[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[2]
Judgment
THE COURT: In its judgment delivered on 30 April 2019 (Squire v Squire [2019] NSWCA 90) the Court identified the costs orders which it was inclined to make, and then gave the parties, in the absence of agreement as to those orders, the opportunity to make written submissions as to any different or additional orders contended for. That has now occurred, the parties being unable to reach agreement on the question of costs.
The respective positions of the parties are as follows.
The appellants rely on a Calderbank offer made on 27 October 2016, and before the hearing date of 14 November 2016 at first instance was vacated (Judgment [42]). That offer was to accept provisions of $50,000 in the case of Paul and $45,000 in the case of Claire. No separate Calderbank offer was made after the adverse result at first instance and in the context of the appeal to this Court. In such a case although the Court may have regard to the earlier offer of compromise, the costs of the appeal are usually determined by reference to the issues in, and the outcome of the appeal: see Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 at [70] - [79] (Gleeson JA and Tobias AJA); Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [37] - [41] (Spigelman CJ, Beazley and McColl JJA); Bathurst Regional Council v Thompson (No 2) [2012] NSWCA 420 at [16] (Hoeben JA, Meagher and Tobias JJA agreeing); McKeith v Royal Bank of Scotland Group PLC (No 2) [2016] NSWCA 260 at [31] - [36], [44] - [46] (Tobias AJA, Macfarlan JA and Emmett AJA agreeing); Gray v Hobson (No 2) [2018] NSWCA 131 at [9] - [12] (Basten and Macfarlan JJA, Simpson AJA). There is no reason to depart in this case from that usual position.
The appellants seek orders that their costs of the proceedings at first instance and on appeal be paid from the notional estate and that, to the extent that fund is insufficient to meet those costs, they be paid by the respondent. The appellants also resist any capping of their recoverable costs, both at first instance and on appeal (cf Judgment [42], [43]).
The respondent contends that the notional estate should first be applied to satisfy all costs orders, and that the balance remaining after payment of those costs should be divided equally between the appellants. That would mean that each appellant would receive significantly less than the amount determined by this Court. That argument is rejected as challenging the Court's underlying conclusion, and for that reason as being outside the leave granted to make submission concerning costs orders(cf Judgment [45], [46], para 4).
The respondent further contends that the appellants' costs should be assessed on the ordinary basis and capped at the amounts proposed by the Court ($50,000 for the costs at first instance and $21,000 for the costs on appeal) and that her costs, of the proceedings below and on appeal should be paid out of the estate and assessed on the indemnity basis.
The parties' submissions as to the appropriate costs orders may be dealt with shortly. The Court adheres to the view expressed at Judgment [44] that the litigation between these parties is to be treated as "inter partes litigation… with the respondent [ultimately] being the unsuccessful party", so that the ordinary rules concerning costs should apply. It follows that no order should be made for the respondent's costs to be paid on an indemnity basis and out of the estate, she being the sole beneficiary and the only party interested in the outcome of the appellants' claim.
In the face of the appellants' rejected Calderbank offer made by their solicitors' email of 27 October 2016, the respondent should pay their first instance costs incurred after 14 November 2016 on an indemnity basis, and their costs incurred before that date on the ordinary basis. Those costs are not to include any costs thrown away by the vacation of the 14 November 2016 hearing date. At the time that offer was open to be accepted the appellants' evidence had been served, enabling the respondent to assess the merits of their claim, and the respondent was given a week in which to do so, a sufficient period having regard to the nature of the proceeding. As to the capping of the appellants' recoverable costs at first instance, the Court remains of the view that they should be capped at $50,000, which allows for costs unnecessarily incurred in relation to the vacating of that first hearing date.
In the absence of any Calderbank offer made in the appeal proceedings, the appellants' recoverable costs of the appeal should be assessed on the ordinary basis. The appellants' submit that those costs should not be capped at $21,000 or at all (cf Judgment [43]). One reason for the difference between their costs of the appeal and those of the respondent is said to be that as appellants they incurred disbursements of about $10,000 for filing fees, transcript, a hearing allocation fee and the preparation of the appeal books. As those expenses are reasonable, and only incurred by the appellants, the Court accepts that the amount at which the appellants' costs of the appeal should be capped should be increased to $31,000. No submission is made justifying any further adjustment to that amount.
Finally, it is not necessary to make orders in relation to any personal liability of the respondent for the appellants' costs. The amount of the deceased's share of the proceeds of sale of the Baulkham Hills property currently held in the ING Australia account, with accrued interest, is slightly in excess of $260,000. That amount is sufficient to fund the payment of provisions to the appellants totalling $170,000 and the payment of their total costs capped at $81,000, leaving a small amount to be distributed to the respondent, in accordance with the deceased's will.
In the result the Court makes the following orders:
1. Appeal allowed.
2. Set aside orders 1, 2, 3 and 4 made by Kunc J on 4 May 2018 and entered on 7 May 2018, this order not to affect the costs order made by Hallen J on 14 November 2016.
3. Order that the amount held by the respondent in the ING account, and representing the deceased's share of the proceeds of sale of the Baulkham Hills property, together with accrued interest, be designated as notional estate of the late Richard Squire.
4. Order pursuant to Succession Act 2006 (NSW), s 59 that an amount of $85,000 be paid from that fund to each of the appellants, together with interest should either amount not be paid before 10 June 2019. Any such interest is to be calculated at the same rate as the rate at which interest is currently accruing on the amount held in the ING account.
5. The appellants' costs of the proceedings below, assessed on the ordinary basis up to and including 14 November 2016 and on an indemnity basis thereafter, and subject to an overall cap of $50,000, are to be paid out of the notional estate.
6. The appellants' costs of the appeal, assessed on the ordinary basis and capped at $31,000 are to be paid out of the notional estate.
7. The respondent, if otherwise qualified, is to have a certificate under the Suitors' Fund Act 1951 (NSW).
[3]
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Decision last updated: 22 May 2019