NATIONAL INSURANCE CO LTD Vs. NISSIM ABRAHAM GUBBAY

JUDGEMENT

(1.) This is an application made by the present appellant before the learned Judge on the original side in the course of an administration suit to administer the estate of one Abraham Ezekiel Gubbay, who died in November 1906, the suit being brought in 1917. It appears that, with the exception of a certain wine business, the testator left all the properties to his executor upon a trust for conversion and for distribution, in the following shares : 7/16 to Ezekiel Abraham Gubbay, who was the executor; 4/16 to Nissim, who, in the administration suit, was the plaintiff; 3/16 to Elias; 1/16 to Seemah and 1/16 to Joseph In the end, by various assignments, Ezekiel became entitled, in his own right, to 11/16 share absolutely of the fund and, by various transactions made between him and the appellants--the National Insurance Co., Ltd.--the present position is this : The appellants are in the position of mortgagees as regards 11/16 share, where the equity of redemption is in the estate of Ezekiel, who has become insolvent and they are in the position of being sub-mortgagees of the 4/16 share of Nissim. This application was made to enable the appellants to be made parties to the suit and they also asked that they might have the carriage of the proceedings under the order, dated 26 November 1924, directing the sale of certain properties belonging to the estate. It appears that the suit has been going on for a very long, time and the order for sale was made almost four years ago. It does not seem as if the parties had been prosecuting the order for sale with any great diligence, because, although the order was completed in January 1925, and summons was taken out on behalf of the unencumbered share of Joseph amounting to 1/16 in March 1926. nothing practically had been done till the time when this application was brought on. In these circumstances, the learned Judge made an order to the effect that the applicants should be added to the suit as party defendants, but he qualified that with various words, to say: for the purpose of watching the proceedings in this suit on the condition that the applicant do pay its own costs and be not entitled to any costs as against any of the other parties to this suit : And it is further ordered that the said applicant shall pay its own costs and shall not be at liberty to add its costs o? and incidental to this application to its claim as such mortgagee and sub-mortgagee as aforesaid.

(2.) The first question is whether or not the appellants should be made parties to this administration suit. It appears to me to be a mistake to make an order for a person to be a party for watching the proceedings." I see neither meaning nor purpose in such an order. In my judgment, the appellants who have sufficiently shown in this case that they have an interest to the "extent of 15/16 share in the property ought to be allowed to become parties to the proceedings in order that there may not be any delay in carrying out the order for sale. I have no doubt, therefore, that the words "for the purpose of watching the proceedings in this suit" ought not to be present in this order.

(3.) As regards the conditions as to costs: It seems to me that the argument of the appellants is right. The position is that the share of Joseph which is entirely unencumbered ought not to be made to pay a larger share of the costs because another party has encumbered its own share. This appears to be a matter which has often been considered and we have been referred to the case of Greedy V/s. Lavender [1848] 11 Beav. 417. In my judgment, there can be no doubt that the correct course, in such a case, when orders for costs are made, is to make them in such a form that the person who has not encumbered his share shall be relieved as far as possible in the matter of costs created by the fact that another cosharer has assigned or encumbered his share. The practice seems to be clearly enough laid down in the following passages in Daniell's Chancery Practice, 8 edn., p. 1075, to which we have been referred: Where a person entitled either to a legacy or share of a residue incumbers his legacy or share, or by any act of his own occasions additional expense in respect of it beyond what is necessary for the due administration of the estate, the additional expense will be thrown upon the legacy or share; and only one set of costs will be allowed out of the estate to the person entitled and his encumbrances, and such coats will in general be made payable to the first incumbrancer, or to the encumbrances in order of their priorities, and then to the person entitlod. Where, however, each of the incumbrancers stood upon some portion of the share included in his incumbrance, the costs were directed to be divided among them equally.