[2014] NSWSC 321
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199
[2001] HCA 63
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57
[2006] HCA 46
BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton (2011) 82 NSWLR 336
[2011] NSWCA 414
Blake v Norris (1990) 20 NSWLR 300
In Re Beddoe
Source
Original judgment source is linked above.
Catchwords
[2014] NSWSC 321
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199[2001] HCA 63
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57[2006] HCA 46
BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton (2011) 82 NSWLR 336[2011] NSWCA 414
Blake v Norris (1990) 20 NSWLR 300
In Re Beddoe[2008] HCA 42
McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623(1985) 9 ACLR 926
Miller v Cameron (1936) 54 CLR 572[1936] HCA 13
National Trustees Executors and Agency Company of Australasia Limited v Barnes (1941) 64 CLR 268[1941] HCA 3
Northey v Juul [2014] NSWSC 464
O'Brien v McCormick [2005] NSWSC 619
Palmer v AyresFerguson v Ayres (2017) 259 CLR 478[2017] HCA 5
Re Estate Schwartz, Deceased
Application of Gellert
Gellert v Bentwood and Schwartz [2015] NSWSC 1484
Schmidt v Rosewood Trust Ltd [2003] 2 AC 709
[2003] UKPC 26
Stamoulos v Constantinidis
The Estate of Dolf Paul Huber [2020] NSWSC 1539
The Estate of Wendy Gwynne Price
Lanigan v Price (No. 2) [2020] NSWSC 1518
Wishart v Castlecroft Securities Ltd 2010 SC 16
Judgment (6 paragraphs)
[1]
Introduction
HIS HONOUR: On 18 November 2020, two notices of motion were heard. The first was one filed on 7 September 2020, which was superseded by an amended notice of motion filed on 15 October 2020, by the Plaintiff, Janice Merle Rattigan. In the amended notice of motion, the Plaintiff sought an order that the Defendant, Anthony Adrian Hanly, repay, to the estate of Haydon John Skudder (the deceased), amounts that had been paid out of the deceased's estate, or from the deceased's companies, in respect of his legal fees in the substantive proceedings (to which I shall refer).
One purpose of amending the notice of motion was to join the Defendant's solicitor, Alexander Tees, as a respondent, as it was to him that the legal fees sought to be recovered had been paid. In the alternative to the first order sought, the Plaintiff sought an order that Mr Tees repay the amount of legal fees that had been paid to him. (There was another order seeking that the Defendant be restrained from paying any further legal fees, but, sensibly, at an earlier directions hearing, the parties agreed that the Defendant would not do so: Ex PNM2.) (Where necessary, I shall refer to both as the respondents, or otherwise as the Defendant or Mr Tees.) Finally, the Plaintiff sought the costs of the notice of motion.
The second notice of motion was one filed on 6 November 2020, by the Defendant, who sought an order that the Plaintiff pay his costs of a notice of motion that had been filed by her on 26 June 2020. That notice of motion was listed for hearing, before Lindsay J, on 30 March 2021, with an estimated duration of 3 days. When the notice of motion had been set down for hearing, in August 2020, the Registrar had noted that only prayers 3, 4, 6 and 7 of that notice of motion were to be pursued.
Mercifully, the Defendant's notice of motion was resolved during the hearing before me, and the following orders were made, consensually, subsequently:
"Orders that the Plaintiff's notice of motion filed on 26 June 2020 be dismissed.
Orders that the Plaintiff pay the Defendant's costs, if any, of the preparation and service of any affidavits relied upon by the Defendant in defence of the notice of motion filed 26 June 2020 and which have not been read in the notice of motion proceedings heard on 18 November 2020, or otherwise read in the substantive proceedings.
Orders that the hearing listed before Lindsay J on 30 and 31 March 2021 and 1 April 2021 be vacated."
In the circumstances, it is, now, only necessary to deal with the Plaintiff's amended notice of motion.
The Plaintiff did not read any affidavits in support of the amended notice of motion but tendered a number of documents. This was unsurprising as the basal facts for seeking the relief that had been sought were not really the subject of dispute.
The respondents read a number of affidavits going to, amongst other things, the conduct of each of them. More than once during the hearing, it was necessary for me to remind the respondents' legal representatives that it was not necessary for me to analyse all of the evidence upon which they relied going to the conduct of the respondents, or either of them, as no findings could, or would, be made about the matters alleged in the Statement of Claim.
At the hearing of the notices of motion, Ms J Needham SC, with Ms T Catanzariti of counsel, appeared for the applicant/Plaintiff, and Mr T Hale SC, with Ms I Ryan, of counsel, appeared for the respondents.
[2]
Background
Because of the issues to be determined, it is only necessary to refer to some of the background facts, which were not the subject of any real dispute.
The deceased died on 3 June 2017, leaving a Will dated 6 August 2012 and Codicil dated 9 May 2016. This Court granted probate of the Will and Codicil to the Defendant, the executor named therein, on 13 July 2017: Ex PNM1.
Relevantly, after revoking all previous testamentary dispositions, the deceased, in Clause 11 of the Will (as amended by Clause 2 of the Codicil), bequeathed to the Plaintiff certain shares in the following companies: H J Skudder Pty Ltd; Gonville Investments Pty Ltd; Australasian Financial Management Pty Ltd (AF Management); AFM Advisors Pty Ltd (AFM Advisors) and Your Financial Partner Pty Ltd (YFP) (collectively, "the companies") and certain other real estate and personal estate.
By Clause 11.5 of the Will (again, as amended by Clause 2 of the Codicil), the deceased gave to the Plaintiff a 25 per cent share of the residue of the estate, which residue included the shares in the company, Your Financial Wellness Pty Ltd (YFW).
(It should be noted that the Will is a complex document comprising many pages. There appear to be some 32 beneficiaries residing in six different jurisdictions, being NSW, Victoria, Queensland, the United Kingdom, the Republic of Fiji and California, USA.)
Because it was relied upon by the respondents, it is necessary to set out, verbatim, Clause 40 of the deceased's Will (Ex PNM1):
"40 ENTITLEMENT TO CHARGE
40.1 In so far as the law allows, any Executor, nominated estate and/or financial adviser or Trustee of mine being a legal practitioner or a person referred to in the Clause entitled 'Investment Decisions' shall be entitled to charge and be paid all professional or other charges for any business or act done by him or her, or his or her firm, in connection with the Trusts hereof. This power extends to acts that an Executor or Trustee could have done personally as if he or she were not such an Executor or Trustee.
