Anderson v Anderson (No 2)

[2013] QSC 73

SUPREME COURT OF QUEENSLAND

CITATION:

Anderson v Anderson (No 2)  [2013] QSC 73

PARTIES:

JOHN GORDON ANDERSON
(plaintiff)
v
MALCOLM STUART ANDERSON
(defendant)

FILE NO/S:

4984/10

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

27 March 2013

DELIVERED AT:

Brisbane

HEARING DATE:

On the papers

JUDGE:

Dalton J

ORDERS:

1.   The defendant pay the plaintiff’s costs of and incidental to this proceeding on a standard basis to be assessed or agreed.

2.   Direct that the executors of the estate of the late Roma Anderson are permitted to deduct any monies owing pursuant to my costs order (above) before paying any monies to the defendant as beneficiary of that estate.

COUNSEL:

APJ Collins for the plaintiff
G Coveney for the defendant

SOLICITORS:

Quinn and Scattini for the plaintiff
Radcliff Taylor Lawyers for the defendant

1. This is a decision on costs arising from submissions made after my delivery of judgment in the proceeding on 22 February 2013.  The proceeding was brought by one brother against his only sibling in relation to their deceased mother’s transfer of the family home (her major asset) to the defendant at a time when she was elderly and infirm.  The proceeding was brought on the basis that the transfer was vitiated either by a lack of capacity on the part of the mother, or that it had been brought about by the undue influence of the defendant upon his mother.  The plaintiff was successful.  I made a finding that there was an antecedent relationship of influence[1] between the defendant and his mother and that the defendant had not shown that the transfer was voluntary.  Nonetheless, the defendant contends that the plaintiff ought not have his costs of the proceedings.  The defendant proposes that I ought to make no order as to costs.

   [1]Johnson v Buttress (1936) 56 CLR 113, p 138 per Dixon J.

1. The starting point for an award of costs must be UCPR 681(1), which provides that costs of a proceeding are in the discretion of the Court, but follow the event, unless the Court orders otherwise.

1. The defendant relies upon errors and defects identified in the plaintiff’s lawyers’ conduct of the matter as a reason why the plaintiff ought not have his costs.  The first defect identified was that the plaintiff commenced the proceedings in his personal capacity.  The proceedings were for declarations in relation to the impugned transfer.  The plaintiff relies on Scallan v Scallan[2] for the proposition that the plaintiff had no standing to commence the proceedings, at least so far as they relied upon undue influence, and that the proceedings ought to have been commenced by or on behalf of the estate.  I am not entirely convinced that the plaintiff had no standing to seek declarations, he was after all a person affected by the disposition in his character as a beneficiary of his mother’s will.  Nonetheless, I am content to proceed on the basis that the estate was a necessary party to the proceeding because it was necessary that it be bound by the result and that therefore, the constitution of the proceeding by the plaintiff was flawed.

   [2][2001] NSWSC 1129, [10].

1. It was the lawyers for the defendant who adverted to this matter and who convinced the plaintiff’s lawyers to apply for leave to amend the claim and statement of claim on the first day of trial so as to bring the proceedings pursuant to a limited grant of administration on behalf of the estate.  I granted that leave and I am convinced it was necessary.  Nonetheless, in circumstances where the deceased’s will provided equally for the plaintiff and defendant and provided that the plaintiff and defendant together were the executors and trustees of the will, I think the point could be characterised more as one of form than substance.  I certainly cannot see that the problem was one which caused unnecessary costs or delays in the litigation.  Nor can I see that its being remedied, as it was, caused any great cost or delay.

1. The second point raised on behalf of the defendant is that the claim on which the plaintiff succeeded was not pleaded until the second day of a two day trial.  That submission is correct, and it is true to say there was room to criticise the statement of claim as originally drawn (filed 14 May 2010) and as amended (filed 2 April 2012).  In fact, even after it was amended both on the first and, separately, the second, day of the two day trial before me, the statement of claim was still deficient in various respects.  The undue influence claim as originally pleaded rested on allegations based on the effect of the Guardianship and Administration Act 2000 (Qld), which I rejected, and upon what the pleader called, “actual undue influence” of which one particular was given, relating to the defendant’s conduct on 18 September 2008 and dealt with at [7] of my reasons for judgment.  Had that one particular alone been proved, undue influence would not have been made out.  It is therefore true to say that the pleaded case as to undue influence would have failed but for the fact that the plaintiff’s barrister was granted leave to substantially re‑plead the case on the second day of trial.  That conclusion is somewhat moderated by the fact that in April 2012 the plaintiff had amended the statement of claim to add a claim of unconscionable conduct.  I found, strictly, obiter, that claim had also been made out – [67] of my reasons for judgment.  However, fairly, the facts supporting that claim of unconscionable conduct included the new facts pleaded on the second day of trial in support of the undue influence claim.

