Re Hayes (No 2)
[2022] VSC 515
•1 September 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S PRB 2020 00044
IN THE MATTER of the will and estate of THOMAS SYDNEY PASCOE HAYES, deceased
| IAN BENTLEY STILL (in his capacity as the executor of the will and estate of the abovenamed deceased) | Plaintiff |
| v | |
| TACI HAYES | Applicant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 1 September 2022 |
CASE MAY BE CITED AS: | Re Hayes (No 2) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 515 |
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COSTS – Where applicant unsuccessful in seeking revocation of grant of probate – Whether special circumstances warrant indemnity costs order – Whether overarching obligations contravened by unsuccessful applicant or applicant’s solicitor – Where Court requires submissions from applicant and solicitor – Supreme Court Act 1986 (Vic) s 24 – Civil Procedure Act 2010 (Vic) ss 18, 24.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Still and Company Lawyers | |
| For the Applicant | Constable Connor & Co |
HER HONOUR:
Introduction
On 8 July 2020, the applicant filed a summons seeking, inter alia, revocation of the grant of probate of the will of Thomas Sydney Pascoe Hayes (‘the deceased’), dated 24 September 2008 (‘the 2008 will’).[1]
[1]The applicant also requested that the Court grant her leave to apply to the Registrar of Probates for a grant of letters of administration of the deceased’s estate. An application of this type cannot be made on an application such as the applicant’s.
On 11 April 2022, reasons were delivered and orders made dismissing the applicant’s summons.[2] The parties were ordered to file written submissions on costs by 10 May 2022, if they were unable to reach agreement. No agreement was reached by the parties.
[2]Re Hayes [2022] VSC 178 (‘Reasons’).
Plaintiff’s position as to costs
The plaintiff is a solicitor at the firm of Still and Company Lawyers. He is the executor and trustee of the estate of the deceased.
On 28 April 2022, before the date for filing costs submissions, the plaintiff informed the applicant’s solicitor, Mr Peter Connor of the firm Constable Connor & Co (‘Mr Connor’), that he was obtaining an assessment of his costs and sought Mr Connor’s consent to an order for the Court to fix a sum for the costs, so as to avoid additional legal costs that would accompany filing of costs submissions. Mr Connor did not respond to or acknowledge the plaintiff’s correspondence.
The plaintiff then engaged Grace Costs Consultants to provide an assessment of his costs. A costs assessment of $49,815.36 (exclusive of GST and disbursements) was received on 5 May 2022. On the same date, the plaintiff sent the costs assessment to Mr Connor, together with disbursements and proposed minutes of consent orders for the costs to be fixed in the sum of $49,815.36. Despite asking Mr Connor for an urgent response, the plaintiff did not receive an acknowledgement or response from him.
On 9 May 2022, the plaintiff filed written submissions and an affidavit as to his costs.
The plaintiff seeks an order that the applicant pay the plaintiff’s costs of the application on an indemnity basis, assessed in an amount of $55,292.46, alternatively, on the standard basis.
Applicant’s position as to costs
The applicant did not file written submissions on costs.
By email to the Court and the plaintiff dated 19 May 2022, Mr Connor stated that the applicant would not be able to comply with the deadline for submissions on costs due to illness and that he had received the ‘applicant’s clear and informed instructions that she does not wish to argue against the plaintiff’s submissions on costs and is content to abide by the Court’s decision’.
Plaintiff’s submissions
Applicant’s grounds for seeking revocation of the grant of probate of the will
In support of his claim for indemnity costs, the plaintiff highlights the Court’s findings on the particulars provided by the applicant in support of the first of the applicant’s grounds for seeking revocation of probate of the will, being suspicion of lack of knowledge and approval, as follows:
(a) that the particulars outlining the circumstances in which the 2008 will and the deceased’s penultimate will dated 17 September 2003 (‘the 2003 will’) were made did not ‘raise any particular issues of concern’;[3]
[3]Reasons, [39].
