Re Williams; Smith v Thwaites (No 2)
[2017] VSC 771
•19 December 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S CI 2015 03820
IN THE MATTER of Part IV of the Administration and Probate Act 1958 (Vic)
-and-
IN THE MATTER of the Will of MARGARET MARY WILLIAMS, deceased
| ELIZABETH RUTH SMITH | Plaintiff |
| v | |
| ALAN KEITH THWAITES (Executor of the Will and Trustee of the Estate of MARGARET MARY WILLIAMS deceased) | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 19 December 2017 |
CASE MAY BE CITED AS: | Re Williams; Smith v Thwaites (No 2) |
MEDIUM NEUTRAL CITATION: | [2017] VSC 771 |
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COSTS — Family provision claim by plaintiff — Where plaintiff awarded further provision that was marginally less than defendant’s offer of compromise — Supreme Court (General Civil Procedure) Rules 2015, r 26.08(3) — Where effect of r 26.08(3) operates harshly on both plaintiff and defendant — Whether plaintiff’s costs are reasonable and proportionate to the issue in dispute — Content of overarching obligations — Where investigation of plaintiff’s costs necessary —Civil Procedure Act 2010, ss 24, 29.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S P Newton | McCarthy Partners |
| For the Defendant | Mr S E Marantelli | Meerkin & Apel |
HER HONOUR:
Introduction
The plaintiff made application for further provision from the estate of her step mother, Margaret Mary Williams deceased. She was awarded further provision of $100,000.[1] Pursuant to the deceased’s will, the plaintiff received a one quarter share of the residue of the estate. For the purposes of the trial, this was assessed at $38,756. As a result of the judgment, the plaintiff receives $138,756 exclusive of costs.[2]
[1]Re Williams; Smith v Thwaites [2017] VSC 365 (23 June 2017).
[2]Ibid [69]–[70].
The parties were unable to agree on the question of who should pay the plaintiff’s costs of the proceeding.
The defendant seeks an order that the plaintiff pay the defendant’s costs in accordance with r 26.08(3) of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) by reason of his two offers of compromise made to the plaintiff on 15 December 2015 and 3 February 2016 respectively.
Rule 26.08(3) provides that where an offer of compromise is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains a judgment on the claim that is not more favourable to the plaintiff than the terms of the offer, then unless the Court otherwise orders:
(a) the plaintiff shall be entitled to an order against the defendant for the plaintiff's costs in respect of the claim before 11 am on the second business day after the offer was served, taxed on the ordinarily applicable basis; and
(b) the defendant shall be entitled to an order against the plaintiff for the defendant's costs in respect of the claim thereafter taxed on the ordinarily applicable basis.
The plaintiff seeks an order that her costs of and incidental to the proceeding be paid from the estate on the standard basis, unaffected by r 26.08. Although not expressly stated in her submission, it may be implied that, in the alternative, the Court ought to exercise its discretion to ‘otherwise order’ in her favour.
Defendant’s offers to the plaintiff
By offer of compromise filed 15 December 2015, the defendant offered to pay the plaintiff $101,000 by way of further provision, in addition to the plaintiff’s entitlement of a one quarter share of the deceased’s estate. At that stage the plaintiff’s share of the residuary estate was $35,141.84. For the purposes of the offer, the defendant rounded up the value of the plaintiff’s share of the estate to $40,000. The offer stated that the defendant would pay the plaintiff $25,000 for the plaintiff’s costs and disbursements of and incidental to the proceeding. The offer remained open for acceptance until 20 January 2016. In monetary terms, the defendant’s offer was $141,000 exclusive of costs or $166,000 inclusive of costs.
By letter dated 6 January 2016, the plaintiff rejected the defendant’s offer.
On 3 February 2016, the defendant made a second offer to the plaintiff in substantially similar terms. At the date of the second offer, the value of the plaintiff’s share of the residuary estate was $32,845.75 but was again rounded up to $40,000. The defendant’s offer was slightly more favourable than the first offer given the rounding up of the plaintiff’s share of residuary estate by more than $7,000. The provision as to costs remained at $25,000 and the offer was open for acceptance until 24 February 2016.
Plaintiff’s Calderbank offer
By letter dated 25 February 2016, the plaintiff sent a Calderbank offer to the defendant. The letter set out the factors relied on by the plaintiff’s claim for further provision and noted:
Our client is prepared to resolve this matter now. She is prepared to accept $200,000 in full and final settlement for all of her claims in relation to this estate inclusive of her entitlement under the will plus her costs and disbursements on a standard basis. We estimate these costs and disbursements to date to be $25,000.
