David Resler Walton by his tutor John Mann v Terence Hartman as executor of the estate of Wanda Resler

These proceedings first came before me in October 2016, when Mr Daniel Resler Walton sought to commence proceedings against the executors (Mr Terence Hartmann and Elizabeth Svenne) of the estate of his late grandmother, Wanda Resler.

By Notice of Motion filed 26 June 2017, Mr Hartman sought that the proceedings be dismissed on the basis that Mr Walton lacked legal capacity to commence the proceedings.

During the proceedings and in defending the motion, Mr Russo, acted as Mr Walton’s solicitor. He had been a long-time friend of Mr Walton and gave evidence in the proceedings to the effect that he believed that Mr Walton was capable, at least some of the time, of giving adequate instructions. I found that Mr Walton was not incapacitated at October 2016, but that the appointment of a tutor was appropriate going forward. I refer to my decision in Daniel Walton v Terence George Hartmann as executor of the Estate of Wanda Resler [2017] NSWSC 1432.

Mr Mann was subsequently appointed as tutor for Mr Walton in early 2018. At a directions hearing on 9 February 2018, I made the following comment in relation to Mr Russo (T2/44-48):

It appears that between the appointment of the tutor in February 2018 and the present, Mr Russo has continued to take instructions from Mr Walton and liaise with solicitors for the executors about the administration of the estate.

By notice of motion filed 31 May 2019, Mr Salvatore Russo sought leave to make application to remove Mr Mann as tutor. Mr Russo lacks standing to bring such application and thus there are two issues which I had to determine:

The motion was set for hearing on 1 November 2019. Counsel appeared for Mr Russo as well as for Mr Mann as tutor and for the executors.

During the hearing, Mr Russo was first called to be cross-examined. He gave evidence that he was unhappy with the performance of Mr Walton’s tutor and had been himself representing Mr Walton in various matters since the appointment of Mr Mann, including charging Mr Walton legal feels (T33/4-34/9). The following exchange then occurred (T42/46-43/6):

I further had the following exchange with Mr Russo (T49/32-39):

Later, Mr Russo stated that he had formed the understanding based on a comment I made on the 9 February 2018, that he was entitled to keep working for Mr Walton. In particular he stated the following (T45/34-38):

And later on this point (T56/8-16):

Shortly after this final comment, Counsel for Mr Russo requested an adjournment to seek further instructions. The Court was then informed that the motion was no longer pressed (T57/20).

The matter then returned before me to determine the final form of orders that should be made. Mr Russo submitted that he should be given leave to discontinue the motion and that the executors and Mr Russo pay their own costs and the costs of the tutor be paid from the estate. Counsel for Mr Russo submitted that, Mr Russo had been acting genuinely on complaints about the tutor made to him by Mr Walton and was appearing before the court as an amicus curiae. There was no one else who had brought Mr Walton’s complaints to the attention of the Court. Counsel notes that during the course of hearing on 1 November 2019, it became clear that Mr Russo’s application was unlikely to succeed, he chose to withdraw the application rather than require the parties to participate in a further day’s hearing. Taking into account all these factors, there should therefore be no costs made against him.

Counsel for the executors and the plaintiff both sought that Mr Russo’s motion be dismissed and further that Mr Russo pay their costs on an indemnity basis. They note that Mr Russo’s application was misconceived and undermined the administration of justice of the Court. The solicitor for the tutor noted that Mr Russo was primarily concerned with advancing his own interests in particular recovering his professional costs to which he considered himself entitled. The executors further sought orders restraining Mr Russo from acting for Mr Walton in the future.

After short oral submissions on 26 November 2019, I reserved judgement. I now publish my reasons.

The role of tutors is well established and common practice in this Court. A tutor is an officer of the Court who, during proceedings, acts for the interests of the person under the legal incapacity and is responsible for the conduct of the proceedings (Rhodes v Smithenbank (1889) 22 QBD 577).

Relevantly, the Uniform Civil Procedure Rules 2005 (NSW) provide:

It is clear by r 7.18(4) that the rules clearly contemplated a motion by a person for the removal of a tutor. As became apparent, the rules do not comprehensively provide for, who may bring an application to the Court for removal as a tutor, and the precise status of that person.

