Smith v Moore

Supreme Court of NSW|2020-11-18|Before: Williams J, Mr J, Hallen J

Introduction and summary of decision

On 19 October 2020, I published the principal judgment dismissing the plaintiff's claim for provision out of the estate of her late mother: Smith v Moore [2020] NSWSC 1446 (the Judgment).
The question of the costs of the proceeding was reserved to be determined on the papers after receiving written submissions from the parties.
The defendant executor made written submissions on 2 November 2020 contending for an order that the plaintiff pay her costs of the proceeding on the ordinary basis, with the balance of her costs (that is, the difference between the defendant's costs on an ordinary basis and on an indemnity basis) to be paid out of the deceased's estate.
The plaintiff made written submissions on 3 November 2020 contending that there should be no order as to his costs (with the intention that he bear his own costs of the proceeding) and that the defendant's costs should be paid out of the estate on an indemnity basis.
Both parties subsequently notified the Court that they did not wish to make further submissions responding to each other's earlier submissions.
For the reasons that follow, I have decided to make the following orders: 1. no order as to the plaintiff's costs of the proceeding, with the intention that he will bear his own costs; 2. the plaintiff is to pay the defendant's costs of the proceeding on the ordinary basis; 3. the balance of the defendant's costs of the proceeding (that is, the difference between the costs payable by the plaintiff pursuant to order (2) above and the defendant's costs on an indemnity basis) be paid out of the estate of the late Yvonne Gwendoline Smith.
These reasons assume familiarity with the Judgment.

Defendants' submissions

As noted at [3] above, the defendant executor submitted that the plaintiff should pay the defendant's costs of the proceeding on the ordinary basis and that her remaining costs (that is, the difference between the defendant's costs on the ordinary basis and on the indemnity basis) should be paid out of the estate.
The defendant referred to Hallen J's summary of the relevant principles governing costs in family provision proceedings in Meres v Meres (No 2) [2017] NSWSC 523 at [35]-[38], noting in particular that: 1. the effect of UCPR rr 42.1 and 42.20(1) is that the unsuccessful plaintiff must bear the defendant's costs of the proceeding unless the Court otherwise orders; and 2. an unsuccessful plaintiff will, usually, be ordered to pay costs where the claim was frivolous, vexatious, made with no reasonable prospects of success, or where the plaintiff has been guilty of some improper conduct in the course of the proceedings.
The defendant submitted that the plaintiff should pay her costs because the plaintiff's failure to be frank with the Court (which included the giving of false evidence) was improper conduct which caused the estate to incur costs in the course of the proceedings.
In support of this submission, the defendant referred to the following findings in the Judgment: 1. the rejection of the plaintiff's and Ms Nelson's evidence that the plaintiff was indebted to Ms Nelson in the amount of $49,720 or any amount (see Judgment at [131]-[138]); 2. the finding that the plaintiff and Ms Nelson gave false evidence concerning the existence of the alleged loan (see Judgment at [151]), and that the alleged loan was a "recent invention made shortly before the hearing [the proceeding] in the hope of improving the prospects of success of [the plaintiff's] family provision claim" (see Judgment at [131]); and 3. the finding that the plaintiff and Ms Nelson were financially dependent on each other (see Judgment at [131]), despite the plaintiff's and Ms Nelson's assertions to the contrary (see Judgment at [154])

Plaintiff's submissions

As noted above at [4] above, the plaintiff submitted that there should be no order as to the plaintiff's costs with the intention that he bear his own costs, and that the defendant's costs be paid out of the estate on the indemnity basis.
Referring to Harkness v Harkness (No 2) [2012] NSWSC 35 at [18] and Meres v Meres (No 2) (supra) at [38] and [46], the plaintiff submitted that, as proceedings for a family provision order are essentially for maintenance, it is open to the Court to make no order as to costs against an unsuccessful plaintiff if the making of the costs order would adversely affect the plaintiff's financial position that had been taken into account in dismissing the application. It was submitted that it was open to the Court to take this course, even if a costs order against the plaintiff were otherwise justified.
The plaintiff relied on the Court's findings that the plaintiff has few assets in his name and a debt of $53,053 to the Australian Taxation Office (see Judgment at [139]) and that the plaintiff's income does not cover his weekly expenses (see Judgment at [140]). The plaintiff noted the defendant's costs of $96,000 (calculated on the indemnity basis) and submitted that if he was ordered to pay her costs (even on the ordinary basis) that this would severely affect his financial circumstances. In those circumstances, it was submitted that the Court should make no order as to his costs.

Consideration and determination

I accept that the adverse impact of a costs order on the financial position of an unsuccessful plaintiff may be a relevant factor in the exercise of the costs discretion in family provision cases. However, its relevance is limited, or it may have no relevance at all, in cases where the plaintiff's financial position was not material to the dismissal of the application: Haertsch v Whiteway (No 2) at [9].
It is true that the plaintiff was found to have few assets in his name and a debt of $53,053 to the Australian Taxation Office and a very modest income that does not cover his expenses.
However, that is only part of the picture.
The plaintiff was also found to have a long-term and close relationship with Ms Nelson in which they have provided one another with mutual financial support as required since at least early 2017. The plaintiff adduced no evidence of Ms Nelson's assets or income or her capacity to provide ongoing financial support for him in the future.
Moreover, the plaintiff and Ms Nelson were found to have given false evidence to the effect that he was indebted to Ms Nelson in the amount of $49,720. In doing so, they sought to withhold from the Court the true nature of their relationship as one involving mutual financial support and dependence.
I accept the defendant's submission that the adducing of false evidence involved improper conduct on the part of the plaintiff, and that the plaintiff's conduct in maintaining the proceedings on the basis of false evidence, whilst withholding other relevant evidence, caused the defendant to incur costs.
Ultimately, the plaintiff's claim failed because he failed to adduce evidence of all matters relevant to an assessment of the adequacy or otherwise of the provision for made for him in the deceased's will. The Court was therefore unable to reach the state of positive satisfaction required by s 59(1)(c) of the Succession Act. In the continuing absence of evidence of all relevant matters, it cannot be said that an adverse costs order might alter the basis on which the plaintiff's claim for provision was rejected.
Taking all of those circumstances into account, I am of the opinion that the "overall justice" of the case, even after applying "liberality and discrimination", requires that the defendant's costs (as well as the plaintiff's own costs) be borne by the plaintiff and not by the estate.

Conclusions and orders

For the reasons above, I make the orders set out in [6] above.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 November 2020

At a glance

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Judgment (7 paragraphs)

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Legislation Cited (3)

Cases Cited (29)

Cited By (2)