Ribbera v Artusa

[2018] VSC 233

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST

S CI 2017 01007  

IN THE MATTER of the will and estate of ANNUNZIATA RIBBERA, deceased

SALVATORE RIBBERA	Plaintiff
v
NICOLA ARTUSA and LIBERATA CANNIZZARO (in their capacity as the Executors of the Estate of Annunziata Ribbera, deceased)	Defendants

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 April 2018
DATE OF RULING:	10 May 2018
CASE MAY BE CITED AS:	Ribbera v Artusa
MEDIUM NEUTRAL CITATION:	[2018] VSC 233

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COSTS — Costs to follow the event — Whether indemnity costs appropriate — Whether plaintiff issued proceedings in appropriate court — Supreme Court (General Civil Procedure) Rules2015 rr 26.03(4), 63.24, 63.25.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms E L Coates	GPZ Pty
For the Defendants	Mr T Mah	Caleandro, Guastalegname & Co Solicitors

HER HONOUR:

Background

1. Annunziata Ribbera died on 12 October 2015 (‘the deceased’).  The plaintiff is the deceased’s son and the defendants are her brother and sister.   By her will dated 8 May 2007, the deceased appointed the defendants as her executors and trustees and left her estate to her two grandchildren, who are the plaintiff’s children.

1. By originating motion in proceeding S PRB 2016 01392, the defendants sought a grant of probate of the deceased’s will.  The plaintiff filed a caveat challenging the validity of the deceased’s will (‘the probate proceeding’).  He also foreshadowed a claim seeking provision from the estate, pursuant to Part IV of the Administration and Probate Act 1958 (‘the foreshadowed Part IV claim’). 

1. On 3 May 2016, a mediation was held in respect of the probate proceeding and the foreshadowed Part IV claim.  Both the plaintiff and the defendants attended the mediation and were legally represented.  The plaintiff, the defendants and the two beneficiaries of the deceased’s estate executed terms of settlement on 3 May 2016.  Pursuant to the terms, the plaintiff agreed to withdraw his caveat.  Probate of the deceased’s will was granted to the defendants on 19 May 2016.

1. The terms of settlement provided, amongst other matters, that the defendants would:

(a)   pay one third of the net estate to the plaintiff in settlement of the foreshadowed Part IV claim;

(b)   allow the plaintiff access to the deceased’s property to remove any chattels he wished, except a rocking horse, including but not limited to certain specified chattels;  and

(c)    sign all documents and do all things necessary to effect the transfer of the rights to the deceased’s burial plot at the East Keilor cemetery to the plaintiff in his sole name.

1. Despite some delay, the defendants paid the settlement amount to the plaintiff.  Access was given to the deceased’s property from 10 June 2016 until 13 June 2016 for the plaintiff to collect the chattels.  He did not collect all of the chattels that he was entitled to remove under the terms and the reasons for this were explained in an email dated 20 June 2016 to the solicitors for the defendants, namely, the plaintiff’s solicitors explained that the plaintiff had left a few larger chattels at the deceased’s property so that it would be more ‘visually appealing’ for the upcoming auction.  They requested that the plaintiff be allowed a further day’s access to remove the remaining chattels after the auction.  On the same day, the solicitors for the defendant replied that this would ‘not be a problem’.

1. The outstanding issues between the parties were the transfer of the burial plot and the collection of the remaining chattels.  Correspondence between the parties over a period of five months was unsuccessful in resolving these issues.  In respect of the transfer of the burial plot, the plaintiff’s solicitors made enquiries to find out if a transfer could be achieved without the co-operation of the defendants.  In their correspondence to the defendants’ solicitors, the plaintiff’s solicitors warned that if it became necessary to issue a proceeding, the plaintiff would seek costs on an indemnity basis. 

1. On 22 March 2017, the plaintiff issued this proceeding seeking specific performance of the terms of settlement.

1. By letter dated 11 April 2017, the defendants provided the plaintiff with a signed transfer of the rights to the deceased’s burial plot and eventually all documents necessary to effect the transfer.  The defendants also proposed a date for the plaintiff to collect the remaining chattels.  The plaintiff collected those chattels in June 2017.   In the same letter, under the heading ‘Offer’, the solicitors for the defendants invited the plaintiff to discontinue his claim and proposed that each party bear their own costs of the proceeding.  

1. The defendants accept that they failed to comply with their obligations to transfer the rights to the deceased’s burial plot until April 2017.  The reason for the delay was said to be because of an ‘offensive and upsetting’ text message sent by the plaintiff to the daughter of the second defendant on 22 July 2016 that allegedly implied that the plaintiff intended to remove the deceased’s body from the burial plot.  The defendants contend they were not in breach of the terms with respect to the chattels as they were only required to grant access to the deceased’s property to facilitate the collection of the chattels and the plaintiff chose not to collect all the chattels in June 2016. 

