Grynberg v Muller; Estate Late M Bilfeld

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST

119213/94 ROBERT BENJAMIN GRYNBERG & ANORv STEPHEN MULLER & ANOTHER (Estate Late Malke Bilfeld) JUDGMENT (See page 359 of the transcript) 1 HIS HONOUR: Before me is an application to file in these proceedings a notice of motion by Mordecai Popovtzer. The proceedings that I am hearing at some unusual length are applications relating to the costs of this suit, the substance of which was determined by me in a judgment I gave on 27 June 2001: Grynberg v Muller; Estate Late M Bilfeld [2001] NSWSC 532 ("my judgment"). By my judgment I determined that there should not be admitted to probate a will and codicil of the testator made on 22 July 1987 on the ground that, at the time they were made, the testator lacked testamentary capacity. Under that will and codicil, the residuary and principal beneficiary was Mordecai Popovtzer. There was instead admitted to probate on the cross claim of the second defendant a will of the testator made on 11 December 1985 under which the residuary and principal beneficiary was the second defendant, Moriah College. 2 Prior to the matter proceeding to trial between the plaintiffs and the second defendant, the matter had earlier been fixed for trial before Hodgson CJ in Eq (as his Honour then was) between the plaintiffs and the first defendant, Dr Stefan Muller. In contention in those proceedings, in addition to the 1987 will, was a 1988 will. At about the time fixed for that trial, the matter was settled between the plaintiffs and Dr Muller on the basis that the 1988 will would no longer be propounded and that, in effect, there should be no order as to the costs of the proceedings as between those parties. What are presently being agitated before me are questions of costs of the proceedings. The questions are in two areas. The first is whether the earlier order as to costs consequent upon the settlement should be set aside, and the costs as between the plaintiffs and the first defendant reagitated, essentially because it is said that the settlement was come to on the basis that proved mistaken that the 1987 will would in due course be admitted to probate. The other is as to the costs of the proceedings as between the plaintiffs and the second defendant of the proceedings as conducted between them. The present application relates to the latter of these matters. The plaintiffs, although unsuccessful, claim to have an order in their favour made out of the estate of the testator. One of the grounds on which the second defendant opposes the making of that order is the ground that, on the true construction of the arrangements made among the plaintiffs, Professor Popovtzer and Mr Victor Berger, who acted as the plaintiffs' solicitor throughout the proceedings, not only did Professor Popovtzer in fact pay such of Mr Berger's costs as have been paid and undertake liability for any that remain, but also that his liability for those costs was to the exclusion of any liability in the plaintiffs to pay Mr Berger's costs. In these circumstances, the second defendant says that by reason of the principle that the courts can award costs only by way of an indemnity (Gundry v Sainsbury [1910] 1 KB 645; Latoudis v Casey (1990) 170 CLR 534; Cachia v Hanes (1994) 179 CLR 403) costs cannot be awarded because there is no liability for costs in the plaintiffs which can be the subject of indemnification. 3 Very late in the day - this is the eighth day of an unusually complex and difficult costs argument - Dr Birch of Senior Counsel for the plaintiffs, has announced that he appears also for Professor Popovtzer and seeks, on behalf of Professor Popovtzer, leave to file a motion that an order be made for the payment of Professor Popovtzer's costs out of the estate in the event that the argument put by the second defendant, based on the indemnity principle mentioned above, prevents the making of an order in the plaintiffs' favour, which would be made but for that argument. Mr Friedgut, the solicitor for the second defendant, opposes leave. By reason of the lateness of the application, I warned Dr Birch that, if I were inclined to accede to his application, it would almost certainly be on the basis that additional costs caused by the lateness of the application would have in any event to be met by Professor Popovtzer and/or the plaintiffs. In face of this warning, Dr Birch has persisted with the application. 4 Mr Friedgut continues to oppose the application. In opposing it he draws attention to the fact that the first notice of the application was given to him only this morning. He points out, and it is conceded, that the point which the application is intended to meet was clearly taken in written submissions as long ago as last August and was the subject of debate before the Court between Dr Birch and Mr Friedgut on 12 October 2001. He says that his client came to Court to oppose a notice of motion which was clear and unequivocal and is now asked to fight in addition an application on a different basis. He says that, had the motion been filed timeously, the second defendant would have sought to lead additional evidence in relation to it, or at least to investigate whether additional evidence was available. That evidence, in general terms, would have been evidence relating to conduct of Professor and Mrs Popovtzer. He says that any adjournment would cause severe prejudice and delay and adverts to what he has said on earlier occasions about difficulties faced by his client as a result of being out of pocket in respect of more than $500,000 in legal costs; at one stage I considered making an interim order in his client's favour, but ultimately on 13 December 2001 I declined to do so because of difficulties that may have been caused to the interim administrator in relation to the handling of the funds at present available to the estate. He says that by reason of this prejudice, his client's decision is not to seek an adjournment to pursue the evidence referred to, but rather, if I be minded to grant leave to file the motion, to ask me to deal with the whole matter on the evidence already led as rapidly as possible. He reminds me of the provisions of Part 1 r 3 of the Supreme Court Rules 1970 ("the SCR"). 5 In light of the considerations in favour of my granting the application to which I shall shortly come, the only considerations which would lead me to refuse the application for leave are some form of incurable prejudice to the second defendant. The second defendant has decided not to call any further evidence, but says that it is prejudiced by lack of the opportunity to do so. It is not clear on the material before me that any such evidence is available. It is equally unclear that the attempt to get such evidence would cause any considerable delay. I have made it plain that, insofar as the granting of the application would impose any additional costs burden on the second defendant, in essence that would have to be borne by those associated with the seeking of the indulgence. On the other hand, it does seem to me that Part 1 r 3 of the SCR and the principle enshrined there may have some materiality to the way in which I should deal with this application. If I refuse the application and my decision subsequently is that the indemnity argument is upheld, that the plaintiffs are declined a costs order and that one cannot be made in Professor Popovtzer's favour in the proceedings at present constituted, because he is not a party and there is no formal application to that effect, there will be nothing to preclude Professor Popovtzer from subsequently and separately bringing an application for the costs to be ordered in his favour. In the long run, time and expense will, in my view, be saved by my granting the application and dealing with this application on Professor Popovtzer's part as part of the already complicated and difficult exercise which I am at present engaged in. 6 The only way in which Professor Popovtzer could be precluded from subsequently making such an application would be by virtue of the Anshun estoppel principle, or some extension of it. As Professor Popovtzer is not currently a party, and bearing in mind the nature of the application for costs, I think it is very unlikely that such an argument would be soundly based. But, if I am wrong about that and Professor Popovtzer were in the long run precluded by any such principle from making his application for costs, and that application were sound, the injustice of his being precluded in that fashion would, in my view, greatly outweigh any prejudice that will be suffered by the second defendant by my allowing Professor Popovtzer's application for costs to be filed at this stage. Under those circumstances I propose to grant the application for leave to file Professor Popovtzer's notice of motion. 7 I grant leave to Mordecai Popovtzer to file the notice of motion initialled by me and returnable before me at 10am on Friday 8 February 2002. I order that Professor Popovtzer pay the second defendant's costs of the application for leave to file the notice of motion.

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