Cavanagh v Mace (No 2)
[2023] VSC 745
•13 December 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S PRB 2021 21341
| MARGARET CATHERINE CAVANAGH | Plaintiff |
| v | |
| CHRISTOPHER MARSHALL MACE | Defendant |
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JUDGE: | Moore J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | Written submissions dated 23 November 2023 and 4 December 2023 |
DATE OF JUDGMENT: | 13 December 2023 |
CASE MAY BE CITED AS: | Cavanagh v Mace (No 2) |
MEDIUM NEUTRAL CITATION: | [2023] VSC 745 |
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COSTS – Estate litigation – Application for passing over of plaintiff and defendant and appointment of independent administrator – Application successful – Where plaintiff and defendant both seek indemnity costs – Indemnity costs awarded to the defendant – Plaintiff to bear her own costs - Banksia Securities Ltd v Insurance House Pty Ltd (Costs) [2020] VSC 234 - Northern Territory v Sangare (2019) 265 CLR 164 - Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | In person | |
| For the Defendant | Ms R Grayson Morison | Gauld & Co., Solicitors |
HIS HONOUR:
At the conclusion of the trial of the proceeding on 16 November 2023, I made orders passing over the plaintiff and the defendant as executors of the estate of the deceased and appointed an independent administrator in their place. I delivered my reasons for judgment in the proceeding on 21 November 2023.[1] This judgment is in relation to costs.
[1]Cavanagh v Mace [2023] VSC 670 (the reasons for judgment).
The plaintiff seeks an order that her costs of and incidental to the proceeding be paid by the defendant on an indemnity, or alternatively, a standard basis. The defendant seeks an order that his costs of and incidental to the proceeding be paid by the plaintiff personally on an indemnity basis, without recourse to the assets of the deceased’s estate.
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 (the Rules).
[2]Supreme Court Act 1986, s 24.
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, the 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.
The plaintiff’s costs
The plaintiff seeks indemnity costs on the basis that ‘neither the defendant nor the plaintiff been [sic] successful in the litigation’. This submission is patently wrong; the defendant was wholly successful in his application for the plaintiff to be passed over.
The plaintiff’s reliance on r 26.08 of the Rules is also misplaced. The plaintiff was wholly unsuccessful in the proceeding and the document on which she seeks to rely to engage r 26.08 was correspondence relating to an attempt to settle an inventory of assets and liabilities in respect of the deceased’s estate, not an offer of compromise in conformity with the requirements set of r 26.02(3)-(4) of the Rules.
Given that the result of the proceeding was wholly adverse to the plaintiff, there is no arguable basis for why she should have the benefit of a costs order, whether on a standard or indemnity basis.
The defendant’s costs
The defendant seeks an order that the plaintiff pay his costs on an indemnity basis.
In Banksia Securities Ltd v Insurance House Pty Ltd (Costs),[4] John Dixon J summarised some of the principles relating to indemnity costs as follows:[5]
[4][2020] VSC 234.
[5]Ibid [15].
(a) Costs are to be assessed on a standard basis unless the circumstances of the case justify a departure from the usual course.
(b) The making of an indemnity costs order is in the unlimited discretion of the court, with such discretion to be exercised judicially and not unreasonably.[6]
[6]Bass Coast Shire Council v King [1997] 2 VR 5, 29.
(c) The court may order indemnity costs where the circumstances warrant departing from the usual rule that costs be payable on a standard basis, including conduct that bears a ‘sufficient or unusual feature’ or some ‘relevant delinquency’.[7]
(d) The court may order indemnity costs in cases where a party, properly advised, knew or should have known that it had no chance of success and has persisted with its claim.[8]
Additionally, the recognised circumstances which may warrant a special costs order, the categories of which are not closed, include the making of an allegation, known to be false, that the opposite party is guilty of fraud, and the making of an irrelevant allegation of fraud.[9]
[7]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 233; Oshlack v Richmond River Council (1998) 193 CLR 72, 89 [44].
[8]Murdaca v Maisano [2004] VSCA 123, [40], citing Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397; Macedon Ranges Shire Council v Thompson [2009] VSCA 209, [15].
[9]Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, [7]–[8].
Given the defendant’s success in the proceeding, there is no reason to depart from the usual rule as to costs.
For the following reasons, I also consider that it is appropriate that the plaintiff pay the defendant’s costs on an indemnity basis, and that the costs be paid personally by her so that the estate does not bear the burden of the costs order.
(a) As noted in the reasons for judgment, the plaintiff failed to engage with or respond to the grounds for passing over advanced by the defendant.[10] Those grounds were self-evidently compelling and had obvious merit. I accept the defendant’s submission that the plaintiff continued the proceeding without regard to the relevant facts or the law, did not adduce any substantive evidence to contradict the defendant’s case, and did not challenge the evidence of the defendant’s witnesses, despite requiring them for cross-examination.
(b) At trial, the plaintiff was often non-responsive to questions asked of her, or only became so when directed by counsel or by the Court.[11] I found that she invented claims that were untrue for the purpose of assisting her case,[12] and made wild and unsubstantiated allegations about her former solicitors having deliberately drafted an untruthful affidavit on her behalf.[13]
[10]Reasons for judgment, [43].
[11]Reasons for judgment, [8].
[12]Reasons for judgment, [8] and [26].
[13]Reasons for judgment, [42(b)].
Collectively, the above circumstances justify a departure from the usual course that costs are awarded on a standard basis. They support a finding that the plaintiff was seriously delinquent in resisting the claim that she be passed over, both in the manner in which she conducted her case, including by making unsubstantiated and irrelevant allegations of fraud, and by continuing to resist the defendant’s application when, properly advised, she should have known that she had no proper basis to do so.
The Court will make the following orders:
1. The plaintiff personally pay without recourse to the assets of the deceased’s estate the defendant’s costs of and incidental to the proceeding, including any reserved costs, on an indemnity basis.
2.The plaintiff bear her own costs of and incidental to the proceeding, including any reserved costs.
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