Dean v Collins
[2015] WASCA 28
•17 FEBRUARY 2015
DEAN -v- COLLINS [2015] WASCA 28
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASCA 28 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:80/2014 | 2 FEBRUARY 2015 | |
| Coram: | MURPHY JA | 17/02/15 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | VICKI JOY DEAN BEVERLEY KAY COLLINS AVE ANNA LEWIS (As Executor of the Estate of ETHEL MAY LEWIS) KERRY CHARLES LEWIS AVE ANNA LEWIS |
Catchwords: | Practice and procedure Application for security for costs Turns on own facts |
Legislation: | Family Provision Act 1972 (WA) Inheritance (Family and Dependants Provision) Act 1972 (WA) |
Case References: | Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176 Maas v O'Neill [2013] WASC 379 Stokes v Collins & Lewis [2014] WASC 182 Willoughby v Clayson Utz [2008] WASCA 93 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : DEAN -v- COLLINS [2015] WASCA 28 CORAM : MURPHY JA HEARD : 2 FEBRUARY 2015 DELIVERED : 17 FEBRUARY 2015 FILE NO/S : CACV 80 of 2014 BETWEEN : VICKI JOY DEAN
- Appellant
AND
BEVERLEY KAY COLLINS
First-named First Respondent
AVE ANNA LEWIS (As Executor of the Estate of ETHEL MAY LEWIS)
Second-named First Respondent
BEVERLEY KAY COLLINS
Second Respondent
KERRY CHARLES LEWIS
First-named Third Respondent
AVE ANNA LEWIS
Second-named Third Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : MASTER SANDERSON
Citation : STOKES -v- COLLINS & LEWIS [2014] WASC 182
File No : CIV 2412 of 2012
Catchwords:
Practice and procedure - Application for security for costs - Turns on own facts
Legislation:
Family Provision Act 1972 (WA)
Inheritance (Family and Dependants Provision) Act 1972 (WA)
Result:
Application dismissed
Category: B
Representation:
Counsel:
Appellant : Mr M Curwood
First-named First Respondent : Ms R J Lee
Second-named First Respondent : Ms R J Lee
Second Respondent : Ms R J Lee
First-named Third Respondent : Ms R J Lee
Second-named Third Respondent : Ms R J Lee
Solicitors:
Appellant : Arns & Associates
First-named First Respondent : Young & Young
Second-named First Respondent : Young & Young
Second Respondent : Young & Young
First-named Third Respondent : Young & Young
Second-named Third Respondent : Young & Young
Case(s) referred to in judgment(s):
Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176
Maas v O'Neill [2013] WASC 379
Stokes v Collins & Lewis [2014] WASC 182
Willoughby v Clayson Utz [2008] WASCA 93
1 MURPHY JA: This matter was listed on 2 February 2015 pursuant to a registrar's notice to attend dated 4 December 2014, to consider the respondents' application for security for costs dated 27 November 2014. The respondents seek security in the sum of $17,500.
2 The appeal within which the application is made is an appeal from the decision of the learned Master in relation to an application made by the appellant under the Family Provision Act 1972 (WA). The appellant contended that the will of her late mother did not make adequate provision for her. The master noted that at the time the action was commenced, the relevant Act was the Inheritance (Family and Dependants Provision) Act 1972 (WA). However, he said that there was no material difference between the two Acts: Stokes v Collins & Lewis [2014] WASC 182 [1]. He dismissed the appellant's application.
3 (All references to paragraph numbers below are references to paragraph numbers in the master reasons unless otherwise indicated.)
Background
4 The appellant is the daughter of the deceased. The deceased had five children [2].
5 On 14 August 2002 the deceased made a will [3]. The will did not make provision for three of the deceased's children, including the appellant. The deceased left her estate in equal shares to the second respondent in this appeal, the first-named third respondent in this appeal, and the second-named third respondent (the first-named third respondent's wife) [3]. Clause 3 of the will provided, in effect, that the deceased only made provision for the second respondent and third respondents because they had 'devoted a considerable amount of time to helping' the deceased [4].
6 The deceased passed away on 11 May 2011 [2].
7 The deceased's estate was 'small'. The primary asset was a property in Bunbury, which had an estimated value of $240,000. It had not been sold at the date of the hearing before the master. The estimated liabilities of the estate were just over $28,000. The learned master noted that '[a]llowing for the fact this matter went to a full hearing it seems unlikely the estate will have a net value of much over $200,000' [5].
