Levingston v Lola May Levingston as Executrix of the Will of Robert Ian Edwin Partridge - [2017] WASC 371 (S)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   LEVINGSTON -v- LOLA MAY LEVINGSTON AS EXECUTRIX OF THE WILL OF ROBERT IAN EDWIN PARTRIDGE [2017] WASC 371 (S)
CORAM:   SMITH AJ
HEARD:   ON THE PAPERS
DELIVERED:   26 APRIL 2018
FILE NO/S:   CIV 1818 of 2010
BETWEEN:   LOLA MAY LEVINGSTON
Plaintiff
AND
LOLA MAY LEVINGSTON AS EXECUTRIX OF THE WILL OF ROBERT IAN EDWIN PARTRIDGE
First Defendant
RHYS CURJEL PARTRIDGE
Second Defendant

Catchwords:

Practice and procedure - Application for costs - Unsuccessful plaintiff - Whether plaintiff's costs to be paid by estate resulting from deceased's conduct - Deceased's conduct caused litigation - Plaintiff's confusion of testamentary intention insufficient for award of costs - Erroneous decision by plaintiff to initiate proceedings - No costs awarded to plaintiff

Practice and procedure - Plaintiff also executrix - Application for executrix's costs to be borne by estate - Reasonable and proper for executrix to obtain independent representation - Plaintiff's case had little merit - Costs awarded on party and party basis

Practice and procedure - Application for costs - Notice to admit - Previous judgment out of substantially same facts - Second defendant's failure to admit to facts set out in notice - Plaintiff required to prove relevant facts - Plaintiff awarded costs for facts proved pursuant to O 66 r 3(2) Rules of the Supreme Court

Practice and procedure - Second defendant successful party - Plaintiff to pay second defendant's costs of the action

Legislation:

Corporations Act 2001 (Cth), s 1332
Family Provision Act 1972 (WA), s 6, s 7
Rules of the Supreme Court 1971 (WA), O 30 r 2(1), O 66 r 3(2)

Result:

Costs orders made

Category: B

Representation:

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	M J McPhee Barrister & Solicitors
First Defendant	:	Granich Partners
Second Defendant	:	Slater & Gordon Lawyers

Case(s) referred to in decision(s):

Chan v Mazurkiewicz (in his capacity as Administrator of the Estate of Wiltold Mazurkiewicz) [2015] WASC 432 (S)
Daniels v Hall (as Administrator for the Estate of Arnold Edward Daniels) [No 2] [2014] WASC 272
Dean v Collins [No 2] [2015] WASCA 151
Levingston v Levingston [2016] WASC 133
Levingston v Levingston [2017] WASC 371
Mitropoulos v Greek Orthodox Church and Community of Marrickville & District Ltd (1993) 10 ACSR 134
Re Green [1969] WAR 67
Townsend v Collova [2005] WASC 4 (S)
Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191

SMITH AJ:

Background

On 22 December 2017, I dismissed the plaintiff's application under the Family Provision Act 1972 (WA) (the Act).[1]
[1] Levingston v Levingston [2017] WASC 371.
The plaintiff had applied for orders under s 6 and s 7 of the Act for orders making provision for her out of the estate of the deceased, Robert Ian Edwin Partridge, who was her late de facto husband.
The deceased died on 6 October 2008. By his will made on 29 December 1995, he appointed the plaintiff executrix and left his entire estate to his only son, Rhys Curjel Partridge (the second defendant).
The plaintiff's claim was dismissed on grounds that she failed to satisfy the jurisdiction test. The plaintiff failed to satisfy the court that it had a discretion to make an award in her favour as it was found that the deceased had not failed, as at the date of his death, to make adequate provision for the plaintiff's proper maintenance, support or advancement in life.

