Stanojevic v Damnjanovic (Costs Ruling)
[2024] VSC 430
•25 July 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S ECI 2020 03616
BETWEEN:
| GABRIELA STANOJEVIC & ORS (according to the attached Schedule) | Plaintiffs |
| and | |
| PETAR DAMNJANOVIC (as Executor of the Estate of SVETOZAR STANOJEVIC, deceased) and KRISTINA DJUMIC | Defendants |
---
JUDGE: | Tsalamandris J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers (written submissions from the plaintiffs and first defendant dated 8 July 2024, and written submissions from the second defendant dated 28 June 2024 and 16 July 2024) |
DATE OF RULING: | 25 July 2024 |
CASE MAY BE CITED AS: | Stanojevic v Damnjanovic & Anor (Costs Ruling) |
MEDIUM NEUTRAL CITATION: | [2024] VSC 430 |
---
COSTS – Mixed success by plaintiffs – Costs follow the event – Only second defendant liable for plaintiffs costs, as she was the active contradictor – Plaintiffs to pay the first defendant’s costs as the plaintiffs unsuccessful in claim for lost rental income – No basis for second defendant to be compensated for costs – Order for vacant possession of property – Supreme Court Act 1986, s 24 – Supreme Court (General Civil Procedure) Rules2015, Order 63 – Civil Procedure Act 2010, Part 4.5.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr K Mihaly | Kingston Lawyers |
| For the First Defendant | Mr M Seelig | Destra Law |
| For the Second Defendant | In person |
HER HONOUR:
Preliminary
On 21 June 2024, I delivered my reasons for judgment in this proceeding.[1] The proceeding related to a claim by the plaintiffs that a residential property in Hillside was held on trust for them, by the first defendant, Petar[2] Damjanovic, as the executor of the estate of Svetozar Stanojevic. The second defendant, Kristina Djumic, was the sole beneficiary of the estate, and denied the existence and/or enforceability of any such trust. I dismissed the plaintiffs’ claim for a declaration that the property was held on express trust for the benefit of the plaintiff grandchildren.[3] However I was satisfied that the property was held on a resulting trust – 25.77% for Gabriela Stanojevic, and 31.5% on trust for the estate of Zoran Stanojevic. In addition, I dismissed the plaintiffs’ claim that Petar had breached his duty as executor and trustee, for not obtaining rent from Kristina (the rental loss claim). At the conclusion of my judgment, I indicated that I would hear from the parties as to the precise form of orders to give effect to my reasons, and as to costs.
[1]Stanojevic v Damnjanovic & Anor [2024] VSC 350 (principal judgment).
[2]In this ruling, for clarity and without meaning any disrespect, I refer to the parties by their first names.
[3]In this ruling, I adopt the defined terms used in the principal judgment.
The parties were unable to agree on the terms of final orders and were invited to provide written submissions.
The plaintiffs sought a declaration as to the resulting trust, to give effect to my judgment. They sought the orders that:
(i) Kristina deliver vacant possession of the property to Petar, stayed for 30 days;
(ii) Pursuant to Part IV of the Property Law Act 1958 (the PLA), Petar sell the property as soon as practicable, with Petar to have conduct of the sale, subject to his duties as executor and trustee;
(iii) Petar distribute the proceeds of sale after reasonable selling costs (the net proceeds), as follows:
a. to Gabriela, 25.77% of the net proceeds;
b. to himself, to hold on trust for any administrator of the estate of Zoran Stanojevic, 31.5% of the net proceeds; and
c. to himself, to hold the remainder, as executor of Svetozar’s estate.
(iv) The defendants pay the plaintiffs’ costs of the proceeding on a standard basis, to be taxed in default of agreement.
(v) Petar’s costs be paid from Svetozar’s estate, as part of the administration of that estate.
Petar submitted the plaintiffs should pay his costs of the proceeding, as he had been successful in defending the rental loss claim. Further, it was emphasised that, Petar had otherwise taken a neutral position in respect of the plaintiffs’ claim that the property was held on either an express or resulting trust. In those circumstances, it was submitted that Petar should not be ordered to pay the plaintiffs’ costs of the proceeding.
Kristina opposed an order that she vacate the property within 30 days. In written submissions, she indicated that due to work commitments in the Republic of Korea, she is unable to travel to Victoria to facilitate this. Further, Kristina stated that she has no immediate family to assist her in this task.
Kristina also opposed an order that she and Petar pay the plaintiffs’ costs, and also opposed an order that Petar’s costs be paid out of Svetozar’s estate. As I understood her submission, Kristina proposed each party should be responsible for their own costs, and/or that the payment of such costs should be based on the percentage they each receive from the net proceeds, in accordance with my judgment. Further, Kristina invited me to consider awarding her compensation for payment of her own legal fees to date, as she had been ‘drawn into this complicated case’ due to the plaintiffs’ ‘false’ claims of having full rights to the property.[4]
[4]In her submissions as to final orders, Kristina also raised questions pertaining to Petar’s administration of Svetozar’s estate to date, and sought clarification as to what had been done with monies in Svetozar’s personal bank accounts. Such queries are beyond the scope of this proceeding, and are therefore not addressed in this ruling.
