Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (No 3)

1. [1]

   WARD JA: I agree with Payne JA.

2. [2]

   GLEESON JA: I agree with Payne JA.

3. [3]

   PAYNE JA: This is an application for costs and indemnification for those costs arising from proceedings involving a charitable trust. On 7 March 2017, this Court dismissed the appeal in this matter: [2017] NSWCA 28. In what follows, familiarity with this Court’s principal decision is assumed.

Brief Facts

1. [4]

   The subject matter of these proceedings is a charitable trust which holds a monastery property at Wallaroo in NSW. The first appellant is the former registered proprietor of the trust property (“the Property Trust Company”), which was removed as registered proprietor of the trust property by a vesting order made by the primary judge in these proceedings. The second to fifth appellants are directors of the Property Trust Company (“the individual appellants”). The appellants are all associated with the Free Serbian Orthodox Church for Australia and New Zealand (“the Free ANZ Diocese”), a religious organisation that formed in 1964 after a split with the Serbian Orthodox Church.

2. [5]

   The Metropolitanate of Australia and New Zealand of the Serbian Orthodox Church (“the SOC-ANZ Metropolitanate”) was formed in 2010 when the majority of members of the Free ANZ Diocese reconciled with the Serbian Orthodox Church. In 2011, the Bishop of the SOC-ANZ Metropolitanate commenced proceedings in the Supreme Court regarding the control and operation of the monastery property under s 9 of the Charitable Trusts Act 1993 (NSW). He is the first respondent on the appeal. The second respondent is the company incorporated for the purpose of holding property in Australia for the SOC-ANZ Metropolitanate.

3. [6]

   The primary judge found that under s 9 of the Charitable Trusts Act the original purposes of the trust had ceased to provide a suitable and effective method of using the trust property having regard to the spirit of the trust. The primary judge also adopted, with some modifications, a scheme under the Charitable Trusts Act jointly proposed by the first respondent and the Attorney General who appeared before the primary judge and on the appeal as protector of charitable trusts.

4. [7]

   The appeal was concerned with whether the primary judge had properly applied s 9 of the Charitable Trusts Act. At the hearing, the appellants sought leave to file an amended notice of appeal. For the reasons outlined in the appeal judgment, that application was refused, on the basis that it would give rise to unfairness to the respondents: [2017] NSWCA 28 at [1], [14] and [155] –[172]. The Court found that the primary judge addressed each of the relevant issues that the parties presented to him, which were quite different to the issues sought to be agitated on appeal, and that the appellants had not demonstrated any error in his Honour’s reasons.

5. [8]

   In dismissing the appeal the Court ordered the parties to file submissions regarding the appropriate orders as to costs as follows:

6. [9]

   The following submissions were filed:

   1. (1)

      On 20 March 2017 the Attorney General filed submissions. The first and second respondents filed their submissions on 21 March 2017.

   2. (2)

      On 27 March 2017 the appellants filed their submissions in response.

   3. (3)

      On 3 April 2017 the first and second respondents filed their submissions in reply. The Attorney General filed reply submissions on 4 April 2017.

Issues for determination

1. [10]

   The Attorney General does not seek costs. The Property Trust Company accepted that it should be ordered to pay the first and second respondents costs on an ordinary basis. The issues for determination are therefore:

   1. (1)

      Should the Property Trust Company be indemnified from the trust property for its own costs or any costs it is ordered to pay?

   2. (2)

      Should the individual appellants pay the first and second respondents’ costs of the appeal?

   3. (3)

      On what basis should any costs order be made? Are indemnity costs appropriate?

Issue 1 ‑ Indemnification out of trust assets

1. [11]

   The appellants submitted that a trustee may be entitled to an indemnity from the trust estate under the general law or pursuant to s 59(4) of the Trustee Act 1925 (NSW). The appellants submitted that r 42.25 of the Uniform Civil Procedure Rules 2005 (NSW) is inapplicable in this case because there is no “fund” held by the trustee.

2. [12]

   It was submitted that under both the general law and s 59(4) the Court has a discretion, even where a trustee fails in litigation, to allow a trustee to recoup its costs from the trust assets, excluding costs arising from conduct demonstrating want of prudence or diligence (see Warton v Yeo [2015] NSWCA 115 at [5]-[6]).

