Hansen v Hennessey (No. 2)
[2014] VSC 115
•24 March 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2011 1753
IN THE MATTER of Part IV of the Administration and Probate Act 1958
- and –
IN THE MATTER of the will and estate of CHRISTA META ELISABET PHILLIPS (deceased)
| DORIS HANSEN, KAREN HANSEN and RALF HANSEN | Plaintiffs |
| v | |
| INGE HENNESSY | Defendant |
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JUDGE: | LANSDOWNE AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 February 2014 | |
DATE OF RULING: | 24 March 2014 | |
CASE MAY BE CITED AS: | Hansen and ors v Hennessey (No. 2) | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 115 | |
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FAMILY PROVISION — Costs — Plaintiffs jointly represented but only one of three successful — Poor quality affidavits of the plaintiffs — Defendant executor refused to mediate — Small estate and small award — Proportionality — Defendant prolonged trial by unreasonable stance on size and nature of the estate — Other conduct of defendant that increased costs of the represented plaintiffs — Defendant mixed estate funds with her own — Order against defendant personally — Administration and Probate Act 1958 s 97.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr R. Wells | Maddens Lawyers |
| For the Defendant | In person |
HER HONOUR:
Introduction
This judgment concerns the costs orders to be made following determination of three claims for further provision made pursuant to s 91 of Part IV of the Administration and Probate Act 1958 (“the Act”). The plaintiffs are three of the five children of the late Christa Phillips, and the defendant executor is one of the other two children. The testatrix made only minimal provision for the three plaintiffs by her last will, and after a significant bequest to her youngest child Michelle (not a party to the proceedings) and some smaller bequests, left the remainder of her estate to the defendant.
I delivered reasons for judgment on the plaintiffs’ claims on 10 February 2014 (“my Reasons”)[1]. I found that the notional net estate as at February 2014 (being the net estate after allowable expenses and deductions together with deemed interest) was only $201,352.[2] I concluded that the testatrix did not have as at the date of her death any responsibility to make provision for the maintenance of the first and second plaintiffs, Doris and Karen. I indicated I would dismiss their applications on that basis.[3] I did consider the testatrix retained a responsibility to make provision for the third plaintiff, her son Ralf, and that the provision she had made for him in her will was inadequate. I indicated that I would make an order for further provision for him in the sum of $19,000.[4] I also indicated that I would make that order personally against the defendant. The defendant was the residuary beneficiary of the estate and received the bulk of the estate in that capacity. She conceded that she had mixed the estate funds with her own funds. I also found that documents she provided had shown that she did so within six months from the grant of probate, and that no funds now remain in the estate account. I concluded that the defendant had accordingly lost the protection usually afforded a defendant executor, that orders are made against the estate, not against the executor personally.[5]
[1][2014] VSC 20 (“Reasons”).
[2]Paragraph 130.
[3]Ibid, at [144].
[4]Ibid, at [152].
[5]Ibid, at [153].
I also made adverse comment in my Reasons on the quality of the affidavits relied upon by the plaintiffs and also the defendant.[6] Both parties have sought to reflect the outcome of the case and these comments in the orders they now seek.
[6]Ibid, at [8].
The plaintiffs seek costs orders in the following terms:
1. (the substantive order).
2.Subject only to paragraph 3 hereof, the Defendant personally pay the Plaintiffs’ costs of and incidental to this proceeding, in default of agreement such costs to be assessed by the Costs Court on a standard basis.
3. The costs payable pursuant to paragraph 3 hereof shall not include:
(a)Any of the costs of preparing, drawing, engrossing and filing the affidavits of the First and Second named Plaintiffs; and
(b)One of the three days of the trial of this proceeding which was held on 3 December 2012, 11 February 2013 and 12 February 2013 –
(such reduction is made in recognition that the Third Plaintiff has succeeded with his claim, but the First and Second Plaintiffs have not, but all Plaintiffs were jointly represented by the same counsel and instructing solicitors).
The defendant takes quite a different view. She proposes orders to the following effect:
1.An order for costs in her favour as against the first and second plaintiffs, on an indemnity basis;
2. No order for costs in favour of the third plaintiff;
3.Revisiting costs already awarded against her following interlocutory hearings on the basis that the first and second plaintiffs ultimately failed in their applications.
