Maestrale v Aspite - [2014] NSWCA 182

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Maestrale v Aspite [2014] NSWCA 182
Hearing dates: 17 December 2013
Decision date: 06 June 2014
Before: Beazley P at [1];
Macfarlan JA at [141];
Barrett JA at [142]
Decision:
(1) Appeal allowed.
(2) Set aside the award of damages made by her Honour and in lieu order that the respondents pay to the appellant damages in the sum of $273,298 together with interest calculated in accordance with Supreme Court Practice Note 16 (16 June 2010).
(3) Set aside the costs order made by the trial judge and order that the respondents pay the appellant's costs of trial.
(4) Order that the respondents pay the appellant's costs of the appeal.
(5) Direct the parties to bring in short minutes of order to reflect the judgment sum to which the appellant is entitled including both damages and interest.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
COSTS - departing from the general rule - Uniform Civil Procedure Rules 2005, r 42.1 - conduct of parties - misconduct - adverse credibility findings

DAMAGES - measure of damages in actions for tort - assessment of future possibilities or probabilities - evaluative assessment

DAMAGES - measure of damages in actions for tort - deductibility of collateral benefits - where benefit derives from private arrangement with a third party

APPEALS - interference with discretion of court below - need to establish error

APPEALS - general principles - interference with judge's findings of fact - functions of appellate court - where findings based on credibility of witnesses
INTEREST - pre-judgment interest - rate of interest - principles guiding award of interest - Supreme Court Practice Note 16
Legislation Cited: Civil Procedure Act 2005
Family Provision Act 1982
Supreme Court Act 1970
Uniform Civil Procedure Rules 2005
Cases Cited: Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries [1951] 1 All ER 873
Apostolidis v Kalenik (No 2) [2011] VSCA 329
Arian v Nguyen [2001] NSWCA 5
Batchelor v. Burke [1981] HCA 30; 148 CLR 448
Bennett v Jones [1977] 2 NSWLR 355
Chambers v Jobling (1986) 7 NSWLR 1
Devries v Australian National Railways Commission [1993] HCA 78; 177 CLR 472
Fox v Percy [2003] HCA 22; 214 CLR 118
Hexiva Pty Ltd v Lederer (No 2) [2007] NSWSC 49
Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; 53 NSWLR 600
House v R [1936] HCA 40; 55 CLR 499
Lovell v Lovell [1950] HCA 52; 81 CLR 513
Mannix v Loumbos [2000] NSWCA 32
Marine Board of Launceston v Minister of State for the Navy [1945] HCA 42; 70 CLR 518
MBP (SA) Pty Ltd v Gogic [1991] HCA 3; 171 CLR 657
National Insurance Company of New Zealand Ltd v Espagne [1961] HCA 15; 105 CLR 569
Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72
Paff v Speed [1961] HCA 14; 105 CLR 549
R W Miller & Co Pty Ltd v The Ship Patris [1975] 1 NSWLR 704
Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332
Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322
Texts Cited: Supreme Court Practice Note 16 (16 June 2010)
Category: Principal judgment
Parties: Aldo Maestrale (Appellant)
Dante Aspite (First Respondent)
Bartholomew Rando (Second Respondent)
Representation: Counsel:
C T Barry QC; J Rowe (Appellant)
G A Sirtes; J Downing (Respondents)
Solicitors:
MMD Law (Appellant)
HWL Ebsworth Lawyers (Respondents)

File Number(s): CA 2013/31938
Decision under appeal

Jurisdiction:

9111

Citation:

Maestrale v Aspite [2012] NSWSC 1420; Maestrale v Aspite (No 2) [2012] NSWSC 1421

Before:

Fullerton J

File Number(s):

2008/289388

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellant's late father, Mr Maestrale Snr, gave instructions to the first respondent, a solicitor, to prepare a new will under which the appellant would receive a greater benefit that under his father's existing will. However, Mr Maestrale Snr died before executing the new will.

On 8 November 2012, Fullerton J gave judgment for the appellant in proceedings he brought against the respondents alleging that they had breached their professional duty of care to him in failing to prepare and have Mr Maestrale Snr execute the new will prior to his death.

Her Honour discounted the award of damages for two reasons: because there was a possibility or probability that the appellant's sister would have brought a claim for increased provision from the estate had the new will been executed; and because the appellant's brother had given him a loan of his legacy and did not demand the full amount owed to him under his father's signed will. Her Honour also did not award the appellant statutory interest at the rate prescribed by the Supreme Court's Practice Note 16, instead taking as the basis of her calculations the actual interest the appellant had paid on a loan he had taken out to satisfy the legacies to the other beneficiaries so that he could retain the family home.

In a separate costs judgment given on 22 November 2012, her Honour ordered that the appellant was only entitled to a portion of his costs on the basis of a finding that he had given untruthful evidence resulting in unnecessarily lengthened proceedings and increased costs of the litigation.

The appellant appealed from the award of damages and the costs order made by Fullerton J.

Per Beazley P (Macfarlan and Barrett JJA agreeing):

In relation to the costs order:

(1) While pursuant to the Uniform Civil Procedure Rules 2005, r 42.1, the 'general rule' is that costs should follow the event, a successful party may be deprived of costs if guilty of conduct that makes it appear to the court that some other order should be made. This includes conduct that unnecessarily protracts the proceedings. [78]-[80].

Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries [1951] 1 All ER 873; Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72.

(2) While serious dishonesty of the successful party can justify the displacement of the usual costs order, her Honour erred in her factual finding that the appellant gave untruthful evidence. [81]-[84], [102]

Arian v Nguyen [2001] NSWCA 5; Apostolidis v Kalenik (No 2) [2011] VSCA 329; Fox v Percy [2003] HCA 22; 214 CLR 118.

In relation to the award of damages:

(1) The trial judge's assessment of the possibility or probability that the appellant's sister would have brought a claim for increased provision from the estate was an evaluative one. [118]

Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332.

(2) It is ordinarily necessary to establish error before an appellate court will interfere with an evaluative decision. No relevant error was established, as there was material available on which to find that a possibility of the appellant's sister bringing a claim for increased provision existed. [118]-[119]

House v R [1936] HCA 40; 55 CLR 499.

(3) The respondents were not entitled to benefit from a reduction in the damages for which they were liable on account of a private arrangement between the appellant and his brother. [124], [129]

Paff v Speed [1961] HCA 14; 105 CLR 549.

(4) While there is no statutorily prescribed rate of interest with which to calculate pre-judgment interest, it is desirable for there to be some uniformity in the interest rate adopted, provided that the rate bears sufficient relation to commercial reality. The Supreme Court's Practice Note 16 (16 June 2010) conforms with this view, although does not preclude a party from adducing evidence as to the appropriate rate of interest in a particular case. [135]-[136]

R W Miller & Co Pty Ltd v The Ship Patris [1975] 1 NSWLR 704; Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; 53 NSWLR 600; Hexiva Pty Ltd v Lederer (No 2) [2007] NSWSC 49.

(5) The appellant was entitled to statutory interest calculated in accordance with the Supreme Court Practice Note 16 (16 June 2010) as compensation for the loss suffered by being kept out of the monies from his father's estate to which he would have been entitled but for the negligence of the respondents. [133], [138]

Batchelor v Burke [1981] HCA 30; 148 CLR 448; MBP (SA) Pty Ltd v Gogic [1991] HCA 3; 171 CLR 657

Judgment

BEAZLEY P: The appellant, Aldo Maestrale, appeals from the award of damages and the costs order made by Fullerton J in proceedings he brought against the respondents alleging that they had breached their professional duty of care to him in failing to prepare and have his late father execute a will prior to his death on 15 July 2002.

The notice of appeal was filed approximately two months out of time. Objection is taken to the grant of leave to file the notice of appeal out of time and to the granting of leave to appeal. I consider that the time for filing the notice of appeal should be extended to 12 April 2013. A summons seeking leave to appeal was filed on 1 February 2013. If leave to appeal had been necessary, the summons was filed 44 days out of time. The lateness of that filing was not significant, being just over a month after the costs judgment on 22 November 2012, had leave to appeal been necessary. However, leave to appeal was not required. Nonetheless, the filing of the summons put the respondents on notice of an impending appeal. Nor have they pointed to any prejudice in the late filing of the notice of appeal.

The appellant's father, Biagio Maestrale (Mr Maestrale Snr), died on 15 July 2002 from acute myeloid leukaemia. Mr Maestrale Snr left a will, made in 1982, which provided for his estate to be bequeathed to his wife and after her death to his children (who at the time of making this will were still infants) in equal shares. Mr Maestrale Snr's wife predeceased him by many years.

On 8 July 2002, Mr Maestrale Snr gave instructions to the first respondent, Mr Aspite, a solicitor in partnership with the second respondent in the law firm Anderson Lawyers, to prepare a new will. Under the proposed new will, the appellant's three siblings were each to receive $150,000, with one sister to receive an additional legacy of $10,000. The appellant was to receive the residue of the estate, with the right to retain the family home, which was unencumbered, and to pay the bequests to his siblings from his own funds, or alternatively, to sell the home and satisfy the bequests to his siblings out of the proceeds of sale.

The instructions for the will were given in the informal environs of a café in circumstances where Mr Maestrale Snr had been given a day pass from the Royal Prince Alfred Hospital, where he had been hospitalised since 3 June 2002, to attend a social function in Leichhardt. He was in a wheelchair and Mr Aspite agreed that Mr Maestrale Snr's general appearance and what he knew of his medical condition rang "alarm bells" for him, so that he knew he should act promptly in preparing the will. The appellant was not present during the meeting with Mr Aspite. However, he understood that it was his father's intention, in making a new will, to make greater provision for him because of the care and commitment he had given to his father during his illness that had been diagnosed about two years previously.

On the morning of 15 July 2002, the new will was prepared in Mr Aspite's office. Later that morning, Mr Aspite, accompanied by the second respondent Mr Rando, went to the hospital for the purposes of having Mr Maestrale Snr execute the will. However, they arrived approximately 10 minutes after Mr Maestrale Snr died. The time of Mr Maestrale Snr's death was recorded as 11.20 am. Accordingly, the 1982 will remained as Mr Maestrale Snr's last will and testament.

Mr Maestrale Snr's estate was valued at $1,092,000 and under the terms of his 1982 will, the appellant and his siblings each received the sum of $273,000. The appellant claimed damages for the sum of $411,738, being the loss he alleged he suffered as a result of the negligence of the respondents in failing to have the new will executed, either in a formal or informal manner, prior to Mr Maestrale Snr's death.

