Plaintiff v Defendants

1 On 17 December 2019, judgment was delivered on the plaintiff's claim for further provision from the estate of his deceased father ('the principal judgment').[1] On 13 May 2020, orders for the costs of the proceeding were made, save for a further issue regarding costs of the affidavits filed by the plaintiff ('the costs judgment').[2] The background to the remaining issue was set out in the costs judgment as follows:

[T]he plaintiff filed two affidavits: an affidavit sworn 19 October 2018 by the plaintiff and an affidavit sworn 19 February 2019 by Wendy Dodson. The affidavit of Wendy Dodson was not relied on by the plaintiff at trial.

The plaintiff's affidavit contained a substantial amount of inadmissible and irrelevant material. These issues were first raised by the Court in an email to the parties dated 30 May 2019, as follows:

The plaintiff's affidavit has a substantial amount of irrelevant and inadmissible detail and the affidavit could not be tendered in its current form. In the circumstances, the costs of and incidental to the affidavit will be an issue for the Court.

By return email dated 14 June 2019, the plaintiff's solicitors informed the Court that its observations were noted.

On 19 June 2019, the Court reminded the plaintiff's solicitors that it would be necessary to review the affidavits sought to be relied upon by the plaintiff. On 21 August 2019, the plaintiff's solicitors informed the Court that counsel had been instructed to review the plaintiff's affidavits. No further correspondence was received from the plaintiff's solicitors in regard to the affidavits, which were not amended before trial.

In its reasons for judgment, the Court observed:

Steven's affidavit comprises some twenty pages, yet contains little to no evidence that establishes any present need on his part. Fifteen pages of the affidavit set out the history of Steven's relationship with the deceased, which is then followed by several bare assertions regarding Steven's current position in life.

Steven's assertions are not borne out by the five documents that are exhibited to his affidavit: a copy of the will, an x-ray report detailing his spinal injuries, a title search for De Burgh Road, a record of land transferred to Anne, and a market appraisal of that land. Of the exhibits to his affidavit, the only document that related at all to his current circumstances was the x-ray report, from which Steven distanced himself in his viva voce evidence. Steven asserted that his expenses are approximately equal to the income received from his disability support pension. However, he provided no list of weekly or monthly expenses, nor any other documentary evidence to support his assertions, as would normally be expected of a party seeking further provision from an estate.[3]

2 The Court concluded that Coulter Roache's failure to draw and settle the affidavits properly and to address the Court's concerns caused considerable costs to be incurred on the part of the plaintiff, as well as costs on the part of the defendants in responding to them. The Court ordered the plaintiff's solicitors to forward details of the wasted costs in respect of the two affidavits and any written submissions in respect of these costs to the Court.

3 After enquiries from the practitioners as to what was required, by email dated 12 June 2020, the Court informed the practitioners that the submissions should address the quantum of any wasted costs associated with the two affidavits filed by the plaintiff and who should be responsible for the payment of any such wasted costs.

4 The plaintiff is now represented by solicitors, Bowman & Knox. Coulter Roache and counsel, Mr Cassidy, are now represented by solicitors, Colin Biggers & Paisley.

5 The plaintiff's position is that he has limited understanding and comprehension of civil litigation. He relied on the skill, judgment and expertise of his solicitor, Mr Black, then of Coulter Roache, and his counsel, Mr Cassidy, and he abided their advice.

6 In relation to the Court's email to Coulter Roache dated 30 May 2019, he is unable to provide any explanation as to why there were no amendments made to his affidavit or any amplification on 'several bare assertions regarding [his] current position in life'. Nor is he able to provide an explanation as to why his affidavit did not set out his 'weekly or monthly expenses, nor any other documentary evidence to support his assertions', other than he left these matters to his lawyer. Had he been requested to provide the information, he says he would have done so.

7 The practitioners itemised the costs of the two affidavits, totalling $15,761.90 as follows:

(a) $13,381.50 for the plaintiff's affidavit being solicitors' fees of $9,641.50 and counsel's fees of $3,740.00; and

(b) $2,380.40 for the Wendy Dodson affidavit.

8 In relation to the plaintiff's affidavit, the practitioners say that there were conferences with the plaintiff on 6 June 2018, 3 October 2018, 4 October 2018 and 19 October 2018, however, not all of those conferences related exclusively to the preparation of the plaintiff's affidavit. The conferences also involved taking instructions from the plaintiff and providing advice to him in relation to the proceeding generally. Coulter Roache are not able to provide any further detail about those conferences in the absence of a waiver of client legal privilege by the plaintiff.