I was referred by Counsel for Mr Russo to the decision of Smith v NRMA Insurance Limited [2016] NSWCA 250, as an example of a case where an application for appointment of a tutor was made by solicitors on record for the applicant who was under a legal incapacity appearing as amicus curiae.

There are in fact various ways a person can participate in proceedings without becoming a party.

As is becoming more common, persons or often organisations, can appear as either intervener or amicus curiae. It is now fairly well established that when a person is accepted as an intervener, in general, they become a party to the proceedings with all the associated privileges. That is, they may be entitled to tender evidence, cross-examine and participate in all aspects of the argument. They further may be entitled to appeal a decision (Corporate Affairs Commission v Bradley (1974) 1 NSWLR 391 at 396-397). Their precise role and level of participation is always a matter for the discretion of the Court.

An amicus curiae on the other hand, as ‘friend of the court’ is not a party to the proceedings and generally has no rights or interest in the litigation, but acts as an advisor to the Court to call attention to particular matters of law or practice (Corporate Affairs Commission v Bradley at 399).

Brennan J in Levy v State of Victoria (1997) 189 CLR 579, considered the role of amicus curiae (at 604-605):

In United States Tobacco Co v Minister for Consumer Affairs (1988) 83 ALR 79, Davies, Wilcox and Gummow JJ noted certain circumstances where parties may be heard as an amicus curiae (at 94):

I also note that a person can appear as a McKenzie Friend (McKenzie v McKenzie [1970] 3 All ER 1034). The Court can allow an individual to assist a litigant in person by taking notes, suggesting potential questions and providing moral support if the Court is of the opinion that it is in the interests of justice to do so. The Court has further considered the danger in allowing ‘paid’ McKenzie friends to appear (Damjanovic v Maley (2002) 55 NSWLR 149).

It is important to determine the precise status and role a new party has as it may have implications for any costs order. For example, amicus curiae are often left to bear their own costs (see e.g Attorney-General (WA) v Marquet (2003) 217 CLR 545 at [86]; Franks v Franks [2012] NSWCA 209, [24]-[27]; Campbelltown City Council v Vegan (2006) 67 NSWLR 372, [64]). However as noted by Kirby P in Breen v Williams (1994) 35 NSWLR 522, the Court maintains the power to ‘impose conditions or burdens of costs if the appearance were abused or unnecessarily protracted’ (at 533) (see also WHW v Commissioner of Police [2014] WASC 153 (S)). It is also important to note the Court’s general discretion as to costs under s 98 of the Civil Procedure Act 2005 (NSW) subject to any other rules of Court or any other Act.

The rules of Court further govern the costs that follow when proceedings are either discontinued or dismissed. The UCPR provides:

The Court in Fordyce v Fordham (2006) 67 NSWLR 497 noted (at [84]):

The Court in Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622 (at 624-625):

In Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, Hill J noted (at 199); “No more can, or should, I think be said than that ultimately costs in interlocutory proceedings, like costs in the main proceedings, lie in the discretion of the Court, which discretion must be exercised judicially.”

It is worth first noting that the motion as pressed by Mr Russo had two main questions to be determined. The first being whether in fact Mr Russo had standing to bring such an application and second whether, on the merits of the case, Mr Mann should be replaced as tutor. These matters ultimately were not fully canvassed or explored. Only part of the evidence was completed, in particular only Mr Russo was cross-examined and there remained significant factual disputes as to the particular actions of Mr Mann and the executors as well as to the credit of various parties namely Mr Russo himself.

It is inappropriate for me to form a final view on these matters, however it is worth stating that I am of the view that any person who can provide relevant information to the Court, must be entitled to raise the issue, if they become aware that an officer of the Court, in this case a tutor, is acting inappropriately or not fulfilling their duties in some way. The Court, can of course, on its own motion seek the removal of a tutor, however that is only if it comes to its attention that something untoward may be happening. Practically speaking, this will not often be the case as clearly the Court does not have the ability or capacity to monitor all such appointed tutors. Therefore, it seems to me, entirely reasonable that someone such as a friend or family member or solicitor, is able to approach the Court if they have a genuine concern about the conduct of the tutor.

