Barrett v Barrett

[2019] NSWSC 1359

Supreme Court

New South Wales

Medium Neutral Citation:

Barrett v Barrett [2019] NSWSC 1359

Hearing dates:

27 September 2019

Date of orders:

11 October 2019

Decision date:

11 October 2019

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

The Court orders that:

 

(1) The defendant’s costs are to be paid out of the estate on an ordinary basis.

 (2) The executor’s costs are to be paid out of the estate on an ordinary basis.

Catchwords:

COSTS – Indemnity costs – Where the plaintiff acted unreasonably as executor in ordering the defendant to vacate a property under the estate – No point of principle

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 57, 58, 98
Succession Act 2006 (NSW), s 99
Uniform Civil Procedure Rules, rr 12.7, 13.4, 42.1

Cases Cited:

Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33
Berbett Pty Ltd v Hansa [1976] VR 385.
Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 118 ALR 248
Cretazzo v Lombardi (1975) 13 SASR 4
Harkness v Harkness (No 2) [2012] NSWSC 35
Hillebrand v Council of the City of Penrith [2000] NSWSC 1058
In re Beddoe; Downes v Cottam [1893] 1 Ch 547
Jvancich v Kennedy (No 2) [2004] NSWCA 397
Liverpool City Council v Estephan [2009] NSWCA 161
McDonald v Horn [1995] 1 All ER 961
Milne v Attorney-General (Tas) (1956) 95 CLR 460
Oshlack v Richmond River Council (1998) 193 CLR 72; (1998) 152 ALR 83
Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121
Rowland v Portus (1906) 6 SR (NSW) 74
Singer v Berghouse (1993) 114 ALR 521
Tadrous v Tadrous [2009] NSWSC 407

Texts Cited:

G Dal Pont, The Law of Costs (LexisNexis Butterworths, 4th ed, 2018)

Category:

Procedural and other rulings

Parties:

Christopher John Barrett, Executor of the Estate of the late Beryl Barrett (Plaintiff)
Ian Francis Barrett (Defendant)

Representation:

Counsel:
D C Eardley with A Galapo (Plaintiff)
F Sinclair (Defendant)

  Solicitors:
Falzon Legal (Plaintiff)
William & Co (Defendant)

File Number(s):

2019/78155

Publication restriction:

Nil

Judgment

1. HER HONOUR: These proceedings have resolved, leaving only the issue of costs remaining. The plaintiff seeks his costs on an indemnity basis and a gross sum costs order to be paid out of the deceased’s estate. The defendant seeks his costs on an indemnity basis, or alternatively on an ordinary basis, to be paid out of the deceased’s estate.

2. The plaintiff is Christopher John Barrett (“the executor”), executor of the estate of the late Beryl Barrett. The defendant is Ian Francis Barrett. The executor and defendant are brothers. The executor relied upon his affidavits dated 30 May 2019 and 15 July 2019. The defendant relied upon his affidavit dated 10 September 2019 and a court book. Mr Eardley of counsel, with Mr Galapo of counsel, appeared for the executor. Ms Sinclair of counsel appeared for the defendant. The defendant was present in court.

3. On 11 March 2019, the executor commenced proceedings seeking that the defendant be injuncted from entering, occupying or remaining at the property known as XXX XXX XXX Chifley (“the property”), and an order for vacant possession. On 8 May 2019, the defendant filed a defence. The defendant has vacated the premises and the property has been sold.

4. The defendant suffered from a spinal cord injury when he was a child, and has for many years been confined to a wheelchair with ongoing health issues and needs. In 1995, after 22 years of work with Sydney City Council, he was declared unfit for work and has since received a Disability Support Pension.

5. The defendant lived at the property throughout his youth with his siblings and parents. After his siblings moved out and his father died, he and his mother continued to live together in the property for over 10 years.

The deceased’s will

6. On 3 July 2014, the mother of the executor and defendant, Beryl Barrett (“the deceased”) died. The deceased made a will dated 13 March 2014 (“the will”) which appointed Christopher John Barrett as her executor. Both the executor and the defendant are among several beneficiaries pursuant to the will. The terms of the will required the executor to sell the property and distribute the proceeds to the listed beneficiaries, subject to cl14.

