Taylor-White (an infant) v Taylor-Bowman
[2004] WASC 281
•23 DECEMBER 2004
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: TAYLOR-WHITE (an infant) By her next friend RUSSELL JOHN WHITE & ANOR -v- TAYLOR‑BOWMAN [2004] WASC 281
CORAM: COMMISSIONER BRADDOCK SC
HEARD: 23 NOVEMBER 2004
DELIVERED : 23 DECEMBER 2004
FILE NO/S: CIV 1428 of 2002
BETWEEN: ARLEN LORIEN TAYLOR-WHITE (an infant) By her next friend RUSSELL JOHN WHITE
First Plaintiff
ROWAN REISS TAYLOR (an infant) By her next friend SHAWN WILLIAM REISS
Second PlaintiffAND
SANDRA MARGARET TAYLOR-BOWMAN
Defendant
Catchwords:
Costs - Action dismissed - Indemnity costs - Costs against legal practitioner - Turns on own facts
Legislation:
Nil
Result:
Special costs order made
Category: B
Representation:
Counsel:
First Plaintiff : Mr W L Goodlet
Second Plaintiff : Mr W L Goodlet
Defendant: Mr I A Morison
Solicitors:
First Plaintiff : Unmack & Unmack
Second Plaintiff : Unmack & Unmack
Defendant: Pye & Quartermaine
Case(s) referred to in judgment(s):
Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Flotilla Nominees Pty Ltd v Western Australian Land Authority & Anor [2003] WASC 122
Flower & Hart v White Industries (Qld) Pty Ltd (1999) 163 ALR 744
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397
Hills v Raunio, unreported; SCt of ACT; Library No 7510 of 1996; 1 October 2004
Levick v Deputy Commissioner of Taxation (2000) 102 FCR 155
Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190
White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169
Case(s) also cited:
Igaki Australia Pty Ltd v Coastmine Pty Ltd (1996) 34 IPR 37
COMMISSIONER BRADDOCK SC: The mother of the infant plaintiffs, Arlen Lorien Taylor‑White and Rowan Reiss Taylor, ("the children") died on 25 June 1999. The defendant, the maternal aunt of the children, was granted probate of her Will on 11 October 1999. The estate is held for the benefit of the two children at the age of 18. These proceedings were begun by writ on 4 April 2002. The respective fathers of the children, Russell John White and Shawn William Reiss, were appointed as next friends for the children by order of the Case Management Registrar on 18 July 2002.
History
Although this matter now comes before the court for determination of issues of costs, the action having been dismissed by the court on 8 November 2004, the essential history of the litigation is relevant.
After the service of the writ, at the first status conference, the plaintiffs were ordered to serve applications for the appointment of next friends forthwith, the writ having been issued in the children's names and other standard orders were made. On 18 July 2002, at the second status conference, the next friends were appointed, the defendant was ordered to file discovery forthwith and an order was made that any application to strike out part or parts of the statement of claim be filed and served by 1 August 2002. An order was made for the filing and service of any application for further or particular discovery by 15 August 2002. On 25 October the plaintiffs made an application to the Case Management Registrar for leave to amend the statement of claim. On 12 December, at the fourth status conference, it was ordered, by consent, that the plaintiffs have leave to amend the statement of claim in accordance with a minute of amended particulars of claim that had been previously filed. That was the final version of the statement of claim at the date listed for trial. The entry for trial was filed on 10 September 2004.
By the amended statement of claim the plaintiffs pleaded as follows:
"1. By her will dated 18 December 1998 Probate of which was duly granted on 11 October 1999 to the defendant, the Executor named therein the abovenamed DONNA LINDA TAYLOR after appointing her to be the Executor and Trustee thereof gave, devised and bequeathed to her upon trust after payment of all the final debts funeral testamentary and administration of the deceased upon trust pursuant of the children of the deceased, the abovenamed infant plaintiffs ARLEN LORIEN TAYLOR‑WHITE and ROWAN REISS TAYLOR as should survive her and attain the age of eighteen years and if more than one as tenants in common in equal shares.
2. By her said will the deceased also appointed RUSSELL JOHN WHITE and JACINTA MAYHEW and SHAWN WILLIAM REISS to be the guardians of the said infant beneficiaries.
