Merrett v Mackay (No 2)
[2022] VSC 519
•6 September 2022
| 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 |
---
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 |
---
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.
---
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 contention of the plaintiff that he achieved substantial success in this proceeding, and submitted further that the estate should receive its costs of the proceeding by reason of the following matters:
(a) the plaintiff’s unreasonable rejection of an offer made by the estate on 17 December 2015 to the effect that the Scotts Creek farm be transferred to the plaintiff, provided that the plaintiff forego his entitlements under his late mother’s will (‘will’) (‘pre-litigation offer’);
(b) the conduct of the plaintiff and his legal representatives in the period leading up to the trial, including but not limited to the numerous attempts made by the plaintiff to get his pleading in order; and
(c) the plaintiff’s limited success at trial.
The estate relied upon an affidavit sworn by its solicitor, Mr Matthew Scott, on 5 July 2022, which largely exhibited correspondence between the solicitors for the parties between September 2015 and May 2021 (that is, shortly prior to trial), and deposed to events and correspondence between the parties post-dating the delivery of the reasons.
The subject matter of the affidavit and the exhibits to Mr Scott’s affidavit included, among other things, the following events prior to the commencement of this proceeding:
(a) the demands made by the plaintiff that the Scotts Creek farm be transferred to him, and the estate’s requests for evidence to support his claim that Caroline had sold him the Scotts Creek farm in 2006; and
(b) the pre-litigation offer and the plaintiff’s response, including the counter‑offers made by the plaintiff.
Mr Scott’s affidavit also went into some detail as to the parties’ conduct of this proceeding, including:
(a) the discussions between the parties at the commencement of the proceeding about the executor’s liability for costs;
(b) the Calderbank[2] offer made by the estate after a mediation held in May 2019;
[2]Based upon the principles set out in Calderbank v Calderbank [1976] Fam 93.
(c) the correspondence between the solicitors for the parties regarding the estate’s criticism of the various iterations of the plaintiff’s statement of claim and proposed procedural orders;
(d) the filing by the plaintiff of an amended statement of claim in June 2019, a revised amended statement of claim in July 2019, and a further amended statement of claim in August 2019, and the estate’s criticism of those pleadings;
(e) the hearing of the estate’s proposed strike out application on 5 February 2020, where Efthim AsJ made orders striking out parts of the further amended statement of claim, and ordered that the plaintiff pay the estate’s costs of the strike out application;
(f) the correspondence between the parties regarding setting the matter down for trial, and the associated procedural orders required; and
(g) the late issue of subpoenas by the solicitors for the plaintiff.
Mr Scott also deposed to:
(a) the valuation he obtained of the Scotts Creek farm after the delivery of the reasons, which was said to be $8,500 per acre, but up to $10,000 per acre if the Scotts Creek farm was sold at public auction;[3]
[3]The plaintiff accepts this valuation.
(b) the correspondence between the parties regarding the costs of this proceeding, and the payment of rates and insurance for the Scotts Creek farm by the estate; and
(c) the estate’s position regarding the final disposition of the proceeding. In that regard, Mr Scott deposed as follows:
It is the [estate’s] position that the Scotts Creek farm ought to be sold such that the administration of the Estate can be finalised, whether that is done by the Plaintiff purchasing the farm outright and paying the Estate an amount equivalent to the Estate interest, or the farm is put to market and sold, with the net proceeds of the sale distributed in accordance with the Judgment. It is my belief that without the Court making an order as to what it is to be done with the Scotts Creek farm, the finalisation of the dispute over the Scotts Creek farm giving rise to the proceeding and the dispute in respect of the Deceased Estate at large will continue without a satisfactory resolution or be prolonged.
