Coombes v Ward

Supreme Court of Victoria|2002-03-27|Before: McDonald J

COSTS: Testators family maintenance; application of plaintiff unsuccessful; order that proceedings be dismissed; application not made "frivolously, vexatiously or with no real prospect of success"; offer made by defendant in compromise of proceeding but not accepted by plaintiff; exercise of discretion; applicant frail and ill and supported by pension; size and nature of estate; no order made against plaintiff in favour of defendant or against defendant in favour of the plaintiff. Administration and Probate Act 1958 s. 97(6)(7).

Counsel for the defendant sought an order that the plaintiff pay the defendant's costs of the proceeding or alternatively that from 12 October 2001 the plaintiff pay the defendant's costs of the proceeding. In making the alternative application, counsel for the defendant informed the Court that on 12 October 2001 an offer had been made by the defendant to the plaintiff to compromise the proceeding, but the offer had not been accepted, in consequence, the proceeding went to trial and judgment. Counsel for the plaintiff conceded that on 12 October 2001 the defendant had made an offer to the plaintiff in compromise of the proceeding, which offer had not been accepted.

On 21 March 2001 I gave directions that each counsel furnish written submissions relevant to the question of costs in this proceeding.

I have now received the written submissions of counsel for each of the plaintiff and the defendant.

By his written submissions counsel for the defendant has informed the Court that on 12 October 2001 an offer was made on behalf of the defendant to the plaintiff in compromise of the proceeding, to pay him a small sum of money together with his costs of the proceeding but that such offer was not accepted by the plaintiff.

The Court's general discretion as to costs is that vested in it pursuant to s. 24(1) of the Supreme Court Act 1986 which provides:

"(1) Unless otherwise expressly provided by this or any other Act or by the rules, the costs of and incidental to all matters in the court, including the administration of estates and trusts, is in the discretion of the court and the court has full power to determine by whom and to what extent the costs are to be paid."

It is provided by Rule 63.02 of the General Civil Procedure Rules, of the Court that:

"The power and discretion of the court as to costs under s. 24 of the Act shall be exercised subject to and in accordance with this order."

However, with respect to an application made pursuant to s. 91 of the Administration and Probate Act 1958, as was the case in this proceeding regard, must be had to the provisions of s. 97(6) and (7) of that Act, which provide:

"(6) Subject to sub-section (7), the court may make any order as to the costs of an application under section 91 that is, in the court's opinion, just. (7) If the court is satisfied that an application for an order under section 91 has been made frivolously, vexatiously or with no reasonable prospect of success, the court may order the costs of the application to be made against the applicant."

Sub-section (7) was inserted in the Administration and Probate Act by Act No. 88/1997 which also, by s. 55 of that Act, substituted s. 91 of the Administration and Probate Act, which broadened considerably that category of persons who may make application pursuant to s. 91 of the Administration and Probate Act 1958. Sub-section (6) was also amended by Act No. 88/1997.

On behalf of the defendant it has been submitted that as it has been determined by the Court that the nature of the relationship existing between the plaintiff and the deceased was that described by the defendant in her evidence, as supported by other witnesses, as against that described in the evidence of the plaintiff and his wife, that it should be held that the application made by the plaintiff pursuant to s. 91 of the Administration and Probate Act was made by him "frivolously, vexatiously or with no reasonable prospect of success". It was submitted that in such circumstances the Court should order the plaintiff to pay the defendant's costs of the proceedings. Alternatively, it is submitted that the defendant should have her costs against the plaintiff subsequent to the offer made to the plaintiff on 12 October 2001, in settlement of the proceedings, which offer was not accepted.

"(1) The plaintiff and the defendant may in respect of any claim in a proceeding serve on one another an offer of compromise on the terms specified in the offer."

It is provided by Rule 26.03(1) that an offer of compromise may be served at any time before verdict or judgment in respect of the claim to which it relates. It is provided by Rules 26.08(3):

"Where an offer of compromise is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains a judgment on the claim to which the offer relates not more favourable to him than the terms of the offer, then, unless the court otherwise orders, the plaintiff shall be entitled to an order against the defendant for his costs in respect of the claim up to and including the day the offer was served. Tax on a party and party basis and the defendant shall be entitled to an order against the plaintiff for his costs in respect of the claim thereafter taxed on a party and party basis."

