Callaghan and Raymont as Trustees of the Outlook Estate Trust v Zevering [2017] QSC 227

SUPREME COURT OF QUEENSLAND CITATION: Callaghan and Raymont as Trustees of the Outlook Estate Trust v Zevering [2017] QSC 227 PARTIES: LYNNE CALLAGHAN AND YVONNE SHIRLEY RAYMONT AS TRUSTEES OF THE OUTLOOK ESTATE TRUST (applicants) v CORNELIA ELLEN ZEVERING (first respondent) ALAN BRYCE BRYDEN & ORS (second respondents) FILE NO: BS 10480 of 2009 DIVISION: Trial PROCEEDING: Application DELIVERED ON: 28 September 2017 (ex tempore) DELIVERED AT: Brisbane HEARING DATE: JUDGE: 28 September 2017 Atkinson J ORDERS: 1. Pursuant to r 709A(3) Uniform Civil Procedure Rules 1999, the first respondent’s costs to be paid in accordance with the order made on 14 September 2010 by the Supreme Court, that the first respondent be awarded her costs of the applicants’ application on the indemnity basis to be paid out of the Outlook Estate Trust, are fixed in the amount of $10,000.00. 2. The amount of $44,000.00 owing to the first respondent for costs be paid into Court, calculated as follows: (a) The amount of $10,000.00, being the first respondent’s costs fixed under r 709A(3) in paragraph 1 above; (b) The amount of $26,000.00, being the first respondent’s costs fixed under r 709A(3) in relation to the order made on 23 September 2011 by the Court of Appeal that the first respondent be awarded one half of her costs of the cross application in the Supreme Court proceedings no. 10480 of 2009 to be assessed on the standard basis to be paid out of the Outlook Estate Trust; -- 1 of 7 -- 2 (c) The amount of $8,000.00, being the first respondent’s costs fixed under r 709A(3) in relation to the order made on 23 September 2011 by the Court of Appeal that the first respondent be awarded the appellant’s costs of the Court of Appeal proceedings no. 10552 of 2010 on an indemnity basis to be paid out of the Outlook Estate Trust. 3. The following amounts owing to the first respondent for remuneration as a trustee of the Outlook Estate Trust be paid into Court: (a) $47,250.25 pursuant to the order of the Court made 15 October 2009 and the order of the Court of Appeal made 23 September 2011 calculated as $131,000 less $83,749.75, payment which has already been made on 29 June 2012 as part of the first respondent’s remuneration as trustee; (b) Interest in the amount of $8,565.01. 4. The following amounts owing to the first respondent as a unit holder of the Outlook Estate Trust be paid into Court: (a) $10,791.07, being a distribution to the first respondent as a Unit Holder pursuant to a resolution of the applicants on 21 June 2012; (b) Interest in the amount of $932.11. 5. The applicants be entitled to withhold and retain from the amounts to be paid into Court in accordance with paragraphs 2, 3 and 4 above the amount of $22,991.89 due from the first respondent to the applicants, being: (a) The amount of $4809.57 pursuant to the order of the court made 17 May 2016 in Court of Appeal matter number 10552 of 2010, being the costs of the application filed in that matter on 11 May 2016; (b) The amount of $4,646.71 pursuant to the order of the Court made 17 May 2016 in this proceeding, being costs of the application filed 11 May 2016; (c) The amount of $6,829.40 pursuant to the order of the Court made 28 September 2017 in the Court of Appeal matter number 10552 of 2010 being the costs of the application files in that matter on 14 September 2017; -- 2 of 7 -- 3 (d) The amount of $6,706.21 pursuant to this order, being the costs of this application fixed in accordance with paragraph 6 below. 6. The first respondent pay the applicants’ costs of this application on the standard basis fixed in the amount of $6,706.21. 7. To the extent that the costs provided for in paragraph 6 above are not the applicants’ full costs of this application, the balance of the applicants’ costs of this application be paid on the indemnity basis out of the Outlook Estate Trust. (i) CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – OTHER MATTERS – where the first respondent had the advantage of costs orders in her favour – where the first respondent failed to serve a costs statement on the applicants as required by r 705 of the Uniform Civil Procedure Rules 1999 – where the first respondent was ordered by the court to serve a costs statement on the applicants under r 709A(2) – where the first respondent again failed to serve a costs statement on the applicants – where the applicants applied pursuant to r 709A(3) for orders fixing the first respondent’s costs – whether orders under r 709A(3) should be made Trusts Act 1973 (Qld), s 96 , s 102 Uniform Civil Procedure Rules 1999 (Qld), r 705, r 709A COUNSEL: M C Long for the applicants No appearance for the respondents SOLICITORS: Tresscox Lawyers for the applicants No appearance for the respondents [1] There are two applications before the Court by Lynne Callaghan and Yvonne Shirley Raymont, as trustees of the Outlook Estate Trust, in Supreme Court matter 10480 of 2009, and one in Court of Appeal matter 10552 of 2010, which was on appeal from an order made in that Supreme Court matter. [2] The application in the Supreme Court matter asks for various orders, as follows: (1) Pursuant to rule 709A