Grant Kornel Power v Miklos Power; Marc Robert Power v Miklos Power

[2010] NSWSC 205

CITATION:	Grant Kornel Power v Miklos Power & Ors; Marc Robert Power v Miklos Power & Ors [2010] NSWSC 205 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	12.02.10, 15.02.10
JUDGMENT DATE :	23 March 2010
JUDGMENT OF:	Nicholas J
DECISION:	In no. 1042/03, the notice of motion filed 10 December 2009 be dismissed; In no. 2972/06, the amended notice of motion filed 17 December 2009 be dismissed; and In each of 1042/03 and 2972/06 the defendants pay the plaintiffs' costs on an indemnity basis
CATCHWORDS:	PRACTICE AND PROCEDURE – COSTS – interlocutory proceedings – appropriate costs orders where proceedings dismissed without proceeding to final determination – turns on the facts – no question of principle – Civil Procedure Act 2005 s 98 – Uniform Civil Procedure Rules 2005 r 36.4(1)(a)
LEGISLATION CITED:	Civil Procedure Act Family Provision Act 1982 Uniform Civil Procedure Rules 2005
CATEGORY:	Principal judgment
CASES CITED:	Baltic Shipping Company. The Mikhail Lermontov v Dillon (Mikhail Lermontov case) (1991) 22 NSWLR 1 Bates v Lloyd [2005] NSWSC 1253 Fordyce v Fordham [2006] NSWCA 274 O’Neill v Mann [2000] FCA 1680 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Prodromos Anastasi Foukkare v Angreb Pty Ltd [2006] NSWCA 335
PARTIES:	Grant Kornel Power – plaintiff in 1042/03 Miklos Power – first defendant in both matters John Russell – second defendant in both matters John Denes – third defendant in both matters John Russell (in his capacity as trustee with Trustman Services Ltd of the Power Family Trust) – fourth defendant in both matters Deruve Pty Ltd – fifth defendant in both matters Trustman Services Ltd – sixth defendant in both matters Marc Robert Power – plaintiff in 2972/06
FILE NUMBER(S):	SC 1042/03; 2972/06
COUNSEL:	C Harris SC - plaintiffs T Rollo (solicitor) – first, second, fourth, fifth and sixth defendants in both matters Submitting appearance – third defendant in both matters
SOLICITORS:	Teece Hodgson & Ward - plaintiff in 1042/03 Atkinson Vinden - plaintiff in 2972/06 Parry Carroll – first, second, fourth, fifth, sixth defendants in both matters Submitting appearance – third defendant in both matters

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Nicholas J

23 March 2010

1042/03 Grant Kornel Power v Miklos Power & Ors
2972/06 Marc Robert Power v Miklos Power & Ors

JUDGMENT

1 His Honour: In these proceedings the plaintiff in each case seeks an order for costs on an indemnity basis of the amended notice of motion filed 17 December 2009 (no. 2972/06) and the notice of motion filed 10 December 2009 (no. 1042/03). The first, second, fourth, fifth and sixth defendants oppose the making of any orders, and contend that no order for costs should be made. The third defendant, an executor of the estate of the late Thomas Joseph Power, submitted to any orders the court might make.

2 On 30 June 2009, in no. 1042/03, in which Grant Kornel Power (Grant) is the plaintiff, the court ordered, by consent, the payment to him of a legacy of $40,000 within 28 days, with interest after the expiration of the 28 day period. It also ordered that 599,994 shares in the sixth defendant, Deruve Pty Ltd, be designated as notional estate of the deceased. Order 5 stated:

“Further consideration of the proceedings be reserved for the purpose of implementation of these orders, including designating further notional estate of the deceased to satisfy the legacy and any interest thereon as referred to in paragraph 1 above and the costs order.”

The orders were entered on 14 July 2009.

3 On 30 June 2009 in no. 2972/06, in which Marc Robert Power (Marc) is the plaintiff, the court ordered, by consent, the payment to him of a legacy of $330,000 of which $215,000 was to be paid by 30 September 2009, and the balance of $115,000 to be paid by 30 October 2009, with interest after the dates for payment. The court also ordered that 599,994 shares in the sixth defendant Deruve Pty Ltd, be designated as notional estate, and ordered that the sixth defendant’s title to the land known as no. 22 Victoria Parade, Manly, be charged with payment of the legacy and any interest payable thereon, and with the payment of costs as ordered. Order 8 stated:

“Reserve liberty to apply on 7 days notice in respect of further orders including for the implementation of these orders and/or designating further notional estate of the deceased to satisfy the legacy and any interest payable under orders 2 and 3 above and the payable under order 4 above.”