8 The master described the appellant as follows:
[The appellant] is 60 years of age. She is unmarried and not in a relationship. She is employed part-time as an aged care worker at the Peter Arney Aged Care Facility in Salter Point. She works 39 hours per fortnight. She supplements her income by having live-in student lodgers and by working weekend shifts. She has a degenerative lower back condition and osteoarthritis of a knee which will require surgery. Because of these problems she has reduced her working hours.
[The appellant] owns a parcel of land at 29 Isaac Moore Drive, Moore Park Beach, Queensland. She estimates its value at $149,000. That asset was received by her as part of a settlement of matrimonial proceedings with her ex-husband. She has bank savings of $20,000, a modest vehicle and superannuation of $30,000. All of these details are taken from two affidavits sworn by her and which were marked exhibits 4 and 5 [6] - [7].
9 The master described the second respondent as follows:
[The second respondent] is 63 years of age. She has been married since 1969. Her main asset is an interest in a house she shares with her husband. She values that asset at $200,000. (It is not entirely clear from the evidence whether that is the value of her half interest or the total value of the property. For present purposes I will assume it is the value of her half interest.) She says she has a mortgage of $125,000 and income of $28,000 per year. This income is derived from a small business she runs with her husband. She does not have any superannuation entitlement [8].
10 The master described the third respondent as follows:
[The first-named third respondent] is 68 years of age. He has a residential property he shares with his wife which he values at $300,000. He has superannuation of $81,213.40. He has an income of $20,800 per annum. This is derived from a small business he runs with his wife [9].
11 The master said that the cross-examination of the appellant, the second respondent and second-named third respondent revealed that they were all better off than suggested in the affidavit material [10], and that 'overall each [of] the parties are [sic - is] of modest circumstances' [11]. The master found that all were ageing, all had limited assets, and none had superannuation which would adequately provide for their needs [11]. He found that the estate was not large enough to accommodate everyone's wishes [11].
12 The master said at [12] that the relevant principles were outlined in Maas v O'Neill [2013] WASC 379 [16] - [19].
13 He said that the appellant's claim was based, 'really', on what she said was 'necessary provision for her advancement in life' [13]. In dismissing the appellant's claim, the master said:
In my view [the appellant] has not satisfied the jurisdictional question. Her needs are no greater than the beneficiaries under the Will. There is no particular aspect of her circumstances which compels a decision the Will must be amended in her favour. Nor is there anything to suggest that she has a particular moral claim as that term is so often used in various judgments. In my view there is no reason why the Will should be disturbed.
In reaching that conclusion I have not paid any regard to cl 3 of the deceased's Will quoted above. It is simply not relevant to the determination of this application. Nor is there any conduct on the part of [the appellant] which could be regarded as disentitling. She appears to have been a loving daughter who visited her mother as and when she could. However, it remains the fact that [the second respondent and the third respondents] lived in the same area of the deceased and were able to visit her on a regular basis. Insofar as there is any dimension in this case which could give rise to a 'moral claim' it must rest with the defendants.
For the sake of completeness I should say had I have determined the jurisdictional question in favour of [the appellant] then in exercise of my discretion I would have divided the estate equally between [the appellant] and [the second respondent] as to one third each and [the third respondents] one third between them. To my mind there is no other way in which the matter could be fairly resolved [15] - [17].
14 On 27 May 2014 the master made orders dismissing the appellant's application. On 18 July 2014, he ordered that the appellant pay the respondents' costs up until 28 days after the making of a Calderbank offer (apparently made on 24 July 2013) and thereafter on an indemnity basis.
15 The respondents have lodged for taxation a bill of costs in the amount of approximately $30,000. A date for the assessment of costs has not been fixed.
The appeal
16 On 18 July 2014, the appellant filed an appeal notice. The appeal notice stated that the last date for appealing was 17 June 2014. On 10 October 2014 Newnes JA ordered that the application for an extension of time within which to bring the appeal be referred to the hearing of the appeal.