40.2 In so far as the law allows, any Executor or Trustee of mine who is not entitled to charge pursuant to the previous subclause and who is not otherwise named or nominated as a primary beneficiary of the Trust in respect of which they may provide their services may:
(a) Be paid out of the income or capital of my estate or of the relevant Trust established by the terms of my Will (as the case may be), remuneration for their services (by way of periodical fee, salary, commission or otherwise) of up to 1% per annum of the gross market value of the assets of my estate or of the relevant Trust established by the terms of my Will (as the case may be); or such greater remuneration as may be awarded by a Court of competent jurisdiction as does not exceed fees charged by the Public Trustee (or by any person succeeding to or substantially taking over the functions of the same) in acting as Executor of an estate or as Trustee of an inter-vivos Trust (as the case may be) if it were to carry out or perform duties similar to those performed by the executor or Trustee of mine; and
(b) Pay all costs, charges and expenses of administering the estate or the relevant Trust out of the estate or Trust whether from the capital or income as the executor or Trustee may determine."
[3]
Procedural Matter
It is necessary to digress here as there is one procedural aspect that should be referred to before proceeding further. The reason for mentioning this procedural matter is that senior counsel for the respondents, in answer to the proposition that there had not been any orders made, by the Court, for the Defendant's costs of the administration of the estate, or otherwise, said that the only exception related to the order for the costs of the first mediation as had been made consensually by the parties.
There had been a number of appearances, in the substantive proceedings, before the former Senior Deputy Registrar in Probate, L Brown in the Probate List. On 18 March 2019, the Registrar made an order in the substantive proceedings, by consent of the parties, that "the matter be referred to private mediation on or before 30 April 2019". Relevantly, an order was also made, consensually, that the "private mediation be paid out of the estate". It was to this order that senior counsel for the respondents referred. The mediation had proceeded before the Honourable W V Windeyer AM RFD ED on 30 April 2019, and "was adjourned so as to permit accounting information to be collated and made the subject of a report or reports". The mediation resumed on 10 June 2019, when it was, again, adjourned.
The matter was placed in Lindsay J's list on 17 February 2020, when his Honour noted, amongst other things "that, subject to any orders of the Court the proceedings respectively 2018/320921 and 2018/390211 are to be heard, and mediated, together".
The matter came into the Succession List on 27 April 2020 on which date, relevantly, I made orders in the following terms:
"5. Orders that the matter be referred to continue the private mediation.
6. Appoints 10 June 2020 before The Honourable Mr W V Windeyer AM RFD ED as the date for the mediation.
7. Directs, in the event that the matter is resolved, that any original affidavits required to be read and not already filed, together with original signed Consent Orders in hard and soft copy reflecting the resolution of the proceedings, be delivered to the Chambers of the Succession List Judge by 4:00 p.m. on 17 June 2020.
8. Orders that the costs of the mediator and mediation room, initially be paid out of the estate of the deceased, with liberty to either party to seek an order for such costs to be paid otherwise."
[4]
Some matters not seriously in dispute
There are a number of matters that are not seriously in dispute, which, in my view, are relevant to the determination of the amended notice of motion. These are:
1. The Plaintiff accepts the entitlement of the Defendant to an indemnity for legal fees referable to the administration of the deceased's estate, either under the terms of the deceased's Will, or under the principle that an executor or trustee is entitled to be reimbursed out of the trust property in respect of all the charges and expenses properly incurred in the execution of the trust: O'Brien v McCormick [2005] NSWSC 619 at [56] (Campbell J).
In their written outline of submissions, counsel for the Plaintiff expressly stated that "[t]he order [sought] is limited to the legal fees relating to the [substantive] Proceedings".
1. Prior to any costs and disbursements being deducted from the estate of the deceased, the Defendant had not sought judicial advice on the question whether he was justified in defending the substantive proceedings. Nor had he sought a pre-emptive costs order (in this context, known as a "Beddoe order" as formulated by Lindley LJ in In Re Beddoe; Downes v Cottam [1893] 1 Ch 547) that he be indemnified in respect of his costs out of the deceased's estate. (There was no evidence provided, or submissions made, going to the reasons for not doing so, but, typically, applications are not granted where an executor or trustee is involved in "hostile litigation".)
2. There was no evidence of any other judicial assessment having been made, prior to the deduction of legal costs from the deceased's estate, of the prospects of the Defendant successfully defending the substantive proceedings at trial, or that he would, otherwise, obtain at trial, or later, an order permitting him to exercise his right of indemnity to meet his legal costs from the assets of the estate.
3. The amounts paid on account of the Defendant's legal costs had not been paid from his own resources. Thus, this is not a case where he was seeking reimbursement, or recoupment, for those legal costs from the property of the estate.
4. The balance of the deceased's estate was, and the remaining entitlements of the Plaintiff, under the Will of the deceased, are, sufficiently large to enable the Defendant's costs to be paid, if an order for those costs to be paid, is made at the conclusion of the substantive proceedings.
5. There was no suggestion that the tax invoices for costs, which had been paid, had been sent for formal assessment by a costs assessor.
6. There was no evidence that the Defendant had sought an indemnity for his costs and disbursements of defending the substantive proceedings, from any of the residuary beneficiaries, of whom the Plaintiff was only one.
7. There was no evidence that any of the residuary beneficiaries had consented to the Defendant deducting any legal costs and expenses of defending the substantive proceedings out of the estate of the deceased.
8. The Court was not directed to evidence that showed knowledge, or conduct, on the part of the Plaintiff, which could amount to consent, as would disentitle her to make the complaint regarding the payment of the Defendant's costs.
9. There was no evidence of the Defendant's (or Mr Tees') capacity to repay any costs that had been paid in the event that the Defendant is ordered to pay the whole, or any part of the applicant's costs of the substantive proceedings. Nor was there any evidence that if an order for repayment were made, the defence of the proceedings by the Defendant would be stultified. Nor was there any evidence enabling the Court to take into account, otherwise, any detrimental effect of a repayment order made against either of the respondents.