The orders were entered on 1 July 2009.

4 In each case payment was not made when due.

5 On 20 November 2009 the plaintiffs filed a notice of motion as if both sets of proceedings had been consolidated. When the matter was before the court on 3 December 2009 the defendants objected to this course with the result that the plaintiffs agreed to make similar applications separately in each proceeding, hence the notice of motion in no. 1042/03 was filed on 10 December 2009, and the amended notice of motion in no. 2972/06 was filed on 17 December 2009.

6 The relief claimed in each is substantially the same, namely an order under s 15(1)(a)(iii) Family Provision Act 1982 (the Act) for the appointment of a trustee of the shares in the sixth defendant designated as the notional estate, with power to realise the shares and pay the legacies from the proceeds, and under s 15(1)(a)(iv) of the Act, with power to exercise any and all rights as a shareholder. The defendants accepted (T p 36) that the purpose of the notices of motion was to enforce compliance with the consent orders made on 30 June 2009.

7 However, the payments of Grant’s claim was made on 11 December 2009, and of Marc’s claim on about 17 December 2009. In these circumstances the plaintiffs no longer press the orders for enforcement but seek an order in each matter for indemnity costs.

Background

8 The relevant background to the filing of the notices of motion and the subsequent history are as follows.

9 On 28 July 2009, in no. 1042/03, the payment of $40,000 to Grant was due.

10 By email of 29 July 2009 the defendants’ solicitors advised that in no. 1042/03 the first defendant required a sealed copy of the consent order “… with the Chief Clerk’s proper signature, so that we can get on with the issue of remitting payment to your client”.

11 By letter of 30 July 2009 to the defendants’ solicitors, the plaintiffs’ solicitors sent a copy of the sealed order in no. 1042/03 signed by the Chief Clerk. Payment of the legacy in accordance with the order was requested.

12 By email of 31 July 2009 the defendants’ solicitors complained to the plaintiffs’ solicitors that the sealed order in no. 2972/06 did not bear the full signature of the registrar. They requested provision of the registrar’s full signature on page three of the order. They advised that their “… client will only attend to seeking finance to pay out your client’s legacy once this is done”.

13 By letter of 3 August 2009 the plaintiffs’ solicitors referred to the service of the sealed orders in no. 2972/06. They confirmed that the first payment was due on 30 September 2009.

14 By email of 6 August 2009, the defendants’ solicitors advised the plaintiffs’ solicitors that funds would be available to pay out Grant’s legacy and interest by 30 September 2009 and payment would be made to their trust account.

15 With their letter of 30 September 2009 to the defendants’ solicitors, the plaintiffs’ solicitors sent Grant’s authority to pay, and requested payment by 1 October 2009.

16 By letter of 1 October 2009 to the defendants’ solicitors, the plaintiffs’ solicitors observed that the payment of $215,000 due by 30 September 2009 had not been made. They referred to the plaintiffs’ right under Order 8 to apply for further relief. They stated that if the amount was not paid by 9 October 2009, application would be made under Order 8 for orders including those in terms substantially similar to those under the present notices of motion.

17 The email of 1 October 2009 from the defendants’ solicitors to the plaintiffs’ solicitors included:

“In respect to the payment of the legacy to Marc Power/his Tutor, I am instructed that my clients have suffered delay in raising finance due to the financial statements relating to the borrowing entities not being prepared in time to obtain finance by 30 September 2009 to pay out the legacies.
I am instructed that the financial statements being prepared and necessary to obtain finance will be ready by the end of this week and it is anticipated that the funds will be available by end of October 2009.
Furthermore, it is not the Executor in Sydney that is arranging the finance, rather it is the Executor John Russell in New Zealand who is organising and arranging finance, which may be make it less convenient and may take more time to effect from New Zealand particularly as Mr Russell lives in a relatively remote town.
Accordingly we are instructed to request that you hold off taking further action as stated in your emailed letter of today, until after 31 October 2009.”

18 In a note to the plaintiffs’ solicitors of 6 October 2009, the second defendant said:

“The Manly Lodge is already on the market and we have substantial interest but no written offers yet. I will be raising a loan to pay out the legacies and legal costs pending the sale of the property. We expect to have the loan raised before the end of the month.”

