Grove v Kenworthy-Groen
[2021] WASC 227
•13 July 2021
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: GROVE -v- KENWORTHY-GROEN [2021] WASC 227
CORAM: HALL J
HEARD: 24 JUNE 2021
PUBLISHED : 13 JULY 2021
FILE NO/S: CIV 1532 of 2020
BETWEEN: JOHN GROVE
Plaintiff
AND
SIMON DIRK KENWORTHY-GROEN
First Defendant
SIMON DIRK KENWORTHY-GROEN as executor of the estate of WILLIAM GROVE
Second Defendant
ANDREW HENDRICK GROVE
Third Defendant
SIMON DIRK KENWORTHY-GROEN
SIMON DIRK KENWORTHY-GROEN as executor of the estate of WILLIAM GROVE
Plaintiff by counterclaim
JOHN GROVE
ANDREW HENDRICK GROVE
Defendant by counterclaim
Catchwords:
Costs - Proceedings for the appointment of an administrator to a deceased estate - Matter settled by the appointment of the Public Trustee - Whether, and to what extent, the defendants are successful parties - Indemnity costs
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Costs order made
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr P D C Robinson |
| First Defendant | : | Mr L A Tsaknis |
| Second Defendant | : | Mr L A Tsaknis |
| Third Defendant | : | Ms M van der Kwast |
| Plaintiff by counterclaim | : | Mr L A Tsaknis |
| Defendant by counterclaim | : | Mr P D C Robinson & Ms M van der Kwast |
Solicitors:
| Plaintiff | : | Williams & Hughes |
| First Defendant | : | Fort Knox Legal |
| Second Defendant | : | Fort Knox Legal |
| Third Defendant | : | Dwyer Durack |
| Plaintiff by counterclaim | : | Fort Knox Legal |
| Defendant by counterclaim | : | Williams & Hughes & Dwyer Durack |
Case(s) referred to in decision(s):
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Frigger v Professional Services of Australia Pty Ltd [No 2] [2011] WASCA 103
Gray v Sirtex Medical Ltd formerly known as Paragon Medical Ltd [2009] WASC 126
Lafferty v Waterton [2016] WASCA 183
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
Wheatley v Bower [2001] WASCA 293
Yara Australia Pty Ltd v Oswal [2012] WASCA 264
HALL J:
These proceedings relate to an application by the plaintiff to be appointed the administrator of his deceased sister's estate. At the commencement of what was to have been a 5-day trial the parties advised that they had agreed to a settlement. The agreement was that the Public Trustee would be appointed as the administrator. This was an outcome that had been sought by the first and second defendant and supported by the third defendant. The only issue that remained in contention between the parties was as to costs.
Each of the defendants sought that the plaintiff pay their costs, either in whole or part on an indemnity basis. The plaintiff sought orders that a significant portion of his costs be paid by the defendants, in part on an indemnity basis. The parties filed affidavits and made submissions both in writing and orally in support of their claims.
The appointment of the Public Trustee was not sought by any party prior to 1 April 2021. It was on that date that the first and second defendant filed a re-amended defence and a counterclaim raising that possibility for the first time. Prior to that time, the plaintiff had sought that he be appointed the administrator and the defendants had opposed that outcome. An order in favour of the plaintiff for costs thrown away as a result of those amendments has already been made. However, the plaintiff seeks that those costs be paid on an indemnity basis.
For the reasons that follow, I have come to the conclusion that the only additional order as to costs that should be made is that the plaintiff should pay each of the defendants' costs incurred after 1 April 2021 on a party/party basis, to be taxed if not agreed. Any costs incurred before that day (other than those covered by the costs thrown away order) should be borne by the parties.
The factual background and relevant procedural history
The plaintiff and the defendants are brothers. For simplicity, and without intending any disrespect to them, I will refer to them (and other family members) by their first names. John is the plaintiff, Simon is the first defendant in his personal capacity and the second defendant in his capacity as the executor of their father's estate, and Andrew is the third defendant.
John, Simon and Andrew, are beneficiaries of their sister, Sonja Grove's, estate (Sonja's Estate). Sonja Grove died intestate on 27 July 1992. On 24 June 1993 letters of administration in respect of Sonja's Estate were granted to her father, William Grove. William died on 30 October 2015 before the administration of Sonja's Estate was complete. Simon is the executor of William's estate and, in that capacity, has undertaken any action necessary in respect of Sonja's Estate since William's passing.