This offer remains open for acceptance until 5.30pm on the 17 March 2016.
Upon enquiry by the defendant, the costs were in addition to the sum of $200,000 making the offer $200,000 exclusive of costs or $225,000 inclusive of costs.
Plaintiff’s estimated and actual costs of the proceeding
The defendant’s first offer was made the day after the parties attended mediation of the proceeding. For the purpose of the mediation, the plaintiff’s solicitor filed an affidavit deposing that the plaintiff’s professional fees and disbursements, calculated on the standard basis, up to and including the mediation were approximately $25,000 inclusive of GST.
This amount was subsequently used in the defendant’s two offers of compromise and a counter offer made by the plaintiff in a Calderbank offer.
For the purposes of the costs dispute, the plaintiff’s solicitor filed an affidavit sworn 7 August 2017, which was substantially different to his estimated costs of $25,000, as follows:
(a) For the period 24 February 2015 to 15 December 2015:
Professional fees $21,597.45
Disbursements $13,378.28
Total $34,975.73
(b) For the period 24 February 2015 to 3 February 2016:
Professional fees $25,839.41
Disbursements $13,378.28
Total $39,217.69
He deposed that to the completion of the trial, the plaintiff’s professional fees and disbursements were now $66,790.76 being professional fees of $42,739.80 and disbursements of $24,050.96. The solicitor exhibited certificates from Ethical Costing and Legal Services that state the professional fees were assessed by that firm on the standard basis pursuant to the Supreme Court Scale, exclusive of disbursements. Whether the certificates from Ethical Costing and Legal Services reflect that the plaintiff’s costs are reasonably incurred and reasonable in amount cannot be assessed from the limited information in them.
Defendant’s submissions
The defendant submits the plaintiff has obtained a judgment that is not more favourable to her than the terms of the offer and, in accordance with r 26.08(3), the plaintiff should be entitled to an order against the defendant for the plaintiff’s costs in respect of the claim before 11am on 17 December 2015, taxed on the ordinary applicable basis and the defendant should be entitled to an order against the plaintiff for the defendant’s costs in respect of the claim thereafter, taxed on the ordinary applicable basis.
The defendant contends that where successive offers are served by the same party, the cost consequences apply to the first offer.[3]
[3]Hillier v Sheather (1995) 36 NSWLR 414.
In respect of the Calderbank letter, the defendant submits that the plaintiff’s claim for $25,000 for costs and disbursements makes it clear that the defendant’s allowance of $25,000 for the plaintiff’s costs in the offers of compromise was proper.
Further, there are no special circumstances that warrant the invocation of the Court’s discretion to ‘otherwise order’ pursuant to r 26.08(3) for the following reasons:
(a) the offer was served early in the proceeding. The proceeding was commenced on 24 July 2015 and the offer was made on 15 December 2015;
(b) the offer was repeated, thereby allowing the plaintiff the opportunity to re- consider the offer and it was unreasonable for the plaintiff not to accept the offer; and
(c) the case was not complex and it was not difficult for the plaintiff to assess the offer. This is reinforced by the fact that the plaintiff served her own offer on the defendant.
The defendant submits that the closeness of the offer to the judgment amount would not normally be regarded as justifying a departure from the rules.[4]
[4]Berry v Coghill [1982] VR 955.
Pursuant to r 26.08(7), the defendant submits that at all material times the defendant was willing and able to implement the proposed offer as the principal asset of the estate, being the Mount Waverley property, had been sold with the proceeds of sale held in trust by the estate.
Plaintiff’s submissions
The plaintiff objects to the defendant’s reliance on the plaintiff’s Calderbank letter in his submissions but says that if it can be relied upon, it does not support the defendant’s assertion that $25,000 was an appropriate figure for costs because it was only estimate of her costs at mediation and as an estimate is not binding. The plaintiff therefore refutes the claim that the plaintiff has obtained a judgment not more favourable to her than the terms of the offer pursuant to r 26.08(3) on the basis that the offer of compromise only offers the plaintiff $25,000 for her costs.
The plaintiff submits that special costs rules apply in Part IV claims.[5] Aside from the costs consequences of any offer of compromise, the plaintiff contends that a party is generally entitled to receive their costs on a standard basis in a Part IV claim. Therefore, absent the offers of compromise, the plaintiff would usually be entitled to $138,756 together with her costs, to be taxed on the standard basis. As the defendant’s offer did not include costs on the standard basis, it cannot be said that she has received an award no better than offered by the defendant.
