Reed v Smith (No 2) - [2022] QSC 229

SUPREME COURT OF QUEENSLAND

CITATION:	Reed v Smith (No 2) [2022] QSC 229
PARTIES:	TIMOTHY OWEN REED (first plaintiff) AND MARIAN ELLEN REED (second plaintiff) v JANET MARY SMITH (AS EXECUTOR OF THE ESTATE OF THE LATE GORDON BEST WRIGHT) (defendant)
FILE NO/S:	BS 8355 of 2019
DIVISION:	Trial Division
PROCEEDING:	Claim
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	28 October 2022.
DELIVERED AT:	Brisbane
HEARING DATE:	Written submissions on costs received from the defendant on 7 September 2022. Written submissions on costs received from the plaintiffs on 4 October 2022. Further written submissions on costs received from the plaintiffs and defendant on 21 October 2022.
JUDGE: ORDER:	Kelly J The orders of the Court are: 1. The balance of the application filed 12 November 2021 is dismissed. 2. Judgment for the defendant on the amended claim filed 17 January 2022. 3. The defendant’s costs of and incidental to the proceeding be assessed on the indemnity basis and paid out of the estate. 4. The first plaintiff pay the defendant’s costs of and incidental to the proceedings to be assessed on the standard basis. 5. The second plaintiff pay the defendant’s costs of and incidental to the proceeding from and including 12 November 2021 to be assessed on the standard basis.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – COSTS OUT OF FUND OR PROPERTY PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL RULE: COSTS FOLLOW EVENT – GENERAL PRINCIPLES AND EXERCISE OF DISCRETION – where the Court determined a separate question application in relation to whether wills were mutual wills subject to a testamentary agreement alleged by the plaintiffs, and if so, whether the declaratory relief sought by the plaintiffs was appropriate – where the plaintiffs failed to prove the alleged testamentary agreement – where there was no real dispute that the defendant was entitled to indemnity costs from the estate, and the defendant won the event – where the plaintiffs otherwise sought no order as to costs – where the defendant sought that the first plaintiff pay her costs and the second plaintiff pay part of her costs – where the plaintiffs characterised the proceeding as an “estate matter” and submitted that the testator caused the litigation – whether the costs rules relating to probate cases is applicable in the circumstances – whether the plaintiffs should pay the defendant’s costs PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENTS – GENERALLY – where the defendant made an offer to the first plaintiff to settle the proceedings – whether the offer was made under r 361 of the Uniform Civil Procedure Rules 1999 – whether the offer had relevance as a Calderbank offer – where the offer was conditional on the first plaintiff indemnifying the defendant against any claim that may be brought against the defendant or the estate of the testator by the second plaintiff –…

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 Reed v Smith (No 2)

Details

AGLC: Reed v Smith (No 2) [2022] QSC 229
Case: [2022] QSC 229
Decision Date: 28 October 2022.

CaseChat Overview and Summary

Reed v Smith (No 2) involved a dispute over the distribution of an estate, specifically whether certain wills were mutual wills subject to a testamentary agreement. The plaintiffs sought declaratory relief, which was denied as they failed to prove the alleged testamentary agreement. The central legal issues were whether the costs rules applicable to probate cases should govern this situation and whether the plaintiffs should be liable for the defendant's costs. Additionally, the court examined whether an offer made by the defendant under rule 361 of the Uniform Civil Procedure Rules 1999 had relevance as a Calderbank offer, particularly in light of the plaintiffs' unsuccessful claim.

The court ruled that the offer made by the defendant was indeed governed by rule 361 of the Uniform Civil Procedure Rules 1999, which mandates that if a defendant's offer to settle is not accepted by the plaintiff and the plaintiff does not obtain an order more favourable than the offer, the defendant is entitled to costs from the date of service of the offer. The court clarified that the comparison under the rule is whether the plaintiff has failed to obtain a more favourable order rather than focusing on whether they obtained a judgment not less favourable than the offer. The court found that the plaintiffs had not obtained an order more favourable than the defendant's offer and thus the rule applied. The court also determined that the costs rules applicable to probate cases were relevant, and the plaintiffs should be liable for the defendant's costs.

The court dismissed the balance of the application filed by the plaintiffs and entered judgment in favour of the defendant. It ordered that the defendant's costs be assessed on an indemnity basis and paid out of the estate. Furthermore, the court mandated that the first plaintiff pay the defendant's costs of and incidental to the proceedings on a standard basis, while the second plaintiff pay the defendant's costs from and including 12 November 2021, also on a standard basis. This decision underscored the applicability of specific procedural rules in estate disputes and the implications of failing to secure a more favourable outcome than a defendant's settlement offer.

Orders

Orders of the court

Kelly J

The orders of the Court are:

1. The balance of the application filed 12 November 2021 is dismissed.

2. Judgment for the defendant on the amended claim filed 17 January 2022.

3. The defendant’s costs of and incidental to the proceeding be assessed on the indemnity basis and paid out of the estate.

4. The first plaintiff pay the defendant’s costs of and incidental to the proceedings to be assessed on the standard basis.

