Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd

Supreme Court of NSW|2023-02-16|Before: Lindsay J

Parties: Cross-Claimant: James Soulos First Cross Defendant: Con Kristallis Second Cross Defendant: Trevor Ian Cork Third Cross Defendant: Nicholas Andrew Soulos

Representation: Counsel: Cross Claimant: A Cheshire SC (on 15-16 September 2022) and T Rollo First and second cross defendants: V Bedrossian SC, N Bilinsky and M Jaieth Third cross defendant: E Herman (on 5,7,8,15,16 September 2022)

(2) Case No 2019/00026988 ("the Dennis Proceedings")

Parties: Plaintiff: Dimosthenis (Dennis) Soulos First Defendant: Con Kristallis Second Defendant: Trevor Ian Cork Third Defendant: Nicholas Andrew Soulos Fourth Defendant: James Soulos Fifth Defendant: Esperia Court Pty Ltd ACN 000457492 Sixth Defendant: A&R Management Pty Ltd ACN 000431694 Seventh Defendant: Maria Pagones

Representation: Counsel: Plaintiff: M Elliott SC and E Finnane First and Second Defendants: V Bedrossian SC, N Bilinsky and M Jaieth Third Defendant: E Herman, solicitor (on 5, 7, 8, 15, 16 September 2022); A Hursh, solicitor (on 6 September 2022) Fourth Defendant: A Cheshire SC (on 15-16 September 2022) and T Rollo Fifth Defendant: M Izzo SC with O Jones Sixth Defendant: No appearance Seventh Defendant: J Kelly SC and B O'Connor

Solicitors: Plaintiff: McCabes First and Second Defendants: McPhee Kershaw Third Defendant: Herman Legal Fourth Defendant: Carroll & O'Dea Fifth Defendant: Chalk Behrendt Lawyers Sixth Defendant: No appearance Seventh Defendant: Uther Webster and Evans

(3) Case No 2019/00027080 ("the Maria Proceedings")

Parties: Plaintiff: Maria Pagones First Defendant: Con Kristallis Second Defendant: Trevor Ian Cork Third Defendant: Nicholas Andrew Soulos

Representation: Counsel: Plaintiff: J Kelly SC and P Muscat First and Second Defendants: V Bedrossian SC, N Bilinsky and M Jaieth Third Defendant: V Bedrossian, N Bilinsky and M Jaieth

Solicitors: Plaintiff: Uther Webster and Evans First and Second Defendants: McPhee Kershaw Third defendant: McPhee Kershaw

(4) Case No 2021/00108316 ("the Esperia Court Proceedings")

Parties: Plaintiff: Maria Pagones First Defendant: Esperia Court Pty Ltd Second Defendant: Con Kristallis and Trevor Ian Cork as executors of the Estate of the late Rene Soulos Third Defendant: Nicholas Andrew Soulos Fourth Defendant: John Nicholas Soulos

Representation: Counsel: Plaintiff: J Kelly SC and B O'Connor First Defendant: M Izzo SC with O Jones Second Defendant: V Bedrossian, N Bilinsky and M Jaieth Third and Fourth Defendants: M Izzo SC and O Jones

Solicitors: Plaintiff: Uther Webster and Evans First Defendant: Chalk Behrendt Lawyers Second Defendant: McPhee Kershaw Third and Fourth Defendants: Wotton Kearney File Number(s): 2018/00050908 ("the James Proceedings") 2019/00026988 ("the Dennis Proceedings") 2019/00027080 ("the Maria Proceedings") 2021/00108316 ("the Esperia Court Proceedings")

INTRODUCTION

On 7 November 2022 I published, as Re Estate Soulos [2022] NSWSC 1507, reasons for judgment in determination of four sets of proceedings arising out of the death of Irene (Rene) Soulos on 27 January 2018. For convenience, I refer to all parties by reference to the informal designations given to them in those reasons. These reasons for judgment assume familiarity with the principal reasons for judgment.
The parties (ultimately, principally, the four adult children of the deceased) were in substantial agreement as to the form of orders to be made consequentially upon publication of the principal reasons for judgment. The orders made on 24 November 2022 to give effect to the reasons for judgment involved an independent element of agreement between the parties about the mechanics of implementation of the judgment, as the reasons contemplated might be the case.
Appeals from those orders having been foreshadowed, the parties were in substantial agreement about the terms upon which the orders should be stayed pending a determination of the appeals. Stay orders were made, accordingly, on 9 December 2022.
Other procedural orders made on 9 December 2022 provided directions for the filing and service of written submissions on costs. They also recorded an agreement of the parties that I be at liberty to determine all questions of costs "on the papers" or, at my discretion, to appoint a time for oral submissions on costs.
All parties have filed and served detailed written submissions as to costs. Annexed to these reasons is a schedule identifying those written submissions.
No party has included in its, his or her written submissions a request for an opportunity to make oral submissions on costs.
I understand, from statements made by counsel on 9 December 2022 and the form of the parties' written submissions, that it is the preference of all parties that I deal with questions of costs on the papers.
So far as I am able, I propose to defer to the parties' preference, but to provide the parties with a copy of these reasons in advance of orders being made: 1. to allow all parties an opportunity to clarify submissions made about orders made or sought for management shares in Esperia Court Pty Ltd to be quarantined from the burden of costs orders; and 2. to cater for the possibility that I have overlooked, or misunderstood, one or more submissions in a complex set of proceedings.
In these reasons for judgment I refer to the four sets of proceedings before the Court in the summary terms adopted for the joint hearing of the proceedings, here listed in the order of their commencement: 1. "the James Proceedings" are numbered 2018/00050908 in the Court's records; 2. "the Dennis Proceedings" are numbered 2019/00026988; 3. "the Maria Proceedings" are numbered 2019/00027080; and 4. "the Esperia Court Proceedings" are numbered 2021/00108316.
As litigated before me, James' claims for relief in the James Proceedings were made by way of a cross claim in what were proceedings commenced, and otherwise determined, as an application for probate. An instrument of grant was issued on 31 March 2021 pursuant to an order made on 12 February 2021 (with the consent of the parties to the James' Proceedings) for the deceased's will dated 13 March 2017 to be admitted to probate in solemn form. James' claims for family provision relief proceeded thereafter on his cross claim.
The James' Proceedings were commenced by the three executors named in the will dated 13 March 2017 (Con Kristallis, Trevor Cork and Nick) in response to a caveat filed by James in which he alleged that the will was invalid for a want of testamentary capacity and an exercise of undue influence. The proceedings were expanded, with competing claims to a grant of administration (and James' application for a family provision order under Chapter 3 of the Succession Act 2006 NSW), until all matters in dispute other than the family provision application were resolved by "consent orders" on 21 February 2021.
The orders made on that occasion included orders to the following effect: 1. order that all previous costs orders be vacated; 2. order that James' costs of the proceedings (excluding the costs of his family provision application), fixed in the sum of $100,000, be paid out of the estate of the deceased; and 3. order that the executors' costs of the proceedings (excluding the costs of James' family provision application) be paid on the indemnity basis out of the estate of the deceased.
I assume, without having made confirmatory inquiries, that a grant of probate was made in solemn form in circumstances in which due notice of the executors' application for a grant was given to all interested persons, including Dennis and Maria. There was no application for revocation of the grant in the principal proceedings.
James applied, by way of a cross claim in the Dennis Proceedings, for orders under section 27 of the Succession Act 2006 NSW for rectification of the deceased's will. That claim was resolved by orders made on 9 September 2022, with the consent of all parties, during the hearing of the proceedings.
The orders made on 9 September 2022 also acknowledged that, independently of the will of the deceased, Dennis was entitled to the full complement of 3,000 "A" class shares in Esperia Court Pty Ltd originally issued to him but ostensibly held by the deceased from about the time Dennis was negotiating a family law property settlement.
The questions of costs that require determination in the present judgment do not call for disturbance of any costs orders previously made in the proceedings.
In particular, there is no occasion to disturb any of the following costs orders: 1. orders made on 12 February 2021 in the probate proceedings, now called the James Proceedings, leading to a grant of probate; 2. orders made on 9 September 2022 for rectification of the will of the deceased pursuant to section 27 of the Succession Act 2006 NSW (on James' application) and, on Dennis' application, rectification of the register of members of Esperia Court Pty Limited; and 3. an order for costs made by Registrar Walton on 22 June 2022 against Maria in disposition of a notice of motion in the Esperia Court Proceedings.

