Re Winter-Cooke (No 3)
[2022] VSC 468
•17 August 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S CI 2016 00704
IN THE MATTER of Part IV of the Administration and Probate Act 1958 (Vic), and the will and estate of SAMUEL ROBERT WINTER-COOKE, deceased
- and –
IN THE MATTER of the Administration and Probate Act 1958 (Vic), and the will and estate of MARCIA WILSHIRE WINTER-COOKE, deceased
-and-
IN THE MATTER of s 175 of the Corporations Act 2001 (Cth)
BETWEEN:
| ROBERT EDMUND WINTER-COOKE | Plaintiff |
| v | |
| SAMUEL MARCUS WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE, and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) and others according to the attached schedule | Defendants |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 17 August 2022 |
CASE MAY BE CITED AS: | Re Winter-Cooke (No 3) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 468 |
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COSTS – Where defendants successful – No submissions from plaintiff on costs – Whether costs should follow the event – No conduct found to displace ordinary principle that costs follow the event – Whether financial disparity between parties relevant to costs decision – Plaintiff to bear costs of defendants and his own costs – Supreme Court Act 1986 (Vic) s 24 – Supreme Court (General Civil Procedure) Rules 2015 (Vic) ord 63 – Oshlack v Richmond River Council (1998) 193 CLR 72 – Northern Territory v Sangare (2019) 265 CLR 164.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Constable Connor & Co Pty Ltd | |
| For the Defendants | Kathy Wilson Legal |
SCHEDULE OF PARTIES
BETWEEN:
| ROBERT EDMUND WINTER-COOKE | Plaintiff |
| - and - | |
| SAMUEL MARCUS WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE, and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) | First defendant |
| CATHARINE FRANCES WINTER-COOKE (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE, and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) | Second defendant |
| PHILIPPA ROSEMARY RISBEY (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE, and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) | Third defendant |
| WINTER COOKE (MURNDAL) PTY LTD (ACN 004 314 443) (as executor and trustee of the estate of MARCIA WILSHIRE WINTER-COOKE, and as executor and trustee of the estate of SAMUEL ROBERT WINTER-COOKE) | Fourth defendant |
HER HONOUR:
Introduction
Samuel Robert Winter-Cooke died on 7 January 2008 (‘the deceased’). He was survived by his wife, Catharine Frances Winter-Cooke (‘Catharine’), and their four children: Samuel Marcus Winter-Cooke (‘Marcus’), Philippa Risbey, Robert Winter-Cooke (‘the plaintiff’) and Arbella Winter-Cooke.
The defendants are the executors and trustees of the estate of the deceased: Marcus (first defendant), Catharine (second defendant), Philippa (third defendant), and Winter Cooke (Murndal) Pty Ltd (fourth defendant). They are also the executors and trustees of the estate of the deceased’s mother, Marcia Wilshire Winter-Cooke (‘Marcia’).
On 26 February 2016, the plaintiff filed an originating motion commencing the proceeding which sought, inter alia:
(a) an extension of time in which to bring an application under Part IV of the Administration and Probate Act 1958 (Vic) (‘the Administration and Probate Act’);
(b) further provision from the deceased’s estate; and
(c) orders relating to an alleged entitlement to certain shares pursuant to Marcia’s will.
On 11 September 2020, the Court refused an application for summary dismissal of the proceeding made by the defendants. A detailed account of the background to the proceeding is set out within the reasons which followed this application.[1]
[1]Re Winter-Cooke [2020] VSC 588, [6]–[25].
On 13 December 2021, the Court delivered reasons and made orders dismissing the plaintiff’s application for an extension of time to bring a claim under Part IV of the Administration and Probate Act.[2] The plaintiff has filed an appeal in respect of this judgment.
[2]Re Winter-Cooke (No 2) [2021] VSC 806.
These reasons assume familiarity with the reasons delivered in respect of both the summary dismissal and extension of time applications.
Costs in the extension of time application
The parties have been unable to reach agreement on the costs of the extension of time application or a stay of costs pending the outcome of the appeal.
Pursuant to orders made on 13 December 2021, the parties were required to file submissions on costs by 31 January 2022. The deadline for filing submissions was extended by further orders made on 9 February 2022, which required the defendants to file short submissions on appropriate cost orders by 11 February 2022, and the plaintiff to file short submissions in reply by 18 February 2022.