The primary judge held that the respondents owed the appellant a duty of care to ensure that in the event of any change in his father's health or capacity, prompt arrangements would be made to attend upon Mr Maestrale Snr for him to execute a formal will or to attend with file notes that could be signed so as to create an informal will. Her Honour found that Mr Aspite's failure to respond to the appellant's urgent SMS text messages on 12 and 13 July 2002 constituted a breach of duty. There is no challenge to the findings of duty or breach. (A cross-appeal was filed but discontinued.) The trial judge awarded the appellant the sum of $282,631.81 by way of damages arising out of the respondents' breach of duty. Her Honour also awarded interest in the sum of $41,693.81, being a percentage of the interest the appellant paid on monies he borrowed to pay out the legacies of his siblings.

In a separate costs judgment given on 22 November 2012, her Honour ordered the respondents to pay 50 per cent of the appellant's costs on the ordinary basis up to and including 30 December 2011 and 40 per cent of the appellant's costs thereafter on the ordinary basis, up to and including 1 May 2012, being the last day of the hearing. Her Honour ordered that the parties bear their own costs of an adjourned hearing date: Maestrale v Aspite (No 2) [2012] NSWSC 1421.

The appellant's oral argument was confined principally to the appeal from the costs order. As this argument involved significant challenges to her Honour's factual findings in the principal judgment, it is convenient to deal with the costs issue first.

The costs issue

The trial judge's reason for depriving the appellant of portion of his costs was based essentially upon her adverse assessment of his credit. This led her Honour to reject the accuracy of a substantial part of a record of mobile phone communications the appellant said he had had with the respondents in the month leading up to his father's death on 15 July 2001. The record became Exhibit A in the proceedings. It is convenient to deal with the appellant's evidence relating to his preparation of Exhibit A.

The appellant said that he made a note in his phone, which was a Nokia 6150, immediately after each communication. He no longer had the telephone, which he said had "died" in about 2004. In late 2002, he had transcribed the notes onto his computer, and printed out a copy at that time. The computer had "died" in about 2007. Proceedings were commenced in 2008. When questioned as to why he had made the notes, he said he had done so "to keep an audit to see if [the first respondent] was going to actually bill me for this particular work". He said that it was his practice to always keep a note of communications with his solicitors so as check their bills should a dispute subsequently arise about any particular matter.

The appellant said that although at the time he made the transcription of the calls he had access to his own telephone billing records, he did not use them for the purposes of transcribing his telephone notes. He said that he did not have access to the respondents' telephone records at the time that he prepared the transcription. The evidence also established that the appellant had not had access to the hospital records prior to the commencement of proceedings.

The appellant was challenged in cross-examination to the effect that he had not made the notes in his mobile phone as he had said. The appellant denied the suggestion. He said that in making the notes in the telephone he used "text language" such as available abbreviations for "and" and "at". He also said the note function in the mobile phone limited the size of notes that could be made and that if the entry was long it was necessary to make more than one note. He described it as being "like turning over a page".

He agreed that there was no detail in his affidavit as to how he had made the notes. He denied that after receiving a request from the respondents for access to the phone, he had 're-educated' himself as to how notes were made on the Nokia 6150.

Exhibit A was as follows:

"SATURDAY 15 JUNE 2002 @ 3:41 pm

- Called and arranged with [Mr Aspite] meeting for Monday 17 June 2002 at Hospital to write up Will.

MONDAY 17 JUNE 2002 @ 1:54 pm

- [Mr Aspite's] secretary - Diana, called re: Will appointment today is cancelled. [Mr Aspite] will call you to arrange another time.

WEDNESDAY 3 JULY 2002 @ 4:32 pm

- I called [Mr Aspite] re: when will he arrange to attend to my Father to write up Will

- [Mr Aspite] excused himself for not having attended

- I'm to call [Mr Aspite] Monday morning to affirm what time he'll be attending

MONDAY 8 JULY 2002 @ 9:20 am

- I called [Mr Aspite] as arranged

- Arranged meeting for today after lunch at the Hospital

- [Mr Aspite] will call on arrival

- At or about 1:30 pm [Mr Aspite] met with Dad at Norton Street Plaza discussed Will

- [Mr Aspite] took down filed notes of instructions for Will

- [Mr Aspite] said 'I will call in by the Hospital and have Dad sign the Will at around 4 o'clock tomorrow afternoon'.

TUESDAY 9 JULY 2002 @ 3:38 pm

- Called [Mr Aspite] re: the signing of the Will today - left message on voice mail

- Did not receive a reply

THURSDAY 11 JULY 2002 @ 10 am

- Received call from secretary Diana re: signing of Will - [Mr Aspite] will call in at the Hospital tomorrow afternoon at around 4 pm

FRIDAY 12 JULY 2002 @ 8:58 pm

- SMS'ed [Mr Aspite] re: his nonattendance to today's appointment

SATURDAY 13 JULY 2002 @ 12:20 pm

- Called [Mr Aspite] and left message re: what's going on??

MONDAY 15 JULY 2002 @ 9:21 am & 9:33 am

- I called [Mr Aspite] - left messages again

- [Mr Aspite] returned my calls - he will attend with Bob

- I informed him Dad was asleep - he said he would attend anyway just as soon as Bob gets to the office

- At or about 11:20 am Dad passed away

- Ward sister-in-charge, Sonia reported two solicitors attended to see Dad - She informed them Dad had already passed away and was given an ANDERSON LAWYERS business card to forward on to me"

Mr Aspite accepted that some of the communications referred to in Exhibit A had been made but either could not remember their content or denied the content was as alleged by the appellant. In particular, he denied that he was told in mid-June 2002 that Mr Maestrale Snr was likely to die at any time.

The appellant submitted it was important for her Honour to determine whose evidence was correct. If Mr Maestrale Snr was not seriously ill until the days immediately before his death, there was no urgency for him to execute a new will and the appellant's account would properly have been rejected. If, however, there was objective evidence that Mr Maestrale Snr was seriously ill during the period he was hospitalised, that would support the appellant's version of the conversations he had had with Mr Aspite and his staff during the month prior to his father's death.

The appellant submitted that her Honour's adverse credit findings of his evidence could not stand in the face of objective evidence that supported his case, particularly in relation to the phone calls and SMS messages between the appellant and the first respondent or his staff between 15 June 2002 and 14 July 2002 as recorded in Exhibit A. The appellant's case was that the hospital records and the telephone billing records of the respondents' business number provided that objective support for his evidence. He also pointed to the absence of any file note on any of Mr Aspite's files of the conversations to which Mr Aspite deposed, such that there was no independent support for Mr Aspite's evidence.

The appellant's challenge to her Honour's findings therefore requires an examination of the hospital records relating to Mr Maestrale Snr's hospitalisation from 3 June 2002 until his death on 15 July 2003 (the hospital notes), together with the other evidence in that period including the telephone billing records. It is convenient to address each item in Exhibit A in turn.

Mr Maestrale Snr's medical condition: overview

Mr Maestrale Snr was admitted to hospital on 3 June 2002. An overview of his condition that led to his hospitalisation and up to the time of his death was contained in a medical report by Associate Professor Gibson, Clinical Associate Professor in Medicine and Senior Staff Specialist, on 21 January 2008. The report is addressed to "To whom it may concern" and states that its purpose:

"... is to document the illness, chronic myelomonocytic leukaemia, transforming to acute myeloid leukaemia that led to [Mr Maestrale Snr's] death."

The report recorded Mr Maestrale Snr's first presentation to Professor Gibson in February 2000, his treatment with two courses of chemotherapy when his disease transformed to acute myeloid leukaemia in October 2001, and the failure of the second course of chemotherapy, given in January and February 2002, which led to a decision in March or April 2002 to adopt palliative management only. Professor Gibson recorded that over the "next couple of months", Mr Maestrale Snr was "in and out of hospital" with complications relating to his disease, including "infection, recurrent pleural effusions, renal failure and rapidly progressive leukaemia".

Professor Gibson then commented on Mr Maestrale Snr's mental state during his last admission to hospital. He stated:

"I have been asked to comment on the patient's mental state during his last admission to hospital. The last admission to hospital was from 3rd June 2002 until 15th July 2002. The indication for admission was to manage the issues relating to the end stages of refractory acute leukaemia and for appropriate palliative care and symptom control. During the last week of his life in particular he was acutely unwell with the consequences of progressive refractory acute leukaemia. According to the hospital records, he is reported to be 'drowsy, fatigued with ongoing high fevers and renal failure'. He required oxygen and intensive nursing support. His condition deteriorated to the point that on a number of occasions, during that last week, the family were advised of [Mr Maestrale Snr's] impending death.

On 12th July 2002, formal documentation of his impending death was undertaken with a 'not for resuscitation' order. According to the medical record, increasing drowsiness and confusion was noted by a number of staff members over his final days. Death was pronounced on 15th July 2002."

The hospital admission form records that on admission on 3 June 2002, Mr Maestrale Snr presented with "decreased platelets and HB" and that his condition was "acute". In the Recommendation for Admission form, the presenting problem is recorded as "A.M.L", that is, acute myeloid leukaemia.

The telephone calls recorded in Exhibit A

The phone call on 15 June 2002

The first record in Exhibit A was of a telephone call to Mr Aspite on 15 June 2002 at 3.41 pm. In his affidavit, the appellant said that on that occasion, he telephoned Mr Aspite, apologised for telephoning on the weekend and stated that it was urgent, as his father needed to speak to a solicitor to draw up a new will. He said that he was at the hospital with his father and that he was "scared I might lose him". He said that he advised Mr Aspite that his father had acute myeloid leukaemia, a cancer of the blood bone marrow and that doctors had informed him that "he could go any day". The appellant said that Mr Aspite said he could not attend that day and the earliest that he could do so was the following Monday. The appellant said that Mr Aspite told him that he had a Court hearing in the city that day and that he could come by "straight after, about 4 pm". He said that Mr Aspite asked him for the hospital ward his father was in.

Mr Aspite denied that he had received that telephone call. He said that had he received such a request, he would most likely have refused to act, as he was very busy at the time. He said that had he agreed to act in such circumstances, he would have organised to visit Mr Maestrale Snr as soon as possible, as he was aware of the importance of acting promptly in circumstances where clients are very ill.

Mr Aspite's evidence was that, to the best of his recollection, the first occasion that he was requested to act for Mr Maestrale Snr was in about mid to late June 2002, when he had a meeting with the appellant in his office in relation to the appellant's District Court proceedings. Mr Aspite said that on that occasion, the appellant asked him to draw up a new will for his father in which he was to be the sole beneficiary as his sisters and brother did not care about his father and he had been looking after him. Mr Aspite also said that during the conference the appellant told him that his father had been diagnosed with cancer and had been given about six months to live and that he was in and out of hospital but was at that time in Royal Prince Alfred Hospital receiving treatment.

