Plaintiff/Applicant: D. Liebhold; J. Thomson
First Defendant and First and Second Cross Claimants: J.S. Emmett
[2]
Plaintiff/Applicant: Chris Nikolovski, Nikolovski Lawyers
First Defendant and First and Second Cross Claimants: David Sachs, Sachs Gerace Lawyers
Second Defendant: in person
Second Defendant: submitting appearance
File Number(s): (2014/301448)
Publication restriction: No
[3]
Judgment
This is the Court's fourth judgment in these proceedings. This judgment should be read with the Court's three previous judgments. Persons, events and things are referred to in all judgments in the same way.
The Court's first judgment decided that the first defendant, Blaguna, required a tutor and stayed the proceedings until a tutor was appointed: Smilevska v Smilevska [2015] NSWSC 1794. After the first judgment, the Court appointed Blaguna's son-in-law, Mitre, to be her tutor.
In the Court's second judgment, the plaintiff, Temjana, succeeded in her proprietary estoppel claim that, based on promises made to her, she was entitled to an irrevocable licence to occupy the Port Kembla property until Blaguna's death, and thereafter to a half share with the second defendant, Blagoja, as tenants-in-common. But she failed on her contract claim and the Court did not decide her common intention constructive trust claim seeking similar relief: Smilevska v Smilevska (No. 2) [2016] NSWSC 397. The Court deferred granting declaratory relief (at [168]) subject to "any further submissions about the exact form of relief necessary to reserve some financial benefit for Blaguna from the Port Kembla property whilst she is in the nursing home."
After the second judgment, Temjana sought by motion ("the costs motion") orders that Mitre and his wife, Gorica, who as Blaguna's attorneys gave instructions for the conduct of the proceedings, should pay (as third parties to the proceedings) Blaguna's costs of the proceedings. The costs motion also sought to deny Mitre and Gorica any indemnity out of Blaguna's estate for recoupment of their costs of the litigation. Temjana's claim was in large measure based upon the contention that acting as Blaguna's attorneys, Mitre and Gorica were responsible for unreasonably prolonging the litigation on Blaguna's behalf.
The Court rejected these arguments in the Court's third judgment. The Court declined in making a third party costs order against Mitre and Gorica and made orders entitling Mitre and Gorica to have recourse to Blaguna's assets for payment of Blaguna's and their costs of the proceedings: Smilevska v Smilevska (No. 3) [2017] NSWSC 820.
In the third judgment the Court also invited submissions on the grant of an alternative restitutionary remedy. Orders were not then made either as to the form of final relief or as to the costs of the proceedings as between the plaintiff and the defendants. It was decided that determination of costs issues should await the outcome of other contests between the parties.
Pending the making of final orders, the Court indicated to the parties that it was prepared to make interim restraining orders, preventing the sale of the Port Kembla property. After that indication, the parties cooperated in not selling the Port Kembla property. But Mitre and Gorica have recently filed a motion seeking the sale of the Port Kembla property ("the sale motion"). The sale motion must be dealt with once the parties have had an opportunity to analyse these reasons.
In this fourth judgment, the Court decides two matters left unresolved by the third judgment: (1) what orders for final relief should be made; and (2) what costs orders should be made as between the plaintiff and the defendants.
In the hearing on 4 December 2017, Mr Emmett of counsel appeared for Blaguna. He also appeared for Mitre and Gorica on the costs motion. Mr Liebhold and Mr Thomson of counsel continued to appear for Temjana. Blagoja continued to represent himself, although he did not appear at the 4 December hearing.
The proceedings were relisted for supplementary argument on 13 April 2018. The Court was informed that Blaguna had died on 23 March 2018. The relisting sought to ascertain what aspects of the parties' submissions might be altered upon her death. Mr Emmett appeared for Mitre and Gorica and explained that he was not authorised to appear for Blaguna's estate, as probate of her estate had not been granted. Mr Liebhold continued to appear for Temjana.
