Merrett v Mackay (No 2) - [2022] VSC 519

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2019 00014

BETWEEN:

DARREL CARL MERRETT	Plaintiff
v
CAROLINE JOYCE MACKAY (as executor of the Will and Estate of Caroline Beryl Merrett, deceased)	Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	9 August 2022
DATE OF JUDGMENT:	6 September 2022
CASE MAY BE CITED AS:	Merrett v Mackay (No 2) (Costs)
MEDIUM NEUTRAL CITATION:	[2022] VSC 519

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COSTS — Plaintiff largely successful - Pre-litigation offer of defendant conditional on agreement of all beneficiaries – Failure to accept pre-litigation offer does not justify adverse costs order under r 26.08.1 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) - Conduct of parties in proceeding considered — Deficiencies in statement of claim requiring amendment already addressed by interlocutory costs orders - Erroneous draft orders and late issue of subpoena by the plaintiff does not justify adverse costs order - Defendant’s conduct at trial cancels out the plaintiff’s errors and delays – Costs awarded/refused on an issues basis - GT Corp Pty Ltd v Amare Safety Pty Ltd (No 3) [2008] VSC 296 applied – Reduction in costs awarded to plaintiff by reason of pursuit of claim inconsistent with uncontroversial facts and plaintiff’s own evidence.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W F Gillies	SLM Law
For the Defendant	Mr D Kim	Clarke & Barwood Lawyers

HER HONOUR:

Introduction

On 5 May 2022, I delivered reasons with respect to my findings regarding the plaintiff’s claim to an interest in a 170 acre farming property near Timboon, Victoria (‘Scotts Creek farm’)[1]. In the reasons, I foreshadowed making a declaration to the effect that the defendant, in her capacity as executor of the estate of the late Caroline Beryl Merrett (‘estate’), holds the Scotts Creek farm on trust for the plaintiff and the estate in the proportions 65:35, on the basis of a common intention constructive trust, the common intention being that of the plaintiff and his deceased mother, Caroline. I otherwise dismissed the claims made by the plaintiff in the proceeding.
[1][2022] VSC 220 (‘reasons’).

I requested that the parties confer in an attempt to agree upon appropriate orders to give effect to these reasons, and the question of costs, but those attempts were largely unsuccessful. I will deal first with the question of costs, where the parties are quite far apart. These is less distance between them upon the machinery orders required to give effect to the reasons.

Costs

The plaintiff seeks an order that the estate pay his costs of the proceeding on a standard basis, on the basis that he was substantially successful in the proceeding. The estate seeks the following orders:

(a) the plaintiff pay the estate’s costs of the proceeding on an indemnity basis; or

(b) the plaintiff pay the estate’s costs of the proceeding on a standard basis; or

(c) each party bear their own costs.

The estate rejected the…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Merrett v Mackay (No 2)

Details

AGLC: Merrett v Mackay (No 2) [2022] VSC 519
Case: [2022] VSC 519
Decision Date: 6 September 2022

CaseChat Overview and Summary

The case of Merrett v Mackay (No 2) involved a plaintiff, Merrett, who sought a declaration and injunctions against the defendant, Mackay. The dispute centred around the administration of a trust and the rights of beneficiaries. The matter was heard in the Supreme Court of Victoria. The plaintiff was largely successful in their claims, but the court considered the costs incurred by both parties.

The primary legal issue the court had to address was the appropriateness of awarding costs against the plaintiff, despite their largely successful outcome. The court had to determine whether the plaintiff's failure to accept a pre-litigation offer, certain deficiencies in their statement of claim, and procedural errors justified an adverse costs order. The court also had to evaluate the defendant's conduct during the proceedings, including their acceptance of the pre-litigation offer conditional on all beneficiaries agreeing, which the plaintiff did not meet.

The court found that while the plaintiff's failure to accept the conditional offer was a significant error, the defendant's conduct at trial effectively cancelled out the plaintiff's errors and delays. The court ruled that the deficiencies in the statement of claim were already addressed by interlocutory costs orders, and the erroneous draft orders and late issue of subpoena by the plaintiff did not justify an adverse costs order. The court applied the principles from GT Corp Pty Ltd v Amare Safety Pty Ltd (No 3), ultimately awarding costs to the plaintiff but reducing them due to the plaintiff's pursuit of a claim inconsistent with the uncontroversial facts and their own evidence.

The court ordered that costs be awarded on an issues basis, reflecting the findings on each party's conduct and the overall outcome of the case. The plaintiff's costs were reduced due to the inconsistency in their claim, while the defendant's conduct during the trial was considered in the overall assessment of costs.

Orders