19 On 1 October 2009 the defendants’ solicitors advised the plaintiffs’ solicitors that her clients needed an extension of time until 31 October 2009 to pay.

20 By email of 8 October 2009 the defendants’ solicitors told the plaintiffs’ solicitors that information concerning the sale of Manly Lodge would not be provided until after instructions had been received from the second defendant upon his return on 19 October 2009.

21 On 15 October 2009 Marc caused to be lodged a caveat over the sixth defendant’s property, Manly Lodge, pursuant to the charge under the orders made on 30 June 2009.

22 By email of 30 October 2009 to the defendants’ solicitors, the plaintiffs’ solicitors sought confirmation of payment that day, as promised. On the same day the defendants’ solicitors advised that they were awaiting the sixth defendant’s “… confirmation instructions in regard to whether he has been successful in raising a loan or whether the legacy to your client will be paid out of the proceeds of sale of the Manly Lodge which as you are aware is currently on the market”.

23 By email of 4 November 2009 the defendants’ solicitors advised the plaintiffs’ solicitors of the second defendant’s instructions:

“1) In respect to the sale of the Manly Lodge, we are now instructed that there are currently 15 potential buyers and a written offer is expected any time soon.
If no written offer is received by 15 November 2009. Mr Russell is planning to fly to Sydney from 15 November 2009 to assist the three real estate agents the property is listed with to close a deal with one of the current interested parties.
2) In the meantime, and as you are aware, Mr Russell has also applied for a loan in order to pay out the legacies and costs. The loan will be paid out from the proceeds of the sale of the Manly Lodge. We are instructed that his loan application has been favorably received and likely to be successful and he will confirm this to us as soon as he has obtained confirmation of finance approval which has not yet come through.”

24 As at 20 November 2009 no payments had been made in compliance with the orders made on 30 June 2009. The notice of motion referable to both matters was filed on that day, returnable on 1 December 2009.

25 On 1 December 2009 the notice of motion was adjourned to 3 December 2009 before me.

26 The letter of 2 December 2009 from the defendants’ solicitors to the plaintiffs’ solicitors in no. 2972/06 included:

“There can be no doubt that the parties were misguided in the estimating time that it would take to realise the property the subject of the trust or to otherwise raise funds for payment of the amounts referred to under the consent orders.
As an interim measure to address the payment of the sum of $370,000 outstanding pursuant to the consent orders our client has taken steps to obtain interim finance at significant cost to Deruve Pty Limited to enable all current obligations to be met. We expect to be in a position to draw down these funds within seven days from today. We enclose a copy of a letter from the funder for your consideration. As a backup we have also arranged interim funding with CSL Money to raise $1.6 million with draw down available subject to valuation by 14 January 2010.”

27 On 3 December 2009 the defendants objected to consolidation of the proceedings. The hearing was adjourned until 17 December 2009. The notice of motion in no. 1042/03 was filed on 10 December 2009, and the amended notice of motion in no. 2972/06 was filed on 17 December 2009.

28 Also on 3 December 2009, in no. 2972/06, the defendants’ solicitors requested the plaintiffs’ solicitors for details of the accounts to which the payments should be made.

29 By letter of 4 December 2009, in no. 2972/06, the plaintiffs’ solicitors advised details of the account, and that the total sum payable was $332,958.90.

30 In their email of 4 December 2009 to the plaintiffs’ solicitors, the defendants’ solicitors requested withdrawal of the caveat to enable transfer of the funds. They said that once the funds had been paid, consent orders for dismissal of the notice of motion would be submitted for consideration.

31 In their letter of 8 December 2009 the plaintiffs’ solicitors informed the defendants’ solicitors that, subject to agreement as to the withdrawal of the caveat, they would agree to orders that the notices of motion be dismissed, with costs on an indemnity basis.

32 In the email of 9 December 2009 in no. 1042/03 the plaintiffs’ solicitors advised the defendants’ solicitors that the amount then payable was $40,887.67. This amount was paid on 11 December 2009.

33 The notices of motion were listed before me at 2pm 15 December 2009 at the request of the defendants’ solicitors. Marc’s solicitors appeared. There was no appearance for Grant, or for the defendants. The proceedings were adjourned to 17 December 2009, and on that day were adjourned for hearing until 12 February 2010.