3. The defendant has been guilty of wilful default in not getting in and accounting for the property being the assets of the estate.
(a)the defendant has produced in January 2001 what purports to be 'Executor's Statement of Donna's Estate at December 2000'
(b)This statement is cryptic and uninformative in that a large number of the items appearing therein are meaningless without further explanation and some of the items therein indicate
(i)that the defendant has wrongly included in the estate monies that do not belong in the estate
(ii)has paid out of the funds in the estate what appears to be excessively large fees to her accountants Maslin Greenwood for services to the estate the nature of which she has not and apparently will not disclose and
(iii)has failed to disclose and will not disclose any particulars of what are described as 'reimbursement and refunds' of various amounts apparently paid by herself and one H.R. Taylor and
(iv)will continue to employ her accountant Maslin Greenwood at great cost to the estate which the deceased was in her lifetime able to manage satisfactorily with no professional assistance at all.
(c)The Defendant appears to have omitted entirely from the assets of the estate such things as the jewellery, the motor car of which the deceased was in possession at the time of her death and has failed to justify large payments out of the estate by the sum of $6,827.75 to the Australian Tax Office which the Defendant's accountants Maslin Greenwood had wrongly calculated as the income tax payable for a capital gain on the disposal of the deceased's former residence.
(d)By reason of the foregoing the plaintiffs have reasonable grounds to believe that the defendant is guilty of further acts and/or omissions detrimental to the estate."
The Plaintiffs sought the following relief:
"1. An account of the estate of the testatrix deceased on the footing of wilful default.
2. If Necessary, administration of the estate of the testatrix deceased.
3. Further or other relief."
By the amended defence of 19 December 2002 the defendant responded as follows:
"1.The Defendant admits paragraph 1 and 2 of the Amended Statement of Claim.
2.The Defendant denies the allegations in paragraph 3 of the Amended Statement of Claim.
3.The Defendant denies that the Plaintiffs are entitled to the relief claimed or any relief.
4.The Defendant denies that the Amended Statement of Claim disclose any cause of action. No material fact is pleaded, alternatively pleaded or particularised, constituting any act of wilful default on the part of the Defendant.
5.The pleadings are frivolous and vexatious and ought to be struck out."
As can be seen, therefore, the position of both parties was apparent before the end of the year 2002. When the matter came on for trial on 8 November 2004, it was listed for two days. No materials, save for the papers for the Judge and a summary of issues by the defendants and a response to that summary by the plaintiff, had been filed for the purposes of the hearing.
At the commencement of the trial counsel for the defendant moved to strike out the statement of claim on the same basis as raised in the defence.
After argument on that day, I struck out the statement of claim, dismissed the action and adjourned the matter of costs for further argument.
I gave reasons ex tempore on 8 November 2004. Essentially the matters pleaded in par 3 of the amended statement of claim could not, if proved, establish the cause of action pleaded. Particulars (a) and (b) criticized the Executor's statement in relation to the estate at a particular point in time and amount to dissatisfaction with the formal accounts and/or information apparently provided by the defendant to the children's next friends, but in no sense established wilful default. Item (c) also takes the form of criticism of the accounting or an apparent dispute as to what items formed part of the estate reflected on the account and an alleged failure to justify payments made to the Australian Tax Office. Again, I took the view that such facts if fully proved could not justify the relief sought. In essence, there appeared to be disagreements between those acting for the children and the defendant Executrix, but these were not such as to have caused the next friends to plead, at any stage of the action, that there had been any specific breach of trust or other form of malfeasance by the defendant other than par 3. There appeared to be a fundamental misconception of the courses of action available on the presumed facts.
The costs application
Against that background, the defendants have brought an application for costs in the following terms:
"1.(1) That Russell John White and Shawn William Reiss and the Plaintiffs' solicitors Unmack & Unmack pay the Defendant's costs of the action, including any reserved costs, on an indemnity basis to be agreed or in default taxed, with the intention that the Defendant be fully indemnified for her costs incurred and in particular it is directed that the Defendant be indemnified fully for the costs of responding to all issues raised by the Plaintiffs whether in the pleadings or otherwise.
