Doedens v Owen (No 2)

Case [2018] SASC 23

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

DOEDENS & ORS v OWEN (No 2)

[2018] SASC 23

Judgment of The Honourable Justice Nicholson

7 March 2018

SUCCESSION - FAMILY PROVISION - PROCEDURE - ORDERS AND OTHER PROCEDURAL MATTERS - COSTS - OFFER OF COMPROMISE

INTEREST - RECOVERABILITY OF INTEREST

The claims of the three plaintiffs for provision for their maintenance, education or advancement from the deceased’s intestate estate were settled prior to trial. A ruling was delivered on 16 February 2018 addressing a number of issues that arose following the settlement of the claims.

This judgment addresses three further issues. The first is whether the costs of the litigation guardian appointed on behalf of the third plaintiff should be met by the deceased’s estate on an indemnity basis. The second is whether the costs of the second and third plaintiffs should be paid by the deceased’s estate and, if so, on what basis. The final issue is whether the first plaintiff is entitled to post judgment interest with respect to the asserted late payment of the amount payable pursuant to the order for provision made in settlement of the first plaintiff’s claim.

Held:

1.       The costs and disbursements of the litigation guardian appointed on behalf of the third plaintiff are to be paid by the deceased’s estate as an indemnity.

2.       The costs of the second plaintiff are to be paid by the deceased’s estate on a solicitor and client basis.

3.       The costs of the third plaintiff, excluding those of the application for the appointment of the first plaintiff as litigation guardian, are to be paid by the deceased’s estate on a solicitor and client basis.

4. The first plaintiff is entitled to receive the sum of $5,948.63 from the deceased’s estate on account of post judgment interest, pursuant to section 114 of the Supreme Court Act 1935.

Inheritance (Family Provision) Act 1972 (SA) s 6, s 7, s 9; Supreme Court Civil Rules 2006 r 267; Supreme Court Act 1935 (SA) s 40, s 114; District Court Act 1991 s 40, referred to.
Sluiter v Keimeier (1969) 54 LSJS 641, discussed.
Millbrook v Davies (No 2) [2004] SADC 92; Holtby v Hodgson (1889) 24 QBD 103; Church of the New Faith Inc v Bower (No 2) (1979) 21 SASR 161; Taylor v Company Solutions (Aust) Pty Ltd [2012] QSC 309; Ward & Ors v HCOA Operations (Australia) Pty Ltd & Anor [2013] QSC 92, considered.

DOEDENS & ORS v OWEN (No 2)
[2018] SASC 23

Civil: Application

NICHOLSON J.        

Introduction

  1. The three plaintiffs in this matter applied, pursuant to section 6 and section 7 of the Inheritance (Family Provision) Act 1972 (SA) for provision for their further maintenance, education or advancement out of the estate of Christopher Owen who died intestate on 29 November 2015. The defendant is the wife of the deceased and, but for the plaintiffs’ claims, is solely entitled to the whole of the intestate estate in accordance with…

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Doedens v Owen (No 2) [2018] SASC 23
Case
[2018] SASC 23
Decision Date

CaseChat Overview and Summary

In the case of Doedens v Owen (No 2), the court was required to determine the costs of the litigation and the recoverability of interest in the context of a family provision claim under the Family Provision Act 1975 (SA). The first plaintiff, who had settled their claim for provision from the estate of the deceased, sought post-judgment interest from the defendant due to a delay in payment. The defendant, in turn, argued that the delay was due to the first plaintiff's failure to execute a transfer of their interest in a property to the defendant.

The court had to consider whether each party should be awarded their costs on a solicitor and client basis, and whether the first plaintiff was entitled to post-judgment interest. The court also had to determine if the defendant had an interest in the proceedings that would prevent the first plaintiff from being appointed the third plaintiff's litigation guardian. The court found that the third plaintiff's claim for costs should not be marked down as the defendant's evidence was produced late in the proceedings. The court also decided that the first plaintiff was entitled to post-judgment interest and that the defendant's opposition to the appointment of the first plaintiff as the third plaintiff's litigation guardian was without merit.

In conclusion, the court awarded costs to the first and third plaintiffs on a solicitor and client basis. The first plaintiff was also awarded post-judgment interest. The defendant's application for costs in relation to the abandoned application for the appointment of the first plaintiff as litigation guardian was dismissed. The court declined to make a direction concerning the payment of interest, leaving the determination of the allowable costs to the costs adjudicating Master.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