Applicable law
The Court’s power to make an order of costs is governed by s 24 of the Supreme Court Act 1986 which relevantly provides as follows:
24 (1) Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.
The usual way that the discretion conferred by s 24 is exercised in civil litigation is to make an order that the unsuccessful party pay the successful party’s costs. This is commonly expressed by the maxim that “costs follow the event”. If that maxim were applied here then an order in favour of the defendant would be made as against the first and second plaintiffs, and an order as against the defendant and in favour of the third plaintiff would be made. That approach would also assume that costs incurred could be allocated to one plaintiff or another, despite the plaintiffs all being represented by the same counsel and solicitors, and steps in the litigation being required irrespective of the number of plaintiffs.
If the parties do not agree on the quantum of costs ordered to be paid, the claimed costs are subject to scrutiny by the Costs Court. Costs are ordinarily awarded on what is described in Order 63 of the Supreme Court (General Civil Procedure) Rules 2005 as the “standard” basis i.e. costs reasonably incurred. In certain circumstances, an order that costs be paid on a higher basis being indemnity costs may be made, but that is not the usual course and a special reason must be shown.
Costs in relation to proceedings under s 91 of Part IV of the Act are determined, however, on different principles. The relevant subsections are s 97 of the Act provide as follows:
(6)Subject to subsection 7, the Court may make any order as to the costs of an application under s 91 that is, in the Court’s opinion, just.
(7)If the Court is satisfied that an application for an order under s 91 has been made frivolously, vexatiously or with no reasonable prospect of success, the Court may order the costs of the application to be made against the applicant.
This provision and the long line of authority on the appropriate determination of costs in applications for further provision were considered by Byrne J in Re Bull, (Deceased) (No.2)(“Re Bull”).[7] Byrne J held that the effect of the authorities and the provision was that defendant trustees are normally entitled to costs from the estate that they seek to protect even if the application for further provision was successful over their opposition. He expressed this entitlement as being normally an entitlement to “an indemnity”. In relation to the costs of a successful plaintiff, His Honour noted that in applications for further provision a successful plaintiff will often have their costs out of the estate on what is now described as the standard basis. At the time of his judgment, a successful plaintiff in general civil litigation was usually only entitled to costs on a lower basis than reasonable costs, which was described as party/party costs. The distinction Byrne J made is no longer applicable, but it does emphasis the distinct approach taken to the award of costs in applications for further provision. His Honour also noted that an unsuccessful plaintiff will not necessarily be ordered to pay the costs of the estate. He noted that the Court may order that each party bear their own costs, and, further, that there had even been cases when an unsuccessful plaintiff has nevertheless had his or her costs paid out of the estate.[8]
[7][2006] VSC 226.
[8][2006] VSC 226, at [3]-[4], citations omitted.
In this case, the unsuccessful plaintiffs do not seek an order for their costs to be paid from the estate, but they do resist a costs order being made against them in favour of the defendant.
The defendant does seek that a costs order be made against the first and second plaintiffs on the basis of their lack of success in the proceeding. Section 97(7) specifically deals with an instance where such an order may be appropriate, being where the application has been made “frivolously, vexatiously or with no reasonable prospect of success”. I will consider shortly whether that description can properly be applied to the cases of the first and second plaintiffs. Another issue that arises, is whether the specification of that class of case by s 97(7) is exhaustive, i.e. can an order for costs be made against an unsuccessful plaintiff even if that plaintiff’s case could not properly be described as frivolous, vexatious or having no reasonable prospect of success?
In the matter of IMO Moerth (No.2), Gardiner AsJ made an order against an unsuccessful plaintiff on the basis that he did not consider that there was “any reason why the principle of costs following the event should be departed from in this instance”.[9] He did, however, also conclude that the application fell within the categories expressed in s 97(7) in any event.
[9][2011] VSC 275, at [47]-[50].
Issues
The issues for my determination are as follows:
1. Should a costs order be made against the first and second plaintiffs? If the answer is yes, should those costs be on the standard or indemnity basis?
2. If the answer is no, should a costs order be made in favour of either the plaintiffs generally, or the third plaintiff?
3. If the answer is yes, what is the appropriate order?
4. Should earlier costs orders made consequent on interlocutory applications be changed given the final result?
Discussion
A costs order against the first and second plaintiffs?