9 The practitioners say they are mindful of the Court's findings that the manner in which the plaintiff's affidavit and Wendy Dodson's affidavit were drawn and settled caused increased costs in the proceeding. They provide an explanation for the contents of the affidavits and submit the costs of preparing the affidavits were appropriate and should be allowed; in other words, the costs orders already made by the Court should stand. They submit the circumstances do not justify the very serious step of making a personal costs order against the practitioners.

10 Coulter Roache acknowledges the Court's concerns with the plaintiff's affidavit as contained in the Court's email of 30 May 2019 and that no amendment was made to the affidavit prior to the commencement of the trial. It now apologises for this oversight.

11 The practitioners made additional submissions in relation to the two affidavits.

Relevance and admissibility of the plaintiff's affidavit

12 The practitioners disagree that the costs of preparing the plaintiff's affidavit were wasted. They submit that, in order to advise the plaintiff generally in relation to the proceeding, it was necessary to obtain the relevant background from him so as to understand his circumstances. Thereafter, they say, it was appropriate that his instructions be put in the form of a statement.

13 The practitioners submit that it was then a forensic decision as to how much of that background should ultimately be included in the affidavit. In analysing that forensic decision, the practitioners highlight that the question of whether the deceased made adequate provision for the plaintiff remained in issue until delivery of the defendants' submissions on the day before the trial.

14 In determining the amount of any provision to be made to the plaintiff, the Court must take into account the degree to which, at the time of death, the deceased had a moral duty to provide for the plaintiff. The background to the relationship between the plaintiff and the deceased was relevant to determining whether, and to what degree, the deceased had a moral duty to provide for the plaintiff. Accordingly, the nature of the relationship between the plaintiff and the deceased remained a relevant issue, even though the existence of a moral duty was conceded by the defendants.

15 The factual matters in the plaintiff's affidavit were matters the Court may consider in making a family provision order - for example, the plaintiff's earning capacity, his physical disability, his contribution to the estate, benefits he gave previously, and his character and conduct. It may be that those matters were ultimately given little or no weight in the exercise of the Court's discretion, however, the practitioners submit that the factual matters in the affidavit were appropriate in light of the provisions referrable to family provision claims.

Did the plaintiff's affidavit cause increased costs?

16 The hearing was stood down on the first day to enable counsel to agree on the matters that should be removed from the plaintiff's affidavit, which they ultimately did. The trial was stood down for about 15 minutes. The practitioners submit that procedural adjournments of this nature are often necessary to deal with issues as they arise during a hearing.

17 They note that the defendants did not raise any further objection to the contents of the plaintiff's affidavit during the trial and no rulings were made by the Court on the admissibility of the remainder of the plaintiff's affidavit. They also rely on the fact that counsel for the defendants cross-examined the plaintiff extensively on the contents of the his affidavit.

18 Finally, as the plaintiff's affidavit stood as his evidence-in-chief at the trial, this avoided the need for lengthy viva voce evidence, which ultimately reduced the time and cost of the trial.

19 Wendy Dodson's affidavit, excluding exhibits, comprised only five pages in length. The practitioners submit that it was relevant to the nature of the relationship between the deceased and the plaintiff, contributions made by the plaintiff in building up the estate of the deceased, and benefits previously given by the deceased to the plaintiff and the plaintiff's children. At the time that Wendy Dodson's affidavit was prepared and filed, Ms Dodson was a cooperative witness. Between the filing of the affidavit and the trial, the plaintiff and Ms Dodson fell out. Ms Dodson did not respond to attempts by the plaintiff's solicitors to contact her prior to the hearing and refused to be available to give evidence at the trial.

20 The practitioners then had to make a forensic decision as to whether to subpoena Ms Dodson or proceed without her evidence. Serving a subpoena on Ms Dodson may have resulted in an adjournment of the trial, thereby increasing the time and cost of the proceeding. The practitioners submit that the inability of the plaintiff to rely on Ms Dodson's affidavit was not the result of any conduct on the part of the practitioners. They also submit that, as the defendants did not provide any written response to Ms Dodson's affidavit, there were no wasted costs arising from it.

21 Section 24 of the Supreme Court Act 1986 gives the Court full power to determine by whom and to what extent the costs of and incidental to all matters in the Court are to be paid.

