2008/282990 Robert Andrew Ciaglia v Pamela Josephine Ciaglia
JUDGMENT
1 HIS HONOUR: On 28 April 2010, I gave judgment in these proceedings. I held that the court should declare that the defendant holds the property located in Chatswood, NSW on trust for the plaintiff as to a one-half share and the plaintiff is entitled to an order that the defendant transfer a half interest in the land to him so that the land is held equally by them as tenants-in-common.
2 There are three outstanding matters for determination in these proceedings. First, as the defendant has died since the proceedings were heard, the appointment of a representative of the defendant's estate under r 7.10 of the Uniform Civil Procedure Rules. Secondly, the appropriate orders for costs in these proceedings. Thirdly, the form of the final orders for relief in these proceedings.
Appointment of representative
3 Rule 7.10 of the Uniform Civil Procedure Rules provides:
"7.10 Interests of deceased person
(cf SCR Part 8, rule 16; DCR Part 7, rule 13; LCR Part 6, rule 14)
(1) This rule applies to any proceedings in which it appears to the court:
(a) that a deceased person's estate has an interest in the proceedings, but is not represented in the proceedings, or
(b) that the executors or administrators of a deceased person's estate have an interest in the proceedings that is adverse to the interests of the estate.
(2) The court:
(a) may order that the proceedings continue in the absence of a representative of the deceased person's estate, or
(b) may appoint a representative of the deceased person's estate for the purposes of the proceedings, but only with the consent of the person to be appointed.
(3) Any order under this rule, and any judgment or order subsequently entered or made in the proceedings, binds the deceased person's estate to the same extent as the estate would have been bound had a personal representative of the deceased person been a party to the proceedings.
(4) Before making an order under this rule, the court may order that notice of the application be given to such of the persons having an interest in the estate as it thinks fit."
4 It is appropriate that a representative of the defendant's be appointed pursuant to rule 7.10(2)(b). By her will, the defendant appointed her son and daughter, Joseph and Christina Ciaglia, as joint executors. Susanna Taylor, the solicitor for the defendant, deposes that she has been informed that Christina Ciaglia will renounce her role as executor. She also deposes that Joseph Ciaglia consents to his appointment as his late mother's representative in these proceedings. I agree with the submission made by defendant's solicitors that it is appropriate that the court appoint Joseph Ciaglia under r 7.10.
5 Probate of the late Pamela Ciaglia's will has not yet been granted. The Probate and Administration Act 1898 (NSW) provides that the real and personal property of a person who has died testate or intestate is deemed to vest in the NSW Trustee and Guardian until probate or administration (as the case may be) is granted (s 61). Section 44 provides that upon the grant of probate, a deceased's property passes to and vests in the executor to whom probate has been granted. Prima facie Joseph Ciaglia would not be able to transfer the half-interest in land to the plaintiff until probate has been granted of the defendant's will. Counsel for the plaintiff made no submission to the contrary.
6 The defendant's solicitor submits that the property is subject to a mortgage and the consent of the mortgagee will be required in respect of the transfer and its registration, but does not consider that any orders in relation to the mortgage are required. The transfer will not affect the rights of the prior registered mortgagee. That is, the transfer will be subject to the existing registered mortgage. I think it preferable for the court to order that Joseph Ciaglia do all things necessary to transfer the half interest to the plaintiff, including obtaining the mortgagee's consent to the transfer and its registration.
7 The defendant also submits that it is likely the parties will sell the property following registration of the transfer and envisages doing so with the agreement of both parties. The defendant seeks liberty to apply to enable either party to seek orders under s 66G of the Conveyancing Act 1919 (NSW) to appoint a trustee to effect the sale of the property in the event that agreement is not reached. Such an application would not arise from the execution or working out of the orders and would be beyond the proper scope of a grant of liberty to apply. Any such application by either party (which may attract a claim for contribution for repairs and improvements) should be brought by a fresh substantive application. There will be liberty to apply in relation to the execution of the orders, but not the wider liberty sought.
8 The plaintiff must pay the defendant's reasonable costs of the transfer and must pay the duty on and other reasonable expenses of the transfer. Such expenses are usually borne by a mortgagor, and there was no evidence of an agreement to the contrary.
Costs of the proceedings
9 Rule 42.1 of the Uniform Civil Procedure Rules provides that costs are to follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. The plaintiff was successful and therefore prima facie is entitled to his costs. There are two reasons for departing from that prima facie position. The first is that the case upon which the plaintiff succeeded was not pleaded until I allowed an amendment during the hearing. Whilst the plaintiff maintained a claim that the half-share of the property was held on trust for him, the legal basis on which the plaintiff succeeded on that claim was not articulated in the statement of claim or the opening submissions of counsel for the plaintiff. The case was extended by late amendments to the pleading. The plaintiff failed on the pleaded claim of estoppel and on his claim to a half-share of all "mesne profits [sic]". In Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137; [1994] 4 All ER 464, Stuart-Smith LJ, with whom the other members of the Court of Appeal agreed, said (at 154):
" As a general rule, where a plaintiff makes a late amendment as here, which substantially alters the case the defendant has to meet and without which the action will fail, the defendant is entitled to the costs of the action down to the date of the amendment. There may, of course, be special reasons why this general rule should not be applied. An example of this is to be found in Kaines (UK) Ltd v Osterreichische Warrenhandelsgessellschaft mbH, (formerly CGL Handelgesellschaft mbH) [1993] 2 Lloyd's Rep 1, 9, where the judge was satisfied that, even if the amendment had been made earlier, the action would have been vigorously resisted. "
10 That approach may require some modification having regard to s 56 of the Civil Procedure Act 2005 (NSW). Notwithstanding the failure of the plaintiff's legal representative to articulate the proper legal basis for the plaintiff's claim, that legal basis should have been appreciated by the legal representatives of the defendant, and I have no reason to doubt that it was. This is confirmed by the offer of compromise referred to below. The amendment to the pleading did not substantially alter the case the defendant had to meet as it pleaded a fact that was common ground. But for the offer of compromise referred to below, I do not consider that the deficiencies in the presentation of the plaintiff's case would warrant depriving the plaintiff of his costs altogether, although they would warrant a reduction of costs to reflect the additional expense to which the defendant was put.
11 As noted at para [34] of the principal judgment, the current proceedings were brought following the dismissal of proceedings commenced in 2006 which substantially raised the same claim. The 2006 proceedings were dismissed by Windeyer J by reason of difficulties with the pleadings, but without prejudice to the plaintiff's right to commence again. In the 2006 proceeding, Lajido Pty Ltd was joined as a second defendant. As well as seeking a declaration that the present defendant held a half interest in the Chatswood land on trust for the plaintiff, the plaintiff sought a declaration that the current defendant pay moneys said to be owed by her to Lajido Pty Ltd, an order that she account for profits of Lajido Pty Ltd and an order that he be paid dividends by that company. The plaintiff did not seek an order under s 237 of the Corporations Act 2001 (Cth) for leave to bring proceedings on behalf of the company against the current defendant.
12 By an offer of compromise dated 19 October 2007 the defendant offered to transfer to the plaintiff a half share in the Chatswood property. This was the relief that the plaintiff has now obtained. The offer was made on the basis that:
" (1) the plaintiff agree to pay any costs associated with the transfer including any stamp duty, legal and registration costs;