[5]Bowyer v Wood (2007) 99 SASR 190 [64]–[68].
The plaintiff also submits that the Court should take into account the fact that the plaintiff commenced the proceeding because the testator failed to make adequate provision for her in her will or, in other words, the deceased was the cause of the litigation. Based on these principles, in assessing whether or not an applicant who has only just failed to better an offer should be penalised, the Court should take into account the fact that any such order would have an adverse impact on the adequacy of the plaintiff’s provision and her limited financial position.
Does Rule 26.08 apply?
In AJ Lucas Drilling Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2),[6] the Court of Appeal affirmed that the policy behind r 26.03(3) seeks to encourage parties to settle matters without recourse to a trial.[7] This is designed for the purposes of preserving the resources of both the courts and parties and is in the public interest of prompt and economic disposal of litigation.[8] Rule 26.08 seeks to establish the prima facie entitlement of the defendant offeror to its party-party (now standard) costs from the time of the offer, where the plaintiff fails to obtain a judgment more favourable than the offer. Such an entitlement is subject to exceptions in cases where a court may ‘otherwise order.’
[6] (2010) 78 ATR 925.
[7]Ibid 935.
[8]Shellharbour City Council v Johnson (No 2)(2006) 67 NSWLR 308, 314 [19].
The Supreme Court (Chapter I Offers of Compromise Amendments) Rules 2013 came into operation on 1 September 2013 and made significant changes to the offer of compromise regime under the Rules. As a result, r 26.02(4) now expressly provides that offers of compromise may be either inclusive of costs or state that costs are in addition to the offer.
The central question regarding the dispute about the costs rests on the determination as to whether the judgment was more favourable than the offer. It is accepted that the relevant offer for consideration is the defendant’s first offer.[9]
[9]Hillier v Sheather (1995) 36 NSWLR 414, 420–1.
Employing a simple ‘like for like’ analysis, excluding costs, the defendant’s first offer totalled $141,000 compared with that of $138,756 awarded to the plaintiff. On this analysis, r 26.08(3) is engaged as the defendant’s offer was marginally more favourable to the plaintiff than the amount ultimately awarded to her.
In assessing whether the judgment is more favourable than the defendant’s first offer inclusive of costs, the defendant’s offer totalled $166,000. The Court should not add the actual costs incurred by the plaintiff up until judgment to the amount for the sake of the comparison. To do so leaves the Court with the difficult task of comparing an offer inclusive of costs or costs in addition to the offer with that of a judgment where costs have not yet been determined. In drawing a proper comparison between the cost inclusive offer and the judgment, the Court must assess where the judgment costs should lie. In order to do this, the Court must have regard to the cost consequences specified in the Rules. The offer and the judgment cannot be adequately compared in the manner proposed by the plaintiff as the reasoning becomes circular and undermines the policy on which the Rules are based. If a party is able to rely on the total costs incurred up to the date of judgment, the figure will always be higher than in an offer made at a much earlier stage of a proceeding. If a party knew that the total quantum of costs of the proceeding would be included in this calculation, this could reduce the incentive to accept an offer of compromise.
There is little by way of authority that specifically outlines how the Court must approach the task of determining whether the judgment is more favourable in accordance with r 26.08. In many cases there is a wide discrepancy between the offer and the judgment and it is relatively straightforward to determine which is more favourable.[10] There is some authority relating to the determination of whether a judgment is more favourable in complex circumstances or where a non-monetary amount has been outlined in the offer, such as an apology in a defamation case.[11] In those complex circumstances, it has been held that it is important to view the substance of the result, rather than any actual orders made.[12]
[10]See, eg, Hardie v The Herald and Weekly Times Pty Ltd [2016] VSCA 130 (6 June 2016) [31]; Dean v Stockland Property Management Pty Ltd (No 2) [2010] NSWCA 141 (17 June 2010) [20].
[11]See, eg, Whitehouse Properties Pty Ltd v Bond Brewing (NSW) Ltd (1992) 28 NSWLR 17; Timms v Clift [1998] 2 Qd R 100, 107–8; Stambulich v Ekamper (2001) 48 ATR 159, 171; White v Director of Housing [2003] VSC 124 (29 April 2003) [17]; Dean v Stockland Property Management Pty Ltd (No 2) [2010] NSWCA 141 (17 June 2010) [18]–[20].
