Re National Mutual Life Association of Australasia Limited v Suzanne Crayford Dawbarn; Anz Executors & Trustee Company Limited; David William Lancelot Davis; Eric Gordon Margetts; Edward James Roberts and Stanislaus Straun Smith [1986] FCA 349 (21 October 1986)

FEDERAL COURT OF AUSTRALIA

Re: THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA LIMITED
And: SUZANNE CRAYFORD DAWBARN; ANZ EXECUTORS & TRUSTEE COMPANY LIMITED; DAVID
WILLIAM LANCELOT DAVIS; ERIC GORDON MARGETTS; EDWARD JAMES ROBERTS and
STANISLAUS STRAUN SMITH
No. VG 52 of 1986
Costs
(1986) 4 ANZ Insurance Cases 60-746

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Ryan J.

CATCHWORDS

Costs - payment into Court by life insurance company - joinder of unnecessary respondent - liability for costs of that respondent - whether payable out of the fund in Court or by applicant life insurance company.

Life Insurance Act 1945 - s.105

Harrison v. Alliance Assurance Company (1903) 1 KB 184

HEARING

MELBOURNE
21:10:1986

ORDER

THE COURT ORDERS AS FOLLOWS:

By Consent

1. Subject to the orders for costs contained in this
order, order that the money paid into this court by the
applicant on 26th March, 1986 together with any
interest thereon (which money now stands to the credit
of the short-term call account styled National Mutual
Litigation Account with Commonwealth Trading Bank, 495
Bourke Street, Melbourne) be paid to the first
Respondent and second Respondent.

2. Subject as aforesaid:

(a) the costs of the applicant of and incidental to
this application be taxed on a solicitor and
client basis and, when taxed, paid out of the
moneys in the said account.

(b) costs of the first respondent, second respondent
and third respondent of and incidental to this
application be taxed on a solicitor and client
basis and, when taxed, paid out of the said
moneys.

AND IT IS FURTHER ORDERED:

3. Costs of the fifth-named respondent on being taxed to
be paid by the applicant.

NOTE: settlement and entry of orders is dealt with in Order

36 of the Federal Court Rules.

DECISION

By an application dated 26 March 1986, the applicant, ("National Mutual") claimed a declaration as to the persons entitled to the proceeds of a deposit and administration group life assurance policy issued on 10 January 1975 by National Mutual to the trustees of the Willmore and Randell Superannuation Plan. That application was made pursuant to s.105 of the Life Insurance Act 1945 which provides:

"105 (1) A Company may, subject to any Rules
of Court in that behalf, pay into the Court
any moneys payable by the company in respect
of a policy for which, in the opinion of the
company, no sufficient discharge can
otherwise be obtained.

(2) The receipt of a Registrar, a District
Registrar, a Deputy Registrar or a Deputy
District Registrar of the Court for the
moneys shall be a good and valid discharge to
the company for the moneys so paid in, and
the moneys shall, subject to the rules of
Court, be dealt with according to the order
of the Court."

In accordance with that section, National Mutual had, also on 26 March 1986, paid into Court the sum of$354,601.43 representing the net amount of the proceeds then undistributed of the policy.

2. When the application came before the Court for hearing, counsel for the parties informed me that they had agreed on a form of consent order for the disposition of the moneys in Court. Minutes of the proposed consent order were as follows:

"1. Subject to the orders for costs
contained in this order, order that the
money paid into this court by the
Applicant on 26th March, 1986 together
with any interest thereon (which money
now stands to the credit of the
short-term call account styled National
Mutual Litigation Account with
Commonwealth Trading Bank, 495 Bourke
Street, Melbourne) be paid to the first
Respondent and second Respondent.

2. Order that subject as aforesaid:

(a) the costs of the Applicant of and
incidental to this Application be
taxed on a solicitor and client
basis and, when taxed, paid out of
the moneys in the said account.

(b) costs of the first Respondent,
second Respondent and third
Respondent of and incidental to
this Application be taxed on a
solicitor and client basis and,
when taxed, paid out of the said
moneys."

However, counsel went on to indicate that they had been unable to reach agreement on the costs of the fifth-named respondent. Accordingly, I agreed to hear argument on that question and to make such order as to the costs of the fifth-named respondent as seemed appropriate.

3. The facts, as they pertain to the fifth-named respondent, are in short compass. On 18 September 1964, one Reginald Nockolds Randell died. Until his death, Mr. Randell had been the sole proprietor of a real estate agency and land development business carried on under the name of "Willmore & Randell".

4. By clause 10 of his will dated 22 January 1960 Mr. Randell directed that one half of the net profits received from carrying on the business of the firm of Willmore & Randell in the State of Victoria should be paid and divided in equal shares to the persons for the time being holding the offices in the said firm of Finance Manager, General Sales Manager, Improvement Manager and Buyer and that such provision should remain operative for a period of 20 years from his death or such shorter period during which any lands forming part of the estate having been purchased for the purpose of subdivision and resale should remain unsold.

5. At the date of the death of Mr. Randell, the office of Improvement Manager in the firm of Willmore & Randell was occupied by the fifth-named respondent, Edward James Roberts. Mr. Roberts remained in that position until he retired from the firm in 1979. Mr. Roberts was also one of the trustees of the Willmore & Randell Superannuation Plan constituted by a deed of trust dated 5 December 1974, to whom National Mutual on 10 January 1975 issued the life assurance policy with which these proceedings are concerned. In addition, Mr. Roberts was one of four employees of Willmore & Randell who were members of the Superannuation Plan and beneficiaries under the deed of trust.

