Davenport, as executrix of the Deceased's estate, on the basis that the Deceased assisted Aeges with sufficient knowledge of a dishonest and fraudulent design on the part of Aeges.

Did the Deceased owe fiduciary duties as a director of Aeges to the Applicants as beneficiaries of the F J Trust, which he breached?

66 It is clear that the Deceased, as a director of Aeges, owed a fiduciary duty to Aeges: Hospital Products (96 ‑ 97). The issue is whether he owed a fiduciary duty to the beneficiaries of the F J Trust.

67 A director of a company does not owe a direct fiduciary duty to an individual member: Esplanade Developments Ltd v Dinive Holdings Pty Ltd [1980] WAR 151, 157 (Brinsden J); Cope v Butcher (1996) 20 ACSR 37, 38 (Acting Master Johnson). Neither does a director of a company owe a direct fiduciary duty to an individual creditor: Spies v The Queen [2000] HCA 43; (2000) 201 CLR 603 [93] ‑ [95] (Gaudron, McHugh, Gummow & Hayne JJ). Consistently, nor does a director of a company which is a corporate trustee owe a direct fiduciary duty to a beneficiary of the trust solely by reason of his or her directorship of the trustee company: Hurley v BGH Nominees Pty Ltd (1982) 6 ACLR 791, 796 (King CJ, Mitchell J agreeing), 800 (White J); Cope (38); Canberra Residential Developments Pty Ltd v Brendas (No 5) [2009] FCA 34; (2009) 69 ACSR 435 [69] ‑ [83] (Graham J).

68 I am not satisfied that the Applicants may have a cause of action arising out of a breach of a fiduciary duty owed by the Deceased as a director of Aeges to the Applicants as beneficiaries of the F J Trust, by reason solely of the Deceased's directorship of Aeges.

Did the Deceased effectively control the F J Trust, thereby assuming fiduciary duties towards the Applicants as beneficiaries, which he breached?

69 Given the emphasis placed on this alleged cause of action by the Applicants, it is appropriate that I address it in some detail.

70 In order to analyse the Applicants' case at its strongest, it is necessary for me to quote from the supplementary submissions filed by their counsel on 20 October 2014:

1. The Deceased became a General Beneficiary of the FJ Trust pursuant to a deed of variation dated 7 December 1979 varying the terms of the trust deed for the FJ Trust, ... Depending on the nature of the information produced pursuant to any discovery ordered in these proceedings, the Plaintiffs may claim that the Deceased effectively controlled the trust and had a clear conflict of interest by being involved in his capacity as a director of the trustee company in the appointment of himself as a General Beneficiary of the FJ Trust.
2. The Plaintiffs say that if the Deceased effectively controlled the trust he had a clear conflict of interest by being involved in his capacity as a director of the trustee company in the appointment of himself as a General Beneficiary of the FJ Trust.
3. The Plaintiffs contend that the pattern of distributions by the FJ Trust, almost exclusively to the Deceased following his appointment as a General Beneficiary (7 December 1979) until his death ... , makes available the inference that the FJ Trust was being controlled by the Deceased solely for the Deceased's benefit. This pattern provides 'tangible backing or objective foundation' within the terms of Le Miere AJA's observations in Waller v Waller (see [14] above).
4. For example those distributions almost entirely excluded any distribution to the Plaintiffs without explanation ... despite earlier distributions to the Plaintiffs prior to the Deceased's appointment as a General Beneficiary.
5. Such an inference does not conclusively establish such control by the Deceased (that would require access to the documents sought in the Application) but (in the context of the affidavit evidence filed by the Plaintiffs) consistently with the observations by the Chief Justice (at [10] above) it suggests it, and at least to the extent necessary under Order 26A rule 4 establishes that the Plaintiffs may have the requisite cause of action if they are provided with the documents sought (refer to [10]‑[14] above).
6. This observation reflects the nature of an application under Order 26A rule 4. It is not an application based on evidence establishing a cause of action on the probabilities. It is an interlocutory application that serves the interests of justice by allowing potential litigants to evaluate the evidence available in respect of nominated causes of action, being a cause of action that 'is not mere assertion, conjecture or suspicion'.
7. Depending on the nature of the information produced pursuant to any discovery ordered in these proceedings, the Plaintiffs may claim that the Deceased effectively controlled the trust and had a clear conflict of interest by being involved in his capacity as a director of the trustee company in determining the recipients of distributions (primarily to himself) from the FJ Trust.
8. The Plaintiffs, depending on the nature of the information produced pursuant to any discovery ordered in these proceedings, are considering a cause of action in circumstances where the Deceased 'effectively controlled the trust', and they would rely upon that control and the fact that the Deceased effectively stood in the shoes of the trustee as the basis for the fiduciary obligations they may assert were breached. Such an allegation requires access to the records of the company, i.e. '... the documents constituting or contemporaneously recording the material facts or information necessary to determine the material facts' referred to by McLure JA in NSW Solicitors Mutual Indemnity Fund.
9. There can be no dispute that a trustee owes the beneficiary of a trust fiduciary duties, or that equity would make a natural person (that admissible evidence established was effectively controlling a corporate trustee in the manner in which it made distributions) standing in the shoes of a trustee liable upon the same basis. (original emphasis)

