Hall v Hansen

• 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4861/06 - FLORENCE HELEN HALL v GRANT HANSEN AND ANOR

JUDGMENT ON COSTS 1 HIS HONOUR: This is a matter in which the plaintiff made an application under s 7 of the Family Provision Act 1982 in respect of the late Maxwell Brayshaw Hall who died on 16 July 2005. The matter is before me to deal with a costs application following upon the death of the plaintiff in the course of the hearing. 2 The deceased was survived by his widow, the plaintiff, in the proceedings. The deceased and the plaintiff had been married before and they both had children by earlier marriages. The deceased had three daughters, one of whom, Sarah Hall, is a defendant in the proceedings. 3 The plaintiff's daughter, Helen Hansen, looked after the plaintiff and the deceased and at different times she was involved in the management of the financial affairs of both the plaintiff and the deceased. 4 The deceased made his last will on 22 October 2003. Under that will he appointed his daughter, Sarah, and Grant Hansen, the husband of the plaintiff's daughter, as executors. Probate was taken out by Mr Hansen, who is now the executor of the will. 5 In clause 3 of the will a unit in Watson Street, Neutral Bay, was to be held by the trustees for his wife to reside there for her lifetime or until she remarried. The residue of his estate including the interest in and remainder in respect of the unit was to be held in four equal parts. One part each for his daughters Sarah, Robyn and Jennifer and the other part was to be held by Helen Hansen and her husband Grant Hansen. There was then a child substitution clause in respect of that gift. 6 Therefore the only asset in the estate is the interest of the deceased in the property at Watson Street, Neutral Bay, which was a 78% interest. The other 22.5% interest is held by the plaintiff and her daughter, Helen, as joint tenants. Leaving aside minor matters, the house, the only asset, is valued in the order of $280,000. 7 The trial commenced before me on Monday 2 June 2008 and by that stage the costs on the basis of a one day trial were estimated for the plaintiff $60,000 and the defendant $80,000. The matter was adjourned part heard to Tuesday 3 June 2008 and shortly before lunch on that day I expressed a concern to the parties as to the matter not being finished that day and a concern about cross-examining the plaintiff who was receiving palliative care in St Vincents Hospice. I indicated that I was minded to make an order for interim provision for the plaintiff in the sum of $20,000 and that I would not allow the plaintiff to be cross-examined. I heard submissions and then gave judgment in which I made an order for interim provision in favour of the plaintiff in the sum of $20,000. I also made orders to facilitate the executor borrowing funds to make the funds available. At the conclusion of the hearing on the 3 June 2008 the matter was stood over for further hearing before me on 16 and 17 June 2008. 8 On 16 June 2008 the matter did not proceed for long mainly because a witness who was coming from the Central Coast became ill while he was travelling to Sydney and he was not available for cross-examination. On that day my attention was drawn to the fact that the costs of the interim provision had not been dealt with and I said the following: "I can deal with them at any stage no matter what happens. I do not have to deal with them now. It is far better to hear the rest of the case and get it over and done with and give a judgment as soon as possible." 9 Unfortunately that was not to happen as, when the matter resumed on 17 June 2008, I was advised that the plaintiff had died at the St Vincents Hospice that morning. I made no further order but the order for interim provision which I had made previously was entered on the Court's computer record. 10 The matter was restored to my list on 3 November 2008 for the purpose of arguing costs. On that occasion Helen Hansen, the plaintiff's daughter, and one of the executors of the plaintiff's last will consented to be appointed as representative of the plaintiff for the purpose of completing the proceedings. The other parties to the proceedings consented to this course and they indicated their consent to the question of costs being debated without the need for commencement of further proceedings. 11 At the hearing the plaintiff made an application for the costs of the claim for interim provision and this was opposed by the defendants. The defendants claimed that the plaintiff should pay the costs of the hearing. The plaintiff opposed this. 12 None of the parties before me sought to re-argue the conclusion in McEvoy v The Public Trustee (1989) 16 NSWLR 92 at 100: "…that when a person who would have qualified as an 'eligible person', dies after the commencement of proceedings, but before the making of an order, both the 'cause of action', and the proceedings, abate". 13 I will first deal with the plaintiff's claim for costs of the application for interim provision. 14 Although conceding that the proceedings had abated, it was the plaintiff's submission that because an order for interim provision had been made, the statutory provisions gave power to the court to make an order for costs. 15 The plaintiff referred to rule 29.12 of the Uniform Civil Procedure Rules which provides: "(1) If a party dies after the verdict or finding on the questions of fact, the Court may give judgment and judgment may be entered, despite the death." 16 By reference to the definitions contained in the dictionary to the rules the expression "judgment" is defined in s 3 of the Civil Procedure Act 2005 and "includes any order for the payment of money including any order for the payment of costs." 17 Given that there has been a finding on the questions of fact involved in the application for interim provision it is submitted that the Court can make an order for costs despite the death of the plaintiff. 18 It is necessary to see whether principles which apply to the abatement might affect the statutory provisions to which the plaintiff has referred in her submissions. 