Cangia v Cangia (No 2)

[2008] VSC 556

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 1322 of 2007

ROBERT PAUL CANGIA	Plaintiff
v
JOHN ARNOLD CANGIA	Defendant

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JUDGE:	WHELAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	9, 10, 13, 31 October 2008
DATE OF RULING:	3 December 2008
CASE MAY BE CITED AS:	Cangia v Cangia (No. 2) (Ruling)
MEDIUM NEUTRAL CITATION:	[2008] VSC 556

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PROCEDURE – Costs – Claim under Part IV of the Administration and Probate Act 1958 – Small estate – Costs fixed and amount limited.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B Gillies	Trivett Keating
For the Defendant	Mr R Cook	Dunemann Sutherland Pty

HIS HONOUR:

1. In the reasons which I published on 31 October 2008 ([2008] VSC 455) I foreshadowed a position in relation to the costs of the proceeding which I described in those reasons as a tentative view. I indicated then that the tentative view I had reached was that I should order that the costs of each of the parties be paid from the estate in an amount not exceeding $30,000.

1. That amount is less than the amount of the costs which I was told the executor and trustee has incurred ($34,687.50) but, as I indicated in my reasons, I thought it appropriate to reduce those costs to make an allowance for the time spent on the Egypt trip issue.  Before me today Mr Cook of counsel on behalf of the trustee and executor has not sought to put any submission against that course.

1. In relation to the costs of the applicant, Mr Robert Cangia, I indicated that I had tentatively concluded that the costs order should reflect the adverse conclusions that I had reached on many issues addressed by Robert Cangia, and should also reflect the need to have regard to the size of the estate when assessing costs.  I had also been given an indication of the costs incurred by Robert Cangia ($62,359.50). That indication did not give detail of the work done. It was not possible for me to assess the reasonableness of the costs incurred, even if it were appropriate for me to attempt to do so, and I have not attempted to do so.

1. The reasons why I had reached the tentative view which I set out in relation to Robert Cangia's costs were these.

(1)The relief obtained by Robert Cangia is significantly different from that which was sought.  The provision I propose to order is less than that which was sought in the trial,  and the burden of the provision is quite differently allocated to that which was sought.  Whereas Robert Cangia sought to have the burden of any additional provision borne by the beneficiaries equally I have determined that the burden should be borne by the portion of the estate left to his own family.

(2)On most if not all of the areas of the dispute involving Robert Cangia's own behaviour and activities I found against him, and it seems to me that the costs order ought to reflect that.

(3)The court can and should in my view impose some limits on the level of costs sought to be imposed on small estates in applications of this kind.  There must be some proportionality imposed to avoid small estates being substantially consumed by legal costs in these kinds of proceeding.

1. Today I have heard further submissions from counsel in relation to the costs issues and other matters.

1. Mr Gillies on behalf of Robert Cangia has brought to my attention an offer of compromise dated 2 May 2008, which I have initialled and placed on the court file.  Under that offer Robert Cangia proposed the following:

There shall be further provision made out of the estate for the plaintiff so that in lieu of the bequest of $3,000 made to him in paragraph 9 of the deceased's last will dated 5 March 2005 [sic] there be a specific bequest for him in the sum of $75,000.

1. Mr Gillies submitted that this offer represented an outcome less advantageous to Robert Cangia than the outcome I have found in the reasons I have published.  He referred to the fact that the amount of the bequest is $5,000 lower than the sum I had indicated would be ordered in his favour.  I asked him how he interpreted the offer in terms of where the offered bequest was to be borne, and he indicated that his interpretation was that the $75,000 would come out of the one-sixth shares provided for in paragraph 9(b)(v) and (vi) of the will.

1. Mr Cook submitted that that was not the correct interpretation of the offer. He submitted that the correct interpretation was that there should be a specific request of $75,000, which would be paid out prior to the division of the estate into sixths as provided for in Clause 9 of the will. Thus, Mr Cook submitted, what was offered was a specific provision for Robert of $75,000 which would be borne by the estate as a whole, and that Robert's two children would then still be entitled to one-sixth each of the residue. 

1. My own interpretation of the offer is the same as Mr Cook's. 

1. Having heard argument on the matter today I have reconsidered the tentative view which I had expressed.  The offer of compromise is a significant additional factor, but having considered it I have decided not to alter the course which I previously foreshadowed.  The offer in my view is quite different to the outcome.  It is true that a smaller amount was offered to be accepted, $75,000 rather than $80,000, but it seems to me that it is of greater significance that under the offer the burden of the specific request would have been dealt with in a quite different way to the way in which I have determined it should be. It is also significant that I reached the conclusions which I set out in my reasons on the basis that Robert Cangia proffered an undertaking to use any money ordered in his favour towards the purchase of a house. This was not a component of the offer.

1. In all the circumstances I do not intend to depart from the tentative view I expressed in the reasons. 

1. I will note in other matters the undertaking, which is in the draft order handed up by Mr Gillies, which I have initialled and placed the court file. Mr Robert Cangia through his counsel gave that undertaking to me this morning. He is present in court, and I have taken the opportunity to explain to him the importance of complying with it, and the potential consequences of not complying.