Plaintiff v Defendant

2 On 20 December 2018, the proceeding was dismissed and the costs were reserved. Orders were made for the filing of written submissions on the costs of the proceeding.

3 The deceased died on 10 December 1994. The deceased was survived by the defendant, four of his five children and the three grandchildren of his deceased child. Probate of the deceased's will dated 27 August 1976 was granted to the defendant on 1 March 1995. Pursuant to the will, the deceased left his residuary of the estate to his children equally with a gift over should any child predecease him leaving issue.

4 The plaintiff was married to the deceased's daughter, Brenda Bellman. Mrs Bellman died on 5 September 2016. Probate of her will was granted to the plaintiff on 9 July 2018. The plaintiff claims that any interest in the estate of the deceased passed to the estate of the plaintiff.

5 The plaintiff commenced communicating with the defendant before obtaining a grant of probate in his wife's estate. In November 2017, the plaintiff alleged that a sale of land owned by Thornton Caravan Park Pty Ltd ('the company') on 5 May 1998 ought to have resulted in a distribution of funds to his wife. In addition, he identified a $1 share in the company as an asset of the deceased's estate which had not been distributed to the beneficiaries of the deceased's estate. The plaintiff sought a wide range of documents relating to the estate and the company. Since the death of the deceased, the directors of the company are the defendant and two of the deceased's children.

6 On 25 January 2018, the defendant complied with the plaintiff's request for estate accounts and provided company reports from 1999, a financial statement of the business from 30 June 1998, and a balance sheet and profit and loss statement as of 30 June 2017. The defendant also notified the plaintiff that the only asset remaining undistributed in the estate was the $1 share in the company and no dividends had been declared by the company. On 1 February 2018, the plaintiff requested further information regarding the estate and accounts of the business since 1995. On 9 February 2018 and 14 February 2018, the defendant offered to transfer the $1 share in the company to the plaintiff and the other beneficiaries in equal parts. The plaintiff refused the offer and requested further and more detailed information of the company accounts and the administration of the estate.

7 On 10 April 2018, the plaintiff advised the defendant that he was seeking administration accounts through the Registrar of Probates and also proposed that the defendant be removed as executor and trustee of the deceased's estate and that an independent administrator be appointed. The Registrar of Probates did not contact the defendant's solicitors regarding the provision of an administration account for the estate.

8 The defendant informed the plaintiff on 11 April 2018 and 1 May 2018 that the $1 share had been divided into one cent shares to facilitate transfers to the beneficiaries. In response, the plaintiff continued to request information about the estate, including valuations of property, and confirmed that he would not accept a transfer of shares as satisfaction of his entitlement under the estate.

9 On 15 August 2018, the defendant's solicitors advised the plaintiff's solicitors that an estate administration account would be provided within 14 days, informed the solicitors that there was no basis for the proposed proceeding and indemnity costs would be sought if the proceeding was issued. On 27 August 2017 the defendant's solicitors informed the plaintiff that an administration account had been drafted and was being reviewed by the defendant, and provided the plaintiff with a share transfer for execution, together with copies of the share transfers to the other beneficiaries to the estate. The plaintiff did not sign the transfer.

10 Notwithstanding the advice concerning the administration account, the plaintiff issued the proceeding one day after the expiry of the 14-day period.

11 Since the commencement of proceedings, an administration account was sworn by the defendant on 12 November 2018 in accordance with s 28 of the Administration and Probate Act 1958.

12 The plaintiff seeks orders that the defendant pay the plaintiff's costs personally. He submits that the defendant failed to administer the deceased's estate properly and has not provided an adequate explanation for her actions.

13 The defendant seeks orders that the plaintiff pay the defendant's costs of and incidental to the proceeding on a standard or indemnity basis and the plaintiff pay his own costs.

