These are the reasons for the costs orders that I made in these proceedings at the conclusion of a short hearing on 4 December 2024, after the plaintiff's claims relying on the doctrine of promissory estoppel were dismissed but her claim for an order for provision out of the estate of her late former husband pursuant to Chapter 3 of the Succession Act 2006 (NSW) was upheld on 13 November 2024. [1]
These proceedings were one of five proceedings concerning the deceased's estate. The other four proceedings, which the plaintiff refers to as the "associated proceedings", were case managed together with these proceedings, and orders were made that the five proceedings be heard concurrently, with evidence in one being evidence in the others. Ultimately, the four associated proceedings were resolved prior to the commencement of the hearing of these proceedings. The plaintiff's solicitor affirmed an affidavit on 28 November 2024 deposing that the plaintiff's total costs "incurred across These Proceedings and Associated Proceedings" are approximately $326,227.37, including counsel fees of $118,805.56 and other disbursements of $11,335.11. [2]
Relying on an offer of compromise that she contends was made in accordance with r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) on 22 November 2022, the plaintiff seeks an order that her costs of the proceedings be paid out of the deceased's estate on the ordinary basis up to and including 22 November 2022, and on an indemnity basis thereafter. The plaintiff's solicitor estimates that the plaintiff's costs calculated on that basis would amount to $294,460.15.
The offer of compromise was an offer:
"… to compromise the whole of the Plaintiff's claim in the following manner:
Order, pursuant to s 59 of the Succession Act 2006, that the Plaintiff receive, by way of further provision out of the deceased's estate, the sum of $600,000."
As the defendant submitted, the offer did not specify the part or parts of the deceased's estate out of which the provision of $600,000 for the plaintiff was to be provided as required by r 20.26(2)(a)(ii) and s 65 of the Succession Act. For the reasons explained by Parker J in Scott v Scott (No. 2), [3] with which I respectfully agree, I accept the defendant's submission that this was a defect of substance and that the plaintiff's offer was therefore not a valid offer under r 20.26. I reject the plaintiff's submissions that I should not follow Scott v Scott (No. 2). It follows that the provisions of r 42.14 of the Uniform Civil Procedure Rules are not engaged, and there will be no order for any part of the plaintiff's costs to be paid on an indemnity basis.
The defendant accepts that a sum for the plaintiff's costs of these proceedings should be paid out of the estate, but submits that the amount should be capped at $150,000 to ensure proportionality, to recognise that the plaintiff failed in her promissory estoppel claim, and/or to make an allowance for the costs of numerous adjournments of the proceedings that were occasioned by the plaintiff's inability to attend for cross-examination on account of her ill health.
As to proportionality, the Court has an inherent or general jurisdiction to regulate the costs, charges and disbursements claimed by officers of the Court, as the defendant submitted. [4] In family provision matters, the Court's jurisdiction to make orders capping costs payable out of a deceased estate and to make gross sum costs orders is well established. [5]
In my principal reasons for judgment, for the purpose of considering the impact of the provision that was ultimately ordered in favour of the plaintiff on the residuary beneficiaries of the deceased's estate, I assumed that an amount of up to approximately $150,000 would eventually be paid out of the estate in respect of the plaintiff's costs of these proceedings. I stated: [6]
"I express no final view about the costs orders to be made in these proceedings. The assumed amount of $150,000 in respect of the plaintiff's costs reflects my preliminary view that the plaintiff's actual costs of $330,677 on an indemnity basis and $266,677 on a party and party basis, according to the affidavit affirmed by the plaintiff's solicitor on 24 July 2024, are excessive for a two day hearing with a slim single volume court book containing all pleadings, affidavits and documentary evidence."
My preliminary view was a high level, impressionistic view based on limited information, which is not a proper basis for the making of an order capping the amount of the plaintiff's agreed or assessed costs to be paid out of the estate or making a gross sum costs order. The parties took some time after the delivery of the principal judgment on 13 November 2024 to formulate agreed directions concerning evidence and submissions in relation to costs. Those agreed directions did not contemplate any application for a gross sum costs order. The evidence that the parties have now adduced in relation to costs raises questions about the extent to which the plaintiff's costs of these proceedings may have been increased by reasons of the proceedings being case managed and, at one stage, listed for hearing concurrently with the associated proceedings. However, that evidence lacks the detail that would be required in order for the Court to form a view about the appropriate amount of any cap or any gross sum costs order. The appropriate course in the circumstances is for the quantum of the plaintiff's costs payable out of the estate on the ordinary basis to be determined through the assessment process if the quantum cannot be agreed between the parties. This will afford the plaintiff the opportunity of substantiating her solicitor's assertions that here costs of these proceedings were increased by reason of the associated proceedings, and will afford the defendant the opportunity for interrogating those assertions.