Mr Aspite said that he told the appellant that he could not make a will on those instructions and would need to see Mr Maestrale Snr to ascertain whether he had the capacity to provide instructions. He said he asked the appellant whether Mr Maestrale Snr was of "sound mind" and the appellant told him that he was "fine". He said that the appellant then asked whether Mr Aspite could go and see Mr Maestrale Snr in person. He said that he informed the appellant that he was in and around Leichhardt often and that arrangements could be made to see him there.

Mr Aspite denied that he was informed during this initial discussion that Mr Maestrale Snr had acute myeloid leukaemia or that the doctors had said he could die at any time.

The hospital notes recorded an attendance by Professor Gibson on Mr Maestrale Snr on 14 June 2002. There was an entry on the same day that Mr Maestrale Snr was prescribed "mist morphine 10 mg every 4 hours" for pain relief and directions to the registrar for his care over the weekend. There was then a note, signed by Professor Gibson, of a meeting with the appellant. It states:

"I have discussed ongoing management with [the appellant]. I have explained that the patient has refractory leukaemia and I do not believe that a remission is possible. I have also discussed likely complications such as sepsis/bleeding and the risk of cardiopulmonary arrest. [The appellant] has indicated his wish that everything possible be done for his father. This includes CPR and transfer to [ICU]. I have also explained to [the appellant] the likely prognosis should this happen. [The appellant] has again reaffirmed his wish for his father's management." (emphasis in original)

An entry in the hospital notes for 15 June stated, "obviously deteriorating". There was then a record of various examinations and two references to renal function. The first of those entries stated, "Imp-dehydrated [with] increasing renal impairment". The second entry referred to the "Plan" for Mr Maestrale Snr's care which concluded, "omit morphine if becomes drowsy or renal function ↓". (I have understood the downwards-pointing arrow to mean "deteriorates".)

The appellant relied upon a further entry in the hospital notes of a meeting with the social worker on 18 June 2002. The social worker recorded that the appellant advised her of his father's "current medical plan" and that he had spoken to Professor Gibson and "[understood] his father's medical situation". The appellant told her that he had been asked to "make some decisions about further medical treatment" and said that he would like his father to be actively treated. He told her that he did not wish his father to be aware of his medical situation or of the decisions the doctors had asked him to make. The note also recorded that the appellant "remains hopeful". The social worker asked whether he had family support and the appellant told her that he had siblings who were not very involved in his father's care. The social worker also discussed with the appellant "emotional issues re father's medical situation".

The appellant submitted that Professor Gibson's medical report and the entries in the hospital notes, including his discussion with the social worker on 18 June, were consistent with Mr Maestrale Snr's condition being terminal as at June 2002 and of his condition deteriorating whilst he was in hospital during that period. It followed on this argument that the hospital notes and Professor Gibson's medical report were consistent with the appellant's evidence both as to the making of a telephone call to Mr Aspite on 15 June and of its content.

The appellant submitted that there were other entries in the hospital records that supported his evidence. For example, the appellant was present with his father when he was undergoing medical examinations and tests prior to his final admission to hospital on 9, 11, 12, 24 and 30 April 2002 and 1, 8, 16, and also on 17 May 2002, when he was in hospital, so that he was aware of his father's condition. It was also to be noted that Professor Gibson had recorded that Mr Maestrale Snr was in and out of hospital with a variety of consultations relating to acute myeloid leukaemia during this period. The appellant submitted that, consistently with the medical records, it was obvious to him during this time that his father's condition was deteriorating.

The appellant also referred to his evidence that a few days after Mr Maestrale Snr was admitted to hospital on Monday, 3 June 2002, his father said that he did not think he was going to make it out of hospital on this occasion and asked the appellant to arrange for him to see a solicitor. The hospital notes recorded that the appellant was with his father for the entire shift on 5 June 2002, this being consistent with his father being gravely ill. The appellant also gave evidence that during the first week of his father's admission, Professor Gibson told him that the chances of his father's lungs collapsing or his heart stopping were very high and sought instructions as to what he wanted to do should that occur. However, the appellant had stated that his father should be actively treated and that the hospital should do "whatever it takes to keep [him] alive".

The appellant also referred to his affidavit evidence that in mid-June he had a conversation with Professor Gibson who reiterated that the chances of his father's lungs collapsing or his heart stopping remained very high. He said that he repeated that he wanted his father resuscitated but that Professor Gibson had said to him, "I know that's what you want, but what does your father want?" The appellant, in this part of his affidavit evidence, also referred to Professor Gibson's advice that if Mr Maestrale Snr's lungs collapsed, they would have to insert a tube into his airways and that this would be "of little benefit".

The appellant pointed out that his affidavit evidence had been prepared prior to the hospital records being obtained on subpoena. He submitted that the consistency between his account and those records supported the conclusion that he had been told in early to mid-June 2002 that his father's condition was serious and therefore that it was likely that that was the message he conveyed to Mr Aspite in mid-June. In particular, he submitted that there was nothing in the medical records that supported a view that he would have conveyed to Mr Aspite that his father had approximately six months to live.

A particular challenge made to the appellant's evidence during the trial was the lack of urgency with which he responded to his father's request, when he was first admitted to hospital in early June 2002, to arrange for him to make a will. In response to this, the appellant said that he wanted to keep his father's morale up and stop him from focusing on "preparation of death". The appellant also rejected the suggestion in cross-examination that although Professor Gibson told him the possible complications of his father's illness, he had not placed any time span on his life. The appellant said that he was told that his father could "go any day", both when he was first admitted to hospital and in mid-June 2002, when Professor Gibson "revisited" the question of his father's ongoing care. The appellant said that it was when Professor Gibson spoke to him in mid-June about two weeks after his father was admitted to hospital, that he contacted Mr Aspite and spoke to him in the terms stated in his affidavit.

The respondents contended the entries in the hospital notes did not support the appellant's evidence and, if anything, supported Mr Aspite's version. In particular, they relied upon the references in the notes to the appellant's wishes "that everything possible be done for his father" and his statement to the social worker that he remained "hopeful". The respondents also contended that Professor Gibson's statement in his report of 21 January 2008 that in March or April 2002 a decision had been made to adopt palliative management only, was inconsistent with an entry in the hospital notes of 2 July 2002 by the social worker that the appellant would "like treatment to continue" and that he was "not keen for palliative care to be involved".

The phone call on 17 June 2002

Exhibit A next recorded a telephone call from Mr Aspite's secretary on 17 June 2002. In his affidavit of 2 December 2010, Mr Aspite stated that according to his diary, he was in conference with a client and interpreter, which commenced at 11 am and went for about two and a half hours and was for the purposes of preparing an affidavit.

The telephone records for the respondents' business number recorded a telephone call to the appellant on that day at 1.54 pm. Mr Aspite acknowledged in his evidence that a telephone call had been made from his office to the appellant at 1.54 pm on 17 June, but said he did not know who had made the call or why it had been made. He stated, however, that both he and his partner, Mr Rando, were in communication with the appellant "in relation to different litigated matters as at June 2002". Mr Rando did not refer in his evidence to any communication with the appellant on 17 June 2002.

The appellant submitted that in the circumstances, a reasonable inference should be drawn that the telephone call was made by the secretary on behalf of Mr Aspite who had been detained in conference and therefore could not attend to take instructions on the will as had been previously arranged. In other words, the appellant submitted that his note of 17 June 2002 should be accepted as correct.

The phone call on 3 July 2002

The next challenge to her Honour's findings was in respect of her observations at [35] ff relating to the absence of any communication from the appellant to the respondents between 17 June 2002 and 3 July 2002, when Exhibit A recorded that the appellant again telephoned Mr Aspite and asked when he would be attending upon his father. Her Honour observed, at [41], that the appellant's contention that he phoned Mr Aspite on 3 July in respect of his father's will did not "sit easily with the entries in the hospital notes". In particular, her Honour noted, at [38], that the appellant had reported to the social worker on 26 June that "the doctors may agree to [Mr Maestrale Snr's] discharge". Her Honour also referred to the hospital notes that indicated that Mr Maestrale Snr's condition was relatively stable to the extent that he was granted a "gate pass" on 2 July to enable the appellant to take him to the airport to farewell some relatives. There was also a reference in the notes to Mr Maestrale Snr expressing a desire to travel to Italy later in the year if he was well enough and to the fact that if he was discharged home, additional assistance would not be necessary.

The appellant submitted, however, that it was apparent from the hospital records that the discussions relating to Mr Maestrale Snr's discharge were in respect of his going home to die. In this regard, the appellant pointed to the entry on 8 July 2002, which referred to an entry made by the palliative care nurse of possible plans for discharge in a few days time.

The phone call on 8 July

The next entry in Exhibit A was for 8 July 2002, which recorded an arrangement for Mr Aspite to attend at the hospital after lunch. The appellant contended that his version was supported by the respondents' telephone records for 8 July 2002, which recorded two calls from Mr Aspite's mobile phone to the appellant's mobile, the first at 1.10 pm and the second just prior to 1.30 pm.

There was no dispute, of course, that Mr Aspite met with Mr Maestrale Snr on 8 July 2002 and took instructions for a new will.

The phone calls on 9 and 11 July

Exhibit A next recorded phone calls between the appellant and Mr Aspite's office on 9 and 11 July 2002. The appellant contended that the probabilities were that these telephone calls, so shortly after the meeting on 8 July 2002 related to his father's will, given Mr Aspite's evidence he said that to Mr Maestrale Snr that "it should not take [him] more than a few days" to prepare the will. The appellant also relied upon the hospital notes and medical evidence as demonstrating the likelihood that he was concerned at that time with his father's deteriorating condition. In this regard, the palliative care nurse's note on 9 July 2002 at 5.30 pm recorded that the appellant was present and expressed concerns about his father's condition and his ability to manage things at home.

Her Honour observed that Mr Aspite did not deny but did not recall receiving a voicemail message on 9 July.

On 10 July 2002, a PADP home oxygen prescription form was completed by hospital staff. Mr Maestrale Snr's medical condition was recorded on the form as including a large left-sided pleural effusion, collapse in the left lung and atrial fibrillation. The form also recorded Mr Maestrale Snr's condition as "terminal", but with the box "three month" ticked. The appellant submitted that that was a reference to Mr Maestrale Snr's condition as having been terminal for three months, not an indication of his likely lifespan. The appellant submitted that Professor Gibson's report of 21 January 2008 which recorded that in "the last week of his life in particular he was acutely unwell" supported this interpretation of the form. He also submitted that this evidence contradicted Mr Aspite's evidence that Mr Maestrale Snr told him that "the doctors had given him a few months to live".

