National Trustees Executors and Agency Company of Australasia Limited v Barnes [1941] HCA 3

High Court of Australia|1941-07-01

NATIONAL TRUSTEES EXECUTORS AND APPEL LIMITED AND ANOTHER

PLAINTIFFS, AND BARNES AND OTHERS <i Reine DrrenpDANTS,

H.C. or A, Beccutors and Administrators - Trusts - Action by dissatisfied be tions of breaches of trust - Successful defence by cnsuters eee

administration of the estate and removal of the executors. The ¢ successfully defended the action but were unable to recover the cost were ordered to be paid to them by the plaintiffs, 'The executors then by originating summons to have it determined whether they were be indemnified out of the estate in respect of their costs.

Held that, the costs having been properly incurred as an incident of administration, the executors were entitled to the indemnity, but that shares of the beneficiaries who brought the action should first be u

Sec. 30 (2) of the Trustee Act 1928 powers." In sec. 3 of the Act (Vict.) provides: "A trustee may reim- _ tee" is defined, for the purp burse himself or pay or discharge out of Act, where the context the trust premises all expenses incurred _ include a personal representat in or about the execution of the trusts or

'The executors were refused an order for their costs of the originating nons, inasmuch as they could have obtained an order for costs out of estate on the hearing of the original action if they had joined all the y beneficiaries, as they should have done.

Devision of the Supreme Court of Victoria (Mann C.J.): In re Dunn; National Trustees Hxecutors and Agency Co. of Australasia Ltd. v. Barnes, (1941) VLR. 25, varied.

e National Trustees Executors and Agency Co. of Australasia |. and James Edward Hogan were the executors of the will of d Dunn, deceased, and they were sued in the Supreme Court toria by nine out of thirty-seven residuary beneficiaries for g to call in a balance of purchase money on a contract of sale land or to enforce their rights thereunder on default by the

ser. The beneficiaries alleged other breaches of trust and declarations that such breaches had been committed, ints on the basis of wilful default, administration of the estate removal of the executors from their office. The action was by Mann C.J., who upheld the beneficiaries' allegations and judgment against the executors (Dwyer v. National Trustees ors and Agency Co. of Australasia Ltd. (1)). The executors appealed to the High Court, which reversed the decision in the elow and entered judgment for the executors, with costs of m and the appeal against the unsuccessful plaintiff bene- (2). The executors did not during the proceedings seek to remainder of the residuary beneficiaries in the action, and, conclusion of the proceedings, they did not apply for any that the costs be paid out of the estate. The costs were not the beneficiaries pursuant to the order, and the executors it to be indemnified therefor out of the estate. The costs were

ced as between solicitor and client at £2,006 7s. 5d. The executors e course of the action were ordered to pay £20 17s., the of an interlocutory application made by the beneficiaries for er for further particulars of the defence ; these had also been the executors, and they sought an indemnity for this amount. in the course of the action, the executors had to pay £3 3s. fares and expenses of one Cassidy, a solicitor, of Cobram, ne to Melbourne to be consulted by them, whilst two other

H.C. or A. As in the passing of the executors' accounts the beneficiaries ee objected to their indemnity on all the items, the executors obtained Narionar, leave to withdraw these contested items from their account and poem issued an originating summons out of the Supreme Court of Victoria os for the determination of questions relating to their rights of indemnity, aes They joined Anastasia Myrtle Barnes as a defendant, representing Avsrratasta herself and all beneficiaries who were not parties to the original Lp. _ action, and Walter Kemp and William Charles Lynott Townsend, Bansns, a8 defendants representing, firstly, themselves as assignees of the interests of the plaintiffs to the original action, and, secondly, such

The questions asked in the summons were substantially as follows : -

Are the plaintiffs (that is, the executors) entitled to be reimbursed out of the estate of the testatrix their costs as between - solicitor and client of the above-mentioned action in the Supreme Court and of the appeal from the judgment therein to the High Court of Australia ? i

Are the plaintiffs entitled to be reimbursed out of the estate of the testatrix the sum of £20 17s. ordered to be paid by - them to the plaintiffs in the said action as costs of and incidental - to interlocutory applications therein and paid by them on or about - 8th February 1939 ? J

Are the plaintiffs entitled to be reimbursed out of the estate of the testatrix - (a) the sum of £3 3s. paid to Cassidy, and (6) and (c) the other small amounts expended by the officers as referred to above ?

