Bevilacqua v Robinson

Civil Procedure Act 2005 LEGISLATION CITED : Family Provision Act 1982 Uniform Civil Procedure Rules 2005

Bevilacqua v Robinson [2008] NSWSC 463 Calderbank v Calderbank [1975] 3 All ER 333 Collings v Vakas [2006] NSWSC 393 Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 Harrison v Schipp [2001] NSWCA 13 CASES CITED : Moussa v Moussa [2006] NSWSC 509 Nicholls v Hall [2007] NSWCA 356 Pert v Norris-Smith [2008] NSWSC 57 Shearer v The Public Trustee (Unreported, Supreme Court of NSW, Young J, 21 April 1998) Sherborne Estate (No 2): Vanvalen v Neaves (2005) 65 NSWLR 268 Singer v Berghouse (1993) 114 ALR 521

PARTIES : Gaetano Bevilacqua Samantha Jennifer Robinson - Estate of Jennifer Margaret Robinson

COUNSEL : Mr M K Meek, plaintiff Ms Louise Goodchild, defendant

SOLICITORS : Russell McLelland Brown Lawyers, plaintiff Ritchie & Associates, defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4058 of 2007 GAETANO BEVILACQUA v SAMANTHA JENNIFER ROBINSON (NO 2) JUDGMENT 1 HER HONOUR : In this matter the outstanding question is one of costs. On 20 May 2008 I dismissed the summons by which the plaintiff sought an order for provision out of the estate of the late Jennifer Margaret Robinson under s 7 of the Family Provision Act 1982 (Bevilacqua v Robinson [2008] NSWSC 463). 2 The defendant sought an order that the plaintiff pay the defendant's costs on an indemnity basis. The defendant submitted that the plaintiff's claim was without merit (as his evidence failed to establish any need for provision), his conduct of the proceedings unreasonably increased the costs (by the plaintiff swearing three affidavits, including one alleging serious misconduct by the beneficiaries with respect to the deceased's bank account, an accusation belatedly withdrawn and requiring production of the beneficiaries' financial records), and findings had been made that the plaintiff was evasive and lacking credit in the giving of his evidence. Alternatively, the defendant sought an order that the plaintiff pay the defendant's costs on the usual basis up to 7 April 2008 and on an indemnity basis thereafter, relying on a document styled offer of compromise served on that date. The defendant submitted that the plaintiff's approach (that there be no order with respect to the plaintiff's costs) would be unjust, and the decisions relied on by the plaintiff allowing costs to lie where they fall involved significantly different facts. The plaintiff's reliance on his modest financial position should not be accepted as he had never disclosed his true financial position. Further, and contrary to the plaintiff's submission, the defendant's offer was intended to avoid the litigation and did not indicate any merit in the plaintiff's claim. 3 The plaintiff submitted that none of the matters on which the defendant relied could warrant an order for indemnity costs. 4 The fact that the summons was dismissed with the plaintiff failing to meet the threshold for provision depended on an evaluative judgment. Whether the judgment was a borderline case or not was unclear but such cases usually involve scope for differences of opinion ( Sherborne Estate (No 2): Vanvalen v Neaves (2005) 65 NSWLR 268 at [54] - [58]). Further, the issue of "need" was not necessarily determinative where the statutory criteria is the "the maintenance, education or advancement in life of the eligible person". The defendant had relied on all three aspects. The defendant's offer of 7 April 2008 suggested that the defendant thought the claim had some merit. 5 The allegation about the deceased's bank account was made, tested by obtaining documents (from banks and not the beneficiaries as the defendant submitted), and then withdrawn. The notices to produce to the beneficiaries were unconnected to that allegation and made in the ordinary course where two beneficiaries had given evidence of their financial circumstances. Nothing in these matters indicated any relevant delinquency by the plaintiff such as to warrant an order for indemnity costs. 6 The findings made against the plaintiff with respect to his evidence was not delinquency relevant to an indemnity costs order ( Harrison v Schipp [2001] NSWCA 13 at [134] - [137]). 7 The plaintiff was undisputedly the deceased's de facto partner for six years. The evidence showed that he was of modest means. A costs order would be a substantial burden on the plaintiff ( Sherborne Estate (No 2) at [64] - [66]). Accordingly, the defendant's costs should be paid out of the estate and no order made with respect to the plaintiff's costs. Alternatively, any order for costs against the plaintiff should be limited to costs from 7 April 2008 onwards on the usual (and not an indemnity) basis. The offer was not identified as an offer under the Uniform Civil Procedure Rules 2005 (UCPR 20.26(3)). Hence, it was a "Calderbank" offer ( Calderbank v Calderbank [1975] 3 All ER 333) and the defendant could not take the benefit of UCPR 42.5. 