Enzo Jair Ploder v Vittoria Angelina Garcea

Legal principles 13The Uniform Civil Procedure Rules 2005 (UCPR) contains rules at Part 12 (Discontinuance, withdrawal, dismissal and setting aside of originating process), Division 1 (Discontinuance of claim) which provide: Division 1 Discontinuance of claim 12.1 Discontinuance of proceedings (1) The plaintiff in any proceedings may, by filing a notice of discontinuance, discontinue the proceedings, either as to all claims for relief or as to all claims for relief so far as they concern a particular defendant: (a) with the consent of each other active party in the proceedings, or (b) with the leave of the court. (2) A notice of discontinuance: (a) must bear a certificate by the plaintiff, or by his or her solicitor, to the effect that the plaintiff does not represent any other person, and (b) except where it is filed with the leave of the court, must be accompanied by a notice from each party whose consent is required by subrule (1) to the effect that the party consents to the proceedings being discontinued in accordance with the notice of discontinuance. (3) If any such consent is given on terms, those terms are to be incorporated in the notice of consent. (4) If any party has not been served with the originating process, the plaintiff must file an affidavit to that effect. (5) For the purposes of this rule, proceedings on a cross-claim are taken to be different proceedings to the proceedings on the originating process and to proceedings on any other cross-claim. 12.3 Effect of discontinuance (1) A discontinuance of proceedings with respect to a plaintiff's claim for relief does not prevent the plaintiff from claiming the same relief in fresh proceedings. (2) Subrule (1) is subject to the terms of any consent to the discontinuance or of any leave to discontinue. ... 42.19 Proceedings discontinued (1) This rule applies to proceedings that are discontinued by the plaintiff, as referred to in rule 12.1. (2) Unless the court orders otherwise or the notice referred to in rule 12.1 (2) otherwise provides, the plaintiff must pay such of the defendant's costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued. 14In Re The Minster for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 at 624-625, McHugh J set out, in the particular statutory context before his Honour, "the principles which govern an application for costs when a party elects not to pursue an action because he or she has achieved the relief sought in the action either by settlement or by extra-curial means": In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action... Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried... But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases. [Citations omitted] 15Under the presently applicable rules in the UCPR, the result of discontinuance is that the costs must be paid by the discontinuing party "unless the court orders otherwise" (r 42.19). It is clear that the rules require the discontinuing party to provide proper justification for any costs order different from the conditional direction contained in the rules. In Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32, Hodgson JA (with whom Tobias and Basten JJA agreed) said at [53]-[54]: [53] It has been said that UCPR 42.19 does not give rise to a presumption that costs will be ordered against the discontinuing party: Fordyce v Fordham [2006] NSWCA 274; (2006) 67 NSWLR 497; Foukkare v Angreb Pty Ltd [2006] NSWCA 335 at [65]. [54] However, like UCPR 42.20, UCPR 42.19 states what the order for costs is to be unless there is a discretionary decision to order otherwise: Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [53]. This means there is an onus on the discontinuing party to make an application in respect of costs if it does not propose to pay the costs of the other parties: Foukkare at [65]. In my opinion, it also means that there must be "some sound positive ground or good reason for departing from the ordinary course": Australiawide Airlines at [54]. 16Basten JA said (at [74] and [78]): [74] ... The general costs rule set out in s 98 of the Civil Procedure Act 2005 (NSW) does not identify the limits of the court's discretion with respect to costs. The most important limitation for present purposes is the requirement that, again subject to the court otherwise ordering, costs should follow the event: see r 42.1. If that rule were to be applied, absent persuasion that the court should otherwise order, the plaintiff would be required to pay the costs of discontinuance. It seems likely that it is consistency with that general principle which underlies the default consequence provided in r 42.19. If that rule has application with respect to a discontinuance (and no reason was proffered as to why it should not) the discretion to make a costs order under r 42.19 will be confined by that general principle. In that respect, it may be misleading to describe the discretion under r 42.19 as "unconfined": see Fordyce at [87]. ... [78] This approach is not entirely consistent with that outlined in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622 at 624-625, where McHugh J concluded that where "both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings". However, the rule pursuant to which the applicant sought costs in the High Court conferred an open discretion: see High Court Rules 1952 (Cth), O 71, r 39, set out at 623. Further, his Honour held that where there had been no hearing on the merits, "a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order": at 624. UCPR rr 42.1 and 42.19 indicate that a different approach may properly be taken by this Court in respect of both issues upon which his Honour relied: see also Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [64]. 