That rule applies to a proceeding where a plaintiff has obtained judgment on his or her claim to which the offer relates. In a proceeding where the plaintiff has failed and the proceeding has been dismissed, in the usual case there would be no room for the operation of this Rule as cost would follow the event. In this case the plaintiff has been not successful, he has not obtained judgment on his application but rather it was ordered that his proceeding be dismissed. However, as I understand, the submission made on behalf of the defendant, it is that when regard is had to the provisions of Rule 26.08(3) and the provisions of s. 97(6) and (7) of the Administration and Probate Act, that in the event of the Court not making an order that the plaintiff pay the defendant's costs of the proceeding then justice requires that it should be ordered that the plaintiff pay the defendant's costs from the time that the offer was made to the plaintiff in compromise of the proceeding which offer was not accepted.

It was further submitted on behalf of the defendant that while accepting, that in some cases the costs of an unsuccessful plaintiff, in a proceeding in the nature of a testator's family maintenance proceeding may be ordered to be paid out of the estate[1] in the circumstances of this case no order should be made that the plaintiff's costs be paid out of the estate of the deceased.

On behalf of the plaintiff it has been submitted that the defendant's application for an order that the plaintiff pay the defendant's costs of the proceedings whether it be in their entirety or from 12 October 2001 should not be acceded to, but rather it should be ordered that the plaintiff's costs of the proceeding, as between solicitor and client, be paid out of the estate of the deceased. It was submitted that it should not be concluded that the proceeding was made "frivolously, vexatiously or with no reasonable prospect of success".

It is to be observed on the terms of s.79(7) of the Administration and Probate Act that even if the Court was to determine that the plaintiff's application was made "frivolously, vexatiously or with no reasonable prospect of success", it does not follow that the Court should order that the plaintiff pay the costs of the defendant. Rather, if it was determined that such was the case, then in such circumstances a discretion would arise for the Court to exercise.

In Butterworths, Australian Legal Dictionary, the editors, when defining the phrase "frivolous and vexatious", note that the phrase "is generally used with respect to a statement of claim intended to commence legal proceedings." In Dey v Victorian Railways Commissioners[2], which concerned an application by the defendant, in civil proceedings, for the Court to summarily intervene and dismiss the action on the grounds that it was frivolous, vexatious and an abuse of the process of the court, Dixon, J. at p. 91 said that the application was really made to the inherent jurisdiction of the court, "to stop the abuse of its process when it is employed for groundless claims". He further said,

"... once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process."

Dixon, J. at p. 91 further cited with approval the judgment of O'Connor, J. in Burton v Shire of Bairnsdale[3] where the latter said:

"Prima facie every litigant has a right to have matters of law as well as of fact decided according to the ordinary rules of procedure, which give him full time and opportunity for the presentation of his case to the ordinary tribunals and the inherent jurisdiction of the court to protect its process of abuse by depriving a litigant of these rights and summarily disposing of an action as frivolous and vexatious will never be exercised unless the plaintiff's claim is so untenable that it cannot possibly succeed."

In Munning v Australian Government Solicitor and Ors[4], Dawson, J. had before him an application pursuant to O.26, r.18 of the High Court Rules for an order to dismiss an action brought in the High Court as "frivolous and vexatious". At p.391 his Honour held that the action was groundless and bound to fail and therefore vexatious. He ordered that the action be permanently stayed.

In the circumstances of this case the discretion of the Court is sought to be exercised not at a time when the proceeding has been commenced as in a strike-out or summary dismissal or stay application, but after the conclusion of the trial and judgment and on the question of costs. It is in such circumstances that the issue to be determined is whether the application was made "frivolously, vexatiously or with no real prospect of success".

