Baychek v Baychek

[2010] NSWSC 987

CITATION:	Baychek v Baychek [2010] NSWSC 987
HEARING DATE(S):	26 August 2010
JUDGMENT DATE :	3 September 2010
JUDGMENT OF:	Ball J
DECISION:	1. A half interest in the property at Chippendale be designated as the notional estate of the deceased; 2. The plaintiff receive a legacy out of the notional estate of the deceased of $183,000; 3. The defendant pay the plaintiff the sum of $15,000 on account of the plaintiff’s legal costs. 4. The defendant to pay the plaintiff's costs of the application to reopen the judgment in this matter.
CATCHWORDS:	COSTS - family provision - cost capping - whether appropriate to cap costs
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW) Family Provision Act 1982 (NSW) Legal Profession Act 2004 (NSW) Practice Note SC Eq 7 Property (Relationships) Act 1984 (NSW)
CATEGORY:	Procedural and other rulings
CASES CITED:	Autodesk Inc v Dyason (No 2) (1983) 176 CLR 300 Beach Petroleum NL v Johnson (No. 2) (1995) 57 FCR 119 Carey v Robson [2009] NSWSC 1199 Hadid v Lenfest Communications Inc {2000] FCA 628 Jvancich v Kennedy (No 2) [2004] NSWCA 397 Lownds v Home Office [2002] 1 WLR 2450 Moussa v Moussa [2006] NSWSC 509 Nudd v Mannix [2009] NSWCA 327 Sherborne Estate (No 2): Vanvalen v Neaves (2005) 65 NSWLR 268 Singer v Berghouse (1993) 114 ALR 521
TEXTS CITED:	Ritchie’s Uniform Civil Procedure NSW, Editors: P Taylor, E Elms, G Bellew, M Meek, T Bartush-Peek, LexisNexis
PARTIES:	Katherine Mary Vlasta Baychek (Plaintiff) Beverley Fay Baychek (Defendant)
FILE NUMBER(S):	SC 2009/288750
COUNSEL:	C Harris SC (Plaintiff) P Menadue (Defendant)
SOLICITORS:	Atkinson Vinden (Plaintiff) AJ Law & Co (Defendant)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BALL J

3 SEPTEMBER 2010

2009/288750 KATHERINE MARY VLASTA BAYCHEK v BEVERLEY FAY BAYCHEK

JUDGMENT

Introduction

1 I delivered my judgment in this matter on 18 August 2010. In that judgment, I indicated that I proposed to make an order that the plaintiff receive a legacy out of the notional estate of the deceased of $183,000, which, subject to one adjustment, was the amount of the plaintiff’s mortgage over her home, but that I would make no order for costs on the basis that approximately $50,000 of the mortgage represented legal costs incurred by the plaintiff in this case. The plaintiff’s total costs are estimated to be approximately $111,000.

2 I also indicated in my judgment that I thought it was appropriate to make an order that the deceased’s 50 per cent interest in a property at Chippendale be designated as the deceased’s notional estate. However, I invited the parties to consider whether it was appropriate to make some other order in relation to the deceased’s notional estate, to bring in short minutes of order if they could agree and to make submissions on the matter if they could not, before I made formal orders.

3 Following my judgment, Mr Harris, who appeared for the plaintiff, sought to reopen my judgment in relation to costs on the basis that I had dealt with costs in an unexpected way without giving his client a reasonable opportunity to address me on that issue and that, in doing so, I had denied his client natural justice.

4 As a result, two issues remain outstanding. The first is what order I should make in relation to the notional estate of the deceased. The second is whether I should reopen my judgment in relation to costs and, if so, whether I should vary my judgment in that respect.

Order in relation to notional estate

5 Mr Menadue, who appeared for the defendant, accepted that, in view of my judgment, it was appropriate for me to make an order designating as notional estate of the deceased his half share of the property at Chippendale. Mr Harris, on the other hand, submitted that I should also make an order designating as part of the notional estate of the deceased half the amount held in a bank account that was in the name of the defendant and the deceased. Mr Harris said that that course was preferable because it would facilitate enforcement of my judgment, if that became necessary. Clearly, enforcement against cash held in a bank account is more straightforward than enforcement against real property. However, in my opinion, the difficulty with Mr Harris’s submission is that s 28(2) of the Family Provision Act 1982 provides that:

“… the court shall not make an order designating as notional estate of a deceased person property in excess of that necessary to allow the making of provision that, in its opinion, should be made.”