3. [13]

   It was submitted that it is normally the case that a trustee who commences or defends an action in that capacity is entitled to be indemnified out of the estate for the costs incurred in doing so, even if the litigation is unsuccessful, if the trustee’s conduct is found to have been mistaken, and the other party in the litigation is held to be entitled to an order for costs.

4. [14]

   It was accepted that this exception to the usual rule that costs follow the event is itself subject to some exceptions. These include impropriety, such as when a trustee takes or defends proceedings in breach of trust, or conducting the proceedings in such a way that the Court, on a general view of the case, regards the trustee’s conduct as “not honestly brought forward” or “where the claim is of monstrous character, that is, one which no reasonable man could say ought to have been forwarded” and where costs are incurred by a trustee in furtherance of a personal interest: Drummond v Drummond [1999] NSWSC 923 at [43]-[47] per Austin J.

5. [15]

   The appellants accepted that if a trustee, after taking the advice of the court at first instance, appeals against the court’s determination, the trustee is ordinarily regarded as being in much the same position as any other appellant and so, if unsuccessful in the appeal, will be ordered to pay costs personally. The rule is subject to exceptions or, perhaps more accurately, is to be applied according to all the circumstances of the case.

6. [16]

   It was submitted that, in the context of this appeal, the Court should be reluctant to deprive an unsuccessful trustee of an order that the trustee’s costs be paid out of the trust fund, where the appeal is pursued in the performance of its duties as trustee. There is a sound policy reason as to why a trustee should be encouraged to use the resources of the court. Trustees act in a fiduciary role and have fiduciary responsibilities. They are looking to the interests of the relevant stakeholders to whom those responsibilities are owed in bringing the appeal. They should not be discouraged from pursuing litigation, where properly advised, by reason of a fear that the usual order might apply.

7. [17]

   The appellants submitted that this Court should find that the Property Trust Company is entitled to an order that its costs of the appeal (other than the costs of theapplication for leave to amend the Notice of Appeal and the costs payable to the first and second respondents) be reimbursed out of the trust property for the following reasons:

   1. (1)

      the Property Trust Company was acting in its capacity as trustee, as the order for its removal as trustee had been stayed, and was seeking to uphold the purposes of the charitable trust upon which it held the monastery property in bringing the appeal;

   2. (2)

      there was sufficient uncertainty as to whether s 9 of the Charitable Trusts Act might be applied to vary the purposes of a charitable trust held for the purposes of one religious institution (the Free ANZ Diocese) to the purposes of another religious institution (the SOC-ANZ Metropolitanate) where the first religious institution has continued in existence. There had been no appellate consideration of s 9 and no previous application of s 9 to vary the purposes of a charitable trust for the advancement of religion where the religious institution for which the trust property is held has continued to exist;

   3. (3)

      there were arguable grounds of appeal which, in the interests of the Free ANZ Diocese, the Property Trust Company had a fiduciary responsibility to pursue; and

   4. (4)

      the conduct of the individual appellants in having acted in breach of trust was academic in relation to the application of s 9.

8. [18]

   The appellants submitted that to the extent that the first and second respondents’ objection to the Property Trust Company exercising its right of indemnity arises out of the appellants’ conduct in seeking to amend the notice of appeal, the Property Trust Company does not seek any indemnity out of the trust property for these costs.

9. [19]

   The first and second respondents did not seek indemnity for their costs from the trust property, save in the circumstance that an order was made allowing the Property Trust Company to have its costs reimbursed from the trust property, in which case they sought to be indemnified to the extent that the respondents’ costs were not paid by the appellants.

10. [20]

    It was submitted that while the order removing the Property Trustee Company as trustee was stayed pending determination of the appeal, this does not demonstrate that the appeal was brought by it in its capacity as trustee.

11. [21]

    The first and second respondents pointed out that the Property Trust Company did not seek an order for indemnification in the notice of appeal. It was submitted that it was significant that if the Property Trust Company brought the appeal in its capacity as trustee it did not seek judicial advice concerning the conduct of the appeal. The failure of the Property Trust Company to seek judicial advice meant that the trust property ought not bear the costs of an unsuccessful party on appeal. The first and second respondents also relied on the fact that the Property Trust Company did not act properly or reasonably in the conduct of the appeal.

12. [22]

    It was submitted that the trust property in the present case comprised land and church buildings. Charging the monastery with the costs of the litigation, and the consequent risk of sale to meet costs, should be avoided. In the judicial advice proceeding, the Property Trust Company had sought (but did not obtain) a direction that it be permitted to encumber the monastery to raise funds for its defence (Re Free Serbian Orthodox Church – Diocese for Australia and New Zealand Property Trust [2012] NSWSC 649 at [20]).