(b) that the particulars supporting the contention that the content of the 2008 will and the 2003 will was contrary to the deceased’s previously expressed intentions ‘lack[ed] specification as to the circumstances in which the statements were made’.[4] Further, the Court found that it was not suspicious for the deceased to have provided for his wife’s side of the family,[5] nor were comments allegedly made in 2016 proximate to the time when the 2003 will and the 2008 will were made.[6] Similarly, the Court found that ‘no temporal connection’ had been established between alleged efforts to obstruct the applicant from visiting the deceased in hospital prior to his death in 2019, and the circumstances surrounding the making of the 2003 will and the 2008 will;[7]
(c) in regard to the allegation of suspicious behaviour on the part of the plaintiff and Jennifer Wright, a beneficiary under the 2008 will and the 2003 will (‘Jennifer’), following the deceased’s death, the Court stated that the plaintiff was obliged to ask the applicant to confirm her relationship to the deceased, as she was not a named beneficiary in the 2008 will;[8] and
(d) as to the allegation of a close relationship between Jennifer and the plaintiff’s law firm, in the context of cremation arrangements for the deceased, the Court referred to the plaintiff having deposed that the deceased wished to be treated in the same manner as his wife.[9]
[4]Reasons, [42].
[5]Reasons, [42].
[6]Reasons, [43].
[7]Reasons, [43].
[8]Reasons, [44].
[9]Reasons, [45].
In relation to the applicant’s second ground of suspicion as to the deceased’s testamentary capacity, the plaintiff highlights the Court’s findings that the particulars provided by the applicant were ‘vague, with no particular factual basis’, as well as being ‘speculative and not based on any facts raised in her particulars’.[10]
Dismissal of the applicant’s application
[10]Reasons, [56].
The plaintiff highlights the Court’s conclusion that the applicant had failed to establish a prima facie case for revocation of the grant of probate in respect of the 2008 will.[11]
Costs follow the event
[11]Reasons, [58].
The plaintiff submits that ‘the ordinary rule in adversarial estates litigation is that costs follow the event on a standard basis’, and that a trustee who is successful in prosecuting or defending such a proceeding will generally be entitled to a costs order in their favour.[12]
[12]Citing GE Dal Pont, Law of Costs (LexisNexis, 4th ed, 2018) [10.3]; Supreme Court Act 1986 (Vic) s 24(1).
In support of this position, the plaintiff relies upon this Court’s decision in Re Anderson (No 2),[13] in which it was stated that:
The Court’s jurisdiction in relation to costs is conferred by s 24(1) of the Supreme Court Act 1986. The Court’s general discretion in relation to costs must be exercised judicially and in accordance with O 63 of the Supreme Court (General Civil Procedure) Rules 2015.[14] The prima facie position in respect of costs litigation is for standard costs to be ordered by the Court. The usual order as to costs is that costs follow the event and a successful party is entitled to an award of costs in its favour.[15]
[13][2017] VSC 463 (‘Re Anderson’), [7] (McMillan J) (citations included).
[14]Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399, [11] (Croft J).
[15]Oshlack v Richmond River Council (1998) 193 CLR 72, 97 (McHugh).
Absent any other considerations, and in light of the applicant being wholly unsuccessful in her application, the plaintiff submits that the applicant should bear the plaintiff’s costs on, at least, a standard basis.
Indemnity costs
In the alternative, the plaintiff seeks his costs on an indemnity basis and also relies upon observations made by this Court in Re Anderson (No 2),[16] as follows:
The Court’s discretionary power also allows the Court to make an award for costs other than on the standard basis. The Court’s discretion to depart from the usual order for costs will only be exercised where a proceeding exhibits a special or unusual feature or special circumstances.[17] The types of circumstances that may warrant a special costs order are not closed.[18] Each proceeding must be considered on its own facts to ascertain whether those facts support the making of a special order for costs. Where serious allegations of fraud have been made without a proper basis, orders have been made for costs to be assessed on an indemnity costs.[19]
[16]Re Anderson (n 13) [10] (citations included).
[17]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 (‘Ugly Tribe’); Lutar v Carley [2017] VSC 366, [21] (McMillan J).
[18]Ugly Tribe (n 17) [8] (Harper J).
[19]Brown v Guss (No 2) [2015] VSC 57, [76] (McMillan J).
In support of his submission on indemnity costs, the plaintiff relies on the applicant’s failure to file separate applications contesting each will; the failure to provide sworn affidavits; the allegations of impropriety against the plaintiff and Jennifer which ‘never should have been made’; and the applicant’s failure to respond to the plaintiff in relation to the swearing of the affidavits and the question of costs.