10. Whilst at the hearing of the amended notice of motion, senior counsel for the respondents spent a large amount of time taking the Court to the evidence filed and served by each of the Defendant and Mr Tees, as to his conduct, respectively, it seemed in order to justify the conduct of each, the notice of motion filed on 6 November 2020, was limited to seeking an order for the costs of the notice of motion filed 26 June 2020. No other orders had been sought in the Defendant's notice of motion. Even now, the respondents have not sought an order that the Defendant be indemnified, from the estate, for the costs he has incurred, that is to say an order in the nature of a prospective costs order, on a retrospective basis. (This is not to suggest that the Court would make such an order.)
11. To the extent that the strength of the Defendant's case, in circumstances where the deduction of legal costs of the substantive proceedings without reference to the Court is relevant, there was no confidential advice tendered going to whether the defence of the claims is well-founded and has reasonable prospects of success.
12. Initially, when asked whether the respondents would offer security for, rather than having to repay, any amount ordered to be repaid to the estate, senior counsel stated, categorically "[w]e don't propose to offer such a security" and that "[n]either the defendant or the solicitor is prepared to offer any security pending the determination of the substantive proceedings": Tcpt, 18 November 2020, p 16(17-30). Later, he stated that if an order were made, the Defendant and Mr Tees should be given the opportunity to do so: Tcpt, 18 November 2020, p 54(34-44).
(In order to accommodate the change of position, I indicated that if, prior to delivering reasons for judgment, the parties were able to agree upon a form of security, on the basis that, if the Plaintiff were successful on the amended notice of motion, such security, rather than repayment of the amount ordered, and if they sent a form of order to me that might be used in those circumstances, then I could make an order as agreed. If no agreed form of order were made, I would simply make an order based upon my conclusions. I suggested this course in order to avoid further argument rather than to form the basis of any determination. Unsurprisingly, no suggested form of order, that might be used if the Plaintiff were successful, has been provided.)
[5]
Some legal principles
First, it is necessary to consider the foundation for the application made in the amended notice of motion. This was not the subject of the written submissions filed and served on the part of the Plaintiff. No reference was made to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 54.3(3)(d) or to r 54.3(4)(b) which, relevantly, provide:
54.3 Relief without general administration
…
(3) Proceedings may be brought for an order directing any executor, administrator or trustee -
…
(d) to do or abstain from doing any act.
(4) Proceedings may be brought for -
…
(b) directing any act to be done in the administration of an estate that the Supreme Court could order to be done if the estate were being administered under the direction of the Court …
...
UCPR r 54.1 defines "estate" to mean a deceased person's estate.
At the commencement of oral submissions, senior counsel for the Plaintiff stated (Tcpt, 18 November 2020, p 18(41-47)):
"Perhaps I should start by saying your Honour is indeed correct, that UCPR 54.3 enables the plaintiff to bring proceedings to seek that the executor do a specific thing. But the width of that section, that of course is a thing that can be cured in an administration suit and repayment of costs to an estate which have been removed by the executor without authorisation or an order of the Court is of course something that could be ordered in an administration suit."
The argument made on behalf of the respondents was that the amended notice of motion was not a "proceeding": Tcpt, 18 November 2020, p 31(45) - p 32(07).
The respondents' submission should be rejected. Apart from anything else, the amended notice of motion has been filed in the substantive proceedings. In any event, the submission is inconsistent with In the matter of Bevillesta Pty Limited [2011] NSWSC 1378, in which Barrett J (as his Honour then was), at [25]-[26], wrote:
"Mrs Rahme's interlocutory process was not properly or appropriately filed 'in' the 'proceedings' commenced by the originating process of Mr Green and Mr Krejci upon which Bergin CJ in Eq made orders in June 2011. But that interlocutory process itself embodies or initiates 'proceedings' in its own right, being proceedings between Mrs Rahme and the trustees. In Harkness v Bell's Asbestos and Engineering Ltd [1967] 2 QB 729, Lord Denning MR said at 735, in relation to an English rule of court relevantly indistinguishable from s 63:
'This rule should be construed widely and generously to give effect to its manifest intentions. I think that any application to the court, however informal, is a 'proceeding'. There were 'proceedings' in being at the very moment that the plaintiff made his affidavit and his solicitor lodged it with the registrar.'
That is the position in this case also. As in Australian Coastal Shipping Commission v Curtis Cruising Pty Ltd (1989) 17 NSWLR 734 (at 753), the steps Mrs Rahme took of filing the interlocutory process and serving it on the trustees were steps by which she began proceedings against the trustees."
[6]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 03 December 2020
] NSWSC 1539
The Estate of Wendy Gwynne Price; Lanigan v Price (No. 2) [2020] NSWSC 1518
Wishart v Castlecroft Securities Ltd 2010 SC 16; [2009] CSIH 65
Texts Cited: John S James (ed), Stroud's Judicial Dictionary of Words and Phrases (4th ed, 1972, Sweet & Maxwell)
Category: Principal judgment
Parties: Janice Merle Rattigan (Applicant/Plaintiff)
Senior counsel for the respondents relied, particularly, upon Clause 40.2(b) of the Will. This sub-clause, of course, refers to the payment of "costs, charges and expenses of administering the estate or the relevant Trust". There is a dispute, in this case, about what costs, charges, and expenses, have been paid in administering the estate or the relevant Trust. In addition, the Clause says nothing about legal costs and disbursements associated with contested hostile proceedings in which maladministration of the estate by the Defendant is alleged.
The value of the deceased's estate in NSW, as disclosed in the Inventory of Property attached to, and placed inside, the Probate document, was in excess of $5.65 million: Ex PMN1. There are other assets, in other jurisdictions, the nature and value of which were not the subject of evidence.
The substantive proceedings were commenced on 19 October 2018, when the Plaintiff filed a Statement of Claim, in which she sought an order that the Defendant pay the bequest in Clause 11 of the Will to her pursuant to s 84 of the Probate and Administration Act 1898 (NSW); an order that Probate of the deceased's Will and Codicil be revoked, and that letters of administration with the Will and Codicil annexed be granted to Stephen Chant, an accountant and the substitute executor named in the Will; or, in the alternative, to an independent solicitor (being either Gerard Basha of Bartier Perry, Richard Neal of Teece Hodgson & Ward or Jeremy Glass of Glass Goodwin).