17In Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365, Bryson JA (with whom McColl JA agreed) said at [48]: [48] [The relevant] passage from Lai Qin is not readily applicable to decision under r 42.20(1). UCPR r 42.20 is not entirely consistent with McHugh J's observation that the proper exercise of the costs discretion will usually mean that the Court will make no order as to costs. Justice McHugh's observations were directed to the discretionary power in O 71 r 39 of the High Court Rules (Cth), set out in Lai Qin at 623, which was discretionary overall, whereas in contrast r 42.20(1) creates a starting point by requiring " ... the plaintiff must pay the defendant's costs of the proceedings ... " unless that outcome is displaced by a discretionary decision. It should in my opinion no longer be said that if the moving party, or if both parties have acted reasonably in commencing and defending proceedings the proper exercise of the costs discretion will usually mean that the Court will make no order as to the costs of the proceedings; observance of the starting point under r 42.20 will make this outcome less usual than it earlier was. 18It has been said that some matters for consideration in exercising the discretion to make other than the usual orders will be the reason the proceedings were discontinued, whether the discontinuance is a consequence of having achieved practical success in relation to the claim (Cummins v Australian Jockey Club Ltd [2009] NSWSC 254 at [32] and [34]), whether the defendant has acted unreasonably in its opposition to the plaintiff's claim, whether the defendant's conduct has caused unnecessary costs to be incurred, and whether the proceedings have been rendered futile by circumstances beyond the parties' control (Newcastle Wallsend Coal Co Pty Ltd v Industrial Relations Commission (NSW) [2006] NSWCA 129; at [23] and [39]). 19In Fordyce v Fordham [2006] NSWCA 274 Santow JA observed (at [3]): [3] I would wish to add this observation on one aspect of the reasons on UCPR 42.19 and 42.20. I consider the fact of discontinuance is likely to be a factor of some weight in exercising the discretion to determine whether the discontinuing party should be ordered to pay the other party's costs. While it is true the Court may otherwise order, the onus remains on the discontinuing party to justify such an order by reference to the circumstances said to justify exception to the normal cost outcome in such event. That the Court retains a discretion to accommodate such circumstances does not alter their character as being by way of exception nor the consequence in terms of onus. That said, the discretion remains to otherwise order. 20The cases, especially the more recent decision of Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32, indicate that for the purposes of determining costs under r 42.19, there is no "presumption" that the discontinuing party pays the costs of the proceedings. However, a court commences with a predisposition that the party seeking discontinuance ought to be characterised as an unsuccessful party, and that unless there is some sound positive ground or good reason for departing from the ordinary course, the discontinuing party should pay the costs of the proceedings. In Lai Qin, the discretion with which McHugh J was dealing in the statutory context of that case was completely unhindered by any statutory predisposition. 21However, notwithstanding the different statutory context, it is clear that the considerations referred to by McHugh J in Lai Qin are not irrelevant. In Fordyce v Fordham [2006] NSWCA 274, McColl JA (with whom Beazley JA agreed) said (at [84]) that: [84] ... Other relevant considerations were...usefully gathered in Lai Qin...notwithstanding, as the discussion below reveals, that they were decided in a different statutory context. 22In an application such as this, it is therefore appropriate, if the Court feels able to do so, to consider the filed evidentiary materials for the purpose of expressing a view on the reasonableness or otherwise of the manner in which the litigation was conducted or, where appropriate, on the merits of the case. However, as McHugh J noted, the ability on the part of a Judge to predict with any certainty in advance of a trial whether a party would be successful is likely to be rare. Examples of cases that might fall within that category would be those which turn upon questions of law, such as the construction of a contract, or the construction of statute, where there is little doubt about the outcome, or perhaps where there is uncontested evidence or where parties have made relevant admissions in the pleadings as to material facts. However, where, as here, there are contested issues of material fact which are highly relevant to the determination of the issues between parties, it is difficult, if not impossible, in the absence of the benefit of hearing that evidence and any cross-examination, for a court to reach a sufficient level of conviction about the ultimate merits of a case.