Parties' claims as to costs

The second defendant submits that the appropriate order for costs is that the plaintiff pay the first and second defendants' costs of the action.
The plaintiff contends that the appropriate orders as to costs should be:
(a)The first defendant's costs as executrix should be borne by the estate as the plaintiff, as the claimant, as well as being the executrix, acted reasonably and properly in having separate representation in her capacity as executrix in the interests of the estate and that those costs incurred by her as executrix should be met by the estate in any event. This is said to be particularly so given that the solicitors representing her as executrix had a very limited role in the proceedings.
(b)The plaintiff's costs should be borne by the estate as the application has been brought about through the conduct of the deceased during his lifetime.
(c)In the alternative to (b), the plaintiff should receive 60% of her costs of the hearing in any event, such costs being the costs of formally proving background facts referred to in a notice to admit served by the plaintiff on the second defendant in draft form on 27 July 2017, and formally in the same terms as the draft on 1 August 2017.
(d)In the alternative, the plaintiff says that there should be no order as to costs.

The plaintiff's claim for costs

In support of the plaintiff's claim for her costs of the action she points out that she was in a loving and trusting relationship with the deceased over a period of at least 10 years, whereby the conduct of the deceased induced her to believe that she had a good cause of action for provision to be made to her under the Act.
The acts of the deceased relied upon by the plaintiff are as follows:
(a)The deceased signed a letter dated 13 April 2005 together with the plaintiff. The letter contained instructions as to the intended disposition of property on the death of the deceased and the plaintiff and was sent to their solicitor, Jonathan Meyer, for action. The letter stated:
(i)the deceased was concerned for the most cost effective way for the plaintiff to have control of Ian Partridge Pty Ltd (the company) on his death; and
(ii)'personal estate left to Lola'.
(b)During his lifetime, the deceased treated the assets of the company as if he was the only shareholder. In fact, the second defendant was a majority shareholder and would receive the bulk of the company assets in the event that the company was wound up. However, the deceased regarded the assets of the company as his own to deal with as he wished. To that extent, he treated the company as if the corporate veil had been lifted.
(c)During his life, the deceased purported to give control of the company after his death to the plaintiff by appointing her the alternate governing director and convened a meeting to put this appointment into effect, even though he had Mr Meyer's advice that such a step 'would not work'. The deceased did not inform the plaintiff of this advice.
(d)The deceased gave contrary advice to the second defendant telling him that the affairs of the company were in a bit of a mess, vaguely mentioned outstanding debts that he could do nothing about but said that when he (the second defendant) was in charge of the company he could sort them out. The deceased did not disclose this conversation to the plaintiff.
(e)The deceased advised the plaintiff's son, John Levingston, of an intention to create a trust in favour of the plaintiff's grandchildren.
(f)The deceased provided oral advice to Mr Meyer of his intent to leave his 'personal estate', including all outstanding loans, to the plaintiff.
(g)Third party witnesses, Helen Evers, Beverley Dungey and Karen Mills, recounted conversations they had with the deceased in which the deceased had made negative comments about the second defendant and changing his will. These statements were contrary to the provisions in the will.
In these circumstances, the plaintiff says she was left in a confused state about the deceased's intentions as all of the deceased's statements and actions, at least towards her, were contrary to the effect of the terms of the will.
Despite not changing his will, the deceased kept saying things to the plaintiff, and others, as to what his intentions were, which were contrary to the express terms of the will. The plaintiff claims the result of this, and the deceased's failure to reconcile the will with his statement of intent to the plaintiff, and others, was not only confusion but litigation. In these circumstances, the plaintiff claims it is reasonable that she should not be penalised on costs. The plaintiff contends that to the contrary, her costs should be paid from the estate because the cause of the litigation might reasonably be said to take its origin from the actions of the deceased in making statements to her and other persons, while at the same time not making his intentions clear by either a new will or making a clear statement to her that he intended to leave her nothing.
The plaintiff submits that the effect of the judgment in the substantive matter is that although statements were made by the deceased that are contrary to the effect of the will and even though a moral duty and expectation might have arisen in the plaintiff (in the context of the relationship between the deceased and the plaintiff), the jurisdictional tests were not met.
In these circumstances, it is submitted that the principle which applies to probate cases to the effect that an unsuccessful party may still recover costs from the estate where the litigation has been brought about through the conduct of the testator should also apply to this type of case where the conduct of the deceased, in various respects, can reasonably be said to have led directly to the application being made.[2]
[2] Re Green [1969] WAR 67, 83 (Wolff CJ).
In Re Green, Wolff CJ observed:[3]