[12]Pettiford v Whicker [2005] NSWCA 370 (24 October 2005) [15]; Westsub Discounts Pty Ltd v Idaps Australia Ltd (No 2) (1990) 94 ALR 310, 318–19.
There is also some authority that the Court must look at the time when the relevant offer was made and ascertain what, if any, decision as to costs would have been made and what form the costs would have taken.[13]
[13]Metricon Homes Pty Ltd v Sawyer [2013] VSC 518 (27 September 2013); Hopkins v Hopkins [2015] VSC 50 (2 March 2015).
While it is not a requirement to determine whether a costs award would have been found in favour of the plaintiff at the time of the defendant’s offer, it is useful to assess what the plaintiff now says are the actual costs incurred by her up to the date of the defendant’s first offer. The plaintiff’s costs of the proceeding at the date of the first offer are now said to be $34,975.73. Adding that figure to $138,756 totals $173,731.73 which is greater than the defendant’s total offer of $166,000. On this view, r 26.08(3) would not be applicable as the offer is not more favourable than the judgment.
Such as assessment is flawed as it relies on the plaintiff’s failure to assess accurately her estimated costs as at the date of mediation. The plaintiff’s solicitor provided an affidavit deposing as to the plaintiff’s estimated costs up to the mediation. It was reasonable for the defendant to rely on that estimate in making offers, the first offer being made the day after the mediation. The plaintiff’s solicitor is the person with the information to assess the quantum of the costs. The defendant is entitled to assume that when a solicitor deposes on oath as to the estimate of the costs that the figure is reasonably accurate and his position should not be prejudiced by the default of the plaintiff’s solicitor. The fact that the plaintiff’s costs are now said to be a further $10,000 is not a factor that should be used against the defendant. The plaintiff’s submission that $25,000 was not an appropriate figure to allow for costs because it was an estimate must be rejected.
In persuading the Court to exercise its discretion to depart from the ordinary consequences of the r 26.08,[14] the party seeking to displace the prima facie rule bears the onus.[15] The Court must be mindful of the fact that a plaintiff who rejects an offer of compromise must be assumed to have taken into account any risks and vicissitudes that may ensue.[16] As stated in Maitland Hospital v Fisher (No 2):
Litigation is inescapably chancy. The purpose of the rule is to put a premium on realistic assessment of cases. It is not to demand perfect foresight which is denied even to the judges. That is why a discretion is retained, under the rule, for the court to order otherwise than as the rule provides. But the ordinary provision is expected to apply in the ordinary case. It has added a new duty to the functions of legal practitioners advising litigants. It is a duty which is both protective of the interests of litigants and of the public interest in the prompt and economical disposal of litigation. It is the duty of courts, allowing for exceptions in particular cases, to give effect to the purpose of the rule[17].
[14]Victoria v McIver(2005) 11 VR 458, 468 [31]; Simply Irresistible Pty Ltd v Couper [2011] VSC 33 (17 February 2011); Nakos v Serdaris [2016] VSC 179 (27 April 2016) [17]–[18]; Stevens v Spotless Management Services Pty Ltd(No 2) [2016] VSCA 311 (12 December 2016) [26].
[15]Simonovski v Bendigo Bank Ltd [2003] VSC 139 (2 May 2003) [17]; Shellharbour City Council v Johnson (No 2)(2006) 67 NSWLR 308, 314 [19]; Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd (No 2) [2011] FCA 283 (25 March 2011) [8].
[16] Page v Incorporated Nominal Defendant[1981] VR 170, 173–4; Hultquist v Universal Pattern and Precision Engineering Co Ltd [1960] 2 All ER 266, 272 (Sellers LJ).
[17](1992) 27 NSWLR 721, 725–6; See also NSW Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100, 102; Morgan v Johnson (1998) 44 NSWLR 578, 581–2; Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435, 441 [21].
The Court must exercise caution in departing from the prima face rule and only do so in cases that warrant such a departure, invariably expressed in terms such as ‘compelling and exceptional circumstances’, ‘for proper reasons which, in general, only arise in an exceptional case’ and ‘special circumstances’.[18]
[18]IFTC Broking Services Ltd v Commissioner of Taxation (2010) 268 ALR 1, 4 [9]; Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281, 284–5 [16]–[18]; Simply Irresistible Pty Ltd v Couper [2011] VSC 33 (17 February 2011); Nakos v Serdaris [2016] VSC 179 (27 April 2016) [18].