Discussion and evidence 23The outcome of this litigation to some extent turns upon the determination of two issues, being: (1) the precise nature of the relationship between the Plaintiff and the Deceased; and perhaps (2) the legal basis on which the sum of $100,000 was provided by the Defendant to the Deceased for the purchase of the House. 24The Plaintiff alleges that he was living in a de facto relationship with the Deceased, that they were engaged to be married, and that the Deceased wished for him to have everything that she owned, including her superannuation. In his affidavit of 29 June 2011 he says he "was living in a domestic relationship with [the Deceased] at the time she died", and that they "lived together as man and wife". 25A number of affidavits sworn by individuals who knew the Plaintiff and the Deceased support the Plaintiff's allegations that the Deceased and the Plaintiff lived together, were planning to marry, and had been given $100,000 to purchase a home. There is evidence from Mr Roderiguez, Mr Tolemeo and Mr Kasic which supports that the couple were living together in a de facto relationship. 26It seems from this evidence that although the relationship between the Plaintiff and the Deceased was brief in duration, it was intense, moving within a matter of months from correspondence over the internet to purchasing, and living together in, the House. 27Following the Deceased's death, the Deceased's parents arranged for a death notice to be placed in the Daily Telegraph newspaper, which read, among other things: ...cherished and adored by Enzo... 28The Defendant disputes the Plaintiff's description of the nature of his relationship with the Deceased. In her affidavit, sworn 21 October 2011, the Defendant alleges that her daughter at no time had sexual relations with the Plaintiff because of her religious beliefs, and that the Plaintiff and the Deceased were not engaged, not living together, not in a de facto relationship, and that the Plaintiff was simply the Deceased's "boyfriend". The Defendant accepts that her daughter mentioned marrying the Plaintiff at some future time, but nothing more. 29The evidence of both Ms Blake and Ms Alessio have been put on to dispute the evidence filed on behalf of the Plaintiff. Ms Blake said, though unspecified by time, that the Deceased said "I will not have a sexual relationship outside of the covenant of marriage". Ms Alessio also said that the Deceased said "I won't have sex before marriage. It is the right thing to do". Again, that appears to be unspecified in point of time. According to Ms Alessio, she also asked the Defendant, one week after the Deceased took her own life, whether he was in a sexual relationship with the Deceased, and he allegedly denied it on the basis of the fragility of the Deceased's mental state caused in part by her sensitivity about her physical appearance. 30The Defendant instructed her solicitors to write a letter to the Plaintiff's solicitors, dated 18 April 2011, which included the following: Put at its highest, the relationship between Miss Garcea and your client was no more than a girlfriend/boyfriend relationship. They were not engaged to be married and they most certainly were not living in a de facto relationship as husband and wife...or even a close personal relationship. ... My clients deny any sexual liaison between Mr Ploder and their daughter. I am instructed that she was simply not well enough to engage in sexual activity notwithstanding her strict religious beliefs. As a result of the stance taken by the Defendant, the Plaintiff commenced the present proceedings. 31Whilst I have formed some very tentative views about the evidence, especially that called by the Defendant, I acknowledge that there are contested issues of fact which it is simply impossible to come to any concluded view on without hearing the witnesses. At the moment it is not possible for me to come to any firm view about whether the Defendant has acted unreasonably in her opposition to the Plaintiff's claim and caused him to incur unnecessary costs. 32In passing, I should observe that the Succession Act 2006 expressly specifies the "the nature and duration of the relationship" (s 60(2)(a)) between the Deceased and the Plaintiff would be relevant to the Plaintiff's application for provision out of the Deceased's estate. Furthermore, it expressly provides that an "eligible [person] who may apply to the Court for a family provision order in respect of the estate of a deceased person" includes "a person with whom the deceased person was living in a de facto relationship at the time of the deceased person's death" (s 57(1)(b)), and "a person with whom the deceased person was living in a close personal relationship at the time of the deceased person's death" (s 57(1)(f)). Without setting out any further detail, it is apparent that the probability of success of the Plaintiff's claim will be affected by the intimacy of his relationship with the Deceased. This material fact is contested between the parties. 