7. Clause 14 of the will reads:

“14.   I DIRECT that my son Ian Francis Barrett shall be entitled to reside in my home at XXX XXX XXX Chifley for an initial period of 12 months from my death and then for such further period as my Trustee in his sole discretion determines and allows in order that Ian Francis Barrett have the use, occupation and enjoyment of the same on condition that he shall pay all rates, taxes and outgoings from time to time assessed or payable in respect of the property and shall keep the property and household furniture, goods, chattels and effects in good and substantial repair, order and condition and properly insured against loss or damage by fire in the name of my Trustee who shall lay out any money received in respect of such insurance in replacing or reinstating the property destroyed or damaged or in purchasing similar property to be held upon and subject to the same trusts and provisions as the property destroyed or damaged.”

8. On 21 August 2014, probate of the will was granted.

9. After the initial period of 12 months had expired, the defendant continued to live in the property. He paid the rates, taxes and outgoings in accordance with cl 14.

10. From July to November 2014, the executor deposed (Aff, 28 May 2019 [19] and [20]) that he had been trying to find the defendant a better arrangement for assisted living, as the property was not suitable for his needs and required maintenance. He made inquiries and attended two or three open days at a nearby facility, Maroubra Gardens, where the executor and defendant’s aunt lived. The executor left a copy of the 2014 Maroubra Gardens property sales brochure on the dining room table, and then said to the defendant, “I’ve put some brochures on the table for you to look at.”

11. On 7 November 2014, the solicitor of the executor wrote to the defendant in the following terms:

“The writer confirmed with [the executor] the mutual understanding that the parties had when and if his discretion was ever to be exercised. It was agreed that the discretion would be exercised according to your late mother’s wishes, that is, you would be allowed to stay at the home for as long as it was possible to do so without it impacting on your proper care. She expressed her wishes that [the executor] consult with your medical practitioner, Carol, if necessary a Health Care assessment Team and the remainder of your siblings.

The writer has been assured by [the executor] that you will not be asked to vacate the home if you have the ability to occupy the home, that is medically fit to be able to do so and that by doing so, you will not be putting yourself in danger. Our discussions with [the executor] on these issues have never varied and we have never been told anything different.

[The executor] has confirmed that he will consult with your medical practitioner and your brothers and sisters before any decision is made and if you are considered to be able to reside at the home he will abide by that decision.”

12. In other words, the executor agreed that his discretion would be exercised according to the deceased’s wishes, namely that the defendant would be allowed to stay at the property for as long as it was possible to do so without it impacting on the defendant’s proper care. The executor made an assurance through his solicitor that the defendant would not be asked to vacate the property if he had the ability to occupy the home, in the sense that he was medically fit to occupy it and by so doing would not be putting himself in danger. Further, the executor confirmed that he would consult with the defendant’s medical practitioner and his brothers and sisters before any decision was made. The executor agreed to abide by the decision ultimately reached.

13. Between November 2014 and March 2019, the defendant resided in the property uneventfully and without interference, paying bills when he received them.

14. In March 2018, the defendant came under the care of Caroline Santangelo of Spinal Cord Injuries Australia. The defendant was registered under the National Disability Insurance Scheme. As part of her work, Ms Santangelo began to look for suitable accommodation for the defendant.

15. At the end of June 2018, the defendant believed that he had reached an agreement with his siblings that he would be allowed at least a further 12 months to find a new home that suited his special needs.

16. On 10 September 2018, the defendant received a letter from the executor’s solicitor requiring him to vacate the property by 29 October 2018. It is my view that this time frame was unrealistic. Given his medical condition and significant disabilities, including his confinement to a wheelchair, the defendant could not have been expected to find suitable alternate accommodation in under five weeks.

17. On 16 September 2018, the defendant’s brother Peter, also a beneficiary of the will, emailed the defendant’s solicitor to say that neither he nor other siblings Neil, Kathy and Carol were party to the request that the defendant vacate the property. Peter mentioned that he was concerned about the likely negative impact on the defendant’s mental health.

18. On 9 October 2018, the executor’s solicitor wrote a further letter to the defendant requesting a response to the letter dated 10 September 2018.

19. On 18 October 2018, the defendant’s solicitor, Mr Williams, replied to the notice to vacate. He advised that as the defendant was disabled and required specialist-supported accommodation rather than an aged care facility, the defendant intended to vacate the property but only as soon as suitable accommodation became available. Mr Williams also advised that Ms Santangelo was assisting the defendant and co-ordinating assessments to secure other accommodation. The executor (or his solicitor) was invited to contact Ms Santangelo to confirm that she was searching for appropriate accommodation for the defendant. A copy of an email to Mr Williams dated 21 September 2018, attached to the letter to the executor, confirmed that the defendant’s application for an accessible accommodation for a supported independent living unit Maroubra was pending. The defendant’s solicitor also advised that in Ms Santangelo’s expert opinion, 6 to 12 months would be a reasonable time frame for the defendant’s relocation.