The summons came on for hearing before Mann C.J. on 24th - and 25th September 1940, and in a reserved judgment, on 14th October 1940, he answered the questions: (1) No; (2) No; (3) No, and ordered that the costs of the defendants to the summons be taxed as between solicitor and client and paid out of the estate and that the plaintiffs bear their own costs of the summons: In re Dunn; National Trustees Executors and Agency Co. of Australasia Ltd. y. Barnes (1).

Ham K.C. (with him Mulvany), for the appellants. The trustees were entitled to be recouped the costs of defending the action brought by the dissentient beneficiaries. What the trustees did was quite reasonable, and they are entitled to an indemnity. They had acted properly in the administration of the estate (Turner v. Hancock (2);

(1) (1941) V.L.R. 25. (2) (1882) 20 Ch, D, 303, at p. 305

les of the Supreme Court of Victoria, Order LXV., rule 1). They #- ©. ov 4. r + ac ting for the benefit of the estate, although they were defending ee ves. The benefit need not be pecuniary (Walters v. Wood- ysroxan ridge; Ex parte Teesdale (1) ). In re Dunn; Brinklow v. Singleton Trustees is distinguishable, as it contained charges of gross personal fraud. aera! ARKE J. referred to Courtney v. Rumley (3).] Acxcy authorities show that trustees who have even been guilty of Pi Soe breaches of trust of no great impropriety have been allowed Lp. r costs as between solicitor and client out of the estate (In re patvps ; Butt v. Wright (4); Taylor v. Tabrum (5); Bailey v. - id (6) ). In Nissen v. Grunden (7) the trustees were allowed costs of defending themselves: See also Noble v. Meymott (8) ; toyds v. Royds (9) ; Cotton v. Clark (10). TARKE J. referred to In re Jones ; Christmas v. Jones (11).} are entitled to their costs, and it is not a matter of

for the court (In re Love ; Hill v. Spurgeon (12) ).

The proper time for the trustees to apply for costs in ition action was at the conclusion of the proceedings, t afterwards. If they apply later, then the sole consideration is ther the costs claimed were proper charges and expenses incurred trustee in the administration of the estate (In re Beddoe ; y. Cottam (13) ). The right of indemnity is common to all , but the test here is whether the costs were incurred in and the execution of the trust (Hood and Challis, Conveyancing, Land and Trustee Acts, 7th ed. (1909), p. 408). These costs not so incurred; the defence was solely for the benefit of eutor (Worrall v. Harford (14); Attorney-General v. Mayor forwich (15); In re German Mining Co. (16) ). The principle a trustee is entitled to his costs rests on an implied contract v. Williamson (17)). Lord St. Leonards' Act (22 & 23 ¢, 35), passed in 1859, declared the law as set out in

( 2878) 20 W.R. 520; (1878) 7 (9) (1851) 14 Beay. 54 (51 E.R. 207]. Ch. D, 504, at p. 510. (10) (1852) 16 Beay. 134 [51 E.R. 728}.

6 Sim, 281 [58 E.R. 599). (14) (1802) 8 Ves. 4, at p. 8 (32 E.R.

250, at pp. 251, 252). (15) (1837) 2 My. &'Cr. 406, at p. 424 (40 E.R. 695, at pp. 701, 702]. (16) (1853) 22 L.J. Ch. 926. (17) (1858) 25 Beav, 622, at p 626 [53

H.C. or A. the above cases. This was copied in Victoria by the Stat ea Trusts 1864, sec. 78 (now Trustee Act 1928, sec. 30 (2)). The Narroxaz 18 Whether the costs were properly employed in execution of a