THE GOVERNING LEGISLATION

The core legislation governing the determination of costs questions in these proceedings is the following: 1. the Civil Procedure Act 2005 NSW, section 98, which provides, in essence, that, subject to rules of court, costs are in the discretion of the Court; 2. the Uniform Civil Procedure Rules 2005 NSW, rule 42.1, which provides, as a general rule, that costs follow the event unless it appears to the Court that some other order should be made; and 3. the Uniform Civil Procedure Rules 2005 NSW, rule 42.2, which provides, in essence, that, unless the Court otherwise orders, costs payable to a person under an order of the Court are to be assessed on the ordinary basis rather than the indemnity basis.
There is no dispute that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the costs that are incurred: In the matter of Hillsea Pty Ltd [2019] NSWSC 1309 at [12]; Oshlack v Richmond River Council (1998) 193 CLR 72, [1998] HCA 11 at [44] and [134]; Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [9].
In so far as the proceedings have involved applications (by James, Dennis and Maria) for family provision orders under Chapter 3 of the Succession Act 2006, the Court's attention has been drawn to section 99 of that Act.
That section empowers the Court to make an order that the costs of proceedings under Chapter 3 be paid out of the estate (or notional estate) of the deceased.
The present proceedings involve no questions relating to notional estate. The family provision orders made in favour of James, Dennis and Maria were made in relation to the estate of the deceased. No party has submitted that there is a need, or foundation, for an order designating property as notional estate of the deceased in order to accommodate costs orders.

MANAGEMENT SHARES QUARANTINED FROM COSTS ORDERS

Upon a common assumption that, after allowing for specific gifts made in the deceased's will, there is no residue of her estate available to meet any liability for costs that the estate may have, Maria submits that I should determine that: 1. subject to sub-paragraph (b) of this paragraph, the burden of costs should be allocated proportionately (or rateably according to value) amongst the specific gifts in the will, consistent with Schedule 3 to the Probate and Administration Act 1898 NSW; and 2. the management shares specifically ordered to be allocated to Maria, Dennis and James as family provision by the orders made on 24 November 2022 (which, by virtue of section 72 of the Succession Act 2006, operate as a codicil to the will) should not bear the burden of any costs orders.
If the management shares allocated as a form of family provision are to be exempted from any costs burden it might be thought that so too should the management shares expressly given to Nick under the terms of the deceased's will.
No submissions have (yet) been made as to how I should determine whether an allocation of a costs burden should be "proportionate" or "rateable according to value" or what the consequences of the choice might be. This is a topic that calls for supplementary submissions.
Maria's submission that costs orders should expressly quarantine management shares in Esperia Court Pty Ltd acquired by James, Dennis and herself under the orders made on 24 November 2022 consequent upon publication of the principal reasons for judgment has elicited from James and Dennis a submission that: 1. the orders of 24 November 2022 already sufficiently quarantine management shares; 2. no costs order should be made that might be thought to undermine the operation of those quarantine orders; and 3. if a quarantine costs order is to be made as proposed by Maria it should be accompanied by similar orders equally protective of their interests.
The separate orders made in each of the James, Dennis and Maria Proceedings on 24 November 2022 included orders to the following effect: 1. order, pursuant to section 59 (or in James' case sections 59 and 65) of the Succession Act, that, in addition to the provision made for the applicant for family provision relief (James, Dennis and Maria respectively) in the deceased's will, the applicant receive by way of further provision from the estate of the deceased 125 of the 500 management shares in the issued share capital of Esperia Court Pty Ltd. 2. order, pursuant to section 66 of the Succession Act, that … no part of the legacy identified in subparagraph (a) be applied towards or charged for payment of debts or costs of the estate …; 3. order, pursuant to section 66 of the Succession Act, that … the interests of James, Dennis, Maria and Nick, as persons affected, be adjusted such that the management shares in Esperia Court Pty Ltd be distributed equally between them. 4. The orders in relation to the management shares made (as summarised in subparagraphs (a) to (c) inclusive) operate concurrently with, and not in addition to, the orders made in relation to those shares in the Esperia Court Proceedings so that a transfer of management shares made to an identified transferee operates to satisfy the corresponding orders in the related proceedings of James, Dennis and Maria.
These standard form orders in the James and Dennis Proceedings include an express provision that the burden of the "legacy" of 125 management shares be borne by Nick, who otherwise received those shares under the deceased's will.
The orders that the 500 management shares be distributed equally between the four siblings achieve the same outcome in each of the James, Dennis and Maria Proceedings.
For the record, the "standard form orders" here paraphrased can be found as orders 1(b), 2(a) and 3(a) and notation 5 in the James Proceedings; orders 12, 13(a) and 14(a) and notation 16 in the Dennis Proceedings; and orders 1, 2(a) and 3 and notation 5 in the Maria Proceedings.
In so far as the orders refer to "concurrent" orders made in the Esperia Court Proceedings they refer, essentially, to orders 1(a) and 1(b) of the orders made on 24 November 2022 in the Esperia Court Proceedings to the following effect: 1. Order that, pursuant to section 233(1)(j) of the Corporations Act 2001 Cth: 2. the executors of the estate of the deceased are ordered to do all things required on their part to transfer and lodge for registration with Esperia Court Pty Ltd the following management shares in the company to the persons listed in (b) … ; 3. the persons to whom the management shares are to be transferred in accordance with order (a) are: 1. Maria as to 125 management shares; 2. Dennis as to 125 management shares; 3. James as to 125 management shares; and 4. Nicholas as to 125 management shares.
In the construction of the orders made on 24 November 2022 allowance can be made for the fact that, although the orders were prepared to give effect to the principal reasons for judgment, they include an element of agreement between the parties about implementation of the judgment. In that context I take it to be common ground, as between all four siblings (James, Dennis, Maria and Nick), that no management shares given to James, Dennis or Maria as family provision should be "applied towards or charged for payment of debts or costs of the estate".
It is not altogether clear from the orders made in the James, Dennis and Maria Proceedings that the management shares gifted to Nick in the will of the deceased (but adjusted pursuant to orders made under section 66 of the Succession Act) to accommodate the family provision orders are intended to have the same protection from "payment of debts or costs of the estate".
I propose to allow the parties an opportunity to make supplementary submissions on this point; but, as presently advised, I am inclined to make orders that explicitly recognise that Nick's management shares have the same protection as those of his siblings or equivalent protection.
I would appreciate guidance from the parties as to the source and nature of the jurisdiction invoked in support of orders proposed for management shares to be quarantined from the burden of costs orders, bearing in mind the operation of the orders made on 24 November 2022 and the absence of an application for directions in administration of the deceased's estate. It occurs to me that I might be being asked to make consequential orders for the working out of final orders, or partial administration orders, rather than simply costs orders. In any event, I am inclined to the view that if I am to make orders of the type sought by Maria I should have some indication (by evidence or otherwise) of their anticipated operation.