20. On 20 November 2018, the executor’s solicitor acknowledged this information and advised, “We will be contacting Ms Santangelo in relation to providing an update.” Apparently this contact took place. It appears that, in spite of Ms Santangelo’s experience with Spinal Cord Injuries Australia, the executor largely disregarded her opinion that 6 to 12 months was a reasonable relocation time frame. Instead, the executor’s solicitor advised the defendant by letter that he was to vacate the property within 10 days, no later than 30 November 2018.

21. Not surprisingly, on 27 November 2018, the defendant requested an extension of time to vacate the property.

22. On 14 December 2018, the executor’s solicitor wrote to the defendant’s solicitor and stated:

“We were advised that your client is currently receiving out of home care. Our client believes that he should be able to live independently in rental accommodation with the same supports, whilst his preferred accommodation becomes available.”

23. The letter continued that the defendant had until 5.00 pm on 19 January 2019 to vacate the property on the basis that in the opinion of the executor, an additional 6 to 12 months of living in the property was unreasonable under the circumstances. If the defendant remained in the property after 19 January 2019, the executor had given instructions to seek orders to obtain vacant possession without any further notice.

24. On 19 January 2019, the defendant was still residing in the property.

25. On 11 March 2019, the executor filed the statement of claim seeking vacant possession of the property from the defendant. It was personally served on the defendant. On 8 May 2019, the defendant filed his defence.

26. The email from Ms Santangelo dated 29 March 2019 and forwarded to the executor’s solicitor confirmed, “[The defendant] and I have spent considerable time looking at housing options however due to [the defendant]’s specific requirements due to power wheelchair use and other health concerns we have not found suitable housing options for [him]. ... Mr Barrett’s siblings need to understand that it takes time as formal assessments need to be done and there are very few properties that can accommodate a power wheelchair.” Correspondence from some of the options was attached. One of the options confirmed that the defendant had been applying for suitable accommodation since at least 3 August 2018. His sister Carol had been looking for a home on his behalf from March 2019 through May 2019.

27. On 20 May 2019, at the first directions hearing before the registrar, consent orders were made in relation to a timetable.

28. Also in May 2019, the defendant inspected and later applied to purchase a unit at a retirement village in Mosman. Contracts were exchanged on 10 June 2019.

29. On 8 July 2019, the executor’s solicitors wrote to this Court seeking to relist the matter to seek default judgment. This request was misconceived, as the defendant had filed his defence on 8 May 2019 such that default judgment was no longer a viable option. On 11 July 2019, the executor’s solicitors re-sent the letter dated 8 July 2019. On 11 July 2019, the defendant’s solicitor emailed the executor’s solicitors and advised, “[O]ur client will vacate the subject premises on or before 31 July 2019.”

30. On 15 July 2019, the executor filed a notice of motion seeking orders that firstly, the defence be struck out for want of prosecution pursuant to r 12.7 of the Uniform Civil Procedure Rules (“UCPR”); secondly, the defence be dismissed with costs pursuant to UCPR 13.4 (a), (b) or (c); and thirdly, judgment be made for the applicant with costs. The executor sought to rely upon the affidavit of Christopher John Barrett dated 15 July 2017 in support.

31. On 19 July 2019, settlement took place on the retirement village at Mosman. As there was now certainty regarding alternate accommodation, the defendant offered to settle the proceedings by way of letter.

32. On 23 July 2019, the executor accepted the offer to settle. However, he refused to agree to the defendant’s terms regarding costs, namely that the executor (as executor of the estate) pay the defendant’s costs as agreed or assessed. Instead, the executor sought an order that the defendant pay the plaintiff’s costs on an ordinary basis, and then after 19 October 2018, on an indemnity basis.

33. By 7 October 2019, the property had sold for $1,370,000.

The executor’s submissions

34. The executor submitted that he has been wholly successful. The defendant acted unreasonably in refusing the executor’s offers, essentially forcing the executor to commence proceedings and then replying with a futile defence: see Hillebrand v Council of the City of Penrith [2000] NSWSC 1058. The executor argued that the defendant’s conduct in not defending his case violates the principles set down in ss 56-58 of the Civil Procedure Act 2005 (NSW).