33As to the basis on which the Defendant provided the $100,000 to the Deceased for the purchase of the House, in my view the evidence at the moment strongly indicates that it was by way of a gift, not a loan. But the position is not entirely clear. There are obvious conflicts in the evidence. 34At a meeting with Ms Mammoliti on 27 September 2010, the Defendant signed a statutory declaration in which she wrote: I am giving my daughter $100,000 as a non-refundable gift because she does not want a wedding celebration but would prefer to purchase a property. 35The Defendant acknowledges two things in her statutory declaration. First, that the payment of $100,000 to the Deceased was a gift, not a loan. Secondly, that the Deceased and the Plaintiff were contemplating marriage. In her pleadings, the Defendant appears to concede that the payment of $100,000 was provided as a gift. 36Importantly, Ms Mammoliti, apparently an independent third party, swore an affidavit on 30 November 2011, in which she refers to certain conversations which took place during the meetings between the Plaintiff, the Deceased, the Defendant and herself for the purpose of arranging finance. Ms Mammoliti's evidence potentially corroborates the Plaintiff's evidence in a number of respects. She alleges that the following took place: (1) during the first meeting on 20 September 2010, the Plaintiff introduced the Deceased as his "fiancé", and referred to her in the same way throughout the meeting in the presence of the Defendant; (2) during the first meeting the Deceased said words to the effect: "I told mum I don't want a wedding, she is giving us a $100,000.00 as a gift. I would rather put the money towards a deposit on our home". (3) during the first meeting, the Defendant said words to the effect: "Fiona has told me that she doesn't want a big wedding. Instead she says that she wants the money to help buy this home with Enzo. I thought, 'yes', he makes my daughter very happy. Enzo has taken such good care of Fiona, when he visits our place and is like a son to us". (4) during the second meeting, Ms Mammoliti explained that the bank would only approve the loan if the $100,000 was a non-refundable gift, and the Defendant replied in words to the effect "Yes. I understand, if my daughter does not want a wedding and she wants to use the money to purchase a home for Enzo and herself, that is o.k. with me." (5) it was never suggested or implied that the $100,000 was a loan; (5) during late October 2010 the Defendant called Ms Mammoliti and said words to the effect: ...I will ask the bank to transfer my gift of $100,000 to Fiona... She is excited that they are buying a home and getting married. 37As to the nature of the payment of $100,000, the Defendant says it was a "contribution towards Fiona's purchase of the property" by way of a loan. In her own words: Mrs Mammoliti: I understand that you are contributing $100,000 to the purchase of this property. [The Defendant]: Yes that is right. Mrs Mammoliti: Ok well you will need to sign this statutory declaration saying that it is a gift to your daughter and not a loan. [The Defendant]: Why do I need to say it's a gift? I am lending the money to my daughter. Mrs Mammoliti: It's a normal procedure it needs to be referred to as a gift or the bank will not lend the money. 38However, in her affidavit sworn 14 February 2012, the Defendant says: ...I say that the $100,000 was a gift to Fiona. 39The brief analysis of the evidence above on both issues raises the reality that credit will play an important part in the determination of the facts. However, at the moment, I am simply unable to be entirely confident about these issues such as to make any findings about the probability of the Plaintiff's success. However I do see this issue concerning the $100,000 as somewhat more clear cut than the issue about the nature of the relationship between the Plaintiff and the Deceased. 40Nothing I have said should be taken as me having made any findings on any factual issue. Indeed I am unable to do so, but I have simply attempted to weigh up the available material before me, as part of the determination of the likely prospects of success of the Plaintiff at the trial. 41In all the circumstances, I consider it was reasonable for the Plaintiff to commence proceedings. In my view, he had no choice given the letter in which the Defendant completely denied the existence of any significant relationship between the Plaintiff and the Deceased. Therefore whilst I consider it was reasonable for him to commence proceedings on the basis of the relationship as he perceived it to be, and his expectation that he would therefore receive something out of the estate, I do not feel I can confidently find he would be successful in the litigation.