Designation of half the amount held in the bank account alone would not be sufficient – since half that amount is less than $183,000, and, indeed, is less than $133,000, assuming that I were to deal with the question of costs in some other way. On the other hand, designation of the deceased’s half share of the property at Chippendale is sufficient. In those circumstances, I do not think that it is appropriate to make any designation in respect of the amount held in the bank account.

Should I reopen my judgment in relation to costs?

6 A preliminary question in relation to costs is whether I should reopen my judgment. Mr Harris is correct to say that I did not specifically raise the question of costs during the course of the hearing. However, in opening oral submissions, Mr Menadue raised the question of cost capping and said that, if I were to find for the plaintiff, the defendant would want to say something about the amount of costs in these particular proceedings. In the defendant’s final written submissions, Mr Menadue made the following submission:

“Finally, it is noted that if the Plaintiff is successful then, in light of the small sums involved (and the fact that the Plaintiff has only filed a limited amount of affidavit evidence) the Court should cap any costs awarded.”

The plaintiff made no submissions in reply to that submission.

7 Natural justice is denied where, to quote Brennan J in Autodesk Inc v Dyason(No 2) (1983) 176 CLR 300 at 309, “the court has reached a conclusion by adopting a proposition of fact or law which the unsuccessful party has not had an opportunity to argue”. In this case, I think the plaintiff was on notice that cost capping was an issue and that she had an opportunity to deal with the issue in reply. I accept, however, that the plaintiff may have anticipated that the question of costs would be dealt with after I gave judgment. I also accept that the order that I indicated in my judgment that I proposed making was not strictly an order capping costs. Rather, the conclusion I reached was that provision should be made for the plaintiff for the full amount of her mortgage (less $25,000 owed to the plaintiff by a friend). Having reached that conclusion, I concluded that no order for costs should be made on the basis that $50,000 of the plaintiff’s mortgage related to costs incurred by her. The effect of my order was to fix the plaintiff’s costs at an amount that was substantially less than the plaintiff’s actual costs. However, one result of what I did was to make it unnecessary for the plaintiff to have her costs assessed. An order in those precise terms was not raised by me or by the defendant. In those circumstances, I think that it is appropriate that I reopen my judgment in relation to the question of costs.

The relevant principles

8 The question of costs in this case raises two broad issues. The first is the scope of the power and discretion of the court in relation to the question of costs. The second is how that power and that discretion should be exercised in this case.

9 The general principle in relation to costs is set out in s 98(1) of the Civil Procedure Act 2005 (CPA). That subsection provides:

“(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.”

10 Subsection 98(4) provides:

“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:
(a) costs up to, or from, a specified stage of the proceedings; or
(b) a specified proportion of the assessed costs; or
(c) a specified gross sum instead of assessed costs; or
(d) such proportion of the assessed costs does not exceed a specified amount.”

It is clear that subs (4) does not limit the scope of subs (1). Subsection (4) gives particular examples of orders the court may make. It does not purport to circumscribe the general power contained in subs (1).

11 Normally, s 98(4)(c) of the CPA is treated as a provision for the benefit of the costs applicant. It permits a costs applicant to make an application for a gross sum costs order rather than being put to the expense and trouble of an assessment. Courts have made it clear that, when used in that way, the court is not required to proceed as if it were dealing with an assessment. It is entitled to take a broad brush approach provided that that approach is logical, fair and reasonable: Beach Petroleum NL v Johnson(No. 2) (1995) 57 FCR 119 at 123; Hadid v Lenfest Communications Inc {2000] FCA 628 at [27]. Implicit in this principle is that the gross sum bear a reasonable relationship to the actual costs of the party making the application, and to the costs that that party might reasonably be expected to recover on assessment. That means, among other things, that there must be a reasonable evidentiary basis for the order the court makes. That evidentiary basis is normally provided by the costs applicant in the form of an affidavit setting out the actual costs incurred and how they were calculated. Often, the evidence also includes evidence of the amount that is likely to be recovered on assessment.

