Maria Kronemann(in her capacity as executor of the estate of Jeanne Papaioannou deceased) v Christos Papaioannou
[2020] VSCA 275
•9 November 2020
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCI 2020 0057
| MARIA KRONEMANN (in her capacity as executor of the estate of JEANNE PAPAIOANNOU deceased) | Applicant |
| v | |
| CHRISTOS PAPAIOANNOU | Respondent |
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| JUDGES: | KYROU JA and MACAULAY AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 30 October 2020 |
| DATE OF JUDGMENT: | 9 November 2020 |
| MEDIUM NEUTRAL CITATION: | [2020] VSCA 275 |
| JUDGMENT APPEALED FROM: | [2020] VSC 257 (McMillan J) |
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COSTS – Security for costs – r 64.38(4) of the Supreme Court (General Civil Procedure) Rules 2015 – Applicant seeking leave to appeal an award of further provision from an estate pursuant to pt IV Administration and Probate Act 1958 and associated costs award – Low prospect that applicant will succeed on appeal – High risk that an order that the applicant pay the respondent’s costs will not be satisfied – Bodycorp Repairers Pty Ltd v Oakley Thompson & Co Pty Ltd [No 3] [2016] VSCA 185 applied – Amount of security – Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd [2017] VSCA 293 applied – Applicant ordered to provide security for costs in the amount of $15,000.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr N P Byrne (Solicitor) | Nicholas P Byrne |
| For the Respondent | Mr T Mah | Hartwell Legal |
KYROU JA
MACAULAY AJA:
Introduction
Jeanne Papaioaonnou died on 14 October 2017. Her husband of 28 years, Christos Papaioannou, applied for and obtained further provision from her estate by an action brought in the Trial Division under pt IV of the Administration and Probate Act 1958 (‘Act’). The executor of the deceased’s estate, Maria Kronemann, resisted Mr Papaioannou’s claim. In addition to awarding further provision,[1] the trial judge ordered that Ms Kronemann pay Mr Papaioannou’s costs without indemnification from the estate, including some on an indemnity basis.[2]
[1]Papaioannou v Kronemann [2019] VSC 844 (‘Provision Reasons’).
[2]Papaioannou v Kronemann (No 2) [2020] VSC 257 (‘Costs Reasons’).
Ms Kronemann applied for leave to appeal the judge’s orders awarding further provision to Mr Papaioannou, and as to costs. In turn, Mr Papaioannou applied for security for his costs of the application for leave to appeal, and if leave is granted, the appeal. It is that application that is the subject of these reasons.
After hearing oral submissions, we announced that we were satisfied that Ms Kronemann should provide security for Mr Papaioannou’s costs in the sum of $15,000. We stated that we would pronounce formal orders at the time of publishing our reasons. These are our reasons.
Factual background
For the duration of their marriage Mr and Mrs Papaioannou lived in a home in East Boundary Road, Bentley East (‘Property’). The Property had been purchased by Mr Papaioannou and his first wife in 1973. His first wife died in 1979, a mortgage over the Property was discharged in 1980 and the Property became Mr and Mrs Papaioannou’s marital home upon their marriage in 1990.
In 2012, Mr Papaioannou transferred a one-half interest in the Property to Mrs Papaioannou for no consideration, after which they were registered as tenants in common in equal shares. Around the same time, Mrs Papaioannou made her last will dated 24 November 2012. Probate of her will was granted to Ms Kronemann. Mrs Papaioannou’s half interest in the Property is the sole asset in her estate.
By her will, Mrs Papaioannou devised a life interest in her half share of the Property to Mr Papaioannou. Under the terms of her will, that interest is to be held on trust for Mr Papaioannou’s use and occupation during his life, with him to pay all the rates, taxes, outgoings and insurances on the Property. Upon Mr Papaioannou’s death, Mrs Papaioannou’s half interest in the Property forms part of the residuary estate to be distributed in equal shares to Mrs Papaioannou’s four surviving children and a grandson who was the child of a son who had predeceased her. Mrs Papaioannou’s five children (including Ms Kronemann) were her children of a prior marriage.
