Consolaro v Consolaro [No 2] - [2017] WASC 320

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: CONSOLARO -v- CONSOLARO [No 2] [2017] WASC 320

CORAM: MASTER SANDERSON

HEARD: 28 SEPTEMBER 2017

DELIVERED : 9 NOVEMBER 2017

FILE NO/S: CIV 1906 of 2002

BETWEEN: ROSS JOSEPH CONSOLARO
Plaintiff
AND
PHILLIP JAMES CONSOLARO
Defendant

Catchwords:

Practice and procedure - Application by plaintiff for leave to tax costs eight years after judgment - Turns on own facts

Legislation:

Civil Judgments Enforcement Act 2004 (WA)

Result:

Leave granted subject to conditions

Category: B

Representation:

Counsel:

Plaintiff: Mr G J Douglas
Defendant: Mr M Bruce

Solicitors:

Plaintiff: Douglas Cheveralls Lawyers
Defendant: Kitto & Kitto

Case(s) referred to in judgment(s):

Dennehy v Reasonable Endeavours Pty Ltd [2001] VSC 447
Duer v Frazer [2001] 1 All ER 249

MASTER SANDERSON: This was the return of two chamber summonses, one filed 5 January 2017 (referred to as the 'old application') and the second filed 18 July 2017 (the 'new application'). Before dealing with the relief sought in the chamber summonses it is necessary to provide some background facts.
This action was commenced some 15 years ago. The plaintiff is the son of the defendant. The action concerned a property known as the 'Walyunga property'. After a trial in 2008 judgment was entered in favour of the plaintiff in August 2009. Justice EM Heenan determined the plaintiff had an interest as to one‑third of the Walyunga property. He ordered that interest be transferred into the name of the plaintiff and extended the operation of the plaintiff's caveat until that was done. He also awarded costs in favour of the plaintiff.
The plaintiff did not aggressively pursue enforcement of the judgment because his interest was protected by a caveat and his defendant father was at that time 99 years of age. In 2010 the defendant sold the property without informing the plaintiff. (In the course of submissions counsel for the defendant maintained the sale agreement was not entered into without the knowledge of the plaintiff. On the material available that appears not to have been the case. In any event any dispute on that issue is irrelevant to the resolution of the present applications.)
When the plaintiff became aware of the sale of the property negotiations took place between the plaintiff's solicitor and the defendant's solicitor as to how the matter was to be resolved. Without detailing the course of those negotiations it is enough if I say that on 7 February 2011 settlement of the Walyunga property took place, part of the proceeds were paid to each of the plaintiff and the defendant and $630,000 was placed in an ANZ bank account. This deposit had two functions. First, $500,000 was set aside for any damages claim the plaintiff might have had for use of his interest in the property. Second, $130,000 was provided to cover the costs awarded to the plaintiff. The signatories to the account were the plaintiff and the defendant. There is a dispute between the parties as to how this fund ought be characterised. The plaintiff alleges the funds are held on trust; the defendant says the parties should be regarded as stakeholders. I will come back to this dispute later in these reasons.
On 2 November 2013 the defendant died. On 29 October 2014 the plaintiff died. After the death of her husband the plaintiff's widow Judith Consolaro took over conduct of the matter. On 6 November 2014 the plaintiff's solicitor approached the ANZ bank to substitute the plaintiff's executor as signatory on the account. The bank refused. As at October 2016 the bank confirmed that the executors of the estate of the defendant were the only two signatories on, and holders of, the account. The bank further indicated it was aware of the dispute between the plaintiff's estate and the defendant's estate and said it would not release any funds unless there was agreement between the parties confirmed in writing or it was ordered to do so by the court.
On 13 May 2016 the plaintiff's solicitor provided a precis of a draft bill of costs to the defendant's solicitor. On 30 June 2016 the plaintiff's then solicitor retired from practice. In September 2016 the plaintiff instructed the current solicitors. On 23 September 2016 the plaintiff's solicitors provided a bill of costs to the defendant's solicitors. The defendant had changed solicitors a number of times during the course of the dispute and his present solicitors are not the same solicitors who represented him at trial.
As at September 2016 there were three outstanding issues between the parties. First, the defendant would not agree to the filing of a bill of costs. As eight years had elapsed between the entry of judgment and the preparation of the bill of costs the plaintiff required leave to enforce any costs order under the provisions of the Civil Judgments Enforcement Act 2004 (WA). The defendant would not agree to that leave being granted. Second, there was the issue to which I have already referred - that is to say, whether or not the funds held by the bank were held in trust or whether the parties were stakeholders. Finally, there was the question of whether or not the plaintiff was entitled to damages. It was in an attempt to deal with some of these issues that the plaintiff issued a chamber summons on 5 January 2017. It then became apparent that unbeknownst to the plaintiff's solicitors probate of the plaintiff's will had not been granted. An issue arose as to whether or not it was possible to proceed on that summons. Rather than deal with that issue the parties agreed the summons should be dismissed. The only issue was as to costs.
Having obtained probate the executors of the plaintiff's estate then filed the new application on 18 July 2017. Relevantly, the orders sought were as follows:
1.The executors in the estate of Ross Joseph Consolaro, namely Kyli Rochelle Peet and Wayde Joseph Consolaro are made parties to the cause and are substituted for Ross Joseph Consolaro as Plaintiff.
2.The executors in the estate of Phillip James Consolaro, namely Norma Adelaide Gordon and Gail Lucille Rudez are made parties to the cause and are substituted for Phillip James Consolaro as Defendant.
3.The defendant pays the sum of $630,000 into Court pending determination of this application.
