Kostopoulos v Dellis (No 2) - [2023] SASC 109

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KOSTOPOULOS v DELLIS & ANOR (No 2)
[2023] SASC 109
Reasons for Decision of Auxiliary Judge Costello a Master of the Supreme Court
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS
The applicant applied for an order that her costs of the action be paid out of the estate on a solicitor/client basis - the second respondent opposed such an order and sought that the costs of the parties be paid out of the estate on a party/party basis - consideration of the "standard order" and the factors relevant to the exercise of the court's discretion on costs in matters of this type.
Held:
1. The applicant is to have her costs paid out of the estate of the deceased on a solicitor/client basis.
2. There be no order for costs for the second respondent.
Inheritance (Family Provision) Act 1972 (SA); Supreme Court Criminal Rules 2014 (SA), referred to.
Pizimolas v Pizimolas & Zannis (No 2) [2010] SASC 209; Whitington v Whitington (No 2) [2009] SASC 178; Parker v Australian Executor Trustees Ltd (No 2) [2016] SASC 115; Bramwell v Bramwell & Ors (No 2) [2022] SASC 76; Latoudis v Casey (1990) 170 CLR 534; Ohn v Walton (1995) 36 NSWLR 77 at 79, considered.

KOSTOPOULOS v DELLIS & ANOR (No 2)
[2023] SASC 109
Introduction

On 17 May 2023 I delivered judgment[1] in respect of the applicant’s claim for further provision, pursuant to the Inheritance (Family Provision) Act 1972 (“the IFP Act”).
[1] Kostopoulos v Dellis & Anor [2023] SASC 78
By her will the deceased made a specific bequest of $20,000.00 to the applicant (her daughter) and left the residue of the estate, the quantum of which was nearly $400,000.00, to the second respondent (her son).
In my judgment I was satisfied that the applicant had been left without adequate provision for her proper maintenance, education and advancement in life and determined that further provision should be made for the applicant out of the residual estate of the deceased.
In lieu of the bequest of the sum of $20,000.00 to the applicant I ordered that the estate should be divided by distributing an amount equal to 40% of the residual estate to the applicant and 60% to the second respondent.
Consequent upon the delivery of my judgment, the parties filed written submissions on the question of costs and supplemented those submissions with brief oral argument on 20 July 2023. These reasons deal with the issue of costs.
Filed offers
On 14 December 2022 the second respondent filed an offer to resolve the dispute on the following basis:
a. That, in addition to the $20,000.00 legacy left to her in the deceased’s will, the applicant receive a further $40,000.00 for her proper maintenance, education and advancement in life;
b. That there be no order as to costs.
On 20 December 2022 the applicant filed an offer to resolve the dispute on the following basis:

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kostopoulos v Dellis (No 2)

Details

AGLC: Kostopoulos v Dellis (No 2) [2023] SASC 109
Case: [2023] SASC 109
Decision Date: 25 July 2023

CaseChat Overview and Summary

In the matter of Kostopoulos v Dellis (No 2), the applicant sought an order for the costs of the proceedings and a variation to the distribution of the estate of the deceased. The court was required to decide whether the applicant was entitled to indemnity costs and whether a costs order should be made against the second respondent. The case was heard in the Supreme Court of South Australia. The legal issues involved determining the effect of a costs order on the second respondent, whether the applicant was entitled to indemnity costs, and whether the second respondent's failure to respond to the applicant's offer was imprudent. The court found that the applicant's offer was a formal, relevant offer within the meaning of UCR 132.10, and that the applicant had obtained a judgment no less favourable than her formal offer. Therefore, she was entitled to indemnity costs from a date 14 days after the offer. The court also found that the second respondent's failure to respond to the offer was unwise, but his failure could not be categorised as imprudent. However, the court noted that an award of costs of this amount would have a significant impact on the amount the second respondent could expect to receive and it would result in a real hardship to a man of his relative impecuniosity. The court concluded that costs orders of this nature were made to compensate the successful litigant, not to punish an unsuccessful party. The court made orders for the costs of the first respondent to be taxed or agreed on a solicitor and client basis and paid out of the residual estate upon the footing of an indemnity. The court also made orders for a legacy to be paid to the applicant out of the residual estate of the deceased, and for the Public Trustee of South Australia to be appointed manager to take possession of and control and manage the legacy portion of the protected person's estate.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In considering this issue, I have also had regard to the fact that the applicant’s offer constituted a formal, relevant offer within the meaning of UCR 132.10 and that she has obtained a judgment no less favourable than her formal offer. I note that in such circumstances the Rules provide that an applicant is entitled to indemnity costs from a date 14 days after the offer. In my view, whether or not the second respondent’s failure to accept the applicant’s offer could be categorised as imprudent, his conduct in not making any response at all to the offer was unwise. Effect of a costs order on the second respondent I am informed that the applicant’s costs, should a solicitor/client order be made, are in the vicinity of $50,000.00-$55,000.00. As I have already acknowledged, an award of costs of this amount will have a significant impact on the amount which the second respondent can expect to receive and it will no doubt result in a real hardship to a man of his relative impecuniosity. Nevertheless, I do not overlook the fact that costs orders of this nature are made to compensate the successful litigant, not to punish a party who is unsuccessful.[9][9] Latoudis v Casey (1990) 170 CLR 534; Ohn v Walton (1995) 36 NSWLR 77 at 79. In all the circumstances, I am of the view that the applicant should have her costs upon a solicitor/client basis. I decline to make an order that the second respondent have his costs paid out of the estate. Formal orders In order to give effect to the reasons I delivered in Kostopoulos v Dellis & Anor [2023] SASC 78 and to these reasons, I make the following orders:1.The costs of the First Respondent Executor of this action be taxed or agreed on a solicitor and client basis and paid out of the residual estate upon the footing of an indemnity.2.The following provision be made out of the estate of EFSTATHIA DELLIS late of 16A Little Sturt Street Adelaide SA deceased who died on 26 August 2021 for the maintenance, education or advancement in life of the applicant, MARY KOSTOPOULOS in lieu of the benefits conferred upon such person by the will of the deceased namely that:a.the net estate be divided into 100 portions;b.the applicant is to receive a legacy equivalent to 40 of those portions;3.The burden of the legacy referred to in order 2 herein be borne by and paid out of the residual estate of the deceased.4.Save as aforesaid the First Respondent Executor shall stand possessed of the estate of the deceased upon and subject to the trusts declared in the will so far as such trusts shall be capable of taking effect and as varied by these orders.5.A certified copy of this Order be made on the probate of the will of the deceased and, for that purpose, the First Respondent Executor produce the probate to the Registrar of Probates.6.Pursuant to s 8 and s 12 of the Aged and Infirm Persons Property Act 1940 (“AIPPA”), a protection order is made over the applicant’s estate and be limited to the legacy paid by way of order 2 herein (“Legacy Portion”).7.The Public Trustee of South Australia be appointed manager to take possession of and control and manage the Legacy Portion of the Protected Person’s estate with the powers and duties given and imposed by the AIPPA and the Rules of Court made pursuant to the AIPPA. 8.This Order be served on the protected person and Public Trustee within 7 days by forwarding an office copy of it to each of them by prepaid post and that such service be proved by affidavit or statement of facts filed in this action within 7 days of the service.9.The applicant’s costs and disbursements of and incidental to this action be paid out of the residual estate of the deceased on a solicitor and client basis.10.There be no order as to costs of the second respondent.11.The parties may apply for further orders and directions.

Ratio Decidendi

Legal Principle Established

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