At the time of Mrs Papaioannou’s death, Mr Papaioannou (born 26 December 1930) was 87 years of age and, at the time of trial, almost 89. He was and is a pensioner.
Judge’s decision
The judge ordered that there be further provision for Mr Papaioannou out of the deceased’s estate. In short, her Honour ordered that 20 per cent of the estate’s interest in the Property be transferred to Mr Papaioannou and that his existing life interest in the estate’s remaining share of the Property take the form of an ‘extended portable life interest’.[3]
[3]Meaning, that Mr Papaioannou’s rights to the life interest be extended to permit him to use it, if the need arises, to secure a more suitable home or aged-care accommodation. See Thompson v Thompson [2015] VSC 706, [13].
Under the Act, the judge was not empowered to make an order for further provision from the estate (‘a family provision order’) unless satisfied, among other things, that:
(a)at the time of her death, Mrs Papaioannou had a moral duty to provide for Mr Papaioannou’s proper maintenance and support; and
(b)the distribution of the deceased’s estate failed to make adequate provision for the proper maintenance and support of Mr Papaioannou.[4]
[4]Act, s 91(2)(c) and (d).
In determining the amount of provision under any family provision order, the judge was required to take into account, among other things, the degree to which, on the date of death, the deceased had a moral duty to provide for Mr Papaioannou, and the degree to which the distribution of the deceased’s estate failed to make adequate provision for his proper maintenance and support.[5]
[5]Act, s 91(4)(a) and (b).
Section 91A(1) of the Act specified the evidence that the judge was required to take into account (namely, the will, any reasons expressed for making the dispositions in the will or other relevant evidence of the deceased’s intentions). Section 91A(2)(a)–(m) set out the criteria to which the judge may have regard in making a family provision order. Having reviewed the provisions of the will and finding there were no other relevant reasons or expressions of intention, the judge proceeded to address each of the statutory criteria she was entitled to take into account. Under each of those criteria, her Honour made the following findings:
Factors that may be taken into account in making a family provision order: s 91A(2) of the Act
(a) the nature of the relationship, including the length of the relationship
24[Mr Papaioannou] is the deceased’s husband. At the time of the deceased’s death, they were married for approximately 28 years.
(b) any obligations or responsibilities of the deceased to the eligible person, any other eligible person and the beneficiaries
25The deceased had a moral responsibility to provide for [Mr Papaioannou]. The remaining beneficiaries are the deceased’s children of a previous marriage, to whom she also had a moral responsibility, and her grandchildren.
(c) the size and nature of the estate
26The estate comprises the deceased’s half interest in the [Property], valued at between $390,000 and $450,000.
(d) the current and future financial resources, earning capacity and financial needs of the eligible person and any beneficiary
27[Mr Papaioannou] owns the remaining half of the [Property]. At the commencement of this proceeding [Mr Papaioannou] had savings of approximately $47,000. At trial, this amount had been reduced to approximately $29,000. The [principal] reason for this was that since the deceased’s death, [Mr Papaioannou] paid for the deceased’s funeral, headstone and a medical bill, the total of which amounted to $16,998.58.
28[Mr Papaioannou] lives frugally. He receives the aged pension of approximately $450 per week. This is spent on his basic living expenses. Pursuant to the will, [Mr Papaioannou] also pays for the rates, taxes and outgoings in respect of the [Property]. The rates for the 2019 financial year were $1,347.20. [Mr Papaioannou] relies on his two children for further financial support.