Costs of the proceeding

1. Despite the best efforts of counsel, the parties were unable to agree on the costs of the proceeding.

1. The plaintiff seeks orders that the defendants personally pay the plaintiff’s costs on an indemnity basis and the proceeding otherwise be dismissed.

1. The defendants seek no orders as to costs. Alternatively, pursuant to r 63.24 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’), they seek that the plaintiff’s costs be assessed on the Magistrates’ Court scale, less the additional costs incurred by the defendants due to the plaintiff having issued this proceeding in the Supreme Court, instead of the Magistrates’ Court.  In the further alternative, they seek that the Court apply r 63.24 without modification and award the plaintiff his costs on the County Court scale, less the additional costs incurred by the defendants due to the plaintiff having issued the proceeding in the Supreme Court, instead of the County Court. 

1. The basis of the alternative orders is that the proceeding could have been issued in the County Court or the Magistrates’ Court, instead of the Supreme Court, as the orders sought by the plaintiff are within the jurisdiction of the County Court and Magistrates’ Court. 

Applicable principles

1. The usual order as to costs is that a successful party is entitled to an award of costs in its favour and the unsuccessful party bears the liability for the costs of the unsuccessful litigation.[1]  The prima facie position in respect of costs in litigation is for the costs to be assessed on the standard basis.[2]  The purpose of a costs order is to compensate the successful party, not to punish the unsuccessful party.

   [1]Oshlack v Richmond River Council (1998) 193 CLR 72, 97 [67].

   [2]Supreme Court (General Civil Procedure) Rules2015 r 63.31.

1. A special costs order will only be made where the proceeding exhibits a special or unusual feature or special circumstances.  In Ugly Tribe v Sikola, Harper J identified the types of circumstances warranting a special costs order, noting that the categories of circumstances are not closed.[3]  Each proceeding must be considered on its own facts and, specifically, whether those facts support the making of a special order for costs.  As a general rule, it is the conduct of the party as litigant, not conduct prior to the commencement of litigation, that is relevant to the decision as to whether to award costs on an indemnity basis.[4]

   [3]Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 (14 June 2001) [7]–[8] (‘Ugly Tribe’).  See also Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399 (14 September 2012). The decision at first instance was affirmed by the appellate decision on the issue of special costs: Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237 (6 September 2013) [538]–[551].

   [4]See NMFM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77, 92 [56].

1. Rule 63.24 provides that, unless the Court otherwise orders, where a plaintiff in a proceeding for debt or damages recovers by judgment or otherwise an amount (exclusive of costs) not exceeding $100,000, the plaintiff is entitled only to the costs to which the plaintiff would have been entitled if the proceeding had been brought in the County Court less the additional costs properly incurred by the defendant by reason of the proceeding having been brought in the Supreme Court instead of the County Court (but the plaintiff shall not be required to pay to the defendant any amount by which the additional costs exceed the costs payable to the plaintiff).  The Court will not make an order to the contrary unless there are special circumstances.[5] A plaintiff’s choice of court is not limited by r 63.24 but the rule operates to protect defendants against the unnecessary higher costs of a proceeding issued in a court that is not appropriate for the proceeding. In r 63.24, recovery of an amount otherwise than by judgment means recovery by compromise of the claim, whether or not it is reached in accordance with Order 26 of the Rules in respect of offers of compromise.

   [5]See O’Doherty v McMahon [1971] VR 625.

1. Rule 63.25 provides that r 63.24 applies, with any necessary modification, where the plaintiff obtains by judgment, or by the acceptance in accordance with r 26.03(4) of an offer of compromise, relief other than for the recovery of a debt or damages and the value of any property to which the relief relates does not exceed $100,000. The scope of r 63.25 is narrower than r 63.24 as it is limited to relief obtained ‘by judgment or by the acceptance in accordance with r 26.03(4) of an offer of compromise’.

1. The corresponding rule to r 63.24 in the County Court Civil Procedure Rules 2008 (‘County Court Rules’) is r 63A.24. The rule applies to a proceeding brought in the County Court which, as the result of the trial demonstrates, was more appropriate to be heard and determined in the Magistrates’ Court.

Should the defendants pay the plaintiff’s costs of the proceeding?

1. The plaintiff took many steps in attempting to avoid issuing the proceeding.  These steps include enquiring whether a transfer of the burial plot could be effected without the co-operation of the defendants and corresponding with the defendants’ solicitors over a five month period in respect of the two remaining issues.  That correspondence included warnings that if a proceeding was issued by the plaintiff, he would seek costs on an indemnity basis. 