34 On 17 December 2009, in no. 2972/06, the sum of $333,664.10 ($NZ422,919.93) was paid to Marc’s account.

Principles

35 The relevant principles which guide a court on the question of costs where proceedings have been resolved without a hearing on the merits have been recently considered. In Prodromos Anastasi Foukkare v Angreb Pty Ltd [2006] NSWCA 335 Beazley JA said:

“66 In Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 Hill J summarised the principles that have emerged from the case law as to how the Court should approach the exercise of discretion in respect of costs when there has been no hearing on the merits. He said (at 201):
(1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order …
(2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial … This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue.
(3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them …
(4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation …
(5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted …’

67 The same question was considered in Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622. McHugh J said at 624 –625:
‘In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd [1971] QWN 13, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.’ (Footnotes omitted)
68 The principles discussed in these cases apply where a court is asked to make an order under UCPR 42.19. This was recognised in Fordyce v Fordham , where McColl JA (Beazley and Santow JJA agreeing) said, after pointing out the default orders provided for under the rules governing discontinuance (see UCPR 42.19):
‘84 [ UCPR 42.19 is] a relevant, but not determinative, consideration. Other relevant considerations were, as the primary judge concluded, usefully gathered in Lai Qin and Australian Security Commission v Aust-Home Investments Ltd & Ors (1993) 44 FCR 194, notwithstanding, as the discussion below reveals, that they were decided in a different statutory context.
…
87 Once it is recognised, however, that the costs discretion conferred by UCPR 42.19 … is unconfined, the matters referred to in the Lai Qin line of authority are plainly pertinent, although, again, not necessarily determinative.’”

36 In Fordyce v Fordham [2006] NSWCA 274 McColl JA referred, with approval, to passages from the judgment of Finn J in O’Neill v Mann [2000] FCA 1680:

“81 It might also be noted that even though in O’Neill v Mann Finn J referred with apparent approval to an “an ‘underlying policy in the Rules that the discontinuing party should be liable for the other party's costs unless the court orders otherwise”, quoting Cooper J in Grundy v Lewis (Federal Court of Australia, 28 May 1998, unreported), his Honour also observed that “…so various can be the reasons for, and circumstances of, discontinuance that that policy cannot safely be said to have hardened into a ‘usual rule’ where leave is granted such as exists where there has been a determination of a claim on its merits …[t]he conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs.” He referred with approval to McHugh J’s observations in Lai Qin (at 625) to the effect that no costs order will usually be made where both parties have acted reasonably in commencing, defending and continuing proceedings.”

37 Section 98 Civil Procedure Act 2005 relevantly provides:

“98 Courts powers as to costs
(1) Subject to rules of court and to this or any other Act:

(a) costs are in the discretion of the court, and
(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.”

38 Subject to the rules, the discretion is unconfined, but in the end must be exercised with regard to the requirements of justice in the particular circumstances of the case.

Consideration

39 The plaintiffs submitted that the filing of the notices of motion was made necessary by the unreasonable conduct of the defendants in failing to comply with the orders, being delinquent conduct which justifies orders for indemnity costs.

40 In no. 1042/03, concerning Grant, reliance was placed on the defendants’ unexplained failure to make the payment, as ordered on 28 July 2009, and their insistence on 29 July 2009 that, before proceeding with the question of payment, they required the plaintiffs’ solicitors to provide a sealed copy of the order bearing the signature of the court officer.

41 Reference was made to the unexplained breach of the defendants’ representation made on 6 August 2009 that payment would be made to Grant by 30 September 2009. In circumstances where the defendants sought no variation of the orders, and had no further communication with the plaintiffs, it was submitted that the plaintiffs were well justified in filing the notice of motion of 20 November 2009 to enforce compliance, and also in exercise of the liberty under Order 5 of the orders made on 30 June 2009.

42 In no. 2972/06, concerning Marc, reliance was placed on the defendants’ insistence on 31 July 2009 that, before seeking the necessary finance, they required the plaintiffs’ solicitors to provide a sealed copy of the order bearing the signature of the court officer.

