Craig v Craig
[2015] WASC 109 (S)
•24 APRIL 2015
CRAIG -v- CRAIG [2015] WASC 109 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 109 (S) | |
| Case No: | CIV:2178/2014 | ON THE PAPERS | |
| Coram: | MITCHELL J | 24/04/15 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Costs orders made | ||
| B | |||
| PDF Version |
| Parties: | SADIE ROBINSON CRAIG LESLIE BOYD CRAIG as Executor of the Estate of JOHN BOYD CRAIG LESLIE BOYD CRAIG as Trustee for the BOYD CRAIG TESTAMENTARY TRUST KATE HERRING SHACKLOCK as Beneficiary of the Estate of JOHN BOYD CRAIG LESLIE BOYD CRAIG & KATE HERRING SHACKLOCK as Trustees for the FRANCES BEATRICE STONE TESTAMENTARY TRUST |
Catchwords: | Family provision Costs Turns on own facts |
Legislation: | Family Provision Act 1972 (WA), s 14(6) |
Case References: | Craig v Craig [2015] WASC 109 Daniels v Hall [No 2] [2014] WASC 272 Erlich v Fleiszig (No 2) [2013] VSC 288 Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
LESLIE BOYD CRAIG as Executor of the Estate of JOHN BOYD CRAIG
First Defendant
LESLIE BOYD CRAIG as Trustee for the BOYD CRAIG TESTAMENTARY TRUST
Second Defendant
KATE HERRING SHACKLOCK as Beneficiary of the Estate of JOHN BOYD CRAIG
Third Defendant
LESLIE BOYD CRAIG & KATE HERRING SHACKLOCK as Trustees for the FRANCES BEATRICE STONE TESTAMENTARY TRUST
Fourth Defendant
Catchwords:
Family provision - Costs - Turns on own facts
Legislation:
Family Provision Act 1972 (WA), s 14(6)
Result:
Costs orders made
Category: B
Representation:
Counsel:
Plaintiff : Mr L A Tsaknis
First Defendant : Ms S L Brown
Second Defendant : Ms S E Bruce
Third Defendant : Ms S E Bruce
Fourth Defendant : Ms S E Bruce
Solicitors:
Plaintiff : Camm & Associates
First Defendant : WL & KJ Everett
Second Defendant : Jackson McDonald
Third Defendant : Jackson McDonald
Fourth Defendant : Jackson McDonald
Case(s) referred to in judgment(s):
Craig v Craig [2015] WASC 109
Daniels v Hall [No 2] [2014] WASC 272
Erlich v Fleiszig (No 2) [2013] VSC 288
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191
- MITCHELL J:
Background
1 On 24 March 2015 I dismissed the plaintiff's application for leave to file an application under the Family Provision Act 1972 (WA) (Act) out of time.1 The critical factor in the exercise of my discretion to grant or refuse leave was my conclusion that, on the facts asserted by the plaintiff or assumed in her favour, she did not have an arguable case for the grant of relief under the Act.
2 The parties have advanced different submissions as to the appropriate costs orders in relation to the plaintiff's application for leave to file out of time.
Parties' position as to costs
3 The plaintiff contends that the appropriate orders are that there be no order as to the costs of the plaintiff or second, third and fourth defendants, and that the estate pay the first defendant's costs of the application to be taxed on a trustee basis. Alternatively, the plaintiff submits that she should pay the first defendant's costs of the application on a party/party basis, and that the balance of the first defendant's costs on a trustee basis be paid out of the estate.
4 The first defendant, as executor of the deceased's Will, submits that his costs should be paid on an indemnity basis and should be paid by the plaintiff and not out of the estate.
5 The second, third and fourth defendants seek an order that the plaintiff pay their costs of the application on an indemnity basis, or alternatively a party/party basis. The second, third and fourth defendants do not seek an order, in the alternative, that their costs be paid by the estate. This is presumably because, as the second, third and fourth defendants note in their submissions, they are the residuary beneficiaries under the Will, so such a costs order would be tantamount to an order requiring them to pay their own costs.
6 All parties therefore accept that the first defendant should have his costs of the application taxed on an indemnity basis. No party contends that the second, third and fourth defendants' costs should be paid out of the estate. All parties accept that the plaintiff should bear her own costs of the application. I agree that, in the circumstances, those outcomes reflect an appropriate exercise of my discretion as to costs.
7 The questions in issue between the parties are therefore whether the plaintiff should pay the defendants' costs of the application and, if so, whether those cost should be paid on a party/party or an indemnity basis.
General principles
8 My discretion as to the costs of the application is conferred by s 14(6) of the Act, which provides that the court may make 'such order as to the costs of any proceeding under this Act as it deems just'. In my view the present application for leave to file out of time under s 7(2)(b) of the Act is a 'proceeding under this Act' for the purposes of s 14(6) of the Act.
9 The approach taken by courts to the exercise of the discretion under s 14(6) of the Act was subject to comprehensive discussion by EM Heenan J in Daniels v Hall [No 2].2 I agree with what his Honour said in that case. Ultimately, as his Honour observed, while observations and dicta in other cases are helpful and pertinent, it must never be forgotten that the court is exercising a broad and general discretion, which must have regard to the circumstances of each particular case and not be limited, controlled or circumscribed by any general rule or practice.3
10 As the discussion in Daniels demonstrates, the usual practice that, in civil litigation, costs should follow the event is not invariably applicable to proceedings under the Act, although in appropriate cases it is applied. Whether it is appropriate to order an unsuccessful applicant to pay the whole or part of the costs incurred by an executor or beneficiary in the proceedings will depend on all the circumstances of the case. In Daniels, cases in which the costs discretion was exercised were discussed, and EM Heenan J identified some potential considerations that may affect the exercise of the court's discretion.
