Pereira v Andrea Janette Patrick and John Reyburn in their capacity as Administratrix and Administrator respectively of the Estate of Gordon Paul Patrick (Dec)
[2002] WASC 122
PEREIRA -v- ANDREA JANETTE PATRICK and JOHN REYBURN in their capacity as Administratrix and Administrator respectively of the Estate of GORDON PAUL PATRICK (DEC) & ORS [2002] WASC 122
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 122 | |
| 22/05/2002 | |||
| Case No: | CIV:1059/2000 | 19 APRIL 2002 | |
| Coram: | HASLUCK J | 19/04/02 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed in part | ||
| B | |||
| PDF Version |
| Parties: | MARIA ELIZABETH PEREIRA ANDREA JANETTE PATRICK and JOHN REYBURN in their capacity as Administratrix and Administrator respectively of the Estate of GORDON PAUL PATRICK (DEC) ANDREA JANETTE PATRICK SHAUN PAUL PATRICK STEPHEN PATRICK MATTHEW MARK PATRICK LAUREN HOPE PATRICK by her guardian ad litem |
Catchwords: | Inheritance Act Appropriate order for costs in contested proceedings Whether defendants acted reasonably in opposing application based on de facto relationship Effect of settlement offer on exercise of discretion Turns on own facts |
Legislation: | Administration Act 1903 (WA) Inheritance (Family and Dependants Provision) Act 1972 Inheritance Act, s 14(6) |
Case References: | Calderbank v Calderbank [1976] Fam 93 Dobb v Hacket (1993) 10 WAR 532 Pereira v Patrick [2001] WASC 342 Cuplovic v Sacilotto [2001] WASC 360 Kimberley v Butcher & Ors [2001] WASC 118 Singer v Berghouse (No 2) (1994) 181 CLR 201 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
ANDREA JANETTE PATRICK and JOHN REYBURN in their capacity as Administratrix and Administrator respectively of the Estate of GORDON PAUL PATRICK (DEC)
First Defendants
ANDREA JANETTE PATRICK
Second Defendant
SHAUN PAUL PATRICK
Third Defendant
STEPHEN PATRICK
Fourth Defendant
MATTHEW MARK PATRICK
Fifth Defendant
(Page 2)
LAUREN HOPE PATRICK by her guardian ad litem
Sixth Defendant
Catchwords:
Inheritance Act - Appropriate order for costs in contested proceedings - Whether defendants acted reasonably in opposing application based on de facto relationship - Effect of settlement offer on exercise of discretion - Turns on own facts
Legislation:
Administration Act 1903 (WA)
Inheritance (Family and Dependants Provision) Act 1972
Inheritance Act, s 14(6)
Result:
Application allowed in part
Category: B
Representation:
Counsel:
Plaintiff : Mr C E Chenu
First Defendants : Mr M D Cuerden
Second Defendant : Mr M D Cuerden
Third Defendant : Mr M D Cuerden
Fourth Defendant : Mr M D Cuerden
Fifth Defendant : Mr M D Cuerden
Sixth Defendant : Mr M D Cuerden
(Page 3)
Solicitors:
Plaintiff : Durack & Zilko
First Defendants : Nicholson Clement
Second Defendant : Nicholson Clement
Third Defendant : Nicholson Clement
Fourth Defendant : Nicholson Clement
Fifth Defendant : Nicholson Clement
Sixth Defendant : Nicholson Clement
Case(s) referred to in judgment(s):
Calderbank v Calderbank [1976] Fam 93
Dobb v Hacket (1993) 10 WAR 532
Pereira v Patrick [2001] WASC 342
Case(s) also cited:
Cuplovic v Sacilotto [2001] WASC 360
Kimberley v Butcher & Ors [2001] WASC 118
Singer v Berghouse (No 2) (1994) 181 CLR 201
(Page 4)
1 HASLUCK J: The plaintiff, Maria Elizabeth Pereira, sought relief under the Inheritance (Family and Dependants Provision) Act 1972 against the estate of the deceased, Gordon Paul Patrick. This is an application for costs and related orders arising out of the judgment allowing the plaintiff’s claim which was handed down on 19 December 2001 in Pereira v Patrick [2001] WASC 342.