43 Reference was made to the notice of intended action for enforcement given to the defendants on 1 October 2009 if the payment due on 30 September 2009 was not made by 9 October 2009, and to the defendants’ failure to honour their representations that payment would be made by 31 October 2009. It was submitted that as no confirmation had been given of the availability of funds as suggested in the defendants’ solicitors’ letter of 4 November 2009, and where no variation of the orders was sought, and no further communication made, the plaintiffs were well justified on 20 November 2009 in taking the foreshadowed action for enforcement and in exercise of the liberty under Order 8 of the orders made on 30 June 2009, the requisite seven days notice having been given.

44 It was put that in respect of both matters the defendants’ conduct effectively precipitated the filing of the notices of motion, the purpose of which was achieved when payments in compliance with the orders were made on 11 December and 17 December 2009. It was argued that the defendants’ conduct which necessitated the present proceedings was so unreasonable or delinquent as to warrant an order against them for indemnity costs.

45 For the defendants it was submitted that no order for costs should be made. It was put that the fact that the payments were made after the filing of the process did not represent a substantial victory for the plaintiffs having regard to the specific relief sought. The argument was that the payments should be regarded as made under the orders of 30 June 2009, and not as a consequence of the filing of the notices of motion.

46 It was also put that, in the circumstances, it was neither necessary nor reasonable for the plaintiffs to file the notices of motion when they did. Although it was accepted (T p 33) that the defendants should have sought a variation of the orders, they asserted that they were endeavouring to make the payments, and were advising the plaintiffs of their progress, and that there was no evidence that they were intentionally evading compliance. It was put that despite notice being given on 1 October 2009, reasonablness required the plaintiffs to have enquired further of the defendants as to their prospects, and to have tested the genuineness of their explanations, before commencing these proceedings.

47 Further, the defendants submitted that in the circumstances the court lacked jurisdiction to make the orders sought, namely an order under s 15(1)(a)(iii) of the Act appointing a trustee of the shares in the sixth defendant, and an order under s 15(1)(a)(iv) empowering the trustee to exercise the rights of a shareholder in the sixth defendant, and consequential orders. These provisions are in the following terms:

“15 Consequential and ancillary orders
(1) To enable effect to be given to an order for provision out of the estate or notional estate of a deceased person (whether or not an order made in favour of an eligible person), the Court may:
(a) make orders for or with respect to all or any of the following matters:
…
(iii) the appointing of a trustee of property in the estate or notional estate,
(iv) the powers and duties of any trustee of property in the estate or notional estate,”

48 As I understood it, the effect of the submission was that the court’s power to make orders under s 15(1) was to enable effect to be given to an order for provision out of the estate. It was put that it was not open to make such an order in these cases because the dates for making payments under the orders had passed, and thus it was no longer possible to give effect to them, the moment having passed. Thus it was put that before an enabling order could be made it must be shown that such an order was necessary to obtain compliance or fulfilment of the relevant order. It was put that in circumstances where the payments had been made the orders sought could not be made and thus the plaintiffs were doomed to fail had the issue proceeded to determination on the merits.

49 In making an assessment of the reasonableness of the conduct of the parties prior to the filing of the notice of motion on 20 November 2009 it is relevant to start with the orders. In no. 1042/03 the defendants were obliged to pay Grant’s legacy within 28 days. In no. 2972/06, the defendants were obliged to pay Marc’s legacy in instalments of $215,000 by 30 September 2009, and the balance of $115,000 by 30 October 2009. Order 5 in no. 1042/03 and Order 8 in no. 2972/06 effectively allowed any of the parties to apply to the court for further orders, including orders for implementation of the orders for payment.

50 As the orders were given in open court they took effect when they were made (UCPR Pt 36, r 36.4(1)(a)). Unless the orders were varied, the defendants’ overriding obligation was to obey them. In each case the plaintiff was entitled to proceed on the basis that they would.

51 In no. 1042/03 the defendants sought no indulgence from the plaintiff or from the court before time for payment expired. Their solicitors’ letter of 29 July 2009 suggests only that the defendants, although in breach of the order, would not arrange the required funds until provided by the plaintiffs with a sealed copy of the order signed by the court officer, with the consequence that payment would be further delayed. Having regard to the terms of UCPR Pt 36, r 36.4(1)(a) in my opinion this requirement was unreasonable and unwarranted. Nevertheless, on the next day the plaintiff’s solicitors sent the signed form of order.

52 On 6 August 2009 the defendants represented that payment of Grant’s legacy with interest, would be paid to his solicitors’ trust account by 30 September 2009. Doubtless on the faith of this representation, on 30 September 2009 the plaintiff’s solicitors sent Grant’s authority to pay and requested payment by 1 October 2009. No payment was made. There was no further communication prior to the filing of the notice of motion.