The defendant was unrepresented at the hearing but represented at an earlier stage of the proceedings. She incurred and paid some legal costs at that stage and said in submissions at the costs hearing that she has now located other invoices and has incurred further legal costs.
The defendant claimed as expenses of the estate in the substantive hearing the legal expenses she had identified to that date. I noted in my Reasons that all those costs, with the exception of the costs of obtaining the grant of probate, were costs incurred in litigation, and so strictly should have been considered at the conclusion of the litigation. The plaintiffs did not take this point, however, and accepted some at least of the legal costs as proper estate expenses, to be deducted for the purpose of determining the size and nature of the estate for division.[10] I allowed legal costs as proper expenses of the estate where the defendant had produced supporting evidence.[11] The allowed legal expenses totalled $19,504.30.
[10]Reasons at [117].
[11]Reasons at [123] and [124].
Strictly, the legal costs should have been paid by the defendant from estate funds kept separate from her own until the conclusion of the litigation. As set out earlier, however, the defendant has mixed the estate funds with her own on the apparent assumption that the estate funds were hers as the residuary beneficiary. Thus the question is not now whether the defendant as executor is entitled to reimbursement from the estate for legal costs she has paid personally- she has achieved that outcome or can do so in any event. The question is whether the unsuccessful plaintiffs should be required to compensate the defendant personally for those expenses.
In making her application for a costs order against the first and second plaintiffs the defendant has focused on two matters — firstly, their lack of success in the proceeding; and secondly comments I made in the substantive reasons about the affidavits of the parties. I also discuss below other relevant matters, that I broadly raised with the parties in the course of the hearing.
Lack of success
As set out earlier costs in Part IV litigation do not necessarily follow the event. The test is what is “just” in all the circumstances. Nevertheless, lack of success remains an important consideration. It is also necessary to consider whether the case of the first and second plaintiffs was frivolous, vexatious or without reasonable prospect of success, being the statutory circumstance in which a costs order may be made against an unsuccessful plaintiff.
Poor affidavits
The comments that I made about the plaintiffs’ affidavits in my Reasons were as follows:
Further, it was a regrettable feature of this case that, notwithstanding that the plaintiffs were represented, all of their affidavits contained much irrelevant or otherwise inadmissible material, including the expression of opinion. Perhaps taking her lead from the plaintiffs affidavit Inge’s affidavits were similarly beset with much irrelevant or otherwise inadmissible material.[12]
[12]Reasons at [8].
The defendant submits that the quality of the first and second plaintiffs’ affidavits lengthened the hearing, and justify not only an order for costs against them, but also an order on an indemnity basis.
I accept the proposition that the inclusion of irrelevant or otherwise inadmissible material in the affidavits that form the evidence in chief of a party may cause unnecessary cost. There may be increased costs of perusal by the opposing party, increased costs of responsive affidavits, and, if objection to some or all of the affidavits is taken at the hearing, an increased length of the hearing. Here the defendant became unrepresented prior to filing her responsive affidavits. Accordingly, I do not consider it shown that the quality of the plaintiffs’ affidavits added to the defendant’s pre hearing legal costs. The defendant’s affidavits were similarly flawed, but neither party took objection to the others’ affidavits. Accordingly, hearing time was not utilised for that task- which was no doubt sensible given the small estate, that the defendant was unrepresented, and that both parties were at fault. Thus, I do not consider that the affidavits, which were prepared and considered in advance of the hearing, substantially added to the cost of the hearing itself.
The plaintiffs accept that some reduction in a costs order to which they may otherwise be entitled is required having regard to my observations about the quality of their affidavits. I will return later to what the appropriate reduction should be. At this point I indicate that for the reasons set out above I consider reduction in a costs order to which they are otherwise entitled is the appropriate way to deal with the quality of their affidavits, and not reliance on that poor quality as a basis for a costs order against the plaintiffs.
Defendant’s conduct of the litigation
I consider that the defendant’s conduct of the trial is relevant to costs in relation to the following matters:
· her lack of success on the contested issues as to the size and nature of the estate;
· her admission that she had given false evidence as to the amount now held in the estate account; and
· her failure to produce required financial documents for consideration during the hearing, which occasioned subsequent orders for production and consideration of the documents when eventually produced by the plaintiffs well after conclusion of the oral hearing.