1. When leave was sought on the second day of trial to re-plead the undue influence claim, the defendant did not oppose leave being granted.  When the new facts pleaded on that day are examined, the defendant could hardly have made a rational argument against leave – all the facts pleaded were within his knowledge.  Nor did the defendant need an adjournment, or to have witnesses recalled, as a condition of my granting leave to amend.  I think the simple fact of the matter is that the defendant at all times knew the facts upon which the plaintiff would succeed, if the plaintiff’s lawyers properly articulated his case.  If the defendant’s lawyers had properly investigated the case against their client (and I am not suggesting they did not), including by taking a comprehensive statement from their client, they too always knew this to be the case. 

1. The defendant’s submission on costs then, is the unattractive proposition that, although he has always known the facts which entitled the plaintiff to relief, and has resisted the relief sought in the proceeding, the plaintiff ought not be entitled to recover costs expended in proving the entitlement claimed, because his lawyers poorly articulated his case.

1. The proposition is made more unattractive when it is considered that the dispute was of the common enough, but nevertheless unedifying, variety in which adult siblings fight about the inheritance left to them by their parents.  And in this case the estate was a modest one. 

1. Further, while my reasons for decision were that I found an antecedent relationship of influence, and that the defendant had not proved, against that background, that the impugned transfer was voluntary, I did make findings of fact as to dominating and calculated behaviour on the part of the defendant to bring about the transfer to him of the family home during his mother’s lifetime.  It was the defendant who arranged for his mother to visit a solicitor to document this transfer.  It was the defendant who gave instructions to that solicitor while his mother remained largely passive during their meetings.  The defendant took advantage of his mother’s age and infirmity, acting in a dominating and overbearing manner so as to isolate and influence her – [62]-[67] of my reasons.

1. The evidence was that when the defendant gave instructions, supposedly on behalf of his mother, for a solicitor to draw up the transfer impugned in this proceeding, the solicitor who drew the transfer gave advice, supposedly to the mother, but certainly in the presence of the defendant, that the transfer might well be subject to challenge on the basis of lack of capacity on the part of Mrs Anderson, or undue influence on the part of the defendant – paragraph [9] of my reasons for judgment.

1. Lastly, the defendant ran no positive case before me.  No evidence was called on his behalf and he did not himself give evidence.  He cross-examined some, but not all, of the witnesses called by the plaintiff.  This approach was consistent with the defendant’s lawyers’ approach to the deficiencies in the plaintiff’s pleading.  No doubt the defendant was entitled to see if the plaintiff managed to prove a case against him.[3]  And he, or his lawyers, may well have been encouraged by the deficiencies in the plaintiff’s pleading.  Nonetheless, he had behaved unconscionably to his financial gain at the expense of his brother; had nothing positive to advance in his own cause, and resisted the relief sought in the proceeding hoping that the plaintiff and his lawyers would not manage to bring to light the true facts of the matter.  Any defendant, properly advised, must have realised that it was likely that the plaintiff’s lawyers would be allowed to put their house in order and, once that was done, the defendant’s prospects were bleak.

   [3]I make it clear I am not criticising the conduct of the case on behalf of the defendant.  To the contrary, so far as I am able to judge, the case for the defendant was run very competently.

1. In all these circumstances, I cannot see that there is any reason to depart from the usual order that costs follow the event.  The plaintiff asked for an order that the defendant pay his costs of the proceeding on a standard basis, but that he should have the difference between that amount, and his indemnity costs, paid from the estate.  I reject that submission.  The essential nature of this proceeding was litigation inter‑partes, not probate litigation – in fact this was the plaintiff’s counsel’s submission on the costs argument.  If the plaintiff does not have a valid reason to ask for the defendant to pay indemnity costs on the well-known Colgate‑Palmolive principles, and none was advanced, I cannot see that there is any reason to apply a rule from probate cases to the matter.  I will direct that the executors of the estate of Roma Anderson are permitted to deduct any amount owing to the plaintiff pursuant to my costs order in this proceeding before paying any monies to the defendant, as beneficiary of that estate.