The appellant also contended that his evidence in relation to telephone communications on 9 and 11 July was supported by other objective evidence. In his affidavit of 25 March 2010, the appellant stated that on Thursday 11 July 2002, at about 10 am, Mr Aspite's secretary, Diana, telephoned him and advised that Mr Aspite would call at the hospital at approximately 4 pm the following day to have Mr Maestrale Snr sign the will. The telephone records established that a telephone call was made to the appellant from the respondents' business landline at 9.59 am and was for a duration of 21 seconds.

On that day, Mr Rando appeared in the Industrial Relations Commission on behalf of the appellant's sister. According to Mr Rando's diary, the Industrial Relations Commission matter was listed for 10 am. Mr Rando made the following diary note of his attendance at the Industrial Relations Commission:

"T - 10:30

Taken - 45 min

Travel - 1 hr."

Mr Rando's note recorded that the matter related to substituted service and the filing of an affidavit of service. Mr Rando's services were billed to the appellant's sister on that day by reference to an attendance of 45 minutes and travelling time of one hour. However, there was no billing for a telephone attendance at about 10 am on that day or of any telephone attendance on that day. This was to be contrasted with the billing on various other dates of telephone calls made in relation to the matter. Nor was there any billing entry for a telephone call or attendance in the appellant's sister's Industrial Relations Commission matter on any of the days referred to in Exhibit A. This is particularly relevant, given the respondents' suggestion that the telephone call on 17 June could have related to Mr Rando's professional services.

The appellant also referred to Mr Rando's evidence that to his recollection the appellant accompanied him to court on 11 July 2002, as being inconsistent with the evidence in the hospital records, in which the social worker reported upon a meeting with the appellant at 11.45 am on that day.

12 and 13 July 2002

The appellant was at the hospital in the late afternoon of Friday, 12 July 2002 when there was a medical conference with Mr Maestrale Snr's doctor, Dr Pearson, and other staff, to determine Mr Maestrale Snr's wishes should his heart fail or his lungs collapse. The appellant told the medical staff his father would want to be resuscitated.

The palliative care nurse recorded that Mr Maestrale Snr's "discharge plans [were] on hold for now". The note also recorded that the appellant was in attendance and was hopeful that his father's condition would improve sufficiently to enable him to be discharged home the following week. At 17.05 pm on the same day, the following report was made in the hospital notes:

"I have had with (sic) [the appellant].

I have explained the futility of intensive care and cardiopulmonary resuscitation. [The appellant] understands and accepts this."

At 6.30 pm there was another entry by the palliative care nurse, noting there had been lengthy discussions with the appellant "re future care plans". It was further reported that in view of the day's events, the appellant would like to take his father home if he was going to die. Under the heading "Plan", the following entry was made:

"Home Monday with full community involvement and backup. The goal for home would be for Mr Maestrale to die at home ..."

The appellant submitted that having regard to the records of his father's condition on 12 July 2002, the probabilities were that his telephone call to Mr Aspite at 8:55 pm was to find out why Mr Aspite had not turned up at the hospital on that day. The appellant further submitted that his father's condition was such as to be consistent with his making a telephone call the following day to Mr Aspite to find out what was going on. Accordingly, his evidence should have been accepted.

The trial judge's findings

The trial judge, at [16]-[17], referred to two aspects of the evidence that she considered reflected adversely upon the appellant's account. First, her Honour, at [16], considered that the absence of any complaint by the appellant to Mr Aspite in the weeks and months following Mr Maestrale Snr's death, coupled with his continued dealings with the firm until 2003, was difficult to reconcile with the case that he sought to make of a number of failures by Mr Aspite to attend upon his father for the purposes of making the will.

Her Honour also considered that the appellant's explanation for making the notes recorded in Exhibit A, namely, as an audit trail to ensure that his father was not charged for attendances by Mr Aspite that had not occurred, coupled with the unavailability of any other records to confirm that those notes were made in 2002, raised additional questions relating to the appellant's credit.

Her Honour, at [17], expressed the view that the hospital records:

"... [which] include[d] the numerous reports of the [appellant's] attitude to his father's illness tended to belie his evidence that as early as 15 June he believed his father did not have long to live or that he was told this was likely."

Her Honour considered that this was in contrast to the position in the days before the death of Mr Maestrale Snr which recorded that the appellant was told that if his father was to suffer a cardiac arrest or a series of respiratory failures, the hospital would not attempt resuscitation. Her Honour also recorded that in the three to four days prior to Mr Maestrale Snr's death, he was acutely unwell and in receipt of intensive palliative care. Her Honour considered that this was "powerful evidence" to support a finding that the appellant was concerned that his father had not made a new will. It was this reason that caused her Honour to accept that the appellant had made the telephone communications recorded in Exhibit A on 12 July and following.

The primary judge, at [70], recorded the appellant's contention and Mr Aspite's denial that Mr Aspite's secretary had telephoned the appellant on 11 July advising that Mr Aspite would attend at the hospital the following afternoon to have Mr Maestrale Snr sign the will. Her Honour preferred Mr Aspite's denial in circumstances where the will was not drawn up until the morning of 15 July 2002, which, on that evidence, meant that there was nothing for him to take to the hospital the previous Thursday. Her Honour considered that it was probable the call made by the secretary on 11 July was referable to the appellant's sister's proceedings in the Industrial Relations Commission and Mr Rando's appearance in that matter on that day. However, it must be observed that Mr Rando did not give evidence that he had required any telephone communication to be made to the appellant that morning in respect of his sister's matter or explain why such a call, if made, had been made. There was no file note or billing record on the sister's file to confirm the call related to her matters. The secretary, as has already been noted, was not called to give evidence.

Further, if Exhibit A was an accurate record of communications between the appellant and the respondents, a reason why Mr Aspite did not attend at the hospital as arranged may have been because Mr Aspite had not yet had time to attend to the will. There is some indication of this in Mr Aspite's evidence. Mr Aspite had said that he was busy the day after taking instructions on the will. He was then asked:

"Q. You really could have done it the next day, if you wanted to?

A. Well, if I had the capacity to do so, yes, if I had the time to do so and the stamina to keep going, yes, I could have."

The primary judge accepted, at [78], that the appellant sent an SMS message to Mr Aspite at 8.58 pm on Friday 12 July 2002, which related to the appellant's concern about his father's deteriorating health and the preparation of his father's will. Her Honour accepted that the appellant asked Mr Aspite to ring him urgently. Notwithstanding this, her Honour did not accept that the content of the message was as recorded in Exhibit A. Rather, in what was essentially a credit based finding, her Honour stated, at [79]:

"Persisting doubts about [the appellant's] honesty as to the circumstances in which he claimed the Mobile Phone Transactions document [Exhibit A] was created, and what he claimed were his telephone conversations with Mr Aspite before 8 July and on that day, leave me in doubt that the text of the message sent on 12 July was in the precise terms that [the appellant] deposed to in his evidence. In particular, I am not satisfied by the fact that [the appellant] sent a SMS message to Mr Aspite at 9pm that it also referred to the prearranged meeting for the will to be executed that day at 4pm. I am not satisfied that Mr Aspite made those arrangements or that he directed his secretary to inform [the appellant] of them. While I accept that the events of the afternoon of 12 July were all-consuming from [the appellant's] perspective, I am unable to accept that if a meeting had been fixed for 4pm for the express purpose of executing the will that [the appellant] did not ring Mr Aspite or his office earlier than 9pm to check on his whereabouts. Were I actually persuaded that arrangements had been made for a 4pm meeting as [the appellant] claimed in his evidence, and were I satisfied that the solicitor had failed to attend at that time without explanation, and then at 8.58pm did not respond to a legitimate query about his failure to attend, I would readily conclude that this constituted a breach of his duty of care to his client and the question of whether that duty of care extended to [the appellant] aside, [the appellant's] case on liability would be made out."

Her Honour also referred to the undisputed evidence that the appellant telephoned Mr Aspite on 13 July 2002 in relation to his father's will but did not accept the content of the telephone call was as recorded in Exhibit A.

Although her Honour, at [91] considered that there were aspects of Mr Aspite's evidence, and to a lesser extent Mr Rando's evidence, relating to the disputed mobile phone communications in June and July that were less than satisfactory, she nonetheless found that the respondents' submission "was not without considerable force". Her Honour was "not persuaded" that the appellant gave truthful evidence of his dealings with Mr Aspite between 15 June 2002 and 8 July 2002. Her Honour also rejected the appellant's evidence that he had no dealings with Mr Rando until October 2002 and did not accept the appellant's evidence of conversations with Mr Aspite concerning his father's diagnosis and prognosis leading up to the meeting between Mr Maestrale Snr and Mr Aspite at Leichhardt on 8 July 2002. Further, her Honour was not persuaded by the appellant's evidence that Mr Aspite made arrangements for the preparation of a will that he repeatedly failed to honour without explanation before that date.

At [91] of the principal judgment, her Honour, after referring to the evidence of the respondents in relation to the disputed telephone calls in June and July 2002 as being unsatisfactory in certain respects, stated that she was "not persuaded that [the appellant] gave truthful evidence of his dealings with Mr Aspite between 15 June 2002 and 8 July 2002". Her Honour did not accept the appellant's evidence as to his father's diagnosis or prognosis leading up to the meeting on 8 July 2002 at Leichhardt and was not persuaded that Mr Aspite made arrangements for the preparation of a will that he repeatedly failed to honour prior to that date.

This latter finding appears to have been based upon her Honour's view that if Mr Aspite had behaved in that way, it was difficult to understand why the appellant had continued to engage him in relation to his father's will, or why he continued to retain him to conduct his and his sister's litigation. The appellant submitted that he had explained why he done so in his evidence. He said that in 2002 his intention was to try and resolve the issue in respect of his father's will with his siblings. However, his sister Rosetta would not agree to accept his father's wishes as contained in his instructions for his new will and that he was told he would have to resolve the issues through litigation. In this regard, he said, "I could not resolve the issue with my siblings so next my step was to recoup my losses through the avenues I'm taking today". The import of this submission was that the trial judge failed to have regard to this evidence.

As I have observed, her Honour made credit findings in respect of the appellant's evidence where she was either unpersuaded, or did not accept his evidence. Her Honour reiterated this in her costs judgment and stated, at [22], that she did not accept the appellant's evidence of:

"... the various dealings he had with [Mr Aspite] on his father's behalf on and from [15 June 2002], or that [Exhibit A] was a document prepared in the circumstances he deposed to in his evidence."