35. The executor now seeks costs, and a special costs order, on the basis that there has been unreasonable conduct or “relevant delinquency” on behalf of the defendant. The executor argued that the defendant’s unreasonable conduct had caused unnecessary expense and delay, without which the executor would not have had to commence legal proceedings in the first place.

36. The executor submitted that the defendant was aware of the executor’s obligation to the beneficiaries of the will. The defendant knew the executor had no choice but to commence legal proceedings in order to compel the defendant to vacate the property so that it could be sold pursuant to the will.

37. The executor submitted that once legal proceedings were commenced, the defendant acted in a way which unnecessarily prolonged the proceedings and caused unnecessary expense to the executor.

38. The executor seeks that an order for costs be made on an ordinary basis up until the 19 October 2018, and thereafter on an indemnity basis pursuant to s 98(4) of the Civil Procedure Act. The executor estimates indemnity costs at that time to be $33,000, plus the costs incurred in the hearing of these proceedings. He submitted that the Court should apply a discount of 20% to the costs incurred by the executor.

39. According to the executor, an order should be made that the gross sum costs order be satisfied from the defendant’s entitlement to distribution from the estate, and be deducted from such payment prior to a net amount being paid to the defendant.

The defendant’s submissions

40. The defendant submitted that in civil proceedings determined without a hearing on the merits, the general principle is that each party should bear its own costs, unless one party has acted unreasonably in bringing or defending the proceedings: see Harkness v Harkness (No 2) [2012] NSWSC 35 (“Harkness”) at [16].

41. The defendant argued that the executor commenced proceedings out of spite, without regard to the time table for relocation from a spinal cord injuries expert and without regard to the best interests of the beneficiaries. He then pursued the claim for possession in a manner which was deliberate and high-handed.

42. The defendant submitted that the executor’s conduct in commencing the litigation and pursuing it so aggressively was totally unreasonable. The executor had a duty not only to himself, but to each of the beneficiaries. There was no imperative for the property to be sold without allowing the defendant sufficient time to relocate. Ms Santangelo, a spinal injury expert, confirmed that a reasonable time for relocation would be 6 to 12 months. The defendant argued that the executor was driven to litigate by fraternal rivalry and frustration at the amount of work he was required to perform as executor. The defendant noted that the executor had stated in an email on 6 November 2014, “[The defendant] has been treated like a child all his life and uses tantrums to get his own way. How do you know I get extreme pleasure in reminding him that the house is going to be sold?” (CB 191). The defendant stated that his brother, Peter Barrett, stated in September 2018 that he is not on speaking terms with the executor as a result of his poor treatment of the defendant (CB 209).

43. The defendant argued that the executor could have guarded against the possibility of being found to have acted unreasonably, and being ordered to personally pay costs, by applying to the Court for directions as to whether to bring or defend the proceedings. This type of re-emptive order is known as a Beddoe order: see In re Beddoe; Downes v Cottam [1893] 1 Ch 547. I note that I do not think this would have been an appropriate approach, as the Court would most likely not have made such an order.

44. The defendant submitted that a trustee will remain personally liable if he or she has acted unreasonably, or for his or her own benefit rather than for that of the trust: see McDonald v Horn [1995] 1 All ER 961.

45. The executor did not attempt to settle the argument over costs, even though the preparation and running of a hearing would likely cost an additional $20,000 of estate funds. The defendant argued that as such, the conduct of the executor has been aggressive and unreasonable. He has disregarded the interests of the beneficiaries. On that basis, the defendant argued that it would be appropriate that the executor’s costs be paid out of the estate on an ordinary rather than an indemnity basis, and it would be appropriate for the defendant’s costs to be paid out of the estate.

46. In the above circumstances, the defendant seeks an order that his costs be paid out of the estate on an indemnity basis or alternatively on an ordinary basis.

The law on costs

47. The starting point for a costs order is s 98 of the Civil Procedure Act. It relevantly reads:

“98 Courts powers as to costs

(1) Subject to rules of court and to this or any other Act:

(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

(2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.

(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.

(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:

…

(c) a specified gross sum instead of assessed costs, or

(d) such proportion of the assessed costs as does not exceed a specified amount.

…”

48. This discretion to award costs is subject to the rules of the Court, the Civil Procedure Act and other Acts. Thus, the Court may order that the costs of proceedings relating to an estate be paid from the estate in such manner as the Court thinks fit.