29At trial, [Ms Kronemann] suggested that the [Property] was in reasonable condition, however, she was speaking of the condition of the [Property] a long time ago. [Mr Papaioannou’s] evidence was to the contrary, speaking of its current condition. His evidence, which is accepted, detailed the poor condition of the dwelling on the [Property], which has had little or no maintenance done on it over the past 28 years. [Mr Papaioannou] has minimal funds and is not able to pay for basic and necessary renovations and improvements, such as fixing an air conditioning system, fixing doors and windows, installing new blinds, and painting the house.
30[Ms Kronemann] and her brother, Terry Pappas, co-own a house in Toogoom, Queensland, which they stated was valued at $320,000. [Ms Kronemann] receives the age pension. Terry Pappas receives the disability pension. The other brother, George Pappas, has a one-third interest in a property in Tarneit, which interest is valued at approximately $180,000. He receives the New Start Allowance. The deceased’s three grandchildren all work, however, no evidence was adduced as to their financial circumstances.
(e) any physical, mental or intellectual disability of any eligible person or any beneficiary
31[Mr Papaioannou] is elderly and frail. In 2012, he was diagnosed with cancer. Recently he suffered a minor stroke. He wears an ileostomy bag. He otherwise currently enjoys reasonably good health for a person of his age.
32The physical health of the residuary beneficiaries was not disclosed, save that at trial George Pappas mentioned that he had suffered a stroke. Mr Pappas did not produce any medical evidence to support his prognosis.
(f) the age of the eligible person
33[Mr Papaioannou] was born on 26 December 1930 and is now aged almost 89 years.
(g) any contributions of the eligible person, otherwise than for adequate consideration, to building up the estate or to the welfare of the deceased or the deceased’s family
34At the time of their marriage, [Mr Papaioannou] was the owner of the unencumbered [Property]. In 2012, he transferred half of his interest in the [Property] to the deceased, without any financial consideration. Although [Ms Kronemann] suggested that this was not the case, alleging that the deceased contributed funds, it was apparent from the evidence that the deceased would not have had the necessary funds to pay any consideration at the time. The Court accepts [Mr Papaioannou’s] evidence that the transfer was made without any financial contribution by the deceased.
35[Mr Papaioannou] paid for the deceased’s funeral, headstone and a medical bill, collectively amounting to $16,998.58. These amounts were paid from his own funds and are expenses that would ordinarily have been paid from the estate. In view of the size of the estate and [Mr Papaioannou’s] limited financial means, these payments represent a significant contribution.
(h) any previous benefits to the eligible person or any beneficiary
36[Mr Papaioannou] was not aware of the deceased having any assets at the time of their marriage. After the deceased’s death, [Mr Papaioannou] discovered a passbook account in the joint names of [Mr Papaioannou] and the deceased. [Mr Papaioannou] was not previously aware of this account. The passbook indicates that the funds in this account were expended by 2007. The funds were not expended by [Mr Papaioannou], and he has no knowledge of who did spend the funds.
(i) whether the eligible person was being wholly or partly maintained by the deceased, and if so, the extent and basis of such maintenance
37At the time of the deceased’s death, [Mr Papaioannou] and the deceased were living together at the [Property] and they pooled their pension incomes to fund their living expenses.
(j) the liability of any other person to maintain the eligible person
38 There is no other person liable to maintain [Mr Papaioannou].
(k) the character and conduct of the eligible person or any other person
39There is no evidence of any conduct that reflects adversely on the character and conduct of [Mr Papaioannou] or the residuary beneficiaries.
(l) the effect that a family provision order would have on the amounts received from the deceased’s estate by other beneficiaries
40Any further provision for [Mr Papaioannou] will affect the interests of the residuary beneficiaries, however, as their interests are subject to [Mr Papaioannou’s] life interest in the estate, they will not be affected until after [Mr Papaioannou’s] death.
(m) any other relevant matter
41 There are no other relevant matters.[6]
[6]Provision Reasons, [24]–[41].
