Douglas v James (No 2) [2015] NSWSC 969

Douglas v James (No 2) [2015] NSWSC 969

This was adversarial litigation caused by Mr James' and Ms Kik's conduct in asserting disputed powers and failing to use non-adversarial trustee procedures and by unreasonable persistence in hopeless claims. As a result, the usual rule that costs follow the event applies, including indemnity costs due to the defendants' delinquency and unnecessary litigation conduct. The probate exception is not applicable. Ms Kik is denied trustee indemnity as her conduct was unreasonable and not for the benefit of the trust.

Parties
First Plaintiff / First Cross Defendant / First Respondent: Zeta Kathleen Douglas; Second Plaintiff / Second Cross Defendant / Second Respondent: Marea Gilbert; First Defendant / Cross Claimant / Applicant: David James; Second Defendant / Sixth Cross Defendant / Sixth Respondent: Janina Kik; Third Defendant / Fifth Cross Defendant / Fifth Respondent: Trudy James; Third Cross Defendant / Third Respondent: Lyn Ison; Fourth Cross Defendant / Fourth Respondent: Angela Webber; Seventh Cross Defendant / Seventh Respondent: John Croce Palmieri
Jurisdiction
Australia
Judgment Date
22 July 2015
Procedural Posture
Costs Determination (post Substantive Judgment in Equity Proceedings) / Post Judgment (costs Determination After Final Orders)
Outcome
Costs orders made against first and second defendants and cross-claimant (indemnity basis); costs not recoverable from trust assets; no order as to costs against other parties.
Legal Topics
Costs, Testamentary Trust Construction, Rectification, Trustee Indemnity, Probate Exception, Submitting Appearance
Equity Succession Law Trusts Civil Procedure Costs Testamentary Trust Construction Rectification Trustee Indemnity +2 more

Case Brief

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Parties

Zeta Kathleen Douglas

First Plaintiff / First Cross Defendant / First Respondent

Marea Gilbert

Second Plaintiff / Second Cross Defendant / Second Respondent

David James

First Defendant / Cross Claimant / Applicant

Janina Kik

Second Defendant / Sixth Cross Defendant / Sixth Respondent

Trudy James

Third Defendant / Fifth Cross Defendant / Fifth Respondent

Lyn Ison

Third Cross Defendant / Third Respondent

Angela Webber

Fourth Cross Defendant / Fourth Respondent

John Croce Palmieri

Seventh Cross Defendant / Seventh Respondent

Procedural Posture

Costs Determination (post Substantive Judgment in Equity Proceedings) / Post Judgment (costs Determination After Final Orders)

Legal Issues

  1. 1 Whether unsuccessful defendants and cross-claimant should pay plaintiffs' costs and on what basis
  2. 2 Whether the 'probate exception' to costs from trust assets applied
  3. 3 Whether a trustee who acted adversarially is entitled to indemnity from trust assets for costs

Ratio Decidendi

This was adversarial litigation caused by Mr James' and Ms Kik's conduct in asserting disputed powers and failing to use non-adversarial trustee procedures and by unreasonable persistence in hopeless claims. As a result, the usual rule that costs follow the event applies, including indemnity costs due to the defendants' delinquency and unnecessary litigation conduct. The probate exception is not applicable. Ms Kik is denied trustee indemnity as her conduct was unreasonable and not for the benefit of the trust.

Court Disposition

Costs orders made against first and second defendants and cross-claimant (indemnity basis); costs not recoverable from trust assets; no order as to costs against other parties.

Orders

  • Defendants to pay plaintiffs' costs of proceedings up to and including 27 March 2015 and costs of application for costs, excluding costs relating to notice of motion filed 27 March 2015.
  • Cross-claimant to pay first and second cross-defendants' costs of the cross-summons.