The defendant’s submissions

49. The usual order as to costs, namely that costs follow the event, is set out in UCPR 42.1. The defendant submitted that UCPR 42.1 does not apply because there was no relevant “event”, and there was no litigation. Instead, the executor simply accepted the defendant’s offer of settlement.

50. The defendant submitted that the principle that costs follow the event may not be determinative if there is no final judgment, or if a contractual agreement between the parties displaces the “event”.

51. The law encourages prospective litigants to settle their disputes without proceeding to adjudication. The defendant argued that less formal settlement offers can generate costs consequences, and can impact on the costs consequences of litigation over a deceased estate. In the present case, where an executor as trustee has prosecuted the proceedings on behalf of the estate, the defendant submitted that it is open to the Court to order that the costs of both parties be allowed, whether wholly or partly, out of the estate: see Rowland v Portus (1906) 6 SR (NSW) 74 at 76 per Walker J.

The executor’s submissions

52. The executor submitted that as costs follow the event, a successful party has a “reasonable expectation” of being awarded costs against the unsuccessful party: see Oshlack v Richmond River Council (1998) 193 CLR 72; (1998) 152 ALR 83 at [67] and [134]. The purpose of an order for costs is to compensate the person in whose favour it is made, not to punish the person against whom the order is made: see Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33 at [34].

53. The “event” is not limited to issues in the technical pleading sense, but extends to all disputed questions of law and fact: see Cretazzo v Lombardi (1975) 13 SASR 4 at [12]. Where proceedings for family provision are brought, the “event” is “the overall justice of the case”: see Singer v Berghouse (1993) 114 ALR 521 at 522 per Gaudron J. The executor submitted that by analogy with s 99 of the Succession Act 2006 (NSW), such costs are generally paid from the estate: see Jvancich v Kennedy (No 2) [2004] NSWCA 397.

54. The executor submitted that a successful party should not be deprived of costs unless there is material to justify a contrary order: see Milne v Attorney-General (Tas) (1956) 95 CLR 460 at 477; Berbett Pty Ltd v Hansa [1976] VR 385.

55. Counsel for the executor has set out the principles that pertain to indemnity costs orders, gross sum costs orders and the relevant discount to be applied. For convenience, I adopt them.

Indemnity costs

56. So far as the issue of indemnity costs is concerned, the executor referred to G Dal Pont, The Law of Costs (LexisNexis Butterworths, 4th ed, 2018) 539-540 [16.51], which states:

“A special costs order may ensue where it appears to the Court ‘that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success’, in which case the action ‘must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law’. Despite this ‘presumption’, it is not a prerequisite to the power to award special costs that a collateral purpose or a species of fraud be established. It is sufficient to enliven the discretion that, for whatever reason, a litigant, whether as plaintiff or defendant, what on proper consideration should be seen to be a hopeless case. As explained by B W Ambrose J in Re SCA Properties Pty Ltd (in liq).

In some cases it is appropriate to make an order for indemnity costs to make it known that the Court will not readily accept that its time and the successful litigant’s money can be wasted on totally frivolous and thoroughly unjustified proceeding. If it appears it is not for the bona fide purpose of protecting and enforcing a legal right but to achieve an ulterior or extraneous purpose than in itself is justification for making of an indemnity order.”

57. In Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 118 ALR 248 at [5], Sheppard J set out the authorities and the relevant principles that are to be applied to an order for indemnity costs.

58. If the Court accepts that each party has enjoyed a degree of success, then no order as to costs would be made: see Tadrous v Tadrous [2009] NSWSC 407 per Brereton J at [13]. The executor argues that this is not the case here.

59. Indemnity costs may be ordered where there is unreasonable conduct or “relevant delinquency” in the proceedings: see Liverpool City Council v Estephan [2009] NSWCA 161 at [95]. Relevant delinquency includes:

1. unnecessarily prolonging the proceedings;

2. behaviour which causes unnecessary expense, such as the failure to adhere to proper procedure; and

3. disregard of court orders: see, for example, O’Keefe v Hayes Knight GTO Pty Ltd [2005] FCA 1559 at [35].