71 The Applicants rely on the decision of French J in Australian Securities and Investments Commission; In the Matter of Richstar Enterprises Pty Ltd (ACN 099 071 968) v Carey (No 6) [2006] FCA 814 in support of the proposition that they may have a cause of action if the Deceased effectively controlled (in the sense of purporting to own) the trust property to the exclusion of the Applicants. In Richstar, French J considered whether the court, on an application under the Corporations Act 2001 (WA) (CA) s 1323, had the power to appoint a receiver to property held by a third party on a trust, whether discretionary or otherwise, of which the 'relevant person' is a beneficiary [12]. CA s 1323 grants the court broad powers to make orders against the subject of an ASIC investigation, prosecution or civil proceeding, referred to as the 'relevant person'. French J defined the issue in this way:

Section 1323(1)(h) authorises the Court to appoint a receiver 'of the property or part of the property' of the relevant person. It does not authorise the appointment of a receiver of the property of third parties other than the relevant person. However, if the relevant person has an interest in property of a third party and that interest falls within the definition of 'property' in s 9 of the Act, then a receiver appointed under s 1323 may be appointed a receiver of that interest [16].

72 For the purposes of the CA, 'property' is relevantly defined in CA s 9 to include a contingent interest in real or personal property. The crux of His Honour's decision is that a beneficiary of a discretionary trust may in certain circumstances have a contingent interest in the property of the trust for the purposes of CA s 1323:

The difficulty with applying the notion of contingent interests to beneficiaries of a discretionary trust lies partly in the uncertain scope of the distribution be it income or capital, which may be made in favour of any given beneficiary. I am inclined to think that a beneficiary in such a case, at arms length from the trustee, does not have a 'contingent interest' but rather an expectancy or mere possibility of a distribution. In some discretionary trusts, and there is an example among those of which [the third defendant] is a beneficiary, charities as a class are included in the class of beneficiaries. It could hardly be said that every charity in Australia has thereby acquired a contingent interest in that trust. On the other hand, where a discretionary trust is controlled by a trustee who is in truth the alter ego of a beneficiary, then at the very least a contingent interest may be identified because... 'it is as good as certain' that the beneficiary will receive the benefits of distributions either of income or capital or both.

... the beneficiary who effectively controls the trustee's power of selection because he is the trustee or one of them and/or has the power to appoint a new trustee has something approaching a general power and the ownership of the trust property... [36] ‑ [37].

73 French J then reviewed some examples of the trusts in issue before the court and opined whether they were amenable to orders under CA s 1323 on the basis that one of the defendants had a contingent interest in the property of the trust.

74 It is not apparent to me that the decision in Richstar offers the Applicants any assistance. Assuming (without needing to decide) that the Deceased was able to exercise such a level of control over the property of the F J Trust that he had a contingent interest in this property for the purposes of CA s 9, this has no significance to the causes of action or remedies available to the Applicants.

75 In their supplementary submissions, the Applicants also refer to the decisions in the Family Court in In the Marriage of Ashton [1986] FamCA 20; (1986) 11 Fam LR 457, In the Marriage of Goodwin [1990] FamCA 147; (1990) 101 FLR 386, and In the Marriage of Davidson (No 2) [1990] FamCA 187; (1990) 101 FLR 373. In each of these cases an order against a company or trust was in effect an order against a party to the marriage as the level of control the party was able to exercise over the company or trust meant that 'in reality' the property was the property of the party to the marriage. The decisions are limited to the family law context, and again do not assist the Applicants.

76 Rather, it seems to me that the proposition set out at [31] of the Applicants' supplementary submissions, and quoted above [70], appears to confuse perhaps four equitable principles.