In what might be an oversimplification, the Plaintiff made various allegations about the conduct of the Defendant as executor. In broad summary, the terms of the Statement of Claim, which comprises some 146 paragraphs, allege maladministration of the deceased's estate in that the Defendant:
1. paid himself a legacy before paying any other beneficiaries, before finalising the administration of the estate and before filing an online notice of distribution;
2. removed the Plaintiff as a director of AFM Advisers and appointed himself sole director (and paid himself director's fees);
3. appointed his personal company as a paid consultant to a number of companies, being YFP and YFW;
4. arranged for AFM Advisors to lend funds to YFP and YFW, where both companies may have been insolvent;
5. used funds from AF Management to pay estate expenses, when Clause 11.3 of the deceased's Will allows those funds to be used only to be pay beneficiaries;
6. sold assets of YFP without consulting the Plaintiff as sole beneficiary; and
7. had not repaid a personal debt to the deceased's estate.
Simply analysed, it appears that the allegations in the Statement of Claim fall broadly into three categories: significant delays in the administration of the estate; breaches of fiduciary duties owed by the Defendant to the beneficiaries (by preferring, his own interests above the interest of the beneficiaries) and, what might be referred to as, matters pertaining to the Defendant's conduct (in shifting funds from solvent to insolvent companies).
In response, the Defendant denied that any conduct constituted a breach of his duty as an executor or trustee, or any breach of fiduciary duty; denied any breach of ss 180 or 181 of the Corporations Act 2001 (Cth); denied that he had jeopardised the administration of the deceased's estate; denied any breach of duty, as executor, which constituted a devastavit (which is defined in John S James (ed), Stroud's Judicial Dictionary of Words and Phrases (4th ed, 1972, Sweet & Maxwell) as "a mismanagement of the estate of a deceased person by his legal representatives 'in squandering and misapplying the assets, contrary to the duty imposed on them; for which they shall answer out of their own pockets as far as they had, or might have had, assets of the deceased'"); and stated that he had acted in good faith and had not delayed the due administration of the estate.
Despite the commencement of the substantive proceedings over two years ago, there has been very little done to advance the case, although there have been nearly 20 prior appearances before the Court and several attempts made to resolve it. At the conclusion of the hearing of the notice of motion, I made directions in the hope that the parties could focus on the way in which the matter might progress, whether as a contested hearing or otherwise. I did so as there was the suggestion, made by Mr Tees, in his affidavit, affirmed on 26 October 2020, at par 27, that "[t]here does not appear to be any remaining utility in the proceedings" and otherwise that "the substantial part of matters put in issue by the Plaintiff … relate directly to the due administration of the Estate".
On 19 December 2018, other proceedings, bearing proceeding number 2018/390211, were commenced by another beneficiary, Marilyn Ford, by Summons (the Ford proceedings). These were proceedings, described by Mr Tees, as dealing with the "transfer of properties bequeathed to Marilyn Ford": Affidavit, Alexander Tees, 6 October 2020 at par 69a.
By the time of the hearing of the amended notice of motion, the Ford proceedings had been resolved, but how the costs of those proceedings are to be borne have not yet been determined.
There was no dispute that moneys had been paid out of the deceased's estate, the quantum of which, on the Defendant's, and Mr Tees', own evidence, varied between about $309,000 and about $344,000. The variance depended upon the date of the relevant affidavit in which the evidence was given.
The Defendant, in an affidavit affirmed on 10 August 2020, at par 6, stated that:
"… since October 2018 the Estate has paid $309,818.75 in legal costs and disbursements (inclusive of GST). The sums paid fall into three categories: (i) the costs and disbursements for the administration of the Estate in NSW, QLD, UK and California USA; (ii) the costs and disbursements incurred in these proceedings and (iii) the costs and disbursements in the related proceedings brought by Marilyn Ford."
In par 9 of the same affidavit, the Defendant added:
"… based on my assessment of the tax invoices and after seeking, and taking into account, the views of my solicitor, Mr Tees, my best estimate at the moment is that about 25% - 30% of the sum of $309,818.75 paid in legal costs and disbursements since October 2018 was in relation to category (i), namely the costs and disbursements for the administration of the Estate in NSW, QLD, UK and California USA. My best estimate is that somewhere between 70% and 75% of those costs and disbursements since October 2018 have been incurred in relation to categories (ii)and (iii), namely these proceedings and the proceedings brought by Mrs Ford. I am not at present in a position to allocate the costs between the two sets of proceedings. I am informed by Mr Tees that he is not able to give an accurate estimate at this stage, partly due to the similar questions and issues raised in the two sets of proceedings. I am further informed by my solicitor, Mr. Tees, that he does not consider that I would be in a position to provide an accurate breakdown of the costs into each of the three categories without the assistance of an experienced costs assessor which would have to be paid for by the estate."
Mr Tees stated at par 64 of his affidavit, affirmed on 6 October 2020, to which he annexed "copies of Memoranda of costs and disbursements received … and paid", that "many items are related to matters that are substantially intermingled and intermixed mediation and litigation matters that are inextricably linked with the due administration of the estate".
At par 65 of the same affidavit, Mr Tees acknowledged:
"I have advised the Executor … that it may not be possible to fully distinguish between matters related to litigation and the due administration of the estate because many of the issues and matters requiring resolution are inextricably intermingled and to the extent that this is or may be possible it is long substantial tasks requiring the services of Specialist Costs Assessment at the expenses of or paid for by the Estate. In addition, the proper classification of each enumerated item of Solicitor, Counsel, Legal services may in some cases ultimately require Judicial Determination. The cost assessment process is estimated to be 2- 3 months, given that the history of the Estate goes back to June 2017. Any costs assessment will also have to clearly delineate between any legal costs and disbursements as between the different sets of Litigation and proceeding(s) commenced respectively as between Janice Rattigan and Marilyn Ford."
Mr Tees stated that the Defendant, in his instructions to him, denied any allegation that, as executor he did not have "proper authority to have the estate, including the Estate companies, pay legal costs and disbursements": Affidavit, Alexander Tees, 6 October 2020 at par 12.
Despite the evidence of Mr Tees, and the submissions made by senior counsel for the respondents (at Tcpt, 18 November 2020, p 2(38) - p 3(40)), it appears clear that many of the claims in the Statement of Claim are made against the Defendant, as executor, personally, and that the litigation may be described as "hostile litigation".
Whether the Ford proceedings can be described in this way is not the subject of any evidence. The contentions of the parties in the pleadings, confirmed by the robust way in which the notice of motion was conducted, suggests that this litigation is like any other hostile litigation.