8 There are a number of difficulties with the defendant's approach to the issue of indemnity costs. First, and as the plaintiff submitted, resolution of claims under the Family Provision Act involves an evaluation, on the whole of the evidence, of whether the plain There are a number of difficulties with the defendant's approach to the issue of indemnity costs. First, and as the plaintiff submitted, resolution of claims under the Family Provision Act involves an evaluation, on the whole of the evidence, of whether the plaintiff has been left without adequate provision for his or her proper maintenance, education and advancement in life. Need is a part of that issue but does not exhaust it. The criteria involved are broad and leave scope for different conclusions to be reached. The defendant holds a strong view that the plaintiff's claims were utterly without merit from the outset. The ultimate resolution of the matter against the plaintiff, however, depended on the whole of the evidence, including the oral evidence of both the plaintiff and two of the daughters of the deceased. The claim was not so manifestly baseless from the outset that the plaintiff and his legal advisers should never have brought the proceedings. 9 While it would have been preferable for the plaintiff's affidavits not to extend to three in number that fact alone does not suggest any unreasonable conduct of proceedings sufficient to warrant an order for indemnity costs. Nor does the allegation about the deceased's bank account. It was a serious allegation and undoubtedly caused distress and concern. It was tested by obtaining documents and then withdrawn. That does not constitute some "special or unusual feature" of the relevant character so as to found an indemnity costs order ( Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 at 233). 10 Similarly I accept the plaintiff's submission that the findings made against the plaintiff (leading to the rejection of much of his evidence about contributions to the deceased's property and welfare) were part and parcel of the issues in dispute in the proceedings. They were not misconduct in the course of the proceedings in the relevant sense. They were part of the process of making factual findings that contributed to the dismissal of the summons. 11 The offer of 7 April 2008 is not an offer of compromise within the meaning of UCPR 20.26 as it does not bear any statement that the offer is made in accordance with the rules as required by UCPR 20.26(3). The statement performs an important function by drawing attention to the operation of the rules. The offer should be treated as a "Calderbank" letter. The observations in Sherborne Estate (No 2) at [54] apply. 12 A number of decisions deal with the issue of costs with respect to claims under the Family Provision Act. 13 In Singer v Berghouse (1993) 114 ALR 521 at 522 Gaudron J observed: Family provision cases stand apart from cases in which costs follow the event. Leaving aside cases under the Act which, in s 33, makes special provision in that regard, costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant's financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate. 14 In Shearer v The Public Trustee (Unreported, Supreme Court of NSW, Young J, 21 April 1998) referred to a bank of case law relating to costs establishing that, first, costs usually follow the event and, secondly, a successful party is hardly ever ordered to pay the costs of an unsuccessful party. Young J described the family provision context as one in which courts had relieved an unsuccessful plaintiff of paying costs in "borderline cases". After considering the cases and s 33 Young J concluded that the position remained that "borderline cases, especially those made by applicants with little funds, can be dismissed yet the applicants' costs be paid out of the estate". 15 In Sherborne Estate (No 2) Palmer J declined to make a costs order against an unsuccessful plaintiff (who had failed to establish that she was an eligible person). Considering the overall justice of the case, the crippling effect of a cost order on the life of the plaintiff was seen to warrant departure from the usual approach to costs (at [65]). 16 In Moussa v Moussa [2006] NSWSC 509 Barrett J considered the operation of s 33 of the Family Provision Act, s 98 of the Civil Procedure Act 2005, and UCPR 42.1. On the basis that there was simply not enough money to go around, Barrett J decided that there was good reason to depart from the usual rule so that costs should lie where they fall (citing Singer v Berghouse). 17 In Collings v Vakas [2006] NSWSC 393 Campbell J was not satisfied that the plaintiff had fully disclosed her financial situation. The plaintiff's claim failed. Noting that costs were in the discretion of the Court, Campbell J ordered that the plaintiff's costs be paid out of the estate. 18 The Court of Appeal, in Nicholls v Hall [2007] NSWCA 356 at [56] - [58] observed that: 56 In his judgment, the primary judge made some comments about the level of costs in these proceedings, with which we agree. However, in dismissing the proceedings, he said there seemed to be no reason why costs should not follow the event, and he dismissed the proceedings with costs.

