Cartledge v Bryan (No 2)

[2023] VSC 436

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S PRB 2022 08875

IN THE MATTER of the estate of GARY RICHARD CARTLEDGE, deceased

NICOLE MAREE HEUVERLING CARTLEDGE	Plaintiff
v
KAYE HELLEN BRYAN	Caveator

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JUDGE:	Moore J
WHERE HELD:	Melbourne
DATE OF HEARING:	Written submissions
DATE OF JUDGMENT:	28 July 2023
CASE MAY BE CITED AS:	Cartledge v Bryan (No 2)
MEDIUM NEUTRAL CITATION:	[2023] VSC 436

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COSTS – Estate litigation – Where caveator established prima facie case – Where plaintiff’s opposition to prima facie case fundamentally misconceived – Costs follow the event – Special circumstances warranting award of indemnity costs – Supreme Court Act 1986, s 24 – Supreme Court (General Civil Procedure) Rules 2015, O 63 – Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189; Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; Dale v Clayton Utz (No 3) [2013] VSC 593; Northern Territory v Sangare (2019) 265 CLR 164.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Peter Cahill
For the Caveator	Andrew Burnett	Petersen Westbrook Cameron

HIS HONOUR:

1. In this proceeding the plaintiff, who is an adult child of the deceased who died on 21 March 2022, seeks a grant of letters of administration upon intestacy in relation to the deceased’s estate.  Kaye Bryan lodged a caveat in relation to the application on the basis that she claimed to be the deceased’s domestic partner at the time of his death.  On 19 April 2023, I published reasons for judgment in which I held that the caveator had established a prima facie case in respect of her claim.[1] 

   [1]Cartledge v Bryan [2023] VSC 195 (the prima facie case judgment).

1. The parties have been unable to agree on the question of costs relating to the prima facie case judgment; these reasons for judgment concern that issue and should be read together with the prima facie case judgment.  The caveator seeks an order that the plaintiff pay her costs on an indemnity basis, or alternatively on a standard basis, and relies upon an affidavit sworn by her solicitor on 3 May 2023.  The plaintiff submits that the appropriate order is that costs be reserved.

1. The plaintiff’s principal contention as to why costs should be reserved was that, despite the caveator’s success in the prima facie case judgment, it was not appropriate at this stage of the proceeding to make an order for costs.

1. The plaintiff submitted that the caveator’s ‘application’ was in substance a preliminary issue as to her entitlement to continue with the proceeding and should be viewed as part of the ‘overall process’ of the litigation.  The appropriate course was to reserve costs so that they could be determined at the conclusion of the proceeding.  It was submitted that, depending on the final outcome of the proceeding, a costs order at this stage in the proceeding could result in an injustice.

1. The plaintiff also referred to the very small size of the deceased’s estate.  As a consequence, the ‘principles of the Civil Procedure Act’  meant that ‘the minimum amount of time and effort should be put into this matter’.  Having regard to these matters, the caveator’s application for costs at this time was an instance of ‘overreaching’.

1. As to the question of indemnity costs, it was submitted that such an award would only erode the balance of the estate which ultimately belongs to one of the parties.

Consideration

1. Unless otherwise expressly provided by an Act or by any rules made pursuant to the Supreme Court Act 1986, the Court has a general discretion in respect of costs, including in relation to the administration of estates and trusts.[2] The discretion is to be exercised judicially and in accordance with order 63 of the Supreme Court (General Civil Procedure) Rules 2015.

   [2]Supreme Court Act 1986, s 24.

1. The usual rule as to costs is that a successful party to litigation is entitled to an award of costs in its favour, with the unsuccessful party bearing the liability for the costs of the unsuccessful litigation.  In Northern Territory v Sangare, High Court stated that:[3]

A guiding principle by reference to which the discretion is to be exercised – indeed, “one of the most, if not the most, important” principle – is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome. ...

[3](2019) 265 CLR 164, 173 [25], omitting citations.

1. Although the requirement to show a prima facie case is a requirement which needs to be met in most cases,[4] for the purposes of the exercise of the discretion in respect of costs in the circumstances of the present matter, there are some analogies with the approach to costs in respect of interlocutory applications. In that context, rule 63.20 of the Supreme Court (General Civil Procedure) Rules 2015 provides that, where an interlocutory or other application is made in a proceeding and no order is made on the application or the order made is silent as to costs, costs are the parties’ costs in the proceeding, unless the Court otherwise orders.  This provision reflects the fact that interlocutory applications usually do not conclude a proceeding and the Court is therefore often not then in a position to determine where the justice lies between the parties in making any order as to costs.[5]  This same concern can be seen to underpin the plaintiff’s submission that a costs order at this juncture of this proceeding might result in an injustice.

   [4]Gardiner v Hughes (No 2) [2019] VSCA 198, [44] (‘Gardiner v Hughes (No 2)’).

   [5]Dale v Clayton Utz (No 3) [2013] VSC 593, [13].

1. Rule 63.20 empowers the Court to ‘otherwise order’ in an appropriate case. Two general circumstances where courts have departed from the general position in respect of costs in interlocutory applications are where: (a) the relevant application was misconceived, because an applicant ought reasonably to have appreciated that the application would fail; and (b) where the interlocutory relief sought is of an uncommon and discrete nature which may be wholly unrelated to the substantive dispute between the parties.[6] 

   [6]Ibid [17], [20].