77 The first is that, from the perspective of Aeges, it is clear that it has a fiduciary duty, as trustee, to exercise its discretionary powers personally and not in conjunction with, or under the direction of, somebody else: Elovalis [51]; Scaffidi [150]. As I have already determined, there is more than a mere allegation, suspicion or assertion that the Deceased exercised such control over Aeges that Aeges breached this duty. The Deceased may then be personally liable for knowingly assisting Aeges in this breach or knowingly receiving property tainted by the breach.

78 The second principle is that liability may arise where the third party knowingly induces or procures a breach of trust or fiduciary duty, whether for his or her own, or for another person's benefit: Grimaldi [244]; EC Dawson [640]. This cause of action is not alleged.

79 The third principle is that liability may arise where the third party is the corporate creature, vehicle or alter ego of the wrongdoing fiduciaries who use it to secure the profits of, or to inflict the losses by, their breach of fiduciary duty: Grimaldi [243]; EC Dawson [641]. Again, this cause of action is not asserted.

80 The fourth principle is that the Deceased may be held liable as a person standing in the shoes of a trustee if he became a trustee de son tort. Perhaps the leading definition of a trustee de son tort is found in the judgment of Smith LJ in Mara v Browne [1895] UKLawRpCh 191; [1896] 1 Ch 199:

What constitutes a trustee de son tort? It appears to me that, if one, not being a trustee and not having authority from a trustee, takes upon himself to intermeddle with trust matters or to do acts characteristic of the office of trustee, he may thereby make himself what is called in law a trustee of his own wrong, that is, a trustee de son tort, or as it is also termed, a constructive trustee (209).

81 A similar comment is made by Lord Millett (Lords Hutton & Hobhouse agreeing) in the House of Lords in Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366, 403 where his Lordship described a trustee de son tort as 'a person who, though not appointed to be a trustee, nevertheless takes it upon himself to act as such and to discharge the duties of a trustee on behalf of others'. His Lordship went on to state that:

Substituting dog Latin for bastard French, we would do better today to describe such persons as de facto trustees. In their relations with the beneficiaries that are treated in every respect as if they had been duly appointed. They are true trustees and are fully subject to fiduciary obligations. Their liability is strict; it does not depend on dishonesty (403).

82 As Professor R P Austin has observed, 'liability as a trustee de son tort arises out of two distinct stages, the intermeddling which gives rise to the status of trustee and the breach of duty': R P Austin, 'Constructive Trusts' in Essays in Equity (ed Finn) (1985, Law Book, Sydney), 210.

83 The circumstances in which a person will become a trustee de son tort were considered in some detail in Nolan v Nolan [2004] VSCA 109 by Ormiston JA (Chernov & Eames JJA agreeing). (I will refer to the parties in the same manner as Ormiston JA). The action was between Jinx Nolan, the daughter of Sir Sidney Nolan, and his second wife, Lady Mary Nolan. Jinx Nolan, the appellant, claimed that she was entitled to possession of three of Sidney Nolan's paintings which are alleged to have been given to his first wife, Cynthia Nolan, Jinx Nolan's mother. Jinx Nolan alleged that she was entitled to the paintings as the sole beneficiary under her mother's will. The paintings were said to have been converted by Sidney Nolan shortly after the death of Cynthia Nolan, and were never passed to the executors and trustees of Cynthia's estate. Rather, they are said to have passed to Lady Mary Nolan, as executrix and effectively the sole beneficiary of Sidney Nolan's last will and estate. The Court of Appeal held that the action should have been dismissed on the basis that the relevant limitation period had expired, and dismissed the appeal ([82] Ormiston JA, Chernov & Eames JJA agreeing). The court also concluded that, were it not for the limitation issues, the decision by the trial judge to dismiss the claim ought to have been set aside and a new trial ordered ([138] Chernov & Eames JJA, Ormiston JA agreeing).

84 In order to avoid the limitation issues, it was necessary for Jinx Nolan to establish that the paintings were impressed with a constructive trust when held by Sidney Nolan (so as to fall within Limitation Act 1980 (UK) s 21(1)(b), which is in similar terms to Limitation Act 1935 (WA) s 47(1)). The existence of a constructive trust depended on whether Sidney Nolan by virtue of his acts in relation to the paintings became an executor de son tort and thereby became a trustee de son tort, or in the alternative independently became a trustee de son tort [17]. Ormiston JA held that he became neither [82]. It is not necessary for present purposes to consider the issues relating to executors de son tort. In relation to a trustee de son tort, His Honour stated:

It is desirable, however, first to deal with the alternative argument based on the characterisation of Sidney Nolan's acts as those of a trustee de son tort and thus of a constructive trustee. The argument, as I would understand it, depended upon the three paintings being treated as trust property by reason of their being subject to the trusts in Cynthia Nolan's will and thus it was said that Sidney Nolan, having come into custody or possession of the paintings, was holding the trust property wrongfully, thereby leading to his being properly described as a trustee de son tort.