The solicitor for the plaintiff, Mr Shaun Moloney, filed and served an affidavit in response on 2 August 2022. Mr Moloney deposed, in summary, as follows:
(a) to the best of his knowledge, Mr Scott did not commence working on this matter until some time in 2018, when he took over from Mr Gerard Barrow;
(b) in late 2018, he telephoned Mr Barrow and inquired whether the estate would be prepared to settle the proceeding on the basis of the pre‑litigation offer. Mr Barrow told him that his client could not recall giving those instructions, and was not prepared to settle the dispute on that basis;
(c) he exhibited correspondence between the parties not exhibited to Mr Scott’s affidavit, including correspondence from Jellie McDonald, the solicitors for Des Merrett (another beneficiary of the estate) in December 2015; and
(d) Mr Moloney deposed as follows:
Except for the question of costs, the issue of the property has been resolved as follows:
a.A 65% interest in the property to be transferred to the Plaintiff in accordance with the Judgment of Associate Justice Daly;
b.A 5.83% interest in the property be transferred to the Plaintiff in accordance with the Will of the deceased;
c.The balance of the property (being 29.17% or approximately 50 acres) has been agreed to be sold for the sum of $8,500.00 per acre of the total sum of $425,000.00 to be acquired:
a.By the Plaintiff if they [sic] are able to obtain finance approval; or in the alternative;
b. By the owner of the adjoining property.
General observations
I shall say more later about the question of whether the plaintiff’s failure to succeed on all of the claims made in the further amended statement of claim should have adverse costs consequences for him, but I accept that, taking a broad brush view, the plaintiff has been substantially successful in this proceeding. The plaintiff claimed an entitlement to the full beneficial ownership of the Scotts Creek farm. Had he not brought this proceeding, he would have been entitled, under the terms of the will, 16.67% of the value of the Scotts Creek farm. As a consequence of the reasons, he is now entitled to a 70.83% interest, a four-fold increase, which equates, in monetary terms,[4] to an interest valued at $1,023,493.50, compared with an interest valued at $241,315.00. Furthermore, the factual foundation of the common intention constructive trust was the agreement said to have been reached between him and his mother in 2006, the existence of which was always asserted by the plaintiff during and prior to the issue of the proceeding. My determination that the plaintiff should not obtain an interest in the entirety of the Scotts Creek farm was based upon an application of the principles governing the grant of equitable remedies, not upon any submission advanced by the estate.
[4]Based upon the valuation of $8,500.00 per acre.
Accordingly, the starting point of the analysis with respect to the question of costs is that the plaintiff, having had to come to Court to make good his claim to an interest in the Scotts Creek farm, should be entitled to his costs of the proceeding. The question is whether that entitlement should be reduced, or, as pressed by the estate, reversed, by reason of the matters relied upon by the estate in its submissions. I shall consider each of the matters relied upon by the estate in turn below.
The pre-litigation offer
The pre‑litigation offer was contained in a letter from the estate’s solicitors to the plaintiff’s solicitors dated 17 December 2015. The letter was headed ‘without prejudice, save for costs’, and stated as follows:
Further to the above matter we confirm that our clients have today instructed that in the interests of finalising the dispute and allowing the matter to proceed, that they propose, with no admission, that the disputed asset[5] be transferred to your client, and that you [sic] client receive no further benefit from the Will. Our clients instruct that they propose the above in the best interests of the Estate and all beneficiaries, to avoid the costs of litigation. We are instructed that any agreement reached would be required to be executed by all beneficiaries.
[5]Being the Scotts Creek farm.
It should be said at the outset that I consider that the pre‑litigation offer was a very good offer, and a very sensible offer in all of the circumstances, had it been accepted and signed off by all of the beneficiaries of the estate. However, the pre‑litigation offer was rejected by the plaintiff, and it appears that the attitude of Des Merrett, one of the beneficiaries of the estate (and a witness at the trial of the proceeding) may well have been a stumbling block to settlement proceeding on those terms.
On 22 December 2015, the solicitors for Des Merrett sent a letter to the plaintiff’s solicitors, as follows:
We act for Des Merrett, who is one of the residuary beneficiaries named in the Will of the deceased dated 15th July, 2011. We note that your client Darrel Merrett is one of the named executors in the Will.
