Brownell v Robinson (No 2)
[2017] TASSC 12
•6 March 2017
[2017] TASSC 12
COURT: SUPREME COURT OF TASMANIA
CITATION: Brownell v Robinson (No 2) [2017] TASSC 12
PARTIES: BROWNELL, Mary Ann
v
ROBINSON, Christine
FILE NO: 98/2015
DELIVERED ON: 6 March 2017
DELIVERED AT: Hobart
HEARING DATES: 23 February 2017
JUDGMENT OF: Brett J
CATCHWORDS:
Succession – Probate and letters of administration – Costs – General principles.
Sheil v Doneley [1903] SR(NSW) 60; Re Buckton; Buckton v Buckton [1907] 2 Ch 406; Re Halston [1912] 1 Ch 435; Oshlack v Richmond River Council (1998) 193 CLR 72; Latoudis v Casey (1990) 170 CLR 534; Murdocca v Murdocca (No 2) [2002] NSWSC 505; NSW Trustee & Guardian v Hull (No 2) [2011] NSWSC 1361, cited.
Aust Dig Succession [1160]
REPRESENTATION:
Counsel:
Plaintiff: C Gunson SC and R Spencer
Defendant: D Zeeman
Solicitors:
Plaintiff: TFR Lawyers
Defendant: Butler McIntyre & Butler
Judgment Number: [2017] TASSC 12
Number of paragraphs: 10
Serial No 12/2017
File No 98/2015
MARY ANN BROWNELL v CHRISTINE ROBINSON (NO 2)
REASONS FOR JUDGMENT BRETT J
2017
On 31 January 2017, I dismissed this action (Brownell v Robinson [2017] TASSC 5), but reserved the question of consequential orders. Each party now seeks specific orders relating to the costs of the action. The plaintiff seeks an order that the costs of both parties be paid from the estate, or, in the alternative, that there be no order as to costs, so that, in effect, each party will be responsible for her own costs of the action. The defendant seeks an order that the plaintiff pay her costs of the action.
Costs in respect of these proceedings are in the discretion of the Court: Supreme Court Civil Procedure Act 1932, s 12, Supreme Court Rules 2000, r 57. That discretion must, of course, be exercised judicially, "that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent": Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 per Gaudron and Gummow JJ. Notwithstanding the unfettered nature of the discretion, it is well recognised in civil cases that the usual order is that costs will follow the event, that is, that a wholly successful party will be entitled to recover costs from the unsuccessful party. As was explained by McHugh J in Latoudis v Casey (1990) 170 CLR 534 at 566-567:
"An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connexion with the litigation: Kelly v Noumenon Pty Ltd (1988) 47 SASR 182, at p 184. The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings. It may, and usually will, be made even though the action has failed through no fault of the unsuccessful party. In Cilli v Abbott (1981) 53 FLR 108, at p 111 Keely, Toohey and Fisher JJ pointed out that 'the object of costs is not to penalize; it is to indemnify the successful party in regard to expense to which he has been put by reason of legal proceedings': see also Anstee v Jennings [1935] VLR 144, at p 148."
A recognised exception to the "usual rule" concerns the costs of proceedings relating to the administration of an estate. Where such proceedings are necessary for or of benefit to the administration of an estate, courts generally have been inclined to permit the costs of all parties to the proceeding to be paid from the estate. For example, cases in which an executor or administrator commences proceedings seeking guidance, assistance or the determination of the court in respect of a question arising in relation to the proper administration of an estate, would normally attract such an order. In Re Buckton; Buckton v Buckton [1907] 2 Ch 406, Kekewich J considered the disposition of costs questions in respect of administration proceedings. He categorised such cases as follows:
(a)Proceedings commenced by an executor, trustee or administrator asking for the court's guidance with respect to construction of a will or instrument of trust, or some other question concerning the administration of the estate, including the entitlement of beneficiaries.
(b)Proceedings of a similar nature but commenced not by the trustees but by a beneficiary. Cases under this category would have in common that they are "made by reason of some difficulty of construction, or administration, which would have justified an application by the trustees, and it is not made by them only because, for some reason or other, a different course has been deemed more convenient".
(c)The third class of case relates to an application "made by a beneficiary who makes a claim adverse to other beneficiaries, and really takes advantage of the convenience procedure by originating summons to get a question determined which, but for this procedure, would be the subject of an action commenced by writ, and would strictly fall within the description of litigation".
His Honour considered that in the first two classes of case, the proceedings were necessary for the administration and benefit of the estate and accordingly, in the normal course, costs of all parties should be met from the estate. However, in respect of the third category, he took the view that "once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs".
This method of categorising and approaching the question of costs in such proceedings has been widely followed in the common law world, including in Australia. (See, for example, the analysis of Campbell J in Murdocca v Murdocca (No 2) [2002] NSWSC 505.)