4.Leave is granted to the plaintiff pursuant to section 13(l)(a), (b), (d) and (e) of the Civil Judgments Enforcement Act 2004 to enforce the judgment for costs granted on 28 August 2009 against the defendant by:
a.Preparing and taxing a bill of costs in terms of the rules of court.
b.Executing against the amount of $630,000 referred to in paragraph 3 above any amount for costs allowed by the taxing officer in any interim or final certificate of taxation.
5.The defendant pays the plaintiff's costs of this application to be taxed if not agreed.
The parties were agreed orders 1 and 2 should be made. (Upon publication of these reasons the names of the parties will be changed but throughout the remainder of the judgment the parties will be referred to as substituted plaintiffs and substituted defendants). As it transpired there was no real need to make order 3. All parties were agreed the bank would not release the funds and, as the funds were secure, there was no need to make what amounted to a mandatory injunction. At the conclusion of these reasons I will make certain orders in relation to the funds but I do not need to consider the merits of the issue. That leaves the question of whether the substituted plaintiffs are entitled to order 4.
Section 13(1) of the Civil Judgments Enforcement Act is in the following terms:
(1)Leave of the court must be obtained before an order may be made under this Act to enforce a judgment -
(a)if 6 years have elapsed since the judgment took effect; or
(b)if the order in the judgment that a person seeks to enforce is subject to the fulfilment of a condition; or
(c)if the property that is proposed for seizure under the order to satisfy the judgment is in the hands of a receiver; or
(d)if the person seeking to enforce the judgment was not personally a party to the case in which the judgment was given; or
(e)if the person liable to satisfy the judgment was not personally a party to the case in which the judgment was given, unless section 14(2)(b) applies to the person; or
(f)if the judgment is against a partnership and is sought to be enforced against a person to whom section 14(2)(b) does not apply; or
(g)if the judgment is given in a case between -
(i)partnerships having one or more partners in common; or
(ii)a partnership and one or more of its partners;
or
(h)if the judgment is against a corporation and is sought to be enforced against one or more officers or shareholders of the corporation.
The parties were agreed the burden of proof was on the substituted plaintiffs to establish an entitlement to enforce the judgment. This burden will usually be discharged by proof of the judgment and evidence on affidavit that some or all of it remains unpaid: Dennehy v Reasonable Endeavours Pty Ltd [2001] VSC 447 [16]. But merely establishing those two matters is not enough. The section makes it clear there is an unfettered discretion to grant or refuse leave. In Duer v Frazer [2001] 1 All ER 249, Evans‑Lombe J considered an application under O 46 r 2 of the Rules of the Supreme Court (UK) which is consistent with s 13(1)(a) of our Civil Judgments Enforcement Act. His Honour said:
It seems to me that these two passages from judgments in the Court of Appeal apply to govern the exercise of the discretion to permit the issue of execution after the expiry of six years under RSC Ord 46, r 2 and that they are support for the proposition that the court would not, in general, extend time beyond the six years save where it is demonstrably just to do so. The burden of demonstrating this should, in my judgment, rest on the judgment creditor. Each case must turn on its own facts but, in the absence of very special circumstances such as were present in the National Westminster Bank case, the court will have regard to such matters as the explanation given by the judgment creditor for not issuing execution during the initial six-year period, or for any delay thereafter in applying to extend that period, and any prejudice which the judgment debtor may have been subject to as a result of such delay including, in particular, any change of position by him as a result which has occurred. The longer the period that has been allowed to lapse since the judgment the more likely it is that the court will find prejudice to the judgment debtor [25].
In his written submissions counsel for the substituted defendants provided a number of reasons why leave ought not be granted. While recognising that it is the substituted plaintiffs who carry the burden it is convenient to approach the matter by reference to the points made by counsel. The first and perhaps the most important point is the obvious one - the length of the delay and the lack of any explanation for the delay. The delay is eight years. The Civil Judgments Enforcement Act anticipates that after 12 years any right to enforce the order will be lost. So while the delay is undoubtedly lengthy it is still within the time prescribed by the legislature (albeit leave is required). Perhaps of more importance is the lack of explanation for the delay.
The affidavit material filed by the substituted plaintiffs does not really address this issue. The solicitor who represented the plaintiff at trial continued to represent the plaintiff and thereafter the plaintiff's personal representatives until 30 June 2016. He appears to have had a number of discussions with the plaintiff's personal representatives after the death of the plaintiff but there is no explanation as to why some steps were not taken to enforce the costs order between the plaintiff's death in 2014 and the retirement of the plaintiff's solicitor in 2016.
It must be acknowledged that there are some unusual features to this case which can in part explain the delay. First, the relationship between the plaintiff and the defendant. The defendant was very elderly. No doubt the normal stresses involved in litigation were even more acute given his age. No doubt the plaintiff took that into account. Then there was the plaintiff's illness which lasted some time before his death. So there is at least a matrix of facts which can on one view be seen as responsible at least in part for the delay which has occurred.
On balance the length of the delay and the reasons for the delay are factors against exercising discretion in the plaintiffs favour.