I emphasise that the costs orders to be made in favour of the plaintiff will be limited to the costs of these proceedings. The plaintiff was not a party to the associated proceedings. It will be for the costs assessor to determine whether any costs incurred by the plaintiff by reason of the associated proceedings (e.g. any costs of reviewing material filed and served in the associated proceedings at a time when they were listed for hearing concurrently with these proceedings) were properly incurred in the conduct of these proceedings on behalf of the plaintiff. I reject the plaintiff's submission that it would be "unfair and contrary to principle to limit the amount of costs that Ms Hart can recover by reference to the facts and matters in dispute in her proceedings alone." Whether or not costs recoverable by the plaintiff in respect of these proceedings may include costs incurred in respect of matters that were in dispute only in the associated proceedings will depend on all the circumstances put to the costs assessor in support of the plaintiff's contention that those costs were properly incurred in the conduct of these proceedings on behalf of the plaintiff.
I reject the defendant's submission that the Court should order that the plaintiff's costs should be apportioned between her unsuccessful estoppel claim and her successful family provision claim, and that only those costs attributable to the family provision claim should be paid of the estate. Contrary to the defendant's submission, this is not a case in which the plaintiff's estoppel claim was clearly separate from the family provision and occupied a significant part of the time taken at trial. As is clear from the principal judgment, substantially the whole of the evidence adduced was relevant to both the estoppel and the family provision claims, and many of the findings made in the course of dismissing the estoppel claims were directly relevant to my decision to make an order for provision in favour of the plaintiff out of the deceased's estate. [7] The established principles that govern the exercise of the costs discretion in cases where it is suggested that costs should follow the event of particular claims or issues rather than the outcome of the proceedings do not warrant an order being made in this case limiting the costs payable to the plaintiff to the costs of her family provision claim, or requiring the plaintiff to pay the defendant's costs of her estoppel claim. [8]
I accept the defendant's submission that the estate should not bear the burden of the costs thrown away by reason of the adjournment of the final hearing on several occasions during the period between 3 June 2024 and 1 August 2024 due to the plaintiff's ill health. It is appropriate that the plaintiff be ordered to bear her own costs of those adjournments, and that the defendant should be compensated for his costs that were thereby thrown away. This extends to the directions hearings that were necessary during that period in order to receive evidence about the plaintiff's state of health and re-list the proceedings for final hearing.
The defendant contends that his costs of the proceedings should be paid out of the deceased's estate on an indemnity basis. The plaintiff made no submission to the contrary, and this is appropriate in my opinion.
For those reasons, the following orders were made at the conclusion of the hearing on 4 December 2024:
1. Order that the plaintiff is to pay her own costs and the defendant's costs thrown away by reason of each adjournment of the final hearing of the proceedings 2021/258013 in the period from and including 3 June 2024, including, for the avoidance of doubt, the costs of all directions hearings during the period from 3 June 2024 to 1 August 2024.
2. Order that the defendant's costs to be paid by the plaintiff in accordance with order (1) above are to be paid on the ordinary basis in such amount as may be agreed or assessed.
3. Order that the plaintiff's costs of proceedings 2021/258013, other than the costs that are the subject of order (1), are to be paid out of the estate of the late Anthony Siracusa on the ordinary basis in such amount as may be agreed or assessed.
4. Order that the defendant's costs of proceedings 2021/258013 are to be paid out of the estate of the late Anthony Siracusa on an indemnity basis.
[2]
Endnotes
Hart v Basha [2024] NSWSC 1441.
All amounts of costs referred to in these reasons are inclusive of GST.
[2022] NSWSC 914 at [59]-[97].
Hartnett v Bell [2023] NSWCA 244 at [123] (Bell CJ, Adamson JA and Griffiths AJA agreeing).
Alexiou v Alexiou [2024] NSWSC 1340 at [116]-[147].
[2024] NSWSC 1441 at [198].
See, in particular, [2024] NSWSC 1441 at [193] and [219]-[222].
Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] (Beazley, Ipp and Basten JJA); Oikos Constructions Pty Ltd v Ostin (No 2) [2021] NSWCA 98 at [11]-[16] (White JA, Basten and Macfarlan JJA agreeing).
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Decision last updated: 04 December 2024