2 Section 14(6) of the Inheritance Act deals with the subject of costs. The Court may make such order as to the costs of any proceeding under this Act as it deems just. The discretionary power to be exercised by the court in relation to costs is broad, but it must be exercised with due consideration being given to the long-established practice of the courts in awarding costs in disputed legal proceedings. The basic rule is that the successful party in a disputed claim will generally be allowed the costs of the proceedings.
3 There has been some modification to the basic rule in the context of Inheritance Act proceedings. Orders are often made that the costs of the proceedings are to be paid out of the estate where the parties have acted reasonably in either pressing or resisting a claim. The convention I am referring to is reflected in the case of Dobb v Hacket(1993) 10 WAR 532. I will return to the principles mentioned in that case in a moment.
4 The plaintiff submits that a special costs order should be made in this case having regard to the settlement offer she made on 25 September 2000, a considerable time before the trial commenced. It is for this reason that I need to weigh up the submissions made on both sides with some care.
5 Various affidavits bearing on the costs issue are before me. Counsel for the plaintiff placed particular reliance upon the affidavit of Maria Elizabeth Pereira sworn 10 April 2002 to which was annexed a letter to the defendant’s solicitors dated 25 September 2000 containing the without prejudice offer in question. I note that the offer is wrongly described in the body of the affidavit as a letter dated 25 September 2002. It is apparent, however, when one turns to the letter itself, that it is the relevant without prejudice proposal for settlement.
6 I have before me also the affidavit of Colin Edward Chenu, counsel for the plaintiff, sworn 6 June 2001 in support of an application to vacate a trial date, and the affidavit of John Henry Reyburn sworn 9 November 2001 which is directed to the circumstances in which the proceeds of the AMP superannuation policy were brought to account as part of the assets
(Page 5)
- of the estate. The former affidavit has annexed to it a letter faxed by Nicholson Clements to Mr Nicholls on 6 June 2001 which refers to the way in which it came to light that the proceeds of the AMP policy should be added to the value of the estate. These matters have been supplemented by detailed written submissions and minutes of proposed orders from counsel on both sides.
7 The facts of the matter are set out at length in the reasons for judgment which I delivered on 19 December 2001. I noted that the plaintiff, Maria Elizabeth Pereira, claimed that the disposition of the estate of the late Gordon Paul Patrick, effected by the law relating to intestacy, was not such as to make adequate provision for her. I referred to the fact that the deceased died intestate on 10 May 1999. The plaintiff contended that she was the de facto widow of the deceased and was entitled to relief pursuant to the provisions of the Inheritance Act. I noted in my reasons for judgment that the effect of a memorandum put into evidence by consent was that at the date of the hearing the value of the estate should be regarded as being $313,253.33. The parties recognised that various amounts had previously been distributed from the estate and that the portion of the estate remaining undistributed was the sum of $116,969.
8 It was common ground at the hearing concerning costs that the agreed value of the estate was only arrived at after various exchanges between the parties and as a consequence of more rigorous discovery revealing that the proceeds of the AMP superannuation policy ought to be added to the value of the estate. At the time the offer for settlement was made on 25 September 2000 the assumption was that the estate was worth less than proved to be the case. Indeed, the plaintiff, at par 17 of her affidavit sworn 10 April 2002, says that at the time she made the offers dated 25 September and 27 October 2000 she believed, having regard to the affidavits provided by the defendants, that the net value of the estate was $220,675.43.
9 My reasons for judgment canvassed the factual issues between the parties at length. It is quite apparent from those reasons that a central issue was whether the plaintiff could be described as being in a de facto relationship with the deceased within the meaning of the relevant statutory provisions. If the plaintiff failed in regard to that threshold issue, then she would not have been entitled to the relief sought.
10 I examined the evidence bearing upon that issue at length. At par 60 and par 61 of my reasons I said this:
(Page 6)
- “I am satisfied that the plaintiff is the survivor of a relationship which, to outward appearances, was that of a married woman, even though there had been no lawful ceremony. The plaintiff was being at least partly maintained by the deceased and she had made some sacrifices in order to create and sustain the relationship. I have been able to form the opinion required by the Act that the deceased had a special moral responsibility to make provision. It follows that, in my view, the threshold issue must be resolved in favour of the plaintiff in that she has been able to establish that she has standing of the kind contemplated by s 7(1)(f) to advance a claim as a de facto widow.”
