Grant v Grant; Grant v Grant

Supreme Court of NSW|2022-06-10|Before: Slattery J

EX TEMPORE Judgment

This is the Court's fifth judgment in these twin proceedings concerning the Grant family. The two proceedings have been referred to in all previous judgments as the "estate recovery" proceedings and the "family provision" proceedings. This judgment should be read together with the Court's earlier judgments. Events, matters and persons are referred to in this judgment in the same way as the previous judgments.
The Court's fourth judgment, Grant v Grant; Grant v Grant (No. 4) [2022] NSWSC 106 sets out the background to the earlier judgments of the Court. In summary the Court's second judgment contains the principal findings and conclusions, disposing of both the estate proceedings in the family provision proceedings: Grant v Grant; Grant v Grant (No. 2) [2020] NSWSC 1288. This was followed by a judgment awarding indemnity costs in both proceedings to the successful plaintiff, Seth Grant, the legal representative of the estate of the late Dr Alan Grant: Grant v Grant; Grant v Grant (No. 3) [2021] NSWSC 1. The unsuccessful defendants at trial, Nerez Grant and Kashaya Williams, appealed against these judgments, but their appeals were dismissed: Grant v Grant [2021] NSWCA 181.
The fourth judgment dealt with a contest concerning consequential orders in the estate recovery proceedings. It resulted in the Court making orders in relation to the administration of the estate generally, including the appointment of Mr Seth Grant as a special administrator of the estate, the sale of the Killcare property, and the administration of the proceeds of sale of the estate's property. Orders for the possession of the Killcare property, have been made and the property has now been sold. The special administrator now applies for orders under the Civil Procedure Act 2005, s 98(4)(c) ("the CPA Act") for a specified gross sum instead of assessed costs in both the estate recovery proceedings and the family provision proceedings. This judgment deals with that application.

Applicable Legal Principles

The Court's power to make a s 98(4)(c) order should only be exercised when the Court considers it can do so fairly between the parties, and where an appropriate sum can be determined on the available materials. The making of such an order may be appropriate where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the results of the proceedings. A broad-brush approach is appropriate. The detail required of a formal cost assessment, would defeat the purpose of the making of a specified gross sum cost order, if it were required on a s 98(4)(c) application. I have discussed the principles in greater detail in Bahamad v Wong (No. 2) [2020] NSWSC 1320. They do not need elaboration here.
In the third judgment the Court awarded indemnity costs in both proceedings in favour of the estate. The indemnity costs orders in the estate recovery proceedings were made against both Ms Williams and Ms Nerez Grant. In the family provision proceedings, indemnity cost orders were made only against Ms Grant.
The present application is for a specified gross sum instead of the assessment of those indemnity costs. It is not unusual in applications under s 98(4)(c), notwithstanding an award of indemnity costs, for a discount to be applied in reaching the specified gross sum that is fixed. Such a discount can be appropriate even where costs are awarded on the indemnity basis. A successful party is not always able to demonstrate under an indemnity costs order that all the costs claimed were properly and reasonably incurred. Applying a discount reflects the fact that some costs would not be recovered on a cost assessment, even in an indemnity costs situation.
But that does not mean that the Court must apply a percentage discount to the sum sought by the successful party. If the Court can be confident that there is little risk that the sum includes costs that might be disallowed on an assessment, then the case for a discount is seriously undermined. Where there is no evidence of unreasonableness in a claim for indemnity costs it may be appropriate not to apply any discount: Beach Petroleum NL v Johnson (No 2) [1995] 57 SCR 119 at 1645.