The parties put short submissions explaining how their cases had changed by reason of Blaguna's death. Their respective submissions are dealt with later in these reasons.
[4]
(1) What Order For Final Relief Should Be Made?
The starting point for consideration of alternative restitutionary relief is the Court's conclusion in the third judgment (at [40]), that to grant declaratory relief of the kind originally contemplated in the second judgment (at [168]) would condemn Blaguna to very grave hardship. By the time of the third judgment, evidence of the full extent of Blaguna's current and continuing liabilities were available. After reviewing this evidence, the Court said in the third judgment (at [40] and [41]), as follows:
"[40] In my view, to grant declaratory relief in this case of the kind originally contemplated will condemn Blaguna to very grave hardship. This is one of those cases in my view where alternative restitution relief should be examined instead.
[41] But the parties did not debate the extent of such restitutionary relief and in my view, due to the various combinations of restitution foreshadowed in submissions, there will need to be a supplementary hearing about how that is to be calculated."
The Court there had in mind that the making of declaratory relief which extinguished Blaguna's entitlements to the Port Kembla property would place her in the unacceptable position of being unable to meet her current and anticipated liabilities to the nursing home where she resided, or to her legal representatives.
The Court invited the parties to advance submissions for a relief hearing on 4 December 2017. To prepare for that hearing, the parties were asked to further investigate Blaguna's liabilities to pay nursing home fees, to reach agreement about the approximate current valuation of the Port Kembla property and to consult about moving Blaguna from the Port Kembla nursing home to Queensland. The parties put on supplementary evidence and submissions to deal with these issues.
Temjana indicated that, if an alternative remedy were to be granted, and she was not given an equitable interest that allowed her to keep the Port Kembla property, she would soon be looking for other accommodation. She explained through her counsel that she and her daughter, Zaklina, were not readily able to find rental property on the private market. They were resigned to having to apply to the New South Wales Department of Community Service for public housing. It is not in contest that both Temjana and Zaklina are both persons with disabilities. There would still be a requirement for them to undergo an occupational therapist's assessment and complete an independent living skills assessment before placement on the list for public housing.
One concern of Mitre and Gorica at the December 2017 hearing was to explore whether Blaguna could be moved into a nursing home in Queensland, consequent upon a sale of the Port Kembla property to satisfy Blaguna's liabilities.
That issue was in turn complicated by the plaintiff's argument that Blaguna was not liable to pay the full substantial accommodation fees which were being demanded by the nursing home. A review of those fees had not been concluded by the time of the hearing in December 2017 and the supplementary hearing in April 2018.
The death of the first defendant has to a very considerable degree simplified the issues that face the Court in relation to considering the grant of final relief. From the preliminary conclusion reached in the Court's second judgment (at [138]), where the Court acknowledged that it should prima facie enforce a reasonable expectation that the party bound has created or encouraged (Delaforce v Simpson Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 ("Delaforce"), at [63]) potential frustration of the grant of that primary relief emerged from the evidence as a strong countervailing factor by the time of the third judgment (see [39] and Delaforce at [89]), not only because of grave hardship to the first defendant but the highly debatable uncertainty surrounding alleviating that hardship by providing for the first defendant's past and future care costs. That debate not only included issues about the proper quantum of her past care but it included issues concerning her proper future accommodation, including the wisdom and cost of moving her to Queensland to be closer to Mitre and Gorica. The first defendant's death means that hardship considerations disappear in this form and that the highly debatable uncertainty mostly disappears.
What remains are two residual but important hardship issues. But, in my view, they are not now so great that they will frustrate the grant of relief originally contemplated. I will now deal with them in turn.
First, the care costs issue now really only concerns a relatively minor debate about whether the first defendant was liable for the past nursing home accommodation fees at the Wollongong Nursing Home mentioned in the last judgment. The plaintiff was critical of how this issue had been managed by Mitre and Gorica in the past but the Court found that criticism was unwarranted: see the third judgment (at [13] - [26]). But as the Court indicated in argument, that liability is really a matter between Blaguna's estate and the Commonwealth and is not something which the Court can make any binding determination about but something which should nevertheless be able to be resolved in the near term.