Factors favouring an award of costs against the plaintiff
11 In the circumstances of the present case there are a number of factors that lead me to the view that the plaintiff should pay at least some portion of the defendants' costs of the application.
12 First, it is significant that I found that the plaintiff did not have an arguable case. Properly advised, the plaintiff should have appreciated that her proposed application under the Act had no reasonable prospect of success.
13 Secondly, the plaintiff is a person of considerable personal wealth, described in my primary reasons, who has the capacity to meet a costs order.
14 Thirdly, it is relevant that the plaintiff sought the indulgence of the court in obtaining an extension of time in which to file an application. The second, third and fourth defendants referred me to the decision of Lansdowne AsJ in Erlich v Fleiszig.4 In that case her Honour expressed the view, in relation to Victorian family provision legislation, that there was no warrant for departing from the approach taken in general civil litigation on an unsuccessful application for an extension of time as opposed to an unsuccessful application. I do not agree that the general principles to which EM Heenan J referred in Daniels are inapplicable to an application for leave to file out of time. The application for leave is still made under the Act, and the costs discretion being exercised remains that under s 14(6) of the Act. In that context I do not think the exercise of the costs discretion conferred by s 14(6) of the Act in relation to an application under s 7(2)(b) of the Act is to be equated with the exercise of the court's discretion to award costs on an application for extension of time in ordinary civil litigation. However, it remains a relevant, although not controlling, consideration that the plaintiff has sought an indulgence in circumstances where she failed to comply with the time limits prescribed by the Act.
Factors counting against requiring the plaintiff to pay the whole of the defendants' costs
15 There are also some factors in the present case that count against the exercise of my discretion to order that the plaintiff pay the whole of the defendants' costs.
16 First, the plaintiff was successful on the issue of whether leave should be granted if she had an arguable case. That was a point of debate in the proceedings on which the defendants were unsuccessful.
17 Secondly, there was considerable duplication in the arguments by lawyers representing the first defendant, on the one hand, and the second, third and fourth defendants, on the other hand. In cases where the executor confines his or her argument to putting all relevant evidence before the court, it may be appropriate for the beneficiaries to be separately represented and actively oppose the application. However, in this case the first defendant went beyond merely placing evidence before the court, and actively opposed the grant of leave. In practical terms there was no significant difference between the submissions advanced on behalf of the first defendant and those advanced on behalf of the second, third and fourth defendants. In my view, in the circumstances of this case, the plaintiff should not be left with the burden of paying the costs of two sets of solicitors and counsel advancing the same position. Of course, the same person, Leslie Boyd Craig, is the first defendant, the second defendant and one of the fourth defendants. While the second, third and fourth defendants had a direct interest in the proceedings, they could have left it to the first defendant to defend the application when it was clear at all times that he intended to do so. Alternatively, the first defendant might have limited his role to placing evidence about the estate before the court, and leaving it to the legal representatives of the other defendants to defend the application. When these choices were open to the defendants and not adopted by them, the plaintiff should not be required to pay two sets of legal costs where the argument presented by the two sets of lawyers was essentially the same.
18 Thirdly, it appears from correspondence, exchanged before proceedings were commenced, that the second, third and fourth defendants expressed the view that the terms of the Will might not enable the funds from the Will trust to be used to secure entry into a retirement village facility. It is true that the plaintiff's former solicitors agreed with this view for 'the purposes of negotiation'. However, the position was advanced by the second, third and fourth defendants, and they did not resile from the position until the hearing of this matter. The second, third and fourth defendants were prepared to negotiate an outcome which would enable funds to be used for that purpose, however a negotiating condition was that the plaintiff would be required to surrender at least some control of her choice of a retirement facility. In my view it was not reasonable for those defendants to require the plaintiff to surrender her autonomy in the choice of her future living arrangements. The correspondence indicates that concern about this issue, which I determined was unfounded, was a motivating factor for the making of the application. That those defendants contributed to the plaintiff being concerned about that matter, and identified an unreasonable condition for resolving the concern, is a factor counting against an award of costs in favour of those defendants.
Orders
19 Having regard to all of the above matters, in my view the appropriate orders are the alternative order proposed by the plaintiff, namely:
1. The plaintiff pay the first defendant's costs of the application as between party and party.
2. The costs of the first defendant be taxed on a trustee basis and, to the extent that those costs exceed the costs borne and paid by the plaintiff as between party and party, be paid out of the estate.5
20 Those orders will burden the plaintiff with paying the complete costs of one party defending the application, on a party/party basis, and see the balance of the costs of the application borne by the estate or the residual beneficiaries of the estate (those two alternatives having the same practical effect). In my view those are the just costs orders in all the circumstances of this case.
1Craig v Craig [2015] WASC 109.
2Daniels v Hall [No 2] [2014] WASC 272.
3Daniels [37].
4Erlich v Fleiszig (No 2) [2013] VSC 288.
5 This was the form of order made in Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191. The reference to 'trustee' attracts O 66 r 9(2) of the Rules of the Supreme Court 1971 (WA), which provides for a trustee to be indemnified for costs out of the fund held by the trustee insofar as they are not recovered from or paid by any other person.
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