Pozniak Estate: Morgan v Reuben [No 2] [2005] NSWSC 813

New South Wales Supreme Court

CITATION : Pozniak Estate: Morgan v Reuben [No 2] [2005] NSWSC 813

HEARING DATE(S) : 10 August, 2005

JUDGMENT DATE : 10 August 2005

Equity Division JURISDICTION : Probate List

JUDGMENT OF : Palmer J

DECISION : Defendant to pay Plaintiff's costs on indemnity basis.

CATCHWORDS : COSTS - FRAUD - INDEMNITY COSTS - Testamentary dispositions propounded by defendant were found to be forgeries - not an issue at trial whether the defendant was party to the fraud - defendant on notice prior to commencement of proceedings that the plaintiff had expert evidence that the deceased's signatures were forgeries - whether defendant acted reasonably in necessitating the plaintiff's proceedings.

LEGISLATION CITED : Evidence Act 1995 (NSW) - s.135

- Brown v M'Encroe (1890) 11 LR(NSW) Eq 134 - Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 CASES CITED : - Hodges, Re Estate of (1988) 14 NSWLR 698 - Oshlack v Richmond River Council (1998) 193 CLR 72 - Spiers v English [1907] P 122

Kurt Morgan - Plaintiff PARTIES : Elias Reuben - Defendant

FILE NUMBER(S) : SC 115853/03

M.S. Wilmott SC, M.W. Sneddon - Plaintiff COUNSEL : L.J. Ellison - Defendant

Robert King & Associates - Plaintiff SOLICITORS : Phillips Fox - Defendant

LOWER COURT JURISDICTION :

Ex tempore

As to admissibility of evidence 1 Mr Ellison seeks to read an affidavit of Elias Reuben filed in Court by leave this morning. The affidavit is directed solely to the question of the costs of the proceedings. 2 Mr Willmott SC, who appears with Mr Sneddon for the Plaintiff, objects to the whole of the affidavit being read. He says that in substance it seeks to go behind the findings which I have made in the judgment. He says further that this evidence could have been led from Mr Reuben in the course of the trial. Basically for those reasons he says that the Court should in the exercise of discretion under s.135 of the Evidence Act 1995 (NSW) reject the evidence because its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the plaintiff or misleading or confusing. 3 The question of costs in these proceedings is a difficult one. The difficulty arises because I have found that the signature of Mrs Pozniak on the testamentary dispositions propounded by the Defendant, that is, the 1995 Will and the 1997 Codicil, were forgeries and that the attestation of those signatures by Mr and Mrs Ryner were fraudulent. 4 The parties accepted in the course of trial that it was not necessary to show who had been behind the fraud perpetrated or for what reasons the fraud had been perpetrated. All that was necessary to resolve was the question of whether the signatures of Mrs Pozniak on the disputed documents were hers or were forgeries. For that reason, although I found that Mr and Mrs Ryner had not told the truth when they said they had attested Mrs Pozniak's signatures, I did not go further, nor was I invited to go further, to find whether or not the Defendant, Mr Reuben, or anybody else had procured Mr and Mrs Ryner to take part in this fraudulent design. 5 The evidence now sought to be adduced on behalf of Mr Reuben in his affidavit is by way of answer to an application by Mr Willmott for indemnity costs against Mr Reuben. In this affidavit Mr Reuben seeks to say that he acted in good faith in propounding the 1995 and 1997 documents because he relied upon Mr Ryner's assurance that the signatures on those documents were genuine. He says that he did not see the originals of the documents before Mrs Pozniak's death and that when Mr Ryner showed the documents to him, he had no reason to doubt that the documents were genuine. 6 It seems to me that this evidence does properly go to the question of costs. It raises an issue of good faith and reliance on Mr Reuben's part when good faith or lack thereof is the essence of Mr Willmott's application for costs on an indemnity basis. 7 Mr Willmott, by his submissions, seeks to show that Mr Reuben could not have been acting in good faith in propounding the 1995 and 1997 documents. In order to do that, he relies upon certain passages in the judgment from which he seeks to draw inferences, although, as he concedes, there has been no finding in my judgment as to Mr Reuben's complicity or otherwise in the fraud which has been perpetrated by Mr and Mrs Ryner. 8 It seems to me therefore that I ought in justice and fairness to permit Mr Reuben to give evidence which directly confronts the allegations which the Plaintiff makes against him in reliance upon inferences drawn from the judgment. I therefore admit the whole of the evidence of Mr Reuben contained in the affidavit of 9 August 2005.