In my opinion the argument fails for one simple and good reason ... namely, that in this respect there is no evidence that Sidney Nolan purported to act as a trustee in dealing with the three paintings or did any act from which such an inference might be drawn [25] ‑ [26].

85 After reviewing the authorities and leading texts, His Honour summarised the position as being that 'trustees de son tort intend, by their actions, to assume the role of trustees and, at least in the first place, to take control of trust property for the benefit of others rather than for themselves' [29]. The focus on the inquiry is on whether there was an intention to act in the role of trustee in relation to certain property [29].

86 The key finding made by Ormiston JA was that the actions alleged against Sidney Nolan were to the effect that he acted adversely to Cynthia Nolan's estate, not on behalf of it [76] ‑ [77]. His Honour observed:

[T]he appellant's allegation requires that Sidney Nolan be treated as holding as trustee and not adversely to the interests of any beneficiary. To create an institutional constructive trust there must be some act which either directly displays such an intention in the supposed trustee or some acts or circumstances from which it may be inferred that he had an intention to act as a trustee or fiduciary or in some other role which imported an obligation to hold property as if he were a trustee. Again there have not been shown to be any such acts or circumstances. If the allegation be true, there would obviously here have been a contrary intention, that is, an intention to deal with the paintings as if they were his own, if that be established [80].

87 The same is true in the present case. The allegations by the Applicants are that the Deceased assumed control of the F J Trust and then acted in his own interests, as if he owned the trust property, by making distributions to himself and entities he controlled. This cannot constitute him a trustee de son tort.

88 In coming to the conclusions which I have set out above, I have not taken into account against the Applicants any limitation issues. To the extent to which the proposed causes of action accrued prior to the commencement day of the Limitation Act 2005 (WA), being 15 November 2005, the Limitation Act 1935 (WA) applies. Limitation Act 1935 carves out from the limitation periods applicable to proceedings against trustees any 'claim founded upon any fraud or fraudulent breach of trust to which the trustee was a party or privy': s 47(1). Fraud in this context means equitable fraud: In de Braekt v Powell [2007] WASCA 55; (2007) 33 WAR 389 [18] (Buss JA). The proposed causes of action arguably assert equitable fraud. Moreover, although the court could take a limitation defence into account as a matter relevant either to its power under RSC O 26A r 4 or the exercise of its discretion, it should not normally do so except in the clearest of cases, of which this is not one: Waller [87].

Have the Applicants been able to obtain sufficient information to decide whether or not to commence proceedings?

89 RSC O 26A r 4(1) in effect prohibits the court from exercising the power to grant pre-action discovery if the applicant already has sufficient information to enable a decision to be made as to whether to commence or take proceedings: The Hancock Family Memorial Foundation Ltd [40]; The New South Wales Solicitors Mutual Indemnity Fund [61]; Henderson [34]. There is an inherent tension between the requirement that an applicant 'may have a cause of action' and the requirement that the applicant 'after reasonable enquiries, has not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take the proceedings'. The stronger the relevant evidence already available to an applicant, the stronger its position under the former, but the weaker its position under the latter. On the other hand, the weaker the evidence, the weaker the applicant's position that she may have a potential cause of action, yet the stronger the position that there is insufficient information to make a decision: The Hancock Family Memorial Foundation Ltd [39]; Glencore International AG v Selwyn Mines Ltd [2005] FCA 801; (2005) 223 ALR 238 [14] (Lindgren J); Henderson [34].

90 Whether an applicant under O 26A r 4 has sufficient information to enable a decision to be made to commence proceedings of the nature it wants to bring is to be determined objectively: The New South Wales Solicitors Mutual Indemnity Fund [60]. Sufficient information means 'no more than that which is reasonably necessary to enable the person to decide whether to commence or take proceedings': The New South Wales Solicitors Mutual Indemnity Fund [15], [28]. 'Ordinarily, what is reasonably necessary is unlikely to extend beyond documents constituting or contemporaneously recording the material facts or information necessary to determine the material facts': The New South Wales Solicitors Mutual Indemnity Fund [15], [28].