5. The second plaintiff pay the defendant’s costs of and incidental to the proceeding from and including 12 November 2021 to be assessed on the standard basis.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Relevantly, there was no evidence as to whether Gordon told Dawn anything about the 2016 will. I found that the plaintiffs had failed to prove that: (a)Gordon did not tell Dawn about his 2016 will;[3] and(b)Dawn lost testamentary capacity between mid-2010 and 21 January 2016.[4] [3]Reed v Smith [2022] QSC 173 [104].[4]Ibid [112].Evidence relied upon in respect of costs Janet relied upon an affidavit of her solicitor which was directed to two issues, the making of an offer of settlement dated 18 December 2020 (“the offer”) and Tim’s knowledge, at or around the time of the offer, of the net value of Gordon’s estate. By letter dated 23 November 2020, Janet’s solicitor provided Tim’s solicitor with a schedule of the assets and liabilities of the estate. That schedule advised that the net value of the estate at that point in time was $514,421.38. The offer was in the following terms:“ OFFER TO SETTLE1. TAKE NOTICE that the Defendant hereby offers to settle these proceedings on the following terms and conditions in accordance with Chapter 9 Part 5 of the Uniform Civil Procedure Rules. 2. This offer remains open for acceptance for fourteen (14) days from the date of service upon you. 3. The Defendant offers to settle this action on the basis of a payment to the Plaintiff of the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000.00) plus the Plaintiff’s costs of and incidental to this action to be agreed or assessed on a standard basis which is in full satisfaction of the cause of action in respect of which the Plaintiff claims and is conditional upon the Plaintiff indemnifying and keeping indemnified the Defendant as against any claim that may be brought against the Defendant or the estate of Gordon Best Wright by Marian Ellen Reed. 4. This offer to settle remains open for acceptance for fourteen (14) days from the date of service. Acceptance of this offer is to be communicated in writing to the solicitors for the Defendant. 5. Payment of the said sum of THREE HUNDRED THOUSAND DOLLARS ($300,000.00) is to be made within twenty-one (21) days of the Defendant’s receipt of acceptance of the offer by the Plaintiff and is to be paid into the Plaintiff’s solicitors trust account.” Tim and Marian relied upon an affidavit of their solicitor which established that on 21 December 2020, well after the proceeding commenced, Tim was first provided with access to the records kept and maintained by the nursing home that cared for Dawn. Until that point in time, they had received emails from Gordon which relevantly described Dawn’s deteriorating mental state. The parties’ proposed orders and arguments Against that outcome of the trial of the separate question and the evidence relied upon in relation to costs, the parties have provided written submissions as to further orders and costs. Janet seeks orders to the effect that:(a)judgment be entered in her favour;(b)her costs be assessed on the indemnity basis and paid out of the estate;(c)Tim pays her costs of and incidental to the proceeding up to and including 18 December 2020 on the standard basis;(d)Tim pays her costs from and including 19 December 2020 to be assessed on the indemnity basis; and(e)Marian pays her costs from and including 12 November 2021 (the date on which an application for Marian’s joinder as second plaintiff was filed) to be assessed on the standard basis.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

No party placed any reliance upon r 700A of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’). Consideration The first issue concerns the effect of the offer under the Rules. Rule 361 of the UCPR provides as follows:“(1) This rule applies if—(a)the defendant makes an offer that is not accepted by the plaintiff and the plaintiff does not obtain an order that is more favourable to the plaintiff than the offer; and(b)the court is satisfied that the defendant was at all material times willing and able to carry out what was proposed in the offer.(2)Unless a party shows another order for costs is appropriate in the circumstances, the court must—(a)order the defendant to pay the plaintiff’s costs, calculated on the standard basis, up to and including the day of service of the offer; and(b)order the plaintiff to pay the defendant’s costs, calculated on the standard basis, after the day of service of the offer.(3)However, if the defendant’s offer is served on the first day or a later day of the trial or hearing of the proceeding then, unless the court otherwise orders—(a)the plaintiff is entitled to costs on the standard basis to the opening of the court on the next day of the trial; and(b)the defendant is entitled to the defendant’s costs incurred after the opening of the court on that day on the indemnity basis.(4)If the defendant makes more than 1 offer satisfying subrule (1), the first of those offers is taken to be the only offer for this rule.” Janet’s submissions on costs oscillated. Initially, she submitted to the effect that the offer did not engage r 361 of the UCPR but had relevance as a Calderbank offer and to the exercise of the Court’s general discretion as to costs.[6] That initial submission was made on the basis that r 361 “prescribes orders if an offer to settle by a defendant is not accepted by a plaintiff and the plaintiff obtains a judgment that is not more favourable to the plaintiff than the offer to settle. The [UCPR is] silent in circumstances where the plaintiff’s claim fails in its entirety and the defendant has made an offer to settle”.[7] Tim and Marian accepted that initial position as correct.[8] The position was not however correct as it did not reflect the language of r 361. Rule 361(1) of the UCPR relevantly uses the language “…the plaintiff does not obtain an order that is more favourable to the plaintiff than the offer”. The rule no longer uses the language “…the plaintiff obtains a judgment no less favourable than the offer”. The latter language was relied upon by Chesterman J in Emanuel Management Pty Ltd (in liquidation) v Foster’s Brewing Group Ltd[9] in concluding that the then rule had no application in that case where the plaintiff had not obtained a judgment. In Wiggins Island Coal Export Terminal Pty Ltd v Civil Mining & Construction Pty Ltd,[10] Holmes CJ noted that the comparison called for by r 361 is no longer whether the plaintiff has obtained “…a judgment… not more favourable… than the offer to settle”, but whether the plaintiff has failed to obtain a more favourable order.[6]Defendant’s outline of submissions [9].[7]Ibid.[8]Submissions of the plaintiffs on costs [6].[9][2003] QSC 299 [36].[10](2021) 7 QR 1, 20 [39].