17 On 10 September 2014, the appellant filed an amended appellant's case. The grounds of appeal are as follows:
1. The master made an error of law in determining that the appellant had not satisfied the first stage jurisdictional question under section 6 of the Family Provision Act 1972 ('the Act'), because the appellant had not established that her needs were greater than the beneficiaries under the deceased's will (Reasons [15]).
2. Further, and in any event, the master made an error of fact in finding the appellant's needs were no greater than those of the beneficiaries under the will, when the master ought to have found that the appellant's needs were greater than those of the beneficiaries under the deceased's will (Reasons [11], [15]).
3. In light of the circumstances referred to in the first 2 grounds of appeal, and the appellant's personal and financial circumstances as at the date of the death of the deceased, the master made an error of law by reaching a decision that the appellant had not satisfied the jurisdictional question which was so unjust that the master failed to properly exercise the discretion reposed in the court and the master should have decided that the appellant had satisfied the jurisdictional question and then proceeded to vary the will of the deceased to divide the estate into three equal shares (with one share awarded to the appellant) as he did on a provisional basis in his Reasons at [17].
4. Further and alternatively, the master made an error of law in the exercise of his discretion in fixing the final costs order of the proceedings by ordering:
a. the appellant to pay the respondents' costs up until 28 days after the Calderbank offer was made; and
b. the appellant pay the respondents' costs on an indemnity basis save in so far as those costs have been unreasonably incurred from that date;
which order was so unjust that the master failed to properly exercise the discretion reposed in the court.
19 On 27 November 2014 the respondents applied for security for costs. The respondents relied on an affidavit of the second respondent sworn 26 November 2014. The affidavit indicated that the question of security had been the subject of conferral between the parties' solicitors from 8 October 2014, and it annexed a draft bill of costs in the sum of approximately $17,500. The appellant relied on her affidavit sworn 15 December 2014.
20 On 15 January 2015 the appeal books were filed.
Security for costs application - the parties' contentions
21 The respondents' submissions are to the following effect:
• There is evidence suggesting the appellant's means are modest and that the appellant had expressed concerns about funding her appeal.
• Taking into consideration the appellant's 'present financial circumstances' it is 'likely she would not be able to meet the costs of the appeal in the event' she was unsuccessful.
• The appellant does not own assets within the jurisdiction that would satisfy any adverse costs order against her. The appellant is the registered proprietor of a property in Queensland with an estimated value at $149,000, but that property has been on the market for some time and has not been sold.
• Taking into account the size of the estate, the competing claims on the 'testator's bounty', and the reasons for decision of the master, the appellant has low prospects of success.
• The provision of security would not prejudice the appellant. If the court ordered security for costs, the appellant would not be in a 'financially worse position than if the Court of Appeal dismissed her appeal', because the respondents' legal costs would be comparable to the amount of security sought, ie, $17,500.
• The appeal was commenced out of time, and the master's decision is presumed to be correct until otherwise overturned.
• The appellant's impecuniosity was not caused 'directly or indirectly' by any conduct of the respondents.
• The appellant commenced the appeal 'despite knowing that she was in a modest financial situation, and had not paid the respondents' costs from the primary proceedings'.
• There was no real delay, in that the respondents initially raised the question of security on 8 October 2014, shortly after having filed the respondents' case. Until then they had no opportunity to examine the merits of the appellant's case as part of an overall assessment as to whether to make an application for security.
22 The appellant submits, in effect, that the appellant has good prospects of success in the appeal; that '[t]he appeal has been made bona fide' and that the questions raised in the appeal are at least arguable; the appellant has property available to meet any adverse costs order against her; whilst the appellant has modest assets and a limited income, she has the Queensland property worth around $149,000; and the application for security was not made promptly, and occurred well after the filing of the appellant's case on 21 August 2014, and the respondents' answer on 2 October 2014.
Principles
23 In Willoughby v Clayson Utz [2008] WASCA 93, Newnes JA said [14] - [16]:
It is, of course, impossible to state exhaustively the factors which are relevant to the exercise of the discretion but some of the relevant factors are:
(a) the appellant's prospects of success on the appeal;
(b) the appellant's capacity to pay any costs ordered against him or her, that being an important consideration but not a conclusive one; a court will not order security against an individual appellant solely on the grounds of impecuniosity;
(c) whether an order for security would frustrate a possibly genuine appeal;
(d) whether some other person stands to benefit from the appeal if the appellant is successful, where that person has not offered to provide security or to indemnify the appellant in respect of any costs for which the appellant may become liable to the respondent;
(e) any delay by the respondent in bringing the application for security.