Grounds of appeal
Ms Kronemann has sought leave to appeal against the orders of the judge on the following grounds:
1The court erred in law by failing to make any initial finding that the deceased at the time of her death had an unfulfilled obligation or moral duty to [Mr Papaioannou] as prescribed by Section 91 ss 2 of the [Act] which finding is essential, before proceeding in contravention of that legislation to judgement and orders of provision for [Mr Papaioannou], based upon its finding of need for [Mr Papaioannou].
2The court ruling during trial that a document entitled ‘position paper’ served by [Mr Papaioannou] on [Ms Kronemann] upon an open basis being the sole document particularising his claim was not evidentiary material thereby restricting cross examination of [Mr Papaioannou], was unfairly prejudicial to [Ms Kronemann’s] case and an inappropriate administration of justice pursuant to the power vested in the court by Section 26 (b) of the Evidence Act.
3The court’s ruling as cited in Ground 2 preceding which it based upon a stated perception that ‘position papers’ are limited to use in a mediation process and accordingly privileged communications was wrong in fact and law, given the evidence before the court at the trial.
4The failure of the Court to exercise the power vested in it by section 91A 2 (k) of [the Act], specifically to evaluate the character and conduct of [Mr Papaioannou] as an eligible claimant, by forbidding cross examination of him for [Ms Kronemann] regarding perceived false and offensive content of his position paper. The content alleged immoral conduct by the deceased testator towards him. Such restricted cross examination was wrong in law and unfairly prejudicial to [Ms Kronemann’s] case.
5The failure of the court under Section 91A 2 (m) of the [Act] to take any or any sufficient account of the survivorship benefits which had accrued to the exclusive financial benefit of [Mr Papaioannou] of at least $50,000 upon the death of the deceased testator in determining a need of [Mr Papaioannou] for further provision. Such election or oversight by the court not to consider that contribution by the deceased, unfairly disadvantaged [Ms Kronemann’s] case at trial.
6The Court’s findings that a need for [Mr Papaioannou] existed as assessed by the court at the time of trial as distinct from the time of death was wrong in law. Further, for reasons of fact, the evidence then available to it did not support a finding of need for [Mr Papaioannou] at either time. Accordingly, those findings were wrong in fact and law.
7The Court in its discretion, disproportionately punitively and beyond the interests of justice, ordered [Ms Kronemann] to pay [Mr Papaioannou’s] costs. Some of which upon an indemnity basis. All of which without recourse to meet such payment from estate assets. Nor did it allow any time for payment. Revocation of those costs orders made by the Court is sought.
In substance, Ms Kronemann contends that the judge erred by:
(a)failing to assess the existence of the requisite moral duty on the part of the deceased to provide for the proper maintenance and support of Mr Papaioannou at the correct point of time, namely at the date of the deceased’s death (ground 1);
(b)not allowing Ms Kronemann to tender or cross examine Mr Papaioannou upon the contents of a ‘position statement’ he had filed, on the basis that it was confidential (grounds 2, 3 and 4);
(c)failing to take into account that Mr Papaioannou had received the benefit of $50,000 in cash as the surviving proprietor of a bank account (ground 5);
(d)assessing the question of Mr Papaioannou’s ‘need’ at the wrong point in time, and making a finding he had such ‘need’ against the evidence (ground 6); and
(e)making a decision on costs which was disproportionate, punitive and against the interests of justice (ground 7).
Principles regarding security for costs
The Court has power under r 64.38(4) of the Supreme Court (General Civil Procedure) Rules 2015 to make an order that security be given for the costs of an application or appeal on such terms as the Court thinks fit. The power to order security for costs involves an exercise of discretion. In Bodycorp Repairers Pty Ltd v Oakley Thompson & Co Pty Ltd [No 3], McLeish JA said the following about the factors which are relevant to the exercise of that discretion:
Various factors have been identified as relevant to the exercise of [the discretion to order security for costs], including the prospects of success of the appeal, the magnitude of risk that a costs order would not be satisfied, whether the making of the order would be oppressive in that it would stifle a reasonably arguable claim, whether any impecuniosity of the appellant arises out of the conduct complained of in the proceeding, and whether there are aspects of the public interest which ought to be weighed in the balance.[7]
[7][2016] VSCA 185 [19].