THE PARTIES' PARADIGM

As authorised by an order made under rule 28.5 of the Uniform Civil Procedure Rules, the four sets of proceedings before the Court were heard together, with the evidence in each set of proceedings taken to be evidence in each other set of proceedings so far as material.
The submissions of all parties have nevertheless proceeded on the basis that costs orders should be made in, and by reference to the conduct of, each particular set of proceedings. No party has submitted that a global order for costs can, or should, be made affecting all four sets of proceedings across their boundaries.
Nor has any party invited the Court (by reference to section 98(4)(c) of the Civil Procedure Act 2005) to make a "specified gross sum costs order" instead of an order for "assessed costs".
With one minor exception (relating to costs said to have been incurred by Nick in his personal capacity), no party has placed before the Court evidence, or submissions, about the quantum of costs incurred, or sought, in respect of the proceedings before the Court.
The course of the proceedings and the scale of the representation of the parties suggest that the quantum of costs incurred by each party is likely to have been substantial.

IDIOSYNCRATIC FEATURES OF THESE PROCEEDINGS

There are some idiosyncratic features of these proceedings which inform the parties' submissions about costs.
All parties recognise that some costs should be ordered to be paid out of the estate of the deceased.
No party seeks an order that the "professional executors" (Messrs Kristallis and Cork) personally bear the burden of a costs order. Muted criticism of the professional executors has not risen so high.
Despite muted criticism, no party has disputed the entitlement of the professional executors to be indemnified out of the estate of the deceased for their own costs or for costs payable by them to other parties.
Because Nick is a major beneficiary of the estate of the deceased, and he was a director of Esperia Court Pty Ltd throughout the pendency of the proceedings, as well as one of the deceased's three executors, his position must be distinguished from that of the professional executors who, ostensibly, have had carriage of the proceedings on behalf of the estate.
In determining all questions of costs in these proceedings, the Court must be mindful of the fact that different views can be taken of some questions depending upon characterisation of the roles of Nick (and his son John, who is closely aligned with Nick) in management of Esperia Court Pty Ltd and administration of the estate of the deceased.
On one view (advanced by James, Dennis and Maria), the proceedings have largely borne the character of an adversarial contest between Nick (and John) on the one hand and, on the other hand, Nick's siblings (James, Dennis and Maria).
On the view of the proceedings advanced by Nick and John, Nick and John have never acted in their own interests but always in obedience to the will of the deceased, both in management of Esperia Court Pty Ltd (as directors of the Company) during the deceased's lifetime, and in seeking in the proceedings (with Nick as an executor and both men as beneficiaries) to uphold her testamentary intentions as expressed in the will admitted to probate.
In general terms, the logic of the submissions made by James, Dennis and Maria is that, having engaged in adversarial contests in their own interests and lost, Nick and John should personally bear their own costs and those of James, Dennis and Maria as their adversaries.
In general terms, the logic of the submissions made by Nick (and John) is that any costs liability to which they may be exposed should be borne, in whole or part, by the estate of the deceased.
James, Dennis and Maria join issue with Nick (and John) on this because: 1. they complain that, to the extent that their costs may be ordered to be paid out of the estate of the deceased, they will, or may, be required, as beneficiaries of the estate, to bear a part of that burden personally, notwithstanding their success in the proceedings; 2. they contend that the deceased, having died before the commencement of all four sets of proceedings (and, specifically, before commencement of the oppression suit known as the Esperia Court Proceedings), Nick and John cannot deflect from themselves onto the estate of the deceased responsibility for the conduct of the proceedings; the fact that the deceased was a party to oppressive conduct, even as a major cause of it, does not alter the fact that it was they (not the deceased) who made critical decisions about the course of the proceedings.
Nick and John, for their part, invite the Court to see the proceedings (particularly the Esperia Court proceedings and the family provision claims of James, Dennis and Maria) through the prism of their siblings' submissions to the effect that the Court should order that Esperia Court Pty Ltd be wound up. They contend that, in resisting the making of a winding up order (and orders for an immediate sale of company assets), they must be taken to have achieved a measure of success.
In weighing up the significance of competing submissions about the absence of an order for Esperia Court to be wound up (or for an immediate sale of assets) it is necessary to notice that, although it was Maria who sought a winding up order in the Esperia Court Proceedings as relief for oppressive conduct, and it was James who applied for a winding up order under Chapter 3 of the Succession Act 2006, submissions made in support of an application for a winding up order were supported, across the boundaries of proceedings, by each of Maria, James and Dennis.
Forensically, Maria had carriage of the oppression proceedings because, independently of the deceased's will, her status as a member of Esperia Court Pty Ltd was unchallenged.
Forensically, James had carriage of the submission that a winding up order could be made as a form of family provision order because he perceived himself to have had a strong claim under Chapter 3 of the Succession Act for a return to him of all the shares he had formerly held in Esperia Court Pty Ltd.
In common with each other, Maria, James and Dennis sought to clarify their respective interests in Esperia Court Pty Ltd and to realise what they, jointly and severally, perceived to be their entitlements in the company.
No costs orders are sought by or against A&R Management Pty Ltd (a defendant in the Dennis Proceedings) because the company played no active role in the proceedings and was not represented at the final hearing.