(2) In the alternative, the Defendant seeks specific special costs orders and directions to the Taxing Officer requiring the Plaintiffs and/or their solicitor to pay the Defendant's costs of responding to all issues raised by the plaintiffs whether in the pleadings or otherwise pursuant to items 13A of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2002 ('the 2002 Scale'), or item 32 of the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2004 ('the 2004 Scale').
2.A direction to the Taxing Officer to make an appropriate allowance for the attendance of a senior practitioner as an instructing solicitor during the hearing.
3.That the Defendant's costs of the costs application be paid by Russell John White and Shawn William Reiss and the Plaintiffs' solicitors Unmack & Unmack on a party and party basis, to be agreed or in default taxed pursuant to item 12 of the 2004 Scale.
4.Shawn William Reiss forthwith withdraw caveat H876659 lodged 21 September 2001 over 122A Watkins Street White Gum Valley the subject of certificate of title volume 1954 folio 62.
5.That there be liberty to apply."
Affidavits have been filed upon the costs application. For the defendant, an affidavit of Jeanette Maria Tavelli dated 9 November 2004 and an affidavit of the defendant of the same date. The plaintiffs filed affidavits of the next friends, Ms Jacinta Joan Mayhew and Walter Leslie Goodlet. At the hearing of the application for costs, Mr Morison for the defendant objected to the contents of the affidavit of Mr Shawn William Reiss, on the grounds of irrelevance and their scandalous nature. In part the affidavit concerns the caveat which the defendants have raised in the fourth order sought on the costs application. In part it confirms the chronology of events. However a large percentage deals with events and circumstances in which the deceased made her will and to that extent is irrelevant. It contains allegations against the defendant which were not those pleaded, including matters about the deceased's car and jewellery, and the use of some cheques. To the extent that it contains such irrelevant material and expresses the personal feelings of the deponent it has no bearing upon the issues before the court. It is repetitive of matters raised in prior correspondence. Much of it is quite inappropriate and should not have been included in an affidavit filed for the purposes of a costs application.
A minute of proposed orders was also filed on behalf of the plaintiffs as follows:
"1)That the plaintiffs [sic] claim against the defendant be dismissed.
2)That the defendant be formally be [sic] removed as trustee of the estate of the late DONNA LINDA TAYLOR for the plaintiff infant beneficiaries.
3)That RUSSEL JOHN WHITE and SHAWN WILLIAM REISS be appointed in her place immediately.
4)That the defendant and PYE & QUARTERMAINE and MASLIN GREENWOOD repay to the Trust account all moneys payed [sic] out of the Trust account for the purpose of and in the course of this action."
Counsel for the plaintiffs at the outset of his submissions sought to tender in evidence a bound volume containing, he said, the entire correspondence passing between the solicitors for the parties. Initially, it appeared that as certain of the correspondence had been exhibited to the affidavits of both parties, it would be preferable to avoid the tender of such voluminous material unless in the course of argument it became apparent that it was essential. Counsel for both parties ultimately consented to the tender of the bound volume as Exhibit 1. Mr Morison undertook to ascertain whether there were any items omitted from that volume, and if necessary remedy that omission by affidavit in due course. No such further materials have been filed although a further affidavit of Ms Catherine Sadlier has been filed which annexes more recent correspondence to which I will return later in these reasons. The volume of correspondence (exhibit 1) commences by letter from the plaintiffs' former solicitors on 4 September 2001 directed to the defendant personally and proceeds to its conclusion in a letter from the defendant's current solicitors to the plaintiffs' solicitors dated 4 November 2004. Some 126 letters are there included.
From this material it can be seen that: 1) the defendants have responded to enquiries and provided explanations to issues raised, but not to the satisfaction of the next friends; 2) that the same issues have been repeatedly raised by the next friends; 3) that after the commencement of proceedings issues other than those apparently relevant to the pleaded case were also raised repeatedly; 4) questions of discovery and inspection were pursued in detail and at length by both parties.
The next friends rely upon Exhibit 1 to show that they have acted in a reasonable and courteous fashion. The defendant relies upon the material to show that the next friends have raised issues repeatedly, some of which went to matters outside the action after the writ was issued and that correspondence has been unnecessarily protracted and costly.
The main issues raised on the costs application may be summarised as follows:
1.Are there grounds for the plaintiffs to pay the defendant's costs?