13. [23]

    It was submitted that the conduct of the appeal by the Property Trust Company was wholly unsatisfactory and that, properly advised, the appeal should not have been pursued.

14. [24]

    The Attorney General sought the following orders:

15. [25]

    The Attorney General submitted that the ordinary rule is that a trustee is entitled to indemnification from the trust fund in respect of costs of proceedings brought or defended by it as trustee. This rule applies equally in the context of charitable trusts. The rule now finds expression in r 42.25 of the UCPR. Previously, this rule was stated in substantially the same form in Part 52A r 42 of the Supreme Court Rules 1970 (NSW).

16. [26]

    It was submitted that the specific provision in r 42.25 of the UCPR is to be applied in preference to the general provision creating an implied indemnity in favour of a trustee set out in s 59(4) of the Trustee Act 1925 (NSW). That general provision does not refer specifically to costs in legal proceedings whereas r 42.45 does. In any case, r 1.5 of the UCPR has the effect that r 42.25 must apply to these proceedings. Unless a specific order is made by the Court under r 42.25(2) then it would follow from r 42.25(1) that the Property Trust Company was entitled to have recourse against the trust assets for its costs, although the rule does not, at least not expressly, extend to an indemnity for the costs of other parties which a trustee may be ordered to pay.

17. [27]

    It was submitted that it was well established that a trustee may be deprived of his or her right of indemnity where he or she has acted on a basis that no other reasonable person would have. It was submitted that the conduct of the Property Trust Company on this appeal met that description.

18. [28]

    There are a number of potentially overlapping sources of power which need to be considered in addressing the application by the Property Trust Company to be indemnified from the trust property:

    1. (1)

       first, the general law principle that a trustee is entitled to an indemnity (or, where costs have been paid, reimbursement) from the estate for expenses incurred in the execution of the will and in the administration of any trusts;

    2. (2)

       secondly, the embodiment of that general law principle in the Trustee Act 1925 (NSW), s 59(4) which provides:

    3. (3)

       thirdly, the Trustee Act further provides specifically with respect to litigation costs:

    4. (4)

       fourthly, UCPR r 42.25 provides:

19. [29]

    In relation to the general law principle and s 59(4), as was noted by Starke J in National Trustees Executors and Agency Company of Australasia Ltd v Barnes (1941) 64 CLR 268 at 274 in relation to the equivalent Victorian provision:

20. [30]

    As further explained in the course of that judgment, the concept of “proper expenditure” excludes conduct demonstrating want of prudence or diligence.

21. [31]

    In the same case, Williams J said that where the trustee succeeds in litigation, there is a clear entitlement to the indemnity whereas, where the trustee fails, “he may be allowed his costs out of the estate”, implying a discretion in the latter situation. Williams J also noted that “the indemnity must be given effect to in such a way as to make the burden fall upon the beneficiaries equitably having regard to the circumstances under which the costs, charges and expenses were incurred.”

22. [32]

    Section 59(4) of the Trustee Act has statutory counterparts throughout Australia. In Rouse & Ors v IOOF Australia (No. 3) [1999] SASC 208 at [38] Lander J said of the exercise of discretion to award costs under s 35(2) of the Trustee Act (SA):

23. [33]

    These remarks are equally apposite to the approach which should be applied in the present case under s 59(4) of the Trustee Act.

24. [34]

    It is to be noted that at general law if a trustee, after taking the advice of the court at first instance, appeals the court’s determination the trustee is ordinarily regarded as being in much the same position as any other appellant and, if unsuccessful in the appeal, will be ordered to pay costs personally: Australian Incentive Plan Pty Ltd v Attorney-General for Victoria (No 2) [2012] VSCA 251, per Nettle JA at [9]-[10]. It is appropriate to consider, as Neave JA did in State Trustees Ltd v Bedford (No 2) [2012] VSCA 319 at [25], in the context of a family provision claim, but equally applicable in the trust context, that:

25. [35]

    No party relied upon the power in s 93 of the Trustee Act in the present case.

26. [36]

    So far as UCPR r 42.25 is concerned, it applies in this case (UCPR r 1.5) and clearly operates by way of an exception to UCPR r 42.1, pursuant to which costs follow the event, but which is subject to other provisions in Pt 42. Further, r 42.25 appears to extend the general law entitlement to apply even where the trustee has been unsuccessful, so long as the trustee has not “acted unreasonably”.