The general rule in probate actions is that costs follow the event: Twist v Tye, [1902] P 92; Spiers v English, [1907] P 122. There are two types of case where the general rule may be departed from: (1) where the litigation has been brought about through the conduct of the testator; and (2) where the parties who have failed have reasonably been led into the litigation by a bona fide belief in their case and have, therefore, felt it desirable to inquire into the testamentary dispositions of the testator: Twist v Tye, supra, per Gorell Barnes, J, at p 94.
[3] Re Green [1969] WAR 67, 83 (Wolff CJ).
The second defendant says that the principle in Re Green should not be applied as the application made by the plaintiff is not a probate action and the general approach in family provision claims is that an unsuccessful plaintiff is to bear his or her own costs and to pay the costs of the defendant or defendants.
Contrary to the submission put on behalf of the second defendant, the principle considered by Wolff CJ in Re Green is not restricted to probate matters or, indeed, family provision matters.
Le Miere J had regard to the principle in a decision on costs in a family provision claim in Chan v Mazurkiewicz (in his capacity as Administrator of the Estate of Witold Mazurkiewicz).[4] His Honour firstly referred to the observation made in Dean v Collins [No 2][5] wherein the Court of Appeal stated that it is the general policy of the court to order costs against unsuccessful claimants or beneficiaries in family provision claims.[6] His Honour then went on to observe:[7]
A court may refuse costs to a successful defendant who has, by inducing the plaintiff to believe that she had a good cause of action, or by some other act or omission, led the plaintiff to bring the action, where aside from the defendant's inducing conduct, the action would in all likelihood not have been brought. For example, in Mitropoulos v Greek Orthodox Church and Community of Marrickville & District Ltd (1993) 10 ACSR 134, 139 McLelland J held that the conduct of the defendant was such as to encourage the plaintiffs to believe that they had a valid claim to relief in the proceedings and that for that reason there should be no order against the plaintiffs in respect of the defendant's costs.
[4] Chan v Mazurkiewicz (in his capacity as Administrator of the Estate of Wiltold Mazurkiewicz) [2015] WASC 432 (S).
[5] Dean v Collins [No 2] [2015] WASCA 151 [34].
[6] Chan v Mazurkiewicz (in his capacity as Administrator of the Estate of Wiltold Mazurkiewicz) [2015] WASC 432 (S) [5].
[7] Chan v Mazurkiewicz (in his capacity as Administrator of the Estate of Wiltold Mazurkiewicz) [2015] WASC 432 (S) [6].
In Mazurkiewicz, Le Miere J relied upon the decision of McLelland J in Mitropoulos v Greek Orthodox Church and Community of Marrickville[8] as authority for the principle that the general rule that the costs that follow the event may be departed against where the litigation has been brought about by the conduct of the deceased. Mitropoulos was not a probate or family provision matter. It was an application made seeking orders validating a procedural irregularity associated with a committee meeting of a company pursuant to s 1322 of the Corporations Act 2001 (Cth).
[8] Mitropoulos v Greek Orthodox Church and Community of Marrickville & District Ltd (1993) 10 ACSR 134 (McLelland J).
In the matter before Le Miere J in Mazurkiewicz, his Honour found that if not for the conduct of the deceased in inducing the plaintiff's erroneous appreciation of their relationship, the plaintiff would not have initiated the family provision proceedings.[9]
[9] Chan v Mazurkiewicz (in his capacity as Administrator of the Estate of Wiltold Mazurkiewicz) [2015] WASC 432 (S) [9].
However, his Honour also found that the plaintiff had made an erroneous decision in bringing proceedings and thus, the estate should not be burdened with covering the plaintiff's costs.[10]
[10] Chan v Mazurkiewicz (in his capacity as Administrator of the Estate of Wiltold Mazurkiewicz) [2015] WASC 432 (S) [10].
Given the findings made by me in the substantive matter, I am of the opinion that the same principle applied by Wolff CJ in Re Green and Le Miere J in Mazurkiewicz is capable of application in this matter.
However, I am not satisfied that the conduct of the deceased in this matter was such as to entitle the plaintiff to an order for costs out of the estate.
The plaintiff's confusion about the testamentary intentions of the deceased cannot be said to be properly sufficient to induce her to form a belief that she had a good cause of action. Leaving aside the adverse findings made about the plaintiff's credibility in the trial of this action, the plaintiff's case was weak. Properly advised, the plaintiff should have understood her case had little prospect of success with little or no real merit to commend it.
The majority in Vigolo v Bostin[11] did not endorse an approach that a claimant would be left without adequate provision if that person has substantial independent means for his or her maintenance and advancement in life and their claim is made solely on grounds of disappointed expectations raised by statements of intention by a testator or testatrix. Yet this was precisely the case put forward by the plaintiff.
[11] Vigolo v Bostin [2005] HCA 11; (2005) 221 CLR 191.
In a case such as the plaintiff's where education is not relevant, the test is whether as a matter of fact a claimant has been left without adequate provision for his or her proper maintenance, support or advancement in life. In circumstances where the plaintiff is a woman of advanced years, and had at the time of the death of the deceased (and continues to have) capacity and significant resources to more than meet her own needs, the plaintiff's case was plainly without merit.
The plaintiff made an erroneous decision to institute the family provision proceedings, and in these circumstances she should not be entitled to her costs from the estate.

