Supreme Court New South Wales Medium Neutral Citation: Affidavit under Part IV of the Trustee Act by Tenterfield Shire Council (No 2) [2019] NSWSC 1119 Hearing dates: On the papers - submissions 30 July 2019 Decision date: 30 August 2019 Jurisdiction: Equity Before: Emmett AJA Decision: Jack Edward Walsh, in his capacity as administrator in the estate of Jeanette Irene Walsh, pay the costs of Russell Eric Templeton, in his capacity as the administrator in the estate of Lucille Mary Kathleen Marshall (nee Walsh), in relation to the motion of 18 September 2017 Catchwords: COSTS – whether an order should be made under s 93 of the Trustee Act 1925 (NSW) for the costs of the motions to be paid out of the fund – whether the applicant should pay the respondent's costs of responding to the motion on an indemnity basis Legislation Cited: Trustee Act 1925 (NSW) Cases Cited: Crawford v McIntosh [2004] NSWSC 180 NSW Trustee & Guardian v Hull & Anor (No 2) [2011] NSWSC 1361 Category: Costs Parties: Jack Edward Walsh, Administrator under Letters of Administration 23 July 2004 of the Estate of Jeanette Irene Walsh (Applicant) Russell Eric Templeton, Administrator under Letters of Administration 31 March 2014 of the Estate of Lucille Mary Kathleen Marshall (nee Walsh) (Respondent) Representation: Counsel: J E Thomson (Applicant - Jack Edward Walsh) G B Colyer (Respondent - Russell Eric Templeton) Solicitors: Lincoln Smith & Company Solicitors (Applicant - Jack Edward Walsh) Keypoint Law (Respondent - Russell Eric Templeton) File Number(s): 2005/00262592 Judgment 1. On 16 July 2019, I published my reasons (the Principal Reasons) [1] for concluding that monies paid into Court by Tenterfield Shire Council following the sale of a property situated in Tenterfield for non-payment of rates levied on the Property (the Fund) should be paid out to Mr Russell Templeton in his capacity as administrator of the estate of the late Lucille Walsh. I rejected an application made by Mr Jack Walsh for the Fund to be paid to him in his capacity as executor of the estate of the late Jeanette Walsh. I reserved the question of costs and have now received written submissions on the question of costs. In these reasons I shall use terms as defined in the Principal Reasons. 2. Jack seeks an order under s 93 of the Trustee Act 1925 (NSW) that his costs of the two motions be paid out of the Fund. Mr Templeton, on the other hand, seeks an order that Jack pay Mr Templeton's costs of responding to Jack's motion on an indemnity basis. Section 93(3) relevantly provides that, in any proceedings with respect to the management or administration of any property subject to a trust, the Court may, if it thinks fit, order any costs to be paid out of such part of the property as, in the opinion of the Court, is the real subject matter of the proceedings. 3. Jack advances in aid of his application for costs the principle that if, in the proper performance of the duty of a trustee, the trustee seeks the assistance of the Court to decide a question, the costs occasioned by the proceeding instituted by the trustee for that purpose will normally be paid out of the fund to which the question relates [2] . Where a trustee applies to the Court for the resolution of an uncertainty as to the terms of a trust and joins competing beneficiaries, it is not uncommon for the Court to order that the costs of the beneficiaries, including an unsuccessful one, be paid from the trust estate. Courts regularly make orders requiring the costs of disputation in relation to an estate to be paid out of the estate where the litigation is in the nature of an approach to the Court to clarify an uncertainty. On the other hand, if the litigation is in substance adversary litigation, it is common for the Court to make orders that one party pay the costs of the other. [3] 4. The issue in the present proceedings does not arise from any uncertainty as to the terms of a trust and the present proceedings are not fairly characterised as being an application to the Court for the resolution of uncertainty. The terms of the trust upon which the Council held the proceeds of sale of the Property are clear, namely, that the balance of the proceeds of sale of land by a council are to be held by the council in trust for the persons having estates or interests in the land immediately before the sale, according to their respective estates and interests. Thus, the question in these proceedings was which of the estate of Lucille or the estate of Jeanette held an interest or estate in the Property at the time of the sale of the Property by the Council. That is essentially adversarial litigation. Had the Council not sold the Property, there could well have been adversarial litigation between the legal personal representatives of the respective estates to determine in which of the estates the Property was held. In those circumstances, I do not consider that it is appropriate for Jack's costs to be paid out of the Fund. 5. Jack also contends that, even if his costs are not to be paid out of the Fund, there ought to be no order for him to pay Mr Templeton's costs. He points out that he brought the claim as legal personal representative of Lucille's estate and asserts that his claims were reasonably and legally arguable on the material that was available, albeit insufficient to establish that the Property was beneficially owned by Lucille. 6. Mr Templeton accepts that it was always necessary for him to bring an application for the payment out of the Fund. He therefore seeks an order that Jack pay Mr Templeton's costs of responding to Jack's motion. He also seeks that the costs be paid on the indemnity basis. 7. On 26 February 2018, Jack's solicitors wrote to Mr Templeton's solicitors offering to withdraw his motion and raise no objection to the payment to Mr Templeton of the Fund on the basis that Mr Templeton pay an amount of $3,500 towards Jack's costs of the proceedings and that there be no other order as to costs. Mr Templeton's solicitors responded on 26 June 2018 offering to pay the amount of $2,000 to Jack in relation to the costs of his motion if he consented to his motion being dismissed and raised no objection to Mr Templeton's claim to the Fund. That offer was rejected by a letter of 10 July 2018. 8. I do not regard the rejection of Mr Templeton's offer by Jack as unreasonable. Accordingly, there is no basis for an order for indemnity costs. On the other hand, I consider that the proceedings should properly be characterised as adversarial. The appropriate order therefore, is that Jack Edward Walsh, in his capacity as administrator in the estate of Jeanette Irene Walsh, pay the costs of Russell Eric Templeton, in his capacity as the administrator in the estate of Lucille Mary Kathleen Marshall (nee Walsh), in relation to the motion of 18 September 2017. ********** Endnotes 1. See [2019] NSWSC 894. 2. See NSW Trustee & Guardian v Hull & Anor (No 2) [2011] NSWSC 1361 at [4]. 3. See Crawford v McIntosh [2004] NSWSC 180 at [9]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 August 2019