GUIDANCE TO A COSTS ASSESSOR

If the parties cannot reach agreement on the quantum of costs payable in respect of the four sets of proceedings before the Court, a costs assessor may be obliged to quantify, in detail, liabilities for costs ordered by the Court in generic terms.
With costs orders to be made by reference to several proceedings heard together, with several "causes of action" distributed across those proceedings, it may be of assistance to a costs assessor for me to notice what appear to me to have been the "major" issues that occupied the attention of the Court, and the preoccupation of the parties, at the final hearing of the proceedings.
To my observation, a central concern of all parties was ownership and control of Esperia Court Pty Ltd viewed principality through the perspective of Maria's oppression suit and incidentally through the perspective of the family provision applications of James, Dennis and Maria.
The oppression suit focused attention on: 1. the ownership of shares in Esperia Court Pty Ltd, particularly claims by Dennis and James (against the estate of the deceased) to be restored to their former ownership of ordinary shares in the company; 2. the circumstances in which Esperia Court Pty Ltd, Nick and John acquired the Symond Arcade (with a substantial loan from the National Australia Bank) and thereafter conducted the business of the Arcade in partnership; 3. the circumstances in which Esperia Court Pty Ltd granted a lease of the Strathfield Private Hotel to Nick's company, SPH Holdings Pty Ltd, and, through his company, Nick operated the business of the Hotel; 4. the aspirations of Nick and John to redevelop Esperia Court Pty Ltd's properties in the Strathfield Town Centre area; 5. the role of the deceased (as Governing Director and the holder of the management shares), Nick and John in management of Esperia Court Pty Limited; 6. whether Esperia Court Pty Ltd could, and should, be made the subject of a winding up order or orders for an immediate sale of property which Nick and John aspired to redevelop.
There were a number of comparatively independent (but in some cases interlocking) issues of particular concern to James, Dennis and Maria beyond their family provision claims upon the management shares in Esperia Court Pty Ltd: 1. James' quest to have his shares in Esperia Court Pty Ltd returned to him involved his application for rectification of the deceased's will to correct transposed references to "A" and "B" class shares. He was also concerned, on his family provision application, to obtain a release of any obligation upon him under the will of the deceased to give effect to a right of pre-emption in favour of Nick and Nick's sons should he seek to sell 79 The Boulevard, Strathfield. He was also concerned to be released from any arguable liability to repay the deceased's estate a $117,500 loan which he believed had been released by the deceased; 2. Apart from his application for a return to him of his shares in Esperia Court Pty Ltd, Dennis' case was largely directed towards securing his ownership of the Chapman Street property, either directly or through ownership of the deceased's shares in A&R Management Pty Ltd. His claim to beneficial ownership of the Parsons Street property was abandoned during the course of the hearing; and 3. Maria's case included a claimed entitlement to 100 shares in A&R Management Pty Ltd over which the deceased had assumed control but which had never been transferred out of her ownership. In both her oppression suit and her claim for family provision relief, Maria endeavoured to persuade the Court that orders might be made the effect of which would be to convert her property interests to a money sum.
As remarked in the principal judgment, some of the claims made in the proceedings on the parties' pleadings were not hotly contested. In that category, I would place: 1. James' rectification application, his concern to be freed from any right of refusal vested in Nick and Nick's sons in relation to 79 The Boulevard, Strathfield and his concern about an obligation to repay a $117,500 loan; 2. Dennis' claim to ownership of the Chapman Street property, either directly or through ownership of shares in A&R Management Pty Ltd; and 3. Maria's claim of an entitlement to 100 shares in A&R Management Pty Ltd.
James, Dennis and Maria were successful on each of these counts. In forensic terms, they were "put to proof" on each claim by parties (the deceased's executors, including Nick) who might be thought, in colloquial terms, to have "run dead".
In my assessment, more than a few affidavits read by the parties were of marginal significance to any real question in dispute in the present proceedings, and they may have been prepared in anticipation of the contested probate suit which, as events transpired, was resolved without a contest. Care might need to be taken to ensure that there is no duplication in the payment of costs.

Introduction

Because the parties have structured their submissions on costs by particular submissions referable to the four sets of proceedings before the Court, my consideration of competing costs' submissions does likewise, subject to a review of all prospective costs orders in an endeavour to ensure consistency of approach.

The Esperia Court Proceedings

Parties. The parties to the Esperia Court Proceedings are Maria (as the plaintiff) and (as defendants) Esperia Court Pty Ltd, the professional executors of the deceased's estate, Nick and John.
The Nature of the Relief Claimed. By her Originating Process and her Statement of Claim (as amended), Maria successfully contended that the affairs of Esperia Court Pty Ltd had been, and were being, conducted in a manner that was oppressive of her as a member of the company such that warranted remedial orders under sections 232-233 of the Corporations Act 2001 Cth.
Maria's Submissions. Maria's primary submission is that the costs of the Esperia Court Proceedings should be paid by Nick and John as the people responsible for the oppressive conduct of the affairs of Esperia Court Pty Ltd found by the Court. Alternatively, Maria submits that her costs should be borne by "all defendants" to the Esperia Court proceedings equally as she has been successful against each defendant and, as a result, costs should follow the event.
Esperia Court's Submissions. Esperia Court Pty Ltd submits that the three former director defendants of the Company (being the deceased, through her estate; Nick; and John) should pay Maria's costs equally because, it submits, the conduct of those persons was the 'main factor' which led to Maria seeking the relief that she did. The Company does not support Maria's submission that only Nick and John should bear the burden of her costs.
Esperia Court Pty Ltd submits that it was not unreasonable for it to expend funds to resist a winding up order and that the appropriateness of its defence of the proceedings may have been different if Maria had not sought a winding up order.
The Company submits that, if the Court is not minded to award costs against its former directors, then it supports Maria's alternative position, that all four defendants, including it, pay her costs in equal shares, subject to it having the benefit of an order that any costs payable to Maria by it be set off against her liability to pay costs orders against her by Registrar Walton on 22 June 2022.
The Company acknowledges that, if it and the deceased's estate bear a burden of Maria's costs, she will bear part of the burden of her own costs herself as a shareholder of the Company and a beneficiary of the estate.
The Professional Executors' Submissions. In so far as Maria seeks costs orders against parties other than themselves, the professional executors do not seek to be heard. They oppose any order for costs being made against them, noting the absence of any allegation of unreasonable or inappropriate conduct against them.
To the extent that, as an alternative position, Maria seeks a costs order against the professional executors, they submit that such a costs order would be an unnecessary complication because they would call upon the assets of the deceased's estate in order to satisfy their entitlement under the general law to be indemnified from those assets.
In summary, the professional executors submit that any costs order made in favour of Maria should be limited to an order that her costs be paid by Nick and John.
The Submissions of Nick and John. Nick and John submit that the appropriate order for costs in the Esperia Court Proceedings is that the deceased's estate, Nick and John should each pay 25% of Maria's costs and that she should itself bear 25% of her costs because she was not successful in her attempt to wind up Esperia Court Pty Ltd or to bring about an immediate sale of assets of the Company. They accept, as Maria contends in her primary cost submission, that Esperia Court should not be liable for any of Maria's costs.
Nick and John join in the submission of Esperia Court Pty Ltd that there should be an order for the set-off of costs referable to Registrar Walton's order of 22 June 2022.
Determination. In my opinion, the appropriate order for costs to be made in the Esperia Court Proceedings (recognising that costs should, prima facie, follow the event) is an order to the effect that Nick and John pay Maria's costs of the proceedings on the ordinary basis.
In my assessment, Nick and John bear substantial responsibility for costs incurred in the Esperia Court Proceedings. Responsibility for those costs cannot simply be attributed to the deceased in circumstances in which institution of the proceedings post-dated her death; management of Esperia Court Pty Ltd was in the hands of Nick and John following her death; and the course taken by Nick and John in defending Maria's claim of oppression was informed by their own interests and forensic decisions.
In the Esperia Court Proceedings Nick and John were, in substance, Maria's adversaries.
In my opinion, the fact that no orders were made for the winding up of Esperia Court Pty Ltd, or for an immediate sale of its assets, in response to a finding of oppression does not detract from the foundational finding of oppression, which was opposed.
I decline to make an order for a set off of costs at this stage of the proceedings because, as it seems to me, such an order could serve only to complicate the process of assessment of costs and the more appropriate time to consider questions of set-off is likely to be when all costs have been agreed or assessed.