The second residual hardship issue is the position of the attorneys, Mitre and Gorica, now the executors of Blaguna's estate. The Court made findings in the third judgment about the reasonableness of their conduct in defending these proceedings and the steps they took to obtain judicial advice. Because of those findings and their entitlements as attorneys, the Court is not prepared to grant any final relief that does not see the liabilities that they have undertaken on behalf of Blaguna satisfied before the plaintiff and Blagoja take any interest in the Port Kembla property. The Court will now make a declaration of the kind originally contemplated at the time of the second judgment but it would be qualified by the need to further satisfy all those liabilities of Mitre and Gorica. That is the course which the Court has now taken in the declarations and orders below.
But those liabilities have largely crystallised now. They were the subject of evidence at the last hearing and are discussed briefly below. This discussion is more now to demonstrate their nature than to assess their validity. But should the quantum of those costs be later put in issue, it is undesirable for a cost assessment to take place in a case such as this. The Court has powers under the Civil Procedure Act 2005, s 98(4)(c) to make specified gross sum costs orders and the liberty to apply which the Court will grant today covers a possible application for such an order. If there is any other issue about the quantum of these liabilities, the parties can return to Court under the liberty to apply provided.
Before the Court was evidence from Mr Ben Johnson in his affidavit of 3 November 2017 about a Department of Human Services review of Blaguna's income, assets and costs required to access the Robina nursing home in Queensland. These costs now no longer need to be considered.
Mitre's affidavit of 2 November 2017 gives a list of debts owing by Blaguna, including to the Wollongong nursing home, being fees as at 2 November 2017 of $64,611.19 (later updated). He also estimates funeral and testamentary expenses in that affidavit and costs of administering her affairs as attorney. All the costs he describes seem to the Court to be of a general nature for which he should be reimbursed, subject to any issues of quantum. These fees were updated in a supplementary affidavit shortly afterwards.
Mitre's evidence about the costs of moving Blaguna to Queensland are now irrelevant. The principal remaining integers in any future calculation are the value of the Port Kembla property and Mitre and Gorica's legal costs. Fortunately, the parties have been able to agree upon the value of the Port Kembla property at $768,500. After selling expenses, the parties agreed that the net proceeds of sale are $750,000.
Mr David Sachs' most recent affidavit estimates present and likely future legal expenses for Blaguna, including those of Mitre and Gorica, at $290,535.46. This may vary slightly but the other main expense incurred on Blaguna's behalf will be funeral expenses of about $30,000. There is still ample scope for proceeds of sale of the property to be available to the plaintiff and Blagoja after these costs are deducted. This is why the Court is now more comfortable with taking the original course of declaring Blagoja and Temjana to have an interest in the Port Kembla property after these expenses.
When Blaguna was still alive, Mr Sachs' affidavit indicates that, based on Blaguna's life expectancy together with the need for provision for vicissitudes in life, another $160,000 plus (and the Court might have anticipated even more) would have been needed to be set aside. But that is no longer required.
With this guidance and the declaration made below, the parties should now be able to bring these proceedings to finality cooperatively.
[5]
(2) What Order For Costs Should Be Made?
Two costs issues were argued. First, the parties differ as to whether any costs order should be made against the first defendant. Second, they are in contest as to whether the effect of a Calderbank letter the plaintiff served on the defendants at the commencement of the proceedings may result in an order for indemnity costs.
[6]
Costs - Orders Between the Parties
The plaintiff sought an order that the first defendant pay her costs of the proceedings. The first defendant contended that each party should bear his or her own costs of the proceedings. The position of the second defendant, Blagoja, is considered separately later in these reasons.
The parties acknowledged that the appropriate costs order may be influenced by the final relief ordered by the Court. Mindful of that relationship, argument on costs orders was parceled up with argument about final relief. The parties' submissions on costs covered a variety of possible outcomes in relation to final relief. For example, Blaguna submitted that, if the amount ultimately received by Temjana is so small that her victory would be regarded as Pyrrhic at best, then the Court should take that into account in reducing costs orders in her favour.
