Re McKenzie (No 2) - [2018] VSC 238

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TESTATORS FAMILY MAINTENANCE LIST

S CI 2016 02462

IN THE MATTER of Part IV of the Administration and Probate Act 1958

-and-

IN THE MATTER of the estate of DAVID CYRIL McKENZIE, deceased

BETWEEN:

AILEEN MOIRA McKENZIE and FAYE ADA HARRIS	Plaintiffs
v
DAVID GORDON McKENZIE and LYNTON HENRY McKENZIE (as executors of the will of DAVID CYRIL McKENZIE)	Defendants

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	11 May 2018
CASE MAY BE CITED AS:	Re McKenzie (No 2)
MEDIUM NEUTRAL CITATION:	[2018] VSC 238

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COSTS — Where provision awarded to successful plaintiffs more favourable than their open offers made after mediation and before trial — Where plaintiffs seek their costs from the estate on indemnity basis — Where at trial executors limited asset pool to their share of the estate — Where defendants seek their costs from the estate

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr S T Pitt	Katz Silver Lawyers
For the Defendants	Mr M C McKenzie	Trevor Yong & Associates

HER HONOUR:

Introduction

The plaintiffs in this proceeding were successful in their respective claims for provision from the estate of the deceased. The judgment, delivered 21 December 2017, provided that if the parties were unable to agree on the costs of the proceeding, written submissions were to be provided to the Court.[1]
[1]Re McKenzie [2017] VSC 792 (21 December 2017) [98].

The parties were unable to agree on the plaintiffs’ costs and provided written submissions.

Background

When the trial concluded on 16 June 2017, interim orders were made in respect of the first plaintiff’s claim reflecting the plaintiffs’ open offer made prior to trial. Those orders included the transfer of the freehold title of the home block, together with a small triangular portion of land annexed to the home block, to the first plaintiff and the payment of the sum of $70,000 to the first plaintiff (‘the interim orders’).

The first plaintiff’s entitlements under the deceased’s will included the sum of $36,942.05 from an insurance policy of the deceased and annual payments of $5,000 adjusted for CPI from each of the defendants. Orders were made for the defendants to pay personally to the first plaintiff the sum of $10,000 within 30 days of the orders being made.

In the reasons for judgment, the Court made the following orders, subject to the interim orders having been complied with by the defendants:

(a) Pursuant to s 91(1) of the Administration and Probate Act 1958, in addition to the further provision made by the orders on 16 June 2017, further provision be made for the first plaintiff out of the estate of the deceased by payment to her of a further pecuniary legacy of $180,000;

(b) Pursuant to s 91(1) of the Administration and Probate Act 1958, provision be made for the second plaintiff out of the estate of the deceased by payment to…

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.

Continue reading Re McKenzie (No 2)

Details

AGLC: Re McKenzie (No 2) [2018] VSC 238
Case: [2018] VSC 238
Decision Date: 11 May 2018

CaseChat Overview and Summary

In the matter of Re McKenzie, the plaintiffs sought costs from the estate of the deceased on an indemnity basis, arguing that the provisions awarded to them were more favourable than their open offers made after mediation and before the trial. The executors of the estate, in their capacity as defendants, had limited the asset pool to their share of the estate. The court was required to decide whether the plaintiffs were entitled to costs from the estate on an indemnity basis and, if so, the extent of those costs.

The court considered the relevant statutory provisions and case law, which established that costs on an indemnity basis could be awarded in certain circumstances. The court noted that the plaintiffs had made open offers that were less favourable than the provisions awarded to them, but these offers were made after mediation and before trial. The court also considered the executors' limitation of the asset pool to their share of the estate, which was relevant to the quantum of the costs that could be awarded. Ultimately, the court held that the plaintiffs were entitled to costs from the estate on an indemnity basis, but the quantum of those costs was limited to the executors' share of the estate.

The court ordered that the plaintiffs were to be paid costs from the estate on an indemnity basis, but limited to the executors' share of the estate. The court also ordered that the executors were to be paid costs of the proceedings from the plaintiffs, on an indemnity basis, to the extent that those costs exceeded the executors' share of the estate. This decision clarified the scope of indemnity costs in the context of estate litigation and the limitations that may apply where the asset pool is limited to a particular share of the estate.

Orders