TROJA v TROJA [NO 2] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MAHONEY and MEAGHER JJA 17 December 1993 and 15 April 1994, 11 May 1994 [1994] NSWCA 321 COSTS — cross appeal — judge applies forfeiture rule to disentitle wife beneficiary under will from taking in her deceased husband's estate following homicide of husband — orders that Public Trustee's costs come out of husband's estate — following appeal by wife to Court of Appeal, mother (alternative beneficiary) files cross appeal contending that costs should be borne primarily by wife — cross appeal not disposed of in orders made by Court in appeal — following further argument — held: (by the Court). the cross appeal should be dismissed (per Kirby P) because upon the view he favoured the appeal should have been allowed and the costs of the trial should abide the outcome of a new trial, (per Mahoney JA and Meagher JA): because the order providing for costs was discretionary and no error had been shown in the exercise of the discretion to warrant its disturbance. ORDERS Cross appeal dismissed with costs. Kirby P On 29 March 1994 the Court published reasons and pronounced orders in these proceedings. On 11 April 1994, the solicitor for the respondent (cross appellant) wrote to the Registrar contending that the Court had not dealt with his client's cross appeal. Whilst acknowledging that I referred to the cross appeal at 32 of my reasons, he said: "So far as I can see, neither Mahoney JA nor Meagher JA referred to my client's cross appeal at all. The solicitor asked that the matter be taken up with the Court and stated: "Tt seems lo me that it is unnecessary to relist the matter as it has been fully argued and all that remains is the Court's decision on my client's cross appeal." The matter was relisted to permit the parties to make any submissions, or additional submissions. which they wished. Further submissions were put. Counsel for the appellant (cross respondent) offered no additional argument in relation to the cross appeal. However, he asked for the costs of the application. On the substantive matter, my opinion remains as it was expressed in my original reasons. Because of the conclusion which I reached on the appeal (different from the other members of the Court) I was of the opinion that the issue argued on the cross appeal did not arise. It arose only if the appellant failed, and, by reason of the orders favoured by the majority, the respondent succeeded in the appeal. However, it is appropriate that, to give effect to my conclusion, I should add a proposed order that the cross appeal be dismissed with costs. As earlier stated, even if had been of the same view as the majority, I would have favoured such an order disposing of the cross appeal. I would reserve the question whether leave to bring the cross appeal was required. If it was, I would favour granting such leave but dismissing the cross appeal. 2 UNREPORTED JUDGMENTS So far as the costs of the application to re open the matter are concerned, I would not make any special order. In fairness to the cross appellant, two matters must be kept in mind: 1. The Court failed by its orders to dispose of the cross appeal and the cross appellant was perfectly within her rights to bring that failure to the attention of the Court; and 2. In doing so, the solicitor for the cross appellant emphasised that he was not necessarily asking that the matter be relisted. The relisting resulted from the internal directions of the Court for the prompt and public dispatch of its business. In all of the circumstances. and for reasons which sufficiently appear in my previously published opinion. I would propose that the cross appeal be dismissed with costs. Mahoney JA The first defendant Jeanna Ann Troja ("the wife") was married to Frank Pirronello Troja ("the husband'). By his will dated 27 January 1983, the husband appointed the wife his executor and trustee and left her the whole of his estate. He provided that, in the event of her "failing to survive me" for thirty days, his mother Myrtle Elizabeth Troja ("the mother") should be his executor and trustee and (in the event) his sole beneficiary. On 2 July 1989 the wife feloniously killed the husband. On 29 August 1991 the mother brought proceedings in the Equity Division of the Court. She claimed a declaration that the wife was disentitled to take any benefit under the husband's will and that she (the mother) was entitled to the whole of his estate. The proceeding involved two issues: a claim as to the effect of the felonious killing of the husband by the wife ("the forfeiture issue"); and the construction of the will (the "construction issue"). The wife brought a cross claim. The cross claim appears to have been designed to raise issues as to: the effect of the wife's killing of the husband upon her right to take a benefit under the will; the construction of the will and its operation in the events which had happened, and a claim under the Family Provision Act 1982. There was obviously a contest as to who was entitled to administer the estate. With the agreement of the parties, administration of the estate was granted to the Public Trustee. He was joined as a defendant in the mother's claim and in the wife's cross claim. The issue now to be determined relates to the order made in the proceedings in respect of the Public Trustee's costs. In order to determine this issue, it is necessary to examine the course which the proceedings took and the orders that were made. In the Equity Division there was a hearing only of the mother's claim: the hearing of the cross claim was postponed. It was adjourned to the Registrar's List, presumably to await the final determination of the mother's claim. The mother's claim was heard by Waddell CJ in Eq. The Public Trustee had been made a party to the proceeding in respect of that claim. He took an active part in the proceeding before the judge: he cross-examined witnesses and, I infer, made submissions He was a necessary party to that proceeding. As the wife was also a party to the proceeding as a defendant and as the substantial contest was between the mother and the wife (I put aside the position of Mr Troja as a possible beneficiary