12 In Sherborne Estate (No 2): Vanvalen v Neaves (2005) 65 NSWLR 268, Palmer J expressed the view that s 98(4)(c) of the CPA also gave the court power to fix a gross sum in respect of costs on the application of the costs respondent. However, his Honour said (at [42]):

“It is conceivable that the Court could exercise the power under s 98(4)(c) on the application of an unsuccessful party in making a final costs order so as to cap a successful party’s costs where the Court considers that the successful party’s costs are grossly excessive. … But such a capping order would be very rare: the Court’s decision would have to be an informed one, that is, founded on a consideration of the costs actually incurred, the circumstances at the time at which the were incurred, whether they were reasonable in those circumstances, and what would have been a reasonable amount to have incurred.”

His Honour concluded (at [44]) that the power given by s 98(4)(c) should only be exercised in exceptional cases where the court is satisfied that an application can be dealt with more quickly, cheaply and justly than an assessment under the Legal Profession Act 2004. Applying that principle, his Honour was not prepared to make an order under s 98(4)(c) in the case before him because the applicant for the order (that is, the costs respondent) did not place before his Honour sufficient evidence to enable the court to make a logical, fair and reasonable estimate of what would be an appropriate gross sum to incorporate in a costs order. I will return to this issue below.

13 Reference should also be made to s 60 of the CPA. That section provides:

“In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject matter in dispute.”

Although this section is not itself concerned with the award of costs, it states an important principle which is relevant to the exercise of the court’s discretion in relation to costs.

14 UCPR r 42.1 provides:

“Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.”

Although the application of the rule is expressed to be subject to a condition (that is, that the court make an order as to costs), the rule is regarded as embodying the principle that costs normally follow the event. Exceptions, of course, exist. A number of examples are listed in Ritchie’s Uniform Civil Procedure NSW at [42.1.20] – such as where a party’s success is attributable only to matters raised in a late amendment, or where a successful party recovers merely nominal damages, or where a successful party has been guilty of some form of misconduct. However, these examples, as the authors of the service acknowledge, are only examples. There is a wide range of circumstances in which it may be appropriate not to make an order for costs in favour of a successful party.

15 UCPR r 42.4 provides:

“(1) The court may by order, of its own motion or on the application of a party, specify the maximum costs that may be recovered by one party from another.
(2) A maximum amount specified in an order under subrule (1) may not include an amount that a party is ordered to pay because the party:
(a) has failed to comply with an order or with any of these rules, or
(b) has sought leave to amend its pleadings or particulars, or
(c) has sought an extension of time for complying with an order or with any of these rules, or
(d) has otherwise caused another party to incur costs that were not necessary for the just, quick and cheap:
(i) progress of the proceedings to trial or hearing, or
(ii) trial or hearing of the proceedings.
(3) An order under subrule (1) may include such directions as the court considers necessary to effect the just, quick and cheap:
(a) progress of the proceedings to trial or hearing, or
(b) trial or hearing of the proceedings.
(4) If, in the court’s opinion, there are special reasons, and it is in the interests of justice to do so, the court may vary the specification of maximum recoverable costs ordered under subrule (1).”

16 In Sherborne Estate (No 2) (2005) 65 NSWLR 268 at [24], Palmer J concluded that r 42.4(1) only permitted an order to be made in advance of a hearing. It did not permit an order capping costs at the end of the hearing. In reaching that conclusion, his Honour pointed out that subrules (2)-(4) only make sense in the latter context. However, the Court of Appeal in Nudd v Mannix [2009] NSWCA 327 held that the court did have power to make an order capping costs at the end of the hearing. Handley AJA (with whom McColl and McFarlane JJA agreed) said that that power was expressly conferred by UCPR r 42.4(1).