Consideration

The material before the Court on this application is extensive. The Court directed that the estate put on evidence of all its invoices and memoranda of fees on this application. These were attached to an affidavit of Seth Grant, deposed on 4 April 2022 and read on this application. No expert evidence has been filed. Expert evidence is unnecessary in these cases. The Court can make the decision based upon its own experience.
The matter is complicated by the fact that Ms Nerez Grant has recently been made bankrupt. The bankruptcy means the Court may not take a fresh step in any proceedings against her in respect of a provable debt in her bankruptcy: see Bankruptcy Act 1966 (Cth), ss 57 and 58. The indemnity costs orders made here were made before her bankruptcy and prima facie appear to be provable debts in her bankruptcy. The Court cannot enter judgment against Ms Grant for a specified gross sum instead of assessed costs.
But the Court can make a s 98(4)(c) order against Ms Williams. Notwithstanding Ms Grant's bankruptcy, whilst assessing the appropriate order against Ms Williams, the Court can nevertheless indicate what order it would have made against Ms Grant but for Ms Grant's bankruptcy.
The Court made directions for Ms Grant and Ms Williams to file evidence and submissions, in response to the affidavit of Seth Grant of 4 April 2022, and the written submissions that had been filed on behalf of the estate on 20 May 2022. Ms Grant and Ms Williams chose not to file either evidence or written submissions in response.
Ms Grant sought to advance oral submissions, on behalf of herself and Ms Williams, despite their failure to file written submissions in accordance with the Court's directions. The Court allowed these oral submissions to be put. But no further evidence was advanced on their side. So, the Court is left with the evidentiary material supplied by the estate, for the making of these orders.
The estate's claim for a s 98(4)(c) order is to be considered in the background of the conduct of the proceedings and the incurring of legal costs. I am in an apt position to be able to make a s 98(4)(c) order. I am familiar with almost all the appearances in Court and all the procedural steps that have incurred costs in both proceedings since late 2019.
The Court is satisfied that an order should be made under 93(4)(c). These have been long, protracted, and bitter proceedings. The hostile litigation within this family has involved significant complexity. I have already observed in several places in my second judgment, that this litigation has been lengthened by their conduct by both defendants: second judgment, paras [46], [47], [50], [331] and [334]. The appeal Ms Grant and Ms Williams brought against the second judgment was unsuccessful.
The cross-examination of the estate's witnesses by Ms Grant and Ms Williams was often ill-directed and added to the costs incurred in the proceedings. Ms Williams' and Ms Grant's cases in the proceedings were lacking direction, discipline, and organisation. Their failure to address the real issues in the proceedings rather than their own select grievances added unnecessarily to the length and complication of the proceedings. Additional costs were incurred because of their failure to comply with the Court's directions for filing submissions. To afford them procedural fairness the Court ultimately allowed Ms Grant and Ms Williams to advance oral submissions to cure their procedural defaults.
The Court has made findings of serious misconduct against both defendants, including that they were responsible for forging the signature of Dr Alan Grant, and for the transfer of the Killcare property pursuant to a dishonest and fraudulent scheme.
With this background, the Court is not in any doubt that were a costs assessment to take place, it would risk being protracted, disordered, vexatious, delayed and aggravating to the successful party, the estate of the late Alan Grant. The Court will therefore make the orders requested but only against Ms Williams in the estate recovery proceedings. Ms Williams and Ms Grant were jointly and severally liable for the costs orders made in the estate recovery proceedings. Ms Grant alone was liable for the costs order in the family provision proceedings and no judgment can be entered against her in these proceedings.