On 21 November 2019, John applied to the court under the Non‑Contentious Probate Rules 1967 (WA) for letters of administration in respect of Sonja's Estate. Simon and Andrew objected to his application. On 30 April 2020 John commenced this action by writ of summons seeking an order that he be granted letters of administration de bonis in Sonja's Estate and that Simon and Andrew pay the costs of the action.
On 29 May 2020, Simon applied for summary judgment on the grounds that the administration of the estate had been completed by a resolution made by William on 27 August 2015 to distribute Sonja's Estate, that Andrew and Simon were the only persons beneficially entitled to the assets and that Simon, as executor of William's estate, held the assets on trust for he and Andrew. On 6 July 2020, Simon abandoned his application and amended his defence to reflect that John was not entitled to any distributions from Sonja's Estate because John and his wife, Kerry, owed the estate $220,000 in unpaid loans which were forgiven by William when he passed the resolution to distribute the corpus of Sonja's Estate equally between Simon and Andrew. Essentially, the claim was that the loan was forgiven on the understanding that John would not receive any distributions from the estate. Simon also brought a counterclaim seeking a declaration that only he and Andrew were entitled to the assets of Sonja's Estate. John denied that the loan remained outstanding.
On 1 April 2021, Simon further amended his defence stating, inter alia, that John was in a position of conflict between his own interests, the interests of Sonja's Estate and those of Simon and Andrew and to ensure the proper administration of Sonja's Estate, John should not be appointed. His counterclaim was also amended by adding a claim seeking to have the Public Trustee appointed as the administrator and deleting all other claims for relief. Andrew amended his defence to mirror Simon's except that he did not bring a counterclaim, rather his response was to support Simon's counterclaim. Simon and Andrew were ordered to pay John's cost thrown away by reason of the amendments, with liberty to apply for those costs to be paid on an indemnity basis
The trial was initially set down for 3 days commencing on 24 May 2021. John's counsel raised concerns with Master Sanderson, who was to preside over the trial, as to an alleged failure by Simon and Andrew to comply with their ongoing discovery obligations. At a directions hearing on what ought to have been the first day of trial, Simon produced correspondence showing that on 1 April 2021 his solicitors had advised the Public Trustee that Simon was seeking orders for the Public Trustee's appointment and that on 13 April 2021 and 20 May 2021 the Public Trustee had responded neither confirming or denying that it would accept any appointment by the court.
Master Sanderson stated that he would not appoint the Public Trustee absent written confirmation it consented to act. Accordingly, Simon's solicitors wrote to the Public Trustee again, and on 26 May 2021 the Public Trustee wrote to all parties confirming that it would accept the appointment, albeit reluctantly.
The matter was set down for a 5-day trial before me commencing on 24 June 2021. On 21 June 2021, at a directions hearing requested by John, an issue was raised regarding refusal by Simon to permit inspection of certain documents due to a claim that they were protected by legal professional privilege. It became apparent at the hearing that the relevant documents had been filed in the court in 2001 in respect of a different matter and had been obtained by Simon's solicitors by making an application to the court. In these circumstances it was unnecessary to determine whether the claim for privilege was properly made as it was apparent that John could obtain the documents in the same way as had Simon. Costs in respect of this hearing were reserved.
On 22 June 2021, John's solicitors wrote to Simon and Andrew's solicitors stating that John would consent to orders appointing the Public Trustee as the administrator of Sonja's Estate.
On 24 June 2021, the first hearing day of the trial, the parties advised that an agreement had been reached to resolve the matter subject to the court being satisfied that appointment of the Public Trustee was appropriate. Andrew's solicitors contacted the Public Trustee and obtained advice as to the orders it sought on being appointed as the administrator. I made orders to the effect of those sought by the Public Trustee and vacated the remaining trial days. The only issue remaining in contention between the parties was as to costs. The parties filed written submissions and affidavits on that issue and made oral submissions in support of their respective positions at a hearing conducted for that purpose.
The plaintiff's costs claim
John's submissions on costs break the action into three discrete date ranges:
1.30 April 2020 to 1 April 2021;
2.1 April 2021 to 26 May 2021; and
3.27 May 2021 to 24 June 2021.
John already has the benefit of an order in respect of the first period that the defendants pay his costs thrown away as a result of the amendments. However, he submits that those costs should be paid by the defendants on an indemnity basis. He argues that Simon's initial case that the estate did not need an administrator was hopeless because neither Simon nor Andrew had legal authority to deal with the property of the estate. Simon's assertion that he (as executor of William's estate) held the property on trust for himself and Andrew is said to be misconceived.