The defendant’s admission of earlier false evidence meant that earlier cross examination of her on this issue was thrown away and further cross examination was required. It also prolonged the hearing by the necessity to obtain a duty barrister for her in her own interest.
The defendant’s attitude to the size and nature of the estate substantially caused unnecessary prolongation of the hearing. As set out in my Reasons, there were five matters in dispute in relation to the estate:
·the inclusion by the defendant of the Mercedes Benz van in the estate — the plaintiffs contended it belonged to Ralf;
·the very large debt claimed by the defendant to be owing to the estate by Ralf — the plaintiffs asserted there was no legally recoverable loan;
·the attempt by the defendant to ascribe a commercial value to the Ford Bus — the plaintiffs said it had no commercial value;
·the failure by the defendant to include as assets any shares giving rise to the dividend or dividends as disclosed;
·most of the claimed expenses and allowances — the plaintiffs contended that these were of a personal nature.
The necessity to determine these issues (with the exception of the issue in relation to the shares which emerged only in the plaintiffs’ final submissions) lead to extensive cross examination of the third plaintiff in particular by the defendant, and long cross examination of her by counsel for the plaintiffs. The defendant was unsuccessful in relation to all of these contested issues, with the exception of the issue relating to the shares. In other words, the defendant was unsuccessful in relation to all the estate issues which consumed much of the hearing time.
The defendant says that she took the stance she did on these issues because she considered that she was following her mother’s wishes and she was not legally represented. She also submitted that the whole experience was very distressing for her, being under attack by her brother and sisters, and that she was suffering from stress and depression. I accept that all those factors no doubt played a part, but the effect has been to substantially increase the costs of the dispute for the represented plaintiffs. Further, an executor is not required to blindly follow what he or she considers were the testator’s wishes and is always able to take legal advice, should do so, and here the defendant did do so, at least in the initial stages. The absence of legal representation at the hearing is also no explanation at all for the defendant telling untruths.
Proportionate costs
In assessing the defendant’s conduct in relation to these issues, I have had regard to the requirement imposed on the parties to litigation by s 24 of the Civil Procedure Act 2010. That section provides as follows:
24Overarching obligation to ensure costs are reasonable and proportionate
A person to whom the overarching obligations apply must use reasonable endeavours to ensure that legal costs and other costs incurred in connection with the civil proceeding are reasonable and proportionate to —
(a) the complexity or importance of the issues in dispute; and
(b)the amount in dispute.
By virtue of s 10 of the Civil Procedure Act 2010, this overarching obligation together with the others set out in the Act apply both to parties and their legal practitioners. The obligation is to use “reasonable endeavours” to keep costs “reasonable and proportionate”. There is, thus, an objective element to the test. Of the four issues relating to the estate on which the defendant failed, only the issue relating to the ownership of the Mercedes Benz van could in my view to be said objectively arguable on the evidence. The evidence about ownership of the van was not wholly one way because it was registered in the testatrix’s name. The other contentions by the defendant, however, in relation to the large debt claimed to be owned by Ralf, the value of the bus, and her claimed expenses, were not supported either by evidence or by established principle. It was not, viewed objectively, reasonable for the defendant to prolong the trial to advance them, given the very small size of this estate.
The defendant’s conduct in failing to produce documents in answer to a notice to produce returnable prior to the conclusion of the oral hearing has also in all likelihood added to the costs of the proceeding for the represented plaintiffs. Some of these costs, in particular the costs of the relistings post trial, will be met by costs orders already made on those days. There may, however, also be additional costs occasioned by the defendant’s default, for example of perusal of documents produced some time after the issues were fresh in the mind of the plaintiffs’ lawyers.
Failure to mediate
The plaintiffs have also urged upon me that the defendant did not use reasonable endeavours to resolve the dispute by attending a mediation. This, if established, could arguably be a breach of the overarching obligation imposed by s 22 of the Civil Procedure Act 2010 which provides as follows:
22Overarching obligation to use reasonable endeavours to resolve dispute
A person to whom the overarching obligations apply must use reasonable endeavours to resolve a dispute by agreement between the persons in dispute, including, if appropriate, by appropriate dispute resolution, unless —
(a) it is not an interest of justice to do so; or
(b)the dispute is of such a nature that only judicial determination is appropriate.