11 I then went on to consider the other issues and determined that in the exercise of the Court’s discretion in the manner allowed for by the Act, provision should be made for the plaintiff from the deceased’s estate. I then turned to the question of what provision should be made and said this at par 88:
“I consider that an appropriate form of provision is for the plaintiff to be allowed one-fourth of the agreed value of the estate, that is to say, $78,309, on the assumption that this will be sufficient to allow her to discharge her existing mortgage, attend to home repairs and improvements, and alleviate her need for regular employment to some extent, so that she will be at liberty to proceed with further education of the kind foreshadowed in her affidavit.”
12 I concluded my judgment by saying that I would hear from the parties as to the terms of any orders or directions that might be required to carry my ruling into effect. I said that the notional distribution of the estate was subject to the question of costs being resolved. I had hoped that the parties would be able to resolve that issue by agreement, but that has not proved possible.
13 At the time of my judgment, it was not brought to my attention that there had been settlement proposals preceding the trial. This gives rise to an important question, namely, to what extent, if any, those settlement proposals should be brought into consideration when exercising the Court’s discretion in relation to costs pursuant to s 14(6) of the Inheritance Act.
14 Counsel for the plaintiff said that the effect of the settlement proposal made on 25 September 2000, at a time when the estate was
(Page 7)
- believed to be in the order of $220,000, was to put up an offer of compromise whereby the plaintiff would settle for something less than one-fifth of the estate, plus some provision for costs.
15 Counsel for the plaintiff said that if the matter is viewed in that light, the logic of the situation was that when the true value of the estate became known as being $313, 235 it was open to the defendants to acknowledge that the plaintiff was prepared to settle for less than one-fifth of the value of the estate. In the event, the offer was not accepted, the matter proceeded to trial, and the Court’s ruling was that the plaintiff be allowed one-fourth of the estate. The stance of the plaintiff, as reflected in its proposed minute of orders, is that allowance should be made for the settlement offers.
16 The plaintiff’s proposed orders are as follows:
"(1) The distribution of the intestate estate of Gordon Paul Patrick (deceased) under the provisions of the Administrative Act 1903 be varied, so that the plaintiff receive an amount equal to one-fourth of the agreed value of the estate (being the sum of $313,235.33) after deduction of the costs referred to in paragraph 3 of these orders.
(2) After deduction of the costs referred to in paragraph 3 and payment of the costs referred to in paragraph 4 of these orders the balance of the estate (“the balance”) be distributed in accordance with the provisions of the Administration Act as follows:
(a) the first $50,000 of the balance, and one-third of the remainder of the balance to the second defendant;
(b) the rest to be divided equally between the third to sixth defendants.
(3) The costs of the plaintiff and the defendants incurred prior to 25 September 2000 be taxed and paid from the estate on a solicitor and own client basis.
(4) The costs of the plaintiff incurred on or after 25 September 2000 be taxed on a solicitor and own client
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- basis and paid from the second to sixth defendant’s share of the estate.
- (5) There be no order as to the costs of the defendants incurred on or after 25 September 2000.
(6) In the event that, by reason of distributions already made from the estate by the first defendants to the second to sixth defendants or any of them, the estate has insufficient funds to pay the sums required to be paid to the plaintiff by paragraphs 1, 3 and 4 of these orders, it is ordered that the party or parties to whom such distribution or distributions were made shall repay to the trustee such amount to the first defendants as is necessary to enable them to comply with those orders (and if more than one, in equal shares).
(7) There be liberty to apply."
17 Counsel for the defendants opposes orders in those terms and proposes that orders be made reflecting what might broadly be described as the more conventional position, that is to say, that the costs of all the parties be paid from the estate upon the basis that the resistance to the plaintiff’s claim was reasonable. Counsel contends that the plaintiff’s settlement offers should not be thought to have such an effect upon the exercise of the discretion as to require a departure from the usual approach.
18 The implication of the defendants’ proposal is that if all of the costs are paid out of the estate, the value of the estate (which is agreed at the figure of $313,235.33) will be substantially diminished before the moment comes to calculate what is the value of a one-fourth share which is to be allowed to the plaintiff. It is for this reason that the plaintiff seeks some amelioration of the position by saying that it is only the costs of all the parties up to 25 September 2000, which ought to be paid out of the estate. An order should be made that the defendants be responsible for the costs thereafter. The consequence of this proposal would be that the amount of costs to be paid by the estate, before the plaintiff’s one-fourth share is calculated, would be much less. Thus, the amount the plaintiff would in fact receive would be larger than if the defendants’ view of the matter prevails. I am therefore conscious that the issue concerning costs is of some importance.
