CATCHWORDS Costs - payment ainto Court by life insurance company - yoinder of unnecessary respondent - liability for costs of that respondent - whether payable out of the fund in Court or by applicant life insurance company. Lite Insurance Act 1345 - 5.105 Harri v. Alliance Assurance Company £13021 1 KB 184 THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASTA LIMITED v. SUZANNE CRAYFORD DAWBARN &@ ORS, VG No. 52 or 1386 21 October 1986 Ryan J. Melbourne. IN THE FEDERAL COURT OF AUSTRALIA ) ] VICTORIA DISTRICT REGISTRY , VG NG. 52 uF 1985 J GENERAL DIVISION ! Between: THE NATIONAL MUTYAL LIFE ASSOCIATION OF AUSTRALASIA LIMITED (Applicant) And: SUZANNE CRAYFORD DAWBARN {First-named Respondent) ANZ EXECUTORS & TRUSTEE COMPANY LIMITED (Second-named Respondent) DAVID WILLIAM LANCELOT DAViS iThird-namea Respondent) ERIC GORDON MARGETTS \Foucth-named Respondent) EDVIAPD JAMES ROBERTS \Fifth-named Respondent) STANISLAUS STRAUN SMITH tu (Sixth-named Respondent) Judge Making Order: Ryan J. Date of Order: 21 October 1986 Where Made: Melbourne. THE CO tJ MINUTE OF ORDER on URT ORDERS AS FOLLOWS: Subject to the orders for costs contained in this arder, order that the money paid into *his court by the applicant on <ci6th March, 1536 together with any interest thereon (which money now stands to the credit of the snort-term call account styled National Mutual Litigation Account with Commonwealth Trading Bank, 495 Bourke Street, Melbourne) be paid to the first Respondent and second Respondent. Subject as aforesaid: {a) the costs of the applicant of and incidental to this application be taxed ona solicitor and client basis and, when taxed, paid out of the moneys in the said account. (bd) costs of the first resreondent, second respondent val a and third respondent of and incidental to this application be taxed ona solicitor and client basis and, when taxed, paid out of the said moneys. lus AND IT I5 FURTHER CRDERED: 3. NOTE: Costs of the fifth-named respondent on being taxed to be paid by the applicant. settlement and entry of orders is dealt with 36 of the Federal Court Rules. 1n Order IN THE FEDERAL COURT OF AUSTRALIA } VICTORIA DISTRICT REGISTRY <S fea] a o ln bs a ry al Wo a oh GENERAL DIVISION ) Between: THE NATIONAL MUTUAL LIFE ASSICTATION OF AUSTRALASTA LIMITED 'Applicant? B J p SULANNE CRAYFORD DAWBARN (First-named Respondent) ANZ EXECUTORS & TRUSTEE COMPANY LIMITED (3econd-named Respondent) DAVID WILLIAM LANCELOT DAVIS (Third-named Respondent) ERIC GORDON MARGETTS (Fourtn-named Respondent) EDWARD JAMES ROBERTS (rifth-named Respondent) STANISLAUS STRAUN SMITH (Sixtn-named Respondent) Coram: Ryan J. Date: 21 October 19386 REASONS FOR JUDGMENT ON COSTS By an application dated 26 March 1986, the applicant, ("National Mutual") claimed a declaration as to the persons entitled to the proceeds of a daposit and administration th group life assurance policy issued on 10 January 1575 by National Mutual to tne trustees of the Wilimore and Randell Superannuation Plan. That application was made pursuant to 5.105 of the Life Insurance Act 1345 which provides: "105 (1) A Company may, subject to any Rules or Court in that behalf, pay into the Court any moneys pavaple by the company in respect of a policy for which, in the opinion of the company, no sufficient discharge can otherwise be obtained. (2) The receipt of a Registrar, a District Registrar, a Deputy Registrar or a Deputy Dastract Registrar of the Court for the moneys shall be a good ana valid discharge to the company for the moneys 50 paid in, and the moneys shali, subject to the rules of Court, be dealt with accoraing to the oarder of the Court." In accordance with that section, National Mutual had, also on 26 March 1986, paid into Court tne sum of $354,601.43 representing the net amount of the proceeds then undistributed of the policy. When the application came before the Court for hearing, counsel for the parties informed ma that they had agreed ona form of consent order for the disposition of the moneys in Court. Minutes of the proposed consent order were as follows: "lL. Subject to the orders for casts contained in this order, order tnat the money paid into this court by the Applicant on 26th March, 15386 together with any interest thereon twhich money now stands to the credit of the short-term call account styled National Mutual Litigation Account with Commonwealth Trading Bank, 495 Bourke Street, Melbourne) be Respondent and second tl Order tnat subject as WwW pala to the first Respondent. afor a Bald: - (a) the costs af the Applicant of and ancidental to this Application be taxed on a solicitor basis and, wnen taxed, the moneys in the said tb) costs of the first second Respondent Respondent of this Application sol1cator and when taxed, paid moneys." c and in he lient and client paid out of account. Respondent, and third cidental to taxed on a basis and, out of the said However, counsel went onto indicate that they had been unable tao reach agreement on the costs of the fifth-named respondent. Accordingly, I agreed to hear argument on -.