The Maria Proceedings

Parties. The parties to the Maria Proceedings are Maria (as plaintiff) and (as defendants) the professional executors of the deceased's estate and Nick.
The defendants, collectively, are the executors of the estate of the deceased. The professional executors (on the one hand) and (on the other hand) Nick have been separately represented in the proceedings because, whereas the professional executors have no personal interest in the proceedings, Nick, as a principal beneficiary of the estate, does.
The Nature of the Relief Claimed. In the Maria Proceedings, Maria successfully obtained family provision relief under Chapter 3 of the Succession Act.
The usual order upon a successful application for a family provision order is that the costs of the plaintiff be paid out of the estate of the deceased on the ordinary basis and that the costs of executors or administrators representing the estate be paid out of the estate on the indemnity basis.
Maria's Submissions. Maria contends that, in accordance with usual practice, she should have an order for her costs to be paid out of the estate of the deceased on the ordinary basis and that the professional executors should have an order that their costs be paid out of the estate on the indemnity basis.
She contends that there is no warrant for an order that Nick's costs (to the extent that there are any) be paid out of the estate of the deceased, or that he be permitted to be indemnified out of the estate for his costs.
Maria's submissions about Nick's costs are predicated on the basis that, in substance, Nick left defence of Maria's family provision claim to the professional executors, limiting himself to advancement of his own interests.
The costs orders sought by Maria are in essence the following: 1. an order that Maria's costs be paid out of the estate of the deceased on the ordinary basis; 2. an order that the costs of the professional executors be paid out of the estate on the indemnity basis; 3. an order that the burden of costs required to be paid in accordance with (a) and (b) be borne proportionately (or rateably according to value) amongst the specific gifts in the will of the deceased, but excluding the management shares in Esperia Court the subject of family provision relief in favour of Maria, Dennis and James; and 4. no order as to the costs of Nick.
The Professional Executors' Submissions. The professional executors consent to Maria's proposed orders in so far as those orders affect the professional executors' interests. They do not seek to be heard regarding the costs outcome sought by Maria vis-à-vis Nick.
Nick's Submissions. Nick supports the orders proposed by Maria with the exception that he submits that his costs incurred in relation to his position as executor (rather than in relation to pursuing his personal interests) should be paid on the indemnity basis from the deceased's estate. He accepts that he is not entitled to recover his costs incurred in furtherance of his personal interests but contends that he should be entitled to recover costs incurred by him in discharge of his obligations as an executor.
A solicitor who, from time to time, appeared for Nick at the final hearing of the proceedings informs the Court, through a letter attached to Nick's submissions, that the solicitor's firm issued invoices to Nick totalling $133,786.02, of which the solicitor estimates that 70% of the work performed for Nick "related to his role and obligations as executor" of the deceased's estate.
Determination. The contents of the letter have not been tested, and I take the letter to refer to work done on behalf of Nick in relation to the proceedings generally, and, moreover, possibly in administration of the Soulos Estate, not merely the Maria Proceedings. I attach no evidentiary significance to the letter save to note that it lays a claim for the fees of counsel who did not appear for Nick (or at all) at the final hearing. In his written submissions (expressed to relate to the Maria, James and Dennis Proceedings collectively) Nick includes the following: "Dennis contends [that the ordinary position in relation to costs orders in family provision proceedings] should not apply to Nick because of his personal interest in the claims … Nick accepts that he is not entitled to recover his costs incurred in the furtherance of his personal interest. However, the majority of Nick's costs in the Family Provision Proceedings were incurred in the administration of the estate. Nick's former solicitor in the Family Provision Proceedings [the author of the letter attached to the written submissions] has estimated that 70% of the legal costs incurred by Nick related to his role and obligations as executor of [the deceased's] estate, rather than in relation to pursuing his personal interests. … Nick therefore contends that 70% of his personal costs should be paid on an indemnity basis from [the deceased's] estate. In the alternative, Nick submits that the Court should order that his costs incurred in relation to his role and obligations as an executor of [the] estate [be] paid on an indemnity basis from the estate, with the relevant amount of those costs to be determined on assessment [emphasis added]."
These submissions reinforce an apprehension that Nick seeks to recover, via a costs order in family provision proceedings, costs which do not relate in any material way to the proceedings themselves (but relate to general administration work) and give insufficient attention to Nick's concession that it is "broadly correct" to say that he "fell in behind the professional executors and left it to them to conduct the defence" of the family provision proceedings.
In my opinion, leaving aside for the moment the allocation of the burden of costs orders, the appropriate orders for costs are those usually made in family provision proceedings. That is, the plaintiff should have her costs paid out of the estate of the deceased on the ordinary basis and the deceased's executors should have their costs paid out of the estate on the indemnity basis.
Accepting that Nick may properly have incurred some (albeit probably minimal) costs attributable to his role as an executor in the conduct of the proceedings, he should not, in my opinion, be deprived of an order that those costs (and only those costs) be paid out of the estate of the deceased on the indemnity basis.
A costs assessor may well need to exercise judgement in the characterisation of costs incurred by Nick, limiting his entitlement to costs to costs incurred in his executorial rather than his personal capacity. However, in principle, he should be entitled to recover from the estate costs properly incurred by him as an executor in the conduct of the proceedings.
Accordingly, I propose to make orders to the following effect: 1. ORDER that the costs of Maria be paid out of the estate of the deceased on the ordinary basis; 2. ORDER that the costs of the professional executors be paid out of the estate of the deceased on the indemnity basis; and 3. ORDER that the costs of Nick (limited to costs incurred in discharge of his executorial duties in connection with these proceedings and not including costs otherwise incurred either in these proceedings or in administration of the estate generally) be paid out of the estate of the deceased on the indemnity basis.
I will deal with submissions about the burden of costs orders after consideration of any supplementary submissions about whether any (and, if so, in what terms) costs or other orders should be made to quarantine Esperia Court Pty Ltd's management shares in administration of the deceased's estate.