(Page 9)
19 When I review the principles bearing upon the matter it is convenient to return to the case of Dobb v Hacket(supra) which I cited at the beginning of these reasons. In that case, being a matter arising under the Inheritance Act, Murray J held that in circumstances where a successful application had been made over the resistance of defendants seeking to preserve their interests as beneficiaries, the usual order was that the costs of all the parties be paid out of the estate. It is generally considered unfair to require unsuccessful defendants to Inheritance Act claims to bear the costs directly, if they have not behaved unreasonably in their defence.
20 In Dobb v Hacket(supra) it was the clear intention, so far as the defendants were concerned, to make offers which were without prejudice except in relation to the issue of costs. His Honour referred to the case of Calderbank v Calderbank [1976] Fam 93 and then went on to say that the Court should preserve in the minds of litigants the conscious consideration that their behaviour may place them at risk as to costs, if they refuse reasonable offers of settlement before trial. The plaintiff in Dobb v Hacket (supra) was shown to have behaved unreasonably in not accepting the offer made on 3 August 1992 by the fourth defendant’s solicitor. As such it was held that the plaintiff was entitled to have her costs paid out of the estate up to and including 12 March 1993 but she should bear her own costs incurred thereafter. The first defendant would have his costs paid out of the estate. The second, third and fourth defendants would have their costs paid out of the estate so far as they were incurred up to and including 12 March 1993 and their costs incurred thereafter were to be paid by the plaintiff. All orders as to costs were to be taxed.
21 I note immediately that the circumstances in that case were not entirely in conformity with the circumstances of the present case. In Dobb v Hacket(supra) a defendant made an offer to the plaintiff which was unreasonably refused. In the present case, however, it is the plaintiff who made the offer of settlement, which was refused.
22 Counsel for the defendants sought to distinguish the present case upon that basis from Dobb v Hacket(supra). It emerged in the course of my exchanges with him, however, that the reasoning in Dobb v Hacket (supra) is applicable. If there have been without prejudice or other exchanges before trial which have the potential to bring a disputed issue to an end without the need for a trial, then the reasoning in Dobb v Hacket (supra) suggests, putting aside the particular circumstances of that case, that this is a matter which the Court can take into consideration when applying the power granted to it pursuant to s 14(6) of the Inheritance Act.
(Page 10)
23 I digress briefly here to say that in light of the decision of Murray J, I do not see a need to resolve the more complex issue of whether s 14(6) of the Inheritance Act qualifies or displaces the effect of the Rules of Court, particularly O 24A, which provide for the making of formal offers of compromise. It seems to me, having regard to Dobb v Hacket (supra) that in the context of an Inheritance Act application I am entitled to take account of offers of settlement made before trial.
24 Against this background, one can see that there is a basis in the present case for the plaintiff’s contention that a special costs order should be made having regard to the settlement proposal that was put up by the plaintiff on 25 September 2000 and rejected by the defendants, before the trial of the action.
25 Counsel for the defendant argued forcefully in answer to that view of the matter that in the present case some special considerations should bear upon the exercise of the Court’s discretion. I am now referring to his written submissions at par 6 and par 7, being a line of argument which he developed at the hearing. He pointed out that the defendant’s resistance to the plaintiff’s claim, which was based on the existence of a de facto relationship, was of a kind where it was reasonable for the defendants to put the plaintiff to proof. Counsel put the matter this way in his written submissions:
“6. To succeed, the plaintiff needed to prove, firstly, that she was the de facto spouse of the deceased, and if so, that the operation of the intestacy provisions did not make adequate provision for her proper maintenance, support, education or advancement in life. Having established those matters there was then an issue as to what provision should be made.
7. The nature of the plaintiff’s relationship with the deceased was something peculiarly within the knowledge and means of proof of the plaintiff. There was also an issue as to whether, on the facts as found, the plaintiff was, as a matter of law, the de facto spouse of the deceased. The opposition to the plaintiff’s claim to be the deceased’s de facto was seriously arguable. It cannot be said that the defendants acted unreasonably in that respect.”