Plaintiff's claim that the second defendant pay her costs for proving facts referred to in the notice to admit

On 11 August 2017, the second defendant formally declined to respond to the notice to admit. On the same day, the court made directions requiring the parties to file and serve further affidavits on which they intended to rely upon at trial.
This is a matter where there had been a previous judgment arising substantially out of the same facts in 2016.
In CIV 1817 of 2010, the plaintiff brought a claim before the Supreme Court arising out of the letter signed by her and the deceased on 13 April 2005 which she claimed constituted an agreement by which the deceased agreed to leave his estate, or his personal estate, to her.
In the alternative, the plaintiff claimed that if the letter of 13 April 2005 did not constitute an agreement:
(a)the second defendant was estopped from denying the existence of the agreement; or
(b)the letter of 13 April 2005 gave rise to either a resulting trust or a constructive trust over the deceased's estate, or his personal property, in her favour.
Tottle J heard the claim in CIV 1817 of 2010 and dismissed the action.[12]
[12] Levingston v Levingston [2016] WASC 133.
In CIV 1817 of 2010 Tottle J made a number of findings of fact, many of which were relevant to this matter.
In the plaintiff's notice to admit in relation to each of the 78 facts for which an admission was sought, a reference was given in the notice to the judgment paragraph in which the facts were found in the judgment delivered by Tottle J. These references were included in the draft, and formal notice to admit filed by the plaintiff, and delivered to the second defendant, pursuant to O 30 r 2(1) of the Rules of the Supreme Court 1971 (WA) (RSC) prior to directions being made in this matter for the filing of additional affidavit material.
As the second defendant, through counsel, declined to respond to the notice to admit, the plaintiff was required to prove the facts referred to in the notice to admit. The plaintiff did so by filing supplementary materials in the form of affidavits from herself and from her other witnesses (of which there were 11), together with a book of documents which was filed as part of the affidavit of the plaintiff sworn on 26 August 2017.
After the conclusion of the trial of this matter an amended notice to admit was filed by the plaintiff which included a column containing references to the various affidavits in the book of documents where the evidence relating to each of the facts set out in the notice to admit was to be found. In response, the second defendant filed a document admitting the majority of the facts in the notice to admit. Of the 78 paragraphs in the notice to admit, the second defendant partially admitted paragraphs 15, 17, 21, 34 and 61. Paragraphs 49, 50, 53, 54, 55, 56, 60, 62, 70, 71, 72, 73, 76 and 77 were not admitted by the second defendant.
Except for paragraphs 49, 62 and 75, the remaining facts on which an admission was sought by the plaintiff were found to be proved in the judgment in the substantive matter.
I accept the submission made on behalf of the plaintiff that by the time the second defendant filed his response to the plaintiff's notice to admit on 31 October 2017, the plaintiff had proved each of those facts, save for those asserted in paragraphs 49, 62 and 75.
The second defendant submits it was not reasonable to expect him to admit facts in the notice to admit, prior to the hearing of the plaintiff's claim. He points out that prior to being served with the notice to admit the only evidence filed by the plaintiff was an affidavit sworn 2 June 2010 and that by serving the notice to admit, the plaintiff made it clear that she was not prepared to go to trial on the basis of the affidavit alone.
The second defendant makes an odd submission that the notice to admit did not focus on any particular issue or issues and that had the second defendant responded to the notice to admit, the plaintiff's case at trial would have been comprised in the 2010 affidavit, the responses to the notice to admit and, presumably, some further affidavit evidence. It is said, therefore, that the case advanced by the plaintiff (in the absence of pleadings in a matter of this nature) would not have been readily accessible in a coherent form. It is also said to follow that it is unreasonable to require the second defendant to have responded to the notice to admit as the efficient conduct of a hearing would have been prejudiced had the matter proceeded on this basis.