The exact status of such a person however is slightly unclear. As Mr Russo argued, he could be seen as an amicus curiae, or perhaps an intervener. I do not think however this is the case. It is clear to me, that Mr Russo is best described as the applicant on the motion. He is clearly a full party on this current motion with all the rights and responsibilities that attach to the full-party status. He is clearly not a party to the main proceedings. Mr Russo, is not helping or assisting in the substantive proceedings, he is not assisting with the determination of the ultimate probate or family provision proceedings. Rather he has, on his own volition, decided to bring this motion for the removal of the tutor and is in fact a party to the motion or perhaps more accurately the issues on the motion by bringing the application.

I note the fact that on the original motion, Mr Russo did not in fact seek leave to appear as amicus curiae. I also note that although Counsel for Mr Russo on 1 November asked that the application be treated as an ‘application by a friend of the Court’ (T2/31) however ultimately the issue of whether Mr Russo did in fact have standing was not finally determined. It seems totally incongruous to describe Mr Russo as an amicus curiae when he has not been a bystander but rather pushing the motion forward, seeking to tender evidence, and playing an active and important role in the proceedings. He has not simply assisted the court, but at one point rather perused his own interests and sought to recover his own costs.

His ultimate status is of course important to the final costs orders that follow. I regard it appropriate to treat him as an applicant on the motion, which given the rules and the prima facie object of the motion he had in my view the standing to bring.

The rules of Court provide that if parties settle a matter, certain consequences flow. The exact form of the settlement, whether it involves a discontinuance, a dismissal or some other order, will change the costs outcomes for the parties. Parties are always entitled to cease litigating without an explanation, however in some cases, accepting a particular settlement may amount to an acknowledgement of the weaknesses in one’s argument. That is not to say that capitulation should necessarily be treated that way. Capitulation can indeed, depending upon the evidence, be appropriate and the only reasonable response to the running of a trial and a recognition of the dynamic nature of litigation.

As already noted, the evidence was not fully explored before me. However, on one view, it could be said, that Mr Russo had lost the ability objectively to challenge the assertions of Mr Walton. He certainly did not provide any evidence of medical experts as the capacity of Mr Walton, rather he seemed to have unilaterally decided that he was able to receive instructions from Mr Walton. This, at best, may be a gross error in judgement. Mr Russo appeared unable to accept my decision that Mr Walton was not capable of giving instructions and proceeded to charge him significant legal fees that he expected to be paid from the estate. Leaving to one side whether in fact Mr Russo was acting genuinely in what he believed to be Mr Walton’s interests, it is clear to me that monitoring and reporting to Mr Walton on Mr Mann’s costs, is far removed from operating under this so call ‘shadow-brief’ and incurring significant costs against someone incapable of providing adequate instructions.

I note that the Court would not wish to discourage the attempt by persons to bring to the Court’s attention matters of genuine concern regarding tutors, however, as put forward by the plaintiff and defendants, this application seems to me misconceived. Counsel for Mr Russo, noted in submissions that he had made a forensic choice to withdraw the motion. It is apparent prima facie that there was a dearth of evidence to support any wrongdoing on the part of the tutor.

That said, clearly someone like Mr Russo in the appropriate circumstances, has in my view standing to bring to the Court’s attention genuine matters of concern about the conduct of the tutor, who is after all an officer of the Court. A person who, however, makes such an application needs honestly and genuinely to form a view or belief that there is some inappropriate conduct on the part of the tutor before such an application can be brought. It would be a serious matter here to suggest Mr Russo did not hold such a belief. He is also an officer of the Court. There is insufficient evidence and the matter did not proceed sufficiently for me to form a view about that matter one way or the other.

Although it was put that his sole motivation in bringing the motion was recoupment of his costs (which he denied) it was not put that he did not hold a genuine belief that Mr Walton had legitimate grievances about Mr Mann.

I am prepared purely on this costs argument to give Mr Russo the benefit of the doubt (Briginshaw v Briginshaw (1938) 60 CLR 336, s 140 Evidence Act 1995 (NSW)). That is principally why I do not consider an order against him or his firm for indemnity costs is, in the circumstances, the appropriate order. Nonetheless he is seeking to discontinue (which I consider to be the appropriate application) and therefore, I am of the view that he or his firm should pay the costs of the other parties on an ordinary basis. I would also order should there be in any shortfall between their costs and what they recoup from Mr Russo on an ordinary basis, they should be indemnified for any shortfall out of the estate.

I would invite the parties to bring in short minutes to reflect these reasons.