Pizimolas v Pizimolas (No 2)

Case [2010] SASC 209


SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

PIZIMOLAS v PIZIMOLAS & ZANNIS (NO 2)

[2010] SASC 209

Judgment of The Honourable Justice Kourakis

14 July 2010

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OUT OF A FUND - WHEN COSTS ALLOWED OUT OF FUND

Following trial in which plaintiff claimed entitlement to whole of deceased estate, judgment delivered dismissing plaintiff’s claims for a constructive trust and family provision and allowing defendants’ counterclaim for mesne profits – defendants applied for costs – plaintiff argued that costs should come out of the estate.

Held: Defendants in their capacity as executors to have costs paid on indemnity basis from the estate – defendants to have solicitor’s costs on party/party basis and lump sum of $800 for counsel fees on the counterclaim – plaintiff to pay defendants 15 per cent of defendants’ total costs of litigation on party/party basis for constructive trust claim – defendants to have costs of defending family provision claim paid out of estate on party/party basis.

Evidence Act 1929 s 67C, referred to.
Public Trustee v Hall [1937] SASR 252, applied.
Bowyer v Woods [2007] SASC 327, discussed.
R v Seigneur (2009) 103 SASR 207; Chapman v Allan and Draper (1999) 74 SASR 274; Rayner v Pethick [2006] SASC 70, considered.

PIZIMOLAS v PIZIMOLAS & ZANNIS (NO 2)
[2010] SASC 209

Civil: Application

  1. KOURAKIS J:      On 28 May 2010 I delivered judgment in this matter.[1]  The plaintiff and the defendants are siblings.  I dismissed the plaintiff’s claim that he held his mother’s residence, which was the substantial asset of her estate, on a constructive trust.  I also dismissed his claim for greater provision out of the estate than the equal shares which were left to him and his two siblings.  I allowed the defendants’ counterclaim for mesne rent for a period in which the plaintiff remained in occupation of his mother’s residence after he had been given notice to quit.

  2. The defendants, in their capacity as beneficiaries under the will, seek an order that the plaintiff pay their costs of defending his claim and in prosecuting their claim for mesne profit.  The plaintiff contends that no order for costs should be made against him and seeks an order that his costs be paid out of the estate.  It is common ground that the defendants, in their capacity as executors, should have their costs paid on an indemnity basis from the estate; I so order.

  3. I shall first deal with the question of costs on the defendants’ mesne profit claim.  There is no basis upon which the ordinary rule that costs follow the event can be displaced.  I order that the defendants have their solicitor’s costs on the counterclaim, to be taxed on a party/party basis.  I shall fix a lump sum for counsel fees on that claim because of the difficulty in disentangling the counsel fees incurred on the…

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Pizimolas v Pizimolas (No 2) [2010] SASC 209
Case
[2010] SASC 209
Decision Date

CaseChat Overview and Summary

In Pizimolas v Pizimolas (No 2), the parties were involved in a dispute over the distribution of a deceased estate. The plaintiff sought a constructive trust and family provision from the estate, while the defendants counterclaimed for mesne profits. The trial resulted in the dismissal of the plaintiff's claims and the allowance of the defendants' counterclaim. Following the judgment, the defendants applied for costs, arguing that the plaintiff's request for costs to come out of the estate should be denied.

The key legal issue before the court was whether a letter from the plaintiff, which included an offer made in a previous mediation conference, could be admitted as evidence to support the defendants' application for costs. The plaintiff contended that the letter should be excluded under section 67C of the Evidence Act 1929, which generally prohibits the admission of evidence of communications made in connection with settlement negotiations. The court had to determine if any of the exceptions to this rule applied to allow the evidence.

The court found that none of the exceptions under section 67C(2) of the Evidence Act 1929 applied. The plaintiff did not consent to the admission of the letter, nor had the substance of the evidence been disclosed to the court or any third party. The court also noted that the communication in question was made during a settlement conference and did not include a statement that it was not to be treated as confidential. As a result, the court refused to admit the letter into evidence. Consequently, the application for costs was denied, and the plaintiff was required to bear the costs of the proceedings.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

The letter refers to offers made in an earlier mediation conference including an offer made by the defendants to settle on the basis that the parties withdraw their respective claims and carry their own costs. The defendants have bettered that offer and now wish to tender the plaintiff’s letter to show that they made the offer. The plaintiff objects on the ground that, even though the offer was set out in his letter of 31 December 2009, it evidences communications made in a settlement conference and is therefore rendered inadmissible by s 67C of the Evidence Act 1929, which provides:67C—Exclusion of evidence of settlement negotiations(1)Subject to this section, evidence of a communication made in connection with an attempt to negotiate the settlement of a civil dispute, or of a document prepared in connection with such an attempt, is not admissible in any civil or criminal proceedings.(2) Such evidence is, however, admissible if—(a) the parties to the dispute consent; or(b) the substance of the evidence has been disclosed with the express or implied consent of the parties to the dispute; or(c) the substance of the evidence has been partly disclosed with the express or implied consent of the parties to the dispute, and full disclosure of the evidence is reasonably necessary to—(i)enable a proper understanding of the other evidence that has already been adduced; or(ii)avoid unfairness to any of the parties to the dispute; or(d) the communication or document included a statement to the effect that it was not to be treated as confidential; or(e) the proceeding in which the evidence is to be adduced is a proceeding to enforce an agreement for the settlement of the dispute or a proceeding in which the making of such an agreement is in issue; or(f) the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute; or(g) the making of the communication, or the preparation of the document, affects the rights of a party to the dispute; or(h) the communication was made, or the document was prepared, in furtherance of—(i) the commission of a fraud or an offence; or(ii) the doing of an act that renders a person liable to a civil penalty; or(iii) the abuse of a statutory power.(3)Subsection (1) does not apply to parts of a document that do not concern attempts to negotiate a settlement of a dispute, if it would not be misleading to adduce evidence of only those parts of the document. It should be noted that s 67C of the Evidence Act 1929 prohibits the admission of evidence in “proceedings”. It is not limited to the trial of the substantive controversy. An application for costs is a proceeding or, at the very least, a step in a proceeding.[6][6] R v Seigneur (2009) 103 SASR 207. In my view, none of the exceptions in s 67C(2) apply. Whatever the plaintiff may have intended when the letter was sent, he does not now consent to admission of the letter for the purposes of s 67C(2)(a). Generally, the consent of the parties to the tender of confidential information pursuant to s 67C(2)(a) must be contemporaneous.[7] Nor has the substance of the evidence been disclosed to the Court, or indeed any third party, so as to fall within s 67C(2)(b). Section 67C(2)(d) of the Evidence Act 1929 is inapplicable because the “communication” to which it refers is the communication made in the course of the settlement conference. Section 67C(2)(d) does not operate on the statement made in the plaintiff’s subsequent letter that he did not intend to treat the contents of his letter confidential. Moreover, the defendants have at no time stated that they would not treat the offer made by them in the mediation as confidential. The other exceptions even more obviously do not apply. I refuse to receive the letter.[7] Chapman v Allan and Draper (1999) 74 SASR 274 at 289; Rayner v Pethick [2006] SASC 70 at [25].

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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