We are instructed that the farm property at Scotts Creek ought be included as an asset of the estate, in the inventory of assets and liabilities in any application for probate of the will, together with money owing by Darrel to the deceased.
We are instructed to request a written undertaking from your client that he will not attempt to transfer the farm property to himself without the express written approval of all residuary beneficiaries named in the Will, including our client Des.
A letter was sent in similar terms to the solicitors for the estate on the same day. On 8 January 2016, the solicitors for the estate sent a letter to the plaintiff’s solicitors enclosing a copy of the letter from Des Merrett’s solicitors, and saying, among other things:
We confirm that we are instructed that your client has advised our clients that he rejects our clients [sic] proposal.
On 11 February 2016, the plaintiff’s solicitor wrote to the solicitors for the estate. In this letter, which was headed ‘without prejudice save as to costs’, the plaintiff’s solicitors:
(a) confirmed the plaintiff’s rejection of the pre-litigation offer;
(b) stated that the plaintiff had purchased the Scotts Creek farm from his mother in 2006, and as such was entitled to ‘an absolute legal and beneficial title to the property’;
(c) stated that the plaintiff’s right to the Scotts Creek farm was separate from the plaintiff’s entitlement under his mother’s will, and the plaintiff rejected the contention that he should receive no benefit under the will;
(d) asserted that the position of the other executors of the estate was not to the effect that the plaintiff had not in fact purchased the Scotts Creek farm from their mother, but rather that they were unhappy with the price paid by the plaintiff;[6]
[6]It is apparent from the reasons that the price paid by the plaintiff for the Scotts Creek farm in 2006 was a considerable undervalue, perhaps as little as 20 per cent of the value at the time (excluding the value of the plaintiff’s contributions to the Scotts Creek farm).
(e) referred to some meetings between family members and professional advisors in 2011 and 2012 where the plaintiff’s purchase of the Scotts Creek farm was discussed and the price paid disclosed;
(f) stated as follows:
Our client desires to see the matter resolved but in order to do so requires your clients to confirm they accept that the farm will not be included in the inventory of assets of the estate and that upon obtaining a Grant of Probate the executors will execute all documents necessary to effect the transfer of the property to our client with the estate being liable for the estate’s costs of the Transfer including but not limited to any legal fees for the estate as a result of the transfer.
(g) referred to the plaintiff’s estimate of the value of the balance of the assets of the estate as being in the range of $350,000 to $380,000, which included the sum of $30,000 owed to the estate by the plaintiff; and
(h) went on to state as follows:
In the interests of resolving the matter with his siblings without further legal proceedings our client, subject to and conditionally upon the estate in fact having assets to the value of $350,000‑$380,000 as estimated, is willing to accept the sum of $45,000.00 in full and final settlement of his entitlement in his mother’s estate.
The estate submitted that the pre-litigation offer complied with all of the of requirements of r 26.08.1, in that it was made without prejudice, was clear in its language, was open to be accepted for a reasonable period of time, and, most importantly, its terms were more favourable to the plaintiff than the outcome at trial. Further, the estate submitted that the pre-litigation offer was a substantial compromise in that the plaintiff had failed to provide the estate with any evidence that he had purchased the Scotts Creek farm.
In response, the plaintiff submitted that the monetary value of the pre-litigation offer fell short of what he received at trial. However, the main difficulty with the pre‑litigation offer was that it was incompetent, in that it was dependent upon all of the beneficiaries of the estate providing their consent to the transfer of the Scotts Creek farm to the plaintiff, which the evidence suggests would not have been forthcoming. Indeed, both Audrey and Des maintained their position that the Scotts Creek farm should be treated as an asset of the estate up to and including the trial.
The estate submitted by way of reply that the plaintiff had acknowledged that the pre‑litigation offer was capable of acceptance at the time, and, in any event, any concerns of Des Merrett regarding the terms of the pre-litigation offer was a matter between Des Merrett and the executor of the estate, and should not have concerned the plaintiff.