John submits that both Simon and Andrew ran their defence despite knowing it was doomed to fail and as a tactic to delay the appointment of an administrator to Sonja's Estate. He submits that the defendants' unreasonable behaviour should be subject to sanction by the court. He says that substantial work was performed to ascertain the various assets in Sonja's Estate that needed to be administered. Furthermore, work was completed to defend Simon's application for summary judgment, which Simon later abandoned.
As to the second period, John submits that his costs between 1 April 2021 and 26 May 2021 should be paid by Simon and Andrew on a party/party basis. John asserts that he had no knowledge that the defendants had communicated with the Public Trustee until he read Simon's submissions filed on 21 May 2021. The issue was raised with Master Sanderson and the correspondence was later produced by Simon. John submits that Simon failed to comply with his ongoing discovery obligations and that at the time he amended his counterclaim seeking that the Public Trustee be appointed he had not received notice from the Public Trustee that it would accept such an appointment. He says that Simon's claim was doomed to fail until positive acceptance by the Public Trustee was confirmed, which did not occur until 26 May 2021.
As to the third period, John accepts that he is liable for Simon and Andrew's costs after the Public Trustee indicated acceptance of appointment as the administrator. However, he submits that it is reasonable to allow one week from the date of receipt of the Public Trustee's communication to allow him to consider the appointment and obtain advice about its effect. He considers that he should pay Simon's costs from 2 June 2021 to 24 June 2021. John also accepts that he should pay Andrew's costs of the action from 2 June 2021, save for the costs of the counterclaim as it was filed only by Simon.
In making these concessions John does not accept that his case was doomed to fail and that Simon's counterclaim was certain to succeed. He submitted that there were a number of arguable reasons why the Public Trustee should not be appointed, including that he (John) is a beneficiary of the estate and willing to accept the appointment, that it is common for a conflict to be present between an administrator who is also a beneficiary, and that the administration of the estate will not be straightforward resulting in significant costs if an independent administrator were appointed, such as the Public Trustee, which would further erode the estate's assets. These submissions go to the issue of whether costs for the third period should be paid on an indemnity basis.
John's final submission relates to a Calderbank offer made by letter dated 16 April 2021 which was sent to his solicitors from Andrew's solicitors and with Simon's authority and agreement. The letter offered to settle the matter by the parties agreeing to appoint the Public Trustee as administrator of Sonja's Estate. The defendants also agreed to pay John's costs of the action and counterclaim on a party/party basis, to be taxed if not agreed. The plaintiff submits that the letter holds no weight in relation to costs because at the time it was sent there was no assurance that the Public Trustee would accept the appointment and, furthermore, that the plaintiff had no knowledge that the Public Trustee had been contacted by the defendants. In those circumstances his rejection of the offer was not unreasonable.
The first and second defendants' costs claim
Simon submits that he was wholly successful in the action and counterclaim and that there is no reason not to make the usual order, as referred to in O 66 r 1 Rules of the Supreme Court 1971 (WA) (RSC), that the successful party should be awarded costs.
Simon submits that since the commencement of the proceedings he has opposed John being appointed administrator of Sonja's Estate. Whilst Simon accepts that he amended his defence and added a counterclaim on 6 July 2020 and amended this defence and counterclaim on 1 April 2021, he submits that it did not add to the material facts pleaded in the defence. The prayer for relief in the counterclaim changed from seeking a declaration that he and Andrew were the only persons beneficially entitled to the estate and that Simon was the sole trustee over the estate's assets, and was capable of exercising power over them, to seeking that the Public Trustee be appointed as the administrator.
Simon further submits that there is no sound reason why costs should not follow the event. Further, that if any costs were thrown away by reason of the amendments to the counterclaim on 1 April 2021 that it is a matter properly addressed by the taxing officer pursuant to O 66 r 3(1) RSC. He denies that his pre-amendment position was not arguable and asserts that John should not be awarded indemnity costs for the costs of the action before that date. He submits that he made the amendment after objectively viewing the matter and considering that the appointment of the Public Trustee was the preferred outcome for the estate.