-guestion and to make such order as ro the costs of Fiftth-named respondent as seemed appropriate. The facts, as whey pertain respondent, are in short compass. Reginald Nockolds Randell died. on i Until that to the fifth-named 8 September 1964, one his death, Mr. Randell had been the sole proprietor of a real estate agency and land development business carried on under the name of Randell". By clause 10 of his will dated Randell directed that one half of the from carrying on the business of the 22 January 1960 net profits rec firm of Willmo "Willmore & Mr. eived re & Randell in the State of Victoria should be paid and divided in equal shares to the persons for the time being holding the offices in the said fiem of Finance Manager, General Sales Manager, Improvement Manager and Buyer and that such provision should remain operative for a period of 20 years from his death or such shorter period during which any lands forming part of the estate having been purchased for the purpose of subdivision and resale should remain unsold. At the date of the death of Mr. Randell, the office of Improvement Manager inoctne firm of Willmore & Randell was occupied by the fifth-named respondent, Edward James Roberts. Mr. Roberts remained in that position until he retired from the firm in 1973. Mr. Roberts was also one of the trustees of the Willmore & Randell Superannuation Plan constituted by a deed of trust dated 5 December 1374, to whom National Mutual on 10 January 1975 1ssued the life assurance policy with which these proceedings are concerned. In addition, Mr. Roberts was one of four employees of Willmore & Randell who were members of the Superannuation Plan and beneficiaries under the deed of trust. By clause 16:15) of the Trust deed it was provided that "the Company" (defined therein as "Willmore & Randell an unincerporated body having 1ts principal place of business at kK in a 1c = ie wo n Street Melbourne") may at any time remove a Trustee rh nh a m office and may appoint a new Trustee ain place of any Trustee so ramoved or ostherwise vacating office and shail fall any vacancy occurring in the Trustees." Effectively, therefore the powers of removal of the trustees and the appointment of new trustees were in the trustees for tne time being of the estate of Reginald Nockolds Randell. On 165 January 1986, the first and secona-named respondents having on 13 February 1384 by order of the Supreme Court of Victoria, been appointed trustees of the estate of the late Mr. Randell, removed the current Trustees of the Superannuation Plan, including Mr. Roberts, and appointed themselves and the third-named respondent, David William Lancelot Davis, to be the new trustees. Information of the execution of that deed of removal and appointment was given by letter to National Mutual on the same day, 15 January 1996. By paragraph 3 of an affidavit sworn on 724 April 1986 by William Henry Buttler, who 15 employed by Watironal Mutual as an actuary, 1t was deposed .2. On the Z7th day of November, 1979 the applicant drew a cheque in the sum of $142,358.37 to be paid to the Fifthnamed Respondent pursuant to the provisions of the SuperPlan on the grounds cf his late retirement from Willmore & Randell." By the time the application came before Sweeney J. for darections on 9 May 1986, the fafth-named respondent had not entered an appearance, and his Honour ordered that "a copy of today's Order be served upon Edward James Roberts and that he -- file and serve a statement of intention in relation to his attitude to the claims made ain this matter and whether he intends to take any action.". Pursuant to that direction, a statement of intention dated 9 July 1996 was filed on behalf of the fifth-named respondent The statement included the following paragraphs: or. "2. THE fifthnamed Respondent has no interest in, and neither supports nor - Opposes, the claims made in this matter ° on behalf of: (a) the applicant, 