27. [37]

    Although unnecessary to decide here, there may be a question about the interaction of UCPR r 42.25 and s 93(2) of the Trustee Act. As Basten JA explained in Warton v Yeo [2015] NSWCA 115:

28. [38]

    Basten JA held in Warton v Yeo at [13] that because s 93(2) was not engaged in that case, the difficulty perceived in Macedonian Orthodox Church did not arise. There was no inconsistency between s 93(3), which empowers the Court to order costs be paid out of such part of the property as is the real subject matter of the proceedings, and the general power to order costs. The same conclusion is appropriate here.

29. [39]

    The construction of r 42.25 of the UCPR proposed by the appellants should be rejected. The word “fund” in r 42.25 should be read as referring generally to the property or assets of the trust, rather than to an identifiable cash asset. Rule 42.25 is not limited to trusts having cash assets. As Hamilton J said in Metropolitan Petar v Mitreski [2006] NSWSC 336 at [30], the predecessor rule to r 42.25 (Part 52A r 42 of the Supreme Court Rules 1970) was in relevantly identical language, but “fund” was separately defined to include any property held on trust for any purpose. When the rule was replaced by r 42.25 of the UCPR a definition of “fund” was not included. Hamilton J considered r 42.25 should nonetheless be understood in the same way as the predecessor rule. His Honour was correct to do so.

30. [40]

    In Warton v Yeo, Ward JA (who agreed with the orders proposed by Basten JA in that case), emphasised that “unreasonableness” of the conduct of the trustee was the critical question to be decided. Her Honour said:

31. [41]

    A cautious approach is required to avoid the risk of trustees bringing unmeritorious appeals in circumstances where, as here, the trustee has chosen not to obtain judicial advice before appealing. In Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Dicoesean Bishop in Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 it was held:

32. [42]

    I accept as correct the statement of Brereton J in Bovaird v Frost [2009] NSWSC 917 at [32] that Macedonian Orthodox Community Church does not mean that a failure by a trustee to obtain judicial advice reverses the prima facie position established by UCPR, r 42.25. In my view, however, the absence of an application for such advice is a matter highly relevant to the question of whether the trustee has “acted unreasonably”.

33. [43]

    Whether the question of indemnification is approached at general law, under s 59(4) of the Trustee Act or under UCPR r 42.25, the result is the same in this case. The Property Trust Company in the present case acted unreasonably within the meaning of UCPR r 42.25 and for the purposes of exercising the discretion at general law or under s 59(4) for the following reasons:

    1. (1)

       The appeal was wholly unsuccessful and was rejected by the Court unanimously. The Property Trust Company, acting reasonably, must have had serious doubts about the merits of the appeal. The principal attack on the findings of the primary judge, framed on the appeal as an assault on the elements of the spirit of the trust, departed in fundamental ways from the case conducted by the Property Trust Company below (see Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic [2017] NSWCA 28 at [3], [14], [163] – [167], [169]). In light of these matters, the failure of the Property Trust Company to seek judicial advice before embarking on the appeal was unreasonable. Had it done so, the very real problems with the way it proposed to conduct the case would no doubt have become apparent. For completeness, it is to be noted that no attempt was made by the Property Trust Company to seek leave to lead any evidence on this application to show that it was acting on legal advice in the appeal;

    2. (2)

       Despite clear notice for some months of fundamental defects in the notice of appeal, the appellants did not apply to amend the grounds until the first day of the hearing and then provided no explanation for the delay in bringing that application. The proposed amended notice of appeal was a complete replacement of the notice of appeal. The application was dismissed. The appellants essentially made no meaningful submissions in support of the proposed amendments. The provisions in Pt 6, Div 1 of the Civil Procedure Act identified as “guiding principles” with respect to civil proceedings generally are relevant here. Section 56(1) provides that the “overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.” The court is to give effect to that purpose when exercising any power under the Civil Procedure Act and the UCPR, including r 42.25. The failures of the Property Trust Company in relation to the notice of appeal were fundamental, in that they masked the real issues for determination. As noted above, on analysis, those issues were different, sometimes dramatically so, from the issues advanced before the primary judge.