As the trial of this proceeding disclosed, there were real questions of fact and law to be determined. The fact that I accepted the evidence of the defendant as supported by witnesses called in support of her case, in preference to that of the plaintiff and his wife in determining the nature of the relationship that existed between the plaintiff and the deceased at her death as a matter relevant to whether the deceased had responsibility to make provision for the proper maintenance and support of the plaintiff from her estate and I held that she did not, does not mean and it does not follow that the application of the plaintiff was made frivolously, vexatiously or with no reasonable prospect of success. This was a case in which real questions of fact and law had to be determined on trial. It cannot be said in my view that the application of the plaintiff was so untenable that it could not possibly succeed or that it was groundless and bound to fail. Although the plaintiff was not successful, the application of the plaintiff for an order under s.91 of the Administration and Probate Act, was not made frivolously or vexatiously. Further, I do not conclude that the plaintiff's application had no reasonable prospect of success. In reaching that conclusion I consider the application of the plaintiff as brought by him under s.91 of the Administration and Probate Act for an order that provision be made from the estate of the deceased for his proper maintenance and support in the event of the Court being satisfied that the deceased had responsibility to make provision for the proper maintenance and support of the plaintiff from her estate, and on it being further determined that the will of the deceased did not make adequate provision for the proper maintenance and support of the plaintiff. On this matter I do not have regard to the nature or amount of the provision sought by the plaintiff by his originating motion or as identified and stated by his counsel at the commencement of the trial. Having reached this conclusion, the discretion vested in the Court by s. 96(7) of the Administration and Probate Act does not arise for the Court to consider or exercise. That however does not end the matter. By virtue of s. 97(6) of the Act the Court may make any order as to costs of the plaintiff's application, "that is, in the Court's opinion, just".

In Singer v Berghouse[5], the proceeding before the Court was an application for security of costs on an appeal to the High Court against a decision of the Court of Appeal of the Supreme Court of New South Wales upholding a decision by Master Windeyer rejecting the appellant's application under the provisions of the Family Provision Act 1982 (NSW). At p. 521 Gaudron, J. said:

"In most cases costs follow the event in the sense that save in special or extraordinary circumstances, costs are awarded in favour of the successful party and against the unsuccessful one."

"Family provision cases stand apart from cases in which costs follow the event. Leaving aside cases under the [Family Provision] Act [1982 (NSW)] which, in section 33, make 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 applicants, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicants' 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."

In footnote 4 to her Honour's judgment she noted that it was said by Ross Martyn (Family Provision: Law and Practice, 1985) at p. 78 that in the United Kingdom an unsuccessful applicant "will be very lucky indeed if he gets his costs out of the estate".

In determining whether an order should be made against the plaintiff in this case, having regard to the nature of the proceeding it is relevant to consider the circumstances of the plaintiff. As found by me, the plaintiff is 72 years of age and suffers from the various medical conditions referred to in my judgment. He is a frail ill man. His only income is from the pensions that he receives. He and his wife live in rented accommodation. On the evidence before the Court it can be only concluded that if an order for costs was made against the plaintiff it would have an extremely detrimental effect on his financial position.

It does not follow however that it should be ordered that the plaintiff's costs of the proceeding be paid out of the estate of the deceased. Apart from a small amount of money the estate of the deceased comprised her former home situated at 43 Somers Street, Bentleigh which by her will the deceased devised and bequeathed to the defendant. It was submitted on behalf of the plaintiff that in such a proceeding as this it is usual that the defendant pay the plaintiff's costs of the proceeding. Be that the case or not the fact is that the plaintiff was unsuccessful in the proceeding, he failed to satisfy the Court that the deceased had responsibility to make provision for his proper maintenance and support out of her estate. In such circumstances the discretion vested in the Court pursuant to s. 91(1) of the Act did not arise for it to exercise. In my view, having regard to this matter and to the nature and size of the estate of the deceased, justice does not require or dictate that the estate of the deceased should bear the plaintiff's costs of the proceedings.

Accordingly, the conclusion that I have reached is that the applications of the plaintiff and the defendant, each as to costs, should be dismissed and no order for costs should be made in this proceeding. It is ordered that the plaintiff's application for costs and the defendant's application for costs each be dismissed.

[1] Re Whitfield [1937] VicLawRp 6; [1937] VLR 17 at 21.

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Judgment (41 paragraphs)

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