Kerley v Kerley
[2018] VSC 703
•15 November 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2017 05165
IN THE MATTER of the will and estate of LORETTO MARY KERLEY, deceased
| PETER JAMES KERLEY and CATHRYN ELIZABETH KERLEY | Plaintiffs |
| v | |
| JOHN FREDERICK KERLEY (who is sued both as the executor of the will of LORETTO MARY KERLEY, deceased and personally) | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 15 November 2018 |
CASE MAY BE CITED AS: | Kerley & Anor v Kerley |
MEDIUM NEUTRAL CITATION: | [2018] VSC 703 |
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COSTS – Where plaintiffs sought specific performance of terms of settlement – Proceeding resolved by agreement save as to costs – Where parties sought costs orders against each other – Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms C McOmish | Weir & Strempel |
| For the Defendant | Sinisgalli Foster Legal |
HER HONOUR:
Introduction
Loretto Mary Kerley died on 11 February 2015. She was survived by her three adult children, being the first plaintiff (‘Peter’), the second plaintiff (‘Cathryn’) and the defendant (‘John’). Her son, Richard predeceased her.
Probate of her will dated 14 May 2009 was granted to John, with leave reserved to Peter, on 27 July 2015.
On 5 October 2015, Cathryn issued a proceeding seeking further provision from the estate of the deceased, with Peter as the first defendant and John as the second defendant, in their capacities as executors of the estate of the deceased.
On 1 March 2016, the parties compromised the proceeding and other issues in relation to the deceased and the estate. Terms of settlement were executed on 1 March 2016.
Application by the plaintiffs
By originating motion filed 19 December 2017, Peter and Cathryn sought, inter alia, specific performance of the terms of settlement by John, personally and in his capacity as executor of the estate of the deceased.[1] Peter and Cathryn accept that the terms of settlement were performed, save for the terms relating to the delivery by John of certain model train sets and estate films on or before 1 April 2016. Pursuant to the terms:
[1]On the first return, an order was made for the proceeding to continue as if it had been commenced by writ, pursuant to r 4.07(1)(a) of the Supreme Court (General Civil Procedure) Rules 2015.
(a) John was to make the estate films available to Peter for copying by a professional copyist chosen by Peter, the expert copyist was to be located in Melbourne, and Peter was to pay the cost of the copying for both himself and Cathryn;
(b) John was to deliver Peter’s model train set and one half of the model train sets then remaining to Peter, with the exception of John’s model train set and Richard’s model train set; and
(c) John was to deliver Richard’s model train set, including the engine and carriages, 00 gauge 1958 circa Hornby to Cathryn.
Background to the proceeding of the plaintiff
By email dated 19 January 2017, John informed Peter and Cathryn that on 17 January 2017 he delivered all 88 reels of film to the copyist chosen by Peter to enable the films to be digitally copied at Peter’s expense. He stated that in doing so, he had fulfilled his obligations under the terms of settlement. He also stated that on 18 January 2017, the copyist contacted him and asked that the films be retrieved as soon as possible. John stated that he had done so and that the films were no longer at the copyist’s premises.
On 12 May 2017, the solicitor for Peter and Cathryn wrote to the defendant as to the outstanding matters under the terms of settlement as follows:
PLAINTIFF CHATTELS [Cathryn]
Item 1 in the Schedule “copy films (digital)”, plaintiff will pay costs.
These have not been provided.
Item 5, Richard’s model train set 00 gauge 1958 circa Hornby.
[Cathryn] has been provided with some engines and some carriages however nothing else by way of a train set has been made available such as track, points, buffers for sidelines, signals and sundry other pieces of scenery.
FIRST DEFENDANT CHATTELS [Peter]
In relation to [Peter], you agree to make the estate films available for copying by a professional chosen by [Peter] and [Peter] shall pay the costs of such copying and such expert will be in Melbourne.
Clearly the purpose of the Terms were [sic] to facilitate the provision of the estate films to both Cathryn and Peter. This has not taken place and neither of them have copies of the estate films.
[Peter’s] model train set and one half of the model train sets then remaining with the exception of your model train set and Richard’s model train set is to be made available to [Peter]. Save for some rolling stock, that is trains and carriages, there has been no provision of track, signals, buffers, points and sundry other scenery that form part of the train sets.
We are instructed that unless there is complete performance of all of the terms of settlement by close of business on the 29th May 2017 we have instructions to bring an application before the court to compel compliance with the terms of settlement including an application for costs in support of which this communication and other communications with you will be produced.
We are instructed that previously the films were delivered to [the copyist] for copying however we understand that they were removed from his possession within 24 hours.
Our clients are anxious for the outstanding aspects to be completed immediately and in this circumstance, [Peter], nominates [name and address] as the expert for the purposes of the terms.
We also understand that around the time of delivery of the films to [the copyist] in January 2017, an agreement was provided for signing by [the copyist]. That agreement was not previously seem by our office and we understand was not signed by [Peter or Cathryn].
We now formally request that a copy of this agreement be made available to us by return mail.
By email dated 30 May 2017, John responded in detail concerning the films and maintained that the terms required him to take the films to a professional copyist in Melbourne for copying at Peter’s expense and that he had done this. He maintained that Cathryn was required to contact him directly if she wanted to pay for a copy of the films and that she had not contacted him at all about having them copied. He stated that he had fully complied with the terms of settlement by taking the estate films to a professional copyist and that he had fully complied with all conditions in the terms of settlement. He also stated that it was one of his conditions to agreeing to the mediation agreement that negotiations concerning the copying be done directly between siblings so as to avoid unnecessary legal expenses.