In respect of the applicant’s failure to file separate applications for each will, the plaintiff relies upon this Court’s decision in Re Gardiner,[20] where it was stated that:
A challenge to multiple wills could not be heard in one application as there will be different grounds relied upon in respect of separate wills and different parties in respect of each will.[21]
[20][2016] VSC 541.
[21]Ibid, [36] (McMillan J).
The plaintiff relies on two cases in which the Court found it appropriate to order indemnity costs. First, in Re Vasiliades; Pappas v Vasiliades (No 2),[22] which concerned an unsuccessful application to remove an executor, indemnity costs were ordered in part because the defendant had attempted to resolve the question of costs without the need for submissions.[23] In the current proceeding, the plaintiff deposes to making two written attempts to reach agreement with the applicant on costs, but has yet to receive a response.
[22][2022] VSC 16.
[23]Ibid, [19] (McMillan J).
Secondly, in Re Anderson (No 2),[24] which concerned an unsuccessful application for revocation of probate, indemnity costs were ordered on the following basis:[25]
The applicants and their solicitors have obligations under the Civil Procedure Act 2010 to ensure, amongst other matters, that all claims brought have a proper basis, to narrow the issues in dispute and to minimise delay.[26] The two contested grounds do not conform with these obligations. Not only have the applicants made allegations of fraud that ought never to have been made, they have also caused delay and wasted costs. I am satisfied that this justifies the conclusion that their conduct falls within the scope of special or unusual features or special circumstances described in the authorities to warrant a special costs order…
[24][2017] VSC 463.
[25]Ibid, [17] (citation included).
[26]Civil Procedure Act 2010 (Vic) ss 18, 23, 25.
On 8 September 2020, the plaintiff wrote to Mr Connor noting that he had not received any sworn affidavits from him or his client. The plaintiff submits there is no excuse for the applicant’s failure to provide sworn affidavits, given the procedures established by the Court to accommodate the pandemic restrictions.[27] Further, the applicant and her mother were living in Queensland at all relevant times and their ability to produce sworn affidavits was not impacted by pandemic restrictions. In any event, the plaintiff submits that his evidence is not contradicted by the applicant’s unsworn affidavits.
[27]Citing Reasons, [8].
The plaintiff also refers to the ‘serious allegations of impropriety’ made in an unsworn affidavit by Mr Connor that sought to impugn the plaintiff’s position as a legal practitioner and as alternate executor of the deceased’s estate, despite his status as ‘a solicitor of many decades standing’. The plaintiff submits that these allegations were in breach of Mr Connor’s overarching obligations under ss 18 and 23 of the Civil Procedure Act 2010 (Vic) (‘the Civil Procedure Act’), that is, the requirement for a proper basis at the time of making a claim and the obligation to narrow the issues in dispute. In this regard, the plaintiff relies upon the statement in Mr Connor’s unsworn affidavit of 8 July 2020 which refers to ‘potential allegations of fraud, undue influence, incapacity, promissory estoppel and unconscionable conduct worthy of investigation’.
Further, the plaintiff submits that the applicant made ‘serious allegations of collusion’ against the plaintiff and Jennifer in relation to preparation of the 2008 will and allegations that the applicant was obstructed from contacting the deceased prior to his death. In this regard, the plaintiff notes that the applicant and her mother did not visit the deceased between 2008 and 2019.
Unfair to burden beneficiaries
Pursuant to r 63.26 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), the plaintiff submits that, as executor of the estate, he is entitled to have his costs of defending the application reimbursed from the estate on an indemnity basis, insofar as the costs are not paid by any other person. If the costs order is made on the standard basis, the plaintiff submits that the estate, and therefore the beneficiaries, will be burdened with the remainder of the costs not covered by the standard order.
The plaintiff submits this would be ‘an unjust imposition’ on the beneficiaries, given that the costs result from the applicant’s decision to bring and prosecute the application. The applicant is not a beneficiary, therefore costs payable by her would not derive from her portion of the estate. The plaintiff submits that the applicant has ‘wilfully persisted’ with allegations based on unsworn evidence and has increased the plaintiff’s costs by failing to respond to the plaintiff’s attempts to reach agreement on costs.