1b) the first, second and thirdnamed Respondents, (2) che rfrourthnamed Respondent, and (d) the sixthnamed Respondent. i THE fifthnamed Respondent accordingly does not intend to take any action in this matter, and will abide by any order made by this Honourable Court." When the application came on for hearing, Mr. Wicks of counsel for the fifth-named respondent, sought, and was granted, leave to withdraw from the proceedings subject to a right to be heard on the question of costs. When he exercised that right, Mr. Wicks urged that his client's costs should be paid either cut of the fund in Court or by National Mutual. Mr. Hayne Q.C. who appeared with Mr. Finkelstein for the first, second and third respondents argued that Mr. Roberts' costs should not fall on the fund, but should he paid by National Mutual. He was supported in that submission by Mr. Fajgenbaum Q.C. who appeared with Mr. Whelan for the fourth-named respondent and by Mr. Downing for the sixth-named respondent. Mr. Randali for Nationai Mutual, on the other hand, urged that considerable controversy surrounded both the identity of the trustees of the Superannuation Plan, and the source and disposition of the fund in Court. That controversy, 1t was contended, justified the joinder of the fifth-named respondent as also did an interest which, 1t was suggested, Mr. Roberts "may have had ~.. Im making assertions as to the appropriateness and soundness of the fund itself". Accordingly, it was submitted, Mr. Roberts' costs should be paid out of the fund in Court. In my view the facility afforded to a life insurance company by 5.105 of the Life Insurance Act should pe availed of with some care. Claimants to the proceeds of a policy should not be burdened by unnecessary duplication of parties, or by unwarranted joinder of respondents. As was pointed out in a similar statutory context by sir Richard Collins MR in Harrison v. Alliance Assurance Company C1903 1 KB 134 at 188:- "It must be borne in mind that the defendants, in seeking the protection of the Act, do s0 at the risk of having to pay any costs to which the plaintiff may, in consequence, be put, if their own attitude has been in any way unreasonable. If the plaintiff's title to the policy money be as clear as his counsel alleges it to be, then no doubt such order will hereafter be made against the defendants with regard to the plaintiff's costs as justice to him may require. sa the result would in that case be that the defendants would obtain the protection they want, but no injustice would be done to the plaintiff." On the facts known to National Mutual when it issued the application, Mr. Roberts had been lawfully removed as trustee of the Superannuation Plan, and, as long ago as 27 November 1979, he had been paid out the full amount to which National Mutual considered he was entitied as a beneficiary of the fund. Prima facie, therefore, he had no interest in the, disposition of the fund to warrant his joinder as a vespondent. Ir might have been prudent for National Mutual to have written to Mr. Roberts before issuing the application, advising him of its intention to do so, and requesting an intimation as to whether he had any interest in the outcome which he wished to maintain by being joined as a respondent. That course was not taken, andin all the circumstances, I consider that National Mutual should pay Mr. Roberts' costs. At first, I was disposed to think that any liability of National Mutual for Mr. Roberts' costs snould be limited to those incurred up to the filing of the statement of intention contemplated by the order of Sweeney J. on%3 May 1986. However, I consider, on reflection, that Mr. Roberts, having been joined as a respondent, was entitled to maintain his representation in the proceedings to ensure that he did not have to meet his costs out of his own pocket. His participation up to the final hearing of this matter was no more than was necessary to pursue that entitlement since no proposal was made by any other party assuring Mr. Roberts of an indemnity against his own costs. Accordingly, the costs of the fifth-named respondent should be taxed and when taxed paid by National Mutual. An order should be drawn up incorporating the minutes of consent orders on which the parties had agreed, order as to costs. I certify that this and the preceding eight (@&) pages are a true copy of the Reasons for Judgment herein or the Honourable Mr. Justice Ryan. Dated: @/- /o- Ps, OP Fanané Associate and the this ae