Nand v Prasad [2008] FJHC 143; Civil Action 210.2006 (19 March 2008)

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SHWETA PRIYENA NAND and
SHAESTA PRIYENA NAND
both daughters of Shanda Nand by their Next Friend
PARMILA WATI f/n Bhadre Sen,
Nurse of Spreydon Christchurch Aotearoa/New Zealand
Plaintiffs

AMBIKA PRASAD f/n Ram Lal,
Pilot of Nadi Fiji,
Executor and Trustee of the Estate of SHARDA NAND
f/n Ram Lal and in Propria Personam
Defendant

The origins of this action lie in a divorce and a death. On 16 October 2002, a decree nisi in respect of the marriage of Dr Sharda Nand and Ms Parmila Wati was pronounced by the Magistrate’s Court at Nadi in its divorce jurisdiction, to be made absolute in 14 days. The decree nisi stated that custody of the children of the marriage, Shweta Priyena Nand and Shaesta Priyena Nand, the Plaintiffs herein, be placed with Ms Wati, with reasonable access to Dr Nand. Further, the decree nisi referred to property which was thereby made subject to a trust:

The property settlement in regard to Lot No. 13, Waqa Circle, Nasos, Nadi is that the property will be held by [Dr Nand] as Trustee for the 2 children only. All mortgage repayment to be settled by [Dr Nand]. No costs: Plaintiffs’ Bundle of Documents (PBD), Document 10

1.1 On 19 June 2004 Dr Nand died. His last will and testament (the will), made on the date of the divorce (decree nisi) 16 October 2002, was proved and registered in the Probate Registry of the High Court of Fiji. The sum of Dr Nand’s estate at probate was stated as $150,000. In respect thereof, the ‘administration of all and singular the estate which by law devolves to and vests in the personal representative of [Dr Nand] was granted by the Court ... to Ambika Prasad’, the Defendant herein, ‘as the sole executor and trustee’: Defendant’s Bundle of Documents (DBD), Document 1

1.2 In addition to revoking all former wills and appointing his brother, Ambika Prasad, as sole executor and trustee, Dr Nand’s will provided:

I GIVE DEVISE AND BEQUEATH all my real and personal property of whatsoever nature and whatsoever situate over which I shall have disposing power at the time of my death to my trustee upon trust as follows:-

TO SELL and invest the trust property and apply the income derived therefrom at his discretion.

UPON payment of all expenses hold the balance of the income upon Trust for the benefit of all beneficiaries as follows:-

I GIVE DEVISE AND BEQUEATH the rest and residue all my real and personal property of whatsoever nature and wheresoever situate over which I shall have disposing power at the time of my death to my said brother AMBIKA PRASAD upon trust and thereafter to my said daughters SHWETA NAND and SHAESTA NAND in equal shares and shares alike absolutely after the younger daughter attains the age of 21 years.

1.3 On 21 July 2006 a Writ of Summons issued from the High Court at Lautoka commencing the present action. After setting out matters relating to the Plaintiffs, the marriage, divorce and death of Dr Nand, his will and the grant of probate, along with details of the property which is primarily at the centre of this dispute, namely Lot 13 on DP 6468 comprised in Certificate of Title No. 25624 situate at 13 Waqa Circle in Nadi (the trust property), the Statement of Claim observed that the trust property was held by Dr Nand in trust for the two Plaintiffs with mortgage repayments Dr Nand’s responsibility and said, amongst other matters:

[Mr Prasad] has been in breach of his duties and responsibilities as the Executor and Trustee of the estate of [Dr Nand] and in particular:

1.5 Further, had the trust property ‘been properly administered’ by Dr Nand and following Dr Nand’s death Mr Prasad, it ‘would have received gross rental of at least $2,000 per month from 16 October 2002 and after allowing for outgoings the [Misses Nand] would have received net rental of at least $1800.00 per month’: para 13

1.6 The Misses Nand, continued the Statement of Claim, ‘have been in due need of funds ... for their maintenance support and education’ in Spreydon Christchurch in Aotearoa/New Zealand and have depended upon ‘the limited income of their mother, Parmila Wati, borrowings made by her’ and ‘generosities of families and friends’. They have been paid no income for the trust property from 16 October 2002 to Dr Nand’s death on 18 June 2004, so that all income receivable by him in respect of it should have been paid to them. They are therefore owed $36,000 being rent from the trust property at the rate of $1800.00 per month, a debt owed to them by Dr Nand as at the date of his death: paras 15, 16

1.7 In respect of Mr Prasad, the Statement of Claim says he has not paid them the $36,000 sum nor the $1800.00 per month they should have received since Dr Nand’s death, and because of ‘the breach of his duties’ the Misses Nand ‘have suffered special damages of $81,000 from 16 October 2002 to 16 July 2006’, continuing to suffer special damages of $1800 per month as from 16 July 2006 to date of judgment: paras 18-20

1.8 In addition to these special damages and interest under common law and/or the Law Reform Miscellaneous Provisions (Death and Interest) Act, the High Court Rules and/or inherent jurisdiction, the Misses Nand claim the following Orders:

1.9 In the Defence to the Claim, Mr Prasad admits that under Dr Nand’s will the Misses Nand are bequeathed the ‘residual Estate ... subject to the provisions of [Dr Nand’s] will’: para 6

1.10 He states that in respect of the trust property, he paid the sum of $25,000 to settle the loan on mortgage of the trust property, with further interest in the amount of $1250.00 to May 2006: para 5

1.11 Further, prior to Dr Nand’s death, the trust property was let at a rental of $1600.00 per month, being vacated by the tenants on or about 8 October 2004. Another tenant was then secured by a real estate agent on behalf of Mr Prasad, effective from 10 January 2005 at a rental of $1700.00 per month: para 11

1.12 Mr Prasad denies that the Misses Nand have repeatedly demanded from him an account in respect of the trust property and Dr Nand’s estate and that he has ‘neglected and/or refused to do so’. He denies also that they have demanded that he transfer the trust property to them and/or their mother to hold as trustee for them, and that he has neglected and/or refused to do so. He says on 17 July 2005 Ms Wati, through her solicitors ‘purport[ed] to write to’ him for accounts to which his former solicitors responded ‘seeking an authority and without responding thereto the [Misses Nand’s] solicitor instituted the present proceedings’, despite his having ‘personally provided a status report’ to her in or around June 2006: para 7

1.13 Mr Prasad says that Dr Nand properly administered the trust property and denies the assessment of the amount of gross rental and net rental as set out in paragraph 13 of the Statement of Claim: para 8

1.14 He says he is not aware of the need for funds as asserted by the Misses Nand in the Statement of Claim (para 15), saying that Ms Wati ‘has received substantial proceeds of [Dr Nand’s] life insurance in or around June 2006’.