91 In Davis v Sagar Pty Ltd (Unreported, WASC, Library No 980443, 10 August 1998), which was decided shortly after O 26A was inserted into the RSC, Master Sanderson observed:

Order 26A was inserted into the Rules of the Supreme Court in October 1996. It was designed to rectify what was seen as a significant problem in litigation - that is, the inability to obtain discovery from anyone other than a party to an action. At the same time that this rule was introduced, provision was made for the early return of subpoenas: see O 36 r 16A. The introduction of O 26A was part of the raft of amendments associated with a move to full caseflow management. It also represented a change in philosophy. The aim was to ensure that a party that commenced litigation did so after careful consideration, rather than proceeding in the hope that something might turn up during the discovery process. With respect to discovery from a non-party, the aim was to ensure that all relevant documents were available to all parties to ensure no relevant fact remained hidden. It is against this policy background that O 26A must be applied (5).

92 As I have quoted above [28], Ms Algie states on behalf of the Applicants that 'it has not been possible for us to make a decision whether or not to proceed against the [Respondents] because we have not been able to obtain sufficient information to do so'. She further states that: 'My sisters and I are trying to obtain sufficient information to enable us to make a carefully considered decision as to whether legal proceedings should be commenced'.

93 In their written submissions dated 26 September 2014, the Applicants submit that:

1. The actions being considered by the Plaintiffs relate to matters that took place in 1979 and following, now some 35 years ago in circumstances where the Plaintiffs are considering allegations of fraud. In these circumstances the Plaintiffs are anxious to make sure that what would be extremely expensive and hard fought litigation involving allegations of fraud is not commenced without a full account of the contemporaneous written record.

94 Among the documents which the Applicants have not been able to obtain, but seek, are:

• All documents relating to distributions received from the F J Trust by the Deceased or any of his related entities.
• The Deceased's tax returns.
• Bank statements for Aeges as trustee for the F J Trust.
• Bank statements for the Deceased.
• The tax returns for and financial statements for Kuku (WA) Pty Ltd (a recipient of distributions from the F J Trust).

95 The Respondents submit that the Applicants have received more than sufficient information to enable them to make a decision as to whether to commence proceedings. In particular, the Applicants have copies of:

• The F J Trust Deed.
• The 1979 Deed.
• The history of officers of Aeges, set out in the ASCOT extract.
• The minutes of the meetings of the directors of Aeges at which the distributions for the F J Trust were agreed for the financial years ending 30 June 1978 to 30 June 2012.

96 The Applicants also have the ability to access the publicly available information about the officers and shareholders of other companies referred to throughout the materials before me.

97 The Applicants also submit that they require the documents that record the monies that were distributed to the Deceased 'and the end to which those monies were put and where that wealth currently lies' (submissions dated 26 September 2014 [57]). They continue to say that there 'would be no point in litigation of this type where there is no prospect of recovery of funds' (Applicants' submissions dated 26 September 2014 [57]). In response, counsel for Aeges asserted that the purpose of using pre-action discovery to determine prospects of recovery is improper. In many cases, this would be a valid observation. However, given that the Applicants are seeking to identify money which they say was paid out in breach of trust, the fact of receipt of money is part of the cause of action, as opposed to merely going to recovery. Having said that, the documents which are 'reasonably necessary' do not extend as far as the Applicants submit.

98 By bringing this application, it is self-evident that the Applicants consider that they have not been able to obtain sufficient information to decide whether or not to commence proceedings. However, it is for the court to review the sufficiency of the information already obtained and whether more is reasonably required.

99 The causes of action that I have identified the Applicants may have against the Deceased's estate centre on the inferences which may be drawn from the pattern of distributions of the income of the F J Trust to the Deceased or entities he controlled between 1979 and 2012. I am conscious of the principle that an allegation of fraud, breach of trust or wilful default ought not be made lightly, and will need to be pleaded with some particularity: RSC O 20 r 13(1)(a); Magill v Magill [2006] HCA 51; (2006) 226 CLR 551 [39] (Gleeson CJ); Henderson [39], [45]. Moreover, an 'allegation that a third party is liable as a knowing participant in a dishonest or fraudulent design is of such seriousness as to require it to be pleaded and particularised': EC Dawson [658]; Farah Constructions [657]. In this context, I consider it reasonably necessary for the Applicants, prior to making a final decision as to whether to commence the proposed proceedings, to be provided with all the contemporaneous financial and trust records of the F J Trust, the Deceased and the entities which are recorded as having received distributions from the F J Trust, being Kuku and Deepdale.