17 There is much to be said for the views expressed by Palmer J. However, it does not follow from his Honour’s reasoning that UCPR r 42.4 sets out the only circumstances in which the court may cap costs. In my opinion, that rule does not expressly or impliedly operate as a limitation on CPA s 96. Rather, it sets out one set of circumstances in which that power to cap costs may be exercised, and places some limits on that power. The likelihood is that the drafters of the rule thought it was appropriate to do so to make it clear that an order capping costs could be made in advance, and not simply at the end, of the hearing, but that limits should be placed on a power to cap costs in those circumstances. It seems clear that the Court of Appeal was not referred to the decision in Sherborne Estate (No 2) and the reasoning of Palmer J in relation to UCPR r 42.4. Handley JA may well have expressed himself differently had it been. The fact remains, however, that Nudd v Mannix is authority for the proposition that the court does have power to cap costs at the end of the hearing. Whether or not that power should properly be regarded as conferred by UCPR r 42.4 is not important. In my opinion, it is clearly conferred by CPA s 96; and UCPR r 42.4 at least confers a qualified power to cap costs prior to the final hearing.

18 One other provision should be mentioned in this context. Paragraph 24 of the Family Provision Practice Note (Practice Note SC Eq 7) provides:

“Orders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the value of the estate is less than $500,000.”

In addition, paragraph 4 of the Usual Order for Hearing which is set out in Annexure 4 of that practice note (and which was made in this case) provides in paragraph 2 the following:

“No less than 4 weeks before the hearing date, the solicitor for each party must file and serve on the client and all other active parties, an affidavit setting out:
2.1 details of the client’s anticipated costs from the commencement to the conclusion of the proceedings;
2.2 any details of alleged complexity for the justification of any aspects of the costs referred to in 2.1.”

19 There are not a large number of cases in which the court has exercised the power to cap costs. There are, however, some. Nudd v Mannix [2009] NSWCA 327 is one. In that case, the deceased left a distributable estate of $415,182. He left legacies of $10,000 to each of his 6 grandchildren and his son, Wayne, and left the residue of his estate to be divided between his other two sons. The plaintiff was the deceased’s de facto partner, who had looked after the deceased for a number of years but who was unable to continuing doing so towards the end of the deceased’s life. The plaintiff lived in her son’s house and her principal sources of income were pensions she received from Centrelink and from the United Kingdom. At first instance, McLaughlin AsJ awarded the plaintiff a legacy of $60,000. The hearing lasted 2 days, although McLaughlin AsJ disallowed the plaintiff’s costs of the second day on the basis that her unreasonable conduct had increased the length of the hearing by a day. At the hearing, the plaintiff led evidence that her legal costs were estimated to be $82,200. McLaughlin AsJ expressed surprise at the amount and ultimately capped her costs at $60,000. On appeal, the Court of Appeal awarded the plaintiff a further amount of $60,000 to come out of the legacies made in favour of the grandchildren. It also set aside McLaughlin AsJ’s disallowance of the plaintiff’s costs of the second day. In its view, the plaintiff had not unreasonably prolonged the length of the hearing. However, the Court of Appeal did not disturb McLaughlin AsJ’s order capping costs, although, as a result of its other orders, those costs now included the costs of a two day hearing and the amount recovered by the plaintiff had increased to $120,000.

20 One point to observe about Nudd v Mannix is that there was nothing that could be described as exceptional about the facts in that case. The plaintiff’s costs appeared to be large having regard to the nature of the case, the size of the estate and the amount that she recovered. However, the costs were still substantially less than the amount that she ultimately did recover. Nonetheless, the Court of Appeal was not prepared to interfere with the order capping costs. That conclusion appears to me to be entirely consistent with Practice Note SC Eq 7. That practice note, and para 24 in particular, recognise three features of Family Provisions Act matters that are often not present in other cases.

21 One of those features is that Family Provisions Act proceedings are concerned with the proper distribution of a fixed pool of assets – that is to say, the deceased’s estate – between a number of people who may at least be thought to have a moral claim to a share of that pool. Consequently, in awarding costs in Family Provisions Act cases the court is willing to consider the overall justice of the case: Singer v Berghouse(1993) 114 ALR 521 at pp 521–2 per Gaudron J. In many cases, that will still mean that an unsuccessful party will have to pay costs: see Moussa v Moussa [2006] NSWSC 509; Jvancich v Kennedy (No 2) [2004] NSWCA 397; Carey v Robson [2009] NSWSC 1199. However, in some cases, the court is willing, for example, not to order that an unsuccessful applicant, whose claim was not without merit, pay the estate’s costs of the application. Similarly, it is often difficult to separate the claim or claims from the costs orders that follow from them, since, for example, those costs orders when made out of the estate in favour of a party have some of the characteristics of a distribution to that party and, at the same time, affect the ultimate amount available for distribution to others. Consequently, there will be cases where, when considering the overall justice of the case, it is appropriate to make no order for costs in favour of a successful party or, more often, to cap those costs – particularly where the estate is not large. Of course, another way of dealing with this second type of case is to make an adjustment to the amount awarded to the applicant having regard to the fact that the applicant will also recover costs. However, there seems to be no reason why either avenue should not be open to the court. Practice Note SC Eq 7 recognises that fact.