As observed earlier in these reasons, the pre‑litigation offer was a very good offer. If accepted (and if it were capable of acceptance) the plaintiff would have received the Scotts Creek farm in its entirety, and would have foregone approximately $60,000 from the balance of the assets of the estate (a net position of $30,000, give that he owed the estate $30,000). His own resources and the resources of the estate would not have been significantly depleted by legal costs, given that the pre‑litigation offer was made just over three years prior to the commencement of the proceeding. Setting aside the increase in the value of the Scotts Creek farm in the years since the pre‑litigation offer was made, it was clearly better than the result achieved by the plaintiff at trial. If the pre-litigation offer had been accepted and given its full effect, the plaintiff would have benefited from the entirety of the substantial increase in the value of the Scotts Creek farm since early 2016.
However, I agree with the plaintiff’s submissions that the pre‑litigation offer contained an important and, for present purposes, fatal caveat: it was conditional upon each of the five other beneficiaries of the estate agreeing to the Scotts Creek farm being transferred to the plaintiff at a relatively modest cost to him. And, while there is no evidence as to whether the terms of the pre‑litigation offer were ever discussed at any length with Des Merrett and his solicitors, or were formally rejected by Des Merrett, the letter from his solicitors dated 22 December 2015 (which was sent less than a week after the pre‑litigation offer was made) made it clear that Des did not accept the plaintiff’s contention that he was entitled to the Scotts Creek farm.
There is no evidence before me as to whether the plaintiff’s rejection of the pre‑litigation offer was based upon a view that Des Merrett would not agree to it, or for some other reason, or whether if the issue was pressed more forcefully than it had been at the time, Des Merrett and the other beneficiaries of the estate would have ultimately agreed to the transfer of the Scotts Creek farm to the plaintiff in order to avoid the risks and costs of litigation. However, the uncertainty surrounding the question of whether the pre‑litigation offer could have, if accepted, been given effect means that its rejection does not provide a sound basis for depriving the plaintiff of his costs of the proceeding. In particular, I do not think it is correct to say that it was up to the executor to deal with Des Merrett: the terms of the pre-litigation offer suggest otherwise.
The plaintiff’s conduct of the proceeding
The estate’s submissions made much of the conduct of this proceeding prior to trial, going so far as to submit that the plaintiff’s conduct of the proceeding amounted to serious breaches of the Civil Procedure Act 2010 (Vic) (‘CPA’), which warranted an adverse costs order against the plaintiff.
The estate submitted that the manner in which the plaintiff’s claim shifted over time amounted to conduct which breached s 23 of the CPA, which requires a person to whom the overarching obligations under the CPA apply to use reasonable endeavours to narrow the scope of the issues in dispute. The estate submitted as follows:
The various amendments to his pleadings demonstrate the Plaintiff’s inability to narrow the issues in dispute which came at significant costs to the Defendant… the defendant gave the Plaintiff plenty of opportunity to resolve the issue before the Defendant was forced to issue her strike out application.
The estate also relied upon what were said to be disagreements between the parties as to the interlocutory orders that the Court should make in support of its contention that the plaintiff had breached s 23 of the CPA. The plaintiff’s failure to put forward consent orders in a form which would have been approved by the Court was also relied upon by the estate in support of its submission that the plaintiff breached s 25 of the CPA, which provides that a person to whom the overarching obligations apply must use reasonable endeavours to act promptly and minimise delay in connection with a civil proceeding.
The plaintiff rejected the submission that his conduct of the proceeding had caused unnecessary delay and expense, and submitted that it was the estate that had raised unnecessary technical points by way of defence, and led unnecessary and irrelevant evidence at trial, such as evidence about the farming contributions of the other siblings. The plaintiff submitted as follows:
There is no evidence here that court orders were hindered. There is no evidence that there was improper discovery nor that there were wide or oppressive subpoenas. The interlocutory costs orders here allocated responsibility. On the last interlocutory application, the defendant sought to strike the proceedings out and was unsuccessful.