On 11 February 2022, the defendants filed written submissions on costs. On 18 February 2022, the plaintiff’s solicitor indicated that the plaintiff would not make any submissions on costs, expressing a preference for an order to stay the costs. By email dated 7 March 2022, the defendants opposed the plaintiff’s request for a stay. In the absence of consent from the defendants, the plaintiff’s solicitor was ‘content to leave the question of a stay of execution (pending the outcome of the plaintiff’s application for leave to appeal) entirely to the Court’. No submissions on this point were made by the plaintiff. In the absence of submissions from the plaintiff for a stay of costs and in light of the defendants’ refusal to consent to a stay, it is not appropriate to make the order requested by the plaintiff.
On 29 March 2022, the Court emailed the parties and asked them to file affidavits outlining the costs of the proceeding, including disbursements and overall quantum, by 8 April 2022. The defendants filed an affidavit of costs on 8 April 2022, and the plaintiff filed the same on 11 April 2022. In the plaintiff’s affidavit of costs, the plaintiff’s solicitor took the view that the Court had ‘chosen not to act on the plaintiff’s request to order a stay of execution on the Court’s own motion’.
Plaintiff’s affidavit of costs
The plaintiff has not provided any submissions on costs despite being requested to do so by the Court in orders made on 9 February 2022. The affidavit of costs filed by the plaintiff following the Court’s request of 29 March 2022 appears to assume that costs in the extension of time application have already been awarded to the defendants on the standard basis. It states: ‘The plaintiff’s substantive application for an extension of time in which to bring his family provision claim was dismissed with costs awarded to the defendants on a standard basis.’
The plaintiff’s affidavit of costs set out a costs estimate of $25,000 for counsel fees and $8,500 for solicitor’s fees in the ‘strike out application’, that is, for the defendants’ application for summary dismissal of the proceeding. No costs estimate was provided in respect of the extension of time application.
The plaintiff states in the affidavit that ‘[t]he quantum of the plaintiff’s costs of the strike-out application are problematical and, according to the plaintiff’s costs consultant, may be a lively issue before the Costs Court’. Further, the plaintiff says that ‘[t]he issue of the allowable costs incurred before and after the strike-out application was dismissed is (apparently) the main potential source of conflict between the parties’. The plaintiff states that the costs provided in accordance with the Court’s order are subject to these issues. No submissions in support of the issues raised in this affidavit were provided by the plaintiff.
On 12 April 2022, the Court contacted the plaintiff’s lawyers to request a costs estimate for the extension of time application. By email dated 18 April 2022, the plaintiff’s solicitor estimated counsel fees and minor disbursements at $37,000 and professional fees at $19,500 for the extension of time application. This estimate is described as having been made ‘subject to the reservation’ set out in the plaintiff’s affidavit of costs, which is set out in the preceding paragraph.
Defendants’ submissions
On 11 February 2022, the defendants filed written submissions on costs, in which they seek orders that the plaintiff pay the defendants’ costs of and incidental to the proceeding, including all reserved costs, on the standard costs basis.
The orders are sought on the grounds that as ‘the plaintiff’s litigated claim was dismissed (and the balance of the plaintiff’s initial claims previously discontinued) there is no reason … for the Court to depart from the general approach to the Court’s exercise of discretion to award costs in civil litigation, namely, that costs follow the event’. Referring to the plaintiff’s discontinued claims in a footnote to this submission, the defendants submit that, pursuant to r 63.15 of the Supreme Court (General Civil Procedure) Rules 2015, they are entitled to an order that the plaintiff pay their costs of the part of the proceeding that was discontinued by the plaintiff.
In their written submissions, the defendants refer to the previous ss 97(6) and 97(7) of the Administration and Probate Act and submit that those provisions do not affect the Court’s general discretion on costs under s 24(1) of the Supreme Court Act 1986 (Vic). In particular, they submit that those provisions ‘[do] not limit the court’s ability to make a costs order against an unsuccessful plaintiff’ to only applications which have been brought ‘frivolously, vexatiously or with no reasonable prospect of success’.[3] Here, they rely upon Erlich v Fleiszig (No 2),[4] in which the Court referred to various cases involving applications for an extension of time brought pursuant to s 99 of the Administration and Probate Act. The defendants submit that, of the six cases discussed in this context, the plaintiff was unsuccessful and ordered to pay the defendant executor’s costs in four.