1.15 He admits that ‘save for $3000.00 paid to [Dr Nand’s] mother’ as provided in Dr Nand’s will, ‘no other sum has been distributed as the income of the Trust was insufficient to pay the liabilities of the Estate and maintenance of the trust property which have been paid from the income and by way of [his] personal advances’: para 10

1.16 He denies Dr Nand owed the Misses Nand the sums set out in paragraphs 17, 18 and 19 of the Statement of Claim, and denies he has breached his duties and that the Misses Nand have thereby suffered special damages. He denies further that they have suffered loss of use of monies payable to them, and that he is not a fit and proper person to continue as Executor and Trustee of Dr Nand’s estate: para 11

1.17 In conclusion, Mr Prasad says that he has ‘properly administered [Dr Nand’s] Estate and has maintained proper account and that it was [Dr Nand’s] express wish and appointment that he administer the Estate on the trusts therein and that he is a fit and proper person, willing and able to do so’. He says that alternatively the ‘accounts of the Estate are available ... to be submitted to’ the Misses Nand. He asks that the action be dismissed with costs ‘personally against’ Ms Wati: paras 12 and 13

When the matter was called on for trial, the parties requested it be stood down for a short time to enable negotiations with a view to possible part settlement and narrowing the issues before the Court. This resulted in consent orders as follows.

2.2 Additionally, some items were agreed as no longer in dispute, whilst others remained so. This was clarified by reference to letters dated 11 January 2008 and 12 January 2008: PDB. Document 7 and PDB, Document 12

2.3 The letter of 11 January 2008 was from Mr Prasad’s lawyers to the Misses Nand’s lawyers, whilst that of the 12 January 2008 was from the Misses Nand’s lawyers to those of Mr Prasad. In the latter, items indicated are, by consent, no longer in dispute:

1.	Solicitors costs in December 2004	$2,000.00
2.	Hospital and funeral costs of Sharda Nand in June 2004	$1,500.00
3.	In December 2004 Nadi/Labasa/Nadi x 2	$ 250.00
4.	CMLA Insurance Policies March 2005 -	$60.00	NOT IN DISPUTE
	Mother	$3000.00
5.	June 2005 Estate Account opening	$250.00	NOT IN DISPUTE
6.	August 2005 FEA Lautoka Medical Centre Account	$ 163.04
7.	Budget Pharmacy	$1,299.00	(Not Paid so) NOT IN DISPUTE
8.	06-11-06 Solicitors Fee	$2000.00
9.	07.06.07 Solicitor Fee	$2,250.00

	TOTAL	$12,772.04
	REVISED TOTAL		$11,163.00

2.4 Further, documents filed by the parties were agreed to be admitted by consent, and the Plaintiffs advised that they would be calling no further evidence, being content to rely upon the materials before the Court. These included the Copy Pleadings, the Plaintiff’s Bundle of Documents (PBD), the Plaintiff’s Additional Bundle of Documents (PBD), and the Defendant’s Bundle of Documents (DBD).

2.5 The Defendant elected to rely upon the materials before the Court, in addition to calling the Defendant as a witness.

Mr Ambika Prasad said Dr Nand was his brother and upon Dr Nand’s death he became trustee and administrator of Dr Nand’s estate. He was taken to DBD, Document 1, being the registration of probate and copy of Dr Nand’s will. By reference to the will, Mr Prasad said that the payment of $3,000 to his and Dr Nand’s mother had been made once only, due to her death.

UPON payment of all expenses hold the balance of the income upon Trust for the benefit of all beneficiaries as follows:-

3.2 He said this ‘means whatever is left from the estate goes to the daughters’. He said that when Dr Nand’s youngest daughter reaches 21, the trust property will come to them. In the meantime, he said, the trust property ‘needs renovations’ which requires payment. He stated that when the trust property was threatened with mortgage foreclosure due to some $25,000 being outstanding, he paid that sum from his own resources. He was subsequently reimbursed from rental income earned on the trust property.[1]

3.3 Mr Prasad was taken to DBD, Document 2. This is a ‘Transaction History Listing’ for an account in the name, account type and number:

3.4 Taken to page 8 of the account listing, Mr Prasad explained two items. First, an amount of $161,047.00 was credited to the account on 28 October 2004. Listed as ‘CHQ REPAYMENT 2’, it was described by Mr Prasad as a payment into the account being mortgage insurance which Dr Nand had taken out on the trust property. Mr Prasad explained further that, as Document 2, page 8 shows, this left a balance of $21,125.88 remaining to be paid off the mortgage. Various loan interest amounts, service fees and fee arrears brought the amount left owing on the mortgage to $24,824.25 as at 15 June 2005. Mr Prasad said that this is the amount paid from his own funds to prevent foreclosure and mortgagee sale. The source of the funds which repaid Mr Prasad was the rents paid in on the trust property.

3.5 Mr Prasad was then taken to DBD, Document 3 of 21 January 2005. This is a letter from Colonial National Bank, Manager Recoveries – Secured Lending, to Messrs Maqbool & Company, Barristers & Solicitors of Labasa. These are the lawyers whom Mr Prasad originally employed in respect of his role as trustee and administrator of Dr Nand’s will and estate. The letter states:

We refer to your letter of 21st December 2004 and our reply of 12th January 2005 and advise that due to the following, there was a reduced payment in Hompac proceeds:

3.6 At the bottom of the letter is a handprinted note with an initialed signature which appears to be ‘AR’ or ‘AP’ (Mr Prasad), stating: ‘NB’s reply to query regarding the extra $24,824=25.’

3.7 The Court interpolates here to observe that the divorce settlement of 16 October 2002 (also the date of Dr Nand’s will) makes Dr Nand responsible for ‘all mortgage repayment’ – this would mean any mortgage repayment covered by insurance, and any mortgage repayment not so covered. As to this, see further later.

3.8 Mr Prasad was taken to DBD, Document 4. That is a letter dated 16 June 2005 from Colonial National Bank, Assistant Manager Services, to Dr Sharda Nand (Deceased) & Mrs Premila Nand at a Nadi post office box. It advised of settlement of account noting a settlement cheque in the amount of $24,866.86 received, security release CT25724 (that is, the trust property). ‘Disbursement of proceeds’ indicates ‘closure of account – 1477801’, constituting $24,824.25 and ‘Settlement Attendance Fee’ in the amount of $42.61, being a total of $24,866.86.

3.9 Next, Mr Prasad was taken to DBD, Document 5, being a ‘Notice to Vacate’ from National Bank of Fiji Limited t/a Colonial National Bank, in respect of Mortgage No. 467663, secured upon ‘All the land comprised in Certificate of Title No. 25724 being Lot 13 on DP 6468 containing an area of 800m2’, namely the trust property. The Notice referred to the terms of the mortgage, giving 14 days ‘notice to vacate’ and a warning of an intention to issue eviction action. The Notice is dated 29 July 2004. Mr Prasad said that he paid the $25,000 in response to that letter to stop the sale of the trust property.

3.10 Mr Prasad was taken to various other documents, including BDB, Document 6 and BDB, Document 15. Document 6 is a letter of 12 October 2004 from the tenants of the trust property, advising of their having moved out of the trust property and seeking to arrange handover of keys. As Mr Prasad noted, this meant that the trust property was vacant and he arranged through an agent for a new tenancy. Document 15 is the ‘estate account’,[2] showing the balance as at 11 August 2006 being $20,403.56, then various deposits of $1700 being rent and an outgoing of $2000.00 on 6 November 2006, noted as being a ‘lawyers fee’ and the debit to the account of $25,000 on 12 January 2007, being the reimbursement to Mr Prasad. Two further debits noted by him in evidence as solicitors’ fees taken from the account were in an amount of $2250.00 on 7 January 2007, then per DBD, Document 7, in the amount of $1800.00.