of the Uniform Civil Procedure Rules 1999, the first respondent’s costs be paid in accordance with the order made on 14 September 2010 in the Supreme Court, that the first respondent be awarded her costs of the application on an indemnity basis, to be paid out of the Outlook Estate Trust, to be fixed in an amount as determined by the Court. [3] The first respondent in that application is Cornelia Ellen Zevering. The application then seeks that, pursuant to section 96 of the Trusts Act 1973, the Court makes the following directions: -- 3 of 7 -- 4 (2) Pursuant to section 102 of the Trusts Act 1973, the following amounts owing to Ms Zevering for costs be paid into Court: (a) the amount of her costs, fixed under rule 709A in paragraph (1) above; (b) the amount of the first respondent’s costs, fixed under rule 709A, in relation to the order made on 23 September 2011 by the Court of Appeal that the first respondent be awarded one-half of her costs of the cross-application in the Supreme Court proceedings number 10480 of 2009, to be assessed on the standard basis, to be paid out of the Outlook Estate Trust; and (c) the amount of her costs, fixed under rule 709A, in relation to the order made on 23 September 2011 by the Court of Appeal that she be awarded her costs of the Court of Appeal proceedings number 10552 of 2010, on an indemnity basis, to be paid out of the Outlook Estate Trust. (3) That, pursuant to section 102 of the Trusts Act, the following amounts owing to Ms Zevering for remuneration as a trustee of the Outlook Estate Trust be paid into Court: (a) $47,250.25, pursuant to the order of the Court made on 15 October 2009 and the order of the Court of Appeal made on 23 September 2011, calculated as $131,000 less $83,749.75, payment of which has already been made, on 29 June 2012, as part of Ms Zevering’s remuneration as trustee, and interest on the amount of $47,250.25, to be calculated. (4) Pursuant to section 102 of the Trusts Act 1973, the following amounts owing to the first respondent as a unit holder of the Outlook Estate Trust to be paid into Court: (a) $10,791.07, being the distribution to the first respondent as a unit holder, pursuant to a resolution of the applicants on 21 June 2012; and (b) interest on the amount of $10,791.07, to be calculated. [4] The applicants seek a direction that they are entitled to withhold and retain from the amounts to be paid into Court, in accordance with the previous three paragraphs, the amount of $9456.28 due from Ms Zevering to the applicants, being (a) the amount of $4809.57, pursuant to the order of the Court made on 17 May 2016, in Court of Appeal matter number 10552 of 2010, being the costs of the application filed in that matter on 11 May 2016; and (b) the amount of $4646.71, pursuant to the order of the Court made on 17 May 2016, in this proceeding, being the costs of the application filed on 11 May 2016. [5] The applicants also seek an order that they are entitled to withhold and retain from the amounts to be paid into Court the following further amounts: (a) the costs of the application in Court of Appeal matter number 10552 of 2010, to be filed at the same time as this application; and -- 4 of 7 -- 5 (b) the costs of this application, in an amount to be fixed. [6] The applicants also seek an order that, to the extent that the costs so provided for are not the applicants’ full costs of this application, the balance of the applicants’ costs of this application be paid, on an indemnity basis, out of the Outlook Estate Trust. [7] The application in the Court of Appeal matter follows a somewhat similar format, asking for costs to be paid, in accordance with orders made of the Court of Appeal, be fixed and paid into Court. [8] An application to be made in this Court has arisen given the longstanding unwillingness of, and failure by, Ms Zevering to serve a costs statement. She has the advantage of costs orders awarded in her favour. Rule 705 of the Uniform Civil Procedure Rules provides that a party entitled to be paid costs must serve a costs statement in the approved form on the party liable to pay the costs. The rule sets out what must be contained in the costs statement. Ms Zevering has been unwilling or unable to serve such a costs statement. Accordingly, on 17 May 2016, on the application of the trustees, this Court made orders, pursuant to rule 709A(2), requiring Ms Zevering to serve costs statements under rule 705, so that her entitlement to costs could be resolved and the trustees could pay those moneys, and thus bring an end to the matter. [9] No such costs statements have been served. It appears that Ms Zevering is seeking an adjournment of today’s hearing, which has been brought by the trustees, seeking orders pursuant to rule 709A(3), which they are entitled to seek if the party entitled to be paid costs does not comply with the Court’s direction to serve a costs statement, as is the case here. Ms Zevering has sought to have this matter adjourned by sending emails to the Court and to the solicitor for the trustees. Nothing in those emails, which I have read and which have been made exhibits, convinces me that this application should not proceed to hearing, or that Ms Zevering has anything to say