100 As I have noted [11], the Respondents accept that the Applicants have made reasonable inquiries. Accordingly, I am satisfied that, even after having made reasonable inquiries, the Applicants have not been able to obtain sufficient information to enable a decision to be made as to whether to commence the proceedings they propose.

Are there reasonable grounds for believing that the Respondents have in their possession documents that may assist in making the decision?

101 Ms Davenport helpfully attached to her affidavit a schedule setting out which of the documents sought from her she currently has in her possession or control. Ms Davenport has advised the court that many classes of documents exist, and are in her possession.

(a) All documents and correspondence relating to distributions received by the late Angus Horwood (or any of his related entities) from The F.J. (Angus) Horwood Trust since 1977;

(b) All loan account records for the late Angus Horwood since 1979 in relation to The F.J. (Angus) Horwood Trust;

(c) All bank statements since 1979 for Aeges Pty Ltd as trustee for The F.J. (Angus) Horwood Trust; and

(d) All tax returns lodged with and income tax assessments received from the Australian Taxation Office since 1979 for Aeges Pty Ltd as trustee for The F.J. (Angus) Horwood Trust.

103 No director of Aeges placed evidence before the court to the effect that Aeges dos not have any of these documents in its possession. Aeges is required by CA s 286 to 'keep written financial records that ... (a) correctly record and explain its transactions and financial position and performance; and ... (b) would enable true and fair financial statements to be prepared and audited'. This obligation 'extends to transactions undertaken as trustee': CA s 286(1). However, the financial records are only required to be maintained for seven years after the transactions covered by the records are completed: CA s 286(2). Assuming that Aeges complies with CA s 286, I have reasonable grounds for believing that it will have at least some documents in its possession falling within the classes sought. It may be that Aeges no longer has some of the more historical information. However, I am not told this on affidavit. If this is the case, and orders are made, the loss or destruction of historical documents can be deposed to in the affidavit verifying the list.

104 I am satisfied that there are reasonable grounds for believing that Ms Davenport, either in her own right or as the Deceased's executrix, and Aeges have in their possession documents that may assist the Applicants in making a decision as to whether or not to commence the proceedings they propose.

Ought the discretion be exercised in favour of the Applicants?

105 The court will exercise caution before making an order under O 26A r 4 and will only do so where it is reasonably necessary to achieve the proper administration of justice: McCarthy [13]; Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33 [82] (Steytler J), [1] (Malcolm CJ agreeing), [24] (Wallwork J agreeing). In Central Exchange Steytler J identified a number of factors relevant to the exercise of this discretion:

A Court, in considering whether or not to exercise the discretion afforded it by the section, or, to put it differently, in considering whether or not the order is reasonably necessary to achieve the proper administration of justice, will ordinarily take into account a range of factors. Without attempting to be exhaustive, these will usually include such things as the likelihood that a cause of action of the kind suggested will be found to exist, the nature and significance of that potential cause of action, the likely effect, on the person against whom discovery is sought, of the making of an order of the kind contended for, whether there is any other adequate means, available to the intending plaintiff, of obtaining the information which it seeks, the nature and confidentiality of the documents proposed to be obtained, the possible significance of the information contained within those documents to the decision whether or not to commence the contemplated proceedings, whether the applicant is able to compensate the potential party for its cost of complying with the order and whether there is any evidence of bad faith on the part of the applicant [83].

This approach was adopted by Le Miere J in Waller [106].

106 A significant factor in favour of the exercise of the discretion is the complexity of the corporate and trust arrangements utilised by the Deceased. Moreover, until the recent inquiries following the death of the Deceased, the Applicants appear to have had no knowledge of the manner in which the affairs of the F J Trust were conducted. This is not an action in which the proposed plaintiff has a contemporaneous record of their side to a dispute involving the proposed defendant.

107 I consider that the judicious use of pre-action discovery will not only assist the Applicants to consider whether to commence the proceedings, but assist them to identify the parties against whom the proceedings should be commenced and the particular causes of action to be asserted. This in turn will facilitate the timely, efficient and proportionate disposition of the proceedings, objects which I am directed to seek to achieve by RSC O 1 r 4A.

108 The Respondents did not place any evidence before the court of any specific or particular prejudice which they will, or might, experience if an order for pre‑action discovery were made.