22 A second feature of Family Provisions Act matters is that the amount claimed or that the plaintiff can reasonably be expected to recover may be quite small, either because the estate is small or because the claim itself does not justify the award of a more substantial amount. In those cases, it is reasonable to expect that the costs will be proportionate to the amount claimed and the nature of the issues in the case. As Palmer J pointed out in Sherborne Estate (No 2) (2005) 65 NSWLR 268 at [30] (referring to Lord Wolfe’s comments in Lownds v Home Office [2002] 1 WLR 2450), “[p]roportionality of costs to the value of the result is central to the just and efficient conduct of civil proceedings”. As I have pointed out, that principle is reflected in the CPA s 60. It is also reflected in the structure of our court system and in rules that apply in particular areas of the law – such as UCPR r 42.30, which provides that an applicant in a claim under the Property (Relationships) Act 1984 is not normally entitled to recover costs in this court if the amount the applicant recovers is less than the jurisdictional limit of the Local Court. In the case of Family Provisions Act matters, the principle that costs should be proportionate to the amount claimed is also reflected in Practice Note SC Eq 7, para 24.

23 A third feature of Family Provisions Act matters is that, as Palmer J pointed out in Sherborne Estate (No 2) (2005) 65 NSWLR 268, they often involve considerable personal animosity. In disputes of that type, parties are often more concerned to vindicate their position than to resolve the dispute as efficiently and as cost effectively as possible. In those cases, it may well be appropriate to cap such a party’s costs.

24 None of what I have said is intended to suggest that the discretion in relation to costs in Family Provisions Act matters need not be exercised judicially or that it need not be exercised in accordance with well established principles concerning the award of costs. Rather, the point is that the special nature of Family Provisions Act matters means that the court may be more willing in appropriate cases to depart from the rules that normally apply in order to give proper effect to those principles.

25 One point follows from what I have said is that I do not think that an order fixing costs in Family Provisions Act matters should be seen as any more exceptional than an order capping costs. Where the court makes an order capping costs, the effect of the order, if it is to have any effect at all, will be to limit the amount that the costs applicant can recover on assessment to the amount of the cap. To put the point another way, the cap will normally be fixed at an amount that is less than the amount that it might reasonably be expected that the costs applicant will recover on assessment. Were it otherwise, there would be no point in fixing the cap in the first place. If the court makes an order fixing costs at the cap – and the cap is a true cap – the effect of that order is to permit the costs applicant to recover costs without the need for assessment but still to limit the amount that the costs applicant might otherwise expect to recover on assessment. The advantage, then, of fixing costs in this way is that the amount fixed still operates as a cap but it does so in a way that makes assessment unnecessary. In doing so, it gives effect to the overriding purpose identified by the CPA s 56 – that is, to facilitate the just, quick and cheap resolution of the proceedings. In fixing costs as a cap rather than as a substitute for an assessment, it seems to me that the court should take into account the same matters that it takes into account in determining an appropriate cap. That is, what the court must be satisfied of is that the costs are excessive having regard to matters such as the nature of the case, the size of the estate and the amount that the costs applicant has recovered and could reasonably be expected to have recovered at the time proceedings were commenced. If the court is satisfied that the costs are excessive, then it will need to determine what amount to fix. But, as I have said, the nature of that enquiry seems to me to be no different from an enquiry concerning what amount to fix as a cap. I return to this matter below.