The disentitling conduct goes on way and that is the conduct of the Defendant. There is no disentitling conduct, it is submitted, on the behalf of the Plaintiff.
Taking first the issue of the various iterations of the statement of claim, I largely agree that it took the plaintiff a considerable amount of time and effort to get his pleading in order, largely at the prompting of the solicitors for the estate.
The other complaint made by the estate regarding the plaintiff’s conduct of the proceeding concerned the attempts made by the plaintiff to prematurely set the matter down for the trial, and putting forward erroneous and/or inappropriate procedural orders for the purposes of submitting consent orders to the Court, and the late issue of the subpoena directed at Mr David Harris, a solicitor, who ultimately gave very useful evidence at the trial.
In my view, the latter complaints are quite trivial, and do not warrant making any adverse costs order against the plaintiff. While the failure to make use of the Court’s template orders may have caused some minor cost and inconvenience, it is hardly an offence carrying such opprobrium as to warrant making an adverse costs order with respect to the whole of the proceeding, particularly given that in a proceeding of this nature, the bulk of the costs incurred by the parties would have been incurred in the running of the trial, not in the interlocutory stages of the proceeding. It might be open to the estate upon any taxation of costs to argue that the plaintiff should not have the costs of drafting orders which could not have been made, but that is as far as that point goes. As for the late service of the subpoena upon Mr Harris, the estate has failed to identify how this conduct has caused it to incur unnecessary costs, or caused the progress of the proceeding to be delayed. While the Court’s jurisdiction to make adverse costs orders against a party under s 29 of the CPA has some punitive elements, the primary focus of the jurisdiction is compensatory.[7]
[7]Yara Australia Pty Ltd v Oswal [2013] 41 VR 302 [24].
As for the various iterations of the statement of claim, I accept that the additional costs incurred by the estate by reason of the deficiencies in the plaintiff’s pleading have, at least in part, been compensated for by the costs order made in favour of the estate by Efthim AsJ on 5 February 2020, and the plaintiff has also acknowledged that the estate is entitled to the costs incurred in addressing and answering the plaintiff’s various versions of the statement of claim, such that there is no need to make any further adverse costs orders against the plaintiff in that regard.
I accept that the dispute concerning the deficiencies in the plaintiff’s pleading was not a trivial matter. However, the estate’s submission to the effect that it should receive its costs of the proceeding by reason of the plaintiff’s conduct of the interlocutory steps in the proceeding invites some scrutiny of its own conduct. The plaintiff’s submission to the effect that the estate prolonged the proceeding, particularly the trial, by its own conduct has some merit. By way of example, the estate’s resistance to the tender of a summary of rates paid in respect of the Scotts Creek farm, while successful, ultimately went to what could be described as a “false issue”, given there was no plausible alternative theory as to who paid the rates for the Scotts Creek farm save for in one year many decades ago.
Further, while the question of whether the handwriting on the documents relied upon by the plaintiff (‘notes’) was not, strictly speaking, a false issue, given that I can understand why there were some grounds for doubt about the provenance of the notes, considerable time and effort was expended upon what amounted to a very serious allegation of dishonesty and misconduct on the part of the plaintiff. While none of the estate’s witnesses were prepared to allege that the plaintiff had forged his mother’s handwriting and planted the notes amongst her possessions, an allegation to that effect was made in the estate’s final written submissions, and it was necessary to deal with the handwriting issue at some length in the reasons. However, the real forensic significance of the notes was not their authorship, but the ambiguous nature of their contents, such that while the notes supported the plaintiff’s evidence, they did not of themselves provide conclusive proof of the plaintiff’s contention that he had purchased the Scotts Creek farm in 2006, and had paid for it in full. I also agree that the evidence led by the estate regarding the contributions said to have been made by the other siblings to the farming operations on the Scotts Creek farm was of limited, if any, assistance.
Accordingly, while I do not propose to undertake a close analysis of what conduct of each party caused the other party to incur excessive and/or unnecessary costs, my overall impression is that any deficiencies of the plaintiff’s conduct of the interlocutory steps in the proceeding has either been already compensated by an order for costs, and/or has been cancelled out by the manner in which the estate conducted the trial.