Undoubtedly, the hearing of the substantive proceedings will involve contests concerning allegations of the conduct, and behaviour, of the Defendant as executor of the deceased's estate, and the Court will be required to determine the legal consequences, if any, of that conduct and behaviour, including whether, as sought by the Plaintiff, the grant of Probate to the Defendant should be revoked, or whether he should be removed if he has become a trustee.
During the course of the hearing, I made clear that it was not the purpose of the adjudication by the Court on this contested amended notice of motion, to determine whether the Defendant, after the substantive proceedings are determined, will be entitled to recover any amount for the legal costs and disbursements incurred by him in relation to the proceedings, or otherwise. It is clearly premature, on the present state of the evidence, which has not yet been tested, on either side, to do so.
The sole question for determination on the amended notice of motion is whether, pending an order of the Court dealing with the costs and disbursements of the substantive proceedings, or otherwise, the respondents, or either of them, should repay to the estate, all, or any part, of the amount that had been paid for legal costs and disbursements.
In reaching my conclusion on this question, it is neither necessary nor appropriate to express any view on the Defendant's conduct or behaviour, or whether, at the conclusion of the substantive proceedings, an order will be made that he receive his costs of the proceedings, either as against the Plaintiff, or out of the estate of the deceased. Those will be matters for another time, or times, and will be determined after all of the allegations, on each side, have been properly tested.
In addition, if Probate accounts are ordered to be filed (see s 85(1AA) Probate and Administration Act), the Probate Rules confer on a registrar the powers of the Court in relation to, amongst other things, the passing of the accounts of executors and administrators. Conferral of power on the registrar referable to s 85 of the Probate and Administration Act is found in Pt 78 r 94(3)(c) of the Supreme Court Rules.
A Registrar has power to moderate disbursements "in whole or in part".
The process of moderation of legal, or other professional, fees, is distinct from taxation of those fees. "Taxation involves the determination of what amount is properly payable by the executor to the solicitor. Moderation involves a determination of what amount is proper to allow to the executor as an outgoing from the estate: In the Will of Kerrigan (1935) SR (NSW) 242; (1935) 52 WN (NSW) 79, at 251": The Estate of Maureen Laila Huber, of Cobram VIC; The Estate of Dolf Paul Huber [2020] NSWSC 1539 at [60] (Slattery J). See also what I have written in The Estate of Frances Kedesch Michell [2020] NSWSC 1300.
Ultimately, the parties were content for me to note (Tcpt, 18 November 2020, p 14(08) - p 15(40)), in relation to the amended notice of motion, that:
"other than the alleged agreement that the defendant's costs of the 2019 mediation were to be paid out of the estate … there is no evidence of any agreement by the residuary beneficiaries that the costs of the defendant of the proceedings be paid out of the estate."
(It is difficult to know what to make of the order for costs of the first mediation to which senior counsel referred. Perhaps, in the future, the parties might be able to agree that the order made should be treated in the same way as the order that I made in relation to the continued mediation, namely that it be limited to the costs of the mediator and the mediation room. In this way, neither party will be prejudiced. Either, or both, may seek an order for such costs to be paid otherwise, if so advised. Ultimately, no doubt, that will be a matter for further debate.)
In Blake v Norris (1990) 20 NSWLR 300 at 306 Smart J wrote:
"In Stroud's Judicial Dictionary, 5th ed, vol 4 at 2029-2035, some fifty-five instances are given of the use of the words "proceeding" or "proceedings" in legislation, rules of court or documents having legal significance. The meaning depends on the context in which the word is used. In some cases it is equivalent to "an action" whereas in others it may mean a step in an action. Sometimes it may include a counter claim. The Oxford Companion To Law (1980) by Professor Walker states (at 1002-1003) that "proceedings" is sometimes used as including, or meanings, an action or prosecution, and sometimes as meaning a step in an action. The word "proceeding" is capable of such a variety of meaning that dictionary definitions as to its ordinary or natural meaning are not of much use. They tend to highlight the number of meanings which the word can bear.
Any assistance as to its meaning has to be derived from the statutory context and the objects of the legislation in question."
In my view, the word "proceeding" relevant to r 54.3 refers to the means, or vehicle, by which the subject matter of a dispute is brought before a court for adjudication and includes, as in these proceedings, an interlocutory step brought by notice of motion. In other words, it covers any form of legal curial process.
The object of the jurisdiction set out in UCPR Part 54 is to enable questions to be settled between beneficiary and executor. In McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623 at 636; (1985) 9 ACLR 926 at 935, Young J (as his Honour then was) explained the right of a beneficiary to an order in the following way:
"A beneficiary, if he complains to the court about the administration of a trust is, as a matter of course, entitled to the appropriate order, either to answer his question as to the construction of a trust instrument, or to settle a dispute as to the administration of the trust in whole or in part under the authority of the court, unless the court is satisfied that there is no question which requires its decision. Suspicion of irregularities on very scanty material with respect to mal-administration may be sufficient because the sanction is if, on the court's further inquiry, its initial order is made wrongly, then it will be discharged and the plaintiff must pay the costs of the inquiry. A fortiori, if the affairs of the trust are in great confusion or there have been significant breaches of trust."
In Re Estate Schwartz, Deceased; Application of Gellert; Gellert v Bentwood and Schwartz [2015] NSWSC 1484, at [12], Lindsay J described UCPR Pt 54 as a "procedural expedient" that is "designed to provide [a] summary, cost-effective [alternative] to an application for general administration of a trust by the Court" (citations omitted).
In Stamoulos v Constantinidis; Constantinidis v Constantinidis [2017] NSWSC 1808, at [50]-[51], Parker J in discussing the rule, stated:
"Under UCPR Pt 54, the Court has power to grant relief of the type which could formerly have been granted in what were known as administration proceedings. The Court has wide powers to direct acts to be done in the administration of the estate and to determine questions arising in the administration of the estate, including questions as to the rights or interests of a person who claims to be a creditor of the estate: r 54.3(2)(c).
These powers are amply wide enough to ensure that the interests of the estate can be protected. But, of course, the making of such orders is not a matter of right on the part of the beneficiary who applies for them. Ultimately, it is a matter for the Court to consider whether the orders should be made and, in doing so, the Court will take into account such questions as to the strength of potential claims or arguments available to the estate as against creditors or other third parties, and other practical questions such as the degree of likely recovery."