The factors to which McLeish JA referred in Bodycorp provide a useful framework for considering Mr Papaioannou’s application for security for costs.
Prospects of success of the appeal
We will address Ms Kronemann’s grounds of appeal by reference to the five issues we set out at [13] above: the moral duty, the position statement, the survivorship benefit, need and costs.
Moral duty
Ms Kronemann pointed out that when the judge stated her finding (in para 25 of the Provision Reasons)[8] that ‘the deceased had a moral duty to provide for [Mr Papaioannou]’, her Honour failed to specify that it was a finding based at the time of the death of the deceased. In part, Ms Kronemann’s argument is that the judge did not assess the existence or degree of moral duty at the correct time, namely the date of death. Relevant to that argument, the Provision Reasons demonstrate that her Honour correctly qualified the relevant time for considering the existence (and degree) of the moral duty in paras 13(c) and 16 before summarising her finding in para 25.
[8]See [11] above.
Another of Ms Kronemann’s arguments on this topic is that there was ‘no evidence … that the deceased had upon her death a moral duty to provide for [Mr Papaioannou] further than that which she had provided for him in her will and from their joint savings’.[9] By this contention, Ms Kronemann appears to be submitting that her Honour erred in weighing up of all the competing factors to which she had regard in determining that further provision should be made.
[9]Emphasis added.
The legislation reposes in the Court the responsibility to make a discretionary judgment upon an ‘instinctive synthesis’ of all the criteria.[10] It follows that there will be a range of appropriate provisions, and minds could legitimately differ on what is proper provision. Mr Papaioannou argued that so long as the judge considered the matters which she was required to take into account, and took into account such matters as she was entitled to take into account that were appropriate to the circumstances, it will be difficult for Ms Kronemann to establish ‘error’ in her Honour’s balancing of the competing factors.
[10]Saric v Vukasovic [2019] VSCA 57, [10]–[11].
Finally, Ms Kronemann intends to argue that, in order for the Court to find any want of moral duty, it was necessary for her Honour to have found that the deceased was aware that Mr Papaioannou was not content with the provision that had been made for him under the will (or that the will made inadequate provision for him). Mr Papaioannou submitted that there was no statutory requirement for such a finding and no case authority was cited to support the need for such a finding. Although the contemporaneous response by a deceased to a complaint made, before death, of the inadequacy of a will to provide for a particular person may be of some relevance, it was submitted that the absence of any such complaint (or the deceased’s awareness of a complaint) was not in itself a relevant factor.
Position paper
Pre-trial orders were made by a judicial registrar on 20 December 2018. Those included that the parties each file and serve a ‘position statement’. Those position statements were to contain representations of relevant existing facts which, to the best of the knowledge and belief of the person making them, were true and correct. The position statements were to be provided with the objective that they may be relied upon by the opposing parties in entering negotiations to explore the possibility of compromising the proceeding and as an outline of the anticipated evidence to be given at trial by the person making the statement. The orders went on to provide for a mediation to take place. No express orders were made about the confidentiality of the position statements.
At a later directions hearing, after an unsuccessful mediation, the judicial registrar ordered that ‘subject to any order of the Trial Judge, the evidence in chief in this proceeding at trial shall be viva voce’.
At trial, during the cross-examination of Mr Papaioannou, the solicitor representing Ms Kronemann sought to examine Mr Papaioannou on things which he had said in his position statement filed in accordance with the judicial registrar’s orders. The judge refused permission for cross-examination on the position statement on the basis that it was confidential, and that it did not form part of the evidence for the trial.[11]
[11]Transcript of Proceedings (15 October 2019) 43.7–43.9.