The plaintiff’s mixed success at trial
Finally, the question remains as to whether the plaintiff should not have all of his costs of the proceeding on the grounds that the plaintiff was unsuccessful in making good all of his claims at trial. While it is not always the case that costs are awarded (or refused) on an “issues” basis, it is accepted that they may be so awarded.[8]
[8]See GT Corporation Pty Ltd v Amare Safety Pty Ltd (No 3) [2008] VSC 296, where Robson J said, before conducting a detailed survey of the relevant authorities, as follows (at [31]): ‘Although it is said that costs follow the event, where a successful party has failed with respect to an issue of law or fact, any costs order in favour of the successful party may be adjusted to reflect that fact, particularly where the issue of law or fact can be regarded as discrete. In substance, the court may, in its discretion, order costs on an issue by issue basis and should, in exercising its discretion on costs, bear in mind these general principles’.
The estate submitted that an analysis of the reasons shows that the plaintiff failed on all but one of his claims, and his claim for a constructive trust was only partially successful. The oral contract of sale for the Scotts Creek farm was unenforceable, the representations claim was wholly unsuccessful, there was no resulting trust or common endeavour constructive trust, and the plaintiff’s claim for equitable compensation based upon lost wages/remuneration was also completely unsuccessful. Furthermore, the plaintiff’s evidence was not accepted in relation to all matters, or was found on occasion to be lacking.
The plaintiff submitted that the current proceeding was not an example of a case where a successful plaintiff has put forward an exaggerated claim and has succeeded only to a limited extent. He submitted that he did not fail on any finding of fact, and all of the facts ventilated at trial were relevant to the outcome. The plaintiff failed to establish that there was an enforceable contract for the transfer of the Scotts Creek farm to him, but the factual findings made regarding this transaction were an important foundation of the Court’s decision making process. It was the estate that failed to make good numerous defences, such as the unconscionability claims and its claims concerning the authenticity of the handwriting on the notes.
As can be seen from the reasons, the plaintiff’s claims in the proceeding can be disaggregated as follows:
(a) the representations claim;
(b) the contract claim;
(c) the proprietary estoppel claim;
(d) the resulting trust claim; and
(e) the constructive trust claim.
However, (b) and (c) above are essentially a single claim, in that the proprietary estoppel claim required an analysis of whether the failure of the plaintiff and his mother to reduce their oral agreement with respect to the Scotts Creek farm to writing could be “saved” by any evidence to the effect that the plaintiff relied upon representations made by his mother that the agreement for the transfer of the Scotts Creek farm was legally enforceable. No such evidence was advanced on behalf of the plaintiff.
While the plaintiff was ultimately only successful in making good his claim that there was a common intention constructive trust with respect to the Scotts Creek farm, the only claim upon which he was totally unsuccessful was the claim based upon the representations said to have been made to him by his parents in his youth. I found that the representations were either not made, or if they were made, they were not of a character which could have been relied upon, or were in fact relied upon.
In contrast, while the plaintiff’s claim that he had entered into a legally binding enforceable agreement with respect to the Scotts Creek farm was ultimately unsuccessful, the evidence about that transaction, which I accepted, formed an important factual foundation for the claim I ultimately upheld. Similarly, the evidence about the financial and other contributions made by the plaintiff to the maintenance and operation of the Scotts Creek farm, while imprecise, also provided an important factual foundation that the plaintiff ought to be entitled to a majority interest in the Scotts Creek farm. Finally, the responsibility for the need to have a proceeding, including a full trial, in order to determine the parties’ entitlement to the most significant asset of the estate can, at least in part, be sheeted home to Caroline (and by extension the estate) by reason of her failure to adequately document the transaction concerning the Scotts Creek farm, her failure to fulfil her promise to leave the plaintiff the Scotts Creek farm in her will, and her prevarication about getting her affairs in order while she still had capacity and the assistance of solicitors to do so.