22 Rule 63.23 of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules') sets out the circumstances in which a lawyer may be liable to pay the costs of a party to a proceeding, often referred to as a 'wasted costs' order, as follows:

Costs liability of lawyer

(1) Where a solicitor for a party, whether personally or through a servant or agent, has caused costs to be incurred improperly or without reasonable cause or to be wasted by a failure to act with reasonable competence and expedition, the Court may make an order that -

(a) all or any of the costs between the solicitor and the client be disallowed or that the solicitor repay to the client the whole or part of any money paid on account of costs;

(b) the solicitor pay to the solicitor's client all or any of the costs which the client has been ordered to pay to any party;

(c) the solicitor pay all or any of the costs payable by any party other than the client.

(2) Without limiting paragraph (1), a solicitor fails to act with reasonable competence and expedition for the purpose of that paragraph where any application in or trial of a proceeding cannot conveniently be heard or proceed, or fails or is adjourned without any useful progress being made, by reason of the failure of the solicitor to -

(a) attend in person or by a proper representative;

(b) file any document which ought to have been filed;

(c) lodge or deliver any document for the use of the Court which ought to have been lodged or delivered;

(d) be prepared with any proper evidence or account; or

(e) otherwise proceed.

(3) The Court shall not make an order under paragraph (1) without giving the solicitor a reasonable opportunity to be heard.

23 The jurisdiction to make a non-party costs order, especially against the solicitors for a party to a legal proceeding, is exceptional and should be exercised with caution.[4] Although its object is compensatory, a non-party costs order falls within the inherent jurisdiction of the Court to discipline those who come before it.[5] However, r 63.23 does not require a party seeking costs from a solicitor to establish dishonesty, criminal conduct or personal obliquity; misconduct, default or negligence will suffice.[6]

24 In Dura (Australia) Constructions Pty Ltd v Hue Boutique Living (No 5), John Dixon J usefully summarised the principles that a court should take into account in the exercise of its wasted costs jurisdiction:

(a) The court's jurisdiction to make a wasted costs order against a solicitor is founded on breach of the duty owed by the legal practitioner to the court to perform his duty as an officer of the court in promoting, within his own sphere, the cause of justice.

(b) 'Negligent' should be understood in an untechnical way to denote failure to act in a way no reasonably well-informed and competent ordinary member of the profession would have done.

(c) The jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised with care and discretion and only in clear cases.

(d) The wasted costs jurisdiction discloses a tension between two important public interests, one that the wasted costs orders should not become a back-door means of recovering costs not otherwise recoverable against a legally-aided or impoverished litigant, and that the remedy should not grow unchecked to become more damaging than the disease and, two, that litigants should not be financially prejudiced by the unjustifiable conduct of litigation by their or their opponents' lawyers.

(e) A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he or she acts for a party who pursues a claim or a defence that is plainly doomed to fail.

(f) The legal practitioner is not the judge of the credibility of the witnesses or the validity of the argument.

(g) A judge considering making a wasted costs order arising out of an advocate's conduct of court proceedings must make full allowance for the exigencies of acting in that environment; only when, with all allowances made, an advocate's conduct of court proceedings is quite plainly unjustifiable can it be appropriate to make a wasted costs order.

(h) A legal practitioner against whom a claim for a costs order is made must have full and sufficient notice of the complaint and full and sufficient opportunity of answering it, and a legal practitioner should not be called on to reply unless an apparently strong prima facie case has been made.

(i) Where a legal practitioner's ability to rebut the complaint is hampered because the client maintains client legal privilege, full allowance must be given for the practitioner's inability to tell the full story and he or she should be given the benefit of the doubt. In such circumstances, the court should not make an order against a practitioner without satisfying itself that it is in all the circumstances fair to do so, or, put the other way, it is only when, with all allowances made, a practitioner's conduct of proceedings is quite plainly unjustifiable that it can be appropriate to make a wasted costs order.

(j) The procedure to be followed in determining applications for wasted costs must be fair and as simple and summary as fairness permits.[7]

25 In deciding whether to make a wasted costs order, the Court should have regard to the framework created by the Civil Procedure Act 2010 ('the CPA') for the conduct of civil proceedings. Section 28(2) of the CPA provides that, in exercising its discretion as to costs, a court may take into account any contravention of the overarching obligations under the CPA.

