Sandford v South & Ors

Second and Third Defendants: Piper Grimster Jones Lawyers

Sandford v South & Ors (No 2) [2025] NTSC 33

s 41 of the Administration and Probate Act 1969 (NT)

• [1] On 7 April 2025, I delivered judgment in this case.[1] I ordered that the first defendant ('Adam'[2]) be removed as an executor of the will of Darryl John South and issued an injunction prohibiting him from entering or remaining on four blocks of land upon which the business the subject of the estate of Darryl John South is conducted.
• [2] The plaintiff ('Teena') seeks orders that: (a) her costs of the proceeding be paid out of the estate, taxed on an indemnity basis; (b) Adam is to reimburse the estate for those costs (less costs thrown away as a result of the abandonment of paragraph 2 of the originating motion), which may be by way of deduction from future distributions of his share of the estate; (c) Adam is to bear his own costs personally and without indemnification from the estate; and (d) the proceeding be certified fit for two counsel.
• [3] The second defendant ('Anita') and the third defendant ('Allysa') seek orders that Adam pay their costs of the proceeding on an indemnity basis.
• [4] Pursuant to the orders that I made on 7 April 2025, Teena, Anita and Allysa filed and served written submissions in support of the costs orders they seek. Adam did not file any written submissions in response, or otherwise seek to be heard on the issue of costs.

• [5] For the order that her costs be paid out of the estate, Teena relies on: (a) the right of a trustee in s 26 of the Trustee Act 1893 (NT) to discharge out of the trust all expenses incurred in the execution of the trust or the trustee's powers; and (b) the right at common law of an executor to recoup everything that they have expended properly as executor.[3]
• [6] Teena also relied on cl 19 of the will of Darryl John South. That clause does not, in its terms, appear to be apt and it seems to me that cl 18.11 of the will is the appropriate clause permitting an executor to pay legal costs from the estate.
• [7] In any event, whatever be the source of the indemnity, I am satisfied that Teena has a right to pay the legal costs she has incurred in bringing this proceeding from the estate. I am satisfied that the proceedings were properly brought and prosecuted by her for the benefit of the estate in her capacity as executor.
• [8] Rule 63.29(2) of the Supreme Court Rules 1987 (NT) ('SCR') provides that, where the Court makes an order for the payment of costs to a party who sues as trustee, the costs are, subject to SCR 63.30, to be taxed on the indemnity basis. Rule 63.30 provides that where a party who sues as trustee is entitled to be paid costs out of a find which he or she holds in that capacity, the costs are, unless the Court otherwise orders, to be taxed on the indemnity basis.
• [9] Teena's right to indemnity for her legal costs from the estate extends to payment of the full amount of her legal costs, rather than costs determined on a court scale of costs, because her indemnity is not so limited.
• [10] It also extends to the costs associated with the relief sought in Part 2, [2] of the amended originating motion, which was abandoned before the hearing.[4] While those costs were thrown away by that abandonment, I am satisfied that consideration of that relief was reasonable, and the costs thrown away would not be substantial because that relief was abandoned before the hearing and the affidavit evidence filed in the proceeding was relevant to the relief Teena ultimately pursued and succeeded on.
• [11] Consequently, there will be an order that Teena's costs of and incidental to the proceeding are to be paid out of the estate, as taxed on an indemnity basis.

• [12] One of the most, if not the most, important principle by reference to which the Court's discretion in respect of costs is to be exercised is that the successful party is generally entitled to his or her costs.[5] That principle ordinarily applies in applications to remove executors.[6]
• [13] There is no reason to depart from that principle in this case. Adam was the unsuccessful party in Teena's application and he should bear the liability for her costs. As Teena's costs will be paid out of the estate, Adam's share of the estate should be reduced accordingly.
• [14] The only exception to that relates to the costs thrown away by Teena's abandonment of the relief sought in Part 2, [2] of the amended originating motion. In accordance with r 63.11(7)(b) of the Supreme Court Rules 1987 (NT), Adam should not have to bear those costs.
• [15] Consequently, there will be an order that Adam reimburse the estate for Teena's costs, except for the costs thrown away due to the abandonment of Part 2, [2] of the amended originating motion, and is to do so by way of deduction from future distributions, in accordance with the will, to him from the estate.

Adam's liability for Teena's costs should be on the indemnity basis

• [16] I am satisfied that there is some special or unusual feature about this case which requires, by the justice of the case, an award of costs in Teena's favour against Adam on the indemnity basis, not to punish Adam, but to compensate the estate.[7]
• [17] Adam was removed as an executor because he was unfit to remain as an executor and his conduct had directly caused substantial adverse impacts to the operation of the business comprising the residual estate under the will.[8] Adam was forewarned of the likely commencement of the proceedings, and of costs consequences. Despite that warning, he resisted Teena's application, gave uncredible evidence and made serious unsupported allegations against Teena and other people.
• [18] Consequently, Adam's costs liability to the estate will be on the indemnity basis.

• [19] Teena sought certification under r 63.72(9)(b) of the SCR that the retainer of more than one counsel was warranted. I accept that a prudent person not compelled by poverty would come into Court with two counsel in this matter,[9] given the weight of the case, particularly the value of the estate and its inclusion of a substantial operating business and associated parcels of land and the central proposition that Adam was unfit to be an executor, and the reasonably complex factual issues relating to the structure and operation of the business and Adam's conduct.
• [20] Consequently, I will certify the matter as fit for two counsel.