TRUSTEES [Witu1ams J. referred to Halsbury's Laws of England, EEHUROES "voll BB paDiD

AND ; ' ens The costs here were subject to an order, and the taxing mast '0. OF sees A 'Avstratasra 2llowed one counsel, showing that that was an expense impro

Lr. incurred (Hosegood vy. Pedler (1); In re Maddock; Butt v. Vi Banves, (2) )- Order LXV., rule 1, applied only in the original a

Once an order for costs is made, they are no longer costs wit rules but become charges and expenses of the trustees (. Edmundson (3); In re England's Settlement Trusts ; ] England (4); Walters v. Woodbridge; Ex parte Teesdale (5 Turner v. Hancock (6); In re Dunn; Brinklow v. Singleton " As to the costs of the unsuccessful summonses for particulars, are not proper expenses.

[Ricu A.C.J. Do you press for those, Mr. Ham ? [Ham K.C. The answer to that question may affect the q of issue-estoppel on the taking of accounts before the Chief Cle Lewis. As to the costs of these proceedings, if the trustees ha

obtained the proper order for the joinder of all beneficiaries on

then questions 2 and 3 would have been unnecessary. The ori ing summons is for the benefit of the trustees personally. ~

Gowans, for the respondent Barnes. There are two questions : - (1) What is the proper measure of the trus indemnity ? (2) Do the expenses incurred here fall within indemnity? As to the first question, the principle is now state the statute and is the same as has always been stated by the Chan courts. All the cases quoted to show that a trustee was entit

the administration proceedings and not in subsequent pro: The proceedings were proper administration suits or claims accounts, or claims by beneficiaries to have the estate handed o Different considerations apply, however, when, subsequently, 1 trustees apply after the original proceedings have been com In the first class of cases, the trustee, prima facie, is entitled to re

(1) (1896) 66 LJ. Q.B. 18. (5) (1872) 20 W.R. 520; (1878) 7 (2) (1899) 2 Ch, 588. Ch. D. 504. g (3) (1917) 2 Ch. 285, at pp. 293, 294. (6) (1882) 20 Ch. D. 303. (4) (1918) 1 Ch. 24, at p. 28. (7) (1904) 1 Ch. 648.

from the estate if an order is made on the original proceed- but in the second class of cases, if the trustee does not ask order on the original proceedings, then the trustee loses his facie right and must show that the costs and expenses were d in the proper administration of the estate. The statement principles is found in In re Love ; Hill v. Spurgeon (1). The ice there set out was applied in an administration suit, in subsequent proceedings. The test in the subsequent gs is whether the costs were properly incurred in the due of the trusts. In other words, was it for the benefit of state? The distinction between an administration action and action is shown in Williams v. Jones (2). In that case the was not allowed costs but was left to the same remedies as an ry litigant in a hostile action (In re Davis ; Muckalt v. Davis the defence by the trustee in the action is not for the of the estate but for the benefit of the trustee, to protect pocket, then the costs are not expended in or about the tion of the trust. It is in the nature of a hostile action. If ees are entitled to be recouped out of the estate, then (a) intiff's right to be recouped should be conditional on exhaust- remedies under the High-Court order, and (b) should be ly against the unsuccessful beneficiaries' shares (In re Allen ; vy. Foster (4) ).

wy, in reply. It was unnecessary to join representatives of ies in the original action (Williams on Executors, . (1930), vol. m., p. 1266; Rules of the Supreme Court, XVI, rules 8, 33; Order LV., rule 10). The trustees execute the original order of the High Court (Farmers Protec- Ac 1940 (Viet.) ). The effect of that Act is retroactive to 7th Lugust 1940. The court should not go past the questions asked by

the interests of the beneficiaries who did not sue.

A.C.J. I have had the advantage of reading the judgment rother Williams. As I agree with his reasons and the order by him, I cannot usefully add anything to what he has said.

