Reeves v Reeves (No 2) [2024] NSWSC 386

Supreme Court New South Wales

Medium Neutral Citation: Reeves v Reeves (No 2) [2024] NSWSC 386 Hearing dates: 19 March 2024 Date of orders: 16 April 2024 Decision date: 16 April 2024 Jurisdiction: Equity Before: Meek J Decision: Orders made consequent upon an offer of compromise with partial order otherwise. Defendant not permitted an indemnity out of the estate for the costs ordered to be paid to the plaintiff. Catchwords: SUCCESSION — Dispute regarding costs payable consequent upon contested hearing relating to construction and rectification of the deceased's last Will and estoppel claim — Approximately 9 months after commencement of proceedings defendant appointed pursuant to Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 7.10(2)(b) to represent the deceased's estate — Estoppel claim successful having practical effect of giving the plaintiff property to which he would not otherwise be entitled having regard to the dismissal of the construction and rectification claims SUCCESSION — Interaction between the costs orders and statutory order under the Probate and Administration Act 1898 (NSW) ("PAA") for payment of testamentary expenses — Court's exercise of discretion under s 93(3) of the Trustee Act 1925 (NSW) and s 98 of the Civil Procedure Act 2005 (NSW) ("CPA") displaces (to the extent described in the costs order) the statutory order provisions of s 46C(2) of the PAA concerning how testamentary expenses are to be borne COSTS — Offers of compromise — UCPR r 42.14 — Principles discussed — Whether offers contained element of 'real' or 'genuine' compromise (on facts – Yes) — Whether defendant acted reasonably in rejecting offers (on facts – No) — Whether there are other factors beyond the defendant's reasonableness capable of supporting an 'otherwise' order — On facts plaintiff proposed a partial 'otherwise' order — Held partial order otherwise made ordering plaintiff to pay defendant's costs of construction and rectification claims up to the time of the first offer SUCCESSION — Costs — Discussion of means of appraising whether the cost or expense which is the focus of the indemnity sought is 'properly' or 'reasonably' incurred SUCCESSION — Representative orders — Nature and scope of an estate representative's role bearing upon costs — Discussion of sources of a representative's obligations and entitlements — Discussion of options for representatives in estate proceedings to protect themselves as to costs liability, specifically by seeking indemnity and judicial advice — Discussion of jurisdiction (equitable and statutory) to provide for representation of an estate — Discussion of various UCPR Part 7 representation orders and choices, and the connection and interaction between them — Specific discussion regarding representative orders under UCPR r 7.10(2)(b) SUCCESSION — Representative appointment pursuant to UCPR r 7.10(2)(b) — Reference to historical background — Requirements for consent and independence — Discussion of terms of appointment — Discussion regarding nature and scope of a UCPR r 7.10(2)(b) appointee's obligations and entitlements — Discussion regarding availability of indemnity and judicial advice to UCPR r 7.10(2)(b) appointee COSTS — Indemnity — Discussion regarding how one assesses whether a party is substantively acting in his or her own interest as opposed to acting in a representative capacity COSTS — Set-off of costs orders favouring either side LAW REFORM — It is timely that there be an amendment (or at least consideration of an amendment) to the CPA and UCPR to clarify the position of whether a r 7.10(2)(b) representative may be given judicial advice Legislation Cited: Civil Procedure Act 2005 (NSW) Probate and Administration Act 1898 (NSW) Supreme Court Act 1970 (NSW) Trustee Act 1925 (NSW) Supreme Court Rules 1970 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: A Goninan & Co v Atlas Steels [2003] NSWSC 956 Adam v Mullen (1976) 18 BPR 35,773 Ahmed v Chowdhury [2012] NSWSC 1452 Aid/Watch Inc v Commissioner of Taxation (2010) 241 CLR 539; [2010] HCA 42 Aliperti v Official Trustee [2000] NSWSC 315 Alsop Wilkinson (a firm) v Neary [1996] 1 WLR 1220 Anderson v Hill [2017] NSWSC 1149 Antoun v Antoun (No 3); Antoun v Hanna [2023] NSWSC 684 Application by Muhammad Elias Attia [2020] NSWSC 94 Application of Macedonian Orthodox Community Church St Petka Inc (No 2) (2005) 63 NSWLR 441; [2005] NSWSC 558 Application of Peter Hodges [2021] NSWSC 55 Application of the NSW Trustee and Guardian; Estate of Alice Maude Critchley [2020] NSWSC 1635 Application of Uncle's Joint Pty Ltd ACN 148 176 792 [2014] NSWSC 321; (2014) 12 ASTLR 487 Arakella Pty Ltd v Paton (2004) 60 NSWLR 334; [2004] NSWSC 13 Australian Legion of Ex-Servicemen & Women [2021] NSWSC 149 Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009 Bar-Mordecai v Rotman - Estate of the late Eveline Hillston (Supreme Court (NSW), Bryson J, 21 July 1998, unrep) Basis