In reply, the plaintiffs submitted that there was no basis for Kristina to delay the sale of the property for her own convenience, noting that even hardship to a co-owner is an insufficient ground to refuse a sale order.[5]
[5]Citing Yeo v Brassil [2010] VSC 344, [23].
In respect of their costs, the plaintiffs maintained that both defendants ought be ordered to pay their costs, as the plaintiffs were substantially successful, given my conclusion that almost 60% of the property was held on resulting trust, and thus outside Svetozar’s estate. It was put that Petar was the registered proprietor of a property bound by a trust, which he had failed to admit. As a consequence, the plaintiffs were required to prosecute the proceeding, such that Petar should bear the costs of their success. In respect of Kristina, it was submitted that, as the active contradictor to the plaintiffs’ claim, she should also be responsible for the plaintiffs’ costs.
Analysis
Costs
Section 24 of the Supreme Court Act 1986 (Vic) and Part 4.5 of the Civil Procedure Act 2010 (Vic) (the CPA) confer a broad discretion on the Court to award costs. This discretion must be exercised in accordance with Order 63 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules).[6]
[6]Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’) r 63.02.
The general rule is that the costs of litigation follow the event – that is, ‘[a]bsent disqualifying conduct, the successful party should recover its costs even when it has not succeeded on all heads of claim’.[7] Further, ‘the Court is entitled to examine the realities of the case and will attempt to do ‘substantial justice’ as between the parties on matters of costs’.[8] This may include apportioning of costs.[9] Unless provided for by the Rules or an order of this Court, costs are to be taxed on a standard basis.[10]
[7]Chen v Chan [2009] VSCA 233 [10(1)]. Citing with approval Ritter v Godfrey [1920] 2 KB 47; Oshlack v Richmond River Council (1998) 193 CLR 72, 97-8 (McHugh J); 124 (Kirby J).
[8]Ibid [10(2)]. Citing with approval Spotless Group Limited v Premier Building and Consulting Pty Ltd and Northern Suburban Properties Pty Ltd [2008] VSCA 115, [14].
[9]Ibid [10(3), (5), (6)].
[10]The Rules (n 6) r 63.31.
It is not uncommon for a party to have mixed success in litigation. Whilst the plaintiffs failed in their claim for an express trust to be declared, and in their rental loss claim, they were successful in their claim that the majority of the property was held on resulting trust. There has been no disqualifying conduct which should disentitle the plaintiffs from an order for costs, nor is it in the interest of justice for there to be an apportionment of costs.
Kristina was the contradictor of the trust claim, and took an active role in that aspect of the proceeding. I reject her characterisation of the plaintiffs’ claim. It was not a false claim. The express trust was determined to be unenforceable on the ground of unconscionability. The alternate claim of the resulting trust, was successful. There was no viable defence presented by Kristina in respect of the resulting trust claim, and her closing submissions on it were based upon mere speculation. In the circumstances, Kristina will be ordered to pay the plaintiffs costs.
Given the outcome of the proceeding, there is no basis for Kristina to be compensated for her costs. Further there is no basis for Kristina to be compensated for the stress she claims she suffered as a consequence of the litigation.
Given that Petar took a neutral position in respect of the plaintiffs’ trust claim, and (save for defending the rental loss claim) did not participate in the trial, I will not order Petar pay the plaintiffs’ costs of the proceeding. Instead, I will order the plaintiffs pay Petar’s costs, given he was successful in his defence of the rental loss claim.
For the avoidance of doubt, Petar, as executor, should not be personally responsible for the shortfall of any legal costs incurred in this proceeding. It is appropriate that such costs are borne by Svetozar’s estate.
Sale of the property, including the need for vacant possession
Svetozar died almost eight years ago. Since the time the amended statement of claim was filed on 20 December 2022, the plaintiffs’ prayer for relief has included an order for sale of the property pursuant to Part IV of the PLA. When the property is marketed for sale, it is preferable that there is vacant possession. The personal inconvenience and/or cost to Kristina in having any stored chattels removed from the property, is insufficient to further delay the sale of this property.
Accordingly, I will order that Kristina deliver vacant possession of the property to Petar, stayed for 30 days.
I will also order that, pursuant to Part IV of the PLA, Petar have conduct of the sale, subject to his duties as executor and trustee.
Proceeds of the sale of the property
In accordance with my judgment, I will order the following distribution of the net proceeds from the sale of the property:
(vi) to Gabriela, 25.77% of the net proceeds;
(vii) to Petar, to hold on trust for any administrator of the estate of Zoran Stanojevic, 31.5% of the net proceeds; and
(viii) to Petar, to hold as executor of the estate of Svetozar Stanojevic, the remainder of the net proceeds.
SCHEDULE OF PARTIES
S ECI 2020 03616
BETWEEN:
| GABRIELA STANOJEVIC | First Plaintiff |
| NIKOLA STANOJEVIC | Second Plaintiff |
| NATALIJA STANOJEVIC | Third Plaintiff |
| STEFAN STANOJEVIC | Fourth Plaintiff |
| -and- | |
| PETAR DAMNJANOVIC (as Executor of the Estate of SVETOZAR STANOJEVIC, deceased) | First Defendant |
| KRISTINA DJUMIC | Second Defendant |
0
6
0