In most applications for further provision a mediation is routinely ordered by the Court. In small estates, that mediation is often a mediation conducted by an Associate Judge or a Judicial Registrar i.e. a judicial mediation to limit the costs of the parties and to encourage settlement. In this case, an order for private mediation was made in the first instance, and then an order for judicial mediation, but neither were in the event enforced by the Court because the defendant said that she could not enter into any negotiations as she considered to do so would go against her mother’s wishes.
In hindsight, it is entirely regrettable that this matter was required to go to trial, given the financial and emotional cost of trial to the parties and the disproportion between the likely legal costs and the size of the ultimate award. The defendant does not dispute that she refused a mediation, which it appears the plaintiffs would have otherwise attended. Given that two of the three plaintiffs were, however, ultimately unsuccessful, I do not consider that the defendant’s conduct in relation to the mediation is relevant to her application for costs against the first and second plaintiffs. I will return to it shortly in relation to the plaintiffs’ application for costs.
Plaintiffs’ conduct
The final matter that I have considered in determining whether an award of costs should be made against the first and second plaintiffs, is the fact that the key evidence on which I based my conclusion that the testatrix did not have a responsibility to make provision for them on her death were letters that they had each written to their mother in April and March of 2009 refusing further contact with her. Neither Doris nor Karen revealed these letters in their evidence in chief. They relied on their mother’s conduct towards them, which they described as abusive, but on examination that conduct post-dated their own letters. It was the defendant who was required to adduce evidence of the letters the first and second plaintiffs had earlier written, rejecting contact with their mother. This factor does support an award of costs against the first and second plaintiffs, because they did not reveal evidence which was presumably in their capacity to reveal and in frankness they should have revealed. They did not deny the letters when they were put to them in cross examination.
Conclusion
The arguments in favour of an order for costs against the first and second plaintiffs are that they were unsuccessful in the proceeding and that they failed to disclose the critical evidence against them, although they could have disclosed the letters and arguably should have. I accept the submission of counsel for the plaintiffs, however, that even if the first and second plaintiffs had revealed the letters they wrote to their mother, their case was still arguable. They were daughters of the testatrix, they previously had a close and at times affectionate relationship with her, and these factors would in most instances create a strong case for the testatrix having a moral responsibility to make provision for them. I do not consider that their case was advanced frivolously, vexatiously or with no reasonable prospect of success, or that the trial would necessarily have been shorter had they revealed these letters.
Costs do not always follow the event in Part IV litigation, and here there is no doubt that the defendant’s conduct prolonged the trial by advancing contentions in relation to the estate that were objectively unarguable and by giving false evidence. I consider that these two matters together contributed to at least one day of the hearing time. They did not contribute to the defendant’s own legal costs, which were incurred either before or after the hearing, as she was unrepresented during the hearing, but this extra day of hearing certainly added substantially to the plaintiffs’ legal costs.
The defendant by her conduct of the litigation has also added to the plaintiffs’ costs pre and post-trial.
On balance, given the defendant’s own conduct and the increase in the costs occasioned to the plaintiffs by that conduct, I do not consider that an order for costs should be made against the first and second plaintiffs, despite their lack of success. The first and second plaintiffs accept that they are not entitled to all their legal costs being paid by the defendant or the estate given their lack of success and the nature of their affidavits and I consider that this is the appropriate way to regard both those matters.
It follows that it is not necessary to consider the defendant’s submission that the order for costs she seeks should be on an indemnity basis.
A costs order in favour of the plaintiffs?
The first and second plaintiffs do not seek the whole of their costs. They do, however, seek together with the third plaintiff the costs of the proceeding with the exception of their affidavits and one of the three days of trial. The effect if this order is made would be that the defendant would be required to pay the reasonable costs of: commencing the proceeding, the preparation of the third plaintiff’s affidavit, the interlocutory steps, two of the three days of trial, post-trial steps not already covered by the existing costs orders, and the steps associated with the delivery of judgment and these costs applications.
The defendant submits that no order should be made against her for the costs of the third plaintiff. This approach is inconsistent with the approach she adopted in relation to her application for costs against the first and second plaintiffs. That application was essentially based on their lack of success. It would also be highly unusual for a successful plaintiff not to have his costs met by the estate. Given the mixing of estate and personal funds, in this instance that would require an order against the defendant personally.