26 The overarching purpose of the CPA in relation to civil proceedings is to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute. Relevantly, s 20 of the CPA provides that a person to whom the overarching obligations apply must cooperate, inter alia, with the Court in connection with the conduct of that proceeding. Section 24 provides that practitioners and parties must ensure that the costs of the proceeding are reasonable and proportionate to the complexity or importance of the issues in dispute and the amount in dispute. As stated in Yara Australia Pty Ltd v Oswal:

Section 24 adopts a flexible test. There is plainly no costs matrix or formula that can be applied in determining whether the parties have met their obligations. Rather, the court must weigh the legal costs expended against the complexity and importance of the issues and the amount in dispute, in order to determine whether the parties used reasonable endeavours to ensure those costs were proportionate.[8]

27 Pursuant to s 29(1) of the CPA, the Court may make any order it considers appropriate in the interests of justice if it is satisfied, on the balance of probabilities, that a person has contravened any overarching obligations. In particular, s 29(1)(a) provides that the Court may order that such a person pay some or all of the legal costs or other costs or expenses of any person arising from the contravention of an overarching obligation. In the exercise of this power, as with the exercise of any power under the CPA,[9] the Court must seek to give effect to the CPA's overarching purpose 'to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute'.[10]

28 Finally, the Court retains the power to make orders under both r 63.23 of the Rules and s 29 of the CPA on its own motion.[11]

29 The overarching obligations apply to the practitioners, both of whom represented the plaintiff in his family provision proceeding.[12] The proceeding was a civil proceeding within the meaning of the CPA.[13]

30 The plaintiff has not authorised the practitioners to waive privilege that he holds over documents and information that might be relevant to their response to the Court and, therefore, the Court is not privy to the details and circumstances of the plaintiff's instructions to the practitioners. This may hamper the practitioners' ability to respond.[14]

31 In determining whether the practitioners have breached the aforementioned overarching obligations, it is necessary to assess their conduct in the proceeding.

32 At the outset, it must be observed that the practitioners are presumed to have expertise and experience in advising their clients and know the law and procedure in their areas of expertise. The practitioners regularly practice in the area of wills and estate litigation, including family provision claims, and regularly appear in that jurisdiction of this Court. Having regard to the hourly fees charged by the practitioners, it is also assumed they hold the expertise and experience to undertake litigation in the area of wills and estates, which includes conduct in family provision matters and in relation to issues of costs. Further, the Court's Practice Note at the time referred to the fact that affidavits filed in family provision claims tend to include much irrelevant and inadmissible material, and reminded practitioners of their overarching obligations set out in Part 2.3 of the CPA, which includes s 24 referred to above.

33 After an unsuccessful mediation in February 2019, orders were made towards listing the proceeding for trial. Within that context, the Court sent the email dated 30 May 2019 to Coulter Roche concerning the deficiencies in the plaintiff's affidavit with a warning that the costs of and incidental to the affidavit would be an issue for the Court.

34 On 14 June 2019, Coulter Roche responded by noting the Court's observations. On 19 June 2019, the Court reminded Coulter Roche that it would be necessary to review the affidavit. On 21 August 2019, Coulter Roche informed the Court that counsel had been instructed to review the affidavit. Despite this, there was no fee slip from Mr Cassidy for reviewing the affidavit amongst the fee slips he produced to the Court.

35 The practitioners have not provided an explanation for their failure to address the Court's issues with the plaintiff's affidavit. In their submissions the practitioners refer to their failure in not reviewing or amending the plaintiff's affidavit as an 'oversight' and apologise to the Court. In light of the communications from the Court, it is difficult to accept this conduct as an 'oversight'. The practitioners simply disregarded the Court's communications and failed to cooperate with the Court in connection with the conduct of the proceeding. They also ignored the Court's warning as to costs.

36 The Court raised the issue again at the commencement of the trial. After the proceeding was stood down for a short time, Mr Cassidy informed the Court of some minor deletions to the affidavit. The fact that dealing with the few deletions in the plaintiff's affidavit at the commencement of the trial only took a short time is not to the point in terms of wasted costs. Had the practitioners addressed the Court's queries after May 2019, it would have been unnecessary to stand the proceeding down, even for a short time, and the cross-examination of the plaintiff would likely have been shorter. This may have resulted in the trial finishing in one day. Further, the fact that the defendants did not raise objections to the affidavit is not a reason for the practitioners failing to address the deficiencies identified by the Court.

37 The 'forensic decision' undertaken by the practitioners as to how much of the background should be included in the affidavit was flawed as not only did it contain inadmissible and irrelevant matters, but it also failed to include relevant evidence relating to the plaintiff's current position and his liabilities and expenses.[15] The issue of what was adequate provision for the plaintiff was the issue at trial and not, as submitted by the practitioners, only until the day before the trial.

38 The practitioners suggest that the cost estimate of $13,381.50 for the plaintiff's affidavit may be high, as not all of the conferences were exclusively for the preparation of the plaintiff's affidavit. Notwithstanding this, the costs of the plaintiff's affidavit include the costs for obtaining the inadmissible and irrelevant detail. In the ordinary course, the practitioners would be entitled to the costs of the plaintiff's affidavit that addressed the requirements of the Part IV provisions but not for costs in obtaining inadmissible and irrelevant detail.