Quantum of a Specified Gross Sum Costs Order

I now turn to what the appropriate quantum of the order should be. One complication exists in in assessing the quantum of the estate's claim for costs. The proceedings first came before me, in relation to the care of the parties' father, Dr Alan Grant, who was then in an aged care facility and needed day to day funding. The NSW Trustee & Guardian (NSWTAG) had by then been appointed as a tutor for the deceased. Zucker Legal acted for the NSWTAG. After Dr Alan Grant's death, on behalf of the estate Seth Grant instructed Braye Cragg solicitors, to act in both the estate recovery proceedings and the family provision proceedings.
After the Court's second judgment, the estate's present lawyers, Teece Hodgson & Ward, commenced to act for the estate to pursue the enforcement of judgments and the proceedings in the Court of Appeal.
A dispute arose between the estate and Braye Cragg solicitors about the legal costs Braye Cragg had charged in the proceedings. That dispute went to a costs assessment, as between solicitor and client. The figures now claimed on behalf of the estate are the reduced fees, payable to Braye Cragg following that assessment. Those reduced fees appear in the summary set out below.
The Court accepts as accurate the convenient summary of the evidence of the quantum of the estate's costs, as incurred and claimed, that is set out in paragraph [32] of the estate's written submissions of 20 May 2022 for the estate recovery proceedings, and paragraph [33] for the family provision proceedings. These are an accurate summary of all the memoranda of fees and disbursements and other cost materials detailed in Seth Grant's affidavit.
The estate incurred the following costs up to judgment, after judgment and on appeal in the estate recovery proceedings against Ms Grant and Ms Williams. Estate Recovery Proceedings (Pre Judgment) a) Zucker Legal Fees $10,945.00 b) NSW Trust and Guardian Fees $17,143.00 c) Braye Cragg Tax Invoices $265,600.18 d) Disbursement Invoices $58,787.50 e) Disbursements paid direct from trust account $35,262.09 f) Miscellaneous Disbursements paid by Seth Grant $30,642.28 Total: $418,380.05 Estate Recovery Proceedings (Post Judgment) a) Teece Hodgson & Ward (incl disbursements) $93,765.07 b) Work in progress $5,997.75 Total: $99,762.82 Appeal Proceedings (Estate Recovery proceedings and Family Provision proceedings) a) Teece Hodgson & Ward (incl disbursements) $62,191.95 Total: $62,191.95 Overall Total: $580,334.82
The estate incurred the following costs in relation to the family provision proceedings that Ms Grant brought against it. Family Provision Proceedings a) Braye Cragg Legal Fees $164,927.86 b) Disbursements paid direct from trust account $1,734.35 c) Miscellaneous Disbursements paid by Seth Grant $15,627.28 Total: $182,289.49 Overall Total: $182,289.49
There is some attraction in this case ordering a full indemnity in favour of the estate when fixing a specified gross sum instead of assessed costs. It is common, even in cases where indemnity costs have been ordered, for a discount of between 10 and 20% to be applied.
But special features are present here. The Court has found Ms Williams and Ms Grant jointly engaged in a dishonest scheme to deprive their father of the Killcare property. In the preparation and conduct of the proceedings the estate needed to pay very close attention to detail to prove their dishonest conduct to the requisite high standard, given the serious misconduct being alleged.
At a cost assessment, the legal representatives of the plaintiff would for this reason have an excellent argument to justify what may otherwise be thought in other cases to be overly cautious or unnecessary costs.
Another factor allows the Court to more confident in giving a full lump sum indemnity under the indemnity costs orders. For a matter which has gone as long as this, and has had as many documents and witnesses as this, and involves as strong a contest as this the Court regards the fees that have been charged by the lawyers for the estate, as very reasonable. I would therefore not expect large discounts to be applied by a costs assessor to the costs claimed, were these proceedings to go to costs assessment.
Moreover, the material supplied in Mr Grant's affidavit of 4 April 2022, and exhibit SG3, provides fully detailed memoranda of fees and lists of disbursements. From this material the Court is in a good position to form judgments about the reasonableness and appropriateness of the charges concerned.
Ms Grant raises challenges to the claim for a full indemnity. She calls into question the travel expenses of bringing Seth Grant and his wife from the United Kingdom to Australia for the hearing. It is to be remembered that this hearing took place before the Covid-19 pandemic first hit Australia in February 2020. It was conducted under pre-pandemic conditions. Ms Grant gave notice for Seth Grant to be present for cross-examination. Moreover, the Court expects that parties to proceedings be present. His travel expenses, and those of his wife, who was also a witness in the proceedings and who was cross-examined, are reasonable expenses of the litigation.
Weighty considerations point towards a full indemnity being granted here. But there is always the likelihood of some expenses being successfully challenged on a costs assessment. The just course here therefore is to give almost a full indemnity. I will give a full indemnity to the plaintiff in the estate recovery proceedings, in respect of all disbursements and counsel's fees. But I will give a 95% indemnity in respect of solicitors' professional costs. That determination allows for the small possibility of some costs not being recoverable on an assessment.
The Court will request the legal representatives of the estate to break the above figures down and recalculated them so that they reflect the decision made here. The Court can then quantify the specified gross sum costs order in chambers.
When the Court receives the material for the recalculation, I note in the estate recovery proceedings that, had Ms Grant not been bankrupt, I would have entered judgement for that particular amount. And I will enter judgment against Ms Williams for that amount. But no judgment will be entered against Ms Grant in the family provision proceedings but I will note the result of the recalculation in those proceedings.
The figures presently before the Court do not include any costs incurred from 4 April 2022 up to today. The estate has offered to provide additional tax invoices for fees and disbursements up until today, including today's appearance, and the quantum of those will be calculated at those discounted rates now determined by the Court.
As the estate has been successful on this application, it is appropriate for it to be compensated in costs for the bringing of the application. I will make the same order in respect of the costs of this application as I have in respect of the earlier costs.
Ms Williams did not have anything to say against a costs order of this type being made against her in respect of the present application. As the estate has been successful, costs would normally follow the event. I will further order that the costs of the 98(4)(c) application that Ms Williams pay those costs to the estate. And I will further direct that the estate provide an affidavit recording those costs and a calculation of those costs and disbursements, in accordance with the formula which the Court has set out in respect of the earlier costs.
In summary, this a case for the reasons I have given, where where something very close to indemnity would be justifiable, but I think some small margin should be permitted. So, it will be 100% of counsel fees and other disbursements, and 95% of solicitors' costs in respect of all costs payable by Ms Williams on this application. Judgment for these amounts will be entered in chambers.