In the present case it is also a relevant factor, in my view, that the appellants are in default of the payment of costs ordered to be paid by them in the first claim, which was for the same, or substantially the same, causes of action as the second claim which is the subject of this appeal.
Where security for costs is ordered, the amount of the security should be such as the court thinks just in all the circumstances. Where an appellant is impecunious, the security ordered should not be greater than is absolutely necessary: Commonwealth Bank of Australia v Eise (1991) 6 ACSR 1, 3 - 4; Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241 [9].
24 In Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176, Newnes JA also observed [20] - [23]:
It is, however, incumbent upon a defendant who wishes to obtain security for its costs to apply promptly for that relief once it is, or ought reasonably be, aware that the plaintiff would be unable to meet an order for costs. Security for costs is not a card that a defendant can keep up its sleeve and play at its convenience. Delay is an important consideration in the determination of an application for security for costs because it is capable of causing prejudice or unfairness to the plaintiff. A plaintiff is entitled to know at the earliest opportunity, before it has committed substantial resources to pursuing the litigation, whether it will be required to provide security. The later an application is made the greater the likelihood that it will cause substantial disruption or distraction in the conduct of the plaintiff's case, and if the plaintiff is unable to provide security, the greater the costs that will have been wasted. The oft-cited words of Moffitt P in Buckley v Bennell Design & Constructions Pty Ltd (1974) 1 ACLR 301 are apposite:
'The right to seek security for costs and to stay proceedings, with the possible result that a claim for damages is frustrated, is a powerful weapon. Therefore, the litigant who seeks to use it against his opponent is at risk of not having it available, unless the application is made and persevered with in circumstances involving the least oppression of his opponent. The primary reason why the application should be brought promptly and pressed to determination promptly is that the company, which by assumption has financial problems, is entitled to know its position in relation to security at the outset, and before it embarks to any real extent on its litigation, and certainly before it is allowed to or commits substantial sums of money toward litigating its claim (309).'
I would add that in an era when the need to ensure the efficient use of judicial resources has become increasingly important, delay may also be significant in that regard. A late application which frustrates the action will mean that the judicial resources already devoted to the case will have been wasted. Where it results in the adjournment of an imminent trial it will often have the result that the trial dates will be wasted: see Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd [1991] FCA 459.
There are, however, degrees of delay and the effect of delay will vary according to the circumstances. The reason for the delay will also be an important consideration. Where delay has occurred it will not necessarily bar an order for security for costs, but generally the longer the delay, the more proximate the hearing and the more that has been done by the plaintiff to advance the case, the greater will be the significance of the delay and the more difficult it will be for the defendant to persuade the court that an order for security for costs will not be unfair or oppressive: Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497, 514.
In order to show prejudice it is not necessary for a plaintiff to establish what it would have done differently if the application had been made earlier (although such evidence would be an important consideration in the exercise of the discretion); prejudice will generally be regarded as inherent in substantial delay: Green v CGU Insurance Ltd [2008] NSWCA 148; (2008) 67 ACSR 105 [57].
Disposition
25 Having carefully considered all the evidence and submissions of the parties, on balance I am not persuaded that security for costs should be ordered in this case. At the outset I should say that I accept the appellant's case to be arguable, but no more than that in light of the necessarily limited debate on that issue in this application. Bearing that in mind, the following matters appear to me to assume the most significance. First, I am not persuaded that the Queensland property would be insufficient to meet any adverse costs orders against the appellant. The fact that the property has been on the market for some time does not indicate, necessarily, that the property would not in due course be realised for a value in or about the amount certified by the valuer on the evidence. Secondly, there has been no taxation of the costs of the proceedings below. It is not unreasonable for the appellant not to have paid the costs of the primary proceedings in those circumstances. Thirdly, the question of security was only raised well after the filing of the appellant's case and some days after the filing of the respondents' case. The appeal is listed for hearing next month. I do not accept that the matter was ever of such fundamental complexity that it was appropriate to wait until after the parties had filed their respective cases before making an assessment as to whether security should be sought.
26 In all the circumstances of the case, I would dismiss the application for security.
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