The James Proceedings

Parties. The parties to the James Proceedings are James as cross-claimant and, as cross-defendants, the professional executors and Nick.
The proceedings have been conducted on a cross claim filed in the Probate Proceedings and continued on the cross claim following the determination of the principal, Probate Proceedings.
The Nature of the Relief Claimed. In these proceedings James successfully claimed a family provision order under Chapter 3 of the Succession Act.
As previously stated in connection with Maria's family provision claim, the usual orders in family provision proceedings are that the costs of the applicant for relief (in these proceedings, a cross-claimant) be paid out of the estate of the deceased on the ordinary basis and that the costs of the representatives of the estate be paid out of the estate on the indemnity basis.
A complication in these proceedings, as in the Maria Proceedings, is that Nick participated in the proceedings, in a limited way, directed primarily towards protection of his personal interests and only incidentally (if at all) as a representative of the deceased's estate, in common with the professional executors as his co-executors.
James' Submissions. As between himself and the professional executors, James (with the consent of the professional executors) invites the Court to make the usual orders as to costs. As between himself and Nick, he invites the Court to order that Nick indemnify the estate for all costs ordered to be paid out of the estate pursuant to the usual orders.
Underlying James' submissions are two contentions about allocation of the burden of costs orders. First, that all costs ordered to be paid out of the estate should be borne by Nick. Secondly, that no part of the testamentary provision made for James (under the will of the deceased or pursuant to a grant of family provision relief) should be applied to meet costs or expenses of the estate.
In essence, James contends that Nick was his real contradictor in these proceedings (albeit that he stood behind the professional executors in their conduct of the proceedings); Nick was motivated by his own adversarial interests rather than the interests of the deceased's estate; Nick stood in the way of any settlement of the proceedings though James himself was prepared to negotiate an outcome of the proceedings; and, as he was successful in the proceedings, an order should be made that, as between himself and Nick, costs follow the event.
James also contends, as he did in the principal proceedings, that he should receive some special allowance in the making of the Court's orders because, unlike his siblings, his shares in Esperia Court Pty Ltd have been (re)acquired by him in circumstances in which he has an exposure to capital gains tax in relation to them.
The Professional Executors' Submissions. The professional executors consent to James' proposal that, as between themselves and James, the usual form of costs orders be made and, in substance, they make no submissions about the separate position of Nick.
Nick's Submissions. Nick's submissions mirror those made by him in connection with Maria's Proceedings; namely, that he should be allowed his costs insofar as he acted as an executor of the estate of the deceased but not insofar as he represented his personal interests.
Determination. In my opinion, the usual orders should be made, as I have determined should be made in the Maria Proceedings, including an order in favour of Nick limited to an assessment of his participation in the proceedings in his representative capacity.
Questions about the allocation of the burden of costs orders vis-à-vis Esperia Court Pty Ltd's management shares will be dealt with after allowing all parties an opportunity to make supplementary submissions.
I do not propose to make an order, as sought by James, that Nick exonerate the deceased's estate from all liabilities for costs or that James' testamentary provision be absolutely protected from exposure to any of the costs' burden. Neither type of order would be a fair or reasonable outcome in disposition of proceedings more complex than James imagines. Allowance must be made for the fact that, for better or worse, Nick occupied the offices of a director of Esperia Court Pty Ltd and an executor with the concurrence of the deceased. James' submissions might be thought to reflect his deep disappointment that, in the deceased's later years, Nick displaced him as her special adviser and she favoured Nick over him in testamentary provision.
James' submissions about his role in the Dennis Proceedings fall to be determined in connection with the Dennis Proceedings, not the James Proceedings.
I do not regard as material to any costs orders to be made such, if any, capital gains tax liability James may have referable to his (re)acquisition of shares in Esperia Court Pty Ltd or any comparison between James' position and those of his siblings. James' contention that he must, or should, be treated equally with his siblings is misdirected. That is not the nature of an exercise of family provision jurisdiction or ancillary business.