Section 131(1) of the Evidence Act 2008 prohibits evidence being adduced of a document prepared in connection with an attempt to negotiate a settlement of the dispute. Ms Kronemann proposes to argue, however, that these position statements were not prepared expressly or exclusively for the purposes of a mediation, and were intended to be ‘open’ documents capable of admission as evidence in the trial. Accordingly she will argue that her Honour was in error in refusing their admission on the basis that they were confidential or that they were not capable of being part of the evidence.
In her written case, Ms Kronemann outlined the nature of the matters contained in the position statement which she contends were relevant to the existence (or the degree) of the deceased’s moral duty to provide for the proper maintenance and support of Mr Papaioannou. Those so identified include whether or not the deceased worked during the marriage, brought assets into the marriage or said things which Ms Kronemann regarded as ‘inaccurate, self-serving or particularly offensive to the deceased’s moral character’.
As well as arguing that her Honour was correct to refuse permission to cross-examine on the position statement for the reasons that she gave, Mr Papaioannou argued, in any event, that to the extent any of those matters in the positon statement were relevant, the solicitor for Ms Kronemann in fact did cross examine Mr Papaioannou in relation to most of them: that is, upon the deceased’s financial contribution to the marriage, her work history and the joint bank account. For that reason, he submitted, even if the judge erred in this respect, no real prejudice was occasioned by that error.
Survivorship benefit
Under this topic, Ms Kronemann intends to argue that the judge did not take ‘any or any sufficient account’ of a survivorship benefit of at least $50,000 in assessing Mr Papaioannou’s need for further provision. The reference to the $50,000 is to the remaining balance in a joint bank account and possibly some additional cash which was kept in the house. Mr Papaioannou points out that her Honour referred to the fact that Mr Papaioannou had retained savings of approximately $47,000 (see para 27 of the Provision Reasons set out at [11] above). Her Honour pointed out that Mr Papaioannou had paid close to $17,000 of expenses which were ordinarily expenses of the estate.
Mr Papaioannou argued that it will be difficult for Ms Kronemann to persuade the Court that, having explicitly referred to the existence of that financial resource, the judge failed to take it into account when assessing need. Moreover, to the extent that Ms Kronemann’s complaint concerns the extent to which her Honour took the cash resources into account, Mr Papaioannou repeats his argument about the inherent difficulty in challenging a discretionary decision upon an ‘instinctive synthesis’ of many factors, among which the available cash resource is but one.
Need
Under this topic, Ms Kronemann will contend that there was no evidence presented on behalf of Mr Papaioannou in the form of a ‘chart, forward plan or any intelligible format, listing his periodic receipts and reasonably foreseeable expenditures over a weekly, fortnightly, monthly or any other period of time’ which showed Mr Papaioannou’s deficiency in resources to meet his needs.
Mr Papaioannou points to paras 27–29 of the Provision Reasons in which her Honour summarised her findings on the financial resources and financial needs of Mr Papaioannou. He contends there is no special requirement for the form in which the evidence is presented before appropriate and sufficient findings can be made.
Costs
The judge ordered Ms Kronemann to pay Mr Papaioannou’s costs of the proceeding, without indemnification from the estate, including costs on an indemnity basis after 11 October 2019. That day was the expiry date of an offer made by Mr Papaioannou to settle the proceeding. He had offered to settle on the basis that the estate provide him 10 per cent of Mrs Papaioannou’s interest in the Property, an extended portable life interest and that the parties’ legal costs be paid from the deceased’s interest in the Property, fixed at certain amounts. It was an offer to settle on a basis that was less favourable to him than the judgment he obtained from the Court.
The judge stated that the ‘prima facie position that a defendant executor may be indemnified from the estate for the costs of the proceeding’ may be modified in the exercise of the Court’s discretion according to the circumstances of the particular case.[12] In exercising her discretion, the judge appeared to take a number of factors into account, namely:
[12]Costs Reasons, [38].