19 The effect of abatement and the ability to recover costs is a matter which has been dealt with in a number of cases. In Price v Ikin [2004] NSWSC 706 I was concerned with an application under the Family Provision Act where the plaintiff died before the hearing. There was an application brought before me for costs. 20 In that judgment I referred to decision of Kenny J in Kalejs v Minister For Justice & Customs (2001) 111 FCR 442 a case in which the proceedings had abated as a result of the death of the applicant between the hearing and the giving of judgment. Mr Kalejs had brought proceedings seeking judicial review under s 39B of the Judiciary Act 1903 (Cth) in respect of a decision by the Minister to give notice under s 16(1) of the Extradition Act 1988 (Cth) and a Magistrate's order under s 19 of that Act that he was eligible for surrender to Latvia. At par 15 to par 22 Kenny J analysed the authorities on the question of whether the particular causes of action were transmissible from the deceased to his or her legal personal representative and as a matter of construction of the statute concluded that it did not survive. 21 At paragraphs 23 - 33 Kenny J considered the authorities on whether in the circumstances the Court is able to make a costs order. When considering the circumstances where the death intervened between the hearing and judgment his Honour said: "[30] A court may, depending on the relevant statute, have power to make a costs order in a case where a party dies after orders have been made regarding the substance of the matter but before an award of costs has been determined: cf Healey v Williams where a costs order was made following the defendant's death after the defendant's discharge upon information. See also, in a different context, Rysak v Rysak and Bugajaski [1967] P 179 and Sugden v Sugden [1957] P 120. " 22 At paragraph 34 he concluded as follows:

" [34] None of these authorities address the difficulty that arises in this case, where, prior to death, there is as yet no order on any substantive issue or as to the costs to be borne by one party or another. Where the subject of the proceeding is a non-transmissible right and a claimant dies before the court has made a decision on the merits, or before any award of costs in favour of one party or other has been made, then, so it seems to me, the court is not only precluded from delivering judgment on the merits but also from making an order as to costs. If there is no-one who can properly be substituted for the deceased claimant since the rights that he sought to pursue are non-transmissible, then, there is no-one who is capable of reviving the action in order that an application for costs might be made. Put another way, in this circumstance, a deceased's personal representative has no legal interest in the proceeding and, therefore, no right to apply for a costs order in his favour. Alternatively, it is sometimes said that the courts will not permit an action to be revived for the sole purpose of an application for costs." 23 The approach advocated by Kenny J accorded with that taken by Levine J in Stead v Foster (Supreme Court of New South Wales, 4 September 1998, unreported) where his Honour, in dealing with a claim in defamation, observed at [16]: "It would appear from this that actions cannot be revived for the purposes of an application for costs alone. It appears to me a fortiori where the action, as a personal one, cannot be revived at all. As I noted above, there have been no orders for costs in the proceedings and certainly none has been taxed or assessed, so there can be no revival of the action on that footing. As appears from p1427-p1430 in Daniell's Chancery Practice, interesting questions may arise where injunctions, committal orders and orders appointing receivers have been made in proceedings which subsequently abate and cannot be revived. These would seem to be the sort of incidental matters to which Mahoney JA was alluding [in Fines at 387] and which the Court may be required to consider, even after the abatement of an action." 24 After referring to various limited exceptions to the rule that a Court will not make orders in an action that has abated his Honour concluded: "I am satisfied upon the authorities above that in this case the action abated upon the death of the plaintiff. As a defamation action, it is incapable of being revived by the remaining parties or the executrix of the deceased plaintiff. The purported attempt by the plaintiff's solicitor to relist the matter with a view to discontinuance was nugatory given the abatement. In my judgment, the abatement of the proceedings in circumstances where they cannot be revived deprives the Court of jurisdiction to entertain an application for costs as made by the first defendant purportedly in the abated action or by freshly originated process." 25 The approach adopted by Kenny J in Kalejs v Minister For Justice & Customs has subsequently been referred to in two cases, namely the unreported judgments of Phung v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 821 and Ali v Hartley Poynton (No 2) [2002] VSC 245. In the former case Ryan J applied Kalejs v Minister For Justice & Customs holding that a visa-holder's application be struck out, it having abated on the death of the applicant and that there be no order as to costs. In the latter case however, Smith J questioned the distinction drawn by Kenny J between cases where the cause of action survived at common law to the benefit of the estate and cases where the cause of action did not survive. At paragraph 6, Smith J held: "In the latter case, Kenny J analysed the earlier decisions and noted that a distinction had been drawn in Foppoli and Sims between cases where the cause of action survived at common law to the benefit of the estate and cases where the cause of action did not. Kenny J held that the power to enter judgment nunc pro tunc was not available where the cause of action did not survive for the benefit of the estate. I question that distinction [11] but, as I have already noted, in the present case s29 has the effect that the relevant causes of action survived. On the basis of Kenny J's analysis, the power to enter judgment nunc pro tunc remained available."