In my view, the orders sought by the plaintiffs are appropriate, save that I would also excise the costs associated with the third plaintiff’s affidavit. This excision adequately reflects in my view the issues of proportionality and the poor quality of that affidavit. There is no other basis shown for departing from the usual approach to the costs of a successful plaintiff. I address the relevant factors below.
Failure to mediate
The third plaintiff was successful with his claim over the vigorous opposition of the defendant. Even though the estate was a very small one, and the award in his favour is small, in the absence of a willingness on the part of the defendant executor to negotiate, the only alternative for the third plaintiff if he was to prosecute his claim was to commence the proceeding and prosecute it until trial, with all necessary and antecedent steps. Although I did not consider the refusal of the defendant to mediate to be relevant to the defendant’s application for costs, I do consider it to be relevant to the plaintiffs’ application for costs against her. Given this refusal, the third plaintiff did not have available to him the possibility of settlement at a mediation.
The minimum necessary steps the third plaintiff was required to undertake were the commencement of the proceeding, preparation of his affidavit, initial directions hearing, consideration of the defendant’s affidavits in response, listing for trial, trial itself, delivery of judgment, and any necessary costs application. I accept the plaintiffs’ submission that in this case further interlocutory steps were also required both before and after trial due to the defendant’s conduct of the litigation.
Defendant’s conduct of the litigation
At the initial directions hearing on 28 June 2011 the Court set as is usual a timetable for the exchange of affidavits and for mediation. The plaintiffs were late in the filing and service of their affidavits, but this step was completed by late 2011. The defendant did not file and serve any affidavit in response, despite promises to do so from her then lawyers. This lead to the proceeding being relisted on 1 May 2012 at the request of the plaintiffs. The relisting also required an affidavit of the solicitor for the plaintiffs deposing to these matters. At that further directions hearing an order was made for mediation by an Associate Judge, which was subsequently scheduled for 19 July 2012. The defendant did not retain lawyers, as is required for an Associate Judge mediation, or, according to the plaintiffs, serve her principal affidavit in response (although it is dated 1 May 2012) and so the plaintiffs were required to relist the proceedings for a second time on 13 July 2012.
It is not immediately clear from the file what occurred on that day save that the proceeding appears to have been adjourned to 20 July 2012 for directions, at which time the defendant appeared by telephone.
Prior to that date a further affidavit by a solicitor for the plaintiffs was prepared deposing as to discrepancies in the management of the estate by the defendant and foreshadowing a possible application to remove her as executor. The directions hearing was adjourned to a date to be fixed.
The proceeding was then relisted for a third time on 14 August 2012 at which time it was listed for trial in December of that year. As set out earlier in these reasons, the plaintiffs contend that the defendant refused to undertake a mediation and on that basis the order for a mediation was not enforced. Although this is not recorded in the Court’s orders of that or earlier date, the defendant did not dispute this account of events and I accept it.
Proportionality
At least the additional directions hearings on 1 May 2012, 13 July 2012 and 20 July 2012 were additional steps in the litigation, above the minimum steps commonly undertaken. I accept the submission of counsel for the plaintiffs that those steps were required due to the conduct of the defendant. They imposed an additional cost burden on the plaintiffs, for which in my view the defendant should compensate them by a costs order. As set out earlier, I have been concerned with the question of proportionality of the costs incurred in this proceeding compared with the amount in issue and the size of the award, but I accept the plaintiffs’ submission that it was impossible for them to take steps other than those they did given the defendant’s conduct. In short, they cannot ensure that costs are proportionate if the defendant does not do so.
Division of costs as between the plaintiffs; the third plaintiff’s affidavit
I also accept the submission of counsel for the plaintiffs that the cases of all three plaintiffs were prosecuted together in the one proceeding, and so the first and second plaintiffs did not incur costs in the proceeding additional to those necessary for the third plaintiff’s own case, except in relation to their affidavits and the proportion of the hearing devoted exclusively to their cases. Excision of the costs associated with identified affidavits is relatively straight forward. It would be far more difficult to disentangle the costs of the interlocutory steps and trial, and seek to ascribe those costs to one plaintiff as opposed to another. In my view that exercise is not a workable one, and I accept the submission of counsel for the plaintiffs that reduction of a costs order made in favour of the plaintiffs to reflect the lack of success by the first and second plaintiffs should be on a clear cut basis, and not by seeking to ascribe any particular step to one plaintiff rather than another (with the exception of affidavits), or by some attempted proportion of overall costs as between plaintiffs.