·that Mr Papaioannou succeeded and the principle that costs generally follow the event;
·that she had given the parties a warning that costs would follow the event, potentially without indemnification from the estate;
·the conduct of the parties in making offers and responding to offers, including that Ms Kronemann’s offers never took into account Mr Papaioannou’s existing life interest in the Property;
·that a week before the proceeding commenced Mr Papaioannou had made an offer to resolve the proceeding on a basis less favourable to him than the Court’s ultimate award, and that, in her Honour’s view, Ms Kronemann was unreasonable in not accepting that offer;
·that Ms Kronemann was herself a beneficiary of the residuary estate and appeared to be conducting the litigation to protect the value of the residuary estate; and
·that Ms Kronemann’s conduct of the litigation, in her Honour’s view, caused a matter which was not complex and involved a small estate to be more complicated than was necessary.
Essentially, Ms Kronemann will argue that her Honour’s order was disproportionate and punitive. In aid of that characterisation, Ms Kronemann submitted that her Honour ought to have, but did not, take into account Ms Kronemann’s inability to pay the costs personally, or that the liability to pay them may cause her to become insolvent. She will also argue that her Honour did not properly take account of the history of the offers made before action, and the nature of them.
Mr Papaioannou contended that the jurisdiction to award costs is seldom affected by the capacity to pay of the party who is to be ordered to pay costs. Further, he argued, the jurisdiction to award costs is discretionary, the matters the judge took into account were all appropriate matters to consider and, for those reasons, it will be difficult for Ms Kronemann to successfully challenge her Honour’s decision.
Assessment of prospects of success
On an application such as this it is neither necessary nor appropriate that we analyse in close detail the arguments for and against each ground of the proposed appeal, or express firm views about the merits of them. That task is for the Court hearing the application for leave to appeal and, if granted, the appeal itself. It suffices that we express our view, at a relatively high level, of the overall prospects of success which we think the application for leave to appeal enjoys upon the arguments the parties intend to present.
In summary, although some grounds may enjoy slightly better prospects than others, overall we would rate Ms Kronemann’s prospect of success on her appeal as low. In saying so, we are particularly conscious of the discretionary nature of decision to make a family provision order once the judge takes into account the statutory criteria. Further, the jurisdiction to award costs is also discretionary in nature. That is not to say that a discretionary decision is unimpeachable, but Mr Papaioannou is correct to submit that, because the decisions both involve the exercise of a discretion, Ms Kronemann’s task is all the more difficult.
We also consider that on most grounds, Mr Papaioannou’s arguments appear to have real force thereby diminishing Ms Kronemann’s prospects of success. It may be that Ms Kronemann’s argument with respect to the judge’s refusal to allow cross-examination on the position statement deserves close scrutiny; but it may also be the case that any error (if it be error) committed by the judge in not allowing that cross-examination did not occasion any real prejudice to Ms Kronemann’s case.
Magnitude of risk that a costs order would not be satisfied
Ms Kronemann does not dispute that she is impecunious and in fact says that she is at risk of insolvency because of the costs order made against her. It is therefore conceded that there is a high risk that a costs order made against her in favour of Mr Papaioannou would not be satisfied.
Whether an order for security would stifle a reasonably arguable claim
On the evidence, it also seems plain that if the court makes an order for security for costs, Ms Kronemann may not be able to comply with it, resulting in a stay of her application for leave to appeal. Given our view, however, that her appeal has low overall prospects of success, we are not persuaded that such an outcome would be oppressive in the sense that it would stifle a reasonably arguable claim.
Whether the respondent contributed to the applicant’s impecuniosity
Ms Kronemann accepts that Mr Papaioannou’s conduct has not contributed to her impecuniosity (other than by his pursuit of the personal costs order made against her which, for this purpose, is not a relevant consideration).