Simon further submits that his costs should be paid on an indemnity basis from the commencement of the proceedings for the following reasons:
1.John ought to have known that he had no chance of success given that there was a dispute as to whether he and Kerry had repaid the $220,000 loan to the estate, as it gave rise to a conflict which was sufficient to preclude John from being appointed;
2.That given evidence in relation to Kerry and John's financial position and the loan from the estate, John did not have a genuine belief that the loan had been repaid and his assertions that it had been repaid were not bona fide;
3.John ought to have known that he had no chance of success as the acrimony between himself and Simon precluded him from being appointed as administrator; and
4.That John's denial of the acrimony between himself and Simon was not bona fide given the evidence of the breakdown in their relationship and the commencement of various court actions initiated between the parties before the commencement of these proceedings.
In relation to the loan between John and Kerry and the estate, Simon's submissions refer to multiple documents in the trial bundle to demonstrate that the loan was still outstanding. Furthermore, the documents the subject of the directions hearing on 21 June 2021 related to the loan and it is submitted that an inference can be drawn that John's agreement to appoint the Public Trustee two days before the commencement of the trial was the result of him obtaining those documents and coming to accept that his case had no prospect of success.
Alternatively, Simon submits that his costs should be paid on an indemnity basis from 16 April 2021 because Simon asked John, either personally or through their respective solicitors, on 21 November 2019, 15 April 2021 and 16 April 2021 whether he would consent to the appointment of the Public Trustee (the latter occurrence being in the form of the Calderbank offer referred to earlier) and on each occasion John stated that he would not consent. Further, that on 8 December 2020 and 21 January 2021 Simon's solicitors wrote to John's solicitors referring to the increasing costs of the litigation and that those costs were disproportionate to the value of the estate, particularly given John was only entitled to, at best, one-sixth of any of the estate's assets.
In conclusion, Simon submits that in all of the circumstances it was unreasonable for John to reject the offer made on 16 April 2021.
The third defendant's costs claim
Andrew submits that he was wholly successful as he had always opposed the appointment of John as the administrator, did not make any unsuccessful counterclaims and supported Simon's counterclaim for the appointment of the Public Trustee. He submits that John should pay his costs of the action, including reserved costs, and that the only question is to what extent, if any, he should be awarded indemnity costs.
He submits that it was inevitable that John would not be appointed the administrator of Sonja's Estate and that his costs of the action should be paid by the plaintiff on an indemnity basis. His reasons for this submission are the same as those outlined in Simon's submissions, which I have detailed above. As John's action was, it is argued, doomed to fail, he should pay all of Andrew's costs on an indemnity basis.
In the alternative Andrew seeks that John pay his costs on a party/party basis up to 16 April 2021 and on an indemnity basis from 16 April 2021, on the basis that it was unreasonable for the plaintiff to reject the Calderbank offer of the same date.
The relevant legal principles
The costs of and incidental to all proceedings in court are in the discretion of the court: Supreme Court Act 1935 (WA), s 37(1). The discretion must be exercised judicially, but it is otherwise unconfined.[1]
[1] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [21] - [22], [134].
The general rules as to costs are set out in O 66 r 1 RSC. Reference is often made to O 66 r 1(1) which provides that, without limiting the general discretion conferred on the court, the court will generally order that the successful party to any action or matter recover his costs.
Whether a party is successful is to be determined by the reality of the circumstances and by which party has succeeded in the underlying real contest. This is not always revealed merely by referring to the orders of the court.[2]
[2] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; Frigger v Professional Services of Australia Pty Ltd [No 2] [2011] WASCA 103 (S) [12]; Oshlack v Richmond River Council [70].
Order 66 r 1(2) and r 1(3) provide two exceptions to the general rule:
(2)If the Court is of opinion that the conduct of a party either before or after the commencement of the litigation or that a claim by a party for an unreasonably excessive amount has resulted in costs being unnecessarily or unreasonably incurred it may deprive that party of costs wholly or in part, and may further order him to pay the costs of an unsuccessful party either wholly or in part.
(3)Where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the Court may order such party to pay the costs of such issue or issues.
While a successful party might be deprived of all or part of their costs, or even ordered to pay all or part of the costs of the other side, there should be some good reason for departing from the general rule that a successful party should be compensated for the costs they have incurred.
