Re Cappelleri (Ruling No 2)
[2022] VSC 711
•21 November 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S CI 2017 00286
| LEONIE CAPPELLERI (by her Litigation Guardian VINCENZO NICOLA CAPPELLERI) | First Plaintiff |
| VINCENZO NICOLA CAPPELLERI (as the Administrator of the Estate of FRANK CAPPELLERI, deceased) | Second Plaintiff |
| VINCENZO NICOLA CAPPELLERI | Third Plaintiff |
| v | |
| DOMENICO CAPPELLERI | First Defendant |
| MARIO CAPPELLERI | Second Defendant |
| F&L PTY LTD (ACN 006187873) | Third Defendant |
| REGISTRAR OF TITLES | Fourth Defendant |
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JUDGE: | Moore J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 October 2022 |
DATE OF RULING: | 21 November 2022 |
CASE MAY BE CITED AS: | Re Cappelleri (Ruling No 2) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 711 |
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COSTS – Plaintiffs successful in interlocutory application – Where conduct of defendants warrants departure from usual position in relation to costs of interlocutory applications – Defendants’ opposition to summons not reasonably arguable – Defendants’ serious allegations against plaintiffs’ solicitors baseless – Defendants to pay plaintiffs’ costs of summons including reserved costs – Rule 63.20 of the Supreme Court (General Civil Procedure) Rules 2015.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Justin O’Bryan | Madgwicks |
| For the Defendants | Gerard Nash KC | Access Law |
HIS HONOUR:
By summons dated 7 July 2022, the plaintiffs sought directions about the reception at trial of evidence from Leonie Cappelleri, the first named plaintiff.[1] Leonie had lost capacity and a litigation guardian had been appointed for her on 30 August 2021. The plaintiffs sought orders that Leonie’s evidence at trial be given by an affidavit sworn by her on 9 November 2020, and for her attendance at trial to be dispensed with.
[1]In the interests of clarity and without intending any disrespect, in this ruling I generally refer to the parties by their first names.
On 12 October 2022, I made orders in terms sought by the plaintiffs for the reasons set out in Re Cappelleri (Ruling No 1).[2]
[2][2022] VSC 561.
The plaintiffs now seek their costs of the summons, including reserved costs.
The defendants submit that the costs of the summons should be the parties’ costs in the proceeding, or alternatively, costs should be reserved to be determined after trial.
Rule 63.20 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) provides that:
63.20 Interlocutory application
Where an interlocutory or other application is made in a proceeding and—
(a) no order is made on the application; or
(b) the order made is silent as to costs—
the costs are the parties' costs in the proceeding, unless the Court otherwise orders.
It is apparent that the general position established by r 63.20 is that the parties’ costs of an interlocutory application are to be the parties’ costs in the proceeding, unless the Court otherwise orders. Counsel for the plaintiffs submitted that the conduct of the defendants in relation to the summons justified the Court departing from the usual position. They submitted that the defendants unreasonably refused to proceed on the basis that Leonie’s evidence at trial be given by affidavit when that initial request was made in February 2022 and further, that in resisting that ‘conventional approach’, they made allegations, without any proper basis, that the plaintiffs’ solicitors had acted inappropriately.
The defendants sought to resist the plaintiffs’ application by submitting that, in circumstances where Leonie had become incapacitated and was unable to attend Court to give oral evidence, it was appropriate for the issue of the admission of her evidence to be determined as an interlocutory matter before trial and that this would enable the trial to proceed as seamlessly as possible. They submitted that the plaintiffs’ wish to rely on Leonie’s affidavit required approval from the Court in the exercise of its discretion and that, ordinarily, the Court’s exercise of discretion is assisted by the submissions of the parties.
The defendants further submitted that they could not reasonably have agreed with the proposed order sought by the plaintiffs as there was doubt about the factual basis on which it was sought, in circumstances where much of the contents of Leonie’s affidavit was contentious.
The defendants also submitted that the order sought by the plaintiffs in their summons was different from the form of order sought in the order proposed about a month earlier and they failed to specify how the plaintiffs proposed that Leonie’s affidavit should be received and relied on at trial.
The defendants submitted that their approach to the plaintiffs’ application was not unconventional. It was noted that they were ordered to make submissions first in circumstances where the plaintiffs had not articulated the basis upon which it was said that Leonie’s affidavit should be received into evidence.