The Dennis Proceedings

Parties. The parties to the Dennis Proceedings are Dennis as plaintiff and, as defendants, the professional executors; Nick; James; Esperia Court Pty Ltd; A&R Management Pty Ltd; and Maria.
Each of James and Maria filed a cross claim. James' cross claim was styled "the first cross-claim". Maria's cross-claim was styled "the second cross-claim".
A&R Management Pty Ltd played no active role in the proceedings. It was not separately represented. No costs orders have been sought by or against it.
The Nature of the Relief Claimed by Dennis. In his statement of claim (as amended) Dennis claimed relief designed to establish, in essence, that he was entitled to all 3,000 "A" class shares in Esperia Court Pty Ltd; all shares of the deceased's estate in A&R Management Pty Ltd and/or the Chapman Street property registered in the name of A&R Management Pty Ltd; the Parsons Avenue property; and a family provision order.
Dennis' claim to all 3,000 "A" class shares in Esperia Court Pty Ltd was vindicated by orders made, by consent, on 9 September 2022 during the course of the final hearing. An order was made for the costs of all parties on Dennis' claim to the shares to be paid out of the estate of the deceased. That order is not to be disturbed by this judgment.
During the course of the hearing Dennis abandoned his claim to the Parsons Avenue property, leaving it to pass under the will of the deceased to Maria, who preferred to receive a cash equivalent on her family provision application. No party has submitted that he should bear costs consequences of his abandonment.
Dennis achieved substantial success on his claim to the shares in A&R Management Pty Ltd (with Maria successful on her claim to a minority shareholding of 100 shares in the company) and success on his related claim to the Chapman Street property.
Dennis succeeded on his family provision claim to the extent of an entitlement (in common with his siblings) to 125 management shares in Esperia Court Pty Ltd.
The Nature of the Relief Claimed by James. On his cross-claim, James claimed an order (under section 27 of the Succession Act) for rectification of the deceased's will to record the deceased's intention that he receive "B" class shares (not "A" class shares intended for Dennis) in Esperia Court Pty Ltd.
That claim was vindicated by orders made, with the consent of all parties, on 9 September 2022 during the course of the final hearing. An order for costs was made providing for the costs of all parties to the cross-claim to be paid out of the estate of the deceased. That order is not to be disturbed by this judgment.
The Nature of the Relief Claimed by Maria. On her cross-claim, Maria claimed ownership of 100 shares in A&R Management Pty Ltd, which the professional executors, on behalf of the deceased's estate, pleaded (but did not actively endeavour to prove) that Maria had transferred to the deceased.
Dennis' Submissions. Dennis invites the Court to make orders to the following effect in relation to the Dennis Proceedings: 1. order that Dennis' costs of the proceedings (including on the cross claims of James and Maria) be paid out of the estate of the deceased on the ordinary basis; 2. order that Maria's costs of the proceedings (including on the cross claims of James and Maria) be paid out of the estate of the deceased on the ordinary basis; 3. order that the professional executors' costs of the proceedings (including on the cross claims of James and Maria) be paid out of the estate of the deceased on the indemnity basis; 4. order that there be no costs in relation to Nick's costs of the proceedings (including the cross claims of James and Maria) to the intent that he pay his own costs of the proceedings; 5. order that there be no order in relation to Esperia Court Pty Ltd's costs of the proceedings (including the cross claims of James and Maria) to the intent that it pay its own costs of the proceedings; and 6. order that there be no order in relation to A&R Management Pty Ltd's costs of the proceedings (including the cross claims of James and Maria) to the intent that it pay its own costs.
Dennis's submissions are based largely upon the propositions that costs should follow the event for both himself and Maria against the estate of the deceased; that the professional executors might have their costs paid out of the estate because they acted as representatives of the estate in these proceedings; that there should be no order for costs in favour of Nick because he left representation of the estate to the professional executors; that there should be no order for costs in favour of Esperia Court Pty Ltd because it also did not participate in the conduct of the proceedings; and, implicitly, there should be no order as to costs in favour of James because he has the benefit of a costs order on his cross claim made on 9 September 2022.
Dennis' submissions observe that if (as other parties have suggested) an order is made that Nick indemnify the estate of the deceased in relation to its costs and/or costs that are payable out of the estate such an order should extend to all of the estate's costs, including its costs in the Dennis Proceedings.
Dennis contends that an order sought by Maria (that the burden of costs ordered to be borne by the estate of the deceased be borne proportionately, or rateably according to value, amongst the specific gifts in the will of the deceased, but excluding the management shares in Esperia Court Pty Ltd the subject of family provision relief in favour of Maria, Dennis and James) is unnecessary because the management shares are quarantined from debts and costs by order 13(b) of the orders made on 24 November 2022 and corresponding orders in the Maria and James Proceedings.
Dennis submits that, if such an order is to be made, it ought to be made in relation to all costs orders affecting the estate, in all proceedings, in the interest of consistency, and to avoid the possibility of orders made on 24 November 2022 being read down.
Dennis notes that James, in costs submissions in the James Proceedings and in reply relating to costs in the Dennis Proceedings, proposes an order that Nick indemnify the estate of the deceased for its costs in the James Proceedings. Dennis does not argue in favour of such an order in the Dennis Proceedings except to say that there should be a consistent approach across the three sets of family provision proceedings.
Accordingly, Dennis submits that, if the Court is moved to make an order to protect the estate of the deceased, and hence the beneficiaries, from the burden of costs by requiring Nick to pay them, then: 1. the objective of such an order will only be achieved if it is made in the other family provision proceedings as well; and 2. the basis for such an order will be equally strong in each of the James, Maria and Dennis Proceedings.
James' Submissions. James seeks no further order for costs beyond the costs order made in his favour on 9 September 2022.
In common with Dennis, James does, however, record an opinion that a submission by Maria (that the burden of costs orders be borne proportionately, or rateably according to value, amongst specific gifts in the deceased's will, but excluding the management shares in Esperia Court the subject of family provision relief) is unnecessary because of orders already made in the principal proceedings on 24 November 2022: order 2(a) in the James Proceedings, order 13(a) in the Dennis Proceedings and order 2(a) in the Maria Proceedings.
Maria's Submissions. Maria seeks orders to the following effect on her cross claim in the Dennis Proceedings: 1. order that the costs of Maria of her cross claim be paid by the professional executors: 1. on the ordinary basis up to and including 2 February 2022; and 2. on the indemnity basis from 2 February 2022; 1. order that those costs, and the costs of the professional executors on Maria's cross-claim, be borne by the estate of the deceased; and 2. order that the burden of costs ordered to be borne by the estate be borne proportionately (or rateably according to value) amongst the specific gifts in the will of the deceased, but excluding the management shares in Esperia Court Pty Ltd the subject of family provision relief in favour of Maria, Dennis and James.
The date 2 February 2022 reflects what is said to be the time at which it should have become obvious to the professional executors, with the benefit of inter partes correspondence, that the estate had no reasonable defence to Maria's claimed entitlement to 100 shares in A&R Management Pty Ltd.
Underlying the claim for an indemnity costs order is the fact that, although the professional executors pleaded that Maria had signed a memorandum of transfer of her shares in favour of the deceased, they did not adduce credible evidence that she had done so, they did not dispute her denial of having done so, and they did not ultimately resist her claim for return of her shares.
The Professional Executors' Submissions. The professional executors consent to the orders proposed by Dennis in so far as those orders impact on their interests: specifically, the proposed order that their costs be paid out of the estate of the deceased on the indemnity basis and confirmation that the costs orders of 9 September 2022 are not to be disturbed.
The professional executors submit that the appropriate costs order in relation to Maria's cross-claim in the Dennis Proceedings is that there be no order as to costs or, alternatively, if an order is to be made in Maria's favour, it should be on the ordinary basis and should be identified as being payable out of the estate and without recourse to the personal assets of the professional executors.
The professional executors dispute Maria's assertion that, upon an application of the principle that costs should follow the event, she is entitled to costs on her cross-claim and that those costs should be assessed on the indemnity basis. That is because, they submit, Maria's pursuit of her claim to ownership of 100 shares in A&R Management Pty Ltd was a futile and unproductive endeavour because A&R Management Pty Ltd had no property except legal ownership of the Chapman Street property and Maria did not oppose Dennis' claim to beneficial ownership of the property. They submit that any success on the part of Maria was entirely a pyrrhic victory to secure registration of shares having virtually no commercial value.
Nick's submissions. Nick's written submissions respond to various submissions made against him by James, Dennis and Maria, particularly submissions of James that urge the Court, in effect, to order that Nick exonerate his siblings and the deceased's estate from all costs liability because he was the real contradictor of his siblings.
In this short paraphrase of submissions for and against Nick I may not have done justice to particular contentions. It is not necessary, however, to set out all the parties' submissions in detail. There is an element of truth in what Nick's siblings say of him as their real contradictor. There is an element of truth, also, in Nick's contention that allowance must be made for his dual capacity (as an interested party and as a representative of the deceased's estate) in approaching complex litigation.
Determination. I propose to adopt Dennis' draft orders relating to the costs of Dennis himself, Maria, the professional executors, Esperia Court Pty Ltd and A&R Management Pty Ltd in the Dennis Proceedings, but not in relation to Nick.
In my opinion, Nick is entitled to an order, similar to the orders proposed in relation to the family provision claims of James and Maria, that the costs of Nick on Dennis' family provision claim (limited to costs incurred in discharge of his executorial duties in connection with the Dennis Proceedings and not including costs otherwise incurred either in the Dennis Proceedings or in administration of the estate generally) be paid out of the estate of the deceased on the indemnity basis.
I do not accept Maria's submission that she should be granted an indemnity costs order against the professional executors on her claim to beneficial ownership of 100 shares in A&R Management Pty Ltd. Whilst it is true that the professional executors had only a weak foundation for disputing Maria's claim it is also true, as the executors contend, that vindication of her claim was little more than a pyrrhic victory because, in light of Dennis' largely uncontradicted claim to Chapman Street, A&R Management Pty Ltd was presented to the Court as a bare trustee of Chapman Street for Dennis without any assets of its own.
In my opinion, the proper outcome is that the costs of both the professional executors and Maria be paid out of the estate on the bases proposed by Dennis.
In expressing this view, I am mindful that the professional executors were confronted by a necessity to make difficult forensic decisions in the context of complex relationships, and sometimes shifting alliances, between members of the Soulos family. To my observation they endeavoured, perhaps at times imperfectly, to play a straight bat on a difficult pitch, which was the correct thing to do.