39 Costs would have been incurred by both sides in considering or responding to the communications from the Court. The defendants' practitioners would have incurred costs considering the plaintiff's affidavit, obtaining instructions to address those issues, drawing and settling affidavits by the defendants, and preparing for trial.

40 If the practitioners' conduct in relation to the plaintiff's affidavit constituted merely poor forensic decision-making, then the Court would not make a wasted costs order. However, the practitioners' conduct in essentially ignoring warnings given by the Court take the matter further. As indicated above, it is not possible to methodically quantify the costs flowing from the practitioners' conduct. In the circumstances, the Court will order that the practitioners bear one half of the costs relating to the plaintiff's affidavit.

41 In respect of Wendy Dodson's affidavit, the substantive part of her affidavit comprised four pages. Despite the submission that the contents were relevant, the matters deposed to in her affidavit were matters in the knowledge of the plaintiff. Ms Dodson's affidavit would likely have had little or no evidentiary value in the determination of adequate provision for the plaintiff. In the circumstances, Ms Dodson's affidavit was unnecessary and the practitioners should bear the costs relating to her affidavit.

42 These wasted costs are unlikely to represent an accurate assessment of the true wasted costs, however, it is necessary to make an assessment for the finalisation of the proceeding. The assessment is necessarily at the lower end, as it does not include costs incurred as a consequence of the unnecessary affidavit material.

43 The plaintiff's costs and disbursements for the proceeding amounted to $94,467.17, made up of Coulter Roache's fees of $46,778.60, counsel's fees of $39,600 and disbursements of $8,088.57. As observed in the costs judgment, the plaintiff's overall costs are unusually high having regard to the fact that the only issue in the proceeding was the amount of any further provision to the plaintiff.

44 Pursuant to the costs judgment, the plaintiff is to pay the costs of the proceeding from his share of the residuary estate, as varied by the orders made 14 February 2020. The defendants' costs are $101,622.96 assessed on an indemnity basis. In total, the amount of $196,090.13 is to be paid out of the plaintiff's share of the residuary estate. That amount should be reduced by the wasted costs as a result of the practitioners' conduct in relation to the plaintiff's affidavit and Wendy Dodson's affidavit.

45 Finally, as the Court has made a finding of improper conduct on the part of the practitioners, it is appropriate that the practitioners pay the costs of the plaintiff relating to this issue.

(a) Pursuant to r 63.23 of the Rules and s 29 of the CPA, the practitioners pay $6,690.75, being 50 per cent the costs of the plaintiff's affidavit filed 19 October 2018, and $2,380.40, being the whole of the costs of Wendy Dodson's affidavit filed 19 February 2019.

(b) The practitioners pay the plaintiff's costs of and incidental to this motion.

[1] Re Dodson; Dodson v Dodson [2019] VSC 833 ('Principal judgment').

[2] Re Dodson; Dodson v Dodson (No 2) [2020] VSC 266 ('Costs judgment').

[4] Knight v FP Special Assets Ltd (1992) 174 CLR 178, 198 (Dawson J); Dura (Australia) Constructions Pty Ltd v Hue Boutique Living (No 5) [2014] VSC 400; (2014) 48 VR 1, 19 [48] (John Dixon J) ('Dura').

[5] See generally Myers v Elman [1940] AC 282.

[6] Etna v Arif [1999] VSCA 99; [1999] 2 VR 353, 385 [82] (Batt JA, with whom Charles and Callaway JJA agreed). As to the latter, mere negligence will suffice. See Gabelich v Donaghey [2018] VSC 184, [76] (Daly AsJ).

[7] Dura (n 4) 22-3 [57] (John Dixon J).

[8] [2013] VSCA 337; (2013) 41 VR 302, 307 [13] (Redlich and Priest JJA and Macaulay AJA).

[9] Civil Procedure Act 2010 (Vic) s 8(1).

[10] Ibid s 7(1). See also Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 8) [2014] VSC 567, [257] (John Dixon J).

[11] Supreme Court (General Civil Procedure) Rules 2010 (Vic) r 1.14(2)(a); Civil Procedure Act 2010 (Vic) s 29(2).

[12] Civil Procedure Act 2010 (Vic) s 10(1)(b)-(c).

[13] Ibid s 11.

[14] Ozaltay v Atilla (No 2) [2018] VSC 764, [19] (McMillan J).

[15] Costs judgment (n 2) [39]-[47].