[3]Citing IMO Moerth (No 2) [2011] VSC 275, [29] (Gardiner AsJ); Briggs v Mantz (No 2) [2014] VSC 487.
[4][2013] VSC 288.
The defendants then refer to the Justice Legislation Amendment (Succession and Surrogacy) Act 2014, which had the effect of abolishing ss 97(6) and 97(7) of the Administration and Probate Act.They submit that ‘the repeal of those sections, indicates a very clear intention by the legislature, that no special approach, or limitations should be imposed on the courts when making costs orders in Part IV proceedings’. Accordingly, the defendants submit that earlier authorities suggesting a different approach to making a costs order in such proceedings, compared with the approach taken in other civil proceedings, are no longer applicable.[5]
[5]Citing, for example, Re Bull (deceased) (No 2) [2006] VSC 226.
On this basis, the defendants submit that the Court has broad discretion to make costs orders, which must be exercised judicially, in accordance with s 24(1) of the Supreme Court Act 1986 and Order 63 of the Supreme Court (General Civil Procedure) Rules 2015.[6] As to the principles according to which the discretion is to be exercised, the defendants refer to Northern Territory v Sangare,[7] in which the High Court stated:[8]
A guiding principle by reference to which the discretion is to be exercised — indeed, “one of the most, if not the most, important” principle — is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome.
[6]Citing Re Connock (No 2) [2021] VSC 122.
[7](2019) 265 CLR 164.
[8]Northern Territory v Sangare (2019) 265 CLR 164 (‘Sangare’), 173 [25] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ) (citation omitted).
The defendants submit that there is no conduct of the litigation on their part that would justify departure from the ‘guiding principle’ that costs follow the event. In this respect, they submit that ‘the successful party in civil litigation ought be compensated for the expense of litigation that ought not have been visited upon them’.
The defendants also pre-empt any argument that the plaintiff might wish to make on inequality between the respective financial positions of the parties by submitting: first, that they deny such inequality; and second, relying on Northern Territory v Sangare, that ‘neither the mere impecuniosity of the unsuccessful party, or the wealth of the successful party alone [are] sufficient to displace the principle of basic justice that a successful party should be compensated for expenses it has incurred because it has been obliged to litigate by the unsuccessful party’.[9]
[9]Citing Sangare (n 8), 173–174 [26]–[27].
In their affidavit of costs filed on 8 April 2022, the defendants estimate their total costs, disbursements, and counsel fees incurred in defending the proceeding at $266,413.51. This figure covers the period from mid-2016 to present, during which the defendants have been represented by three different law firms.
Applicable principles
Costs are at the discretion of the Court,[10] with the discretion to be exercised judicially, in accordance with established principle.[11]
[10]Supreme Court Act 1986 (Vic) s 24(1).
[11]Supreme Court (General Civil Procedure) Rules 2015 (Vic) ord 63; Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399, [11] (Croft J).
The usual order is that costs follow the event, with the unsuccessful party liable for the successful party’s costs of the litigation. This principle was described by McHugh J in the High Court decision of Oshlack v Richmond River Council:[12]
The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did.[13]
[12](1998) 193 CLR 72.
[13]Ibid, 97 [67] (McHugh J) (citation omitted).
The discretion afforded to a court when making a costs order is usually governed by the success in an action or on a particular issue, with the successful party ‘prima facie entitled to a costs order’.[14] In Latoudis v Casey,[15] McHugh J described the rationale underlying the principle as follows:
An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connexion with the litigation: Kelly v Noumenon Pty Ltd.[16] The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings. It may, and usually will, be made even though the action has failed through no fault of the unsuccessful party.[17]
[14]Re Minister for Immigration & Ethnic Affairs (Cth); Ex parte Lai Qin (1997) 186 CLR 622, 624 (McHugh J).
[15](1990) 170 CLR 534 (‘Latoudis’).