Capital Funds Management Ltd v BT Portfolio Services Ltd [2008] NSWSC 555 Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566; [1998] HCA 59 Bayside Council v Estate of Goodman [2019] NSWSC 530 Bovaird v Frost [2009] NSWSC 917 Cardaci v Cardaci [2023] WASCA 158 Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398; [1995] HCA 9 Carnie v Esanda Finance Corporation Ltd (1995) 38 NSWLR 465 Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth (2019) 268 CLR 524; [2019] HCA 20 Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226; [1998] HCA 4 Colquhoun v Graffione (2000) 97 FCR 376; [2000] FCA 325 Cong v Shen [2019] NSWSC 1675 Cong v Shen (No 2) [2020] NSWSC 600 Croghan v Blacktown City Council (2019) 100 NSWLR 757; [2019] NSWCA 248 Cumming v Sands [2001] NSWSC 507 David v Ryan [2018] NSWSC 971 De Lorenzo v De Lorenzo [2019] NSWSC 534 Drummond v Drummond [1999] NSWSC 923 Estate of Guamani; Guamani v De Cruzado [2023] NSWSC 502 Estate of Zbrozek; Duszyk v Morgan - Interim Administrator of the Estate of the late Maria Zbrozek [2020] NSWSC 1591 Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (No 3) [2017] NSWCA 109 GEL Custodians Pty Ltd v Estate of the late Geoffrey Francis Wells [2013] NSWSC 973 Gibson v Wills (1856) 21 Beav 620; 52 ER 999 GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; (2023) 97 ALJR 857 Government Insurance Office v Johnson [1981] 2 NSWLR 617 Hardoon v Belilios [1901] AC 118 Hewitt v Gardner [2009] NSWSC 1107 Hewitt v Gardner [2009] NSWSC 705; (2009) 3 ASTLR 407 Infigo II Pty Ltd v Linmas Holdings Pty Ltd [2023] NSWSC 755 Ivanovski v Perdacher [2009] NSWSC 913 Katsoulas v Kritikakis; Katsoulas v Apostolatos [2024] NSWSC 67 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 Leach v Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 Lean v Alston [1947] KB 467 Lee v Australian Executor Trustees Ltd as trustee of the estate of the late Ronald William Lee (No 4) [2021] WASC 257 Leichhardt Municipal Council v Green [2004] NSWCA 341 Lewis v Martinez as representative of the partners t/as HWL Ebsworth Lawyers [2021] NSWSC 1303 Lewis v Nortex Pty Ltd (in liq) [2006] NSWSC 480 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; [2008] HCA 42 Maddock v Registrar of Titles (Vic) (1915) 19 CLR 681; [1915] HCA 10 Meres v Meres (No 2) [2017] NSWSC 523 Morgan v Johnson (1998) 44 NSWLR 578 Murdocca v Murdocca [2002] NSWCA 373 Murdocca v Murdocca (No 2) [2002] NSWSC 505 Nadilo v Souris (No 2) [2019] NSWSC 246 National Trustees Executors and Agency Company of Australasia Ltd v Barnes (1941) 64 CLR 268; [1941] HCA 3 Nowell v Palmer (1993) 32 NSWLR 574 Oasis Fund Management Ltd v Royal Bank of Scotland NV [2010] NSWSC 584 Photios v Photios [2019] NSWCA 158; (2019) 372 ALR 264 Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) [2004] FCA 1437; (2004) 212 ALR 281 Rappard v Williams [2013] NSWSC 1279 Rattigan v Hanly [2020] NSWSC 1722 Re Beddoe; Downes v Cottam [1893] 1 Ch 547 Re Estate Late Hazel Ruby Grounds; Page v Sedawie [2005] NSWSC 1311 Re Estate Nitopi, deceased [2018] NSWSC 1560 Re Estate of the late Assim [2015] NSWSC 337; (2015) 106 ACSR 544 Re Grimthorpe [1958] Ch 615 Re Hubbard; Estate of Ross [2011] NSWSC 617; (2011) 4 ASTLR 497 Re Jones; Christmas v Jones [1897] 2 Ch 190 Re Permanent Trustee Australia Ltd (1994) 33 NSWLR 547 Reeves v Reeves [2024] NSWSC 134 Riva NSW Pty Ltd v Key Nominees Pty Ltd [2023] NSWSC 711 Shellharbour City Council v Johnson (No 2) (2006) 67 NSWLR 308; [2006] NSWCA 114 Stedman v O'Hearn; Hosemans v O'Hearn [2006] NSWSC 1122 Stojanovski v Stojanovski (No 3) [2020] NSWSC 1540 Tanwar v Aslam [2022] NSWCA 149 Templeton v Leviathan Pty Ltd (1921) 30 CLR 34; [1921] HCA 55 TFML Ltd v MacarthurCook Fund Management Ltd [2013] NSWCA 291 Walker v Harwood [2017] NSWCA 228 Walton v Walton [2015] NSWSC 405 Wang v Yu (No 2) [2024] NSWSC 4 Warton v Yeo [2015] NSWCA 115; (2015) 15 ASTLR 462 Wishart v Castlecroft Securities Ltd [2009] CSIH 65; 2010 SC 16 Zupicic v La Camera Paino as Trustee for the Estate of the Late Mario Novick [2018] NSWSC 1117 Texts Cited: Dal Pont, G E, Law of Costs (5th ed, 2021, LexisNexis) Dal Pont, G E, Law of Executors and Administrators (2022, LexisNexis) Handler, Leslie and Richard Neal, Mason and Handler Succession Law and Practice New South Wales (LexisNexis) Herzfeld, Perry and Thomas Prince, Interpretation (2nd ed, 2020, Lawbook Co.) Heydon, J D and M J Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis) Kiefel AC, Susan, "Judicial advice to trustees: its Origins, Purposes and Nature" (2019) 42(3) Melbourne University Law Review 993 Macquarie Dictionary, online ed Williams, Sydney Edward and Frank Guthrie-Smith, Daniell's Chancery Practice (8th ed, 1914, Stevens and Sons Ltd), Vol 1 Woodman, Roy Allan, Administration of Assets (1964, Law Book Co.) Category: Costs Parties: Russell Robert Reeves (Plaintiff) Kevin Wayne Reeves (Defendant) Representation: Counsel: C Birtles (Plaintiff) S Fendekian (Defendant)