57 No complaint was made about that on appeal. However, we note that in times past, adverse costs orders have occasionally been withheld against plaintiffs who have (without misconduct in the proceedings) brought tenable yet ultimately unsuccessful claims under the Family Provision Act (see Mason & Handler, Succession Law and Practice NSW at [6089]). This practice may have been seen as having some justification from a perceived desirability of minimising post-litigation conflict in family disputes, the availability in some cases of a significant fund the use of which could alleviate hardship on a losing party, and the circumstance that in some cases the decision was a marginal discretionary decision on which reasonable minds could differ. The Court was informed that this is no longer the practice of the Equity Division and that what may be termed general costs principles apply to these types of cases. Without endorsing or disendorsing the apparent change of practice, we would simply note that the point does not arise for consideration in this appeal.

58 We would add that it may have been relevant to the exercise of the costs discretion to know what offers were made and refused by each side. This was a case involving persons who previously had a reasonable relationship, and an estate of a reasonable size, where one might have expected a willingness on both sides to compromise rather than have a relationship-damaging law case involving costs in excess of $150,000.00. 19 In Pert v Norris-Smith [2008] NSWSC 57 Bryson AJ refused to make an order for costs out of the estate in favour of an unsuccessful plaintiff, also applying Gaudron J's observation in Singer v Berghouse. Bryson AJ left costs to lie where they fell. 20 In this case the plaintiff was acknowledged to be an eligible person. The plaintiff was the deceased's de facto partner for six years and remained so at the time of her death. The plaintiff's claim failed on the whole of the evidence. Part only of the reason for that failure is that I did not accept the plaintiff's evidence of the contributions he made to the deceased's property and welfare. I found that he grossly exaggerated these contributions. However, I also gave weight to a range of other factors as disclosed in my principal decision, including the plaintiff's age, educational attainments, work experience, relationship with his mother, and overall financial position and prospects. The weight given to those factors is a matter about which minds could reasonably differ. Some of the matters only emerged clearly during the hearing. 21 There were issues about the plaintiff's disclosure of his full financial situation (but see Collings v Vakas above). Nevertheless, I was satisfied that the plaintiff was a person whose current financial position could fairly be described as modest. The burden of paying the defendant's costs (estimated to exceed $25,000 in total) or a substantial portion thereof would cast a different light on the plaintiff's financial situation and prospects from that on which my decision was partly based. The defendant did make a settlement offer. It was made 28 days before the hearing when the summons had been filed seven to eight months earlier. The fact that the offer was not accepted, given the plaintiff's status as an eligible person and modest financial position, does not indicate any unreasonable maintenance of proceedings on the plaintiff's part. 22 In all of these circumstances, weighing up the position of the plaintiff as against that of the defendant and the beneficiaries under the estate, the overall justice of this case points against application of the usual rule that costs follow the event. 23 Accordingly, I make the following orders: (1) The costs and expenses of the defendant are to be paid out of the estate of the late Jennifer Margaret Robinson. (2) The exhibits may be returned.

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