Settlement negotiations 42As I have already observed, the parties have made numerous offers and counter-offers in an attempt to reach settlement, but these attempts have been unsuccessful. 43Prior to filing the present motion, the Plaintiff provided to the Defendant's solicitors an offer of settlement on 31 January 2013 and indicated that if it was not accepted, the present motion would be filed. The offer was in the following terms: ● that the superannuation death benefit come into the estate; ● that 95% of the net proceeds of sale of the House be paid into the estate (5% is not estate property); ● that the pool be split between the parties; ● that each party pay their own costs of the proceedings; ● that the Plaintiff's summons would be dismissed. 44As already noted, the Plaintiff successfully applied to have the Deceased's superannuation benefits given to him. The Plaintiff's solicitor therefore submitted that: The effect of the offer was that the Plaintiff was paying into the Pool $320,000 that is "notionally" his, but that does not have access to. It is the subject of an appeal. The Defendant was contributing 95% of $93,000, that is $88,350. 45Throughout the proceedings, the Plaintiff has maintained the position that he would be prepared to discontinue the proceedings if the Defendant would agree to give to him the Deceased's superannuation benefits. 46The Defendant rejected the offer and requested the Plaintiff to file his notice of motion. 47The Defendant made a further offer, and on 6 March 2013, the solicitor for the Defendant alleges he had a conversation with the Plaintiff's solicitor to the following effect: [Defendant's solicitor]: Hi Trevor, I have received your client's submissions. I assume that this means that the matter isn't settling. [Plaintiff's solicitor]: That is correct. [Defendant's solicitor]: Our client has effectively agreed to settle for what your client was asking for at the end of January. It seems to me that he is taking a big risk as it is far from certain that his motion either for the discontinuance or the charging orders will succeed. [Plaintiff's solicitor]: We don't think so. As we see it, our client already has the $320,000.00 and we think that will be protected if the motions are successful. [Defendant's solicitor]: Alright, I am not telling you how to run your case but it seems to me the risk and the further significant costs that will be incurred could all be avoided given the position that is on the table. I will speak to John about our submissions in reply. 48On 6 March 2013 the Plaintiff's solicitor also wrote to the Defendant's solicitor in the following terms: [My client] is distressed as to the extra costs now incurred with the notice of motion and your client's very clear instructions that we file that motion as set out in your letter. As this stage, I am instructed, I think, to complete the submissions. 49The Defendant's solicitors responded as follows: Both parties have incurred considerable costs in these proceedings it is difficult to understand how the modest costs associated with the motion could be a road block particularly when it is far from certain that the motion will be successful. Your client has continued to move the goal posts each time a settlement was either reached in principle or was close. It appears this is happening again. The current offer represents provision to your client of greater than 50% of the estate... 50Having considered the correspondence between the parties in relation to the conduct of the negotiations, I am of the view that the parties are not materially distinguishable as to the reasonableness of their conduct. The question of settlement discussions continued right up to the eve of the hearing of this motion, with offers and counter-offers having been made in open court. In the end, by reason of my analysis of their conduct, I regard this matter to be a somewhat neutral factor. 51As to the parties' conduct, their positions have changed over time. It is apparent that the Defendant's position initially was most unreasonable, but it has changed over time to a more compromising stance. The Plaintiff's position has also changed, and I consider on balance that whilst he initially made a most reasonable compromise, he has of late, for reasons best known to himself, hardened his position. This may have been affected by the Defendant's actions in changing the locks at the House, leading to the proceedings in the Small Claims Division in the Local Court, and further, the Defendant's persistence in seeking to challenge the decision of the trustees of First State Super.

Conclusion 52As the authorities make clear, whilst rule 42.19 does not give rise to a presumption that costs will be ordered against a discontinuing party, it states what the costs order will be unless there is a discretionary decision to order otherwise. There must be some positive ground or good reason for departing from the ordinary course (see Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32, per Hodgson JA (with whom Tobias JA agreed) at [53]-[54]). 53I have considered the conduct of the parties in light of the recent decisions of the Court of Appeal stressing the importance of giving effect to sections 56-60 of the Civil Procedure Act 2005 (see for example Richards v Cornford (No 3) [2010] NSWCA 134 at [98]-[110] per Allsop P and the cases which his Honour cited). 54I am unable to say with I think the requisite degree of certainty as discussed in the authorities that the Plaintiff would succeed or be largely successful on all relevant issues at the trial. On my analysis of the factual materials and the state of the evidence to date, I am not persuaded that the Plaintiff's preliminary status as an unsuccessful litigant warrants a re-characterisation. The Plaintiff has therefore not disclosed a sufficient basis to relive him of the burden of paying the costs of the Defendant if he chooses to discontinue. 55I therefore dismiss the Plaintiff's motion, and I order that the costs of this motion be costs in the cause.

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: 15 March 2013