The costs issue is best approached from the structure created by Blaguna's submissions, which conclude that no order as to costs should be made. This conclusion was founded on several arguments that the Court ultimately does not fully accept, although some of her arguments do have force. Each of these will now be dealt with in turn.
First, Blaguna argues that the issue considered in the first judgment about the appointment of a tutor for Blaguna took some considerable time within the hearing. Temjana ultimately succeeded in her contention that a tutor should be appointed for Blaguna but the Court rejected Temjana's contention that Mitre and Gorica were inappropriate appointees. The latter was a significantly time consuming part of the whole contest about a tutor, a contest that arose as a result of Blaguna giving evidence. Blaguna concedes Temjana was justified in bringing the application.
But Blaguna's contention is that the contest was as lengthy as it was mainly because of the plaintiff's desire to exclude Mitre and Gorica from giving instructions in the litigation. This was ultimately also correct in my view. But the Court's findings in the third judgment indicate that Mitre and Gorica did conduct the proceedings reasonably. Consequently, the plaintiff's original opposition to Mitre and Gorica was quite misplaced and the tutor issue should have been able to be resolved far more quickly and probably not raised at all as a matter of contest. In the result, the Court regards the time spent in relation to this issue indicates costs incurred should be paid more by the plaintiff than the first defendant.
Second, Blaguna submits that the plaintiff had substantial but certainly not complete success in the second judgment and she should therefore not be treated as entitled to the full costs of that hearing. It is correct that she did fail on her contract case and her common intention constructive trust case did not have to be decided, although the second judgment indicated that its prospects of success were doubtful.
In the third judgment, Blaguna had substantial success (noted by the Court at [90]). Mitre's and Gorica's stance at that hearing were vindicated. In my view, the outcome in the third judgment, considered on its own, would warrant some costs order in the first defendant's favour in respect of that hearing, notwithstanding the plaintiff's substantial success in the principal hearing leading to the second judgment.
But the plaintiff submits that these were consequential relief hearings and should be treated in cost terms as part of the plaintiff's success. But in this case they were somewhat unusual, involving fresh evidence on both sides and cross-examination of witnesses with detailed oral and written submissions. The third judgment did not involve an entirely freestanding matter but nevertheless it was one on which real independent weight should be given to Blaguna's success because of the way it was conducted.
The first defendant cites wasted time on amended pleadings and other skirmishes on which the plaintiff was unsuccessful. The plaintiff counters that some of these events were caused by the first defendant's own late service of her statement. There is a degree of blame on both sides here.
The first defendant points to some costs orders already being made in her favour. But these orders are relatively minor.
Finally, citing Howard's Storage Pty Limited v Haviv Holdings Pty Limited (2010) 182 FCR 84; [2010] FCAFC 5 at [17], the plaintiff deploys an argument that, because of the high costs of the proceedings, through no fault of her own, she will not be able to receive more than a small amount of the relief that the Court would have held she was entitled in any other circumstances and the aim must always be "to do substantial justice in relation to costs based on the outcomes".
But doing substantial justice also means taking into account how a party conducted proceedings and the issues on which the party won and lost which is what the Court has sought to do here.
How is the matter to be approached? The plaintiff's submissions at various times suggested that costs be awarded in favour of the plaintiff and some issues and in favour of the defendants on others. But in a case such as this, issue-specific orders would become an unnecessary burden in costs negotiations and assessment. In order to bring this case to finality, a global costs order is called for: Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa (No 2) [2007] NSWSC 568 at [25]-[26].
Taking all these matters into account, appropriate weight must be given to the plaintiff's substantial success in the principal hearing that took several days and much of the parties' resources. But this must be balanced against her poor outcomes in subsequent hearings. The plaintiff should have 60% of all her costs against the first defendant.