2.If so, should this be on an indemnity basis?
3.Are there grounds to order that the plaintiffs' solicitor pay the defendant's costs (and on what basis)?
4.In the alternative, should there be a special costs order in relation to the defendant's costs of responding to all issues raised by the plaintiffs whether contained in the pleadings or otherwise?
An order is sought in relation to a caveat lodged by Mr Reiss over the property at 122A Watkins Street in White Gum Valley, being the investment property held by the estate. The evidence in relation to the caveat on the property is contained in the affidavit of the defendant of 9 November 2004, and that of Mr Reiss filed 19 November 2004. Neither party has exhibited the title, the caveat or the materials which were filed in support of the caveat. It appears that the caveat was lodged on behalf of the plaintiffs when the possible sale of the property arose, a course of action with which the children's next friends did not agree. Whilst it is common ground that the property is held in trust by the defendant for the children that would not be sufficient for the court to deal with the matter in the current context. The procedure adopted by the defendants in relation to the caveat is irregular. There is little material properly before the court upon the issue. From the correspondence, it would appear that events have moved on considerably since the time the caveat was lodged and a sale is no longer envisaged. If that remains so, the matter should be capable of resolution by agreement. If not, there is a procedure under the Transfer of Land Act which the defendants may invoke.
The plaintiffs' minute of orders, filed for the purpose of the adjourned hearing, fails entirely to address any issue of costs.
The second, third and fourth orders entirely ignore the events which have occurred and illustrate a lack of understanding of the processes of the court in dealing with this action to date, the proper procedures of the court and the concept of evidence without which the court cannot act in contested matters.
Costs
The general rule is that the successful party to an action recovers his or her costs, although this is a matter in which there is a wide discretion subject to the rules: see O 66 r 1, Rules of the Supreme Court. The usual costs order is one for party and party costs. An order for indemnity costs will only be made if there is some special or unusual feature in the case to justify a departure from the ordinary practice. However, the court has jurisdiction to make an indemnity costs order wherever justice were to require such an order: Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190 at 191; Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233. Even in unusual circumstances, the court has a discretion as to whether an order should be made.
In this case the defendant has been successful. The plaintiffs' submissions opposing the costs orders filed on 19 November 2004 do not address any issues arising on the costs application. They do however assert breaches of trust by the defendant, allege that the duty of defendant's legal advisers was to require her to cease to act as trustee, repeat some matters from the statement of claim, describe the defendant's solicitors as "delinquent" and lack any logic or sense in the context of this application.
The issue relevant to whether the usual course of an order for costs to follow the event arises out of the fact that the defendant was ordered, early in the proceedings, on 18 July 2002, to file an application to strike out the statement of claim, if any, by a specific date. Although the statement of claim was subsequently amended and an amended defence subsequently filed, in which the defendant made the view taken by her of the cause of action abundantly clear, consideration of an application to strike out, before the morning of trial, appears to have sunk without trace. It appears from the correspondence that the parties became deeply engaged in the detail of discovery and inspection and other issues, as the matter proceeded. It is equally plain that the plaintiffs did not revise their position in the light of the defendant's pleaded position. Therefore, whilst it is arguable that much of the costs might have been saved by a more timely application to strike out the statement of claim, the plaintiffs have persisted in the litigation notwithstanding the very clear indication of the challenge to be made. The fact that the plaintiff at this late stage, in submissions filed notionally upon this costs argument, repeats allegations of unpleaded breaches of trust illustrates the lack of analysis of the facts which brought this action to this point. Accordingly, whilst the failure to bring an earlier application to strike out the statement of claim is a relevant consideration, balancing that with the overall conduct of the action, this is not a situation in which I am persuaded that the successful party should be deprived of an order for costs.
Indemnity costs?
Having determined that the defendant should have her costs, there follows consideration upon what basis those costs should be awarded. The defendant's argument for costs on an indemnity basis is based on three matters, firstly, that the plaintiffs pressed the matter to trial when there was no proper foundation for their cause of action and, secondly, that the plaintiffs raised many unpleaded claims in the course of proceedings causing unnecessary cost and delay and, thirdly, that the action was allegedly brought for a collateral purpose, namely, to allow the next friends to control the estate.