Accordingly, to the extent that there should be some apportionment of costs, the only claim that would attract the exercise of discretion in that regard is the representations claim, which I estimate caused what should have been a three day trial to become a four day trial.
The evidence regarding the representations said to have been made by the plaintiff’s parents in his youth, and the contributions made by the plaintiff provided some useful context to the claims which were ultimately successful, or claims which the estate successfully defended on legal grounds rather than factual grounds. However, the claim by the plaintiff to the effect that if he worked on the Princetown farm and the Carpendeit fam, he would then be entitled to the full beneficial interest in the Scotts Creek farm was contrary to the uncontroversial facts and the plaintiff’s own evidence. While there may have been good tactical reasons for advancing such a claim, given the difficulties facing the plaintiff in establishing the existence of an enforceable agreement for the transfer of the Scotts Creek farm, those tactical considerations do not alter the fact that it was a claim that was not put forward in the years that elapsed between Caroline’s death in 2015 and the filing of the amended statement of claim in June 2019. Accordingly, I can infer that the claim was not soundly based, and as such, I do consider that it is appropriate to reduce the costs claimable by the plaintiff by 25 per cent, representing the approximate time at trial consumed by this aspect of the plaintiff’s claim.
Conclusion and further orders
As earlier indicated, I do not understand the parties to be very far apart regarding the issue of what orders need to be made to give effect to the reasons. The plaintiff submitted that the orders should be made to the following effect:
The Plaintiff and the Defendant shall enter into a contract for the sale of the land or the Plaintiff to purchase from the Estate the Estate’s interest in the Scotts Creek land or farm with the following conditions:
(a)The contract be in the standard Real Estate Institute of Victoria form of contract of sale and prepared by the Defendant’s solicitors as the vendor’s solicitors
(b)Have the purchase price being $8,500 per acre of the Estate’s interest. Settlement date to be 30, 60 or 90 days agreed by the parties.
(c)A 65% interest in the property to be transferred to the Plaintiff in accordance with the Judgment of Associate Justice Daly;
(d)A 5.83% interest in the property will be transferred to the Plaintiff in accordance with the Will of the deceased;
(e)The balance of the property (being 29.17% or approximately 50 acres) be sold for the sum of $8,500 per acre for the total sum of $425,000.00 to be acquired:
(f)The Plaintiff pay a 10$ deposit to be paid upon entry into the contract
(g)Each party bear their own costs in respect of the conveyance of the land.
(h)Liberty to apply for the working out of the order.
It appears that the plaintiff intends to raise finance to purchase the balance of the estate’s interest in the Scotts Creek farm, or, if he cannot do so, subdivide the Scotts Creek property and sell the balance to a neighbour. The estate has no difficulty in principle in facilitating the plaintiff’s proposal, but seeks orders which would enable the Scotts Creek farm to be sold by public auction in the event that the parties fail to enter into the contract of sale foreshadowed by the plaintiff, or the contract of sale is terminated. The estate submitted that orders of that kind are necessary to bring some finality to the dispute and to facilitate the winding up of the affairs of the estate.
I agree, save that I would be a little more generous with the time frames proposed by the estate. I will make an order for costs which is largely in favour of the plaintiff, against which will have to be offset the debt owing by the plaintiff to the estate, and the costs ordered or conceded which are payable to the estate. As a consequence, there will almost certainly be an amount owing to the plaintiff by the estate, as well as what is no doubt a modest amount payable to the plaintiff from the balance of the estate under the terms of the will. It may be that some additional time will enable the parties to calculate the net amount payable by the estate to the plaintiff, which in turn may be able to be taken by the plaintiff as a further share of the Scotts Creek farm, rather than in cash. Accordingly, while the estate has proposed that a contract of sale be entered into within 30 days of the date of these orders, I would allow 60 days, and the orders should provide for a 90 day settlement period, unless the plaintiff seeks an earlier settlement date.
Draft orders to give effect to these reasons will be circulated to the parties forthwith.
0
2
0