3.11 Mr Prasad was taken through further documents indicating items for which he stated he used his personal funds, then gained reimbursement from this account, for example DBD, Document 19, item 2 is $1500 in respect of hospital and funeral expenses for Dr Nand; Item 3 is an expenditure of $250.00 covering a trip by Mr Prasad to Labasa as the solicitor who at that time was dealing with the estate matters was located there. Items 8 and 10 were solicitors’ fees and these said Mr Prasad were ‘paid from the trust and in my opinion were for looking after the trust’. He said that his actions were undertaken in respect of the estate which were necessary for its protection.[3] Again there appears to be an elision between Dr Nand’s estate and the Misses Nand’s trust property or a ‘mixing up’ of these, to the detriment of the trust property. If the legal advice and action had to be taken in respect of Dr Nand’s estate (valued at $150,000), why should the assets of the trust property be employed for this purpose?

3.12 In cross-examination, Mr Prasad was questioned about the use of solicitors in Labasa. He said that these solicitors undertook work in relation to insurance and probate after Dr Nand’s death. He acknowledged that the solicitor is a ‘family friend’ and he ‘knew the family well’. However, he said, he saw the solicitor as a lawyer’. Mr Prasad was, he said, originally from Labasa and the $250.00 outgoing from the account was his ‘rebate for travel’. He acknowledged, however, that he ‘probably’ could have undertaken the discussions and work with the solicitor on the telephone.

3.13 He agreed that the trust property was held by his brother (Dr Nand, the deceased) ‘as trustee for the two girls as a result of divorce’. He further stated that the terms were that ‘all liabilities of the mortgage were to be paid by his brother’, Dr Nand.

3.14 Mr Prasad was taken to DBD, Document 24, being a letter of 19 July 2005 to him from the Misses Nand’s mother’s solicitor. The letter referred to instructions by Ms Parmila Wati Nand and the holding of the trust property in trust for the daughters, Shweta Priya Nand and Shaesta Priya Nand in equal shares. It refers to Dr Nand’s death on 19 June 2004 and Mr Prasad’s being trustee of Dr Nand’s estate and says:

Accordingly, we have been instructed by our client as the trustee and guardian of the two children that you furnish us with the account of the said [trust] property.

Furthermore, our client requires also that you do transfer of the said [trust] property to our client who shall hold the same as the trustee for the said two children. Furthermore, under his last Will and Testament the two children are entitled to two third (2/3) of the residuary estate. We shall be grateful if you could inform us of all other properties and monies that belong to the estate.

3.15 The letter ends with a proviso that if the information requested is not received within 14 days then Ms Wati Nand ‘shall have no option but to institute High Court action in the matter’.

3.16 Mr Prasad was asked why ‘until today’ he had ‘not paid a single cent to the girls’. The trust had the capacity to do so, it was said, in that ‘at various times’ there were ‘several $1000 in the Bank’ account. Mr Prasad said he had no address or phone numbers for them, and did not receive a request. Additionally, he said, ‘the mother received $90,000’ in settlement at the divorce.

3.17 Did Mr Prasad know, he was asked, that ‘the girls’ mother was working fulltime as a nurse and then parttime to keep the family alive?’ Mr Prasad said he knew that. ‘Why not pay monies to the girls, then?’ Mr Prasad’s response was that there was no money in the account to do this and in any event what there was had to be used to pay other debts. In relation to the $25,000 payment of the residue of the mortgage and reimbursement to him, it was asked of Mr Prasad, ‘shouldn’t his brother [Dr Nand] have paid that amount?’ Mr Prasad said: ‘he passed it on to me’, then to the question whether it was in fact a liability of his brother, Mr Prasad responded: ‘I guess so, but he passed it on to me.’ Under the agreement entered into in relation to the divorce, ‘your brother was to pay all the mortgage debt,’ Mr Prasad was asked, to which he agreed, ‘yes’ and ‘yes’ to the contention that the mortgage debt had to be paid ‘out of the estate of your brother [Dr Nand]’. Mr Prasad said that the monies were paid from his own pocket and reimbursed from the ‘estate account’.[4] Mr Prasad repeated that nothing was paid to the Misses Nand because he did not have a contact for them and it was not until their mother wrote that he knew where they were. The first contact, he said, was on 19 April 2006.[5]

3.18 The letter of 11 January 2008 earlier referred to was drawn to his attention, together with an attachment showing that as at 10 August 2006 the sum of $22,103.56 was in the trust [property] account. DBD, Document 15 was drawn to Mr Prasad’s attention, showing that as at January 2007, some $25,000 was in the trust property account. So too with DBD, Document 23, a letter of 18 April 2006, being from Ms Wati to Mr Prasad and amongst other matters providing the family’s address in Christchurch Aotearoa/New Zealand.

3.19 Mr Prasad responded that he ‘had to accumulate $25,000 first’ for he ‘had to save the [trust] property for the girls’. (Referring to the outstanding mortgage amount and reimbursement to him of monies paid to prevent foreclosure.) He was given an opportunity to comment on the state of the account, in that as at 16 June 2005 (DBD, Document 4) $24,866.86 was required to be paid, then on 12 January 2007 he repaid himself in the amount of $25,000. Asked about the payments of fees to solicitors, he said that these related to probate and working with the solicitors in relation to the Colonial Bank mortgage.

3.20 He said Ms Wati was scheduled to travel to Fiji in June of 2006 and at that time he and she were ‘supposed to work out then’ how to deal with payments vis-à-vis the Misses Nand. He said: ‘How could I pay when I did not know accounts to send the money to?’ It transpired that despite the earlier arrangement, Ms Wati did not in fact travel to Fiji at the planned time. Asked whether he ‘did not want to send any money to the girls?’ Mr Prasad said that was not true. ‘Why did I save the [trust] property?’ he asked. Why, then, it was asked in turn, did he not contact Ms Wati about the payment of money to her for the Misses Nand when Ms Wati did not travel to Fiji in June? Mr Prasad responded by saying the ‘account did not have enough $ in it at the time to send to the girls’. Yet, it was asked, ‘you did have enough in the account to pay solicitors and other expenses?’ He did this, said Mr Prasad, because he was administering the estate and Dr Nand’s will required him to administer the estate and the affairs of Dr Nand.

3.21 Mr Prasad said he paid the $3000 sum to his and Dr Nand’s mother from ’the estate of the deceased’ once only before she died, along with the hospital and funeral expenses. This did not come, he said, ‘from the trust fund’, although (as earlier noted) it appears from the material before the Court that it was debited to the trust property income. He acknowledged that the $25,000 approx. he paid on the mortgage was reimbursed from the Misses Nand’s trust fund.

3.22 In re-examination, Mr Prasad acknowledged that before the letter of 19 July 2005 (DBD, Document 24 earlier referred to) he knew that the house (being the trust property) was ‘held by his brother as trustee’. In relation to the payment out of the monies owed on the mortgage (over and above the insurance) Mr Prasad repeated that he was ‘thinking of the girls and his brother’s property’. As for the Labasa flight, he said again that he traveled there in relation to probate and the Colonial Bank matter (this I take to be a reference to the mortgage over the trust property and the need to settle it/pay it out). Did he give written instructions, he was asked, and responded: ‘Some I think.’ As for (lack of) payments to the Misses Nand, when there were ‘small amounts of $2000 odd’, Mr Prasad said, it was ‘not worth running around and not worth sending’ to Ms Wati for them (the daughters).