1. I consider that the above considerations provide, by analogy, useful assistance in the exercise of the discretion as to costs in the present matter.  Two matters emerge from the prima facie case judgment which are of particular significance in the exercise of my discretion.

1. First, as I explained in the prima facie case judgment, the plaintiff’s submissions proceeded from a profound misunderstanding as to what the caveator was required to establish in demonstrating a prima facie case.  In focussing upon whether a finding could be made that the caveator was the deceased’s domestic partner and the veracity of the caveator’s evidence, the plaintiff fundamentally misconceived the Court’s task in determining whether there existed a prima facie case.  As I explained in the prima facie case judgment:[7]

Ascertaining whether the caveator has established a prima facie case does not require the Court to make findings in respect of the evidence, nor to address the credibility of witnesses.  They are matters or trial.  The present task is to determine whether the caveator’s allegations, assuming them to be true, call for further investigation as to whether the deceased was in a domestic partnership with the caveator.  As explained by the Court of Appeal in Gardiner v Hughes (No 2), “there may be a case for investigation even if all the facts needed to justify the inference in question are not yet known or alleged, but there is enough to ‘go on’ to call for a trial”.[8]

In the language of the cases dealing with the award of costs in interlocutory applications, the plaintiff’s opposition to the finding of the existence of a prima facie case was misconceived; she ought reasonably to have appreciated that her opposition to the making of such a finding was doomed to fail.

[7]Cartledge v Bryan [2023] VSC 195, [20].

[8]Gardiner v Hughes (No 2) (n 4), [42].

1. Secondly, the above observations highlight the distinct and different nature of the Court’s task in determining whether there exists a prima facie case as compared to the task at trial if a prima facie case is found to be established.  I therefore reject the plaintiff’s submissions that an award of costs at this stage gives rise to a potential risk of injustice in the event that the plaintiff succeeds at trial. Even if, ultimately, the caveator fails to establish the existence of a domestic relationship at trial, it does not thereby follow that there did not exist a case for investigation.  In the language of the cases dealing with the award of costs in interlocutory applications, the determination of the existence of a prima facie case involved the resolution of a discrete controversy which was legally and procedurally separate and distinct to the determination of the  substantive controversy at trial.

1. In summary, the plaintiff’s opposition to the finding of a prima facie case was fundamentally misconceived.  It was a waste of resources for the plaintiff to contest that issue having regard to clearly established legal principles relating to the establishment of a prima facie case and the contents of the grounds of objection and  affidavits relied upon by the caveator.  Those resources have been wasted in a dispute about a discrete controversy – whether there was enough to ‘go on’ to call for a trial - which is qualitatively separate from and different to the controversy to be determined at trial.  Accordingly, in the circumstances of this case, costs should follow the event: the caveator is entitled to her costs in relation to the finding of the existence of a prima facie case. 

1. Generally, where costs are awarded, they are to be awarded on a standard basis.  A special costs order will only be made where a proceeding exhibits a special or unusual feature or special circumstances.  Such circumstances will exist where proceedings are commenced or continued ‘in wilful disregard of known facts or clearly established law’.[9]  For the reasons I have explained above, the plaintiff’s opposition to a finding as to the existence of a prima facie case reflected a disregard of clearly established legal principles in their application to the caveator’s allegations which were readily identifiable.  

   [9]See Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, [7].

1. Further, by letter dated 5 August 2022, the solicitors for the plaintiff were put on notice by the caveator’s solicitors about the relevant legal principles and their application to the material which had been filed, and were invited to concede that the caveator had a prima facie case.  The letter contained an offer to dispose of the interlocutory component of the proceeding by the plaintiff conceding that the caveator had established a prima facie case, which offer was open for 14 days.   

1. Having regard to the principles set out in established in Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2),[10] the letter of 5 August 2022 was sent at a time in the proceeding before the plaintiff needed to file her evidence, and before the parties were to file submissions on the application.  Acceptance of the caveator’s offer would have enabled the parties to avoid unnecessary costs, a notably important consideration in the context of what is a very small estate.  The plaintiff elected to disregard the caveator’s offer which was based on clear and established principles, and press her opposition to the finding of a prima facie case.  In doing so, she acted in wilful disregard of clearly established legal principles in the context of clearly stated and known allegations.

   [10](2005) 13 VR 435.

1. The caveator has accordingly established special circumstances which warrant a departure from the award of costs on a standard basis in relation to the period after the expiry of the offer contained in the letter of 5 August 2022.  The caveator is entitled to payment of her costs incurred after 19 August 2022 in relation to the determination of a prima facie case on an indemnity basis, with such costs to be paid by the plaintiff without indemnity from the deceased’s estate.  It is appropriate that costs otherwise be reserved.

1. The Court will make the following orders:

1.Except as provided by paragraph 2, the costs of and incidental to the  determination of a prima facie case be reserved.

2.The plaintiff pay the caveator’s costs of and incidental to the Court’s determination of a prima facie case incurred after 19 August 2022, with such costs to be paid on an indemnity basis, without indemnification or recourse from the estate of Gary Richard Cartledge, and to be taxed in default of agreement.

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