The parties deployed other minor arguments on the question of what costs orders should be made between them. But these other arguments seem to the Court to be of lesser significance and are not considered here in any detail.
Other Costs Issues. A question which now comes into focus is whether the costs ordered against Blaguna should be paid out of her estate and therefore any proceeds of sale of the Port Kembla property before it is distributed to the plaintiff. This question was not argued between the parties so the Court will hear from them on it, unless it is agreed.
The question can be answered perhaps by asking a different question: if such order is not made, who will bear those costs? Presumably, that will be Mitre and Gorica who conducted the proceedings on behalf of Blaguna as her attorneys. But the Court has already determined in the second judgment that Mitre and Gorica are entitled to indemnity from Blaguna's estate for their own costs incurred on Blaguna's behalf in defending the proceedings and for which they ultimately had judicial advice.
Once it is accepted, as the Court has already found, that Mitre and Gorica conducted themselves reasonably as attorneys in defending these proceedings, there seems little difference in the principle that should apply to the treatment of the liabilities that Mitre and Gorica incurred to Blaguna's lawyers and those that that they incur to the plaintiff.
Temjana may accept this position on which the Court has not reached a concluded view. But she may wish to put further argument on the matter and should so indicate, if she does.
Blagoja's Separate Position. The position of the second defendant, Blagoja, may need separate consideration. Blagoja was joined as a second defendant in the proceedings on 23 October 2015. The Court that day declined to allow certain other proposed amendments propounded by the plaintiff (seeking orders for family provision and the making of a judicial will). But the Court nevertheless allowed Blagoja to be joined as a second defendant and he remained in that capacity throughout the proceedings. He filed a submitting appearance, gave evidence against the plaintiff, was cross-examined and disbelieved in findings made in the second judgment.
His stance in the proceedings was generally hostile to the plaintiff. But being unrepresented, having extremely poor English and relying upon the legal representation on behalf of Blaguna, he said very little apart from his testimony. He was asked for submissions from time to time throughout the hearing of the proceedings. He appears to the Court to have taken a position that was opposed to the plaintiff's claim.
But unless a special order is made because of his early submitting appearance, he will not be liable for any the costs of the proceedings. Notwithstanding that, this is an unusual case from Blagoja's perspective. Despite his hostility to the plaintiff, her efforts have gained him the result of a half interest in the Port Kembla property after Blaguna's liabilities have been satisfied out of it.
There may now be a contest between the plaintiff and Blagoja about whether this outcome means that he should contribute to the costs the plaintiff has expended to gain the benefits that have now fallen to him. This is mentioned now so that the parties can prepare for any argument on the issue.
[7]
Costs - The Calderbank Letter
On 4 November 2015, shortly prior to the first hearing in these proceedings, the plaintiff issued a Calderbank letter to the defendants offering to compromise the proceedings on the following terms: (a) that Temjana, Blagoja and Zaklina have a right of residence in the property until the death of Blaguna; (b) the parties agree to make a judicial will for Blaguna devising the property to Zaklina subject to an actual lifetime right of residence of Temjana and Blagoja, or alternatively deviing the property to Temjana and Blagoja as tenants in common in equal shares; and (c) that each party should bear his or her own costs. The offer was couched in the alternative: that Temjana receive 40 per cent of the net proceeds of sale, plus her costs to date on the ordinary basis. The offer was expressed to be "without prejudice save as to costs" and made in accordance with the principles stated in Calderbank v Calderbank (1975) 3 WLR 586. The offer was said to remain open until 4pm on Friday, 6 November 2015.
The offer in the 4 November 2015 letter was originally only open for less than 48 hours, until 4pm on 6 November 2015. But on 5 November 2015, a further letter from the solicitors for the plaintiff extended the offer to 10am on Monday, 9 November 2015.
The offer was not accepted. Temjana argues that it should have been accepted and that she is now entitled to indemnity costs. Blaguna submits that it was not unreasonable for her not to accept the offer.