Indemnity from the estate as executor and beneficiary

• [21] Anita is also an executor of the estate. Allysa is a beneficiary.
• [22] Anita and Allysa's joinder and participation in the proceedings was necessary and appropriate. They supported Teena's application for the relief she sought in the proceedings.
• [23] As an executor, Anita has the same indemnity as Teena for her legal costs to be paid out of the estate on the indemnity basis. There is no reason to take a different approach in relation to Allysa's legal costs where her quite limited participation in the proceeding was necessary and reasonable.
• [24] Consequently, there will be an order that Anita's and Allysa's costs of and incidental to the proceeding are to be paid out of the estate, as taxed on an indemnity basis.

• [25] Counsel for Anita and Allysa argued that they were seeking what is known as a 'Sanderson order'. That is, an order that an unsuccessful defendant pay directly the costs of a successful defendant.[10] A Sanderson order is the direct form of a 'Bullock order', that is, an order that a plaintiff pay the costs of a successful defendant, but may recover those costs from the unsuccessful defendant.[11]
• [26] It is not clear to me that Anita and Allysa should be characterised as 'successful defendants' for the purposes of such an order because a Sanderson order is made where a plaintiff joins and brings a case against two defendants, succeeds against one and fails against the other.[12] Teena did not bring a case against Anita and Allysa; they were joined because they were necessary parties. Anita and Allysa did not oppose the relief sought by Teena, they supported it. While Adam was an unsuccessful defendant as against Teena, Anita and Allysa were not successful as against Teena.
• [27] In any event, given that they were necessary parties to the proceeding, and it was reasonable that they put a positive case in support of Teena's application, I see no reason why Adam should not bear the liability of Anita's and Allysa's costs as well.
• [28] Consequently, there will be an order that Adam is to reimburse the estate for Anita's and Allysa's costs, and he is to do so by way of deduction from future distributions in accordance with the will to him from the estate.

Adam's liability for Anita's and Allysa's costs should be on the indemnity basis

• [29] For the reasons set out in paragraphs [16] to [17] above, I am satisfied that Adam's liability for Anita's and Allysa's costs should be on the indemnity basis.

• [30] Counsel for Anita and Allysa sought a certification that the matter was fit for senior counsel. No reference was made to any particular rule in the SCR which requires or permits the Court to make such certification.
• [31] In any event, applying a similar test to that set out above in relation to the certification as fit for two counsel, I accept that it was reasonable for Anita and Allysa to engage senior counsel in this proceeding.

• [32] Adam did not make any claim in respect of his costs. He represented himself in these proceedings. Consequently, he has no entitlement to an order for costs because 'costs' are confined to money paid or liabilities incurred for professional legal services.[13]
• [33] Teena seeks an order that Adam bears his own costs of and incidental to this proceeding personally, to avoid a potential claim by Adam for his costs to be paid from the estate.
• [34] For the avoidance of doubt, I will make that order.

(1) The plaintiff's costs of and incidental to the proceeding, including the application for costs, are to be paid out of the estate of Darryl John South ('estate'), as taxed on the indemnity basis.

(2) The first defendant is to reimburse the estate for the plaintiff's costs, as taxed on the indemnity basis, except for the costs thrown away due to the abandonment of Part 2, [2] of the amended originating motion, and is to do so by way of deduction from future distributions in accordance with the will to him from the estate.

(3) The matter is certified as fit for two counsel.

(4) The second and third defendants' costs of and incidental to the proceeding, including the application for costs, are to be paid out of the estate of Darryl John South, as taxed on the indemnity basis.

(4) The first defendant is to reimburse the estate for the second and third defendants' costs, as taxed on the indemnity basis, and is to do so by way of deduction from future distributions in accordance with the will to him from the estate.

(5) The first defendant bears his own costs of and incidental to this proceeding, if any, personally and is not to be reimbursed for any such costs from the estate.

[1] Sandford v South [2025] NTSC 16.

[2] For ease of reference, first names have been used in these Reasons to identify people.

[3] See, for example, National Trustees Executors and Agency Company of Australasia Ltd v Barnes [1941] HCA 3; 1941) 64 CLR 268 at 274 per Starke J, at 277 per Williams J (Rich ACJ agreeing). See also Eyre-Walker v Swyrydan [2024] VSC 29 at [74] per Gray J.

[4] See Sandford v South [2025] NTSC 16 at footnote 2.

[5] Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164 at [25] per Kiefel CJ, Bell, Gageler, Keane and Nettle JJ.

[6] See, for example, Molnar v Butas (No 4) [2018] VSC 165 at [14] per McMillan J; Re Connock (No 2) [2021] VSC 122 at [11] per Moore J.

[7] See Castronova v Tjung (No 2) ]2024] NTSC 105 at [4] per Burns J and the authorities there referred to.

[8] See the similar case of Re Kataryna [2017] VSC 466 in which an executor was removed for incompetence and indemnity costs were ordered against her.

[9] Central Australian Aboriginal Congress v CGU Insurance Ltd [2009] NTCA 2; (2009) 24 NTLR 222 at [18] per Mildren J (Martin CJ and Angel J agreeing).

[10] See Harvard Nominees Pty Ltd v Dimension Agriculture Pty Ltd (in liq) [2023] FCAFC 140; (2023) 299 FCR 224 at [16], [33] per the Court.

[11] Ibid and see Gould v Vaggelas (1984) 157 CLR 215 at 230 per Gibbs CJ (Wilson and Murphy JJ agreeing).

[12] See Renehan v Leeuwin Ocean Adventure Foundation Ltd (No 4) (2006) NTLR 124.

[13] See Cachia v Hanes (1994) 179 CLR 403 at 409 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ.