Waters v Odell (No 2)[2023] QDC 144

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   On 7 to 9 February 2023, I heard the trial of an application for further provision by the applicant, Philippa Waters.  The respondent is her sister.  I published reasons on 14 June 2023.^[1]  Those reasons speak for themselves, and these reasons need to be read with those reasons as well as the orders made in that proceeding. 
2. [2]
   The judgment was an inordinately long one for a three-day family provision application.  It was long in substantial part because of the necessity to work through and fully analyse the evidence which appeared to disclose misconduct of Ms Odell as attorney, as executor, and as confidante of her mother.  It is unnecessary to refer again to the many findings I made impugning Ms Odell’s conduct.  As I said at various points, she consistently misconducted herself in all her formal roles relevant to these proceedings and as a witness in this Court.
3. [3]
   I ultimately ordered that further provision be made for Ms Waters in the amount of $280,000, which together with her extant legacy brought her total entitlement from the estate of her mother to $300,000.  There were difficult questions of costs, which I reserved until later.  Another matter which I raised but did not decide when I delivered judgment was what the consequences of Ms Odell’s conduct as enduring power-of-attorney, executor and witness in the proceedings would be for her continuing role as an executor.  From paragraphs [239] to [245] of my reasons, I articulated a preliminary view that in this specific circumstance, this Court would have power under section 69(1) of the District Court of Queensland Act 1967 (Qld) (‘DCA’) to remove Ms Odell as executor, notwithstanding her appointment as executor of Mrs Benn’s will following an application for common form probate granted by the Registrar of the Supreme Court on 16 October 2020.
4. [4]
   It would have been unfair to make such an order without notice and without hearing both parties as to whether this court had the power to remove Ms Odell and if so, whether and how such power should be exercised.  I also left to be determined:

   1. Questions which plainly arose on the evidence as to whether Ms Odell should be entitled to indemnity from the estate for her costs as executor;  and
   2. The question of how the applicant’s costs of the proceedings (ordered to be paid out of the estate) should be dealt with.
5. [5]
   On 6 July 2023, I listed the matter for mention.  On that day, Mr Hackett sought an order that the costs of the applicant of the proceedings be paid out of the estate on the indemnity basis.  There was no submission advanced to the contrary and no offers were put before me.  I made that order, and in the circumstances of this case, given the ordinary approach for the costs of the successful applicant, it would have been hard to see why such an order should not be made.  I made that order on 6 July 2023, around three weeks after the judgment was handed down. (Offers that were put before me on this hearing indicate, perhaps not surprisingly given the history of the matter, that the applicant has done much better than any offer that was made by the respondent.)
6. [6]
   Also on 6 July 2023, I gave the applicant time to file and serve any application for the removal of the executor, any further application relating to cost issues, and any issue relating to the respondent’s right to indemnity.  
7. [7]
   The applicant filed an application in the following terms:

TAKE NOTICE that the Applicant is applying to the Court for the following orders:

1. For the removal of the Respondent as executor of the estate of Anne Benn.
2. That Constantine George Castrisos be appointed as executor of the estate of Anne Benn.
3. That the Applicant’s costs of the proceedings ordered on 6 July 2023 and the costs of the appearance on 6 July 2023 be fixed in the sum of $155,000.00.
4. That the Respondent’s indemnity out of the estate of Anne Benn in respect of the Respondent’s costs of the proceedings be limited to $60,000, being approximately one third of her solicitor and own client costs, or alternatively such other amount as the court considers appropriate.
5. That the Respondent pay the costs of this Application on an indemnity basis fixed in the sum of $10,000, or alternatively such other amount as the court considers appropriate.
6. Such further or other order that the court considers appropriate.  

8. [8]
   Consistent with my directions, that application came on for hearing today.  I had previously excused Ms Brewer and Ms Coore from further appearance.  Mr Bridge, who is a partner of the firm on the record for Ms Odell, appeared on her behalf. 

Removal of Ms Odell and appointment of Mr Castrisos

9. [9]
   As to paragraph 1 of the application, Mr Bridge had instructions from Ms Odell to consent to her removal as executor.  Mr Hackett expressed the view that the reasoning in my trial judgment that the power arose in this context was correct.
10. [10]
    I have reflected on the reasoning articulated in the primary judgment on this issue and remain of the view that I expressed there.  I consider that in the circumstances of this specific case, the power to remove an executor in the Supreme Court is a power of this Court.  In reaching that view, I considered whether this Court can set aside an order of the Supreme Court under s. 69(1), but the section is in plain terms.  This Court has the powers and authorities of the Supreme Court in the circumstances that are dealt with in s 69(1) of the DCA, which I have already explained arise in this case and allow me to exercise that power.  I see no reason to read down that plenary conferral of power to limit it such that it does not apply to orders of the Supreme Court which can lawfully be set aside by a single Judge of that Court.  Conferrals of power or jurisdiction should not be read down.^[2] 
11. [11]
    The other question that might arise is whether the Court should exercise that discretion, even if it does have that power, where the effect of section 69(1) is to give this Court power to set aside an order of the Supreme Court.  That issue might be significant if the order that we were concerned with was a judgment or order made on the merits by a Judge of the Supreme Court (assuming in that case that it would be possible for a Judge of that Court to set aside such an order).  However, the order that I am dealing with here is a common form probate order.  Whatever discretionary considerations might arise where this Court has the power under s. 69(1) to set aside a Supreme Court order but should hesitate, perhaps, where it is a considered judgment of a Judge of that Court, do not arise here. A common form probate is not a judgment on the merits.  For that reason, I see no discretionary reason why I should not set aside the common form order granting probate of the will to Ms Odell. 
12. [12]
    There is always the residual concern that in acting in this way, some formality needs to be dealt with.  It is common in a solemn form probate proceeding for the Court to make substantive orders in such proceedings, subject to the formal requirements of the Registry.  If I do the same thing here, it does not seem to me that there is any particular administrative problem why this Court should not make the orders sought.
13. [13]
    For those reasons therefore, I remove Ms Odell as executor, a step to which she has consented.  Subject to the formal requirements of the Registrar, I appoint Constantine George Castrisos as administrator of the estate of Mrs Benn.  Mr Castritos is an experienced solicitor and no concerns about his appointment were raised by Ms Odell’s solicitor.
14. [14]
    A further formal step that is required is to require the removed executor to bring in her grant.  Probate orders are powerful orders, permitting the person named as personal representative to present themselves as authorised by the Court to deal with the estate.  It is important that the terms of this order are taken out and provided to her by her solicitors on the record so that she understands that an order of this Court to bring in a probate is an order which must be complied with, and failing to do so without a reasonable excuse is a contempt under section 129(1)(a) DCA. 

Should the applicant’s costs be fixed or assessed?

15. [15]
    The other part of the application relates to fixing or not fixing the amount of Ms Waters’ costs ordered in the proceedings. Mr Hackett urged me to fix the costs at $155,000.  I was unpersuaded (albeit reluctantly) that I have sufficient material before me lawfully to exercise the power under rule 687 of the UCPR.  I say reluctantly because Mr Hackett’s argument in favour of fixing costs was attractive.  He had a copy of the trust accounts statement of the solicitors for the respondent indicating she had spent over $175,000 on the proceedings.  He said that his client’s costs of $155,000 were considerably less, and also correctly submitted that his client had had the main burden of the conduct of the litigation.
16. [16]
    There is no question that Ms Odell’s conduct was a significant - probably the main - cause of the costs incurred in this litigation beyond the costs ordinarily incurred in this kind of application, which might have been, up to a mediation, about $100,000 in total.  Mr Hackett’s proposition was that if the costs were assessed or agreed by Mr Castrisos as he would be entitled to do, independently forming a view drawing on his experience as solicitor, the costs might ultimately be more.  But as I have said, it does not seem to me I have got a sufficient basis to form a view that such a large sum is correct.  Although, I would be not the least bit surprised if the $155,000 claimed was able to be made out on assessment on an indemnity basis.
17. [17]
    In any event, the order that I make, is that the applicant’s costs of the proceedings ordered by me on 6 July 2023, including the costs of that appearance be paid out of the estate and assessed unless otherwise agreed. 

Ms Odell’s indemnity for costs as executor

18. [18]
    The next issue that arises is whether, and to what extent, Ms Odell’s indemnity out of the estate for costs incurred in the proceedings as executor should be limited.  There is no question this Court has the power to limit the entitlement to indmentiy.  The difficulty in this case is this.  As I have said, there is no doubt that Ms Odell’s misconduct as attorney, as executor and as a witness in these proceedings was the principal cause for most of the costs incurred by both sides in this case.  It is also fair to say, with respect, that the respondent’s solicitors might have lost their objectivity at times (perhaps because of the virulence of their client’s attitude to the applicant).  Whatever the reason, a lot of the correspondence coming from the solicitors for the respondent was high-handed, discourteous, aggressive and unhelpful.  
19. [19]
    What to do about Ms Odell’s indemnity?  Mr Hackett’s application asked that it be limited to $60,000.  His solicitors subsequently obtained a copy of the trust account statement for the estate from the respondent’s solicitors, which showed that all but about $25,000 of the costs were incurred after a letter from Mr Hackett’s solicitors (to which I refer to in the judgment),^[3] which letter raised the issue of Mrs Benn’s funds being misapplied by Ms Odell.  Mr Hackett’s submission was to the effect that, acting honestly, Ms Odell should have conceded the matters raised there and that her conduct thereafter was unreasonable in defending the proceedings.  
20. [20]
    The judgment identifies how Ms Odell misconducted herself as an executor and as a witness.  Also important is that a lot of what happened in the trial was a result of the way Ms Waters was ejected on six days’ notice from a house that she had been living in for some 25 years, and which she had been assured by her parents she could live for the rest of her life.  Mr Hackett submitted that in those circumstances, once the misconduct was identified clearly in correspondence, Ms Odell’s further conduct as executor should not attract an indemnity at all.
21. [21]
    He rightly pointed out that the hypothetical reasonable executor in the position of Ms Odell at the start of these proceedings (i.e. who had behaved as Ms Odell did prior to commencement of the proceedings by Ms Waters), would have resigned, or at least provided for someone else to conduct the litigation.  There is considerable merit in Mr Hackett’s approach. 
22. [22]
    However, the approach that I prefer in analysing the extent of the indemnity Ms Odell should have as executor is to look at what might have been expected in the counterfactual situation where a reasonable executor had defended this proceeding from the start, without Ms Odell’s conduct prior to Mrs Benn’s death.  If this case was defended by the hypothetical reasonable executor approaching the matter without prior knowledge of those issues, it is reasonable to assume that Ms Waters would still have had to put on her substantial affidavit, the executor would have had to do work investigating matters raised there and so on, there would have been a mediation and the matter would likely have settled at that point.  I adopt that approach because it is important, I think, not to be too influenced by Ms Odell’s conduct in assessing a fair allowance for her indemnity.  
23. [23]
    In any event, I have decided to adopt the hypothetical reasonable executor approach.  I am not saying that that is an approach that should always be adopted, or even should be adopted in any other case.  It is the approach I adopt in this case, and it seems to me that a reasonable executor would have gone to a mediation and that likely costs to that point for the executor (adopting a generous approach) would have been in the order of $50,000 in a case of this kind.
24. [24]
    For that reason, the respondent’s indemnity out of the estate of Mrs Benn in respect of the costs of the proceedings is limited to $50,000. 

Erroneous evidence as to the value of the estate

25. [25]
    There is one other matter to deal with. 
26. [26]
    I wrote the principal judgment based on an affidavit of Ms Odell that was filed in the proceedings and relied upon by her solicitors and counsel, including in final submissions. That affidavit swore that there was $317,000 in cash in the estate: see paragraph [175] of the principal judgment.  Imagine my surprise when, today, I looked at the trust account statement and found that on the second day of the trial, two payments had gone through the estate trust account totalling $41,000.  That meant that the $317,000 in cash I believed was in the estate (based on the executor’s affidavit) was wrong by $41,000, at the latest on the last day of the trial.
27. [27]
    As I understood Ms Odell’s solicitor’s answers from the bar table, he was aware of this fact but did not disclose it based on advice.  I do not understand how it could have been thought correct not to tell the Court what the true position was in respect of the cash in the estate.  I do not make any findings about who should have informed the Court about this matter, or when, or what (if any) advice was given on the matter.  However, if a solicitor or barrister knows that evidence put before a Court is untrue, or was true but becomes untrue, the Court must be told.  Similarly where an executor has put before the Court evidence as to the value of the estate in a family provision application.
28. [28]
    Further, after the trial, on the 21^st and 22^nd of February, another $20,000 was taken to pay costs of these proceedings on the assumption, presumably, that the executor was entitled to indemnity.  The Court was not informed about that matter either.    My judgment therefore assumed that cash in the estate was some $60,000 more than was available at the time it was handed down.
29. [29]
    The trust account ledger for the estate is exhibit 1 in this application. 

Costs of this application

30. [30]
    That leaves the cost of this application, and that causes me to deal with the position of Ms Odell’s solicitors.  Mr Bridge, a partner at Standard Law Co, solicitors on the record for Ms Odell, told me from the bar table and of course I accept as accurate, that Ms Odell gave limited instructions about the matters that were raised in this application, that she would consent to her removal and that, in broad terms, she did not object to Mr Castrisos being appointed but she did not know him, and that she sought to have the costs of Ms Waters assessed rather than fixed.  
31. [31]
    There was no consent to all the orders sought and, there was nothing said about her right to indemnity for her costs.  Even though, ultimately, the applicant did not get the amount fixed as she sought, this was still an application involving novel points that had to be determined in several respects.  The cause, in a factual and legal sense, of this application was Ms Odell’s conduct described in the principal reasons.  The application had to be brought and heard not least to deal with the question of indemnity upon which it seems Mr Bridge had no instructions.  For all those reasons, it seems proper to me to make the order sought by the applicant that Ms Odell personally pay the costs of this application on an indemnity basis fixed in the amount of $10,000.