on intestacy) the Public Trustee could no doubt have taken the course of submitting to such order as should be made. However, when the proceeding commenced counsel representing the Public Trustee indicated that he appeared "to assist the court". No objection is recorded to the Public Trustee taking that course. As the wife was URJ TROMJA v TROJA [NO 2] (Mahoney JA) 3 then in gaol it was perhaps thought that the participation by the Public Trustee might add to what counsel for the wife could place before his Honour. I would not wish to discourage the proffer of assistance to the Court by public officials, subject of course to proper precautions to prevent the increase in costs. But, however this be, the assistance given went beyond that to be afforded by a submitting defendant. His Honour decided the forfeiture issue and the construction issue in favour of the mother: he held that the wife was disqualified from taking a benefit under the will and that, upon the construction of the will the mother took as sole beneficiary. He directed that the will be administered accordingly. He made orders for costs against the wife which are not now in contest The judge was asked to make special orders for costs in respect of the Public Trustee It is necessary to examine precisely what the judge did. His Honour pointed out that there were two issues then before him for decision: the forfeiture issue and the construction issue The Public Trustee was a necessary party in respect of each of these issues. Therefore, ordinarily it was proper to provide for his costs. The contest was as to whether he should have his costs provided for on the submitting appearance basis or on a more generous basis and as to who should bear them. In respect of the forfeiture issue his Honour held that the Public Trustee should merely have submitted: he should not have taken an active part in the proceedings. His Honour ordered that the Public Trustee have its costs out of the estate on a trustee basis "in so far as they relate to the consequences for the administration of the estate of a forfeiture by the first defendant and on the issue of whether or not there was a forfeiture but limited to a submitting appearance basis". He refused to order that the wife pay the Public Trustee's costs: he did this "in the exercise of my discretion" and "in view of the limited order which I propose to make as to the second defendant's costs ". It would, I think, have been open to his Honour to make a more generous order for costs in favour of the Public Trustee in respect of the forfeiture issue. As I have said, the circumstances might have been seen to warrant the more active participation in the proceeding by the Public Trustee and, in view of the announcement by counsel at the commencement of the proceeding of his appearance "to assist the court", his Honour could have provided generally for the Public Trustee's costs. However, in his discretion, he did not do so. The Public Trustee has not appealed against that order. If the costs are limited to the costs of a submitting defendant, the mother cannot properly object to them. A trustee who, being a necessary party, submits is frequently, if not ordinarily, given costs out of the estate: appearance is perhaps seen as an incident of the office. It would have been open to his Honour to order that the wife, as the unsuccessful defendant on the forfeiture issue, reimburse the estate in respect of those submitting defendant costs. It was within his discretion not to do so. No ground has been made out for interfering with that discretion. In respect of the construction issue, the judge held that "it presented an issue of administration on which in my opinion the Public Trustee had a duty to appear and in the interests of the estate to assist the court". His Honour ordered that the Public Trustee "should have an order for payment of its costs on a trustee basis out of the estate on this issue". Ordinarily a trustee who brings or is party to a proceeding merely as to the construction of the will he is to administer will discharge his duty sufficiently by taking only a formal part in the proceeding: the construction summons of earlier 4 UNREPORTED JUDGMENTS times illustrated this. He will have costs accordingly. However, there are circumstances in which, by reason of the terms of the will or otherwise, the provision which the testator has made throws up issues of difficulty which, in the particular circumstances, warrant a more active participation. If, for example, the position of one of the parties is such that the issues or the arguments will not otherwise be fully placed before the court, it may be proper for the trustee to take a more active part in the proceeding and to have the costs of so doing. It is within the discretion of the judge to make such an order. In the present case, the judge appears to have concluded that the construction issue was such that "the Public Trustee had a duty to appear and in the interests of the estate to assist the court". I think the judge was intending to indicate that, in the circumstances of the present case. it was proper for the Public Trustee to offer and for the court to accept assistance upon this issue. I see no appealable error in the exercise of the judge's discretion to order costs as he did. Without limiting the matters relevant to the exercise of that discretion, his Honour no doubt was conscious that, in relation to the Family Provision issue which was pending, it was necessary for there to be a determination of the forfeiture and the construction issues. It would, in principle at least, have been for the Public Trustee, as executor and trustee. to represent the estate upon the Family Provision issue. What was done in respect of the forfeiture and the construction issues could not be completely divorced from the Family Provision issue and the costs to be incurred in respect of it. The circumstances in which an appellate court will interfere with an order for costs are well established and have not been in contest in the present proceeding. In my opinion it has not been shown that there was an appealable error affecting the judge's exercise of his discretion. Iam conscious