In any event, the Court has an inherent jurisdiction, as part of its equitable jurisdiction, to supervise the administration of trusts to make an order of the type that is sought: Palmer v Ayres; Ferguson v Ayres (2017) 259 CLR 478 at 510-511 [84]; [2017] HCA 5 at [84] (Gageler J), citing Schmidt v Rosewood Trust Ltd [2003] 2 AC 709 at 724 [36]; [2003] UKPC 26 at [36] (Lord Walker for the Board).
The respondents' counsel put the claim being made in the amended notice of motion this way:
"In the Notice of Motion, the Plaintiff seeks:
(a) mandatory interlocutory orders against the Defendant and the Defendant's solicitor for the repayment of certain legal fees paid from the estate may have in paragraphs 1 and 2;
(b) an interlocutory order restraining the Defendant and the Defendant's solicitors from paying the Defendant's legal fees from the deceased estate or from the deceased's company until further order of the court in paragraph 3."
I do not accept that the description of what is being sought is as submitted. Had the Defendant threatened to have recourse to estate property for the purpose of conducting his defence, the procedure for determining that question might very well have been an application, by the Plaintiff, for an interlocutory injunction as was the subject of the additional relief sought in the amended notice of motion (which did not have to be determined because of the undertaking given before the hearing). Here, amounts were simply taken from the estate for legal costs.
In any event, there can be no doubt that the Court has power to grant an interlocutory injunction under s 66(4) of the Supreme Court Act 1970 (NSW), at any stage of proceedings, on terms, and, in any case, where "it appears to the Court to be just or convenient". In this case, I am satisfied if what is sought is as submitted by the respondents, that it is both just and convenient to determine the claim made on this basis.
Then, as is well known, the Court must consider whether the Plaintiff's case presents a serious question to be tried and whether the balance of convenience, hardship and related factors warrant the grant of an interlocutory injunction, the general principles of which were set out in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 216-218 [9]-[13], 231-232 [59]-[61], 239-248 [86]-[105]; [2001] HCA 63 at [9]-[13] (Gleeson CJ), [59]-[61] (Gaudron J), [86]-[105] (Gummow and Hayne JJ), and more recently affirmed in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 68 [19], 81-84 [65]-[72]; [2006] HCA 46 at [19] (Gleeson CJ and Crennan J), [65]-[72] (Gummow and Hayne JJ).
If it were necessary to deal with the matter in this way, based upon the factual matters to which I have referred, or shall refer, I am satisfied that each limb is satisfied.
I turn next to the legal principles with which the case is concerned. It was not suggested that there is any difference between an executor and a trustee in regard to the legal principles set out below.
In Alsop Wilkinson (a firm) v Neary [1996] 1 WLR 1220, Lightman J identified three categories of litigation in which trustees may become involved. At 1223-1224, it was observed:
"Trustees may be involved in three kinds of dispute. (1) The first (which I shall call 'a trust dispute') is a dispute as to the trusts on which they hold the subject matter of the settlement. This may be 'friendly' litigation involving e.g. the true construction of the trust instrument or some other question arising in the course of the administration of the trust; or 'hostile' litigation e.g. a challenge in whole or in part to the validity of the settlement by the settlor on grounds of undue influence or by a trustee in bankruptcy or a defrauded creditor of the settlor, in which case the claim is that the trustees hold the trust funds as trustees for the settlor, the trustee in bankruptcy or creditor in place of or in addition to the beneficiaries specified in the settlement. The line between friendly and hostile litigation, which is relevant as to the incidence of costs, is not always easy to draw: see In re Buckton; Buckton v Buckton [1907] 2 Ch 406. (2) The second (which I shall call 'a beneficiaries dispute') is a dispute with one or more of the beneficiaries as to the propriety of any action which the trustees have taken or omitted to take or may or may not take in the future. This may take the form of proceedings by a beneficiary alleging breach of trust by the trustees and seeking removal of the trustees and /or damages for breach of trust. (3) The third (which I shall call 'a third party dispute') is a dispute with persons, otherwise than in the capacity of beneficiaries, in respect of rights and liabilities e.g. in contract or tort assumed by the trustees as such in the course of administration of the trust."
As I have stated above, having read the pleadings, I am satisfied that the substantive litigation falls within the second category, that is to say, "a beneficiaries' dispute", being one between the Plaintiff, who is one of the residuary beneficiaries, and the Defendant, who is the executor to whom Probate has been granted.
At 1224, Lightman J also observed, in relation to the question of costs in a beneficiary dispute:
"A beneficiaries' dispute is regarded as ordinary hostile litigation in which costs follow the event and do not come out of the trust estate: see per Hoffmann LJ in McDonald v Horn [1995] ICR 685, 696."
This statement does no more than reflect the principle that an executor or trustee will not be able to rely upon the right of indemnity in respect of legal costs incurred in protecting only his, or her, personal interests. Thus, in Miller v Cameron (1936) 54 CLR 572 at 578-579; [1936] HCA 13, Latham CJ expressed the view that a trustee who defended an action for his removal was thereby representing his own interests and not those of the trust estate.
The rationale of indemnification, in respect of the expenses of litigation, as between trustees and the trust estate, or other fiduciaries and those on whose behalf they are acting, is that the party who has incurred the expense has not been acting for his, or her, own benefit but for the benefit of the estate or person in question: Wishart v Castlecroft Securities Ltd 2010 SC 16 at 46 [71]; [2009] CSIH 65 at [71] (Lord Reed for the Court).
In National Trustees Executors and Agency Company of Australasia Limited v Barnes (1941) 64 CLR 268 at 279; [1941] HCA 3, Williams J (Rich ACJ agreeing) observed:
"Such expressions as acting 'for the benefit of' 'with reference to' or 'on behalf of' the trust estate or in the discharge of his duty as a trustee are used indiscriminately in the judgments, but they all mean the same thing, namely, that the question is whether the costs, charges and expenses are properly incurred by the trustee as an incident of his administration of the estate."
(On the basis of these authorities alone, the concession made by the Plaintiff, referred to earlier as to the costs of administration, was properly made.)