Her Honour continued:

"[The] nature and extent of [the appellant's] dealings with [Mr Aspite] was the dominant disputed issue of fact. Again, as I made clear in the substantive judgment, while I was satisfied that [Mr Aspite] had breached his duty of care, it was on a very limited basis. Although the conduct amounting to breach was comprehended by the pleadings, and although [the appellant] gave evidence of it, I was satisfied that breach had been established in large measure referable to evidence independent of [the appellant's] testimony, in particular by reference to the telephone billing records and the hospital notes."

Her Honour concluded, at [24], that in circumstances where the appellant had given untruthful evidence concerning his dealings with the respondents, he thereby acted unreasonably and his conduct resulted in unnecessarily lengthy proceedings greatly increasing the costs of litigation. Her Honour consider that in those circumstances, the ordinary rule as to costs should be displaced.

Submissions

I have already referred to the submissions the parties made in respect of the hospital notes. The parties made the following submissions particularly in respect of Exhibit A., the veracity of its provenance being a critical consideration in her Honour's reasoning on costs.

The appellant contended that the following factors supported his case that he had made notes of the telephone communications with Mr Aspite at about the time those communications had occurred. First, the trial judge accepted that three of the nine entries in Exhibit A were in respect of telephone communications that actually occurred. In particular, her Honour accepted that the telephone communication on 13 July 2002 was made at precisely 12.20 pm and that the note accurately recorded the content of the call the appellant made at that time. The point made by the appellant was that, as his evidence in relation to all the telephone communication was based on Exhibit A, as her Honour accepted three of the calls had been made as recorded in that document, it was likely that the entire document was prepared as he had stated. Further, the consistency of the subject matter of the calls as recorded in Exhibit A, that is, his father's will, was indicative that the document had been prepared by the appellant from his phone records and at about the time each communication was made.

Significantly, the appellant pointed to the fact that at the time of filing his statement of claim, the appellant did not have access to the respondents' telephone records. Those records include a reference to a telephone call made from the respondents' business line on 17 June 2002 at the precise time recorded by the appellant in Exhibit A. There was no billing for this telephone attendance in the appellant's District Court matter or his sister's matter in the Industrial Relations Commission. This was a strong indicator that the telephone call related to arrangements relating to his father's will.

The appellant submitted that the hospital entries did record that the appellant had been informed at the time of his admission and again in mid-June 2002 that his father's condition was terminal and that her Honour had misconstrued that evidence. It was relevant to this submission that Mr Aspite conceded that the appellant did make some telephone calls to him in mid to late-June 2002, but contended that these related either to the appellant's own personal injury matter, or his sister's legal affairs with which Mr Aspite was dealing. However, the appellant pointed to the absence of any record of telephone calls either on his personal injury file or his sister's file, or any charging for telephone attendances in respect of either of those matters on any of the occasions recorded in Exhibit A. Given the detailed notes of attendances kept on his and his sister's files, the appellant submitted that it was unlikely that had the telephone calls related to his or his sister's matters, they would not have been recorded on the file.

The appellant also referred to the failure of the respondents to call Mr Aspite's secretary, Diana, who was recorded in Exhibit A as having phoned the appellant on behalf of Mr Aspite on 17 June and 11 July 2002. As already indicated, telephone billing records of the respondents' business line list a call from the respondents' business number to the appellant's mobile number at 1.54 pm on 17 June 2002. The appellant submitted that the respondents' evidence supported his case that this phone call was made by Mr Aspite's secretary.

The respondents submitted that her Honour's credit finding in relation to the telephone calls ought not be disturbed. They contended that her Honour's questioning of the appellant's reliability, given the explanation that he had made the notes "as an audit trail to ensure the solicitor did not overcharge his father", was well based, particularly as he did not keep a note of the time of each attendance, which would have been important if his purpose was to check the accuracy of any billing. The respondents also relied upon the unavailability of the phone or the computer to corroborate the appellant's evidence.

The respondents further submitted that the appellant had not mentioned in either affidavit about having made notes in his phone or having transcribed the notes onto his computer. They also pointed out, as referred to by her Honour at [26], that the document which became Exhibit A was discovered in the proceedings after billing records of the respondents' phones had been produced. In addition, the respondents referred to the unlikelihood that the appellant would have kept the document for nearly a decade notwithstanding that no bill had been rendered; the absence of the tender of any record of telephone communications in his own matter or in that of his sister, given his evidence that he kept a note of all dealings with his solicitors; and the fact that Exhibit A contained reference to matters that were not telephone communications, including notes of Mr Maestrale Snr's instruction concerning the will at the Leichhardt meeting on 8 July 2002.

Legal principles

The Civil Procedure Act 2005, s 98(1) provides that subject to the Act or any other Act and the rules of court, costs are in the discretion of the court, and the court has full power to determine by whom, to whom and to what extent costs are to be paid. Pursuant to the Uniform Civil Procedure Rules 2005 (UCPR), r 42.1, the 'general rule' is that costs should follow the event "unless it appears to the court that some other order should be made as to the whole or any part of the costs".

A successful party may be deprived of costs if guilty of conduct that makes it appear to the court that some other order should be made: Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries [1951] 1 All ER 873 at 874 per Devlin J; Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72. The conduct may relate directly to the litigation or to the circumstances leading up to the litigation: see Oshlack at 97 per McHugh J.

Conduct in the litigation that may cause a court to exercise the discretion to make some other order than costs follow the event includes where the successful party "unnecessarily protracts the proceedings": Oshlack at 97 per McHugh J. Although McHugh J dissented in the decision in Oshlack there was no disagreement in the High Court as to these general principles: see Mannix v Loumbos [2000] NSWCA 32 at [14] per Foster AJA.

In Arian v Nguyen [2001] NSWCA 5, the Court of Appeal approved the reasoning of a District Court judge who found that the serious dishonesty of the successful party in the conduct of the trial justified the displacement of the usual costs order (although the costs orders made by the trial judge were overturned on other grounds). In that case, the trial judge found that the appellant, despite successfully bringing an action for damages for personal injury, was not a credible witness, had deliberately not told the truth to medical witnesses and had grossly exaggerated his symptoms. Ipp AJA (Foster AJA agreeing) stated, at [37], that:

"... where a party raises issues or makes allegations improperly or unreasonably, this may constitute misconduct such that the court may not only deprive it of costs but order it to pay the whole or a part of the unsuccessful party's costs."

Ipp AJA considered whether it was essential for the exercise of the discretion that the misconduct lengthened proceedings unnecessarily or otherwise caused the costs of the litigation to be increased. His Honour held, at [38], that, on balance, the authorities support the view that:

"... while delay and increased expense brought about by improper conduct in the course of the litigation are highly relevant factors in the discretion to depart from the usual orders as to costs, they are not essential to the exercise of that discretion."

His Honour observed, however, that it would be "very unusual" for that not to be the consequence of misconduct of that kind.

In Apostolidis v Kalenik (No 2) [2011] VSCA 329, the trial judge made findings of serious dishonesty against both the appellant and respondent. The trial judge ordered that the successful respondent be deprived of 25 per cent of the costs of the trial on the basis that she had engaged in improper conduct, told numerous lies, dishonestly exaggerated her case, had failed altogether on some issues; and her own conduct as a witness had wasted court time. In the Court of Appeal, the appellant, in seeking a more favourable costs order, argued that the trial judge had given insufficient weight to the respondent's misconduct. The Court, in rejecting that argument, referred to the statement of Latham CJ in Lovell v Lovell [1950] HCA 52; 81 CLR 513:

"[W]hen the appellate tribunal is considering questions of weight it should not regard itself as being in the same position as the learned trial judge. In the absence of exclusion of relevant considerations or the admission of irrelevant considerations an appellate tribunal should not set aside an order made in the exercise of a judicial discretion... unless the failure to give adequate weight to relevant considerations really amounts to a failure to exercise the discretion actually entrusted to the court."

Determination

There are two ways that one can approach the determination of the question whether her Honour's discretion miscarried in the costs order she made. First, as argued by the appellant, to assess whether her Honour erred in her factual findings in relation to the making of the telephone calls that were recorded in Exhibit A. The second is whether, at a practical level, the trial would have been conducted significantly differently had the trial judge rejected part of the evidence.

The principles governing the review of the factual findings of a trial judge based upon the credit of witnesses were restated in Fox v Percy [2003] HCA 22; 214 CLR 118. Those principles in turn reflect the function of this Court. As the plurality stated, at [23]:

"... On the one hand, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance'. On the other, it must, of necessity, observe the 'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole." (citations omitted)

Their Honours emphasised, at [31], the importance for courts:

"... to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events."

In the present case, there was a body of contemporaneous or near contemporaneous material, in the form of hospital notes, telephone records, solicitor's files, file notes and billing records against which the evidence of both the appellant and Mr Aspite was to be assessed. It could not be said that this material provided "incontrovertible evidence" to the contrary of the trial judge's findings: see Devries v Australian National Railways Commission [1993] HCA 78; 177 CLR 472. However, there is a question whether this material, together with other circumstances, was such that compelling inferences were available such as to favour the appellant's version of events so that his evidence ought to have been accepted by the trial judge: see Chambers v Jobling (1986) 7 NSWLR 1 at 10. An examination of some of that material follows.

On her review of the hospital notes, her Honour, at [61], considered that the recorded wishes of both Mr Maestrale Snr and the appellant, in the days preceding 8 July as well on 8 and 9 July, that Mr Maestrale Snr be discharged home with the "only health concerns being chest pain", was:

"... capable of supporting Mr Aspite's evidence that Mr Maestrale's health, as he assessed it, was not so dire that there was a real risk of his dying within days of 8 July such that delaying preparation of the will until 15 July was unreasonable."

However, the note made by the occupational therapist, that both the appellant and Mr Maestrale Snr were "currently concerned re chest pain", read in the context of the hospital records as a whole, was not expressed as the singular concern in Mr Maestrale Snr being discharged. It was an expression of a particular problem in a context where the appellant had been informed by Professor Gibson on 14 June that he did "not believe that a remission [was] possible": see above at [*24]. That notation could only mean one thing: that further treatment would not assist, but that control of Mr Maestrale Snr's pain was a particular concern. Given that his pain required narcotic medication, that concern was hardly surprising. The evidence needs to be looked at in that context.

The discussion with the medical staff at that time then turned to whether Mr Maestrale Snr should be resuscitated should he have a cardiopulmonary arrest. His medical history made this a not unlikely possibility given that he had atrial fibrillation and a large pleural effusion. It appears that the consequences of seeking to actively treat were explained to the appellant in terms that were far from encouraging. The context in which discharge home was being discussed also included his medication regime which had not changed in any significant way since his admission on 3 June. He was medicated with narcotic or artificial narcotic medication, either mist morphine or Endone, but nonetheless had continuing serious chest pain, apparently arising from pleural fluid. If he was to be discharged he would require continuous oxygen, that is, for 24 hours each day. He was also under review by the palliative care team, notwithstanding that the appellant was resisting palliative care at home. It may readily be inferred that this was because of the appellant's wish and over-optimistic belief he could adequately care for his father himself.