26 Before dealing with the specific facts of this case, there is one other point that I should mention. As I have said, the order that I indicated that I proposed making in this case was to make no order as to costs – not an order capping or fixing costs, although that was the result of what I proposed. I should say two things about this. First, I can see no reason in principle why a court cannot take into account the fact that the costs applicant has recovered a proportion of her costs through some other means in determining what costs order should me made, and in deciding in an appropriate case to make no order for costs at all having regard to that fact. Indeed, it seems to me that it would be wrong not to do so. Secondly, and this is connected to the first point, I do not think that the result should depend on the particular approach that is taken. In the present case, one approach is to conclude that an appropriate measure of the provision that should have been made for the plaintiff was the amount of her mortgage (subject to the adjustment I have mentioned), to recognise that, in applying the Family Provisions Act, it is necessary to have regard to the position at the time that judgment is given and therefore to conclude that the plaintiff should be awarded $183,000, and then to consider the question of costs having regard to that conclusion. Another approach is to recognise that the mortgage includes an amount of costs relating to these proceedings, to exclude that amount from the judgment and then to consider what order should be made in relation to costs. Those two approaches should produce the same result. It follows that the principles relevant to costs capping and costs fixing are also relevant to the discretion whether to award costs at all if part of the costs are already included in the amount of the judgment.

Should a special order in relation to costs be made in this case?

27 In answering this question, some background is important.

28 First, the plaintiff is able bodied and in secure employment. She earns a reasonable income and, so far as the evidence goes, enjoys a satisfactory life-style. She was largely estranged from her father, following court proceedings between them. The defendant was the deceased’s second wife. She and the deceased had been living together for almost 30 years. Throughout much of that time she assisted the deceased with his business interests without pay. She nursed the deceased through several serious illnesses during the later part of his life. She is 65 years old, has some health issues and does not work, and cannot be expected to work. She and the deceased held all their property jointly. As a result, the defendant now owns the matrimonial home, which is where the defendant lives, which is worth at least $1.6 million but which requires significant repairs. In addition, she has an investment property at Chippendale worth $620,000, a superannuation fund of $854,000 and other cash and assets of approximately $284,000. Against this background, I do not think that the plaintiff could have expected to receive anything more than a modest provision in her favour. In fact, leaving aside legal costs, the plaintiff stands to recover $133,000 – which is not substantially more than her legal costs.

29 Second, the hearing in this matter lasted 2 days. The plaintiff relied on 6 affidavits – a principal one and three supplementary ones from her, a short one from her aunt and a short one from her solicitor, Ms Dodaro, which dealt with costs. The defendant relied on 4 affidavits – a principal one and two supplementary ones from her and a short one from her solicitor, which again dealt with costs. In her affidavit, Ms Dodaro gave evidence that the following factors affected the plaintiff’s costs and disbursements:

“(a) The Executor did not apply for a Grant of probate, nor was there a schedule or inventory of assets. Therefore at the outset of this matter, we had to carry out initial investigations to trace and identify assets.
(b) The matter has a complex and fairly lengthy history. As there are issues of notional estate, there were numerous searches required to be obtained and reviewed, including Transfers and other documents to enable us to trace assets and the sale of assets.
(c) There were two corporations with respect to which there were historical searches required. There were also other ASIC searches which needed to be carried out.
(d) We were required to review documentation in relation to a Trust.
(e) There were earlier proceedings between the parties in 1991, with respect to which we had to review the documentation.
(f) As the Executor had not obtained a grant of probate, we were required to obtain a grant of administration.”

30 I accept that it was necessary for the plaintiff to conduct some investigations concerning the deceased’s assets, but it is not clear to me why those investigations were or should have been complicated. This is a case where there were a limited number of assets which passed to the defendant on survivorship. It is not a case where the defendant concealed her assets or, in my opinion, could reasonably have been suspected of concealing her assets. Some of the costs incurred by the plaintiff (such as costs associated with investigating the trust referred to by Ms Dodaro) involved re-litigating issues that had been the subject of the court proceedings between the plaintiff and the deceased, which had been settled approximately 20 years ago. In my judgment, I concluded that it was not open to the plaintiff to re-agitate the issues that had been the subject of the court proceedings.

31 Third, I think that it is relevant that the defendant’s estimated costs were approximately $63,000. In some cases, the costs of another party may shed little light on what costs the costs applicant should expect to recover. But here, on the basis of the material before me, there was not a large difference between the work that needed to be done by the plaintiff and that needed to be done by the defendant. Similar facts needed to be investigated. In addition, similar evidence needed to be led – which is what happened.