These principles are applicable to cases of intestacy. In Sheil v Doneley [1903] SR(NSW) 60, A H Simpson CJ in Eq, was considering the question of costs in respect of the case of an unsuccessful claimant in an enquiry as to the next of kin of an intestate. His Honour held that the general rule that a successful litigant ought recover costs against an unsuccessful litigant, should apply unless it could be shown that the investigation of the claim had resulted in a benefit to the estate. Such might be the case where "it was so doubtful who was right, and so impossible to decide the matter without careful investigation, that if they had not brought forward their claims there could have been no adjudication", (referring to Johnston v Todd (8 Beav 489) at 493). However, in the case before his Honour, he took the view that the claim had been solely for the benefit of the claimant, and had delayed rather than expedited the administration of the estate. He refused to make an order that the claimant's costs be paid from the estate, although he did not make any further order because the other parties to the action had not pressed for an order for costs.
A similar conclusion was reached by Hallam AsJ in NSW Trustee & Guardian v Hull (No 2) [2011] NSWSC 1361. That case also involved an enquiry as to persons entitled on intestacy. A person who claimed to be entitled as the father of the deceased had been joined to the proceedings but was ultimately unsuccessful in pressing his claim. His Honour noted the following at [30]:
"Whilst it is true that the present case was one to establish the identification of rightful beneficiaries, respectfully, I agree with the submission of the second Defendant that the proceedings had all the hallmarks of contentious proceedings, in which the first Defendant sought to advance his claim in his own interest only. To all intents and purposes, as between the Defendants, it was a hostile lis inter partes between two potential beneficiaries as to who was entitled on intestacy. It was certainly not a joint approach to the court to clarify an uncertainty. I was required to determine rights between adverse litigants."
He refused to make an order that the unsuccessful claimant receive his costs out of the estate. However, he did not make an order that he pay the costs of the other parties.
In the case before me, Mr Zeeman, on behalf of the defendant, argues that costs should follow the event. His argument, in essence, is consistent with this case falling within the third category of case defined in Re Buckton, in that it involved the determination of rights between adverse litigants. On the other hand, Mr Gunson SC submits that the question of who was lawfully entitled to the residuary estate was subject to considerable uncertainty, particularly in circumstances in which the defendant's right to the estate was based on a determination that she was the spouse of the intestate within the meaning of the Intestacy Act 2010, which required a further determination that she had been in a "significant relationship" with the deceased within the meaning of the Relationships Act 2003. Mr Gunson submits that the uncertainty was compounded by the fact the relationship was not registered, as it could have been, under that Act. His ultimate submission is that it was to the benefit of the estate to carefully scrutinise the nature of the defendant's relationship with the deceased, and thereby to determine the appropriate beneficiary.
Both Sheil v Doneley and NSW Trustee & Guardian v Hull involved proceedings which had been initiated by persons other than the unsuccessful claimant, in order to identify the proper beneficiaries of the intestate estate. However, in the case before me, the plaintiff commenced an action in circumstances in which a grant of administration had already been made, seeking the revocation of that grant. She brought forward little direct evidence to support her case. Her claim was based on a contention as to the nature of the relationship between the intestate and the defendant, but ultimately this contention was held to be without substance. I see little reason to distinguish between this case and any other civil case involving a factual contention which is not ultimately upheld. There is no basis for a submission that there was any benefit to the estate from this litigation. The grant of administration had already been made, and that position has now been confirmed. Any uncertainty which might exist in determining whether a relationship falls within the definition of a "significant relationship" is uncertainty which is inherent in the legislative definitions, and is not a basis to bring this case within the exception to the usual order applicable in the first two categories defined in Re Buckton. It follows that there should not be an order that the costs of the plaintiff be paid from the estate. To make such an order would, for all practical purposes, require the successful defendant to meet all of the costs of the action, including those of the unsuccessful plaintiff. Further, I see no reason to depart from the usual rule that permits the successful party to adverse litigation to receive the compensation of a costs order against the unsuccessful party. In my view, this case falls squarely within the third category of case referred to in Re Buckton. The following comments of Eve J in Re Halston [1912] 1 Ch 435 at 439, in a slightly different context, are apposite:
"... the case seems to me to fall entirely within the decision of Kekewich J in In Re Buckton [1907] 2 Ch 406, 415. The respondent John Robert Halston asserts his right to possession – the other respondents with one exception concede his right. He has now established his right; if I give costs out of the estate, that is to say out of this real estate, I shall be making the successful party in what is really adverse litigation pay the costs of the unsuccessful party, and if I say no costs I shall still be imposing on the successful litigant a burden which in justice he ought not to have imposed on him. I think, therefore, I am bound to order his costs to be paid by the unsuccessful respondent."
I order that the plaintiff pay the defendant's costs of the action to be taxed, save and except the costs of the unsuccessful application to re-open the defendant's case. The defendant is to pay the plaintiff's costs of the application to reopen. This exception was conceded by the defendant.
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