1. It was only after the proceeding was issued that the defendants complied with their obligations under the terms of settlement.  The defendants regarded the plaintiff’s text message sent in July 2016 as ‘offensive and upsetting’ and relied on it to refuse the transfer the deceased’s burial plot.  This message was sent before the lengthy correspondence took place between the respective solicitors for the parties and was raised at an early stage in that correspondence, with the plaintiff’s solicitors confirming that the plaintiff would not seek to disinter the deceased’s body.  The text message does not excuse the defendants’ failure to comply with their obligations under the terms of settlement. 

1. The defendants’ submission that they were not in breach of the terms of settlement in respect of the remaining chattels ignores the fact that the defendants were notified that the plaintiff left some chattels there for the purposes of the auction of the deceased’s property.  As a result, it should have been relatively simple for the parties to agree to another date for the collection of the remaining chattels, without any ensuing litigation.  This would have been consistent with their overarching obligations under the Civil Procedure Act 2010, that is, to take steps to resolve or determine the dispute, use reasonable endeavours to resolve the dispute, narrow the issues in dispute, ensure that costs are reasonable and proportionate, and to minimise delay.[6]

   [6]Civil Procedure Act 2010 ss 19, 22, 23, 24, 25.

1. The defendants’ failure to comply with the terms of settlement over a lengthy period was the cause of this proceeding.  Once the proceeding was issued, the remaining issues were resolved.  It should not have been necessary for the proceeding to be issued at all.  The usual order for costs should apply and the Court will order that the defendants personally pay the plaintiff’s costs of and incidental to the proceeding.

Should the plaintiff’s costs be assessed on the standard basis or an indemnity basis?

1. The remaining issues between the parties were not complicated and the defendants should have complied with their obligations under the terms of settlement.  The five month period over which the plaintiff made attempts to resolve the two remaining issues is a substantial period for the issues to remain unresolved.  The defendants were warned that indemnity costs would be sought against them in the event that a proceeding was issued.  It should not have been necessary for the plaintiff to issue the proceeding at all.   

1. The defendants’ failure to comply with the terms of settlement over such a long period of time and their attitude towards resolving the remaining issues was not in accordance with their obligations under the Civil Procedure Act 2010.  This has caused delay and wasted costs on the part of the plaintiff.  The conduct of the defendants falls within the scope of the circumstances described in Ugly Tribe[7] and warrants a special costs order in favour of the plaintiff.   

   [7]Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 (14 June 2001).

Should r 63.24 be applied or should the Court otherwise order?

1. The plaintiff’s claim is not a claim for a judgment debt or a money claim. In terms of the monetary value of the claim for specific performance, the plaintiff estimated the value of the chattels at $6,500. No monetary value can be placed on the rights to the deceased’s burial plot. The letter from the defendants’ solicitors to the plaintiff’s solicitors dated 11 April 2017, relied on by the defendants, does not comply with the requirements of an offer of compromise pursuant to r 26.02(3) of the Rules. It fails to contain a statement to the effect that it is served in accordance with Order 26 of the Rules. Prima facie rr 63.24 and 63.25 of the Rules do not apply as the plaintiff did not obtain relief ‘by judgment or by the acceptance in accordance with r 26.03(4) of an offer of compromise’.

1. Had the proceeding been issued in the Magistrates’ Court, the parties differed as to the procedure that would have been adopted.  The plaintiff thought that the parties would have been required to attend a pre-hearing conference, whereas the defendants thought that the parties would have gone straight to arbitration with no pre-hearing conference as the amount in dispute was under $10,000.[8] 

   [8]See Magistrates’ Court Act 1989 ss 102(1), 107(1).

1. The probate  proceeding was heard in the Trusts, Equity and Probate List of this Court and resolved by the terms of settlement.  The plaintiff chose the Supreme Court to enforce his rights and seek specific performance of the terms of settlement arising from the probate proceeding as the dispute arose out of the settlement of the probate proceeding.  With the issues in dispute limited to compliance with the terms of settlement and not being a claim for money, it was appropriate to issue the proceeding in the Trusts, Equity and Probate List of this Court.  This type of dispute is not one that requires a pre-hearing conference or an arbitration or should burden either the Magistrates’ Court or the County Court.  As a specialist list that primarily deals with the administration of estates, the Trusts, Equity and Probate List is generally able to assist in an efficient, timely and cost effective result for the parties and would not require a pre-hearing conference or an arbitration in the circumstances of this proceeding.

Orders

1. Accordingly, the Court will order as follows:

(a)   the defendants personally pay the plaintiff’s costs of and incidental to the proceeding, to be taxed on an indemnity basis, in default of agreement;

(b)   the defendants bear their own costs of and incidental to the proceeding; and

(c)    the proceeding otherwise be dismissed.