Whether there are aspects of the public interest to be weighed in the balance
On the question of public interest, Ms Kronemann raises a point which is illustrative of a problem to her approach to this application and, possibly, the proceeding. She argues that it is a matter of public interest that a court has found a person, posthumously, ‘to have failed his/her moral duty’ and thereby has impugned that person’s good character. Even if that proposition was correct, which in our view it is not, the fact that a court has impugned a person’s character in a case such as this would not be a matter of public interest but only one of private interest.
More importantly, under the Act, the concept of a moral duty to provide for the proper maintenance and support of another person concerns the community’s expectation that a testator should materially support another, given their relationship, personal circumstances and competing claims on resources. It is not, fundamentally, an examination of the personal honesty, probity, uprightness, virtue, integrity, general goodwill or reputation of the testator. Finding the existence of a moral duty to support an eligible person, or that the duty has not been adequately discharged by the terms of the will, does not carry any express or implied adverse findings about those characteristics of the testator.
Putting that issue aside, there is no element of public interest that needs to be taken into account.
Conclusion on whether security should be ordered
Having given appropriate weight to each of these considerations, we came to the conclusion that security for costs should be ordered.
Amount of security
In Trailer Trash Franchise Systems Pty Ltd v GM Fascia & Gutter Pty Ltd, this court stated that the approach to be adopted in assessing the quantum of security for costs is as follows:
In determining a sufficient amount for security for costs, the court does not undertake precise mathematical calculations. Rather, it adopts a ‘broad brush’ approach involving ‘guesstimates as much as estimates’. However, the broad brush approach does not involve an abstract process. It must have an evidentiary basis. The court must have regard to the evidence adduced by the parties as to quantum — whether in the form of an affidavit by an experienced litigation lawyer or an expert report by a costs consultant — although it is not bound by the parties’ estimates. The court may scrutinise the individual items in the parties’ estimates, but not to the extent of minute examination akin to a taxation.
The amount ultimately fixed by the court must not be so low that it fails to provide any real protection to the party seeking security, or so high that it is oppressive to the party required to provide the security. The amount must be ‘just and reasonable’ in all the circumstances of the particular case.[13]
[13][2017] VSCA 293, [64]–[65] (citations omitted).
In support of his application for security for costs, Mr Papaioannou relied upon an affidavit affirmed by his solicitor, Ms Katerina Peiros. Ms Peiros said that she was a legal practitioner and a principal of the firm acting for Mr Papaioannou. From exhibited correspondence it appears she is accredited by the Law Institute of Victoria as a specialist in ‘Wills & Estates’. Nevertheless, she provided no evidence of her experience in litigation or in the assessment of costs in respect of an appeal to this Court.
She affirmed her belief that her client’s costs of the application and the appeal would be approximately $34,000, made up as follows:
(a)$8530, inclusive of counsel fee of $5250, for preparing the written case, and responding to the summary of facts and application book index;
(b)$2550, inclusive of counsel fee of $350, in relation to exchanges with Ms Kronemann in relation to amendments to those same documents;
(c) $1100 for general correspondence;
(d) $1930, inclusive of counsel fee of $1050, for attendance at directions hearings;
(e)$9550, inclusive of counsel fee of $3500 and $550 for an interpreter for her client, for mediation;
(f)$9900, inclusive of counsel fee of $3500 and $550 for an interpreter, for the hearing of the application for leave to appeal and, if leave is granted, the appeal, on an estimate of one day; and
(g) $350 for general advice from counsel.
The amount sought in the application is for security in the sum of $20,000. Ms Kronemann describes this sum as oppressive, and submits that payment of $20,000 ‘or even any substantially lesser amount, is beyond [her] capacity to meet’. In other words, she does not so much argue that the amount as sought is unreasonable so far as the calculation of it is concerned but, rather, repeats her submission that any amount of security would stifle her application.
Further to there being no evidence of the experience of Ms Peirot in assessing costs of the purpose of litigation, it is doubtful whether at least one of the steps for which costs were foreshadowed will occur, namely, a mediation. In all the circumstances, we concluded that the more appropriate allowance for security for costs was $15,000.
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