    3. (3)

       The appellants’ written and oral submissions bore little correspondence to the grounds of appeal. The written submissions did not address in any coherent way the issues raised in that notice of appeal. The appellants’ procedural failures made the resolution of this appeal much more difficult than it should have been. While not raised in the notice of appeal, one of the appellants’ core challenges on appeal was to the primary judge’s findings regarding the purpose of this trust.

    4. (4)

       The appellants abandoned grounds 8 to 13 of the appeal, which related to the individual appellants;

    5. (5)

       The appellants, in effect, sought to agitate a new case on appeal that had not been pleaded or put in the Court below;

    6. (6)

       The appeal raised no principle of law but instead challenged numerous evaluative judgments of the primary judge without regard to the well-established principles in House v The King (1936) 55 CLR 499 and Norbis v Norbis (1986) 161 CLR 513, and without following the proper procedure in this Court when findings of fact are challenged on appeal.

34. [44]

    It follows that the Property Trust Company is not entitled to indemnification from the trust property in respect of its costs of appeal proceedings brought by it as trustee or in respect of any costs it is ordered to pay the respondents to the appeal. Nor, and for more abundant caution in that no application of this kind was foreshadowed, to the extent that the question may arise, are any of the individual appellants entitled to call on the Property Trust Company to take steps to seek an indemnity from the trust in respect of costs the individual appellants may have incurred or may be ordered to pay.

35. [45]

    Finally, I note that the first and second respondents accepted (assuming that an order for indemnification was not made in favour of the appellants) that they should not be entitled to be indemnified for any unrecoverable costs from the assets of the trust. It should thus be clear, in light of these conclusions, that no party is entitled to be indemnified for costs incurred or ordered to be paid in the appeal from the assets of the trust.

Issues 2 and 3 - Costs of the first and second respondents

1. [46]

   As earlier noted, the appellants accepted that the Property Trust Company should pay the costs of the first and second respondents.

2. [47]

   It was submitted that the individual appellants should not be ordered to pay the costs of the first and second respondents for the following reasons:

   1. (1)

      the only ground of appeal which affected the individual appellants, namely to challenge the finding that they acted in breach of trust, was abandoned at an early stage - on 12 April 2016, when written submissions in chief were filed on their behalf, and again in correspondence on 21 July 2016, approximately 6 weeks before the dates fixed for hearing the appeal, when a proposed amended notice of appeal was sent to the respondents; and

   2. (2)

      the remaining grounds of appeal were pursued by the Property Trust Company in its capacity as trustee of the monastery property.

3. [48]

   The first and second respondents submitted that there is no reason why costs should not follow the event in this case. It was submitted that the individual appellants did not seek to withdraw from the appeal after certain grounds of appeal were abandoned. Therefore, as the appeal was brought and prosecuted by the Property Trust Company and the individual appellants, the individual appellants should also be liable for costs.

4. [49]

   The Attorney General did not seek costs and made no submission about whether the individual appellants should be liable for costs.

5. [50]

   As to the Property Trust Company, the appellants accepted that it should pay the costs of the first and second respondents. Such an order should be made.

6. [51]

   As to the individual appellants, whilst it is true that the specific grounds of appeal relating to the individual appellants were said, in a footnote to the appellants’ written submissions filed on 12 April 2016 not to be pressed, no steps were ultimately taken on behalf of the individual appellants to be removed as parties to the appeal.

7. [52]

   Further, while the evidence is clear that the principal actors in the underlying events recounted in the judgment were the individual appellants, they were no longer necessary parties once the grounds of appeal addressed to the individual appellants’ breaches of trust were not pressed.

8. [53]

   In the ordinary course, costs of the unsuccessful appeal would follow the event. It should be accepted, however, that the individual appellants played no active role in the proceedings after 12 April 2016 when, at least in a footnote in their written submissions, the appellants indicated that the grounds of appeal specifically relating to the individual appellants would not be pressed.

9. [54]

   In the circumstances the proper order is that that the individual appellants pay the first and second respondents’ costs of the appeal up to and including 12 April 2016.

Issue 4 - Costs on an indemnity basis

1. [55]

   The first and second respondents submitted that in this case the notice of appeal did not identify any House v The King type error, the appellants abandoned grounds of appeal, proceeded in wilful disregard of unchallenged findings of fact fundamentally inconsistent with the case on appeal, tried to present a case not run below, failed to comply with basic procedural requirements, presented submissions not referenced to the grounds of appeal in any meaningful way, made complaints outside of the grounds of appeal, and no single ground (or sub-ground) was found to be reasonably arguable.