The defendants’ submitted that, because the plaintiffs’ solicitor had obtained an affidavit from Leonie in circumstances where witness statements had been ordered and had obtained a witness statement from Vincenzo, one explanation for this could have been that the solicitor had doubts about Leonie’s capacity. They were accordingly entitled to explore and to make submissions to the Court in relation to those issues and should not be penalised for doing so.
It was submitted that there was medical evidence upon which the Court could have inferred that Leonie’s incapacity preceded the date upon which she swore her affidavit. Although the Court did not draw such an inference, it did not follow that the defendants were not justified in raising the issue.
Given the above matters, it was submitted that the defendants were entitled to resist the admission of Leonie’s affidavit into evidence. Further, the Court’s ruling had provided clarity about the manner in which Leonie’s affidavit could be used at trial; the parties’ submissions had therefore contributed to furthering the administration of justice in the proceeding. The costs of the summons should therefore be costs in the proceeding, or alternatively reserved for determination after trial. It was also submitted that matters emerging at trial may be relevant to the determination of the costs of the summons.
Consideration
I consider that the conduct of the defendants in opposing the plaintiffs’ summons, and the bases upon which they did so, warrants a departure from the usual position in relation to the costs of interlocutory applications and properly justifies an order that they pay the plaintiffs’ costs.
This is not a case where an unsuccessful party’s arguable submissions merely failed to find favour with the Court. An examination of the reasons advanced by the defendants in opposition to the plaintiffs’ application demonstrates that their opposition to the plaintiffs’ application was unreasonable. Of the four reasons advanced by the defendants in opposition to the plaintiffs’ application, one was devoid of any merit;[3] a second was based upon a fundamental misconception about the applicable principles in relation to legal capacity;[4] a third asserted serious failings by the plaintiffs’ solicitors which were made without foundation;[5] and a fourth involved exaggerated claims of prejudice which conflated the basal distinction between admissibility and weight.[6]
[3]Ibid [13].
[4]Ibid [14].
[5]Ibid [25].
[6]Ibid [31].
Not only was the defendants’ position in relation to the summons not reasonably arguable, one of the grounds advanced involved the serious allegation that the preparation of Leonie’s affidavit was ‘highly irregular, anticipatory and an abuse of process’. This claim rested upon alleged serious failings by the plaintiffs’ solicitors, which claims I found to be baseless. The making of this allegation is an additional aspect of the defendants’ conduct which warrants a departure from the usual position in relation to the costs of an interlocutory application.
The defendants’ submissions in opposition to the plaintiffs’ application for costs failed to grapple with these fundamental aspects of their conduct to which I referred in my ruling on the summons.
It is not uncommon for parties in litigation to confront a situation where a party or important witness in a civil proceeding is not, for one reason or another, available to attend trial for cross-examination. Where that occurs, the Court expects practitioners, mindful of their overriding duty to the Court, to endeavour to resolve such controversies by agreement. This may entail, for example, practitioners recognising that if evidence is admitted in the absence of a witness, additional issues about the weight to be given to the evidence will likely arise, or by practitioners seeking to tender only part of the witness’ prior statement into evidence. This is not to say that agreement must always be reached, or that there might be reasonable grounds for a party to oppose the tender into evidence of a witness’ affidavit or witness statement in their absence from trial.
In the present matter, the striking feature about the approach of the defendants’ representatives to the proposed receipt of Leonie’s affidavit into evidence was the absence of any genuine and constructive engagement by them with the plaintiffs’ representatives over many months, which ultimately manifested itself in a hearing which revealed the lack of any reasonable basis to their opposition to the receipt of Leonie’s affidavit into evidence at trial. In those circumstances, to submit, as the defendants did, that the parties’ submissions somehow furthered the administration of justice betrays an unduly narrow understanding of that concept and the manner in which the conduct of practitioners can both hinder and aid the Court in discharging that function.
For the above reasons, there is a good basis in the circumstances of this case for the Court to ‘otherwise order’ in the manner contemplated by r 63.20 and to order that the defendants pay the plaintiffs’ costs of the summons filed on 7 July 2022, including any reserved costs. The Court will so order.
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