I do not agree. The majority of the facts sought to be admitted were relevant facts that established the background to the relationship between the plaintiff, the deceased and the second defendant, and the financial affairs of the plaintiff and the deceased. These matters could have properly formed an agreed statement of facts from which the hearing could have proceeded.
In any event, notwithstanding this submission, it is conceded by the second defendant that facts which were the subject of the notice to admit were matters subject to issue estoppel and that the second defendant was not in a position to deny such matters. In light of this concession, the second defendant's submission that it was not reasonable to admit these facts has no proper basis.
When regard is had to the submission made on behalf of the second defendant that some further affidavit evidence would have in any event been filed on behalf of the plaintiff, it cannot be said that if the matters set out in the notice to admit had been conceded prior to trial that the case advanced by the plaintiff would not have been readily accessible in a coherent form.
Order 66 r 3(2) RSC provides that if a party on whom a notice to admit facts is served under O 30 r 2, refuses or neglects to admit the facts, the costs of proving the facts shall be paid by him, unless the court otherwise orders. Consequently, unless an order to the contrary is made, the plaintiff is automatically entitled to a costs benefit by the operation of the rule. In Townsend v Collova, Le Miere J explained the purpose of O 66 r 3(2) as follows:[13]
Under O 66 r 3(2), if a party proves facts of which he sought admission by a notice and the disputing party did not admit the facts, the disputing party must pay the costs of proof of those facts unless a contrary order is made. The question raised in the present application, then, is whether the plaintiffs should be deprived of those costs. In general, the incidence of party and party costs in litigation does not depend on whether a matter was within a party's knowledge, it depends upon success. Order 30 r 2 and O 66 r 3(2) are intended to encourage parties, including those who expect to be ultimately successful, to consider realistically whether they will put the other party to the cost of proving each and every fact. In the absence of some special factor, the disputing party runs the risk that, if the party giving the notice to admit succeeds, a costs burden must be accepted. The use of costs orders as an incentive to narrow the issues, to shorten trials and to save costs is a part of litigation in this Court. In my opinion the primary question that a party in receipt of a notice to admit a fact must address is whether the notice-giver will prove that fact.
[13] Townsend v Collova [2005] WASC 4 (S) [20].
In circumstances where it is conceded that the majority of the facts which were the subject of the notice to admit had to be admitted by the second defendant because of the effect of the doctrine of issue estoppel, it is clear that the majority of the facts set out in the notice could have been admitted prior to filing of any additional affidavits, thus narrowing the issues between the parties.
As the plaintiff does not seek costs in relation to the facts which were not proven in the judgment of this action, I see no reason to deprive the plaintiff of her costs in relation to each of the facts asserted in the notice to admit except those facts asserted in paragraphs 49, 62 and 75 which I did not find to be proven.
I do not agree, however, that the plaintiff should receive 60% of her costs of the hearing. The cost to the plaintiff in undertaking the additional work is, in my opinion, a matter that should be properly assessed by a taxation officer.
Whilst it is said that 60% of the costs of the hearing were incurred in undertaking the additional work required in formally proving the background facts referred to in the notice to admit, I am not satisfied on the material presently before me that can said to be the case as the second defendant points out:
(a)the further affidavits filed by the plaintiff after the second defendant refused to admit any of the facts in the notice largely comprised recycled witness statements relied upon by the plaintiff in CIV 1817 of 2010; and
(b)the bundle of documents referred to in the affidavits of the plaintiff was a copy of a bundle of documents uplifted from the court in CIV 1817 of 2010.
These are matters, in my opinion, that a taxation officer can assess when assessing the costs to be allowed to the plaintiff of proving the facts set out in the allowed items in the notice to admit.