However, that is not the end of the matter. Generally speaking, if, as executor, a defendant proceeds to defend proceedings without the authority of an order of the Court, or without an indemnity of the other residuary beneficiaries, he does so at his own risk as to costs. As the plurality of the High Court wrote in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 at 93-94 [70]-[71]; [2008] HCA 42 at [70]-[71]:
"In particular, trustees who are sued, particularly for breach of trust, may sometimes experience uncertainty about whether they will be able to obtain indemnity as to the costs of their defence under s 59(4) in any event. Perhaps they will if their breach is excused under s 85(2); but they cannot be sure, in advance, that the court's discretionary power to excuse the breach will be exercised in their favour, and one of the matters to be excused is their failure to obtain the court's direction under s 63 or otherwise …
In short, provision is made for a trustee to obtain judicial advice about the prosecution or defence of litigation in recognition of both the fact that the office of trustee is ordinarily a gratuitous office and the fact that a trustee is entitled to an indemnity for all costs and expenses properly incurred in performance of the trustee's duties. Obtaining judicial advice resolves doubt about whether it is proper for a trustee to incur the costs and expenses of prosecuting or defending litigation. No less importantly, however, resolving those doubts means that the interests of the trust will be protected; the interests of the trust will not be subordinated to the trustee's fear of personal liability for costs." (emphasis in original)
In Application of Uncle's Joint Pty Ltd (2014) 12 ASTLR 487 at 494 [24]-[25]; [2014] NSWSC 321, Brereton J (as his Honour then was) wrote at [24]-[25]:
"Typically, as in National Trustees Executors and Agency Company of Australasia Ltd v Barnes, trustees will be allowed their costs out of the estate in this type of case only after the proceedings against them have been resolved in their favour. Thus in Armitage v Nurse [1998] Ch 241, Millett LJ, with the concurrence of the other members of the court, said (at 263):
In my judgment the respondents should have the right to recoup themselves out of the trust fund but only if and when the action against them is discontinued or dismissed.
In Frost v Bovaird, the full Federal Court rejected (at [79]) the submission that in the case of beneficiaries disputes the trustee was, pending the determination of the claim and without more, entitled to use the trust funds to meet legal costs incurred in defending the claim, the prima facie position being, as stated by Lightman J, that a trustee's legal costs incurred in defending a beneficiaries dispute do not come out of the estate. However, the Court acknowledged (at [75]) that the judgment of the High Court in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 ('St Petka') recognised that it was open to trustees faced with an allegation of misconduct by a beneficiary to apply for judicial advice, pursuant to which they might be entitled to resort to trust assets for their defence."
Slattery J in Northey v Juul [2014] NSWSC 464 summarised the authorities, succinctly, at [74]:
"In a beneficiaries dispute, where misconduct is alleged against a trustee, the trustee is, pending the determination of that claim, not prima facie entitled, without more to an In Re Beddoe order to use the trust funds to meet legal costs incurred in defending the claim: Frost v Bovaird [2012] FCAFC 60, at [79]. But the Court may sometimes feel confident in a beneficiaries dispute that the case is nearly within the first or second class, so as to be able to make a prospective order (usually with the support of the trustee) that parties other than the trustees may have costs out of the fund in any event; but such cases are rare: Re Exchange Securities and Commodities Ltd (No. 2) (1985) BCLC 392, at 395 and McDonald v Horn [1995] 1 All ER 961, at 971 E-G."
Thus, there was a means, available to the Defendant, to be able to have resort to the estate property, pending the determination of the substantive proceedings, in order to pay the legal costs incurred in defending the claim, without fear of being found liable for breach of trust as a result of doing so. This was by obtaining the sanction of the Court by way of judicial advice, prior to the trial of the proceeding, to permit him to do so. Whether the Court would have provided such advice is unknown.
The respondents presented evidence seeking to justify their position, and, effectively, to refute the allegations in the substantive proceedings. It is not for the Court, in determining the amended notice of motion, to resolve the factual disputes that are likely to arise, or to determine the issue on the basis of the untested evidence of the respondents. Nor can the Court, in determining the issue raised by the amended notice of motion, construe the terms of the Clause 40 of the deceased's Will to determine whether it provides a justification for the Defendant's conduct in paying his own legal costs out of the estate assets. That will need to be determined at a final hearing.
Alternatively, as was accepted in the written submissions:
"… There is no final relief in aid of which interlocutory relief is sought. In saying this, the Defendant, of course, accepts the jurisdiction this court has in passing the accounts in respect of all costs paid out of the funds of the estate, including legal expenses."
I dealt with the issue of what is required in filing and passing accounts, including in relation to legal costs, in The Estate of Frances Kedesch Michell at [99]-[137].
As I mentioned several times during the hearing, it is possible that the Defendant will be vindicated, but it is also possible that he will not be.
I express no view on that matter. He may also be entitled to his costs in the defence of the substantive proceedings in the Court's exercise of discretion as to costs.
As Campbell JA (with whom McColl JA agreed) in BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton (2011) 82 NSWLR 336 at 387 [213]; [2011] NSWCA 414 at [213] wrote:
"The form of the proceedings, as inter partes litigation, is not decisive of how the costs of that litigation should be dealt with. Courts exercising equity jurisdiction encounter a variety of situations where a fund is being administered subject to the control of the court, and a question arises about the proper manner in which that fund should be administered. Such a situation can arise concerning administration of deceased estates, concerning administration of trusts … In those situations, whether the costs of the court deciding the question that has arisen should be treated as costs of administration of the fund is significantly influenced by whether the proceedings are in substance adversarial ones."
I also obtain support for the view expressed by what was written by Slattery J, this time in The Estate of Wendy Gwynne Price; Lanigan v Price (No. 2) [2020] NSWSC 1518, at [31]-[32]:
"It is well established that trustees and executors may be indemnified out of the estate for liabilities properly incurred in the performance of their duties: National Trustees Executors & Agency Co of Australasia Ltd v Barnes (1941) 64 CLR 268; [1941] ALR 58; [1941] VLR 133; Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319; [1946] ALR 50; (1945) 19 ALJR 380; [1945] HCA 37; Re Beddoe [1893] 1 Ch 547, 558 (Lindley LJ); Re Jones; Christmas v Jones [1897] 2 Ch 190 ('Re Jones'); GE Dal Point, Equity and Trusts in Australia (Thomson Reuters, 7th ed, 2019) 682-3 [23.135].