29 Ch. D., at p. 350, (3) (1887) 57 LJ. Ch. 3. 34. Ch, D. 120, at p. 126. (4) (1889) W.N. 132.

National 'TRUSTEES EXxecurors AND AGENCY Co. oF AUSTRALASIA

H.C.or A. Srarke J. "A trustee may reimburse himself or pay or di

1941, out of the trust premises all expenses incurred in or about Nartona, execution of the trusts or powers" (Trustee Act 1928 of Viet

'Trusters sec. 30 (2) ). And this provision applies to executors: See Act, Les °8S sec. 3. But this enactment is but statutory recognition of the Aczncy acted upon by the Court of Chancery that an executor or trustee is. Fa entitled as of right to be recouped everything that he has expended _ Lp. properly in his character as executor or trustee (In re Jones; In Bangs, Christmas v. Jones (1) ). My brother Dudley Williams has collec = many cases to the same effect, and I would add another which illus- trates the application of the rule - In re Whiteley; Whiteley y. Learoyd (2). There the trustees were charged with making unauthor- ized or improper investments, and the claim was that the trusts of the will relating to the sums invested should be carried into execution under the direction of the court and that the trustees might be ordered to invest the sums or so much thereof as were not properly invested upon the securities mentioned in the will. The imprudent investment of one sum of £3,000 was established, but as to another - of £2,000 no want of prudence or of diligence was established. There was no order as to costs so far as the £3,000 was concerned, but as to the £2,000 the trustees were given their costs out of the trust Be

estate or out of the £3,000, for which they were liable to account

In the present case, executors were charged with a breach of thie duty in not getting in certain purchase money when it fell due, - forgoing interest, and with some subsidiary acts and defaults - connected with the main charge. The plaintiffs, who were nine out - of some thirty-seven residuary legatees, claimed, inter alia, a declara- : tion that the executors had been guilty of breaches of their duties - as such executors, and administration of the estate of the testator | with all necessary or incidental inquiries and accounts, including accounts upon the footing of wilful default, and an order for removal of the defendants as executors and the appointment of new executors, which last-mentioned claim was based apparently upon the Adminis- tration and Probate Act 1928, sec. 29. When the case was before this court on appeal (4), attention was called to the fact that only nine out of thirty-seven residuary legatees had been made parties to the action, but the litigants were content so to proceed and relied _ apparently upon rules of the Supreme Court corresponding with Order 16, rules 33 and 40, of the English Judicature Rules. A

(2) (1886) 32 Ch. D. 196 ; 33 Ch. D. 347 (C.A.) ; (1887) 12 App. Cas. 727. (3) (1886) 32 Ch, D., at p. 206,

s" (the executors). The executors did not apply for their out of the estate, and the court did not so order, but there is der depriving or purporting to deprive them of such costs : In re Hodgkinson ; Hodgkinson v. Hodgkinson (1). costs awarded to the executors under the judgment already itioned are not, it seems, likely to be paid in full owing to the nt of means of the plaintiffs in the action. So the executors ught by originating summons issued out of the Supreme Court : determination of the questions whether they were entitled to be ed out of the estate of the testatrix their costs as between wr and client of the action already mentioned and of the appeal which they were successful, and whether they were entitled rtain other small sums which need not be detailed. All the z were determined in the negative, upon the ground that itors' defence of the action could and did not result in any

fit to the estate, however, does not, I apprehend, mean y benefit, for it is a commonplace that costs out of the te are given in cases relating to the construction of wills and the nistration of trust estates. Some cases, however, were referred support of the decision already mentioned, the strongest of is In re Dunn; Brinklow v. Singleton (2). But that case down no general rule; the ground of the decision was " that eiver cannot be entitled to indemnity in respect of the costs of tion brought against } him, if it is a purely personal action against

of were acts done by him while acting as an officer of he court" (3). In that case, the receiver had been discharged,

charged against him were conspiring to bring about unneces- M tion and personal fraud and negligence in the management

n estate both as an administrator pendente lite and as a receiver, s were claimed. The case bears but little resemblance e present case, in which an administration order was claimed, was sought to make the executors accountable for a breach eir duty in administering the estate of the testatrix and to

e them from office. No doubt a successful defence of the

(1) (1895) 2 Ch. 190, at pp. 194-196. (2) (1904) 1 Ch. 648. PP'3) (1904) 1 Ch., at p. 657.