NICHOLSON J
The costs adjudicating Master will determine the allowable costs in accordance with the usual rules governing the costs adjudication. A direction such as that sought is unnecessary and I decline to make it.Conclusion as to costs There is nothing about the history of the various offers made by the defendant to the second plaintiff and to the third plaintiff or concerning their failures to accept any of the offers, that would cause me to depart from my initial position that each should be awarded their costs out of the estate on a solicitor and client basis. The interest question For various reasons the payment of the first plaintiff’s settlement sum was delayed. The first plaintiff has made a claim on the defendant for post judgment interest which the defendant has resisted. Each contends that the delay in payment was the fault of the other. The parties agreed during the argument concerning costs that they would file and serve affidavits dealing with the interest question and that, unless I decided that I needed further assistance, I could decide the interest dispute in Chambers and include my reasons in this costs judgment. The settlement of the first plaintiff’s claim for provision was embodied in the following court order pronounced in court by a Master of this Court on 10 August 2017 with the consent of the defendant and the first plaintiff.THE COURT NOTES that:The legal and beneficial ownership of the property situated at 76 Woodville Place, Annerley in the State of Queensland “Annerley” was in dispute to (sic) effect a settlement of the First Plaintiff’s claim it is noted that the First Plaintiff and the Defendant agree that the whole of Annerley is beneficially owned by the estate of the deceased.THE COURT ORDERS that:1.The following provision be made out of the estate of Christopher Andrew OWEN late of Unit 5, 8 Prospect Road Fitzroy in the State of South Australia Scientist (“the deceased”) who died on 29 November 2015 for the maintenance, education or advancement in life of the First Plaintiff namely:(a) that the First Plaintiff be paid a legacy of $650,000 inclusive of interest to the date of this order within 28 days of the execution of a transfer of the First Plaintiff’s legal interest in Annerley to the Defendant as the Administrator of the estate of the deceased and that the Defendant produce a transfer or authority to transfer in registrable form to the First Plaintiff’s Solicitors within 7 days of the date of this order; The order made on 10 August 2017 imposed an obligation on the defendant to pay to the first plaintiff, out of the deceased’s estate, the judgment sum of $650,000 inclusive of interest. The payment was to be made within, that is, no later than, 28 days of the execution of a transfer “of the First Plaintiff’s legal interest in [the Annerley property] to the Defendant …”. The order imposed an obligation on the defendant to produce to the first plaintiff’s solicitors, within seven days of 10 August 2017, a transfer in registrable form.

Ratio Decidendi

Legal Principle Established

Established by: NICHOLSON J

The unexpected death of the second plaintiff, occurring so close to the commencement of trial, brought about a significant change of circumstances with respect to both the second and third plaintiffs. In the case of the second plaintiff, a potentially substantial claim had, through no fault of the second plaintiff or her advisors, been reduced substantially and there had arisen a not insignificant risk of failure at trial in toto. As far as the third plaintiff was concerned, were he to proceed with the trial he would have been solely liable for the costs of prosecuting the trial and solely exposed to any adverse costs order. Further considerations It was only very late in the preparation for trial that the defendant produced a medical report from an expert geriatrician which, if accepted, may have served to undermine to some degree although not wholly the third plaintiff’s claim as to financial need. In this respect, the defendant contends that the third plaintiff’s claim was never properly or comprehensively investigated or prepared by his legal advisors. As such, the third plaintiff’s claim for costs should be marked down on this account. I disagree. The third plaintiff’s advisors produced, in good time, evidence as to financial need that they intended to rely on. It supported the third plaintiff’s claim on its face and it was a matter for the defendant to adduce contesting evidence if so advised which she belatedly did. The compromise ultimately entered into by the third plaintiff was, in the circumstances at that time, a beneficial settlement for the reasons I have set out in my earlier judgment.[15] This was so notwithstanding that the settlement did not take account of costs but left costs to be determined by the Court. However, that is not to say that the third plaintiff or his advisors acted unreasonably in their assessment of and failure to accept the offers earlier provided given the circumstances at the time when those offers were extant.[15] Doedens & Ors v Owen [2018] SASC 12.Two discrete issues The defendant has raised two further discrete costs issues. After the first plaintiff’s claim settled, an application was made on behalf of the third plaintiff for the first plaintiff to be appointed his litigation guardian (FDN 13). This was opposed by the defendant on the basis that she retained an interest in the proceedings. That “interest” was said to arise given the likelihood that the first plaintiff would benefit, in time, from the third plaintiff’s estate in the event that his estate were to be augmented as a result of the proceedings. Rule 79(2)(b) of the Supreme Court Civil Rules 2006 provides as follows.(2)However –(a) …(b) a person who has an interest in proceedings before the Court (apart from his or her interest as representative of the protected person) cannot act as a protected person’s litigation guardian in the proceedings unless the Court directs to the contrary. In the face of this opposition, the application was abandoned and Ms Quick was appointed instead. The costs of the application to appoint the first plaintiff were reserved. I agree with the defendant’s submission that no order as to costs should be made with respect to the third plaintiff’s abandoned application, FDN 13. The order for costs that I propose to make in favour of the third plaintiff will exclude those costs but not the costs of and incidental to the third plaintiff moving the Court for the appointment of Ms Quick.