which would suggest to the Court that it should not make orders under rule 709A(3). [10] In support of that, I should say that this matter commenced on 23 September 2009, when the trustees filed an originating application in the Court seeking orders and directions regarding the remuneration of the trustees of the trust. The Court made orders on 15 October 2009 about remuneration of the trustees, and made directions in relation to a potential cross-application by Ms Zevering for further remuneration. That cross- application was filed on 10 November 2009 and was heard on two days in May 2010. The cross-application was dismissed by a decision handed down on 1 September 2010. Consequential costs orders were made on 14 September 2010 which included an order for costs in Ms Zevering’s favour that is: To the extent not provided for by the order of 15 October 2009, each party’s costs of and incidental to the applicant’s application shall be paid out of the estate of the Outlook Estate Unit Trust on an indemnity basis. [11] Ms Zevering appealed against the decision dismissing her cross-application. That appeal was filed on 29 September 2010, heard on 20 April 2011 and a decision given on 29 July 2011. Consequential orders, including orders as to costs, were made on 23 September 2011. As a result, Ms Zevering had the benefit of these costs orders: -- 5 of 7 -- 6 (a) that the trustees must pay to Cornelia Ellen Zevering on half of the costs of a cross-application to be assessed on the standard basis; and (b) Ms Zevering is to be paid her costs of the appeal out of the Outlook Estate Trust on the indemnity basis. [12] Paragraph 4 of the order authorised the trustee to recover Ms Zevering’s costs of the cross-application paid pursuant to the order out of the Outlook Estate Trust. It is those costs orders, the first one made on 14 September 2010, and the second one made on 23 September 2011, which the trustee has been endeavouring to pay. Notices were served by the trustee after many pieces of correspondence in accordance with rule 709A(1) requiring her to serve a costs statement with regard to the second costs order. [13] On 26 March 2016, a further notice was served on Mr Zevering in accordance with rule 709A(1) requiring her to serve a costs statement under rule 705 in respect of both the first costs order and the second costs order. It suffices to say that no costs statement was then or has ever been, served in spite of the later order to which I referred earlier, that is, the order made by this Court on 17 May 2016 that she was to serve the costs statements under rule 705. [14] I am satisfied that both the orders and this application were served as they were required to be under the Rules. A party who does not serve a costs statement when required under rule 709A(2) runs the following risk: (a) that the Court may either, under subrule 3, set aside the costs order or allow costs in a fixed amount, which may be nominal; and (b) order the party to pay another party’s costs incurred because of the failure to comply with the direction. [15] As the applicants are trustees, they do not seek to take advantage of those rules to set aside the costs order or to allow costs in a nominal amount, but rather ask the Court to fix costs, which is the Court’s best estimate on the material provided by the applicant trustees of what those costs actually are. I have read the material provided by the applicants/trustees, and am satisfied that that is the best estimate that can be done of Ms Zevering’s entitlement to costs under the costs orders, and also of her entitlement to remuneration. And so I intend, therefore, to fix the costs and allow the trustees to pay those costs into Court. [16] The trustees are entitled to ask for and should receive the costs incurred because of the failure of the applicant to comply with the direction. The costs incurred are the costs of bringing this application to Court and they should be awarded those costs. Ms Zevering should pay those costs on a standard basis and they should be fixed so there is no more dispute, and I agree with the applicant’s submission that, to the extent, there is a shortfall between those costs on the standard basis and the trustee’s costs incurred in bringing the applications. The trustee’s costs should otherwise be paid out of the trust on an indemnity basis. [17] The calculations are set out in paragraph 39 of the submissions that have been filed in Court and they reflect the material that is found in the affidavits: -- 6 of 7 -- 7 [18] Item Amount (a) Fixed costs – first costs order $10,000.00 (b) Fixed costs – second costs order $34,00.00 (c) Remuneration to Ms Zevering $47,250.25 (d) Interest earnt on amount of remuneration $8,565.01 (e) Distribution to Ms Zevering $10,791,07 (f) Interest earnt on amount of distribution $932.11 (g) LESS: The trustee’s costs of the applications filed 11 May 2016 -$9,456.28 (h) LESS: the trustee’s costs of the applications filed 14 September 2017 -$13,535.61 Total $88,546.55 [19] I, therefore, make the orders as per the drafts that have been provided to me, which, I will initial and place on the file. I ask that the parties give me minutes of an order to give effect to these reasons. -- 7 of 7 --