SUMMARY DRAFT ORDERS

Subject to allowing the parties to make supplementary submissions upon publication of these reasons, I propose in due course to make the orders for costs here summarised.

The Esperia Court Proceedings

In the Esperia Court proceedings I propose in due course to make orders to the following effect: 1. order that Nick and John pay Maria's costs of the proceedings on the ordinary basis; and 2. note that no other orders for costs are made.

The Maria Proceedings

In the Maria Proceedings I propose in due course to make costs orders to the following effect: 1. order that Maria's costs be paid out of the estate of the deceased on the ordinary basis; 2. order that the costs of the professional executors be paid out of the estate on the indemnity basis; and 3. order that the costs of Nick (limited to costs incurred in discharge of his executorial duties in connection with these proceedings and not including costs otherwise incurred either in these proceedings or in administration of the estate generally) be paid out of the estate of the deceased on the indemnity basis.

The James Proceedings

In the James Proceedings (that is, on James' cross-claim) I propose in due course to make orders to the following effect: 1. order that James' costs be paid out of the estate of the deceased on the ordinary basis; 2. order that the costs of the professional executors be paid out of the estate on the indemnity basis; and 3. order that the costs of Nick (limited to costs incurred in discharge of his executorial duties in connection with these proceedings and not including costs otherwise incurred either in these proceedings or in administration of the estate generally) be paid out of the estate of the deceased on the indemnity basis.

The Dennis Proceedings

In the Dennis proceedings I propose in due course to make orders to the following effect: 1. order that Dennis' costs of the proceedings (including on the cross-claims of James and Maria) be paid out of the estate of the deceased on the ordinary basis; 2. order that Maria's costs of the proceedings (including on the cross-claims of James and Maria) be paid out of the estate of the deceased on the ordinary basis; 3. order that the professional executors' costs of the proceedings (including on the cross-claims of James and Maria) be paid out of the estate of the deceased on the indemnity basis; 4. order that the costs of Nick (limited to costs incurred in discharge of his executorial duties in connection with these proceedings and not including costs otherwise incurred either in these proceedings or in administration of the estate generally) be paid out of the estate of the deceased on the indemnity basis; 5. order that there be no order in relation to Esperia Court Pty Ltd's costs of the proceedings (including the cross-claims of James and Maria) to the intent that it pay its own costs of the proceedings; and 6. order that there be no order in relation to A&R Management Pty Ltd's costs of the proceedings (including the cross-claims of James and Maria) to the intent that it pay its own costs.

Supplementary Submissions

As earlier foreshadowed I propose to allow the parties an opportunity to make supplementary submissions about whether and how management shares in Esperia Court Pty Ltd should be quarantined from costs orders and against the possibility that I have overlooked or misunderstood one or more submissions in a complex set of proceedings.
Presumably, engagement with Maria's submissions about protection of management shares will require express consideration of section 46C(2) of the Probate and Administration Act 1898 NSW and Part II of the Third Schedule to the Act, a topic of concern noted in the principal reasons for judgment.
In light of the submissions that have been made to date (including what may have been a claim by Nick to costs for general administration work) I record that I have not been asked to entertain any application by the deceased's executors for commission or to express any view about such, if any, entitlements one or more of the executors might have to apply for commission.

CONCLUSION

Upon publication of these reasons I will give directions for such, if any, supplementary submissions (written or oral) that any party may care to make. As presently advised, I will not make any orders until an opportunity for supplementary submissions has been given. ANNEXURE SCHEDULE OF COSTS SUBMISSIONS THE JAMES PROCEEDINGS (2018/00050908)
Written submissions of James dated 20 December 2022, with affidavit of Selwyn Leslie Black sworn 20 December 2022.
Written submissions of the professional executors (Kristallis and Cork) dated 16 January 2023 and filed 12.22 pm on 17 January 2023.
Written submissions of Nick dated 16 January 2023 and filed 4.22 pm on 16 January 2023.
Written submissions of James in reply dated and filed 30 January 2023.
Written submissions of Maria in reply filed 30 January 2023.
Written submissions of Dennis in reply dated 30 January 2023. THE DENNIS PROCEEDINGS (2019/00026988)
Written submissions of Dennis dated 19 December 2022 and filed 2.35 pm on 20 December 2022, with draft short minutes of order.
Written submissions of the professional executors (Kristallis and Cork) dated 16 January 2023 and filed 3.54 pm on 16 January 2023.
Written submissions of Nick dated 16 January 2023 and filed 3.59 pm on 16 January 2023, incorporating letter dated 12 January 2023 of Herman Legal.
Written submissions of Maria dated 20 December 2022 filed 3.51 pm on 20 December 2022, with affidavit of Vivian Evans affirmed 19 December 2022.
Written submissions of James dated 13 January 2023 and filed 3 pm on 16 January 2023.
Written submissions of Maria in reply filed 30 January 2023.
Written submissions of Dennis in reply filed 30 January 2023. THE MARIA PROCEEDINGS (2019/00027080)
Written submissions of Maria dated 20 December 2022 and filed 3.39pm on 20 December 2022.
Written submissions of the professional executors (Kristallis and Cork) dated 16 January 2023 and filed 12.25 pm on 17 January 2023.
Written submissions of Nick dated 16 January 2023, with letter of Herman Legal dated 12 January 2023, filed 3.56 pm on 16 January 2023.
Memorandum of James dated 16 January 2023, with outline of submissions dated 13 January 2023.
Written submissions of Dennis in reply dated 30 January 2023. THE ESPERIA COURT PROCEEDINGS (2021/00108316)
Written submissions of Maria dated 20 December 2022 and filed 3.42 pm on 20 December 2022.
Written submissions of Esperia Court Pty Ltd dated 16 January 2023 and filed 3.20 pm on 16 January 2023.
Written submissions of the professional executors (Kristallis and Cork) dated 16 January 2023 and filed 12.27 pm on 17 January 2023.
Written submissions of Nick and John dated 16 January 2023 and filed 3.51 pm on 16 January 2023.
Supplementary written submissions of Nick and John dated 18 January 2023 and filed 1.22 pm on 18 January 2023.
Written submissions of Maria in reply dated 30 January 2023.

Amendments 23 February 2023 - At [68] The words "The Nature of the Relied Claimed" is amended to read "The Nature of the Relief Claimed" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 February 2023

At a glance

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Judgment (34 paragraphs)

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Cases Cited (5)