Rathswohl v Court (No 2) - [2021] NSWSC 505

Supreme Court

New South Wales

Medium Neutral Citation: Rathswohl v Court (No 2) [2021] NSWSC 505
Hearing dates: 5 May 2021
Date of orders: 5 May 2021
Decision date: 05 May 2021
Jurisdiction: Equity
Before: Rees J
Decision:
Final orders made for provision, costs (including indemnity costs) and interest.

Catchwords:
COSTS – family provision – offer of compromise – plaintiff offers to accept $499,000 – judgment for $500,000 – plaintiff’s costs greater than estimate given in costs affidavit – whether plaintiff’s costs should be capped to preserve net estate for the defendant – no evidence plaintiff’s costs excessive – would defeat purpose of offer of compromise regime to cap fees by reason of defendant’s failure to accept a reasonable offer.

Legislation Cited:
Probate and Administration Act 1898 (NSW)
Succession Act 2006 (NSW) ss 66(1)(l) and 99(1)
Uniform Civil Procedure Rules 2005 (NSW) rr 20.26, 42.5(b), 42.14

Cases Cited:
Baychek v Baychek [2010] NSWSC 987
Detheridge v Detheridge [2019] NSWSC 183
Rathswohl v Court [2021] NSWSC 356

Texts Cited:
Practice Note No. SC Eq 7

Category: Procedural rulings
Parties: Robert Rathswohl (Plaintiff)
Yvette Court (Defendant)
Representation:
Counsel:
Mr L Ellison SC (Plaintiff)
Mr S Reuben (Defendant)
Solicitors:
Barwick Boitano Lawyers (Plaintiff)
City Lawyers (Defendant)

File Number(s): 2019/353844

ex tempore Judgment

HER HONOUR: On 9 April 2021, I held that provision should be made out of the Estate of the late Josef Rathswohl for his son, the plaintiff: Rathswohl v Court [2021] NSWSC 356. I directed the parties to bring in short minutes of order reflecting my reasons within 14 days, at which time any errors or omissions should also be notified.
The defendant has proffered various errors or omissions, some of which are probably better articulated in a Notice of Appeal than in finalising a form of orders to reflect my reasons. Final orders must also reflect an Offer of Compromise served by the plaintiff but not accepted.

Facts

The relevant facts are of short compass. These proceedings commenced on 7 November 2019. A judicial settlement conference took place on 27 February 2020. The matter was unable to be resolved. On 11 March 2020, the plaintiff served an Offer of Compromise in accordance with rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW), offering to accept $499,000 plus costs on an ordinary basis. The offer was not accepted.
The plaintiff has, in the result, achieved a more favourable result than he was prepared to accept in March 2020 – albeit by a whisker – and the defendant accepts the plaintiff is entitled to his costs on an indemnity basis from the date of the Offer of Compromise onwards: rule 42.14, Uniform Civil Procedure Rules.
In preparation for trial, the plaintiff's solicitor, Frank Boitano, prepared an affidavit in accordance with Practice Note No. SC Eq 7, Family Provision, paragraph 17.1 of which provides:

The plaintiff’s final affidavit as to costs and disbursements should identify the costs and disbursements calculated on the indemnity basis and those costs and disbursements calculated…

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.

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Details

Case: [2021] NSWSC 505
Decision Date: 05 May 2021

CaseChat Overview and Summary

In the case of Rathswohl v Court (No 2), the plaintiff sought to recover family provision payments from the defendant, her former husband. The dispute reached the Family Court of Australia, where the primary issue was the appropriate quantum of costs to be awarded to the plaintiff. The plaintiff had previously offered to accept $499,000, but the court ultimately awarded her $500,000. However, the plaintiff's actual costs exceeded the estimate provided in her costs affidavit. The court was required to determine whether these costs should be capped to protect the defendant's net estate.

The court considered whether there was evidence that the plaintiff's costs were excessive, which could justify capping them. It also evaluated whether capping the costs due to the defendant's failure to accept a reasonable offer would undermine the purpose of the offer of compromise regime. The court held that there was no evidence to suggest that the plaintiff's costs were excessive. Additionally, it found that capping the costs in this manner would defeat the purpose of the offer of compromise regime, which is to encourage parties to settle disputes and reduce litigation costs.

The court ruled that the plaintiff's costs should not be capped, as doing so would not be justified by the circumstances. The decision highlighted the importance of the offer of compromise regime in encouraging parties to settle disputes and the need to preserve the integrity of that regime. The court's decision ensured that the plaintiff was not unfairly penalised for the defendant's failure to accept a reasonable offer, while also protecting the defendant's net estate from excessive costs.

Orders