An action commenced or continued in circumstances where the plaintiff properly advised should have known that he or she had no chance of success may lead to an order for indemnity costs because such an action might be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts or clearly established law: see Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 per Woodwood J at 401. Examples of circumstances in which indemnity costs orders are made include where allegations of fraud have been made knowing them to be false, unreasonable refusal to accept an offer of compromise, the pursuit or creation of false issues and the failure to admit facts in proper circumstances.
As has been recently remarked by his Honour Justice Pullin in Flotilla Nominees Pty Ltd v Western Australian Land Authority & Anor [2003] WASC 122, where a properly formulated special costs order is made there should be little need for an indemnity costs order to try and recover costs incurred above the scale. In that case his Honour considered in detail the situation prevailing in Western Australia under the present scale and cost regime concluding that where there is no costs agreement under s 59 of the Legal Practice Act, there should not often be any need for an indemnity costs order. The matters relevant to a special costs order are considered further below in that context. However, it remains the case that an order for an indemnity costs is a mark of disapproval on the part of the court about the improper or unreasonable conduct of litigation, even though there should not necessarily be much difference in the costs recovered compared to those recoverable and under properly formulated special costs order.
In this case, as discussed above, whilst the plaintiffs persisted in running the claim to trial the defendant did not for her part seek to strike the action out at an early stage as she might have done. The first of the defendant's grounds for an indemnity order is not strong, for that reason, in my view. The defendant has argued that pleading wilful default where there was none is enough to infer a collateral purpose, but in these circumstances that is not an inevitable conclusion. The difficulties of excessive and/or wide ranging correspondence which increased costs would prima facie seem to be best capable of being dealt with by a special costs order. Thus the remaining argument relied upon by the defendant for indemnity costs would appear to be the allegation that the proceedings were brought for a collateral purpose to permit the next friends to gain control of the deceased's estate by reason of their conduct in relation to two specific matters.
The next friends relied upon their affidavits as to a conversation which allegedly took place on the day after the deceased's funeral, set out at par 1 in her affidavit, in which it is alleged that Russell White said to her "Make life easy for yourself, sell the Watkins Street house and give us half", to which Shawn Reiss allegedly assented. In addition, it is argued by the defendant that the plaintiffs' conduct in relation to the efforts made to involve the Public Trustee in substitution for the defendant were deliberately thwarted by the conduct of the defendant and/or their solicitors. The defendant sees further support for the argument in the third order in the plaintiffs' minute of proposed orders filed 19 November, which seeks that the next friends be appointed in place of the defendant as trustee immediately.
I am not persuaded that, of itself, seeking the removal of the trustee and replacement by the next friends would necessarily amount to an improper purpose in the context of this litigation, without more. There is insufficient evidence to conclude that the next friends did not genuinely hold opinions critical of the defendant in her capacity as executrix and trustee, and there is no evidence to suggest that they have manufactured complaints that they do not genuinely believe to be relevant. I am not prepared to draw any inference from a conversation on the day after the funeral of the deceased, the content of which is denied.
Similarly, in relation to the issue of the appointment of the Public Trustee, the correspondence reveals that the Public Trustee was willing to act in the capacity as trustee, on certain conditions. One of which was that the parties should confirm that all outstanding matters between them were resolved. The defendant was prepared so to confirm but the plaintiffs were not. It is clear from the correspondence that the plaintiffs were not satisfied by the explanations and documentation provided by the defendants, and to that extent they were correct to assert that their differences have not been resolved. Whether the plaintiffs had given consideration to the wisdom of securing the appointment of the Public Trustee, as trustee to the estate, for the benefit of the children, by "agreeing to differ" in the interests of having impartial administration of the estate as it then stood, is not readily apparent. However, the inferences available to be drawn from the facts include others in addition to that contended for by the defendant, for example, a lack of proper understanding of what was being proposed, or a lack of measured assessment of the advantages and disadvantages inherent in the situation. In fact the lack of understanding is patent in the correspondence (Exhibit 1, pages 110, 112, 114). I am not prepared to draw an inference that the conduct was designed deliberately to frustrate the appointment of the Public Trustee, which was a course that the plaintiffs had initiated and wished to adopt.