Gross sum costs order

60. The Court can make an order pursuant to s 98(4) of the Civil Procedure Act for gross sum costs at any time before costs are referred for assessment. The relevant principles applicable in the Court exercising discretion in making a gross costs sum order are outlined in Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [4]-[5]. Stated simply, they may be summarised as:

1. the complexity of the proceedings in relation to their costs;

2. the degree of any disproportion between the issues litigated and the costs claimed;

3. the relative responsibility of other parties for the costs incurred; and

4. the capacity of the unsuccessful party to set aside any costs liability.

The application of a discount

61. If the Court is inclined to make the costs order on a gross sum basis, the Court may also consider a discount of the costs actually incurred or estimated, taking into account contingencies that would be relevant in any formal costs assessment process.

Conclusion

62. Costs are discretionary. In this case, the parties reached a settlement. The general principle in civil proceedings where proceedings are determined without a hearing on the merits, and where is cannot be said that one party has simply capitulated, is that the courts make no order as to costs with the intent that each party bears its own, unless it can be seen that one party has acted unreasonably in bringing or defending the proceedings: see Harkness at [16].

63. These proceedings involve the executor seeking to administer the estate. It is unfortunate that the parties became involved in acrimonious litigation and incurred legal expenses that will ultimately diminish the estate.

64. While I accept that the executor had a duty to sell the property and distribute the proceeds to the beneficiaries, there is no real explanation as to why the executor acted with undue haste in seeking to evict the defendant from the property on 10 September 2018, giving him only five weeks to vacate. Six days later, a brother, Peter, emailed the defendant’s solicitor saying neither he nor his other siblings, Neil, Kathy or Carol were party to this decision. Peter mentioned that he was concerned about the likely significant negative impact on the defendant’s mental health if he was forced to imminently vacate the property.

65. Nevertheless, the executor pursued his request, sending a further letter on 9 October 2018 requesting a response to his letter of 10 September 2018.

66. The events which followed are set out in detail earlier in this judgment, but bear repeating.

67. On 18 October 2018, Ms Santangelo advised the executor’s solicitor of her and the defendant’s efforts to find him alternative accommodation, and stated that in her expert opinion the process would likely take 6 to 12 months.

68. On 14 December 2018, the executor rejected Ms Santangelo’s expert advice, as he had formed the view that the defendant should be able to live independently in rental accommodation with the assistance of home care. However, he extended time for the defendant to vacate the property until 19 January 2019. He informed the defendant that if he remained on the property after that date, the executor would commence legal proceedings without further notice.

69. By 19 January 2019, the defendant had not vacated the property. On 11 March 2019, the executor filed the statement of claim seeking vacant possession of the property from the defendant. On 8 May 2019, the defendant filed his defence.

70. A further email from Ms Santangelo dated 29 March 2019, forwarded to the executor’s solicitor, stated that she and the defendant had spent considerable time looking for housing, but had not found any options suitable to his specific health needs. She emphasised that it takes time to make formal assessments and other inquiries into properties that can accommodate a power wheelchair. She attached correspondences with some of the options, one of which confirmed that the defendant had been applying for suitable accommodation since at least 3 August 2018.

71. It gets worse. On 8 July 2019, the executor sought to have the application for default judgment relisted even though the defendant had filed a defence. It was obvious that as a defence was filed, default judgment was no longer a viable option. On 15 July 2019, the executor filed a notice of motion seeking summary judgment, or alternatively, that the defence be struck out for want of prosecution.

72. Once the settlement took place on 19 July 2019 and the defendant had secured suitable accommodation, the defendant made an immediate offer of settlement. The offer was accepted by the executor on 23 July 2019, except that the executor wanted the defendant to pay his costs after 19 October 2018 on an indemnity basis.

73. Despite the executor’s unreasonable behaviour, he seeks his costs on an ordinary basis, and after 19 October 2018 his costs on an indemnity basis, and those costs be assessed as a lump sum.

74. As the timeline above makes clear, once the defendant secured suitable accommodation, he elected not to proceed with his defence. In these circumstances, it is my view that he acted reasonably and should have his legal costs paid out of the estate on an ordinary basis.

75. The decision as to whether or not the executor should have an award of costs in his favour is borderline. In my view, his unreasonable behaviour disentitles him to an award of indemnity costs. It also disentitles him to a lump sum costs order. However, as he was the executor of the estate, I reluctantly make an order that his costs be paid costs out of the estate on an ordinary basis.

The Court orders that:

(1)   The defendant’s costs are to be paid out of the estate on an ordinary basis.

(2)   The executor’s costs are to be paid out of the estate on an ordinary basis.

**********

Decision last updated: 11 October 2019