Pateman v Pateman

[2017] NSWSC 788

Supreme Court

New South Wales

Medium Neutral Citation:	Pateman v Pateman [2017] NSWSC 788
Hearing dates:	Written Submissions
Date of orders:	19 June 2017
Decision date:	19 June 2017
Jurisdiction:	Common Law
Before:	Rothman J
Decision:	(1)   The defendant shall pay the plaintiff’s costs of and incidental to the proceedings on an indemnity basis; (2)   Otherwise, proceedings dismissed.
Catchwords:	COSTS – ordinary rule that costs follow the event – costs not punishment or reward but compensation – mediation and agreement on Estate interest issues – defendant acts otherwise than in accordance with agreement reached – no defence to possession reasonably available – defendant occupies premises for first time after successful mediation – unjust for other beneficiaries’ interests in Estate to be reduced – indemnity costs ordered.
Legislation Cited:	Civil Procedure Act 2005, s 56(3)
Category:	Costs
Parties:	Noel Pateman (Plaintiff) Maree Ann Pateman (Defendant)
Representation:	Solicitors: Conroy Stewart Spagnolo (Plaintiff) A Koroi-Lawedrau (Defendant)
File Number(s):	2016/190722

Judgment

1. On 25 August 2016 the Court issued orders, in part, granting judgment to the plaintiff for possession of land, a certain number of other ancillary orders and, subject to certain valuation and mediation proposals, granting leave to execute a writ of possession not before six weeks from the date of judgment. Ex tempore reasons issued as to the reasons for judgment.

2. In short, the controversy between the parties arises from a falling out between two beneficiaries of an Estate. Probate had been granted. The defendant, without consent or approval of the executor of the Estate, moved into premises which were the subject of disposition under the Will.

3. The defendant submitted, albeit without evidence, that she wanted to purchase the property. The matter was referred for pro bono legal assistance for the defendant and for mediation before the Registrar.

4. Earlier mediation had resolved of the issues, if any, in the administration of the Estate, but the mediation ordered by the Court on 25 August 2016 did not resolve the possession issues and the defendant did not seek, or have the resources, to purchase the property in question.

5. The property was sold under the powers available to the plaintiff.

6. I gave leave to the parties to deal with costs on the papers. It being obvious that it was inappropriate for the Court to add to the costs of litigation in an Estate of this size and given the nature of the issues involved.

7. The plaintiff has filed a submission (including a chronology). The chronology is not substantially in dispute. Somewhat reluctantly, it seems, the plaintiff has had little or no alternative but to pursue the claim for possession in order to implement the agreement at the mediation on the succession issues.

8. The proceedings have been run most appropriately and as efficiently and cheaply as is possible in the circumstances.

9. The defendant sought to file a Defence, out of time, which draft disclosed no viable or reasonable defence to the proceedings.

10. Submissions were filed on the question of costs by the defendant. It is an accurate description to comment that the submissions are difficult to follow and do not disclose a reason as to why costs ought not follow the event.

11. A further issue arises as to whether, given the size of the Estate, the requirement to litigate the issue, the absence of any or any reasonable defence and the efficient manner in which the plaintiff has conducted the litigation, the other beneficiaries to the Estate should have reduced their share of the Estate on account of each of their shares being reduced by a contribution to the litigation of the difference between party/party costs and indemnity costs.

12. The plaintiff submits that the Court should, in the circumstances, order indemnity costs. It does so on the basis of the provisions of s 56(3) of the Civil Procedure Act 2005, reciting the unreasonable conduct of the defendant and the alleged reasonable conduct of the plaintiff, including undergoing mediation on both the Estate claim and the possession of property issue.

13. Further, the plaintiff claims indemnity costs on the basis of the following factors:

1. the small size and limited resources of the Estate;

2. the defendant’s participation in the settlement requiring the sale;

3. the defendants’ consequent obligation to facilitate the settlement to which she was a party;

4. the defendant’s failure/inability to purchase the property in June 2016 when it was offered to her, or thereafter, despite that being the basis or rationale of the litigation;

5. the defendant’s failure to support her position with evidence; and

6. the consequent complete absence of prospects of success on the part of the defendant.

14. The plaintiff submits that to order that costs be assessed otherwise than on an indemnity basis would be “to reward the defendant for her breach of faith with her co-plaintiff’s in settling the Succession Act claims in a small Estate, having had the benefit of the Estate’s main asset during the proceedings and living there, rent free.”

15. The defendant was party to an agreement in relation to the Estate matter, which involved the sale of the property in question. The plaintiff (in his capacity as executor of the Estate) offered the Estate for purchase by the defendant, which purchase was refused. The conduct of the defendant has forced, in a most inappropriate way, the plaintiff to undertake further proceedings. It was done, purportedly, on the basis of the defendant’s desire to purchase the property of which there was no real prospect.

16. Nevertheless, the plaintiff offered to allow that at an appropriate figure, which was the valuation of the property less the defendant’s share of any proceeds.

17. The conduct of these proceedings is marked by the maintenance of the defence. In circumstances where any party, properly advised or otherwise, should have known that there were no real prospects of success there exists on that basis alone, a basis for the Court to order indemnity costs.

18. Further, the defendant has misled the Court in, at least implicitly, submitting, without good reason, that the defendant was in a position to purchase the property. Further, there is misconduct in that, notwithstanding the defendant’s agreement on the terms resolved in the Estate mediation, the defendant acted unilaterally in occupying, without consent, the property in question.

19. The Court makes the following orders:

1. The defendant shall pay the plaintiff’s costs of and incidental to the proceedings on an indemnity basis;

2. Otherwise, proceedings dismissed.

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Decision last updated: 19 June 2017