26 In footnote 11, Smith J continued: "The decisions in Sims and Kalejs rely on a view of Foppoli that is in my view debatable. In Foppoli, Hale J did not cite Turner's case. Burt J did, but held that the Tribunal did not possess the requisite power. He drew attention to the distinction between cases where the cause of action survived and those where it did not but reserved his opinion on whether it should be drawn. It should be noted also that the principle has been applied in circumstances where the cause of action at common law did not survive, eg, trespass whether to goods or land - see, for example Craven v Hanley, Barnes 255; Winfield, "Death as affecting liability in tort", 29 COL L Rev 239. The case of Craven was decided in 1738. Legislation was not enacted until 1833 (3 & 4 William IV C42) to enable executors or administrators of an estate to maintain proceedings in trespass." 27 His Honour's comments in Ali v Hartley Poynton are obiter as the issue in that case was whether exemplary damages may be recoverable in circumstances where the cause of action survived and s 29 of the Administration and Probate Act 1958 (Vic) explicitly stated that such damages were not recoverable for the benefit of the estate. As noted above, in the present matter, the plaintiff's representatives do not quibble with the fact that the relevant cause of action does not survive. As I have indicated Powell J found in McEvoy's case that as a matter of construction of the Family Provision Act 1982 the cause of action does not survive. 28 The doubts of Smith J were not shared by Connor J In the Marriage of Sims (1980) 50 FLR 286. I also do not share them and note that the cases of Turner, Foppoli, Sims and Kalejs were cases where the death occurred after the hearing and before judgment. 29 It does seem that in the careful consideration of the matter by Kenny J he acknowledged the exception to which he referred in paragraph 30 being whether there might be an appropriate statutory power. In this case there is an appropriate statutory power and I am satisfied that I have jurisdiction to deal with the plaintiff's application for costs of the order for interim relief. I turn to that application. 30 In somewhat discursive submissions the first defendant raised a number of different matters which I will address. 31 The first matter was one that was expressed as follows: "…that order of the Court was based upon one-sided evidence, a lack of proper evidence which the Plaintiff would have been expected to provide through the treating doctor and upon a mistaken basis of fact that the Plaintiff would leave palliative care if only for a short time." 32 In submissions the first defendant recognised that there was a difficulty and that this effectively was cavilling with the reasons I had given for interim provision. There was no appeal from my order and accordingly it stands. In my view it is inappropriate to have regard to the matters to which the first defendant refers on this ground. The decision on costs must accept that it was appropriate to make the interim order as it still stands. 33 The second matter concerned the plaintiff's affidavit sworn on 27 May 2008 in which she said: "I am weak physically from a course of chemotherapy but am regaining my ability to walk." 34 The submission by the first defendant was that the plaintiff's legal practitioners had adduced this evidence because they wanted an order for interim provision not for the benefit of the plaintiff but to secure their own costs. 35 There is no evidence from which I could infer that this was the reason for leading this evidence which was properly before me. The application for interim provision was not made by the plaintiff but was made on the Court's own volition and after indicating that I was minded to do so, the plaintiff embraced the idea. This was some time after the affidavit had been read. There is no substance in this submission. 36 The third matter was that there was clear evidence that the plaintiff had divested herself of funds and she was still seeking further provision. Once again these are matters relate to the substance of the order which I made and there has not been an appeal. I do not think it is appropriate to have regard to these matters. 37 The fourth submission was that I should consider conduct leading up to the commencement of the hearing. The conduct in question was that Mrs Helen Hansen was said to have relinquished her interest in the property for the benefit of her mother, the plaintiff. There was reference to a number of conferences which apparently took place but there was no evidence about them before me and, accordingly, I do not have regard to this matter. 