In my opinion, there is nothing necessarily inconsistent with the appellant wishing his father to be at home at this time and his conveying to Mr Aspite the information provided to him by Professor Gibson and the hospital staff, and expressing a real fear that his father was going to die soon. If that was all there was in this case, it might be thought that my opinion was the expression of one judicial opinion over another and, in circumstances where her Honour had seen the witnesses, it could not be said that there were compelling inferences that favoured the appellant's evidence. However, that was not the only evidence. Exhibit A was important evidence which itself gave rise to inferences favourable to the appellant, if Exhibit A had been prepared from mobile phone records made at about the time the phone call was made.

As already mentioned, there was objective evidence supporting that there were telephone communications made on the dates recorded. For example, the appellant had recorded a telephone call received at 1.54 pm on 17 June from Mr Aspite's secretary. A phone call at that particular time from Mr Aspite's office was confirmed by the phone records. Mr Aspite offered no reason why that phone call was made. Mr Aspite's diary is consistent with the call being made to cancel an appointment because he was engaged in another matter. There was no diary entry, nor was it suggested that Mr Aspite had an appointment that day to see the appellant or his sister in respect of their own litigation. An inference, and the probable inference, was, therefore, that the call related to Mr Maestrale Snr.

The entry in Exhibit A for 11 July is also important. Again, the time of the telephone call recorded in Exhibit A corresponds with the telephone billing records. Mr Rando gave evidence of his belief that the telephone call related to the appellant's sister's matter in the Industrial Relations Commission. That is possible, as the sister's matter was listed in the Industrial Relations Commission that day. However, the probabilities suggest otherwise. First, the call was made from the respondents' office land line. As the sister's matter was listed in the Industrial Relations Commission at 10 am, the likelihood was that Mr Rando was at the Commission and thus not in his office to make the call. There is no file note of the telephone call on the appellant's sister's file. Mr Rando had recorded and billed for travelling time of (in total) one hour. Thus, he would have had to leave his office at about 9.30 am in order to be at the court at 10 am. Someone else, therefore, must have made the call. There is no billing for the telephone call on the appellant's sister's file. An available inference was that the call to the appellant was in respect of his father's will. In the circumstances, I consider that was the probable inference.

The respondents' telephone billing records also precisely corroborated the appellant's evidence of a telephone call made on 12 July at 8.58 pm. Her Honour accepted that this call was made to Mr Aspite to advise him of the position in respect of Mr Maestrale Snr's health deteriorating and that the making of a new will was urgent. This was amply supported by the hospital records. However her Honour did not accept that the contents of the telephone call were as stated in Exhibit A, namely, that the appellant sent a text message as to the signing of the will that day. This view was based on the unlikelihood of a an almost five hour time lag between when the appellant said Mr Aspite was to attend the hospital with the will and in making the call.

However, the delay in contacting Mr Aspite is understandable, given what was occurring at the time. The notes record that Professor Gibson attended at 4 pm. At 5.20 pm, another doctor, perhaps a registrar, recorded that he had a conference with the appellant and explained the futility of intensive care. There is a further entry at 6.30 pm by the palliative care nurse, who recorded that she had had a lengthy discussion with the appellant. The last entry for the day is by a nurse who records that the appellant was still with his father. I do not, therefore, with respect, share her Honour's scepticism as to the appellant's failure to call Mr Aspite at a time proximate to 4 pm when, on the appellant's evidence, Mr Aspite did not attend as arranged. The appellant was with his father whose condition was rapidly deteriorating as recorded in the hospital notes. A person may not necessarily function in those circumstances as one might at less stressful times.

It is also important, if not critical, to the likelihood of Exhibit A being an accurate record of the telephone calls, that the contents of Exhibit A were reflected in the appellant's statement of claim filed on 11 June 2008 and were the basis of his first affidavit sworn 25 March 2010. This was before the appellant had had access to hospital records or to the respondents' files, billing records and telephone records. The information in those documents was consistent with the appellant's version. In my opinion, the hospital records, the telephone records, the solicitor's diary and diary notes and billings viewed as a whole, including the absence of any record in the appellant's or his sister's file of telephone calls on 17 June and 11 July of which there were independent records, supported the appellant's evidence that he made or received telephone calls on the dates specified in Exhibit A.

I am of the opinion that the appellant's evidence relating to the content of the telephone calls recorded in Exhibit A should be accepted, notwithstanding that there are aspects of the respondents' submission, particularly the absence of a recording of the time over which each communication was had, which could cast doubt upon the appellant's stated reason for keeping notes, for audit purposes. However, the appellant's reference to keeping a record for audit purposes indicated that it was of a limited nature, as her Honour recognised. He was not concerned with the time of any charge but with the actual attendances.

I am also not persuaded, having read the whole of the evidence, that the appellant's failure to produce a record of notes he made in his own and in his sister's litigation meant that he did not keep such notes. Rather, those matters had been finalised, unlike the position with his father's will, which remained a live issue for him. Finally, I am not persuaded by the fact that Exhibit A was produced after the appellant had access to the respondents' phone billing records. Access to those records occurred after the filing of the original statement of claim, which included an account of the telephone communications recorded in Exhibit A, as I have explained at [*98].

The other matter that caused her Honour concern, was in my opinion, explained by the appellant. Her Honour's view, at [16]-[17], was that the absence of complaint to the respondents in the period shortly after his father's death and the ongoing retainer of the respondents' firm in his own and his sister's matters was "difficult to reconcile with his case". However, the appellant explained that the litigation matters were ongoing and he was trying to sort things out with his siblings in respect of the will. That is a plausible explanation.

The Supreme Court Act 1970, s 75A, provides that this appeal is by way of rehearing. The plurality in Fox v Percy made the observation, at [27], that:

"If, making proper allowance for the advantages of the trial judge, [the appellate court] conclude[s] that an error has been shown, they are authorised, and obliged, to discharge their appellate duties in accordance with the statute."

As I have concluded that the appellant's evidence in respect of Exhibit A should have been accepted, with the consequent acceptance of his evidence as to the telephone communications with the respondents, it follows that I consider that her Honour's costs orders should be set aside and the appellant should have an order for his costs, other than in respect of the adjourned hearing date in respect of which the parties should bear his and their own costs respectively.

Having reached that conclusion, it is not necessary to consider whether the case would have been run differently so as to impact on costs had I reached a different conclusion and agreed with her Honour that only the calls from 12 July had been made and in terms stated by the appellant. As that would involve a series of hypothetical considerations, it is preferable not to engage in that task.

Grounds 1 and 2: damages

The appellant claimed damages based on the difference between his anticipated benefit under the intended will after paying the bequests to his siblings under the existing will ($632,000) and the actual benefit he received under the existing will ($273,000). However, her Honour, at [110], assessed damages:

"... by reference to the difference between what [the appellant] has in fact had to pay out to retain the family home and what he would have had to pay out but for the solicitor's breach."

The "pay out" to retain the family home is understood as follows. Under the unexecuted will, the appellant was entitled to the family home, but was required to pay out the legacies to his siblings totalling $460,000. In order to comply with his obligations under the existing will but still retain the home, the appellant decided to pay out the bequests to his siblings. This involved a payment of $273,000 to each of his sisters, as well as owing $150,000 to his brother Giovanni who had agreed to accept $150,000 under the will. The total amount the appellant was thus liable to pay to his siblings was $696,000. The appellant needed to borrow this money if he was to pay out the legacies and retain the family home, representing the amount that he needed to pay out of his own money or borrowings to acquire the family home.

Therefore, the damages, calculated as the difference in what the appellant needed to pay out of his own money to retain the family home under the unexecuted and executed will, were assessed as $696,000 - $460,000 = $236,000. To this figure, Fullerton J added stamp duty and conveyancing costs, bringing the total to $288,738. Her Honour then discounted that sum on account of the two factors that are discussed below, bringing the judgment sum without interest to $240,938.

Her Honour, at [108], explained her approach to the assessment of damages as follows:

"... in my view, the principled approach in this case is to compare what [the appellant] in fact received under the will in respect of which probate was granted (that is, what he has in fact had to pay out in order to retain the family home) with what he would likely have actually received under the 'new or intended will' consistent with his father's express wish that he should retain the family home but account to his sisters and his brother for their legacies of $150,000 each with an additional legacy of $10,000 to his sister, Rosetta."

There is no challenge to her Honour's approach as a matter of principle. However, the appellant challenged the two discounts her Honour applied to the award of damages. The first discount was to take account of the degree of possibility or probability that the appellant's sister Graziella would bring successful proceedings under the Family Provision Act 1982 seeking greater provision, had the new will been executed. The second discount was to take into account the fact that pursuant to an arrangement between the appellant and his brother Giovanni, the appellant at the time of the hearing had not paid to Giovanni the sum of $150,000 in satisfaction of the bequest to him, and under the arrangement between the brothers was not likely to pay that sum for a foreseeable period of five years.

These two factors are the subject of grounds 1 and 2 of the appeal respectively.

Ground 1: The possibility or probability that Graziella would bring a claim

The trial judge found, at [114], that she was satisfied the award of damages should be discounted, because of the possibility that Graziella would bring a claim for increased provision from the estate, had her father changed his will in accordance with the instructions given to Mr Aspite. The factors that led her Honour to this conclusion were Graziella's personal circumstances as a single mother with two children, her income being primarily child support payments and payments from Centrelink, together with the influence of her sister Rosetta who did bring a claim (which she later abandoned).

The manner in which her Honour applied the discount is discernable from the Schedule of Damages in her Honour's reasons. Her Honour's approach to the calculation of the discount was as follows. Under the existing will, Graziella was entitled to and was paid the sum of $273,000. According to the expert evidence, assuming a new will had been made, had Graziella brought a claim, she would have increased her legacy from $150,000 to $350,000. The difference between the legacy of $273,000 paid under her father's will and the $350,000 that she would have received had she sought provision under the Family Provision Act was $77,000. Her Honour discounted the figure of $77,000 by 20 per cent to reflect the degree of probability or possibility that Graziella would have brought and been successful in proceedings for increased provision.

The appellant contended that her Honour's finding, that there was a 20 per cent likelihood, or indeed any likelihood, that Graziella would have contested her father's will had it been changed to accord with his instructions to Mr Aspite, was contrary to the evidence.