The court can depart from the general rule that costs follow the event and modify a costs order to take into account matters such as any unreasonable conduct of a generally successful party, or to the failure of that party on one or more specific issues. The exercise of the discretion in that way is recognised in the rules, together with the practice of the court and authority. For example, if the court is of the opinion that the conduct of a successful party has resulted in costs being unnecessarily or unreasonably incurred, the court may deprive that party of costs either wholly or in part and it may further order that party to pay the costs of an unsuccessful party whether wholly or in part. An order that a successful party should recover only a portion of its costs where it has not been wholly successful should not be made as a matter of course for at least two reasons. First, it is often the case that a successful party will not succeed on every issue raised. Secondly, to attempt in every case an analysis of which party was successful on which issue would add uncertainty and complexity at the outcome of litigation and add to the time and cost of costs arguments. The power to apportion costs in this way should only be exercised where there are discrete and severable issues on which the generally successful party failed and which added to the costs of the proceedings in a significant and readily discernible way.[3]
[3] Strzelecki Holdings Pty Ltd v Jorgensen [50] - [51].
In exercising the discretion as to costs, the court will make determinations as a matter of impression and without any attempt at mathematical precision. That approach reflects the fact that it may be difficult to separate the factual and evidentiary substratum of different issues, the fact that some issues are more important than others, and the fact that some issues are subsidiary to others.[4]
[4] Strzelecki Holdings Pty Ltd v Jorgensen [52].
The dispute between the parties in these proceedings has been resolved by agreement without the need for a consideration of the merits of the case. The general principles regarding costs where a matter has not been determined on its merits were stated by the Court of Appeal in Lafferty v Waterton:[5]
It is trite law that the court has a very wide discretion as to costs, limited only by the requirement that it be exercised judicially. The general rule is that the successful party is entitled to an order for its costs. That is because ordinarily fairness requires that a party who has unjustifiably brought the other party before the court, or who has unjustifiably resisted a claim to which the other party is entitled, should have to meet the costs that have been incurred by the other party.
The general rule, however, is based upon the identification of the successful party by a hearing on the merits. In cases where the matter is settled without a determination on the merits the court is deprived of the factor that will usually determine how the discretion as to costs is to be exercised. As McHugh J pointed out in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qi [1997] HCA 6; (1997) 186 CLR 622, 624, the court cannot try a hypothetical action between the parties and burden the parties with the costs which by their settlement they had avoided.
There may, however, be cases where despite the lack of a final determination the court is able to find that the settlement was in fact simply a capitulation by one party in the face of probable defeat, where an order for costs may be appropriate. There may also be cases where the court is able to conclude that one party has acted so unreasonably that the other party should be entitled to an order for costs. But where it appears that both parties have acted reasonably in commencing and defending the proceedings, and their conduct continued to be reasonable until the proceedings came to an end, the proper exercise of the costs discretion will usually mean that the court will make no order as to costs: Ex parte Lai Qin, 625.
[5] Lafferty v Waterton [2016] WASCA 183.
The usual order is for costs to be assessed on a party/party basis.[6] Under an order for party/party costs, the quantum is assessed by reference to the relevant Legal Profession (Supreme and District Courts) (Contentious Business) Determination. An order for the successful party to be paid costs on a party/party basis is generally considered to result in a just outcome as it ensures that the unsuccessful party recompenses the successful party's costs.[7]
[6] Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S).
[7] Gray v Sirtex Medical Ltd formerly known as Paragon Medical Ltd [2009] WASC 126.
An indemnity costs order requires the unsuccessful party to pay all of the successful party's costs actually incurred except insofar as the costs are of an unreasonable nature or have been unreasonably incurred.[8] An indemnity costs order is only made in exceptional circumstances. Such exceptional circumstances can include where the losing party, properly advised, would have known there was no chance of success, has persisted on a hopeless case or has engaged in improper or unreasonable conduct.[9]
[8] Wheatley v Bower [2001] WASCA 293.
[9] Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95; Yara Australia Pty Ltd v Oswal [2012] WASCA 264.
One well-recognised basis for an award of indemnity costs is that the unsuccessful party unreasonably rejected a Calderbank offer. The party who makes a Calderbank offer that is rejected bears the onus of satisfying the court that it should make an award of indemnity costs in their favour. However, the mere fact that the recipient of a Calderbank offer is ultimately worse off than they would have been had the offer been accepted, does not mean its rejection was unreasonable. In determining whether rejection was unreasonable all relevant facts and circumstances must be considered. This includes the stage at which the offer was received, the time allowed to consider it, the extent of compromise offered, the offerees prospects of success, the clarity of the terms of the offer and whether the offer foreshadowed an application for indemnity costs if rejected. It is well-established that a party's erroneous prediction about the prospects of litigation, on the basis of which it rejects a Calderbank offer, may not be regarded as unreasonable if that party was not, at the time, and for good reason, in possession of sufficient information to make a proper assessment of its prospects, or if the circumstances upon which the assessment was based later change.[10]
[10] Strzelecki Holdings Pty Ltd v Jorgensen [82] - [83], [88].