As during the evidence of Mr Prasad the issue had arisen of solicitors fees being paid out of the rental monies of the trust property, prior to the making of submissions Counsel for the Defendant agreed to provide documentation to the Court and the Plaintiff in accordance with the following Order:

4.1 In brief form, the Defendant’s submissions were as follows. On the issue of a trustee in respect of the trust property, it was observed by reference to PBD, Document 10, the divorce property arrangement, that no provision for another trustee was made. In the event of Dr Nand’s death, the appointment of another trustee became necessary. Counsel referred to section 4(1) of the Trustee Act (Cap 65) which provides:

(1) Where a trustee, whether original or substituted, and whether appointed by the Court or otherwise-

(b) remains out of Fiji for more than one year without having properly delegated the execution of the trust; or

(i) being a corporation, has ceased to carry on business, is in liquidation or is dissolved,

then the person nominated for the purpose of appointing new trustees by the instrument (if any) creating the trust, or if there is no such person or no such person able and willing to act, then the surviving or continuing trustee or trustees for the time being, or the personal representative of the last surviving or continuing trustee, may by writing appoint a person or persons, whether or not being the person or persons exercising the power, to be a trustee or trustees in the place of the trustee first in this sub-section mentioned.

4.2 Counsel said that as the divorce settlement did not make provision for an alternative trustee in the event of death, Mr Prasad being the executor and administrator of Dr Nand’s estate appointed himself to look after the estate. In this role, he paid the $25,000 owing on the mortgage on the trust property, in order to save the trust property from mortgagee sale. It was said he took steps that were reasonable for a trustee to take, saving the trust property, then reimbursing himself for it was his money which paid out the mortgage. Insofar as the solicitors’ fees were in issue, action was brought against the trust and against Mr Prasad in his personal capacity. As he was trustee and administrator of the trust, Counsel submitted it was proper and reasonable for Mr Prasad to pay solicitors’ fees in respect of the action.

4.3 By reference to the prayer for relief in the Writ, Counsel for Mr Prasad said Mr Prasad was entitled to use funds from the trust to defend the trust and himself. In so doing, he was acting for the benefit of the trust under the will.

4.4 As to the Plaintiffs’ letter of 12 January 2008 (PBD, Document 12), Counsel said that all bills paid were paid under the powers of the trustee of the will of the deceased, Dr Nand. Mr Prasad was so entitled to use those moneys. No sum was employed for his personal benefit. All was used to settle debts of the deceased and the solicitors in relation to the current action. Where a trustee acts to save an asset or the trust, then the trustee does not bear the debt as a personal debt, said Mr Prasad’s Counsel. Further, at all times Mr Prasad was acting on his belief that he was acting in accordance with the terms of the will.

71. If it appears to the Court that a trustee, whether appointed by the Court or otherwise, is or may be personally liable for any breach of trust, whether the transaction alleged to be a breach of trust occurred before or after the commencement of this Act, but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the Court in the matter in which he committed the breach, then the Court may relieve him either wholly or partly from personal liability for that breach.

4.6 Counsel repeated that Mr Prasad had done what he did to save the trust property for the benefit of the beneficiaries of the trust, namely the Misses Nand. Counsel reiterated that at all times Mr Prasad was acting honestly and reasonably in accordance with his responsibilities as trustee and administrator under Dr Nand’s will. However, if there were any breach of trust, then in accordance with section 71 the Court should relieve Mr Prasad wholly from personal liability for that breach.

4.7 Submissions by Counsel for the Plaintiffs, Misses Nand, referred first to section 4(1) of the Trustee Act, providing various ways in which a trustee can be appointed and, where deceased, appointment of a substitute trustee can be made by a court. However appointed, such appointment should be in writing. This, said Counsel, is not what occurred here. Rather, Counsel said, Mr Prasad simply commenced acting as trustee. Counsel pointed out the use of the words ‘may by writing appoint’ as used in section 4(1) and reiterated that Mr Prasad had never appointed himself in the position of trustee as required under section 4(1) and was sued as he had no powers as trustee of the property. His role as trustee was purely that established by the will, in relation to Dr Nand’s estate alone, not in relation to the trust property which was not a part of Dr Nand’s estate but was held on trust by him (Dr Nand).

4.8 All submissions by Counsel for Mr Prasad, it was said, related to a trustee validly appointed. However, there was no valid appointment here in respect of the trust property. In any event Mr Prasad ‘used moneys belonging to the girls and must reimburse those monies with interest’.

4.9 In regard to section 71, Counsel for the Misses Nand said this provision relates to a trustee appointed by the court or otherwise ‘acting fairly and reasonably’, however Mr Prasad ‘is not a trustee of the property’ and has ‘not been appointed in writing as a trustee’ of the trust property.

4.10 Counsel said that it was necessary to look at the terms of the will and what can be bequeathed by a will. A person can devise and bequeath under a will ‘only what you own and the deceased cannot deal with the girls’ asset’. He took the Court to DBD, Document 1, the will attached to the Probate document, noting that the will was made on 16 October 2002, the date of the divorce of Dr Nand and Ms Wati. This document, said Counsel, makes clear that the [trust] property is held on trust by Dr Nand for the Misses Nand. Dr Nand could not and did not therefore ‘devise and bequeath’ the trust property as he had no entitlement to do so: it was not his to bequeath, being the property of the Misses Nand and held by him on trust for them only.

86.-(1) Without limiting any other powers of the Court, it is hereby declared that, where any property is held on trusts arising under any will, settlement or other disposition, or on the intestacy or partial intestacy of any person, or under any order of the Court, the Court may, if it thinks fit, by order approve, on behalf of-

(a) any person having, directly or indirectly, an interest, whether vested or contingent, under the trusts who, by reason of infancy or other incapacity, is incapable of assenting; or

(b) any person (whether ascertained or not) who may become entitled, directly or indirectly, to an interest under the trusts as being, at a future date or on the happening of a future event, a person of any specified description or a member of any specified class of persons; but this paragraph shall not include any person who would be of that description or a member of that class, if that date had fallen or that event had happened at the date of the application to the Court; or

(d) any person, in respect of any discretionary interest of his under a protective trust, where the interest of the principal beneficiary has not failed or determined,

any arrangement (by whomsoever proposed, and whether or not there is any other person beneficially interested who is capable of assenting thereto) varying or revoking all or any of the trusts, or enlarging the powers of the trustees of managing or administering any of the property subject to the trusts.

4.12 He observed that the provision enables a person – any person – to be appointed as a trustee, and Mr Prasad could have applied to the Court for that appointment. In December 2004, said Counsel, Mr Prasad had lawyers acting for him who could have advised him so that he could have made such an application.

4.13 Counsel for the Misses Nand went on to refer the Court to section 89(1) of the Trustee Act:

89.-(1) An order under the provisions of this Act for the appointment of a new trustee, or concerning any property subject to a trust, may be made on the application of any person beneficially interested in the property, whether under a disability or not, or on the application of any person duly appointed trustee of the property or intended to be so appointed.

