Rostirolla v Fiakos (No 3)

[2002] FCA 1643

FEDERAL COURT OF AUSTRALIA

Rostirolla v Fiakos (No 3) [2002] FCA 1643

COSTS – where applicants unsuccessful in establishing trust alleged – effect of conduct of the deceased

DAYNA ROSTIROLLA and PETER ROSTIROLLA v JOAN FIAKOS and ROYAL & SUN ALLIANCE FINANCIAL SERVICES LIMITED
N 958 of 2002

GYLES J
SYDNEY
19 DECEMBER 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N957 OF 2002

BETWEEN:

DAYNA ROSTIROLLA
FIRST APPLICANT

PETER ROSTIROLLA
SECOND APPLICANT

AND:

JOAN FIAKOS
FIRST RESPONDENT

ROYAL & SUN ALLIANCE FINANCIAL SERVICES LIMITED
SECOND RESPONDENT

JUDGE:

GYLES J

DATE OF ORDER:

19 DECEMBER 2002

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

There be no order as to costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N958 OF 2002

BETWEEN:

DAYNA ROSTIROLLA
FIRST APPLICANT

PETER ROSTIROLLA
SECOND APPLICANT

AND:

JOAN FIAKOS
FIRST RESPONDENT

ROYAL & SUN ALLIANCE FINANCIAL SERVICES LIMITED
SECOND RESPONDENT

JUDGE:	GYLES J
DATE:	19 DECEMBER 2002
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

1. The matter has been stood over to today to deal with, amongst other things, the appropriate order for costs.  The conclusion I have come to is that I should make no order as to the costs of the applicants, in other words, they will bear their own costs.  I take that view because although in form the action is completely adversary, in substance it propounded alternative views about a trust the first of which was not established but an essential part of the case was to establish an alternate trust under which they are residuary beneficiaries.

2. Furthermore, I am satisfied that there is substance in the submission which Mr Cassidy QC puts on behalf of the applicants that there was sufficient conduct by the deceased to make it a reasonable action on their part to test the position.  The declaration which was made by the deceased in the hospital is consistent with their case and I cannot see any reason why I would conclude that they had any particular knowledge (which they would necessarily regard as reliable) which would be to the contrary of that declaration. The fact that I noted that family pressure had been a factor in the change of mind by the deceased does not establish that they knew or believed that they were altering or seeking to alter irrevocable trusts which he had established at an earlier time.  I also bear in mind in considering this issue that the respondent did conduct herself in relation to the deceased on the basis that they could bargain between themselves as to the proceeds of the policy.  That is inconsistent with the position which I had found to exist.

3. Whilst Mr Cassidy has not been able to refer to any case in which the well known exception to the costs rule applicable where the deceased causes a problem in relation to trusts or wills has been applied in a precisely like situation, it seems to me that the analogy is close enough. Here the trust is, in substance at least, close to testamentary because the proceeds of the policy only come in after death and the declaration made just prior to death is very similar to that conduct of a testator which would give rise to a legitimate desire to have the matter clarified by evidence.  The applicants were young at the time of the original arrangements and I have no reason to believe that they would have been privy to what took place at that time.  Indeed, bearing in mind the then position between the deceased and his then wife, it is, I would judge, unlikely that he had confided the nature of his arrangements to his children or his then wife. 

4. So far as the indemnity costs claim is concerned, in a sense that is washed away by the conclusion I have come to that it was not unreasonable to commence proceedings and that there should be no order as to costs.  I would also add that there is substance to what Mr Cassidy says about the inability to really judge the content of the offers that were made compared with what the final financial result may turn out to be in the present state of knowledge.  In my view, it is not a clear enough situation to impose an order for indemnity costs even if an order for costs were appropriate.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:             30 January 2003

Counsel for the Applicant:	DI Cassidy QC and I Raine
Solicitor for the Applicant:	Williamsons Solicitors
Counsel for the Respondent:	R Angyal
Solicitor for the Respondent:	Keith Hurst & Associates
Date of Hearing:	19 December 2002
Date of Judgment:	19 December 2002