Conclusion and Orders

Accordingly, the Court makes the following orders and directions: 1. The Court will give judgment in the estate recovery proceedings, as those proceedings are defined in earlier orders, under Civil Procedure Act 2005, s 98(4)(c) in favour of the plaintiff and against the second defendant, Ms Williams, for the costs claimed by the plaintiff in those proceedings (based on the figures set out in paragraphs [32] and [33] of the plaintiffs written s 98(4)(c) submissions in the estate recovery proceedings dated 20 May 2022 but only up to the date of proof of those costs in the affidavit of Seth Grant of 4 April 2022 - "the estate's presently claimed costs") allowed as to a full indemnity in respect of counsel's fees and disbursements and as to a 95% indemnity in respect of solicitor's professional costs; 2. Direct the solicitors for the estate to calculate the correct amount for the entry of judgment for the estate's presently claimed costs in accordance with order (1) as at today's date and provide the calculation to the chambers of Slattery J and to the defendants. 3. Order that the second defendant, Ms Williams, pay the plaintiff's cost of his application under Civil Procedure Act 2005, s 98(4)(c); 4. Note that the figures for the estate's presently claimed costs do not include costs proven on affidavit as having been incurred after the swearing of the affidavit of Seth Grant of 4 April 2022, but that it is appropriate for the plaintiff in the estate recovery proceedings to be fully compensated pursuant to order (3) hereof for bringing this application after 4 April 2022, and subject to the receipt of appropriate affidavit evidence in support, for which leave to file and serve by 24 June 2022 is given, the Court will consider making an order similar to order (1) in respect of the costs of this application; 5. Once the figures and evidence are provided to the chambers of Slattery J in accordance with orders (1) and (4) the Court will make appropriate orders and declarations about the position of the first defendant, Ms Nerez Grant as if she were not a bankrupt; 6. Grant liberty to the defendants by 5.00 on 15 July 2022 to file documentary evidence substantiating the figures referred to in their affidavits and by the same date the estate has liberty to file and serve evidence as to what it says the potential earnings for Killcare property were prior to the plaintiff taking possession of the said property pursuant to the Court's order for possession; 7. Adjourn these proceedings for an in person hearing at 9am on 14 September 2022, unless the Court advises otherwise that the proceedings will be heard by AVL; and 8. When judgment is entered in chambers in accordance with orders (1) and (4) hereof it will be stayed for a period of 28 days.

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: 30 September 2022

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