Farnell v Penhalluriack(No 3)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 7534 of 2004

PATRICIA FARNELL	Plaintiff
v
FRANCIS WILLIAM PENHALLURIACK as the executor in the estate of MALCOLM HILARY CHIPPERTON	Defendant

---

JUDGE:	BELL J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 June 2008
DATE OF JUDGMENT:	2 October 2008
CASE MAY BE CITED AS:	Farnell v Penhalluriack (No 3)
MEDIUM NEUTRAL CITATION:	[2008] VSC 391

---

COSTS – plaintiff unsuccessful in application for declaration of paternity – defendant trustee sought costs on solicitor-client basis pursuant to r 63.32(2)(a) of Supreme Court Rules – plaintiff sought costs on indemnity basis in reliance on the refusal of a third party, related to the defendant, to provide DNA evidence – usual rule that costs will be awarded to the successful party on party-party basis applied.

---

APPEARANCES:	Counsel	Solicitors
For the plaintiff	Mr R Cook	Monahan + Rowell
For the defendant	Ms K R Rees	T J Mulvany & Co

HIS HONOUR:

I have dismissed the plaintiff's application for a paternity declaration against the defendant trustee: Farnell v Penhalluriack (No 2) [2008] VSC 214.

The defendant seeks costs on a solicitor-client basis in reliance on r 63.32(2)(a) of the Supreme Court Rules. The plaintiff resists any order for costs being made against her and seeks an order that the defendant pay her costs on an indemnity basis.

This proceeding was brought in relation to the alleged paternity of a deceased man in respect of the plaintiff's daughter. The defendant is the trustee of the deceased's will. The plaintiff had not previously obtained a thorough judicial examination of the factual and DNA issues. She did not act unreasonably in bringing the application in the court to obtain that examination. The defendant was a proper contradictor and party, but his trustee capacity was a coincidental incident of the litigation. I do not think this is the kind of case in which r 63.32(2)(a) should be applied to bring about an order for costs against a plaintiff in favour of a trustee defendant on a solicitor-client basis.

The usual rule is that a successful party to litigation is entitled to their costs. This rule should be applied in the present case. There is no basis for doing otherwise. The plaintiff relies on the refusal of the deceased's daughter to undergo a further DNA test. This is not a basis for departing from the usual rule. The question is whether the defendant should be awarded his costs. This is not affected by the private decision of the daughter which, in the substantive judgment, I found to be reasonable in any event.

The plaintiff had some success in the proceeding as I made certain findings in her favour. However, the defendant behaved reasonably in his conduct of the defence and was entitled to contest all the factual and DNA issues in the case. This is not a case in which the court should award costs by or against a party on an issue by issue basis. That would be an artificial approach to adopt in the circumstances. The defendant was successful on the substantive issue, which involved a general consideration of all of the evidence and legal issues. Costs should follow that event.

The plaintiff will be ordered to pay the defendant’s costs, including any reserved costs, on a party-party basis.

---

The case of Farnell v Penhalluriack (No 3) involved a legal dispute concerning a paternity claim. The plaintiff, Farnell, sought a declaration of paternity against the defendant, Penhalluriack, who was the trustee of a family trust. The case was heard in the Supreme Court. The primary issue before the court was the allocation of costs following Farnell's unsuccessful application for a declaration of paternity. Penhalluriack, as the successful party, sought costs on a solicitor-client basis under rule 63.32(2)(a) of the Supreme Court Rules. Farnell, on the other hand, argued for costs on an indemnity basis, citing the refusal of a third party, related to Penhalluriack, to provide DNA evidence.

The court considered the principles governing costs in litigation, particularly focusing on the usual rule that costs are awarded to the successful party on a party-party basis. It examined the circumstances under which costs might be awarded on a solicitor-client basis and the conditions for indemnity costs. The court noted that indemnity costs are typically awarded when exceptional circumstances exist, such as when a party has acted in bad faith or when there has been an abuse of the court process. However, the court found that the refusal of the third party to provide DNA evidence did not constitute exceptional circumstances warranting indemnity costs.

Ultimately, the court determined that the usual rule applied, awarding costs to Penhalluriack on a solicitor-client basis. The court was not persuaded that the refusal of the third party to provide DNA evidence was sufficient to shift the costs to an indemnity basis. The court held that Farnell's application for indemnity costs was unsuccessful. The final orders of the court reflected this decision, with Penhalluriack receiving the costs of the proceedings on a solicitor-client basis.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established