Second, the substituted defendants maintain that the parties have changed and the substituted defendants are prejudiced by these changes. Both the defendant and the plaintiff have passed away. Neither party is now represented by the same solicitors. This it is said will severely prejudice the substituted defendants if there is a taxation. Neither party or their legal representatives have first hand knowledge of the tasks undertaken and the time taken to complete those tasks. That will make assessment of costs difficult. Moreover the costs to be assessed date back many years. The substituted defendants say they will have no reliable way of challenging the validity of timesheets or of understanding the pre‑trial and trial process.
In response the substituted plaintiffs say two things. First, the amounts claimed in the draft bill of costs are largely in conformity with the scales and the assessment process should therefore relatively straight forward. Second, they say while the substituted defendants' solicitors may not have first hand knowledge of what occurred they do have records and they will therefore be in a position to participate fully in the assessment of costs.
On balance this issue falls slightly in favour of the substituted defendants. The length of the delay and the fact costs were incurred so long ago will prejudice the substituted defendants. On the other hand looking at the draft bill of costs it does not appear as though the amounts claimed are excessive. The scales apply. Some documentary evidence is available and while not perhaps as complete as it might have been had this assessment taken place years ago the substituted defendants will still have some basis to challenge particular items. So although the facts favours the substituted defendants it is only marginally so.
Thirdly, the substituted defendants point to the stress of the ongoing litigation. They say the matter has gone on too long and to now force an assessment is simply unfair. While there is some merit in that point it must be remembered that there are still disputes between the parties which have not yet been resolved. There is an argument as to the status of the funds held by the bank and, presumably, still issues relating to damages. That being so any additional stress occasioned by the taxation is in my view all part and parcel of the dispute between the parties and not a factor in favour of refusing leave.
Fourthly, the substituted defendants say granting leave now is contrary to the principles of caseflow management. While that may be a factor it is something that is best considered in the context of the first point I have dealt with above - that is, the length of the delay and reasons for the delay. Caseflow management is not an end in itself and does not really inform this application.
Finally, there is the question of interest. The substituted defendants point out that interest on assessed costs will be payable at 6% per annum backdated to the date of judgment. The draft bill of costs is for an amount of $131,715.70. As of now, assuming costs were assessed at the figure advanced by the substituted plaintiffs, the interest would amount to more than $63,500. The substituted defendants make the point this is a very generous reward for substituted plaintiffs who have simply sat on their hands.
This last point has real merit. However, under s 13(2)(c) of the Civil Judgments Enforcement Act leave to enforce the judgment may be given on terms. There would appear to be no reason why any entitlement to interest should not be restricted. That can be done by placing a cap on the amount of costs recoverable on any taxation. With this limitation in mind I am satisfied it would be appropriate to allow the substituted plaintiffs to enforce a costs order. The factors against allowing such enforcement are the length of the delay and the lack of detailed reasons for the delay. They are the two main issues which fall in the substituted defendants favour. Against that a fund has been put aside which was intended to cover the costs order. Although the substituted defendants may have altered their position given the flux of time it is the fact the funds are held by the bank and they are held by the bank for the purpose of paying costs. That is a factor, and a strong factor, in favour of granting the substituted plaintiffs' application. When that is weighed with the personal circumstances which I have detailed above it would be appropriate if leave were granted.
That said I am satisfied there should be a cap on the costs recoverable by the substituted plaintiffs. Allowing for the fact that there might have been some delay in any circumstances in having the costs assessed I would have thought making an allowance for interest for a period of two years would be reasonable. Accordingly I would propose granting leave subject to the limitation the substituted plaintiffs should not be entitled to interest on the costs as assessed for a period of more than two years. Accordingly I would make an order in terms of par 4 of the chamber summons with some amendment.
That leaves the question of costs on both applications. It is clear the previous plaintiff and his solicitors in the old application proceeded under a mistake of fact. They prepared a raft of documents which were used in relation to the second chamber summons (the new application) and I see no reason why the substituted plaintiffs should suffer a penalty. In relation to the new application the substituted plaintiffs are seeking an indulgence and while they have been successful the costs of the application should not be visited on the substituted defendants. The substituted defendants were successful on their application to resist the order for the mandatory injunction and they should have their costs on that issue.
As I indicated earlier in these reasons there are still matters at issue between the parties. Of prime interest is the status of the fund held by the bank. While the evidence is to the effect the bank will not release those funds it seems to me proper that if all or any part of the funds are to be released 14 days notice should be given to the substituted plaintiffs of the impending release. That will allow the substituted plaintiffs to take any action they deem appropriate to protect the integrity of the fund.
I will hear the parties as to the precise form of the orders.