NaTIONAL Trustees Executors AND AcENcy Co. oF AUSTRALASIA Lro. v Barnes.

a Nariowan 'TRusTEEs EXECUTORS AND AcENcy Co. oF AvsTRALASIA Lap.

action would relieve the executors of any personal liability, as was said in Walters v. Woodbridge (1), that would be " merely an incident " of the successful defence. The action related and related only to the administration of the estate of the testatrix and ) defended and successfully defended upon the ground that it

thus incurred were incurred in or about the execution of the ti r powers of the will of the testatrix. In re Whiteley; Whiteley Learoyd (2) clearly supports the view, but other cases to the effect might be cited: See Morgan and Wurtzburg on Costs, 2nd pp. 180, 181. But the executors should exhaust their ren against the plaintiffs already mentioned before resorting to estate of the testatrix : Cf. Williams v. Jones (3).

The executors' right to retain their costs out of the estate take priority over the claims of any assignee from a beneficiary the estate of the testatrix (In re Knapman ; Knapman v. Wreford (4),

The questions in the originating summons directed to the small sums already mentioned should be answered, as to number 2, negative. The question relates to some costs in interlocuté matters in the action brought against the executors, which were ordered to pay, but there is nothing before the court wh warrants the conclusion that they were reasonably and prop incurred. The third question of the originating summons should be answered in the affirmative. It relates to sums expended in -

of the originating summons seeks a direction how the costs of a parties to the summons should be borne. Shortly, I agree with - the order proposed as to these costs and also as to the costs of this

Wutiams J. The appellants are the executors and trustees of - the will of Winifred Dunn, deceased. She died on 13th October - 1926. One of the assets in her estate was the balance of p money, namely, £4,380 owing by one J. K. Walsh under a contract of sale of land which became payable on Ist May 1930. He was unable to meet this debt on the due date, and the appellants gave - him certain extensions of time to pay.

Under the trusts of the will thirty-seven nephews and nieces were entitled to the estate. Nine of these beneficiaries became

(1) (1878) 7 Ch. D., at p. 509. (3) (1886) 34 Ch. D., at p. 123.

(2) (1886) 32 Ch. D. 196; 33Ch.D. (4) (1881) 18 Ch. D. 300. 347 ; (1887) 12 App. Cas. 727.

d with the trustees' administration of this asset and a suit in the Supreme Court of Victoria which came on to this court. The result of the appeal was that the suit dis ed and the plaintiffs were ordered to pay the defendants' The material facts will be found set out in the report of al Trustees Executors and Agency Co. of Australasia Ltd. v. (I). he statement of claim charged the defendants with breaches of t prayed, inter alia, for an order for administration and the of the trustees. The foundation of the suit was a charge e trustees had committed a breach of duty in failing to get in nce of purchase money on its due date. The court held that e was not sustained and that the trustees had administered properly, No attack was made against the honesty or of the individual trustee or against any officer of the ee is entitled to be indemnified out of the trust estate t all his proper costs, charges and expenses incident to the on of the trust: See Selby v. Bowie (2) ; Cotterell v. Stratton er v. Hancock (4) ; In re Love (5); In re Beddoe ; Downes am (6); In re Maddock; Butt v. Wright (7). In Dawson v. (8) Lord Eldon L.C. said: " This court infuses such a clause y will though not directed." This right received statutory mition in England when the Law of Property and Trustees of Amendment Act 1859, sec. 31, provided that every trust r should be deemed to contain a clause to the effect that be lawful for the trustees to reimburse themselves or pay e out of the trust premises all expenses incurred in or the execution of the trusts or powers of the deed, will or other

was included in the Victorian Statute of Trusts 1864 eated in the Trusts Act 1890, sec. 76, the Trusts Act 1915, and the Trustee Act 1928, sec. 30 (2). The authorities y cited show that this right of indemnification includes costs, es and expenses properly incurred in litigation relating to the

re trustees are charged with breach of trust all the beneficiaries | be made parties to the suit. In the present case the suit rd and determined without twenty-eight of the residuary

BCLR 1. (6) (1893) 1 Ch. 547. 4 Gill. 300 [66 E.R. 720), (7) (1899) 2 Ch. 588. Ch, App. 295, at p. 302, (8) (1811) 18 Ves. 247, at p. 254 [34 303, at p. 305. E.R. 311, at p. 313). 29h. D., at p. 350.