6. By clause 16(b) of the Trust deed it was provided that "the Company" (defined therein as "Willmore & Randell an unincorporated body having its principal place of business at 150 Queen Street Melbourne") may at any time remove a Trustee from office and may appoint a new Trustee in place of any Trustee so removed or otherwise vacating office and shall fill any vacancy occurring in the Trustees."

7. Effectively, therefore the powers of removal of the trustees and the appointment of new trustees were in the trustees for the time being of the estate of Reginald Nockolds Randell. On 15 January 1986, the first and second-named respondents having on 13 February 1984 by order of the Supreme Court of Victoria, been appointed trustees of the estate of the late Mr. Randell, removed the current Trustees of the Superannuation Plan, including Mr. Roberts, and appointed themselves and the third-named respondent, David William Lancelot Davis, to be the new trustees. Information of the execution of that deed of removal and appointment was given by letter to National Mutual on the same day, 15 January 1986. By paragraph 3 of an affidavit sworn on 24 April 1986 by William Henry Buttler, who is employed by National Mutual as an actuary, it was deposed that:

"... on the 27th day of November, 1979 the
applicant drew a cheque in the sum of
$142,368.37 to be paid to the Fifthnamed
Respondent pursuant to the provisions of the
SuperPlan on the grounds of his late
retirement from Willmore & Randell."

By the time the application came before Sweeney J. for directions on 9 May 1986, the fifth-named respondent had not entered an appearance, and his Honour ordered that "a copy of today's Order be served upon Edward James Roberts and that he file and serve a statement of intention in relation to his attitude to the claims made in this matter and whether he intends to take any action.". Pursuant to that direction, a statement of intention dated 9 July 1986 was filed on behalf of the fifth-named respondent The statement included the following paragraphs:

"2. THE fifthnamed Respondent has no
interest in, and neither supports nor
opposes, the claims made in this matter
on behalf of:

(a) the applicant,

(b) the first, second and thirdnamed
Respondents,

(c) the fourthnamed Respondent, and

(d) the sixthnamed Respondent.

3. THE fifthnamed Respondent accordingly
does not intend to take any action in
this matter, and will abide by any order
made by this Honourable Court."

When the application came on for hearing, Mr. Wicks of counsel for the fifth-named respondent, sought, and was granted, leave to withdraw from the proceedings subject to a right to be heard on the question of costs. When he exercised that right, Mr. Wicks urged that his client's costs should be paid either out of the fund in Court or by National Mutual. Mr. Hayne Q.C. who appeared with Mr. Finkelstein for the first, second and third respondents argued that Mr. Roberts' costs should not fall on the fund, but should be paid by National Mutual. He was supported in that submission by Mr. Fajgenbaum Q.C. who appeared with Mr. Whelan for the fourth-named respondent and by Mr. Downing for the sixth-named respondent. Mr. Randall for National Mutual, on the other hand, urged that considerable controversy surrounded both the identity of the trustees of the Superannuation Plan, and the source and disposition of the fund in Court. That controversy, it was contended, justified the joinder of the fifth-named respondent as also did an interest which, it was suggested, Mr. Roberts "may have had ... in making assertions as to the appropriateness and soundness of the fund itself". Accordingly, it was submitted, Mr. Roberts' costs should be paid out of the fund in Court.

8. In my view the facility afforded to a life insurance company by s.105 of the Life Insurance Act should be availed of with some care. Claimants to the proceeds of a policy should not be burdened by unnecessary duplication of parties, or by unwarranted joinder of respondents.

9. As was pointed out in a similar statutory context by Sir Richard Collins MR in Harrison v. Alliance Assurance Company (1903) 1 KB 184 at 188:-

"It must be borne in mind that the defendants,
in seeking the protection of the Act, do so
at the risk of having to pay any costs to
which the plaintiff may, in consequence, be
put, if their own attitude has been in any
way unreasonable. If the plaintiff's title
to the policy money be as clear as his
counsel alleges it to be, then no doubt such
order will hereafter be made against the
defendants with regard to the plaintiff's
costs as justice to him may require. So the
result would in that case be that the
defendants would obtain the protection they
want, but no injustice would be done to the
plaintiff."

10. On the facts known to National Mutual when it issued the application, Mr. Roberts had been lawfully removed as trustee of the Superannuation Plan, and, as long ago as 27 November 1979, he had been paid out the full amount to which National Mutual considered he was entitled as a beneficiary of the fund. Prima facie, therefore, he had no interest in the disposition of the fund to warrant his joinder as a respondent. It might have been prudent for National Mutual to have written to Mr. Roberts before issuing the application, advising him of its intention to do so, and requesting an intimation as to whether he had any interest in the outcome which he wished to maintain by being joined as a respondent. That course was not taken, and in all the circumstances, I consider that National Mutual should pay Mr. Roberts' costs.

11. At first, I was disposed to think that any liability of National Mutual for Mr. Roberts' costs should be limited to those incurred up to the filing of the statement of intention contemplated by the order of Sweeney J. on 9 May 1986. However, I consider, on reflection, that Mr. Roberts, having been joined as a respondent, was entitled to maintain his representation in the proceedings to ensure that he did not have to meet his costs out of his own pocket. His participation up to the final hearing of this matter was no more than was necessary to pursue that entitlement since no proposal was made by any other party assuring Mr. Roberts of an indemnity against his own costs.

12. Accordingly, the costs of the fifth-named respondent should be taxed and when taxed paid by National Mutual. An order should be drawn up incorporating the minutes of the consent orders on which the parties had agreed, and this order as to costs.