The principles in relation to awards of indemnity costs based upon the non-acceptance of Calderbank letters are well established. They were fully stated by Ward J (as her Honour then was) in A v N [2012] NSWSC 549 at [14]-[19]. The considerations relevant to the determination of whether a refusal of a Calderbank offer is unreasonable have been set out in Miwa Pty Ltd v Siantan Properties Pte Ltd (No. 2) [2011] NSWCA 344 at [12], based on Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No. 2) (2005) 13 VR 435; [2005] VSC 8298 ("Hazeldene's") at [25]. The Victorian Court of Appeal (Warren CJ, Maxwell P and Harper AJA) in Hazeldene's stated the following factors were relevant to determining whether the rejection of a Calderbank offer was unreasonable:
"(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d) the offeree's prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed;
(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejecting it."
Blaguna argues that it was not unreasonable of her not to accept the Calderbank letter. Her reasons for so arguing are persuasive.
The time allowed for acceptance was too short. The 4 November 2015 letter only gave less than 48 hours for acceptance of what was not a simple offer. This is generally regarded as a very short time: Harli Retail Stores Pty Ltd v Hafaz [2007] NSWSC 427 and Pollard v Baulderstone Hornibrook Engineering Pty Ltd (No 2) [2007] NSWSC 486 at [13]-[15]. Moreover, in the heat of preparation for a complicated hearing, to allow less than 48 hours for acceptance of a complex offer was unreasonably short.
Extending the time to 10am on Monday 9 November 2015 makes little difference, and is hardly more reasonable. The intervening two days, Saturday 7 and Sunday 8 November 2015 were not working days. In substance, the only extra working time which the extension included was 1 hour on the afternoon of the 6 November 2015 between 4pm and 5pm and 1 hour in the morning of 9 November 2015, between 9am and 10am. This is hardly an extension worth speaking of and it is an extension that covers the most intense period of pre-trial preparation. An effective Calderbank letter could have been served well before this.
But other reasons suggest that non-acceptance by the defendants of the Calderbank letter was not unreasonable.
Temjana has not demonstrated that she achieved a better outcome in the proceedings than the Calderbank letter. The first part of the Calderbank offer was costs inclusive and involved the idea of the parties agreeing upon the making of a judicial will in favour of Zaklina. It is impossible to compare this offer with the result in the proceedings, involving as it does a form of relief which was not even sought in Temjana's final form of Summons.
And this part of the letter also meant that Blaguna could not sell the property to meet her liabilities before her death. The plaintiff has achieved a less favourable outcome than this. The Court will permit the property to be sold.
And the alternative way that the offer was put - 40 per cent of the net proceeds of sale of the Port Kembla property - was hardly a demonstrably better outcome than she actually achieved. The Court's determination in the second judgment was that she must share her net interest with Blagoja, and also with Blaguna for as long as Blaguna lived. As it turned out, Blaguna lived for a little under two years after the giving of the second judgment. It has not been demonstrated in argument that Temjana's offer of 40 per cent of the value of the Port Kembla property represents anything like a market value of Temjana's net half interest in the Port Kembla property after the end of Blaguna's life estate, examined as at the date of the Calderbank offer. Temjana would have to demonstrate that 40 per cent of the then net value of the Port Kembla property represents more than what she has now achieved. There are too many imponderables for the Court to find, with any confidence, that she has done that.
Yet another problem in the plaintiff relying upon the Calderbank letter is that, as is discussed below, final relief will not be given in these proceedings until the position as between Blagoja and the plaintiff is fully resolved. The Calderbank letters made no attempt to deal with this issue.
[8]
Consequential Issues
It follows from these reasons that the Port Kembla property will need to be sold in the near term in order to satisfy Blaguna's many and various liabilities. Her estate has liabilities for her own legal costs, for legal costs ordered against her, for funeral and testamentary expenses and arguably to the nursing home in which she was a resident. The evidence of the hearing was that the Port Kembla property was the only substantially valuable part of her estate. Logic indicates that will have to be sold.