53 In no. 2972/06, on 31 July 2009 the defendants’ solicitors stated that arrangements for finance would only begin after the plaintiff provided a sealed order signed by the court officer. Having regard to UCPR Pt 36, r 36.4(1)(a) and the terms of the orders themselves, this requirement, also, was unreasonable and unwarranted.

54 In response to the notice of intended action of 1 October 2009 the defendants represented that payment would be made by 31 October 2009 and requested no action be taken until after that date. They failed to honour their representation. Their solicitors’ letter of 4 November 2009 indicates no more than that funds were not yet available, and there was no certainty as to when they would be. There was no further communication prior to the filing of the notice of motion.

55 In my opinion, the evidence supports the finding, which I make, that from the time the orders were made the defendants proceeded on the basis that they were entitled to make the payments as and when they chose, and that the times prescribed might be freely ignored. The fact that they did not come back to court for a variation of the orders to accommodate a need for an extension of time reinforces this finding.

56 The plaintiffs acted reasonably in agreeing to the extensions of time sought by the defendants. The letter of 1 October 2009 gave fair warning of intended action, and met the requirements of Order 8 in no. 2972/06. The defendants’ submission that the plaintiffs ought to have made further enquiries of the defendants before proceeding is rejected.

57 I am satisfied that, in the circumstances, the defendants’ course of conduct left the plaintiffs with neither certainty nor confidence as to whether and when the payments would be made. In my opinion, the plaintiffs were left with no choice but to take action by filing the notice of motion to enable effect to be given to the orders. There can be no doubt that the defendants precipitated these proceedings, and the plaintiffs acted reasonably in commencing them. In the circumstances the defendants should pay their costs of the proceedings.

58 I also find that the defendants’ conduct in each matter, taken overall, was conduct which was unreasonable and delinquent in the sense referred to in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, par 44 so as to justify an order that they should pay the plaintiffs’ costs on an indemnity basis.

59 The orders were made by consent. It is evident that the times for payment were agreed upon in order to accommodate the defendants’ arrangements for the obtaining of funds. Absent variation, the defendants were under a continuing obligation to obey them. It is apt to refer to the observation of Gleeson CJ in Baltic Shipping Company, The Mikhail Lermontov v Dillon(Mikhail Lermontov case) (1991) 22 NSWLR 1 (p 9):

“The general policy of the law is that people should honour their contracts. That policy forms part of our idea of what is just.”

60 The defendants’ obligation arose from the making of the orders to which they consented. Its existence was quite independent of any steps which the plaintiff took or did not take to enforce them (Bates v Lloyd [2005] NSWSC 1253, par 16). Furthermore, as a matter of policy, the maintenance of confidence in the administration of justice requires obedience to the orders of the court.

61 The finding that the defendants’ conduct justified the plaintiff’s action renders it unnecessary to deal with the defendants’ submission that had the claims for relief under s 15(1)(a)(iii) and (iv) of the Act proceeded for determination on the merits they were doomed to fail. However, in deference to the submission it is appropriate to state my opinion that it was without substance and must be rejected.

62 As the prefatory words of s 15(1) make plain, the court may make orders for the purpose of giving effect to an order for provision out of an estate. The clear legislative intention is to provide the court with a wide discretionary power to make such orders under sub-pars (a) and (b) as are necessary for fulfilment of, or compliance with, orders already made. In this case, the substance of the relevant orders was the obligation to pay the legacies. The fact that the specified time for payment had passed could not preclude the court from giving relief to ensure that the obligation was discharged. In my opinion the orders sought by the plaintiff were, in terms, within s 15(1)(a) and for which they had arguable claims. It should not be overlooked that, from the outset, the defendants accepted (T p 36) that the purpose of the notices of motion was to enforce compliance with the consent orders made on 30 June 2009.

63 Accordingly I make the following orders:

(1) in no. 1042/03, the notice of motion filed 10 December 2009 be dismissed;

(2) in no. 2972/06, the amended notice of motion filed 17 December 2009 be dismissed; and

(3) in each of no. 1042/03 and no. 2972/06 the fourth, fifth and sixth defendants pay the plaintiffs’ costs on an indemnity basis.

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29/10/2010 - Under slip rule - Paragraph(s) 63(3)