109 The order proposed by the Applicants is on the terms that the Respondents pay the Applicants' costs of the application to the taxed if not agreed. This is an unusual order on an application for pre-action discovery. Rather, the general rule is that a non‑party who provides discovery ought be fully indemnified for the costs of doing so, including the costs of obtaining legal advice in relation to compliance: Jovista Pty Ltd v FAI General Insurance Co Ltd [1999] WASC 44 [10] ‑ [12] (Master Sanderson); Swancross Corporation Pty Ltd v The Minister for Planning and Infrastructure for The State of Western Australia [2004] WASC 259 [6] (Master Sanderson) [6]; Waller v Waller [2008] WASC 51 [217] ‑ [219] (Simmonds J). (It was not necessary for the Court of Appeal to consider the comments of Simmonds J in relation to costs: Waller v Waller [2009] WASCA 61). In Waller Simmonds J (at [215], [219]) approved of the following statement by Master Sanderson in Kim Riley in his capacity as Trustee of the Ker Trust v Jubilee Gold Mines NL [2000] WASC 114:

In relation to costs, the plaintiff should pay the costs of the application. Although the application has been successful, it is the plaintiff who is seeking an indulgence from the Court. The defendant should not be obliged to consent to a discovery order which amounts to a serious invasion of its rights without the sanction of the Court. In other words, the defendant has not acted unreasonably in declining to give discovery, and it should be entitled to the costs of responding to the application.

As regards the cost of providing discovery, in my view those costs should be reserved. If the plaintiff does not commence proceedings, the costs of giving discovery ought be the defendant's, and they ought be awarded on an indemnity basis. There is no reason in those circumstances why the defendant should be out of pocket. If, however, the plaintiff does commence proceedings, the discovery provided by the defendant will reduce the time taken and the costs incurred in providing discovery in the action. In those circumstances, an order for costs in the cause or that costs be reserved would, in my view, be appropriate [18] - [20].

110 My preliminary view is to order costs on the basis set out in Kim Riley, and I give this weight in the process of the exercise of the discretion, though I will hear from the parties as regards the final order.

111 There is another factor in favour of the exercise of the discretion arising out of the status of the Applicants as beneficiaries of the F J Trust. If a beneficiary so requests, a 'trustee is in general obliged to provide documents and information to the beneficiary, at his cost, in relation to the trust property and to provide an accounting in respect of the administration of it': Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, 431 (Mahoney JA), see also (411 ‑ 423) (Kirby P), (442 ‑ 445) (Sheller JA). This right arises even though the interest of the beneficiary is only contingent; Hartigan (431). As the decision in Hartigan illustrates, there are limits on this right. However, in general terms, the exercise of the discretion in RSC O 26A r 4 in the present case is consistent with this right which the Applicants as beneficiaries are independently entitled to.

112 I am satisfied that an order for at least some pre‑action discovery against the Respondents is reasonably necessary to achieve the proper administration of justice. It is therefore an appropriate exercise of the discretion in RSC O 26A r 4 to make orders on the present application.

113 Any order made is to be limited to documents 'in the potential party's possession ... that may assist the applicant in making the decision': RSC O 26A r 4(4). The order made should be no wider than is necessary: GLR Injection Technologies [4]; McCarthy [15].

114 As set out above, I consider it reasonably necessary for the Applicants to be provided with all the contemporaneous financial and trust records of the F J Trust, the Deceased and the entities which are recorded as having received distributions from the F J Trust, being Kuku and Deepdale.

115 I have set out the documents sought from Aeges at [102]. I am of the view that these documents are no wider than necessary.

116 In relation to Ms Davenport, it is evident from the description above [114], that the documents sought by the Applicants are significantly more extensive than what I consider is reasonably necessary. The following table sets out the documents sought by the Applicants with my preliminary assessment of whether the class of documents sought is within the scope I have found to be reasonably necessary:

All documents relating to distributions received by the late Angus Horwood (or any of his related entities) from The F J (Angus) Horwood Trust;

All tax returns lodged with and income tax assessments received from the Australian Taxation Office since 1979 for the late Angus Horwood;

All tax returns lodged with and income tax assessments received from the Australian Taxation Office since 2009 for Kuku (2009) Pty Ltd;

All tax returns lodged with and income tax assessments received from the Australian Taxation Office since 2004 for Kuku (WA) Pty Ltd;

All tax returns lodged with and income tax assessments received from the Australian Taxation Office since 1979 for each other corporate entity related to the late Angus Horwood;

Pages 1 and 3 of the trust deed for The Dress Circle Investment Trust;

All valuations for the property known as 79 Dayrell Road, Nowergup (Lot 2);

All deeds subsequent to the creation of the trust deed relating to The Dress Circle Investment Trust including (but not limited to) any deeds relating to the appointment of new trustees;