[16](1988) 47 SASR 182, 184 (King CJ).
[17]Latoudis (n 15), 566–567 (McHugh J); see also, 543 (Mason CJ).
It is ‘extremely rare’[18] for a court to depart from this rule,[19] with instances where this has occurred described as an ‘exceptional measure’,[20] justified by ‘special circumstances’[21] or ‘substantial grounds’,[22] and requiring ‘good reason’.[23] Dal Pont refers to such phrases as ‘a judicial expression of the notion that a costs order that does not follow the event does not represent the usual exercise of the costs discretion, and so there must be something out of the ordinary in the circumstances of the case to justify it’.[24]
[18]Austen v Ansett Transport Industries (Operations) Pty Ltd [1993] FCA 403, [58] (Burchett J).
[19]On the instances referred to, see generally GE Dal Pont, Law of Costs (LexisNexis Butterworths, 5th ed, 2021) [8.26].
[20]Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co (No 2) [1953] 2 All ER 1588, 1590 (Devlin J).
[21]Ritter v Godfrey [1920] 2 KB 47, 52 (Lord Sterndale MR).
[22]Voyce v Lawrie [1952] NZLR 984, 987 (FB Adams J).
[23]Berry v British Transport Commission [1962] 1 QB 306, 338 (Danckwerts LJ).
[24]GE Dal Pont, Law of Costs (LexisNexis Butterworths, 5th ed, 2021) [8.26].
Regarding the circumstances in which the discretion might be exercised against a successful defendant, the High Court stated in Milne v Attorney-General (Tas)[25] that ‘[i]t is a general rule that a wholly successful defendant should receive his costs unless good reason is shown to the contrary’.[26] In this respect, the focus is generally on the conduct of the successful party, in terms of whether there is conduct to justify departure from the rule.[27] Even if both parties are ‘innocent of wrongdoing’, Dal Pont states that it would not be appropriate for the Court to make no order as to costs.[28]
[25](1956) 95 CLR 460.
[26]Ibid, 477 (Dixon CJ, McTiernan, Williams, Fullager and Taylor JJ).
[27]GE Dal Pont, Law of Costs (LexisNexis Butterworths, 5th ed, 2021) [8.38].
[28]Ibid, [8.38].
The impecuniosity of an unsuccessful party is not a ground, in and of itself, that would prevent the Court from making a costs order against that party.[29] In the Victorian Court of Appeal decision of Board of Examiners v XY,[30] Nettle JA stated that ‘[t]he notion that a litigant should be accorded special consideration in relation to costs on the grounds of poverty or financial disadvantage has nothing to commend it’.[31] The High Court dealt with this point in Northern Territory v Sangare,[32] when discussing how it had been addressed in Board of Examiners v XY,[33] stating that:
As a practical matter, difficulties arise in determining the level of impecuniosity at which it would become a relevant consideration [in an exercise of the costs discretion]. There would also be substantial practical difficulties in determining, after the conclusion of the litigation, the unsuccessful party’s financial standing. In point of principle, it is basic justice that a successful party should be compensated for expenses it has incurred because it has been obliged to litigate by the unsuccessful party. That consideration of basic justice does not lose its compelling force simply because the successful party happens to be wealthy: the successful party, whether rich or poor, did not ask to be subjected to the expense of unmeritorious litigation. The statutory power to order costs affords the successful party necessary protection against unmeritorious litigation; and unmeritorious litigation is no less unmeritorious because it is pursued by a person who is poor or who is a litigant-in-person.[34]
[29]Ibid, [8.30]. At fn 176, Dal Pont cites a lengthy list of authorities on this point, including Sangare (n 8), 174 [27].
[30][2006] VSCA 190.
[31]Ibid, [41] (Nettle JA).
[32](2019) 265 CLR 164.
[33]See Board of Examiners v XY [2006] VSCA 190, [33]–[34] (Chernov JA, with whom Nettle and Neave JJA agreed).
[34]Sangare (n 8), 174 [27] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).