In her affidavit dated 16 June 2011, filed in support of the appellant's claim, Graziella stated, relevantly:

"2 I had a good relationship with my father and visited him regularly. On one occasion when I visited him in hospital about three months prior to him passing away, we had a conversation to the following effect, although most of the conversations between members of our family were in our Sicilian dialect:

He said:

'I have to speak with my solicitor. I am making a few changes to my will. I don't want [the appellant] to have a massive debt to worry about when I'm gone. I will be leaving you all something'.

I said:

'Dad, stop worrying about all that. I am not interested in that; I just want you to get well.'

3 By my reaction, I was not objecting to my father making changes to his will. I was simply trying to make him think positive things rather than the negatives. I was not concerned with his will and did not want him to pass away. It did not concern me that any amount being left to me by my father in his will might reduce. At the end of the day, whatever my father's wishes were, I respected them. Further, I have always got on with my siblings and would not have wanted to argue with them about the will and [the appellant] had done the most out of the children in looking after our father. I did not raise this matter again with my father about his will.

...

7 I am aware that a further will was drawn up by which I would have received $150,000 rather than the quarter share of $273,000 that I actually received. If that had been the case, I would have respected my father's wishes and would not have challenged the will or sought to make a claim for more money from the estate. Following his death, I did not seek legal advice or challenge the will or obtain a greater proportion."

Graziella was cross-examined in relation to the discussion with her father to which she deposed in para (2) of her affidavit as follows:

"Q. Did he say anything more specific in terms of figures or did he leave it at that general level?

A. No, just general.

Q. But you understood from that discussion that that was his wish, that [the appellant] should take more than the rest of you?

A. I did, yes.

Q. And you were aware, weren't you, that [the appellant] had been the one of you who had provided the most care for your father while he had been unwell?

A. Yes.

Q. I take it you regarded that it was fair then that [the appellant] should receive that favour from your father in the sense of receiving more than the rest of you under the will?

A. He was there for my father more than what myself and my sister and my other sibling, John.

Q. So you regarded it as fair that your father gave him more?

A. That's right.

Q. You had no issue with that?

A. No."

Graziella, in response to further cross-examination, said that the appellant had told her of the terms of the proposed new will after her father's death, including that she was to receive $150,000, as were her siblings Rosetta and John, and that there was to be an extra $10,000 for Rosetta. She was then further cross-examined as follows:

"Q. You have said in paragraph 3 that at the end of the day, whatever your father's wishes were you respected them?

A. That is correct.

Q. And you knew at the time of his death that his wish was that you should receive less than [the appellant]?

A. That's right. And if the will had been signed I would have respected what my father wanted.

Q. But you don't suggest, do you, that you have some doubt about whether what [the appellant] told you and what that new will suggests was what you father wanted?

A. I don't have any doubt at all."

In light of this evidence, the trial judge questioned Graziella, that if she understood that her father's wishes were that the appellant was to receive the major portion of the estate and that her own legacy was reduced, why she did not act upon that, rather than retaining the sum of $273,000 to which she was entitled under the existing will. Graziella's answer was as follows:

"HER HONOUR

Q. What was it about the fact of it not being signed that caused you to doubt that your father's wishes were that you would receive less than--

A. Your Honour, we had, I had a conversation with my father when he was in hospital which I'm, I think it would have been about three months prior and he had mentioned to me not the amount but he had mentioned to me that he was, you know, didn't want my brother to be burdened with a massive mortgage and so forth, yep. And I didn't know how much though, and to me it didn't make any difference. Even if he said a dollar each, it didn't, it didn't worry me. It didn't make any difference. My concern was for my father's health.

Q. Of course. And when you learnt of the fact that your father had taken steps to the point of having a new will drawn up, but regrettably passed before he could sign it?

A. Yes.

Q. You knew that he had put those wishes into effect by having a solicitor draw up a new will, didn't you?

A. Yes, I did, your Honour.

Q. This is what I'm struggling to understand. Why wasn't the will, even though it wasn't signed, enough for you to be satisfied in your own thinking that your father's wishes had been carried out?

A. The reason being I just went with what was signed, cause--

Q. You went with the document that was signed?

A. The signed one. I would have, being signed, the other will.

Q. The first?

A. The second.

Q. If the second will was signed?

A. Yeah. I would have accepted anything that my dad wanted us to have, yeah."

There was further cross-examination and additional questioning by her Honour, as follows:

"[COUNSEL]

Q. You see, you told us in your affidavit that it was your father's wishes that were important for you to respect?

A. That's right.

...

Q. But in reality since his death you have insisted on taking an equal share, not a less?

A. I didn't insist. I only went by the document that was signed. I never took any procedures to, in the, in looking into the matters of the will, myself.

...

Q. The reality is that you were happy to take the larger amount despite the fact that you understood at the time of your dad's death that wasn't his wish?

A. No, that is not correct.

HER HONOUR

Q. Well, why did you take the larger amount and not the smaller amount, to be blunt about it?

A. Because that is the document that had been signed. I went with the actual document.

Q. You went with the signed document?

A. With the signed document, that is correct.

Q. Did you do that in discussion at the family meeting?

A. Yes, I did, your Honour.

...

HER HONOUR

Q. Did [the appellant] suggest that you should go with what was signed?

A. [The appellant] read out the will to us.

...

A. The unsigned one. And when he read the will out to us I was willing to accept whatever my father had written.

...

A. ... but we found that it hadn't been signed.

Q. Did [the appellant] tell you it had been signed?

A. No.

Q. Who was it that persuaded you that, if anyone, that the signing of the will made all the difference?

A. When my sister discussed it with me.

Q. So you and your sister together came to an agreement or a concluded idea that the signed will was the will you should go with?

A. We, I can't speak on behalf of my sister.

...

A. ... But as for myself, whichever one was signed that is what I went with."

The respondents submitted that Graziella's evidence that she would have accepted her father's wishes had the new will been executed, was contradicted by her conduct in insisting upon her entitlement under the existing will. Accordingly, there was material available to the trial judge upon which to find that was there was a possibility that Graziella would bring a claim, although that possibility was not high. It was submitted that the assessment made by her Honour was open on the whole of the evidence. The exercise being undertaken by her Honour was an evaluative one: see Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 at 335. The respondents submitted, therefore, that her Honour's assessment ought not be disturbed by an appellate court unless error was demonstrated. The respondents submitted that no error had been demonstrated.

I do not consider that any error has been demonstrated in her Honour's conclusion that there was a possibility that Graziella would have brought a claim for greater provision had Mr Maestrale Snr in fact executed the new will. Although I consider that the possibility was low, it is often said that when a trial judge is making an evaluative determination the principles in House v R [1936] HCA 40; 55 CLR 499 are applicable. Those principles, in essence, require error to be established before an appellate court will interfere. In my opinion, no relevant error has been established and accordingly I would not interfere with this aspect of her Honour's judgment.

Ground 2: reduction for use of Giovanni's legacy

Her Honour determined, at [115], that the sum of $150,000, being Giovanni's legacy which the appellant had not yet paid and therefore continued to retain the benefit of that sum, should be discounted by applying the 5 per cent actuarial tables to reflect a position that the sum would not be paid to Giovanni for a period of five years. The application of the discount reduced the sum of $150,000 to $117,600, with the consequential effect of reducing the award of damages to be paid to the appellant by $32,400.

The circumstances in which the appellant had retained the benefit of the sum of $150,000 was explained by Giovanni in his affidavit sworn on 20 June 2011. Giovanni deposed that his father had told him during the period in which he was ill that he was leaving more to the appellant than to him and his sisters. He said that he was not upset about this, as the appellant had done "far more to help our father", including prior to his final illness. He said that he would not have challenged that will no matter what it contained, saying that he would have respected his father and honoured his wishes.

Giovanni had been living in the family home prior to his father's death and did not pay rent, although he occasionally gave him $50 to assist with expenses. He said that he had lent the sum of $150,000 that he had agreed to receive to the appellant to help him to buy the family home where he continued to live with the appellant and the appellant's wife. Giovanni said that he expected that the appellant:

"... will repay me one day when he can, even if that is years away, but I do not expect him to pay me any interest and will not require him to do so."

Giovanni said that when the appellant repaid him, he would buy himself a residential unit. He maintained in cross-examination that when the appellant repaid him, he would only take $150,000. Giovanni was not challenged in cross-examination to the effect that he had gifted his legacy to the appellant, nor was he challenged as to his expectation that the monies would be repaid someday. He conceded, however, that he was not going to make any demand on the appellant for the monies and that it was his attitude that the appellant would pay him "whenever he can".

The appellant submitted that her Honour erred in applying a discount to reflect repayment of the legacy in five years. He contended that the fact Giovanni had permitted him to use his money could not enure for the benefit of the respondents. The appellant relied, by way of analogy, upon the principle stated in Paff v Speed [1961] HCA 14; 105 CLR 549 at 556 per McTiernan J as follows:

"It seems to me that it would not be just or reasonable that the tortfeasor should claim in the assessment of damages caused by his wrong a credit in respect of a payment received by the injured party from another party towards which the tortfeasor himself has not made nor is liable to make a contribution, and that it would be unexpected that the common law should be found to be otherwise."

In National Insurance Company of New Zealand Ltd v Espagne [1961] HCA 15; 105 CLR 569. In that case, Dixon J commented, at 572, that

"... no legal rule exists that can be applied to every case where an advantage accrues to the injured man which but for the injuries he would not have obtained"

although his Honour nonetheless agreed with the observation of McTiernan J in Paff v Speed set out above.

The respondents, in their written submissions, described the arrangement under which Giovanni's legacy had been made available to the appellant to be "nebulous, potentially being a gift". In circumstances where the suggestion of a gift was not made to Giovanni in cross-examination and where he was not challenged in cross-examination as not telling the truth, it is not open for the respondents to make that submission.

On the question of principle, the respondents submitted that the appellant's argument that the benefit he received by having these monies available to him could not enure for the benefit of the respondents was to "promote inverted logic". They submitted that the Court's focus should be on the actual loss suffered by the appellant, not to any benefit accruing for the respondents. It was submitted that there was no error and, indeed, that it was necessary for her Honour to take this benefit into account.

I do not agree with the respondents' submission. The arrangement between Giovanni and the appellant in respect of the legacy to which Giovanni was entitled, itself reduced to $150,000 on Giovanni's own volition, was understandable. He lived rent-free in the family home and it appears that he had done so for some time, including whilst his father was alive. The reason he advanced the monies to the appellant was to enable the appellant to purchase the family home, which was in accordance with his father's wishes. Giovanni was not challenged on this evidence. It might be observed that, in any event, it was a way of preserving or retaining his own living arrangements which had been in place for some time.