Finally an order for indemnity costs should not be made where a special costs order will sufficiently address inequity that the applicant might suffer. Accordingly, on these facts, for the reasons set out above I am not persuaded that I should order costs to be paid on an indemnity basis by the next friends.
Costs against the solicitor?
Similar considerations in relation to the conduct of the proceedings apply in any assessment of whether an order should be made against the solicitors for the plaintiffs personally. However, there are further specific matters of critical importance as orders this kind are only made where there is evidence to support the proposition that the solicitor has acted improperly in commencing or maintaining proceedings, for an improper purpose or otherwise as an abuse of process of the court. See Flower & Hart v White Industries (Qld) Pty Ltd (1999) 163 ALR 744.
I have already indicated that, on the limited evidence, I cannot draw an inference against the next friends that the litigation was pursued for an improper purpose. Apart from the result, and the extent of the correspondence, there is no other evidence which touches on the motivation or conduct of the solicitor for the plaintiffs. The cases, such as Flower & Hart v White Industries (Qld) Pty Ltd above, in which such orders have been made, show that during the course of trial facts emerge which prove how the action was commenced or maintained by the solicitor without regard to proper professional standards or worse. For example where a solicitor had caused an action to be commenced which was insupportable and alleged fraud for which there was no evidence, for the purpose of gaining his client a negotiating advantage.
There is a high threshold that must be met by a party seeking such an order. See Hills v Raunio, unreported; SCt of ACT; Library No 7510 of 1996; 1 October 2004.
In this case there is no evidence relevant to the solicitor's motivation other than the fact that he has acted for and advised the next friends. There is no evidence that he has any purpose additional to that of his clients. There is no suggestion that he was pursuing some agenda of his own or acting in bad faith.
What remains is the fact that the action was struck out and was, as I have found, misconceived. However, the court must bear in mind that it cannot know all the details and circumstances of the solicitor's instructions. Further, as was said by Goldberg J, in White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 236:
"The authorities do not support the proposition that simply instituting or maintaining a proceeding on behalf of a client which has no or substantially no prospect of success will invoke the jurisdiction. There must be something more namely, carrying on that conduct unreasonably. It is not clear what is encompassed by 'unreasonably' initiating or continuing proceedings if they have no or substantially no chance of success. It seems to me that it involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success with either a recognition that there is no chance of success but an intention to use the proceeding for an ulterior purpose or with a disregard of any proper consideration of the prospects of success."
The authorities were reviewed and considered by the Full Court of the Federal Court in Levick v Deputy Commissioner of Taxation (2000) 102 FCR 155 where the Court (Wilcox, Burchett and Tamberlin JJ) said:
"We accept the statements of principle made in the cases we have cited. We endorse the emphasis on caution in making orders against solicitors, particularly as it will often be difficult for a court to know all the details and circumstances of the solicitors' instructions. We share the concern expressed by Donaldson MR and Dillon LJ in Orchard about the risk of a practice developing whereby solicitors endeavour to browbeat their opponents into abandoning clients, or particular issues or arguments, for fear of a personal costs order being made against them. We agree that such conduct might amount to contempt of court.
Having said that, it is equally important to uphold the right of a court to order a solicitor to pay costs wasted by the solicitor's unreasonable conduct of a case. What constitutes unreasonable conduct must depend upon the circumstances of the case; no comprehensive definition is possible."
In the absence of other evidence I am left with the situation where the litigation was misconceived and persisted in, but with apparently a genuine desire by the solicitor to advance the interests of the infant plaintiffs. This earnest commitment was obvious in the manner of the oral submissions made if not in their content. Therefore, in the light of the authorities I am not prepared to make an indemnity costs order.
Special costs order?
A special costs order may be made where costs are likely to exceed the scale pursuant to s 215 of the Legal Practice Act 2003. The section provides:
"215. Effect of determination
(1)Subject to sections 221 and 241 of this Act and section 14 of the Legal Aid Commission Act 1976 ‑
(a)the taxation of bills of costs of legal practitioners, as between legal practitioner and client or party and party; and
(b)any other aspect of the remuneration of legal practitioners the subject of a determination,
is regulated by a legal costs determination in force under section 210.
(2)Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following ‑
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or taxed.
(3)Nothing in subsection (1) is to be construed as limiting the power of a court, a judicial officer or a taxing officer of a court to determine in any particular case before that court or judicial officer the amount of costs allowed.