But this conclusion leads to a series of other consequential considerations. Many of these are also raised by the sale motion that Blaguna's executors have filed in the proceedings and are still to be determined. The more significant of these other considerations are briefly listed below.
Who will control the sale process? Temjana sought the appointment as a receiver to take control of the sale process. Mitre and Gorica seek as executors of Blaguna's estate to conduct the sale, now that probate has been granted to them. This issue should be able to decided cooperatively. But if not the Court will determine it. Given the extent of Blaguna's liabilities it is undesirable that fees be incurred by a third party professional such as a solicitor or accountant to take control of the sale under the direction of the Court.
The timing of the sale needs to be controlled. Temjana and Zaklina have already foreshadowed their inability to secure a rental property on the private rental market. They have supported that contention with evidence which the Court generally accepts. Their only present alternative is to pursue an application for public housing. Somewhat counterintuitively perhaps, their prospects of obtaining public housing in the short term are likely to be enhanced, if indeed the Court were to make an order for the sale of the house and ultimately, if required, to enter judgment for possession of the property.
The proceeds of sale will need to be further administered. A principal issue will be dealing with Blagoja's interest in those proceeds. As the Court recorded in its second judgment (at [138] and [139]), the form of relief that the plaintiff claimed, joining Blagoja as the second defendant, meant that success would result in Temjana and Blagoja sharing title to the property as tenants in common in equal shares after Blaguna's death. Blagoja's separate interest in the proceeds of sale has not been the subject of any determination. The form of orders propounded by the plaintiff at the last hearing does not acknowledge Blagoja's interest in these monies but is otherwise in the form that the Court has adopted. There may well be a contest between Blagoja and Temjana about their respective shares in these proceeds.
Some framework will need to be put in place for that contest to be resolved. Blagoja was unrepresented throughout the proceedings and had filed a submitting appearance. Although Blagoja and Temjana separated and divorced before the proceedings commenced, it is unclear to the Court whether any property settlement proceedings have or will take place between them. The orders made below provide for the parties to immediately give notice of these reasons and orders to Blagoja, so that process can begin.
But much of this may be hypothetical. The Court has analysed above the overall burden of costs on both sides in these proceedings and there may be very little either for Temjana or for Blagoja to distribute among themselves. But before any steps are taken to resolve issues between Blagoja and Temjana, the net value of the proceeds of sale should first be ascertained.
[9]
Conclusions and Orders
For these reasons the Court makes the following further orders and directions:
1. Declare that the plaintiff and the second defendant are jointly entitled to the Port Kembla property (or proceeds of sale of that property) but only following the satisfaction of all the first defendant's just debts (including any costs ordered in relation to these proceedings funeral and testamentary expenses).
2. Order that the defendants pay 60% of the plaintiff's cost of these proceedings.
3. Order that the plaintiff's claim for indemnity costs based upon a Calderbank letter dated 4 November 2015 be dismissed.
4. Order that the second defendant bear his own costs of these proceedings.
5. Order that, after the payment of the first defendant's costs of these proceedings, the net proceeds of sale of the Port Kembla property be either held jointly be legal representatives of the plaintiff and the first defendant or in the alternative paid into Court, pending a determination as to the relative entitlements of the plaintiff in the first defendant to those monies.
6. Adjourn these proceedings to 2.00pm today to make directions upon, hear, or otherwise deal with the sale motion filed by the executors of the first defendant's estate on 20 September 2018.
7. Direct the plaintiff and the first defendant each to provide a copy of these reasons and these orders to the second defendant, Blagoja, by 12 noon on 6 December 2018.
8. Direct the second defendant to indicate to the other parties and to the Court by 4.00pm on Tuesday, 11 December 2018 what position he wishes to take in relation to his net interest in or in the distribution of the net proceeds of the sale of the Port Kembla property.
9. Direct the parties otherwise to bring in short minutes of order to give any further effect to these reasons that is required.
10. Grant liberty to apply.
[10]
Amendments
04 December 2018 - coversheet: parties
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Decision last updated: 04 December 2018