The plaintiffs propose that only the affidavits of the first and second plaintiffs be excised from a general costs order together with one day of the hearing time. This submission is put on the basis that the preparation of an affidavit for the third plaintiff was an essential step in the success of his case, and that his case alone, given the defendant’s stance in relation to the size and nature of the estate, would have consumed two days of hearing time.
In relation to the affidavits, I consider that the third plaintiff’s affidavit was substantially more prolix and unnecessarily inflammatory than that of the first and second plaintiffs. It contained large amounts of irrelevant assertion that appeared to derive from the hostility between Ralf and Inge rather than relating to relevant issues. I consider that the costs associated with his affidavit should also be excised from the costs order. This will have the effect of reducing compensation for the costs he was required to incur for the successful prosecution of his case, but I consider that that is a just result having regard to the poor nature of the affidavit and the amount in issue. He or his solicitors should bear his or their own costs of the introduction of so much material that was inadmissible in form or content, or both.
In relation to the hearing time, the defendant submits that the success of one plaintiff only of three should lead to a reduction in any costs order against her by the same proportion i.e. two thirds. This would make her responsible for one day of hearing time only. I do not consider this analysis to be correct and I accept the submission of the plaintiffs, that the defendant should be ordered to pay two days of the hearing. Had the third plaintiff alone prosecuted his case without unfounded dispute as to the contents of the estate, the case may have concluded within one day. As it was, however, matters relating to the estate (which concerned principally the third plaintiff) consumed at least a day of hearing. For those reasons I consider the defendant should be responsible for two of the three days of the trial. So as to avoid any argument as to which of the three days should be included and which excluded, my order will be that the defendant pay two thirds of the total costs of the trial.
These orders will be made against the defendant personally as she has treated the estate funds as her own.
Earlier costs orders
The defendant appears to seek that earlier costs orders made on post-trial applications be changed, now the eventual result of the plaintiffs’ application is known. This application is entirely misconceived. Once an order is made final by authentication, the Court lacks power to change it, unless the order itself has specifically reserved that power to the Court. Costs orders were made against the defendant in post-trial applications on 26 March 2013 and 19 December 2013. Order 6 made on 26 March 2013 was in these terms:
The defendant personally pay the plaintiffs’ costs of an incidental to this application on an indemnity basis, subject to the defendant being able to seek discharge or variation of this order on affidavit accompanying her submissions in response.
Thus, there was provision in that order for it to be revisited on a later occasion. It was revisited on 19 December 2013 at which time I confirmed the order for costs but changed the basis to solicitor/client costs only i.e. standard costs. That revisiting exhausted the power to change the order made on 26 March 2013.
The costs order made on 19 December 2013 concerned applications made by the defendant for an extension of time to file her final submissions (which was unsuccessful) and to vary the earlier costs order (which, as noted above, was successful to a degree). The costs order made 19 December 2013 was in these terms:
The defendant personally pay the plaintiffs’ bill of costs of and incidental to her applications on a standard basis.
There was no power built into that order to revisit it on any later occasion.
For these reasons, the defendant’s application to change these earlier costs order fails. For completeness, I add that, even if there was power to now change those post-trial costs orders, I do not consider that the ultimate failure of the first and second plaintiffs provides a basis to do so. The post- trial costs orders reflect the outcome of the particular applications then before the Court, which were discrete from the ultimate outcome. Further, the third plaintiff was in any event ultimately successful, and no extra costs were occasioned by the addition of the first and second plaintiffs in relation to those applications, as all were represented by the same counsel and solicitors.
Orders
There are two further matters to be addressed before final orders can be made. The first is the defendant’s submission that there should be no legacy interest payable, because the third plaintiff owed money to the estate. This submission is misconceived. To the extent any moneys were owed by Ralf in law or by admission to the testatrix, I took that into account in fixing the size of his award. Legacy interest is an entirely different matter, that flows from the delay in finalisation of the estate.
The second matter concerns whether the interlocutory injunction I granted on 26 March 2013 preventing the defendant from selling, disposing, further encumbering or otherwise dealing with her interest in her real estate should be discharged. As the parties have not reached agreement in relation to that matter prior to delivery of these reasons, and it was not addressed at the costs hearing, I will hear them further in relation to that question.
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