The executrix's costs

I accept the submission made on behalf of the plaintiff that as both the executrix and first defendant she acted reasonably and properly in having separate representation in her capacity as executrix in the interests of the estate and that those costs incurred by her as executrix should be met by the estate.
The only role of the executrix's independent solicitors was to attend to present the executrix's affidavit which set out all matters and annexed an independent valuation report relevant to a current valuation of assets and liabilities of the estate.
In Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels) [No 2], EM Heenan J observed that:[14]
… generally a personal representative is entitled to his or her costs out of the estate on an indemnity basis: Krause v Sinclair [1983] 1 VR 73 and Re Nielsen [1968] Qd R 221: see also O 66 r 9(2). Her submissions acknowledge that such costs may be restricted to a party and party basis if they are disproportionate to the size of the estate or where the defence has been conducted by the personal representative with some animus against the plaintiff and that, in such a case, the personal representative might even be deprived of costs: Wang v D'Ambrosio [1999] NSWSC 227 and Cumming v Sands [2001] NSWSC 507.
[14] Daniels v Hall (as Administrator for the Estate of Arnold Edward Daniels) [No 2] [2014] WASC 272 [50].
However, in circumstances where the commencement and pursuit of this claim by the plaintiff had very little merit to commend it, I am not satisfied that the first defendant should have her costs out of the estate on an indemnity basis. I am of the opinion that she should have her costs restricted in this regard to party and party.

The second defendant's claim for costs

As the second defendant was wholly successful in this action, I am satisfied that his costs of the action should be borne by the plaintiff.

Conclusion

The effect of these reasons is that I am of the opinion that the appropriate orders should be:
(a)the plaintiff to have the costs of proving the facts asserted in paragraphs 1 ‑ 48, 50 ‑ 61, 63 ‑ 74 and 76 ‑ 78 of the plaintiff's notice to admit facts, to be paid by the second defendant, to be assessed if not agreed;
(b)the first defendant's costs of the action be fixed on a party and party basis and be paid out of the estate, to be assessed if not agreed; and
(c)the plaintiff to pay the second defendant's costs of the action.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
VV
ASSOCIATE TO THE HONOURABLE JUSTICE SMITH
26 APRIL 2018