In my opinion, by reference to the principle stated by McTiernan J in Paff v Speed, the respondents are not entitled to the benefit of a private arrangement between the appellant and his brother. I consider that her Honour erred in making this reduction in the damages otherwise payable to the appellant.

Ground 3: interest

In his further amended statement of claim, the appellant had claimed interest as an aspect of his damages, being the interest he had paid on the sum of $600,000 that he had borrowed so that he could satisfy the legacies payable under the existing will and thereby maintain the family home. He also claimed interest pursuant to the Supreme Court Act, s 100 (statutory interest) which provides that the court may award interest up to judgment on a money sum as the court thinks fit, on the whole or any part of the judgment sum and for the whole or part of the period from the time the cause of action arose until the time judgment takes effect.

At trial, the appellant submitted that the preferable approach to interest was an award of statutory interest rather than interest on his borrowings. The trial judge rejected this claim on the basis it would overcompensate him. Rather, her Honour took as the basis of her calculations the interest that the appellant in fact paid on the $600,000 loan, as reflected in his loan account: see judgment at [111]. On her Honour's calculation of the damages, $240,938 of that sum would not have been required to be borrowed but for the respondents' negligence. Her Honour thus calculated interest on the basis of 40.1563 per cent of the interest the appellant had paid on the borrowing of $600,000, being the interest that the appellant was required to pay, being the percentage representing the proportion of the $600,000 debt that was incurred because of the respondents' negligence (that is, $240,938/$600,000).

The appellant submitted on appeal that her Honour erred in rejecting his claim for statutory interest.

Consideration

Section 100 makes provision for pre-judgment interest on a claim for damages. The function of such an award is to compensate a plaintiff for the loss which he or she has suffered by being "kept out of his or her money during the relevant period": Batchelor v. Burke [1981] HCA 30; 148 CLR 448 at 455 per Gibbs CJ; MBP (SA) Pty Ltd v Gogic [1991] HCA 3; 171 CLR 657 at [7] per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. This had been explained more fully in Marine Board of Launceston v Minister of State for the Navy [1945] HCA 42; 70 CLR 518 at 525, where Latham CJ stated:

"When an action is brought for damages ... for tort, the amount of damages is never increased (apart from some statutory provision ...) because there has been delay caused by negotiation and litigation or by other circumstances. The loss of the use of the money ultimately awarded as damages is not part of the loss occasioned by the tort or breach of contract itself. It is a loss due entirely to delay in the payment of money ultimately held to be due, and is not recoverable as part of the damages."

This statement was adopted by Samuels JA in Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322. The reverse of the plaintiff being kept out of money is that the defendant has had the use of that money to which the plaintiff was otherwise entitled during the period up to the time of judgment, a point made by Moffitt P in Bennett v Jones [1977] 2 NSWLR 355, at 369-370. His Honour continued, at 370:

"I see no reason why the simple fact that a defendant does not have to pay money when his liability arises, and has the benefit of non-payment for a period, should not provide a basis to make a discretionary order for payment of interest for the whole period. One had the money, and the other not. If it is not a commercial setting, the gain and the loss may not be measured by a commercial rate of interest."

The award of pre-judgment statutory interest is discretionary and there is no prescribed rate of interest that may be awarded. This is to be contrasted with the position in respect of post-judgment interest payable pursuant to s 101: see UCPR, r 36.7, which prescribes the rate at which interest is to be calculated on the judgment debt. Nonetheless, it is desirable for there to be some uniformity in the interest rate adopted, provided that the rate bears sufficient relation to commercial reality: see R W Miller & Co Pty Ltd v The Ship Patris [1975] 1 NSWLR 704. In Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; 53 NSWLR 600, Mason P said, at [30]:

"It would be intolerably burdensome if a court required evidence and argument in every case as to what rate or rates of interest would do justice to the principles which I have endeavoured to summarise. The interests of the parties and of the court, including the interest of consistency as a component of justice, are served by taking a broad, standard approach whereby interest is calculated according to pre-determined rates that the parties can take into account in their dealings during the litigation and in their endeavour to avoid wasteful disputation concerning its outcome."

In conformity with this view, the Supreme Court's Practice Note 16 (16 June 2010) provides:

"5. Practitioners and litigants should expect that where, pursuant to s 100 (1) and (2) of the Civil Procedure Act 2005, interest in respect of a pre-judgment period is to be included in a judgment, the Court will have regard to the following rates, being rates agreed upon by the Discount and Interest Rate Harmonisation Committee established following a referral by the Council of Chief Justices:

(a) in respect of the period from 1 January to 30 June in any year - the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced, and

(b) in respect of the period from 1 July to 31 December in any year - the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced."

The terms of the Practice Note do not preclude a party from adducing evidence as to the appropriate rate of interest in a particular case, as the remarks of the court in Hexiva Pty Ltd v Lederer (No 2) [2007] NSWSC 49 indicate. In that case, a question arose as to the proper rate of interest post-judgment. Brereton J stated, at [18], that:

"[W]hile as a matter of practice the court is often guided in the award of pre-judgment interest by the prescribed rate, that is always subject to evidence, and even in respect of post-judgment interest, [CPA, s 101(2)], and more so prejudgment [CPA, s 100(1), (2)], evidence may show that another rate is appropriate. Although the calling of accountants and other experts to give evidence on applicable rates of interest in every case, or even frequently, has been discouraged [Serisier Investments Pty Ltd v English [1989] 1 QdR 678; Smallacombe v Lockyer, 575; Wheeler v Page (1982) 31 SASR 1, 7], it must be permissible to a party to call evidence to show that in particular circumstances a rate other than the statutory post-judgment rate is appropriate."

In my opinion, the trial judge did not give effect to the underlying basis upon which pre-judgment interest may be awarded, namely, compensation for being kept out of the monies from his father's estate to which the appellant would have been entitled had it not been for the negligence of the respondents. Rather, her Honour had regard to the appellant's actual loss, being a proportion of the interest payable on the loan of $600,000 that he borrowed to pay out the legacies to his siblings. When the basis of an award of statutory interest is understood, it could not be said that such an award would overcompensate the appellant. In circumstances where the appellant sought interest pursuant to s 100, he should have an award of statutory interest.

The appellant sought leave to amend the notice of appeal to include an additional ground, that her Honour should have found that the first respondent was negligent in failing to have the written notes of Mr Maestrale Snr's will signed so as to constitute an informal will. As the primary judge's finding that the first respondent was liable in negligence has not been disturbed, and as that ground does not impact upon the question of costs or damages, it is unnecessary to consider this alternative basis of liability.

Proposed orders

I would propose the following orders:

(1) Appeal allowed.

(2) Set aside the award of damages made by her Honour and in lieu order that the respondents pay to the appellant damages in the sum of $273,298 together with interest calculated in accordance with Supreme Court Practice Note 16 (16 June 2010).

(3) Set aside the costs order made by the trial judge and order that the respondents pay the appellant's costs of trial.

(4) Order that the respondents pay the appellant's costs of the appeal.

(5) Direct the parties to bring in short minutes of order to reflect the judgment sum to which the appellant is entitled including both damages and interest.

MACFARLAN JA: I agree with Beazley P.

BARRETT JA: I agree with Beazley P.

**********

Decision last updated: 06 June 2014

Medium Neutral Citation:	Maestrale v Aspite [2014] NSWCA 182
Hearing dates:	17 December 2013
Decision date:	06 June 2014
Before:	Beazley P at [1]; Macfarlan JA at [141]; Barrett JA at [142]
Decision:	(1) Appeal allowed. (2) Set aside the award of damages made by her Honour and in lieu order that the respondents pay to the appellant damages in the sum of $273,298 together with interest calculated in accordance with Supreme Court Practice Note 16 (16 June 2010). (3) Set aside the costs order made by the trial judge and order that the respondents pay the appellant's costs of trial. (4) Order that the respondents pay the appellant's costs of the appeal. (5) Direct the parties to bring in short minutes of order to reflect the judgment sum to which the appellant is entitled including both damages and interest. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	COSTS - departing from the general rule - Uniform Civil Procedure Rules 2005, r 42.1 - conduct of parties - misconduct - adverse credibility findings DAMAGES - measure of damages in actions for tort - assessment of future possibilities or probabilities - evaluative assessment DAMAGES - measure of damages in actions for tort - deductibility of collateral benefits - where benefit derives from private arrangement with a third party APPEALS - interference with discretion of court below - need to establish error APPEALS - general principles - interference with judge's findings of fact - functions of appellate court - where findings based on credibility of witnesses INTEREST - pre-judgment interest - rate of interest - principles guiding award of interest - Supreme Court Practice Note 16
Legislation Cited:	Civil Procedure Act 2005 Family Provision Act 1982 Supreme Court Act 1970 Uniform Civil Procedure Rules 2005
Cases Cited:	Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries [1951] 1 All ER 873 Apostolidis v Kalenik (No 2) [2011] VSCA 329 Arian v Nguyen [2001] NSWCA 5 Batchelor v. Burke [1981] HCA 30; 148 CLR 448 Bennett v Jones [1977] 2 NSWLR 355 Chambers v Jobling (1986) 7 NSWLR 1 Devries v Australian National Railways Commission [1993] HCA 78; 177 CLR 472 Fox v Percy [2003] HCA 22; 214 CLR 118 Hexiva Pty Ltd v Lederer (No 2) [2007] NSWSC 49 Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; 53 NSWLR 600 House v R [1936] HCA 40; 55 CLR 499 Lovell v Lovell [1950] HCA 52; 81 CLR 513 Mannix v Loumbos [2000] NSWCA 32 Marine Board of Launceston v Minister of State for the Navy [1945] HCA 42; 70 CLR 518 MBP (SA) Pty Ltd v Gogic [1991] HCA 3; 171 CLR 657 National Insurance Company of New Zealand Ltd v Espagne [1961] HCA 15; 105 CLR 569 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 Paff v Speed [1961] HCA 14; 105 CLR 549 R W Miller & Co Pty Ltd v The Ship Patris [1975] 1 NSWLR 704 Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322
Texts Cited:	Supreme Court Practice Note 16 (16 June 2010)
Category:	Principal judgment
Parties:	Aldo Maestrale (Appellant) Dante Aspite (First Respondent) Bartholomew Rando (Second Respondent)
Representation:	Counsel: C T Barry QC; J Rowe (Appellant) G A Sirtes; J Downing (Respondents) Solicitors: MMD Law (Appellant) HWL Ebsworth Lawyers (Respondents)
File Number(s):	CA 2013/31938
Decision under appeal	Jurisdiction: 9111 Citation: Maestrale v Aspite [2012] NSWSC 1420; Maestrale v Aspite (No 2) [2012] NSWSC 1421 Before: Fullerton J File Number(s): 2008/289388