In submitting that the closeness of the offer to the judgment amount will not normally be regarded as justifying a departure from the rule, the defendant referred to Berry v Coghill.[19] In that case, the defendant paid $13,500 into Court and the plaintiff was awarded $9,100 including interest. The defendant was found to be negligent but the plaintiff’s negligence was also found to have contributed to the accident and damages were reduced by 70 per cent. The Court’s focus in the case, however, was not on the closeness of the offer to the judgment amount but whether the plaintiff had been given sufficient opportunity to make a ‘thoughtful decision’ regarding a late payment into Court. It was determined that there was an absence of any distinguishing features in the case to warrant a departure from the rule in what was described as a relatively straightforward negligence case. [20]
[19][1982] VR 955.
[20]Ibid 959.
In other cases, the relative closeness of the offer and the judgment amount has been a relevant factor in the exercise of the Court’s discretion.[21] In Mangan v Mendum,[22] the difference between the amount recovered and the amount paid into court was only $400. The Court held that the plaintiff should have her costs up until the date of payment and no costs order was made thereafter and made the following relevant observations:
It follows that my view is that it does not follow rigidly or automatically or inexorably that where the plaintiff recovers less than is in court, the plaintiff will be ordered to pay the defendant's costs incurred after the time for acceptance of the money, or the date of payment in. Such a practice would operate harshly in some cases, and might well cause some bona fide plaintiffs to be intimidated and to accept less than they honestly and reasonably think to be fair and reasonable for fear of the consequences which might be incurred by them if they failed to judge accurately what a judge would think to be fair and reasonable in the circumstances. [23]
[21]See eg, Windbank v Bradley (1970) 4 ACTR 14, 16. Much of the authority stems from the ACT, and the rules prescribing payments into court. The principles are nonetheless relevant to the assessment as to whether the judgment is more favourable than the offer.
[22](1970) 4 ACTR 44.
[23]Ibid 45–6.
Ultimately each case is dependent on its own circumstances. Factors relevant to the assessment include whether a plaintiff had ample opportunity to consider the offer, or chose not to have any professional advice, the difference between the shortfall in the amount and that awarded, and whether the assessment as to the likely range of an award was difficult.[24]
[24]Titan v Babic (1991) 104 FLR 220, 225–6.
The plaintiff’s submission that the judgment is more favourable than the defendant’s first offer of $166,000 inclusive of costs rests on the proposition that a plaintiff in a Part IV claim is generally entitled to costs on the standard basis, that is, the costs now said to have been incurred by the plaintiff. This submission is similar to that in referred to in [22] above. In addition to the reasons for rejecting that submission, this similar submission is also rejected. Any legal representative advising an applicant wishing to embark on a Part IV claim would inform the applicant that quantification of family provisions are inherently uncertain and difficult to predict and that an applicant should not assume an entitlement to costs being paid out of the estate or assume that he or she will not be ordered to pay the costs of the estate.[25]
[25]Forsyth v Sinclair (No 2) [2010] VSCA 195 (5 August 2010) [17] (Neave and Redlich JJA, Habersberger AJA); Webb v Ryan (No 2) [2012] VSC 431 (20 September 2012) [37]–[38].
The plaintiff ‘s reliance on special costs rules in Part IV claims to support a general entitlement for costs to be paid by the estate is one of the considerations that must be balanced against the objectives of the Rules and the overarching obligations under the Civil Procedure Act 2010 that seek to encourage settlement and avoid frivolous and unreasonable use of estate resources for the purposes of litigation.
The defendant’s attempts to resolve the proceeding by the two offers of compromise acknowledges the importance of the policy behind the Rules. While the plaintiff’s Calderbank offer evidences an attempt to compromise the proceeding prior to trial, the plaintiff overrated the strength of her claim by seeking an amount double than the amount offered by the defendant. Such a significant margin was unlikely to be narrowed by the defendant and justly so where his position mirrored that found by the Court.
In the event that the Court were to adopt the like for like analysis outlined by the defendant, the difference between the offer and the judgment amount is a marginal amount of $2,244 when viewed in the context of a total award of $138,756. This factor, in culmination with other relevant factors, may be sufficient for the purposes of the Court exercising its discretion to ‘otherwise order.’ In particular, the plaintiff’s financial circumstances are that she and her husband have limited financial means, with the plaintiff having little prospect of gainful employment before retirement. If the Court did not ‘otherwise order’ and required the plaintiff to bear the defendant’s costs after the first offer of compromise, for such a marginal difference between the offer, the judgment would operate harshly in circumstances where the award was made for the plaintiff’s proper provision.