It is common practice for an executor to act concurrently in the role of trustee, an executor need not also be a trustee to be indemnified. In Nobarani v Mariconte (No 2) (2018) 360 ALR 390; [2018] HCA 49, the High Court stated at [2]:
'The general rule concerning executors, like that concerning trustees, is that costs properly and reasonably incurred by the executor in connection with the administration of the estate are payable from the estate. These costs can include litigation expenses. Some examples of recoverable litigation expenses are: where an executor has a reasonable and bona fide belief in the validity of the will albeit one that is found to be incorrect; where an executor is unsuccessful in reasonably defending an action brought by legatees; or where an executor unsuccessfully, but reasonably, seeks to uphold a grant of probate on appeal.'"
And at [34]-[35]:
"But executors will not recover expenses from the estate where they have acted with dishonesty or with impropriety, or something more than the making of a mere mistake: Re Jones at 197; Mason & Handler, Succession Law and Practice NSW (LexisNexis, 2020) at [6089], citing Drummond v Drummond and Glenda Phillips v James Phillips; John Matthew Phillips by his Tutor NSW Trustee & Guardian v James Phillips (No 3) [2017] NSWSC 409.
The authorities emphasise the necessity for examining the conduct of the executor and the circumstances in which each of the expenses being questioned were incurred, before deciding whether indemnity in respect of those expenses will be denied. As Ormiston JA stated in Nolan v Collie [2003] 7 VR 287; [2003] VSCA 39 at [53]:
'Naturally the vast majority of costs and expenses will not arise out of any breach of trust but will be merely incurred in the ordinary day to day management of it, but some will arise out of breaches of trust many of which will lead to a denial of indemnification because the relevant breach of duty will be characterised as having been improperly incurred. There will remain, nevertheless, some breaches of duty giving rise to expenses and liabilities about which that cannot be said automatically, so that one must examine those particular breaches individually in the context of the stated duty or power. […] The negative test is the relevant test that is to allow indemnification for what has not been shown to have been improperly incurred.'"
Again, I express no view on that matter as the question with which I am dealing relates to money that the Defendant has withdrawn from the estate in order to pay legal costs that he has incurred. Put another way, is it appropriate to permit the payment, or more precisely, the retention, of the Defendant's legal expenses, deducted from the estate, in advance of a determination, by the Court, hearing the question whether he, as executor, has engaged in the conduct alleged in the substantive proceedings?
I do not accept the submission made by the respondents that there is no evidence supporting the necessity to make orders "to keep matters in status quo" until the hearing: Tcpt, 18 November 2020, p 35(19) - p 36(10). I have set out the factual matters that provide a basis for the making of the orders sought.
In my view, the authorities do not support the submissions of the respondents that the Defendant, as executor, is entitled, without more, pending the determination of the substantive proceedings, to use estate funds, to meet the legal costs incurred in defending those proceedings which have been brought by the Plaintiff. To do so, in circumstances where he may be exposed to a personal costs order, would be to permit the Defendant to benefit when, ultimately, he may not obtain an order for costs and may be liable to the Plaintiff for her costs, or some of them.
An executor should not have the costs of defending allegations made against him in substantive proceedings met out of the estate property until after the allegations in the substantive proceedings have been considered and determined or until a Court has determined that he should receive those costs pending the determination of the substantive proceedings.
It would be particularly unsatisfactory to enable the Defendant, as executor, without prior reference to the Court, to effectively fund his defence of the substantive proceedings, thereby pre-empting the final determination of the trial Judge who hears the substantive proceedings and makes an order for the costs of those proceedings to be borne.
If the Defendant is successful in whole, or in part, as he confidently expects to be, he may receive an order that his costs be paid by the Plaintiff or out of the estate. As stated, it was not disputed that each has the financial capacity to satisfy any order for costs that may be made. Regrettably, whether the Defendant, or Mr Tees, would have the financial capacity to repay the legal costs deducted, in the event that he is ordered to pay costs, is not as clear, since there was no evidence provided by either the Defendant or Mr Tees on that topic.
Finally, on this point, if the substantive proceedings are dismissed, and an order for costs is made in the Defendant's favour, it may not be the estate of the deceased which is to bear the burden of those costs. It may be the applicant/Plaintiff who is to bear the burden of those costs. In that event, it may also have been inappropriate to allow the assets of the estate to have been used in defending the substantive proceedings. It will be the estate that will have been deprived of the capital that has been used to pay the costs, as well as any interest that may have accrued on that capital.
I turn next to what amount should be ordered to be repaid. The Defendant and Mr Tees stated that the total amount of the costs, calculated on the indemnity basis, are $344,027.50 of which the amount of $327,528 has been paid: Affidavit, Anthony Hanly, 10 August 2020 at Annexure A; Affidavit, Alexander Tees, 6 October 2020 at pars 57-64. I note that a proportion ($69,901) of that amount relates to fees incurred after 1 January 2020, of which $17,709.25 relates to the period 10 August 2020 - 6 October 2020.
The Defendant and Mr Tees have estimated that between 70-75 per cent of the legal fees incurred since October 2018 were incurred in relation to these proceedings and associated proceedings commenced by Marilyn Ford, another beneficiary: Affidavit, Anthony Hanly, 10 August 2020 at par 9.
Using that as a guide, and the lower amount ($327,528), I propose to order that the respondents, or either of them, repay to the estate of the deceased an amount equal to about 70 per cent of the amount taken from the estate for legal costs, which equates to approximately $230,000.
The Court has not received any notification from senior counsel for the respondents as to the provision of security by the respondents to the applicant/Plaintiff, so I shall simply make the order for repayment.
Because of the possibility that the Defendant may obtain an order for his costs out of the estate, I propose to order that the amount be paid into Court. In this way, should he receive such an order, the fund could be available, reasonably promptly, to satisfy, in whole or in part, the order made.
There is no reason why the respondents should not pay the costs of the notice of motion in which they have been unsuccessful.
The Court, in respect of the amended notice of motion filed 15 October 2020:
1. Orders that, within 35 days of the making of these orders, the respondents, or either of them, reimburse the estate of the deceased, the amount of $230,000, which amount is to be paid into Court, pending the determination of the substantive proceedings, or any appeal therefrom, whichever is later.
2. Orders the respondents to pay the applicant's costs of the notice of motion.
I note that the matter has been adjourned for further directions before me at 9:00 a.m. on Wednesday, 17 February 2021.