Stegnjaic v Stegnjaic (No 2)

[2019] NSWSC 1213

Supreme Court

New South Wales

Medium Neutral Citation:

Stegnjaic v Stegnjaic (No 2) [2019] NSWSC 1213

Hearing dates:

19 July 2019

Date of orders:

19 July 2019

Decision date:

19 July 2019

Jurisdiction:

Equity - Family Provision List

Before:

Rein J

Decision:

1. Defendant to pay 70 per cent of the Plaintiff’s costs of the proceedings on the ordinary basis.
2. No order as to costs for the Defendant, and the Defendant is not entitled to recover his costs of defending the proceedings from the Estate.

Catchwords:

COSTS – Party/Party – Court’s discretion – Where the plaintiff succeeded on some submissions but not on others – Where the Court awards costs to the plaintiff with respect to the successful portion of the proceedings.

 

COSTS – Party/Party – Exceptions to general rule that costs follow the event – Where the defendant is removed as the executor of a deceased estate on account of his conduct as executor.

  COSTS – Party/Party – Payable out of a fund – Deceased estate – Where the plaintiff and defendant are the only beneficiaries of a deceased estate – Where an order that the estate pay both parties costs is otiose because, in effect, both parties would be paying 50% – Held: each party to bear their own costs in relation to that portion of the proceedings.

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
Waters v P C Henderson (Aust) Pty Ltd (unreported CA (NSW), Kirby P, Mahoney and Priestley JJA, 6 July 1994)

Texts Cited:

Nil

Category:

Costs

Parties:

Sinisa Stegnjaic (Plaintiff)
Milorad Stegnjaic (Defendant)

Representation:

Counsel:
Mr J. Brown (Plaintiff)
Dr J. O’Shea (Defendant)

  Solicitors:
Marsdens Law Group (Plaintiff)
John Fasha Solicitors (Defendant)

File Number(s):

2018/42458

Publication restriction:

Nil

EX TEMPORE Judgment

1. On 15 July 2019 I handed down my reasons for judgment in this matter, having left undetermined the costs outcome and inviting the parties to prepare short minutes of order, including orders in relation to costs. These reasons should be read together with the earlier reasons (including with regard to defined terms), particularly [30] in which I set out some of the considerations in relation to costs.

2. The parties have provided me with competing orders. There has been some discussion about various aspects of those orders other than on the question of costs, and those matters have now been agreed so I do not need to deal with them any further in these reasons.

3. This leaves the question of costs. The two proposed costs orders are quite different. The Plaintiff seeks:

1. An order that the Defendant pay the Plaintiff’s costs of the proceedings on the ordinary basis; and

2. That there be no order as to costs for the Defendant and the Defendant be not entitled to recover his costs of defending the proceedings from the Estate.

The Defendant seeks the following orders as to costs:

1. The Plaintiff not be allowed that part of his costs of the proceedings relating to the Family Provision Claim, the application to have the Plaintiff appointed as Administrator, and the Saunders v Vautier argument, with the remaining balance of the Plaintiff’s costs of the proceedings to be paid as follows:

1. The Defendant to pay 30 per cent of the Plaintiff’s remaining balance of the costs of the proceedings on the ordinary basis, personally.

2. 70 per cent of the Plaintiff’s remaining balance of the costs of the proceedings to be paid by the Estate on an indemnity basis.

2. The Plaintiff to pay the Defendant’s costs of the proceedings on an indemnity basis relating to the Family Provision Claim, on an ordinary basis in regard to the application to have the Plaintiff appointed as administrator and to its Saunders v Vautier argument, with the remaining balance of the Plaintiff’s costs in the proceedings recoverable from the Estate on an indemnity basis.

4. As I mentioned in my earlier judgment, it needs to be borne in mind that since only the Plaintiff and the Defendant share in the Estate, any order that the Estate pay costs has the practical result that the Plaintiff is bearing half of those costs.

5. Although it is within the Court’s discretion to award costs to the successful party even though that party has not succeeded on all issues (see Uniform Civil Procedure Rules 2005 (NSW) r 42.1 and Waters v P C Henderson (Aust) Pty Ltd (unreported CA (NSW), Kirby P, Mahoney and Priestley JJA, 6 July 1994)), I think it is appropriate in this matter to consider the different elements of the case and to determine a percentage attributable to the various issues: see James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31]-[33].

6. In relation to the Family Provision Claim, the Plaintiff has succeeded, but the Defendant was entitled to resist that claim as executor, and although the Defendant was unsuccessful, the litigation arose, at least to some degree, because the Will gave the executor discretion not to sell any property. This is a factor which I take into account in forming a view as to the way in which costs should be attributed to this matter.

7. In my view, the appropriate outcome would normally be that the Estate bear both parties’ costs, and because the need for the claim has arisen in part because of the form of the Will, both parties should receive their costs out of the Estate on an indemnity basis. But since that means they are both paying 50 per cent, the appropriate order is that each party pay their own costs of that portion of the case.

8. On the issue of removal of the Defendant as the executor the Plaintiff was successful, and such of the work as the Defendant did in resisting his removal was necessary because of the matters relied on by the Plaintiff. There were other matters as well, relating to the Defendant’s conduct as executor, that came into play during the course of the proceedings. I do not accept Dr O’Shea’s argument that some allowance should be made for the fact that the Defendant had to spend money putting forward documents in support of the expenditure. That would not have been necessary but for the conduct of which the Plaintiff complained. The Defendant should personally pay the Plaintiff’s costs of that aspect of the matter on the ordinary basis.

9. On the issue of Saunders v Vautier, although it was conceded at the hearing by the Defendant that the Plaintiff should succeed on that basis, the Plaintiff ultimately was not successful on that point. The Plaintiff, however, did by reason of the family provision order obtain the same result, and I do not think that the Plaintiff should have to pay any costs in respect of this.

10. On the identity of the new administrator, both the Plaintiff and Defendant abandoned their positions and a compromise was reached. No costs should be awarded in respect of that aspect of the matter.

11. The great bulk of the time of the hearing was spent on the issue of removal of the Defendant as executor. I indicated to the parties that in my view at least 70 per cent of the hearing was spent on that issue. An appropriate way to deal with the matter is to order that the Defendant personally pay 70 per cent of the Plaintiff’s costs of the proceedings, and that is with no right of indemnity from the Estate.

12. Mr Brown for the Plaintiff did not challenge that assessment, and Dr O’Shea for the Defendant pointed to two matters which I have referred to already in these reasons, neither of which lead me to think there should be any different assessment than that which I have indicated.

13. Accordingly, the order I make is that the Defendant pay 70 per cent of the Plaintiff’s costs of the proceedings on the ordinary basis. Secondly, there be no order as to costs for the Defendant and the Defendant is not entitled to recover his costs of defending the proceedings from the Estate.

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Decision last updated: 13 September 2019