(Page 11)
26 It was not a matter emphasised by counsel for the defendant but I have to say that there was a certain amount of ambiguity concerning the plaintiff’s settlement proposal. The ambiguity is not due to any fault on the plaintiff’s side, but the fact remains that it was a settlement proposal made at a time when the value of the estate was thought to be much less than it ultimately turned out to be. One therefore has to proceed with caution in assuming that it was a settlement proposal which could have brought the matter to an end neatly.
27 In the end I am persuaded that, in the special circumstances of this case, it was reasonable for the defendants to maintain their opposition to the claim advanced. I see this case as a matter turning on its own facts. It should not be regarded as laying down any general rule or principle which might seem to be inconsistent with Dobb v Hacket(supra).
28 In this case, where the claim was bound to stand or fall on the question of whether a de facto relationship could be established, the defendants were entitled to require that the plaintiff prove her case. As counsel for the defendant urged upon me, this is an issue where the very intimate nature of the relationship between the plaintiff and the deceased could and did ultimately prove to be decisive. It was a matter which was peculiarly within the knowledge of the plaintiff, and therefore difficult for the defendants to assess.
29 Accordingly, it does seem to me that for those reasons the defendants were entitled to put the plaintiff to proof. It cannot be said lightly that they had an opportunity to bring the dispute to an end by accepting a settlement proposal. They were in the dark to some extent as to the nature of the relationship between the plaintiff and the deceased. Unlike a commercial context in which a party can evaluate the pros and cons of a settlement offer, I see some difficulty on the defendants’ side in evaluating the proposal put to them. Added to that is the further complication that the settlement proposal emerged at a time when there was misunderstanding as to the true value of the estate.
30 When I draw together all those matters, I am not persuaded that the plaintiff’s proposed orders should be granted. Instead, I shall return to what is described as the usual order by Murray J in Dobb v Hacket(supra).
31 I will make orders in terms of the defendants’ minute of proposed orders and I will come to the particularity of that in a moment.
(Page 12)
32 Before I make the orders, however, I must dispose of one other issue that was before me, that being what counsel for the plaintiff called the plaintiff’s “fallback” position. This referred to the fact that the matter was listed for trial in mid-2001but had to be adjourned when the confusion over the proper application of the proceeds of the AMP superannuation fund came to light. The parties needed time ascertain the true value of the estate.
33 Counsel for the defendants concedes that there was inadequate discovery on the defendants’ side. It was therefore arguable that an order should now be made allowing to the plaintiff the reserved costs referrable to the adjournment. When I look at the Nicholson Clement fax of 6 June 2001, however, in which the circumstances surrounding the superannuation fund and the issue of discovery are described, I am not persuaded that there is sufficient default on the part of the first defendants to merit a special cost order being made in favour of the plaintiff. I am of the view that the usual order that the plaintiff’s costs be paid out of the estate is sufficient to compensate the plaintiff, notwithstanding that such a ruling does have some adverse impact on the one-fourth share which the plaintiff will ultimately obtain.
34 I will make orders pursuant to the defendants’ minute dated 16 April 2002 in the following terms:
1. The distribution of the intestate estate of Gordon Paul Patrick (deceased) under the provisions of the Administration Act 1903 (WA) be varied, so that the plaintiff receive an amount equal to one fourth of the agreed value of the estate (being the sum of $313,253.33) after deduction of all costs to be paid from the said estate pursuant to these orders.
2. After deduction of the costs pursuant to these orders, the balance of the estate (“the balance”) be distributed in accordance with the provisions of the Administration Act as follows:
(a) The first $50,000 of the balance, and one third of the remainder of the balance to the second defendant;
(b) the rest to be divided equally between the third, fourth, fifth and sixth defendants.
3. The plaintiff’s costs to be taxed and paid from the estate on a solicitor and own client basis.
4. The defendants’ costs be taxed and paid from the estate on a solicitor and own client basis.
(Page 13)
- 5. In the event that, by reason of distributions already made from the estate by the first defendants to the second, third, fourth, fifth and sixth defendants or any one or more of them, the estate has insufficient funds to pay the sums required to be paid pursuant to these orders, the party or parties to whom such distribution or distributions were made shall repay to the first defendants such amount as is necessary to enable the first defendants to comply with these orders (and if more than one, in equal shares).
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