H. C. or A. beneficiaries being joined. If the suit had been properly constituted eee) it would have been possible for the trustees to have asked at the Narowaz hearing that their costs as between solicitor and client, so far as not Trustexs recoverable from the plaintiffs, should be paid out of the estate, pees The absence of the twenty-eight beneficiaries made it impossible Acency ask for such an order in the suit. If an application to add the q paces io sia beneficiaries as parties would have put an end to the suit, the failure a Lap. of the trustees to insist on their being jomed might have amounted - Banwrs, to improper conduct on their part which would have disentitled them to the indemnity. It appears, however, that the suit would have gone on in any event, so that the only result of the failure to joi the absent beneficiaries has been that the appellants have forced to incur the extra expense of taking out the present originating summons in order to ask for their costs out of the estate. if The main contention has been whether these costs are recoverable under the indemnity. The learned Chief Justice of the Supreme Court of Victoria decided that they were not because they were incurred by the trustees in defending themselves against a personal liability and therefore on their own behalf and not for the benefit of the trust. He considered the principle to be that the costs of trustees of defending such a suit are chargeable - against the estate in all cases in which the defence is for the benefit of the estate. He referred to Walters v. Woodbridge (1). In that - case the court had approved of a certain compromise by the trustees. | Subsequently, infant beneficiaries by their next friend commenced a suit to have the compromise set aside on the ground that the court had been misled into giving its approval by the fraud of Teesdale, one of the trustees. In view of this charge his co-trustees insisted on severing their defence. He applied to the court for leave to defend the suit and for an order that his costs of so doing might be allowed out of the estate. The Master of the Rolls held that, as the bill contained charges of misconduct against him, no order could be made until the result of the cause was known, and he accordingly - directed the summons to stand over in the meantime. The other trustees do not appear to have actively defended the suit, but Teesdale did so, and it was dismissed with costs. The next friend of the plaintiff was unable to pay the costs, so Teesdale renewed his. application for the payment of his costs as between solicitor and client out of the estate, and the Court of Appeal held that he was entitled to the order. It was pointed out in the judgments that, while he had incidentally succeeded in clearing his own reputation, he had also shown that the making of the compromise was proper

he was entitled to have his costs paid thereout. The present stronger one in favour of the trustees than Walters v. ge (1), a8 there was no severance by the trustees, no was made on their probity, and the only question was vhether they had acted properly or improperly in their adminis- ition of an asset in the estate.. It is to be noted that, in the judgments in Walters v. Woodbridge (1), and in the subsequent ze of In re Dunn; Brinklow v. Singleton (2), where the personal tegrity of the receiver was attacked and he was charged with personal fraud, there are suggestions that it may be cessary for the trustees to show some benefit to the trust estate fore they are to be reimbursed for their costs thereout, although e latter case Byrne J. was careful to point out that he } not attempting to lay down any such general rule. If it ssary to show such a benefit, then the fact the trustees that they have administered properly would be sufficient, but I am satisfied that it is not necessary to do so. Such ons as acting "for the benefit of " " with reference to" or behalf of" the trust estate or in the discharge of his duty as ee are used indiscriminately in the judgments, but they all the same thing, namely, that the question is whether the costs, and expenses are properly incurred by the trustee as an nt of his administration of the estate. If a trustee is sued by ies who complain of some act or omission by the trustee, he

ed to defend his conduct as an incident of such administration e Llewellin; Llewellin v. Williams (3) ). Even if he fails in 'suit, he may be allowed his costs out of the estate, but, if he as in this case, he is clearly entitled thereto. At the e time the indemnity must be given effect to in such a way as e the burden fall upon the beneficiaries equitably having rd to the circumstances under which the costs, charges and 8 were incurred. Here they were incurred as a result of m of nine out of the thirty-seven beneficiaries, so that the : of these beneficiaries should be exhausted before any part burden is placed on the shares of the twenty-eight. It was during the argument that one of the nine is a farmer and ; by reason of the Farmers Protection Act 1940 the trustee cannot 'execution against him or the other eight who are jointly and