In her affidavit sworn 18 December 2017, Cathryn deposed that John had not delivered the estate films for copying, Richard’s Hornsby model train set, Peter’s model train set or the one half of the remaining model train sets.
On 23 February 2018, the first return of the proceeding, John consented to the following orders:
(a) all films referred to in the terms of settlement be delivered by John to Cathryn and Peter’s solicitors by 5 March 2018 for copying by Cathryn and that Peter bear the costs of copying the films;
(b) following the copying, the films be returned to Cathryn and Peter’s solicitors for collection by John; and
(c) John file and serve an affidavit by 2 March 2018 deposing that he had delivered all train set components, parts, accessories and scenery in his possession or power to Peter and Cathryn, pursuant to his obligations under the terms of settlement.
By affidavit sworn 27 February 2018 and filed 1 March 2018, John deposed that:
(a) he had delivered all train set components, parts, accessories and scenery in his possession pursuant to his obligations under the terms of settlement;
(b) he had seven locomotives and 43 carriages and wagons in his possession and exhibited a handwritten copy list prepared in 1984 listing all model trains in his possession;
(c) on 7 March 2016, he delivered one locomotive and five wagons to Cathryn’s solicitors and exhibited a description of these items as ‘Richard’s model train set – locomotive plus five wagons’;
(d) on 10 March 2016, he delivered three locomotives and 19 carriages and wagons to Peter’s solicitors and exhibited a description of these items as ‘Model Trains – Three locomotives and 19 carriages and wagons’;
(e) a train track built by his late father was disposed of by the deceased in 1984;
(f) he had retained possession of the remaining three locomotives and 19 carriages; and
(g) he had no further components, parts, accessories or scenery in his possession.
The estate films were subsequently delivered to a copyist for copying and the issues concerning the trains sets were resolved. The proceeding was adjourned by consent on a number of occasions due to the number of films that had to be copied. On 14 September 2018 the proceeding was dismissed, save as to costs.
Orders sought by the parties
Peter and Cathryn seek orders that John personally pay their costs, fixed at $22,364.20, alternatively, assessed on the standard basis to be taxed in default of agreement.
John seeks an order that Peter and Cathryn pay his costs fixed at $3,766.40.
Applicable principles
The power to order costs is usually exercised after a hearing on the merits and, as a general rule, a successful party is prima facie entitled to a costs order. Success in the action or on particular issues is the factor that controls the exercise of the discretion in most cases.
Where a proceeding is undetermined and has not been resolved by contest before a court in a hearing on the merits, the Court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. The Court has discretion to make costs orders either where a defendant has consented to a grant of final relief or if there is consensus as to the outcome of the proceedings. In certain circumstances, a costs order may be made if it can be determined that one or other party would certainly have succeeded in the proceeding, or if one or other party has acted unreasonably in pursuing or defending the proceeding.[2]
[2]Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622, 624-5 (McHugh J); ASTA Developments Pty Ltd v Amasya Enterprises Pty Ltd [2016] VSCA 186 (3 August 2016) [25].
Consideration
The two issues in the proceeding concerned the estate films and the train sets, components, parts, accessories and scenery. In respect of the train sets and other items, the consent orders required John to file an affidavit by 2 March 2018 as to his delivery of those items pursuant to his obligations under the terms of settlement. John filed an affidavit on 1 March 2018 in compliance with this order deposing as to his delivery of the requisite items in March 2016. The email dated 12 May 2017 referred to some items not having been delivered and it was those items that were the issue in the proceeding.
The Court was informed that these issues were subsequently resolved between the parties and the details of the resolution are unknown to the Court. The Court is unable to determine that one or other party would certainly have succeeded on the issue of the train sets and other items. In those circumstances, in respect of the issue of the train sets and other items, there will be no order as to costs.
The issue of the copying of the estate films was the principal issue of dispute between the parties. The consent orders varied the obligations under the terms of settlement so that Peter and Cathryn then took control of the copying of the estate films.
John’s position is that he was always willing to comply with the terms of settlement, however, after the first nominated copyist asked for the films to be collected, Peter did not nominate another copyist.
The position of Peter and Cathryn is set out in the email of their solicitor dated 12 May 2017. That email sets out the details of the substituted copyist and warns John that if complete performance of all of the terms is not made by 29 May 2017, an application to compel compliance with the terms of settlement would be issued and would include an order for costs against John.
John’s response to this letter reflects the fact that the issue of the copying of the estate films remained outstanding. John did not respond to the fact that Peter had provided the details of a substitute copyist and he did not say that he would deliver the estate films to that person. His position was that he had complied with the terms by delivering the estate films to the first copyist on 17 January 2017.
Such a response by John was unhelpful. It was reasonable in the circumstances for Peter and Cathryn to issue the proceeding. On balance, in respect of the issue of the estate films, there has been a successful outcome for Peter and Cathryn.
Peter and Cathryn have quantified their costs at $22,364.20. Although this amount includes the issues relating to the train sets and other components, the quantum appears to be unreasonable and disproportionate to the issues in dispute.
Accordingly, the Court will order that John pay the costs of Peter and Cathryn in respect of the issue of the copying of the estate films assessed on the standard basis, to be taxed in default of agreement and otherwise each party bear their own costs.
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