(2) An order under the provisions of this Act concerning any interest in any property subject to a mortgage may be made on the application of any person beneficially interested in the property, whether under a disability or not, or of any person interested in the money secured by the mortgage.

4.14 The Misses Nand’s Counsel said that the Court could have done this – namely appointed Mr Prasad as trustee of their [trust] property, and Mr Prasad could have applied to have this done. As he failed to do so, he ‘could not now complain that action is taken against him personally in respect of, on the pretext of the will, meddling in the way he did’. He had ‘no authority to use funds lawfully belonging to the girls. Such funds must be reimbursed to them with interest’.

4.15 Counsel noted that the Probate document – DBD, Document 1, indicates that Dr Nand’s estate, being the value after expenses being nett (not gross) is stated to be $150,000. The mortgage on the trust property was a liability of Dr Nand and his estate, not of the Misses Nand and the trust property. The remainder of the mortgage after the insurance payment was a liability of Dr Nand’s estate and should have been met out of the $150,000.

4.16 Counsel then took the Court to PBD, Document 13, being a letter dated 4 February 2008 from the Misses Nand’s solicitors the Mr Prasad’s solicitors, in support of his contention that Mr Prasad’s evidence ‘should not be taken in the way it was presented to the Court’, particularly in regard to Mr Prasad’s evidence that he ‘did not know how to contact’ the Misses Nand’s mother and that there was no money in the trust to be provided to them. The letter, said Counsel for the Misses Nand, was ‘evidence or proof as to what Mr Prasad really intended’. The letter states:

Re: SHWETA P. NAND & ANOR V. AMBIKA PRASAD, LAUTOKA HIGH COURT ACTION NO. 210 OF 2006

We address this letter on the very serious complaint of the next friend in the above case Parmila Wati.

Parmila Wati spoke to our Dr MS Sahu Kahn on telephone on Saturday 2nd day of February and lodged the following complaints:-

Our client had complained to her lawyers in Christchurch and the matter was then reported to us.

Please advise your client to keep away from our client. He has no right to disturb our client and/or to threaten her in the disgusting manner that he is doing. If he continues then or client shall have no option but to seek the necessary Court Orders.

4.17 Counsel for Mr Prasad objected to this letter’s being raised before the Court in submissions, as Mr Prasad had not been examined or cross-examined on it. However, it was noted by Counsel for the Misses Nand that agreement had been reached between the parties and advised to the Court that both the Plaintiffs’ and Defendant’s documents were before the Court as evidence.

The most charitable way of regarding what has happened vis-à-vis Dr Nand’s estate and the trust property of his daughters is that there has been a misunderstanding or inadvertent ‘mixing up’ of what is a trust property being the property held on trust by Dr Nand for his daughters under the divorce settlement, and the ‘trust’ or position Mr Prasad held as trustee and administrator of Dr Nand’s estate under Dr Nand’s will. Subject to the comment below on the terms of the will, this may be understandable on the part of a lay person. Some may, however, consider it surprising in circumstance where Mr Prasad was legally represented, as it appears, throughout. Legal fees having been incurred and paid confirms this representation and advice. In this circumstance it seems odd that all outgoings vis-à-vis the estate appear to have been paid solely from the trust property, with the $150,000 estate being left untouched. There is nothing before the Court which indicates that that sum ($!50,000) has incurred any expenses or outgoings such as medical or funeral expenses vis-à-vis Dr Nand, or payment to solicitors for advice and action taken in relation to probate, etc.[7]

5.1 The correct position is that there is not one corpus of assets here, but two:

5.2 The latter (trust property) is referred to in the divorce settlement of 16 October 2002. The former (estate) is covered by Dr Nand’s will of the same date.

5.3 (a) mortgage repayment and associated bank charges, etc: With regard to the property held on trust, namely Certificate of Title No. 25724 situate at 13 Waqa Circle in Nadi, under the divorce settlement, Dr Nand is made wholly responsible for the payment of the mortgage. The Decree Nisi is dated 16 October 2002 and provides:

Upon considering the petition (and answer(s)) filed herein and evidence taken thereon the Court Decrees that upon and subject to the decree of the court becoming absolute the marriage between the abovenamed petitioner and respondent [SHARDA NAND s/o Ram Lal and PARMILA WATI d/o Bhadre Sen] solemnised on the 25th day of February 1985 be dissolved.

AND the Court orders further that Decree Nisi to be made Absolute in 14 days. The custody of the children of the marriage namely Sheweta Priyena Nand and Shaesta Priyena Nand to Respondent [Ms Wati] with reasonable access to Petitioner [Dr Nand]. The property settlement in regard to Lot No. 13, Waqa Circle, Nasos, Nadi is that the property will be held by Petitioner as Trustee for the 2 children only. All mortgage repayment to be settled by Petitioner. No costs. (Emphasis added)

5.4 The evidence shows that the bulk of the mortgage repayment outstanding as at Dr Nand’s death was covered by insurance. An additional amount was not. This is evidenced by the correspondence from the Colonial National Bank. This letter (of 21 January 2005) has been quoted earlier however bears excerpting here, insofar as it states that there was a ‘reduced payment in Homepac proceeds’ (the insurance payout upon the death of Dr Nand to cover the mortgage over the property), ‘due to the following’:

5.5 As noted earlier, the handprinted note at the bottom of that letter states: ‘NB’s reply to query regarding the estate $24,824=25’ which appears to be written by Mr Prasad – ‘AP’. This clearly relates to the amount left to be paid after the mortgage insurance paid out the bulk of monies owed on the mortgage. With settlement fee, the sum outstanding and to be paid was $24,866.86. This is the amount Mr Prasad states he paid from his own funds, then gained reimbursement from the trust monies. This he was not entitled do. The divorce settlement makes this clear.

5.6 Hence, the whole of the $25,000 must be reimbursed to the trust property of the Plaintiffs, the Misses Nand. Interest is payable on that amount as from the date it was reimbursed to Mr Prasad from the trust property account, which was not liable for it and ought not to have been used for that purpose.

5.7 The payment out of the mortgage should have come from Dr Nand’s estate, upon which probate was entered and sworn at $150,000. This in my opinion includes any arrears in bank payments. Arrears should not be debited against the trust property as there appears to be no good reason for there being any payments in arrears: it was Dr Nand’s responsibility to ensure that the payments were kept up to date. Those payments were not to be made by income from the trust property, but from his own income. Hence, any late charges or charges due to payments being in arrears should come from Dr Nand’s estate.[8] Ordinary bank charges on the mortgage account may arguably be debited to the Misses Nand’s trust account. On the other hand, as Dr Nand was responsible for the mortgage repayments and the bank charges related to the mortgage repayment account, the bank charges are properly his responsibility not the responsibility of Misses Nand and hence are not to be debited to the trust property income.

5.8 It appears that albeit the amount paid by Mr Prasad was not $25,000 but a lesser sum – namely the sum said by Colonial Bank to remain owing on the mortgage plus settlement fee, and Mr Prasad rounded-off to $25,000 when he reimbursed to himself those monies. The whole of that sum should be recredited to the trust property of the Misses Nand. The monies were expended, as Mr Prasad said, to ‘save’ the trust property from mortgagee sale. Had there been no other monies (that is, Dr Nand’s estate was bare), then the trust property would have had to have borne that payment – whether from the rental income or from sale. However, there was no problem with paying off the amount of $25,000 odd, for it was there in the estate of Dr Nand, which is where it was under the terms of the divorce settlement to be found. It is surprising that from his evidence Mr Prasad had to use his own funds for this payment in that circumstance and not, as appears readily able to be done, pay it out of the estate (admitted to probate at $150,000).

