Stanojevic v Riboskic [No 2]

[2020] VSCA 256

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2020 0002

MILOVAN STANOJEVIC (Executor of the Will and Estate of SLOBODAN STANOJEVIC deceased)	Applicant
v
MILICA RIBOSKIC (by her litigation guardian, James David Daly) [No 2]	Respondent

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JUDGES:	TATE, KAYE and EMERTON JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	28 September 2020
MEDIUM NEUTRAL CITATION:	[2020] VSCA 256
JUDGMENT APPEALED FROM:	[2019] VCC 1764 (Judge Misso)

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COSTS – Appeal – Family Provision – Unsuccessful application for leave to appeal by executor – Whether applicant should pay costs of application for leave to appeal personally if estate exhausted – Whether applicant acted reasonably in bringing application for leave to appeal – Forsyth v Sinclair(No 2) (2010) 28 VR 635, considered.

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WRITTEN SUBMISSIONS:	Counsel	Solicitors
For the Applicant	Mr B Gillies	Zaicos Stantchev & Co
For the Respondent	Dr M Rush QC with Mr P Reynolds	McKean Park Lawyers

TATE JA
KAYE JA
EMERTON JA:

1. On 8 September 2020, the Court delivered judgment[1] dismissing an application for leave to appeal by Mr Milovan Stanojevic, executor of the will and estate of Slobodan Stanojevic (‘Stan’), against an order that provision in the amount of $550,000 be made for the respondent, Stan’s former domestic partner, under pt 4A of the Administration and Probate Act 1958.  The primary judge also ordered that both the applicant’s and respondent’s costs of the trial be paid out of the estate with the respondent’s costs to be paid in priority to the applicant’s costs.

   [1]Stanojevic v Riboskic [2020] VSCA 230.

1. Following the delivery of judgment by this Court, each of the parties has filed written submissions on the question of costs.

1. The orders sought by the respondent are, relevantly, as follows:

2.The respondent’s costs of the application for leave to appeal be paid on a standard basis out of the estate of Slobodan Stanojevic, deceased, in priority to any payment of the applicant’s costs (including the applicant’s costs of the trial) out of the estate.

3.For the avoidance of doubt, if any of the respondent’s costs in paragraph 2 cannot be paid out of the estate, they be paid by the applicant personally.

1. The parties agree that the respondent’s costs of the application for leave to appeal are to be paid from the estate in priority to any payment of the applicant’s costs, including the applicant’s costs of the trial.  However, they disagree on whether there should be an order providing for the applicant to personally pay for any shortfall, should the estate not be large enough to cover the respondent’s costs of the trial and the application for leave to appeal. 

1. The respondent submits that there are six reasons why, if the respondent’s costs of the trial and the application for leave to appeal cannot be met out of the estate, then the respondent should be entitled to recover those costs from the applicant personally:

(a)       The respondent was wholly successful at trial and before this Court.

(b)      The usual order is that costs follow the event.  The respondent should not be deprived of the effect of the usual order in this case.

(c)       The applicant, having received the judgment of the court at first instance, sought leave to appeal at his own risk and must take the usual consequences. An executor is to be regarded as no different from any other applicant in such circumstances and, if unsuccessful, should be prepared to pay costs personally.

(d)      There is a risk that the respondent’s costs will not be satisfied out of the estate. The estate consists almost entirely of the property at 51 King Edward Ave, Sunshine.  There were preliminary appraisals of the property in February 2019 of between $650,000–$675,000 at the low end, and $750,000–$800,000 at the high end.  There is a realistic prospect that, upon a sale of the property (and taking into account agent’s fees and other costs), there will be insufficient funds to meet: (i) the judgment sum of $550,000 in the respondent’s favour, plus (ii) the respondent’s costs of the trial and the application for leave to appeal.

(e)       If there are sufficient funds in the estate to meet the respondent’s costs (after the sale of the property and payment of $550,000 to the respondent), then Order 3 will not affect the applicant.

(f)       The respondent has been restrained in not seeking indemnity costs in relation to the application for leave to appeal, in circumstances where the application lacked merit and was bound to fail.

1. There is no dispute that the respondent was wholly successful at trial and before this Court and that costs should follow the event.  The applicant agrees that he sought leave to appeal at his own risk.  However, the parties disagree as to whether there is any possibility that the respondent’s costs will not be able to be satisfied out of the estate. 

1. The applicant submits that there is no evidence that the respondent’s costs will not be satisfied out of the estate, as the property was valued at $700,000 for probate purposes.  He does not concede that the application for leave to appeal lacked merit or was bound to fail and submits that the respondent’s conduct in claiming a single person’s pension throughout much of the period of her relationship with the deceased would have been a limiting factor to an award of indemnity costs in any event.

1. The Court has no evidence about the quantum of the respondent’ costs or the value of the property, other than the probate records.  The Court is not in a position to form a firm view as to whether the respondent’s costs will be able to be satisfied out of the estate.  If the property is worth $700,000, it seems likely that the respondent’s costs will be satisfied from the estate, although we do not discount the small possibility that they may not.

1. While costs are entirely within the Court’s discretion, conventionally in family provision matters the costs of the parties are paid by the estate unless, and to the extent that, a party has acted unreasonably.[2] 

   [2]Forsyth v Sinclair[No 2] (2010) 28 VR 635, 642 [27]; [2010] VSCA 195 (Neave and Redlich JJA and Habersberger AJA).

1. In this case, although leave to appeal was refused, the applicant did not act unreasonably in seeking leave to appeal. There was some foundation for seeking leave to appeal, namely, that the judge did not give sufficient weight to the fact that the respondent had over many years held herself out to be a single person, in order to benefit from entitlements only available to her in that capacity.  She had kept separate premises in her own name for years.  The challenge to the finding made by the trial judge that the respondent was the genuine domestic partner of the deceased was not entirely hopeless. 

1. In all of the circumstances, we do not consider it appropriate to order that the applicant personally pay any costs of the respondent that cannot be met by the estate. 

1. It will be ordered that the respondent’s costs of the application for leave to appeal be paid on a standard basis out of the estate of Slobodan Stanojevic, deceased, in priority to any payment of the applicant’s costs (including the applicant’s costs of the trial) out of the estate.

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