Farley v Farley

[1999] NSWSC 376

CITATION:	Farley v Farley [1999] NSWSC 376
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	3959/97; 4021/97
HEARING DATE(S):	23 April 1999
JUDGMENT DATE:	23 April 1999
PARTIES :	In 3959 of 1997 - Wayne Lance Farley (P) Jeanette Bertha Farley (D) In 4021 of 1997 - Jeanette Bertha Farley (P) Wayne Lance Farley (D)
JUDGMENT OF:	Master McLaughlin

COUNSEL :	Mr. D. M. Bernie (P) Mr. J. E. Armfield (D)
SOLICITORS:	C P White & Hetherington (P) Shaddick Baker & Paull (D)
CATCHWORDS:	Costs argument
DECISION:

SUPREME COURT OF
NEW SOUTH WALES
EQUITY DIVISION

MASTER McLAUGHLIN

Friday, 23 April 1999

3959/97 WAYNE LANCE FARLEY -v- JEANETTE BERTHA FARLEY (ESTATE OF THE LATE LANCE ROBERTSON FARLEY) 4021/97 JEANETTE BERTHA FARLEY - ESTATE OF LANCE ROBERTSON FARLEY -v- WAYNE LANCE FARLEY

JUDGMENT

1    MASTER: I delivered my reserved judgment herein on 14 April 1999. In that judgment I said that I have not heard any submissions as to costs and that the parties should have the opportunity to be heard concerning costs, in particular whether the costs of Jeanette Bertha Farley (to whom I referred in my judgment as "the defendant") should be paid by Wayne Lance Farley (to whom I referred in that judgment as "the plaintiff"). 2    The parties arranged for the matter to be listed before me this day for the purpose of argument as to costs. 3    Mr Armfield of Counsel, for the defendant, sought an order that the costs which in my reserved judgment I proposed, subject to any argument and submissions by the parties, should be paid by the plaintiff to the defendant should be paid on the indemnity basis. Mr Bernie of Counsel, for the plaintiff, made an application that there should be no order as to costs, to the intent that each party should bear his, or her, own costs of the proceedings. 4    In support of the defendant's application that costs should be paid by the plaintiff on the indemnity basis there was tendered in evidence a letter dated 27 November 1998 from the solicitors for the defendant to the solicitors for the plaintiff, being of the category described as a Calderbank letter. The solicitors for the plaintiff did not respond to the proposals set forth in that letter. 5    On behalf of the plaintiff, however, in resisting the application that the costs should be on the indemnity basis, it was submitted, firstly, that in proceedings under the Family Provision Act, and its statutory predecessor, the Testator's Family Maintenance and Guardianship of Infants Act 1916, there is a very considerable discretionary element in relation to orders in respect to costs. The significance of that discretionary element, so it was submitted is to remove what might otherwise, in other kinds of proceedings (for example, in proceedings grounded upon contract or tort), the almost automatic consequence in respect to costs of the failure to respond to, or to accept, an offer contained in a Calderbank letter, where, as here, the ultimate substantive order made upon the application of the plaintiff is significantly worse than he would have received if he had accepted the offer contained in the Calderbank letter. 6 It has further been submitted on behalf of the plaintiff that the consequences of the intestacy of the deceased and the practical result of the distribution of the estate upon intestacy in the light of the provisions of section 61 D of the Wills, Probate and Administration Act 1898, and the Fourth Schedule to that Act, made it inevitable that in this case the defendant widow would, of necessity, need to institute proceedings under the Family Provision Act. Further, that the plaintiff was entitled to defend those proceedings and to uphold the form of distribution upon intestacy provided for by that statute. 7    As I observed in my judgment, the claim of the plaintiff was not without merit. The problem confronting the Court was what might be described as the lack of assets in the estate available to meet any order for provision to which, firstly, the defendant must inevitably have been entitled in respect to her accommodation, and to which, (subject to what I held to be the higher claim of the defendant) the plaintiff might ultimately have established an entitlement. In my judgment I observed that even though, had the estate been larger, it might be that the plaintiff could have established entitlement to an order for provision equal to, or even exceeding the amount to which he would have been entitled upon intestacy, I was satisfied that the claim of the defendant widow of the deceased was a claim of a higher order than that of the plaintiff. 8    Whilst I appreciate that the failure of the plaintiff to respond in any way to the alternative offers contained in the Calderbank letter is a matter of relevance to the present application of the defendant that her costs be paid on the indemnity basis, I do not consider that the Calderbank letter and the failure of the plaintiff to accept one, or other, of the offers contained therein are determinative of the question of whether the defendant is entitled to have her costs paid on the indemnity basis rather than on the party and party basis. It would have been necessary, in any event, for the defendant to have instituted proceedings to enforce her entitlement to retain the house property. The plaintiff's claim was not without merit. The problem was the lack of any assets to meet such a claim in the light of the higher claim by the defendant widow. 9    Further, it should not be overlooked that under the rules of distribution upon intestacy the plaintiff was entitled to a significant part of the estate. 10    In all those circumstances, I consider that it is not appropriate that the defendant should have her costs on the indemnity basis, but that any costs to which the defendant is entitled to be paid by the plaintiff should be paid on the party and party basis. 11    Whilst it can be appreciated that the various factors to which I have just referred relative to the application of the defendant are also relevant to the application of the plaintiff that there should be no order as to costs, nevertheless, it will be appreciated that, were the defendant widow required to bear her own costs of the proceedings, then the benefit to which, in my conclusion, the widow was entitled from the estate of the deceased would be significantly eroded by her having to meet her own costs. An order of the nature which the plaintiff submits should be made (that is, that each party should bear his, or her, own costs of their proceedings) would thus significantly reduce the benefit to which, in my judgment, the defendant has established an entitlement. Accordingly, I do not propose to accede to the application of the plaintiff that there should be no order as to costs. 12    The costs order which I propose to make is that foreshadowed in my judgment, being that, in proceedings 3959 of 1997, Wayne Lance Farley v Jeanette Bertha Farley, the plaintiff shall pay the costs of the defendant; and in proceedings 4021 of 1997, Jeanette Bertha Farley v Wayne Lance Farley, the defendant shall pay the costs of the plaintiff. In each case the costs will be on the party and party basis. 13    The orders which I make are as follows:

1. I make orders as set forth in my judgment of 14 April 1999 adding to order 2 in each proceedings the words "such costs to be on the party and party basis".
2. I make no order in respect to the costs of today's applications, to the intent that each party will bear his, or her, own costs thereof.

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