5.9 (b) medical, funeral, etc expenses/payments and solicitors fees: Dr Nand’s will makes clear that ‘all [his] just debts and funeral expenses and testamentary expenses’ are to be paid from his ‘real and personal property ... over which [he] shall have disposing power at the time of [his] death’: clause 3 ii) Indeed, he had no right nor power to authorize their payment from property and/or income not his – namely, the trust property. Items paid out of the trust property account which should have been paid out of Dr Nand’s estate are set out in PBD, Document 12

5.10 The funeral expenses and solicitors’ costs relating to probate and other matters vis-à-vis Dr Nand’s estate (such as for example a payment to the FEA in August 2005, in relation to Dr Nand’s medical practice) should not have been claimed out of the Misses Nand’s trust property, but out of the estate of $150,000. All these sums are therefore recoverable by the Misses Nand and must be reimbursed to them, together with interest from the date of its payment out of the trust property account:[9]
.

5.11 The sum of $3000 which was paid to Dr Nand and Mr Prasad’s mother in accordance with a term of Dr Nand’s will was to come from Dr Nand’s estate: clause 3 iii). It appears that it was wrongly paid out of the Misses Nand’s trust property (rental income). This sum is therefore recoverable by the Misses Nand and must be reimbursed to them, plus interest as from the date it was paid out of the trust property account.

5.12 This leaves remaining from the list set out in PBD, Document 12 (Misses Nand’s solicitors’ letter of 12 January to Mr Prasad’s solicitors) the solicitors’ fees of 5 November 2006 and 7 June 2007, respectively in the amount of $2000 and $2250. There are three issues here. First, what precisely these fees relate to. This was to be provided in accordance with the Order made by the Court (as set out above) on 29 February 2008. Secondly, if any of those amounts related to administration and probate and associated matters, then they were the responsibility of Dr Nand’s estate and wrongly charged to the Misses Nand’s trust property. Thirdly, if any related to ‘protecting’ the Misses Nand’s trust property against legal action, there are two independent aspects here: the Misses Nand’s trust property being the property under the divorce settlement, and the Misses Nand’s trust property under Dr Nand’s will which is to come to each when the youngest attains 21 years.

5.13 In respect to the latter aspect, if the legal costs were rightly accrued in defence of the Misses Nand’s interests, then those legal costs would have to be covered in part at least by Dr Nand’s estate – that is, the $150,000, not wholly by the trust property (the divorce settlement property). Their interests lie both in the trust property and in Dr Nand’s estate. Hence, at least part thereof is wrongly debited to the Misses Nand’s trust property (divorce settlement property).

5.14 On all the evidence, however, it appears to me that what was needed here was a recognition on the part of Mr Prasad that the trust property (divorce settlement property) was property to which the Misses Nand were and are wholly entitled and that the income on that [trust] property should have been wholly remitted to them throughout the period of the trust. There was nothing in the divorce settlement that restricted their gaining the income from the property to their reaching 21 years of age. This was a term relating solely to the ‘rest and residue’ of Dr Nand’s estate (see below). There was in that regard, in my opinion, nothing to defend against. Legal action was taken by their mother on behalf of the Misses Nand only when payment to the Misses Nand’s mother as their parent, guardian and custodial was not forthcoming as it should have been.

5.15 Insofar as the estate of Dr Nand is concerned, the will makes clear that the Misses Nand are to succeed to the remainder of the estate in terms of one third each of the net income upon the youngest attaining 21 years. Upon the death of Mr Prasad and Dr Nand’s mother, the one third share of the net income bequeathed to her would go into the ‘rest and residue’ devised and bequeathed upon trust to Mr Prasad, and ‘thereafter to my said daughters SHWETA NAND and SHESTA NAND in equal share and shares alike absolutely after the younger daughter attains the age of 21 years’. In my opinion again, legal fees in relation to any matters relating to this part of the estate to ‘defend’ their interests was misplaced. The emphasis in communications from the Misses Nand’s mother is upon the trust property (the divorce settlement). It does not appear to me that demands are being made in relation to the other entitlements of the Misses Nand, except insofar as an accounting is requested. This, it appears to me, is a proper request to be made by the mother of the daughters whom Dr Nand wished to succeed ultimately to the whole of the residue of his estate.

5.16 Hence, in my opinion, legal fees ought not to be debited against the trust property of the Misses Nand. There following is therefore to be reimbursed to them:

5.17 (c) total reimbursement of various payments out of trust property: This means that the total amount to be reimbursed into the trust property under the divorce settlement is $11,163 plus interest. In respect of each amount, interest runs from the date of the payment out of the trust account, up to the date of judgment.

The Statement of Claim seeks all rental income received in respect of the trust property, namely the land being Lot 13 on DP 6468 comprised in Certificate of Title No. 25724 situate at 13 Waqa Circle in Nadi (the trust property). This claim is set out at paragraphs 16, 17, 18, 19 and 20.

6.1 The evidence is that no monies were received by the Misses Nand or their mother, Ms Wati on their behalf whether during the course of Dr Nand’s life or after his death. Mr Prasad confirmed this in his evidence in respect of the period that he has been in control of the trust property and it is evident from the documents before the Court that this was so prior to Dr Nand’s death.

6.2 As observed, under the divorce property settlement Dr Nand held the property on trust for the benefit of his daughters, the Misses Nand. Subject to the issue of insurance, maintenance and upkeep, this means that all and any income derived from the property was due to them. It was not Dr Nand’s money but theirs, held on trust by him.

6.3 Dr Nand was, as noted, responsible for mortgage payments. However, there was no provision in the divorce settlement for payment of rates, insurance premiums (not the mortgage insurance which was his responsibility), maintenance, etc. This means that those payments would necessarily be made from the income derived – namely the rents.

6.4 It appears that as from 16 October 2002 the trust property was let at $1600 per month, and that this rental income continued up to 8 October 2004. Rental income then recommenced on 10 January 2005 at the rate of $1700 per month and it is understood from the material before the Court is continuing.

6.5 On the basis of 24 months @ $1600 per month, the amount accruing in rental payments on the trust property is $38,400. On the basis of 36 months @ $1700 per month (up to January 2008), the amount accruing in rental payments on the trust property is $61,200, plus two further months to day of judgment (January to March 2008), namely $3400. The total in outstanding rental payments therefore is $38,400 plus $61,200 plus $3400 = $103,000. Part of that amount will be constituted by the reimbursement to the Misses Nand of $25,000 taken from the rental income to pay Mr Prasad vis-à-vis the remainder mortgage and also the repayment of monies wrongly debited to the trust property, namely the sum of $11,163 = $36,163. The total rents owing therefore is $66,867 plus interest.