that the judge's orders had the effect that the mother, as the sole beneficiary under the will, bore the burden of the Public Trustee's costs. It is arguable that, though the Public Trustee should be entitled to these costs out of the estate, an order should be made that the burden of them should be borne by the unsuccessful first defendant, the wife. But, where the matter at issue is the construction of a will and the issues arise because, for example, of the failure of the provisions of the will to deal effectively with the disposition of the property, it is open to a court to direct that the costs of all parties be paid out of the estate. This, I think, is one of the factors which no doubt influenced the judge in what he did in this case. However that be, I see no demonstration of appealable error affecting the discretionary order which his Honour made. It follows from what I have said that, considered on its merits, the cross appeal should fail. But two matters require consideration: whether the cross appeal is properly before this Court on appeal; and how the costs of dealing with it should be provided for. S101 (2)(c) of the Supreme Court Act 1970 provides that an appeal shall not lie to the Court of Appeal except by leave from an order "as to costs only which are in the discretion of the Court". In the present proceeding, it has been assumed that the main appeal is properly before the Court: no issue has been raised in this regard. Were leave lo appeal necessary in respect of the main appeal, clearly it is a case for leave and I would grant leave accordingly. But, in my opinion, it is the intent of the Act and of the Rules that, if a cross appeal is to be brought, that cross appeal may be brought without leave only where the cross appellant "is entitled to do so as of right": see Supreme Court Act, s101(2) and Pt51, R13(1). The assumption is, I think, that a cross appeal may be brought in respect of a relevant costs order only if the cross appellant "is entitled to do so as of right" and that URJ TROMJA v TROJA [NO 2] (Meagher JA) 5 otherwise, leave to appeal is necessary, Had leave to appeal been sought in the ordinary way, I do not think that it would have been granted. Leave to appeal was not sought in respect of the cross appeal. However, the cross appeal was referred to in the original argument before this Court and no objection was taken to its competency. The balance of the proceeding must go back to the Equity Division: the dismissal of the appeal disposes only of that portion of the proceeding, the forfeiture and the construction issues, which has come to this Court on the appeal. It is at the least expedient that the judge dealing with the proceeding be aware of the conclusions of this Court as to the position of the Public Trustee in respect of those issues when he considers what role the Public Trustee should play in the remainder of the proceeding. In the circumstances, I am of opinion that leave to appeal should be granted in respect of it. Leave having been granted, it should be dismissed. The question then arises as to how the costs of dealing with the cross appeal should be dealt with. The solicitors were right in asking that the cross appeal be dealt with. Assuming, as the Court did, that the cross appeal was before this Court, it was necessary that it be decided, whatever the decision upon the forfeiture and the construction issues. If the appeal on those issues was upheld, the costs order required reconsideration and, perhaps necessarily, setting aside; if that appeal was dismissed, it was necessary to consider the issues of principle to which I have referred. What was to be done in respect of those issues or, a fortiori, the Family Provision issue if and when the proceeding was returned to the Equity Division, had to be dealt with by this Court. The cross appeal was not dealt with. That was a slip. It could and perhaps should have been corrected, as most slips are, without further argument: it had already been argued This is the course which was suggested to the Court by the solicitors involved. That would have been done without the parties incurring further costs. But the matter was further argued, no doubt upon the view that the requirements of natural Justice required it. That has no doubt led to further costs, of counsel and solicitors. I have considered whether a special order can and should be made in relation to such costs. In all the circumstances, I do not think that it should. The parties nodded in bringing the cross appeal without leave and in not objecting to the competency of it. Without such leave, the cross appeal was not properly or perhaps validly before the Court tor decision. Meagher JA in particular referred to the issue of leave when the matter came back before the Court. Therefore, it became necessary that that defect be dealt with. The order in respect of the cross appeal should be that it be dismissed with costs. Meagher JA We have formerly dismissed the widow's appeal in this matter. It has now been pointed out to us that we did not dispose of the mother's cross appeal. That cross appeal relates solely to costs. The learned trial judge ha, ordered that the second respondent, the Public Trustee, should be at liberty to take all or some of his costs out of the trust estate, and entirely or partially as of a submitting defendant. It would require some little skill to comprehend precisely what his Honour did order. But whatever it was, the respondent cross appellant objects to it. He submits that an order should have been made requiring the appellant to pay the second respondent's costs below. No order with regards to the second respondent's trust is necessary, as he did not appear on the appeal. Since the cross appeal is limited solely to a question of costs, leave to argue the point is required: s101 of the Supreme Court Act, 1970. In my opinion, no leave should be granted. Nor was any reason advanced why it should. 6 UNREPORTED JUDGMENTS The cross appeal should be dismissed with costs. Cross appeal dismissed with costs. 5 Counsel for the Appellant: MP Podleska Instructed by: Austen Brown, Thompson Counsel for the Respondent: LJ Ellison 10 Instructed by: SA Teen