A decision either way has significant impact and operates harshly on both parties. For the purpose of analysing the harshness, it may be assumed that the defendant’s costs are similar to the plaintiff’s figure of around $66,800 making the combined costs of the proceeding in an amount of $133,600. On any view, this amount is a significant amount of costs for the single issue in dispute.
If the plaintiff were ordered to pay the defendant’s costs from the date of the first offer, she would bear her own costs of $31,815.76 after this date and would be required to pay the defendant’s costs as well — a total amount of around $63,600, that is, the plaintiff would pay $63,600 to recover $100,000. The estate would pay the plaintiff’s costs $34,975 up to the date of the offer and pay their own costs for that period — a total amount around $70,000.
If the estate were ordered to pay the plaintiff’s costs, the estate would be required to pay all of the costs amounting to $133,600. This is in circumstances where the estate complied with the overarching obligations under the Civil Procedure Act 2010 in that an offer was made that ultimately must be seen as a reasonable offer and in the early stage of the proceeding. Had the plaintiff accepted the offer, the total of the costs of the proceeding would have been $50,000.
The analysis highlights an issue significantly wider than the exercise of the Court’s discretion under r 28.03. This is the Court’s concern about the reasonableness and proportionality of the plaintiff’s costs to the issue in dispute. The overarching obligations in the Civil Procedure Act 2010 include an obligation to ensure that the costs of the proceeding are reasonable and proportionate. As stated in Yara Australia Pty Ltd v Oswal:
Section 24 adopts a flexible test. There is plainly no costs matrix or formula that can be applied in determining whether the parties have met their obligations. Rather, the court must weigh the legal costs expended against the complexity and importance of the issues and the amount in dispute, in order to determine whether the parties used reasonable endeavours to ensure those costs were proportionate.
Each party and their solicitor and counsel have an obligation to comply with the overarching obligation. Whether any of them have breached that overarching obligation is to be determined by an objective evaluation of their conduct having regard to the issues and the amount in dispute in the proceeding. The legal practitioners’ duty is non-delegable. The obligation will override their duty to their client where the discharge of that duty would be inconsistent with the overarching obligation. The legal practitioner will not be relieved of this overarching responsibility because of the instructions of their client.
Legal practitioners, whether solicitor or counsel, involved in the preparation of pleadings, affidavits or other materials that are to be used in the proceeding or who provide advice as to such matters, have individual responsibilities to comply with the overarching obligation. Both solicitor and counsel also have an overarching responsibility with respect to the extent and level of their client’s representation. Each must ensure that, having regard to the issues, the extent and level of representation proposed is reasonable and proportionate. Advice or instructions given or received by legal practitioners, and instructions given by the client may inform but will not be determinative of the question whether, viewed objectively, there has been a breach of the obligation.[26]
[26] [2013] VSCA 337 (27 November 2013) [13]–[15].
As stated, the proceeding was not complex. The plaintiff’s estimated costs of $25,000 at the mediation may generally be considered reasonable and proportionate up to that stage, subject to further investigation. By that time, all affidavits would have been filed and, after the unsuccessful mediation, ordinarily the proceeding would be listed for trial. For reasons not made clear, the estimate of $25,000 is now said to be inaccurate by $10,000. Thereafter, the costs effectively doubled and are now said to be approximately $66,800. This amount would ordinarily be considered unreasonable and not proportionate in the context of the issue in dispute. As the plaintiff was already entitled to a quarter share of the residue of the estate, in dollar terms, the proceeding may cost her a significant amount of more than half of the legacy of $100,000 awarded for her further provision.
Conclusion
Before the Court considers the exercise of its discretion under r 28.03 in this proceeding any further, the plaintiff’s solicitor must address the reasonableness and proportionality of their costs of the proceeding and file an affidavit setting out the details of the now claimed professional costs and disbursements, including the basis of the charges and any costs agreement with the plaintiff.
As the analysis above may impact harshly on the defendant, it would assist the Court to know the quantum of the defendant’s costs of and incidental to the proceeding, in particular the costs incurred after the first offer was made on 15 December 2015.
The parties are to provide the further information required by 23 February 2018 or such earlier date as they agree.
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