2. [56]

   It was submitted that the appellants proceeded in wilful disregard of the facts that stood in the way of the appeal. Further, the first and second respondents submitted that the appeal ought not to have been pursued and this Court should mark its disapproval of the procedural conduct of the appeal.

3. [57]

   In the alternative, the first and second respondents submitted that at least the costs of the applications for leave to amend the notice of appeal and for a stay of orders ought to be paid on an indemnity basis. The application to amend involved an egregious delay and the application for a stay was made without material and without instructions that an application for special leave would be made.

4. [58]

   The appellants submitted that the costs of the first and second respondents should not be awarded on an indemnity basis for the following reasons:

   1. (1)

      while rejecting the appellants’ remaining grounds of appeal, the Court made no specific finding that any of these grounds were not reasonably arguable and had no prospects of success;

   2. (2)

      there was no basis for an inference that the appellants in instituting and maintaining the appeal had no legitimate object in mind;

   3. (3)

      there was no misconduct in seeking a stay to consider whether an application to seek leave to appeal should be made;

   4. (4)

      The application for leave to amend the Notice of Appeal did not result in the undue prolongation of the appeal.

5. [59]

   The Attorney General did not make any submissions about whether the appellants should pay costs on an indemnity basis.

6. [60]

   The principles applicable to an award of indemnity costs, now under the Civil Procedure Act s 98, are well known. In Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, Sheppard J said at 230-234:

7. [61]

   Whilst there is force in the first and second respondents’ submissions seeking indemnity costs for the entire appeal proceedings, the discretion is exercised on different grounds to that arising when considering the rights of a trustee to indemnification from a trust. The appellants are correct to submit that the Court did not make a specific finding that any of the grounds of appeal had no prospects of success. It is also correct to conclude that, however misguided the directors of the Property Trust Company may have been, there is no basis to conclude that the appellants were acting for an ulterior purpose. It is not appropriate to characterise the application for a stay which was made (Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Bishop Irinej Dobrijevic (No 2) [2017] NSWCA 42) as being one which should not have been made.

8. [62]

   On the particular facts and circumstances of this case, an order for payment of costs of the whole appeal, other than on a party and party basis, is not warranted.

9. [63]

   The late application for leave to amend the notice of appeal, however, falls into a different category. This had important consequences not only for the hearing of the appeal but also for the use which could be made of the parties written submissions. As noted above, the appellants’ written and submissions bore little or no correspondence to the grounds of appeal. The written submissions did not address in any coherent way the issues raised in that notice of appeal. The appellants’ procedural failures made the resolution of this appeal much more difficult than it should have been. While not raised in the notice of appeal, one of the appellants’ core challenges on appeal was to the primary judge’s findings regarding the purpose of this trust.

10. [64]

    The lack of correspondence between the appellant’s written submissions and the grounds of appeal was specifically drawn to the attention of the appellants by the Attorney General. The principal judgment described the evidence thus:

11. [65]

    The respondents were thus put to the trouble and expense of seeking to address written submissions made which bore no relationship to the notice of appeal and which, on analysis, addressed a case different to that advanced before the primary judge in important respects. This is conduct which should be deprecated.

12. [66]

    To mark the disapproval of the Court it is appropriate that the Property Trust Company be ordered to pay the costs of the preparation of the written submissions on all issues, together with the costs of the application to amend the notice of appeal (including the steps taken in relation to the aborted amendment proposal referred to above) on an indemnity basis.

Conclusion and orders

1. [67]

   I propose the following orders:

   1. (1)

      The Court orders under r 45.25(2) of the UCPR and s 59(4) of the Trustee Act that the Property Trust Company is not entitled to have any of its costs of the appeal paid from the trust property. The Property Trust Company is not entitled to indemnification from the trust fund in respect of its costs of appeal proceedings brought by it as trustee or in respect of any costs it is ordered to pay the respondents to the appeal;

   2. (2)

      The individual appellants pay the first and second respondents’ costs of the appeal up to and including 12 April 2016;

   3. (3)

      The Property Trust Company pay, on an indemnity basis, the costs of the first and second respondents attributable to both the preparation of written submissions and the application to amend the notice of appeal (including the steps taken in relation to the aborted amendment proposal);

   4. (4)

      The Property Trust Company pay the first and second respondents’ costs of all issues in the appeal not addressed by order (3) on a party-party basis.