(2) (1904) 1 Ch. 648. (8) (1887) 37 Ch. D, 317, at p. 327.

Nationa TRusTEeEs Executors AND AcENcY Co. oF AUSTRALASIA. Lr.Barnes.

severally liable with him under the existing order for costs. Assum. ee) ing that this is so, the protection of the Act will presumably Narovaz Continue indefinitely and the order will become enforceable some 'Trustees day. The order should therefore provide that the trustees sho stead recover as much as their costs as possible under this order in the

Agency first instance, and that, in so far as they are not recovered thereunder,

pace Atasta the trustees should be authorized to retain them as between solicitor Lr. and client, first out of the shares of the nine beneficiaries and, Banxns, these shares have been exhausted, out of those of the twenty- ee eight. If authority is needed to show that the court can adjust "the burden of the costs in this way between the beneficiaries, it wil be found in the cases referred to in Halsbury, 2nd ed., vol. 33, Pp 275, notes h and 7, and In re Allen (1).

There are three different amounts of costs, charges and expenses referred to in the three questions asked in the summons. On the hearing of the appeal Mr. Ham did not press for the second of these amounts, while the respondents did not deny that the appe were entitled to the third amount if they succeeded with respect to the first. The order which I have already mentioned will therefore cover the first and third amounts.

After the suit had been commenced the nine plaintiffs assigned their shares by way of mortgage to the respondents Walter Kemp and William Charles Linott Townsend, but the right of these assignees is subject to the trustees' rights under their indemnity - (In re Knapman ; Knapman v. Wreford (2) ; In re Jones ; Christmas v. Jones (3); In re Pain ; Gustavson v. Haviland (4) ; Cock v. Aitken (5); Halsbury, 2nd ed., vol. 33, p. 270). The full amount, therefore, of these nine shares, and not merely the equity of redemption therein, will be available to satisfy the appellants' indemnity.

The appellants' costs of the summons in the court below should not be thrown on the estate, because, if the suit had been properly constituted, the order now asked for could have been obtained at the hearing thereof. It is plain that any costs of the summons or of this appeal that are allowed out of the estate will have to be paid out of the shares of the twenty-eight beneficiaries. The costs of the respondents Kemp and Townsend of the hearing in the court below

or this appeal should not be thrown on these shares.

Appeal allowed. Order of the Supreme Court discharged. In lieu thereof order that the costs, charges and expenses (1) (1889) W.N. 132. (3) (1897) 2 Ch. 190.

(2) (1881) 18 Ch. D. 300. (4) (1919) 1 Ch. 38. (5) (1912) 15 C.L.R. 373, at p. 384.

referred to in questions | and 3 of the summons so far as they are not recoverable from the plaintiffs in suit No, 258 of 1938 under the order for costs made therein may be retained out of the estate of the testatrix Winifred Dunn in the following manner : - First out of the shares _ therein of the said plaintiffs and when these shares have

been exhausted out of the balance of the estate. The costs as Between solicitor and client of the appellants and of the ' A. M. Barnes of this appeal and the costs as

between solicitor and client of the said respondent of this summons to be paid out of the said estate.

for the respondent Barnes, J. F. Carroll. 8 for the respondents Kemp and Townsend, Kemp &

Narionan TRUSTEES Execurors AND AGENCY Co. oF AUSTRALASIA Lav. v. Barnes.

At a glance

Court

Decision date

Source

Judgment (89 paragraphs)

Cited By (16)