6.6 As earlier alluded to, rates and other charges would have been payable from the rental income so that there may be a sum to be set off against this amount, which would be due to Dr Nand’s estate. So that this may be clarified yet finalisation of the action can be facilitated fairly as between the parties, I have included in the orders an order that Mr Prasad provide to the Plaintiffs an accounting of the rental income and outgoings such as rates within 28 days of this judgment. If this accounting is provided within that timeframe but the parties are not able to agree on the outcome – that is, what is to be offset as against the rental income and its effect on the payment required to be made into the trust property/to the Plaintiffs, then liberty to apply will enable the matter to return to me to settle this aspect. However, if no accounting is provided within 28 days of this judgment,[10] then the amount referred to namely $66,867 will be due to the trust property/Plaintiffs.

7. EVIDENCE & ISSUES RE PROBATE – DR NAND’S ESTATE HELD ON TRUST BY MR PRASAD

The amounts set out above which are to be repaid into the trust property – that is, the property of the Misses Nand’s held on trust by Dr Nand – are amounts due to be paid by Dr Nand’s estate if properly expended in accordance with his will or matters properly associated with his will – for example, solicitor costs directly referable to probate matters.

7.1 The amount paid on the mortgage on the trust property over and above the insurance payment should have been paid out of Dr Nand’s estate. Hence, if Mr Prasad paid the amount from his own funds as stated, then he is entitled to reimbursement of that amount from Dr Nand’s estate. That amount was not $25,000 but $24,866.86.

7.2 I note that the original amount as indicated in DBD, Document 2, page 8, was a balance of $21,125.88 remaining to be paid off the mortgage (after insurance payout). Various loan interest amounts, service fees and fee arrears brought the amount left owing on the mortgage to $24,824.25 as at 15 June 2005 (plus settlement fee so in total $24,866.86). It is difficult to see why there should have been fee arrears, albeit service fees and settlement fee are readily understood as being included in the sum outstanding.

7.3 As noted earlier, Mr Prasad will need to repay the sum of $25,000 to the Misses Nand re the trust property. He will then be reimbursed in the sum of $24,866.86 from Dr Nand’s estate. In this regard, he will need to provide an account to Dr Nand’s estate which substantiates this sum having been paid personally by him, in order to be reimbursed for that sum from the estate.

7.4 Insofar as the other amounts which were paid out of the trust property which should have been paid out of Dr Nand’s estate, the possible total here is $11,163.00. All sums appear to be properly to be debited against Dr Nand’s estate for payment, except that there are matters relating to the solicitors’ costs which need verification or raise a question requiring clarification before monies are debited against the estate.

7.5 The $250.00 Labasa airfare was acknowledged in evidence by Mr Prasad to be unnecessary. His evidence was that he could have dealt with the matters by telephone rather than visiting Labasa to speak with the solicitors there in person. It appears to me that some part of that sum is recoverable as against the estate, however, for it may well have required more than one telephone call to settle the matters. The difficulty for the Court is that there is no clarified information as to precisely what were the matters the subject of this visit to the Labasa solicitors. An allowance of $50.00 therefore is provided for, to be paid out of Dr Nand’s estate. Mr Prasad should therefore reimburse Dr Nand’s estate in the amount of $200.00.

was made so that information would be before the Court upon which it could be determined whether the payments to solicitors related to Dr Nand’s estate and in what respect they did.

7.7 As no information was provided per the order, the Court is left in a position where a determination must be made as to whether the stipulated sums are properly to be paid out of Dr Nand’s estate. The relevant sums are $2000 (solicitors’ costs in December 2004), $2000 (solicitors’ fee 6 November 2006), and $2250 (solicitors’ fee 7 June 2007). As I have said, I am not persuaded that any of this expenditure was necessary to preserve or maintain or in any way defend the trust property (the property of Misses Nand held on trust by Dr Nand per the divorce settlement). It is evident, however, that at least part thereof was necessarily expended in respect of probate and administration, including advice sought by Mr Prasad as to probate and his responsibilities as trustee and administrator under Dr Nand’s will.

7.8 In the absence of information as requested, I could determine that the whole or part thereof relates to probate and advice re Mr Prasad’s trustee and administrator responsibilities. However, Mr Prasad’s evidence indicated that at least a substantial part thereof was expended as a consequence of the present action. Therefore, some at least of the solicitors’ costs are attributable to legal costs in respect of Mr Prasad’s defence of the present action.

7.9 In all the circumstances, and taking into account the proper seeking of information as to the trust property and Dr Nand’s estate generally by the mother of the Misses Nand’s as their sole parent and guardian after the death of Dr Nand, it is difficult to see that any ‘defence’ of Dr Nand’s estate was necessary. After the death of Dr Nand and Mr Prasad’s mother, the estate in its entirety – after proper expenditure in relation to Dr Nand’s will and probate and administration of the estate – was the property of the Misses Nand upon the youngest reaching 21 years. Before that date it was to be held in trust for them and they were entitled to know what expenditures had been made out of the property and what was held for them. As I understand the material before the Court, this their mother sought to obtain. It could and should have been provided to her upon her request. Indeed, as trustee and administrator of Dr Nand’s estate, the responsibility lay with Mr Prasad to provide this information without a need for a request. Mr Prasad’s evidence that he did not know how to be in touch with the Misses Nand or their mother, or had no account number, is not persuasive. It was his responsibility to locate them and it is difficult to accept that this was not possible or would create any real impediment, particularly as Mr Prasad had legal advice and assistance. It is not uncommon for searches to be required where the administration of an estate is in issue.

7.10 Rather than endeavouring to make an assessment without the necessary information before me, I will made an order that Mr Prasad is to furnish account in respect of the Dr Nand’s estate from the date of his death. This will necessarily include the information sought by the order made 29 February 2008. However, in light of that order not having been complied with – albeit made to provide the Defendant with an opportunity which advantaged him in all the circumstances - if that account is not provided within 28 days of the date of this judgment then the sum of $6250.00 comprising solicitors’ costs of $2000 (fees December 2004), $2000 (fees 6 November 2006) and $2250 (fees 7 June 2007) is required to be paid by the Defendant into Dr Nand’s estate.

7.11 I note that there is another amount referred to earlier in this judgment which was not in dispute between the parties as having been nominally debited against the Misses Nand’s trust property but not having yet been paid. This was the sum owing to Budget Pharmacy, namely $1,299.00. It is understood that that sum relates to Dr Nand’s health and treatment, so is payable by his estate.

7.12 In addition to this sum of $1,299.00, the sum to be paid out of Dr Nand’s estate of $150,000 is the total of those sums paid out of the Misses Nand’s trust property which is $11,163.00 minus $200.00 (airfares to Labasa minus $50.00), minus $6250 (legal costs which are to be the subject of the accounting by Mr Prasad as trustee of Dr Nand’s estate) = $4,713.

7.13 Upon the accounting by Mr Prasad, if provided within 28 days of the date of this judgment, a determination will be able to be made as to the liability of Dr Nand’s estate for the legal fees which in total are $6,250. If at that time the parties are able to agree on this aspect, then there will be no need to return to the Court. However, liberty to apply as included in the orders herein will permit of a return should agreement not be able to be reached, as does the provision in the orders of a mention date.

7.14 Insofar as administration of the remaining estate of Dr Nand is in issue, taking into account all the evidence and in all the circumstances it appears to me that the most constructive resolution is for the Misses Nand’s mother and guardian to be made the trustee. This means that she will be obliged to act in accordance with her responsibilities as trustee and will need to account to her daughters, the Misses Nand’s, in respect of her administration of the estate, just as she will need to be accountable as trustee in respect of the trust property.