38 In her written submissions the second defendant, Sarah Hall, pointed out that I had referred to the date of death of her father, Maxwell Brayshaw Hall, as being 16 July 2006. In fact the date of death was a year earlier on 16 July 2005. I was misled by an error in the probate which was in evidence and which showed the date of death as 16 July 2006. She suggested that this might have led me into error. However, I do not think this is an appropriate consideration given that there has been no appeal. In any event this would have to be seen in the context of my comments in the judgment at page 5 which are as follows: "Those other issues which relate to questions of relationships between the deceased and the plaintiff and the relationships with the deceased's daughters in the long run will probably have very little bearing on the overall final resolution of the case. " 39 The second defendant referred to section 9 (6) of the Family Provision Act 1982 which provides as follows: "Where on an application in relation to a deceased person, the Court has made an interim order as referred to in subsection (5), it shall, in due course, proceed to make a final determination of the application, which determination shall confirm, revoke or alter the order so made." 40 The second defendant submitted that it was appropriate for me to decline to hear the application for costs and to stand the matter over to the conclusion of the hearing when I could deal with all final costs issues. 41 In a careful submission the second defendant submitted that the event which was relevant under r 42.1 of the Uniform Civil Procedure Rules was not the order for interim provision of $20,000 but the abatement of proceedings which put an end to the possibility of determining the claim. In my view, the relevant event which I am dealing with is in fact the making of the order for interim provision. In the circumstances of this case there can be more than one event and the second event to which the second defendant refers may be important when I refer to the next matter. 42 When I suggested that I was minded to make an order for interim provision, having regard to the urgency apparent upon the evidence which I had heard at that stage, the plaintiff agreed with the suggestion and to that extent there was an application by them in respect of the relief. Precisely what costs should be recovered is a matter for a costs assessor. In my view the relevant event was the making of the interim order and on this matter the plaintiff has been successful. 43 I order the defendants to pay the plaintiff's costs of the application for interim relief. 44 I turn to the question of the costs orders sought by the first defendant. As is apparent from what I have recounted earlier in this judgment the hearing before me had not concluded at the time of the death of the plaintiff. A witness was still to be cross-examined and there were further documents to be tendered on behalf of the second defendant. It would seem that in these circumstances this is not a case which would fall within one of those cases referred to by Kenny J where a party has died between the hearing and judgment and the court allows judgment to be entered non pro tunc so that a party will not be prejudiced by delay arising from the act of the court. Similarly there was no verdict of findings of fact on the substantive application. Thus there is no room for the operation of UCPR 29.12. 45 In support of the first defendant's submission for an order for costs against the plaintiff the first defendant referred to McEvoy v Public Trustee and where Justice Powell after concluding that because of the death of the plaintiff the cause of action could not be maintained, his Honour dismissed the proceedings and ordered the plaintiff to pay the defendant's costs of the motion and the proceedings. However, it is apparent from his Honour's judgment that he was not directed to any authorities dealing with the consequential effect of the abatement and whether in those circumstances an order for payment of costs could be made. 46 As I have sought to demonstrate in Price v Ikin and the cases to which I then referred, a proceeding which has been abated in these circumstances cannot be revived for the purpose of seeking a costs order by the plaintiff. If a deceased persons legal representative has no legal interest in the proceedings and therefore no right to apply for a costs order in his favour it would seem to me that as a natural corollary the defendant would not have the right to apply for an order for costs against the deceased's personal representative. He may have had a right against the plaintiff but that was a separate claim that died with the plaintiff. In these circumstances I do not think that the first defendant is entitled to an order for costs. 47 In Stead v Foster Levine J referred to the jurisdiction difficulty when an action abates. He said: "As to the jurisdiction under which I make this decision, I treat the application as one in the manner of an originating summons (as was the case in Brown v Feney ) to determine the issue of jurisdiction and status of the abated action." 48 There was no new summons and by consent the parties did not wish to proceed on that basis. It seems to me that I should also treat the application in the same way in which his Honour did in Stead v Foster. 49 The order that I make is that the defendants pay the plaintiff's costs of the application for interim provision. I refuse the defendants' application for costs of the proceedings against the plaintiff. **********

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