14 The Court's jurisdiction in relation to costs is conferred by s 24(1) of the Supreme Court Act 1986. The Court's general discretion in relation to costs must be exercised judicially and in accordance with Order 63 of the Supreme Court (General Civil Procedure) Rules 2015.[1] The prima facie position in respect of costs litigation is for standard costs to be ordered by the Court. The usual order as to costs is that costs follow the event and a successful party is entitled to an award of costs in its favour.[2]

15 The Court's discretionary power also allows the Court to makes an award for costs other than on the standard basis. The Court's discretion to depart from the usual order for costs will only be exercised where a proceeding exhibits a special or unusual feature or special circumstances.[3] The types of circumstances that may warrant a special costs order are not closed.[4] Where an action has been commenced or pursued in circumstances where an applicant, properly advised, should have known he had no chance of success, it may be presumed to have been commenced or continued for some ulterior motive or in wilful disregard of the known facts or established law. The discretion is enlivened when, for whatever reason, a litigant persists in, what on proper consideration should be seen to be, a hopeless case.[5] Each proceeding must be considered on its own facts to ascertain whether those facts support the making of a special order for costs.

16 The correspondence from the plaintiff's solicitors in April 2018 referred to their intention to follow the procedure pursuant to r 6.03 of the Supreme Court (Administration and Probate) Rules 2014. They did not follow this procedure. Instead, the plaintiff issued the proceeding in spite of the defendant's solicitors informing them that an administration account had been drafted and was being reviewed by the defendant. Prior to this, the defendant had provided information concerning the estate accounts as well as information concerning the company accounts. The defendant co-operated as best she could with the plaintiff's requests, bearing in mind the length of time since the deceased's death and the death of the solicitor who acted on behalf of the estate some years earlier.

17 The defendant informed the plaintiff that she was ready, willing and able to transfer the remaining estate asset, being the $1 share in the company, to the five beneficiaries. The plaintiff refused to sign the transfer and did not explain his reasons for not signing it. His failure to sign the transfer prevented the last remaining step in the administration of the estate from being finalised. Despite requests for his reasons for not signing the transfer, no meaningful response was given to the defendant's solicitors and he was unable to explain to the Court why he refused to accept the share transfer, given that this would enable the estate to be fully distributed.

18 The administration account that was provided after the commencement of the proceeding contained no further information of any consequence, yet the plaintiff continued to request financial information relating to the estate or the company. Any complaints concerning the company do not form part of the administration of the estate of the deceased.

19 In the circumstances, the application to remove the defendant as executor of the estate and for the defendant to provide an administration account for the estate was misconceived. First, r 6.03 of the Supreme Court (Administration and Probate) Rules 2014 provides an alternative option to attain an administration account, as was recognised by the plaintiff's solicitors but was not pursued by them. Secondly, before the proceeding was commenced the plaintiff had been informed that the remaining undistributed part of the estate was the $1 share in the company. The defendant provided a share transfer for the undistributed share, yet the plaintiff, without explaining his reasons, refused to sign the transfer. Any issue of failing to administer the estate could have been addressed by the plaintiff signing the transfer of the share. Thirdly, the plaintiff's solicitors were informed that the defendant was reviewing the administration account and notwithstanding still issued the proceeding. Fourthly, the information in the administration account did not contain any information of any consequence. Fifthly, the plaintiff's complaints concerning the company are not matters that involve the administration of the estate of the deceased.

20 Practitioners and litigants must have regard to the overarching obligations contained in the Civil Procedure Act 2010. The overarching purpose of the Act is to 'facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute' and the obligations include not making a claim that does not have a proper basis.[6] The plaintiff's application for an administration account and removal of the defendant as executor of the estate of the deceased was misconceived, did not have a proper basis and had no real prospect of success. This has caused loss of time to the Court and to the defendant. In the circumstances, these factors fall within the scope of the circumstances that warrant a special costs order in favour of the defendant.

21 The Court will order that the plaintiff pay the costs of the defendant of and incidental to the proceeding, assessed on an indemnity basis, to be taxed in default of agreement and the plaintiff bear his own costs.

[1] Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399, [11] (Croft J).

[2] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 97 (McHugh J).

[3] Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225; Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189; Lutar v Carley [2017] VSC 366, [21].

[4] Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, [8] (Harper J).

[5] GE Dal Pont, Law of Costs (LexisNexis Butterworths, 4th ed, 2018) 586-87 [16.55], quoting Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 202; (1988) 81 ALR 397, 401 (Woodward J).

[6] Civil Procedure Act 2010, ss 7 and 18.