7.15 Nothing before the Court indicates that Ms Wati is not competent to take on this role and I note that the parties were able to agree that Ms Wati was an appropriate trustee in respect of the trust property. Hence, it would appear that her capacity to act in the role of trustee is not in question at least insofar as the parties are concerned.

7.16 I observe that according to Mr Prasad’s evidence Ms Wati received some $90,000 as a divorce settlement. As at the divorce settlement the trust property was earmarked for the Misses Nand, it seems that the $90,000 received by Ms Wati did not include maintenance vis-à-vis the daughters; they were to be catered for through the trust property. Even were this not the case, the divorce settlement contemplated that the Misses Nand’s should receive the benefit of the trust property – income and capital; and Dr Nand’s wish was that upon his death they should have the benefit of the residue of his estate, to be shared equally with his and Mr Prasad’s mother and upon her death to be shared equally. Thus there is no offset per Ms Wati’s financial position being an outcome of her divorce from Dr Nand, and that relating to her and Dr Nand’s daughters. These are two quite separate and distinct issues. Clearly it was Dr Nand’s wish that his daughters should benefit from his estate as he made clear in his will. Further, it was a determination in consequence of their parents’ divorce that the Misses Nand should benefit from the trust property as set out in the divorce settlement.

7.17 It was Dr Nand’s wish that Mr Prasad should be trustee of Dr Nand’s estate, and I observe the need to respect that wish. However, in light of the matters illuminated through the present action it is proper in my view to substitute Ms Wati for Mr Prasad administrator of Dr Nand’s estate and as trustee of Dr Nand’s estate. This determination is made in accordance with sections 86 and 89 of the Trustee Act.

I have not stipulated a rate of interest. After the hearing concluded, Counsel for the Plaintiffs provided to the Court (with a copy to Counsel for the Defendant) a case wherein the rate of interest had been set at nine percent (9%): South Pacific Recording Limited v. John Yates and Regina Yates Civil Appeal No. ABU0023 of 1997S (High Court Civil Action No. 90 of 1992).

8.1 At this stage, I am not persuaded that nine percent is the appropriate rate of interest and should I be minded to set that rate then I ought not to do so in the absence of enabling the parties, and particularly the Defendant, an opportunity to make submissions on the matter.

8.2 As to the matter of costs, in order to determine an amount of costs to be paid I will need to have before me a list of the costs sought and the amount of each item. This is necessary even were I to make an award in a global figure: Safari Lodge Fiji Limited and Warren Francis v. Rosedale Limited and Dromama Limited Civil Action No. 319 of 1999, 5 February 2008; Frank R. Eggers Junior v. Blue Shield (Pacific) Insurance Ltd Civil Action HBC0094 of 1997L, 11 March 2004.

8.3 I have yet made no decision as to whether an award should be made for general damages and, if so, what.

8.4 The orders made herein therefore include a date for the matter to be set down for mention. This will provide the parties with the opportunity to address the issues as stipulated herein which require an accounting of various expenditures – for example, solicitors’ costs as paid by Mr Prasad in respect of probate, administration and defence of the present action, expenditure from rents on rates vis-à-vis the trust property, etc – and possibly to reach agreement. At the mention date a timetable can be set down for consideration of the matter of costs of this action and the appropriate rate of interest, together with the question of general damages. At that time if the other matters have not been able to be agreed or no accounting has been provided, subject to my earlier indication that upon the expiry of 28 days without such accounting the stipulated sum should be paid unless good reason for an extension of time to provide that accounting is made by the Defendant, those issues can be included in any timetable as appropriate.

^[1] It appears that the ‘trust property’ is being confused with Dr Nand’s estate. On this see later, save as to say at this point that Dr Nand’s will makes clear in my opinion that his estate is to pay for whatever outgoings are necessary as to his medical and funeral expenses, etc, probate and administration costs, and the $3,000 payment to his mother. This is of course as it should be, for the trust property (which is the property the subject of the divorce settlement) is not a part of Dr Nand’s estate. However, it appears that Mr Prasad’s belief is that the trust property is to be used to pay for the expenses and outgoings in relation to Dr Nand’s estate. This is clearly not correct.
^[2] It is the bank account for the trust property – that is, the property Dr Nand held in trust for his daughters under the divorce settlement/agreement.
^[3] The present action was commenced by way of Writ of Summons dated 21 July 2006. Subsequently in evidence Mr Prasad said that the solicitors’ fees related to defending the [trust] property and/or estate against the legal action taken by the Misses Nand through their mother. Arguably, only the solicitors’ fees of 7 June 2007 in the amount of $2,250.00 could relate to the legal action herein, for the earlier solicitors’ fees predate the institution of this action. The letter of 19 July 2005 foreshadows the possibility of legal action, but the action was as noted instituted a year later. Further, the letter of 19 July 2005 seeks only an accounting vis-à-vis the [trust] property and the estate along with transfer of the property in trust to the Misses Nand’s mother. In the event, as noted, legal action was not instituted until much later. Further, the plan was that Ms Wati, the children’s mother, travel to Fiji in June 2006 to ‘work out then’ how payments should be transmitted to her for her daughters’ benefit – see para 3.20 below. As at June 2006, therefore (whatever the rational or otherwise of ‘defending’ against legal action) is it explicable that solicitors’ fees would relate to defending the [trust] property and/or estate against legal action from the Misses Nand? Ms Wati’s letter of 18 April 2006, DBD, Document 23, provides no support for the contention that legal action was contemplated, albeit Ms Wati does foreshadow a need to engage in discussion, an inference being it is about the [trust] property and possibly Dr Nand’s estate.
^[4] It seems clear, however, on the material before the Court, that it was ot the estate account from which payment was made, but the account of the trust property.
^[5] I take this to be Mr Prasad’s receipt of Ms Wati’s letter dated 18 April 2006: DBD, Document 23.
^[6] In the event the order was not complied with. See further later.
^[7] There is also nothing before the Court showing what has happened with the estate. I observe that Dr Nand’s will refers to income on his estate going to his daughters when they reach the age of 21 years, as well as the whole of the estate going to them upon the youngest daughter’s reaching 21 years. Dr Nand, therefore, by his will presumed that there would be income on his estate. It is not evident beyond the sum of $150,000 of what this estate consists. An accounting should remedy this gap.
^[8] Arguably, any charges incurred by late payments after Dr Nand’s death (if there were late payments after that date) would be the responsibility of Mr Prasad in that he had taken to himself the responsibility for the trust property and hence should have ensure that the payments were made promptly on time. If they were made late, then arguably Dr Nand’s estate should not be liable for Mr Prasad’s paying them after the due date.
^[9] On the solicitors costs of 6 November 2006 and 7 June 2007 see later.
^[10] Or persuasive submission made under liberty to apply as to an extension of time. (In any event, the time having been substantial during which any accounting could have been provided, including prior to the institution of legal action, it is difficult to see at least at this stage that an extension should be granted and particularly not one of any substantial length, albeit as I have said the way remains open for persuasive submission. Nonetheless, litigation must have an end and certainty for all parties is necessary.)