32 Fourth, in making the order for provision that I did, I was conscious of the effect that that would have on the defendant. The amount that the defendant inherited on the death of the deceased was substantial and, by the standards of many, she is reasonably well off. Even so, I think that it is reasonable that she should be able to live in the house that has been her home for the past 25 years or so for as long as she wants. I also think that it is reasonable that she should be able to renovate that house, which, as I have said, is now in a dilapidated condition. Once those matters are taken into account, the capital sum she has available to her to produce an income on which she is to live is not so large to make it unnecessary to balance her interests against those of the plaintiff in reaching a just result.

33 Taking these matters into account, I think that this is an appropriate case in which to make an order that has the effect of capping the plaintiff’s costs. This is by no means an extreme case and no doubt, given the width of the discretion, it could be exercised in different ways. But, in my opinion, the defendant should not have to bear all of the plaintiff’s costs when taking into account the amount that the plaintiff has recovered and could reasonably be expected to recover, the costs of the defendant – which, in this case, I think provide a reasonable benchmark – and the defendant’s own needs.

34 That leaves the question of precisely what order should be made. Mr Harris submitted that if I were to cap the plaintiff’s costs I should cap them at $90,000. If that amount was excessive having regard to the matters that I have raised, then that is a matter that can be taken into account on assessment. Indeed, in Mr Harris’s submission, a costs assessor was in a better position to take those matters into account than the court. I do not accept this submission. A costs assessor will consider the question whether the costs were reasonably incurred, and will do so on the usual – that is to say, party/party – basis. But in doing so, the costs assessor will not be concerned with a number of the matters that I have mentioned. Rather, a costs assessor will examine issues such as the reasonableness of the rates charged by the solicitors retained by the counsel, whether it was necessary to brief senior counsel and whether particular attendances were necessary. The issues considered by the court are much broader.

35 I have already indicated that, in my opinion, it is appropriate for the court to cap costs by fixing them as an alternative to capping them by fixing a maximum amount. Which alternative is preferable will depend on the circumstances of the case. Obviously, it is not appropriate to fix costs unless the court is satisfied that the amount fixed is likely to be less than the amount that the costs applicant will recover on assessment – otherwise, the court has not capped costs at all. On the other hand, by fixing costs rather than fixing a maximum, the court dispenses with the need for assessment, which clearly is consistent with the cheap and quick resolution of the proceedings.

36 It follows from what I have said, that I think that it is appropriate in this case to make an order that has the effect of fixing the plaintiff’s costs and to do that by permitting the plaintiff to recover an amount that is determined by reference to the full amount of her mortgage (less the $25,000). The only remaining question is whether, having done that, it is reasonable to make no order for costs in favour of the plaintiff at all. Having considered Mr Harris’s submissions, the one matter that I do not think that I gave adequate weight to was the costs the plaintiff incurred in investigating the defendant’s assets. Although there was no evidence lead on the matter, there appears to be no dispute that the plaintiff asked the defendant to take out probate, or at least to provide the plaintiff with a list of deceased’s assets. The defendant was not prepared to do that and, as a consequence, that was something that the plaintiff had to investigate. I have already said that I do not see why those investigations would need to be extensive. However, I think that some allowance should be made for them in deciding what an appropriate cap is. In those circumstances, the orders I make are:

a A half interest in the property at Chippendale be designated as the notional estate of the deceased;
b The plaintiff receive a legacy out of the notional estate of the deceased of $183,000;
c The defendant pay the plaintiff the sum of $15,000 on account of the plaintiff’s legal costs.

37 The effect of these orders is that the plaintiff will receive a fixed sum in respect of her legal costs of $65,000. Having regard to the total amount of the plaintiff’s legal costs, I think that that amount is properly to be regarded as a cap. In my opinion, it fairly takes into account the matters I have referred to. For the reasons I have given, I think that it is appropriate to express the amount as a fixed amount that the plaintiff is entitled to recover, rather than as a limit on recovery.

38 The plaintiff has been successful in her application to reopen my judgment. That application was opposed by the defendant. In those circumstances, I think it is appropriate that the defendant pay the plaintiff’s costs of the application.

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