(4)If a legal costs determination is in force under section 210 in respect of any business referred to in section 210(2), any other subsidiary legislation fixing or purporting to regulate the remuneration of legal practitioners in respect of that kind of business is of no force or effect."
It is necessary to establish that the scale would be inadequate for one of the factors set out in the section. Here the defendant seeks the costs of responding to issues outside the ambit of the pleadings but interwoven with the correspondence during the action. Otherwise, there is no evidence to show that the scale in terms of rates or time allowed would be inadequate. Indeed the matter was argued upon the basis of the extra work and time involved in the correspondence only.
Having read the entire correspondence, it is apparent that the litigated issues and other issues concerning the estate were mixed together to varying degrees throughout. Nothing would be served in setting out in these reasons the course of correspondence. Some comprises the usual exchanges for discovery, inspection and the necessary communications with regard to court appearances. Other parts concern detailed questions about the administration of the estate. Some involve questions of the conduct of the next friends in, for example, interfering in the management of the rented property of the estate. I have no doubt that it would have taken time and effort to deal with it. It seems to me that the defendant, if not always instantly, did seek to address the next friends concerns and enquiries. To some extent, the enquiries included the reasonable provision of information to the beneficiaries which it is the duty of executors and trustees to supply on request. But they clearly also extended well beyond that to, for example, attempting to track down a particular purchase on the deceased's credit card after her death. The cost of the correspondence and enquiries in that instance must have greatly exceeded the sum involved. One particular issue concerned certain monies from the deceased’s superannuation policy, which did not form part of the estate. Some funds were remitted to the defendant, with the consent of the next friends and appear to have been subsumed in the estate. Some are held separately in trust accounts. These never formed part of the estate, but in so far as the defendant accepted them on behalf of the children she would clearly be a trustee of them. No part of the proceedings concerned these funds. Since the decision in this matter was reserved the next friends have addressed further correspondence to the defendant in this regard, which was attached to an affidavit of Ms Catherine Sadlier filed on 6 December 2004. The two letters raise issues again about the superannuation funds, which were raised in prior correspondence. Ms Sadlier details in par 12 of her affidavit the earlier letters which touch on the same point. There were seven of them, the first being in February 2002. There is no application or matter before the court nor evidence upon which the court has any ability to deal with this substantively. The purpose of filing the material is expressed to be to evidence the unreasonable conduct of the next friends and in support of the costs applications.
In my view, the correspondence and manner in which some of the issues have been repeatedly raised, despite answers, is unreasonable and has created unusual difficulties in the conduct of the litigation. It is particularly of concern because the estate which is held for the benefit of the children is a modest one, and both sides have referred to the costs diminishing that which the children will ultimately enjoy. I am satisfied that this approach has caused unusual difficulty and I will order that the costs of the defendant shall include the costs of dealing with such correspondence, but only where it would not amount to the provision of proper information to which beneficiaries are entitled. Commonsense and prudence would suggest that the parties now move on from these disputes in the interests of the children, and refrain from reopening matters that have been already canvassed, but were never pleaded as breaches of trust, or at all, in the action.
The remaining order sought is in relation to the attendance of a senior solicitor at trial. The matter did not proceed to trial upon the defendant's application on the first morning and there was otherwise no particular reason for such attendance. I am not persuaded that such an order should be made.
The costs of the application for costs should be the defendants as she has been successful substantially in obtaining costs and a special order.
The orders I make are as follows:
1.Russell John White and Shawn William Reiss pay the defendant's costs to be taxed.
2.The costs in order 1 to include a direction to the Taxing Officer to include the costs incurred by the defendant addressing and responding to issues raised by the plaintiffs in correspondence during the course of litigation which did not relate to the plaintiffs pleaded case, pursuant to items 13A of the 2002 Scale or item 32 of the 2004 Scale, except where such costs would be of an unreasonable amount or unreasonably incurred and excluding the cost of supplying to the plaintiffs all such information as might reasonably be required by the beneficiaries of a trust in any event.
3.Russell John White and Shawn William Reiss pay the cost of the costs application on a party/party basis to be taxed.
4.The application of the defendant otherwise be dismissed.
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