The register of Unitholders [sic] required to be kept pursuant to clause 8 of the Dress Circle Farm Unit Trust;

All documents disclosing the consideration given by the trustees of the Ben Crisp Family Trust for units in the Dress Circle Farm Unit Trust;

All documents disclosing the consideration given by the trustee of the Angus Horwood Investment Trust for units in the Dress Circle Farm Unit Trust;

All documents disclosing the consideration given by Cheryl Rae Davenport for units in the Dress Circle Farm Unit Trust;

All loan account records for the late Angus Horwood since 1979 in relation to The F.J. (Angus) Horwood Trust;

All correspondence or documents since 1979 providing details in relation to any distributions from The F.J. (Angus) Horwood Trust;

All bank statements since 1979 for Aeges Pty Ltd as trustee for The F.J. (Angus) Horwood Trust;

All bank statements for the late Angus Horwood since 1979;

All bank statements for Kuku (2009) Pty Ltd since 2009;

All bank statements for Kuku (WA) Pty Ltd since 2004;

All bank statements for The Dress Circle Investment Trust since 2009;

All bank statements for the Angus Horwood Investment Trust since 2009;

All bank statements for Dress Circle Farm Pty Ltd since 1979;

The full financial statements for the Dress Circle Farm Unit Trust from and including 2007;

The full financial statements for the Angus Horwood Investment Trust from and including 2007;

The memorandum and articles of association for Aeges Pty Ltd;

The full financial statements for the Dress Circle Investment Trust from and including 2007;

The full financial statements for Kuku (WA) Pty Ltd from and including 2007;

The full financial statements for Kuku (2009) Pty Ltd from and including 2007;

The full financial statements for Ferman Pty Ltd as trustee for the Angus Horwood Family Trust for the 6 financial years before the company was deregistered;

All documents showing that the share in Kuku (2009) Pty Ltd was acquired and owned by Angus Horwood on behalf of The Dress Circle Investment Trust;

Full financial accounts for the Angus Horwood Family Trust;

All minutes from meetings of shareholders and directors of Ferman Pty Ltd;

All documents relating to contributions or payments made by Angus Horwood to any superannuation fund;

All documents relating to the distribution of superannuation benefits arising from the death of Angus Horwood.

117 My preliminary view is that orders along the following lines will give effect to the reasons set out above. These orders reflect what I consider to be the usual position as to costs as set out in Kim Riley [18] ‑ [19]:

(a) make a list of the documents which are, or have at any time been, in her possession, custody or power within the class of documents described in schedule 1 to this order (corresponding to the documents within scope in [116] above), and in relation to documents which have been, but are not now, in her possession custody or control, when she parted with them and what has become of them;
>
> (b) swear an affidavit verifying the list in paragraph (a);
>
> (c) serve a copy of the documents in paragraphs (a) and (b) on the Applicants; and
>
> (d) serve on the Applicants a copy of each document in the list in paragraph (a) for which no claim of privilege is made, the cost of provision of which is to be paid for by the Applicants at the rate of $0.165 per page.

(a) make a list of the documents which are, or have at any time been, in its possession, custody or power within the class of documents described in schedule 2 to this order (corresponding to [102] above), and in relation to documents which have been, but are not now, in its possession custody or control, when it parted with them and what has become of them;
>
> (b) by a duly authorised officer, swear an affidavit verifying the list in paragraph (a);
>
> (c) serve a copy of the documents in paragraphs (a) and (b) on the Applicants; and
>
> (d) serve on the Applicants a copy of each document in the list in paragraph (a) for which no claim of privilege is made, the cost of provision of which is to be paid for by the Applicants at the rate of $0.165 per page.

3. The Applicants be at liberty to claim the costs in paragraphs 1(d) and 2(d) in any proceedings commenced by the Applicants against the respective Respondent within six (6) months of the date of this order.
4. Subject to the orders in paragraphs 1(d) and 2(d), the Applicants pay each of the Respondents' costs of complying with this order to be taxed if not agreed, unless the Applicants commence proceedings against the respective Respondent within six (6) months of the date of this order, in which event the costs shall be in the cause in those proceedings.
5. The Applicants pay the Respondents' costs of the application to be taxed if not agreed.

118 I will hear from counsel as to the final form of the orders, including costs.

119 I will also hear from counsel as to whether it is necessary to make any distinction between documents held by Ms Davenport in her own right and documents held in her capacity as the executrix of the Deceased's estate.