In respect of family provision litigation, Professor Dal Pont highlights that the ‘irrelevance of impecuniosity’ may be subject to ‘some relaxation’.[35] In this respect, he cites the New South Wales Court of Appeal decision of Chapple v Wilcox,[36] in which Barrett JA referred to such relaxation as the application of ‘liberality and discrimination’; but only ‘where the claim, although ultimately unsuccessful, had merit and involved a genuine question whether the scheme of testamentary benefaction in fact applying was, in the particular circumstances, one reflecting community standards’.[37] His Honour illustrated that point by referring, first, to the circumstances in which a court might depart from the usual rule on costs in the probate sphere, and then linking that to family provision, stating:
It may be said, in the same way, that if the testator has been the cause of family provision litigation by failing to make some disposition that he or she arguably should have made in accordance with community standards, the costs burden should fall on the estate, even if the ultimate decision of the court does not accommodate that disposition.[38]
[35]GE Dal Pont, Law of Costs (LexisNexis Butterworths, 5th ed, 2021) [8.32].
[36](2014) 87 NSWLR 646 (‘Chapple’).
[37]Ibid, 680 [141].
[38]Ibid.
Further support for this position is found in the High Court decision of Singer v Berghouse,[39] in which Gaudron J stated:
Family provision cases stand apart from cases in which costs follow the event. Leaving aside cases under [the Family Provision Act 1982 (NSW)] which, in s 33, makes special provision in that regard, costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate.[40]
[39](1993) 114 ALR 521.
[40]Ibid, 522 (citations omitted).
In MA & J Tripodi Pty Ltd v Swan Hill Chemicals Pty Ltd,[41] the Court of Appeal considered the various costs orders open to it, and concluded that ‘there are no fixed rules as to the appropriate costs order’, because ‘[u]ltimately, the court must be guided by what the justice of the case requires’.[42]
[41][2019] VSCA 46.
[42]Ibid, [154] (Kyrou, Kaye and Emerton JJA).
The Court will prima facie award costs in litigation on a standard basis; however, it has discretion to award costs on a non-standard basis if justified.[43]
[43]See Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 63.28; Re Papaioannou; Papaioannou v Kronemann (No 2) [2020] VSC 257, [36] (McMillan J).
Consideration
The plaintiff’s application was dismissed on the ground that it would not be in the interests of justice for an extension to be granted. Although the Court considered a number of factors in making its decision, the plaintiff’s failure to provide a satisfactory explanation for the delay in bringing the proceeding proved to be determinative of the application.
As the plaintiff has been wholly unsuccessful in his application, the defendants seek that their costs be paid by the plaintiff on the standard basis. The plaintiff has not pointed to any conduct on the part of the defendants in the course of the litigation that would justify a departure from the usual order that costs follow the event; nor has the plaintiff identified any special circumstances that would otherwise justify such a departure. The absence of submissions on costs from the plaintiff is notable in this respect.
The defendants provided submissions on whether a perceived disparity in the respective financial positions of the parties should impact on the decision as to costs. The Court accepts the defendants’ submissions on this issue and follows the principle articulated in Northern Territory v Sangare, namely that ‘basic justice’ requires the unsuccessful party to compensate the successful party for expenses incurred in litigation that it has been obliged to defend, regardless of the relative wealth of the successful party.
In this case, the principle is unaffected by the context of prospective family provision litigation. First, although foreshadowed by the plaintiff’s application, the Part IV claim has not proceeded, therefore the considerations that might otherwise attend a discussion on the impecuniosity of the unsuccessful party are not relevant. Secondly, it appears from Chapple v Wilcox that any relaxation of this principle in the context of family provision litigation would require examination of the claim’s merit and its relationship to community standards.[44] If the proceeding had progressed to a full hearing of the Part IV claim, then establishing the claim’s merit might prove difficult for the plaintiff, based on the preliminary conclusions drawn by the Court in the application as to its strength.
[44]Chapple (n 36), 680 [141].
There is nothing out of the ordinary concerning the circumstances in this proceeding that would justify a departure from the usual order as to costs. Accordingly, it is just and reasonable for the costs of the defendants in opposing the plaintiff’s application for an extension of time to be paid by the plaintiff.
Orders
The Court orders:
(a) the plaintiff pay the defendants’ costs of and incidental to the proceeding, including all reserved costs, on the standard basis to be taxed in default of agreement; and
(b) the plaintiff bear his own costs of and incidental to the proceeding personally.
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