Consideration
The plaintiff’s submissions raise specific issues as to whether the applicant or Mr Connor or his firm may have contravened ss 18 and 24 of the Civil Procedure Act, as a basis for seeking an order for indemnity costs.
Under the Civil Procedure Act, a party is required to conduct a proceeding in a manner that is consistent with the overarching principles set out and a party’s legal practitioner must take into account his or her overarching obligations and assist the client to comply with their duties.
Section 24 of the Civil Procedure Act imposes an overarching obligation on parties and legal practitioners to ‘use reasonable endeavours to ensure that legal costs and other costs incurred in connection with the civil proceeding are reasonable and proportionate’ to the complexity or importance of the issues in dispute and the amount in dispute. This is consistent with the overarching purpose of the Civil Procedure Act, namely to ‘facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.’[28]
[28]Civil Procedure Act 2010 (Vic) s 7(1).
Section 18 of the Civil Procedure Act provides an overarching obligation not to make any claim that does not have a proper basis. This means that when a claim is made or responded to, it requires, at the time at which an assessment of proper basis is necessary, an assessment that a claim or response to a claim has a proper basis on the factual and legal material available to the person making the claim or response.[29]
[29]Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5) (2014) 48 VR 1, 34–5 [88]–[89] (Dixon J).
In Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 8),[30] Dixon J referred to the duties owed to the Court by lawyers and the overarching obligations contained in the Civil Procedure Act as follows:
Returning to the duties owed to the court by lawyers, s 13 of the [Civil Procedure Act] provides that to the extent that any duty or obligation of a legal practitioner to a client, whether arising under the common law, by, or under any statute or otherwise, can operate consistently with the overarching obligations it is not overridden. A legal practitioner or a law practice engaged by, or on behalf of, a client in connection with a civil proceeding must comply with the overarching obligations despite any obligation the legal practitioner or the law practice has to act in accordance with the instructions or wishes of the client. Where there is inconsistency between any duty or obligation and an instruction or a wish of a client, the overarching obligation prevails to the extent of that inconsistency.[31]
[30][2014] VSC 567.
[31]Ibid, [160]. See also Yara Australia Pty Ltd v Oswal (2013) 41 VR 302, 311 [26] (Redlich and Priest JJA and Macaulay AJA).
In Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5),[32] Dixon J observed that the intent of the Civil Procedure Act provisions is that the overarching obligation under s 18 operate more broadly than the proper basis certification under s 42. Under s 42 of the Civil Procedure Act, a practitioner must certify that, on the factual and legal material available, each allegation of fact, each denial and each non-admission in a document has a proper basis. His Honour concluded that the legislature appears to have intended that the s 18 obligation be complementary with the obligation to certify under s 42.[33] His Honour then said:
The legal practitioner’s determination for the purposes of a proper basis certification must be based on a reasonable belief as to the truth or untruth of an allegation or denial or, in the case of a non-admission, that the legal practitioner does not know, and therefore cannot say, whether a fact alleged or denied is true or untrue. Ultimately, whether a claim has a proper basis is a question for the court. A person discharging the overarching obligation can do so by demonstrating a reasonable belief based on the factual and legal material available at the time. If that is done, the obligation is discharged. [34]
[32](2014) 48 VR 1.
[33]Ibid, [87].
[34]Ibid.
The plaintiff’s submissions and his affidavit raise a number of conduct issues that need to be addressed before making any orders in respect of the costs of the application. Whether costs are sought against a party or a non-party, the trial judge is the appropriate person to deal with such issues.
The Court on its own motion invites submissions from the applicant or Mr Connor or his firm as to why there should not be a finding that the Civil Procedure Act has been contravened by them.
Orders
The Court orders:
(a) On or before 22 September 2022, the applicant and the applicant’s solicitor, Mr Peter Connor, and his firm, Constable Connor & Co, located at 9/441 Lonsdale Street, Melbourne, in the State of Victoria file written submissions addressing the question of whether and to what extent they should indemnify the applicant in respect of the plaintiff’s costs.
(b) Pursuant to s 29 of the CivilProcedure Act 2010 (Vic), the applicant’s solicitor, Mr Peter Connor, and his firm, Constable Connor & Co, be added as non-parties to the application for the purposes of investigating whether they may have contravened any of their overarching obligations, specifically those contained in ss 18 and 24 of the Civil Procedure Act (Vic).
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