Factual findings
In a case such as the present, which has been settled without the calling of any evidence, it is effectively impossible to determine the merits of some issues, particularly those that are likely to have depended upon an assessment of the credibility of witnesses. The submissions of all parties sought, nonetheless, to argue in detail the merits of the case. To the extent it is possible to do so, I make the following findings of fact.
The estate was without an administrator after the death of William Grove. There was at least an arguable case that the estate had not been fully distributed as at that date. Accordingly, John's action to appoint a new administrator was not without merit. It is true that John had personal interests that may have conflicted with those of the estate, but that did not necessarily preclude his appointment. In these circumstances, I do not accept that the plaintiff's action was hopeless from the start.
The original defence position was that a new administrator was not necessary either because the estate had been fully distributed or because Simon, in his capacity as William's executor, had the power to do all that was necessary in respect of property in the estate. I accept that these were arguable positions and that the defence case as advanced in the pleadings prior to 1 April 2021 was not hopeless. The fact that Simon later proposed the appointment of the Public Trustee does not mean that his original position was unarguable.
In regard to the claim that John's case depended on him establishing that he had repaid the $220,000 loan, Simon submits that John could never have succeeded on that point due to the existence of inconsistent statements in affidavits and documents filed in unrelated proceedings. The difficulty with this submission is that inconsistent statements go only to credibility unless they are otherwise proven or accepted as true by the witness. The effect on credibility may well depend on what explanation the witness has for an apparent inconsistency. It is impossible for me to assess whether John's claims in respect of the loan were foredoomed to fail without having heard any evidence from he and Kerry.
Simon and Andrew are the successful parties in this action in that the result was that the Public Trustee was appointed the administrator and John's action was dismissed. However, the outcome is not one which formed part of Simon's pleaded case prior to 1 April 2021. None of the parties has been successful in regard to the cases that were being asserted prior to that date. It was only after that date that John could fairly be said to have been resisting the outcome that was ultimately achieved.
John's argument that it was reasonable for him not to concede that the Public Trustee should be appointed before confirmation that the appointment would be accepted cannot be accepted. All of the indications were that the Public Trustee would accept the appointment, albeit reluctantly. In any event, the appointment of the Public Trustee was not dependent on obtaining consent, though clearly that was a practical matter of concern. In any event, the obligation to pay costs after 1 April 2021 does not arise out of any question of reasonableness or otherwise (except insofar as it relates to indemnity costs). It arises from the fact that Simon and Andrew are the successful parties.
John's rejection of the offer made on 16 April 2021 was not unreasonable for the following reasons. The offer was made at a relatively late stage and after considerable preparation had been made for trial. Whilst the indications were that the Public Trustee would consent, it was not entirely unreasonable for John to want absolute clarity and certainty in that regard before abandoning his case. The mere fact that the final outcome reflects the offer (or that the offer was better than the outcome to the extent of costs) does not in itself mean that the rejection was unreasonable. John's conduct in rejecting the offer was not such as to deserve the sanction of the court by an award of indemnity costs.
As to the reserved costs for the directions hearing on 21 June 2021, John did not succeed in his application on that day because an alternative means for him to obtain the documents was found. As an ultimately successful party Simon should have his costs of that hearing.
The fair outcome is that each party should bear their own costs prior to 1 April 2021 (except to the extent of costs thrown away by reason of the amendments, which are the subject of separate order). No party has been successful in terms of the claims they were making prior to that date. After that date John should pay the costs of both Simon and Andrew on a party/party basis, including reserved costs.
None of the claims for indemnity costs have been established. Such an order should be exceptional. The only thing exceptional about this case is the degree of animosity between the parties.
Orders
There be no order as to costs for costs incurred prior to 1 April 2021 (except to the extent of the order for costs thrown away by the plaintiff).
The plaintiff pay each of the defendants' costs incurred after 1 April 2021 (including reserved costs) on a party/party basis, to be taxed if not agreed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
EM
Associate to the Honourable Justice Hall
13 JULY 2021
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