Tham v The Public Trustee (WA) (in its capacity as Administrator of the Estate)
[2016] WASC 170 (S)
•1 SEPTEMBER 2016
THAM -v- THE PUBLIC TRUSTEE (WA) (in its capacity as Administrator of the Estate) [2016] WASC 170 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 170 (S) | |
| Case No: | CIV:1912/2014 | 23 AUGUST 2016 | |
| Coram: | MASTER SANDERSON | 1/09/16 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Costs order made | ||
| B | |||
| PDF Version |
| Parties: | CHE THAM THE PUBLIC TRUSTEE (WA) (in its capacity as Administrator of the Estate) TIEN DUNG LA TIEN CUONG LA THI NGOC DUNG LA THI NGOC HANH LA THI NGOC YEN LA TRAN THI TUYET VAN CHE LA THI WILLIAMS CHE THAM NGUYEN |
Catchwords: | Costs Calderbank offer in Family Provision Act proceedings Turns on own facts |
Legislation: | Family Provision Act 1972 (WA) |
Case References: | Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels) [No 2] [2014] WASC 272 Ford Motor Company v Lo Presti [2009] WASCA 115 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
Estate of VAN TIEN NGUYEN late of 18 Jefferson Drive, Marangaroo, Western Australia, Tailor (Dec)
- Plaintiff
AND
THE PUBLIC TRUSTEE (WA) (in its capacity as Administrator of the Estate)
First Defendant
TIEN DUNG LA
Second Defendant
TIEN CUONG LA
Third Defendant
THI NGOC DUNG LA
Fourth Defendant
THI NGOC HANH LA
Fifth Defendant
THI NGOC YEN LA
Sixth Defendant
TRAN THI TUYET VAN
Seventh Defendant
CHE LA THI WILLIAMS
Eighth Defendant
CHE THAM NGUYEN
Ninth Defendant
Catchwords:
Costs - Calderbank offer in Family Provision Act proceedings - Turns on own facts
Legislation:
Family Provision Act 1972 (WA)
Result:
Costs order made
Category: B
Representation:
Counsel:
Plaintiff : Ms W F Gillan
First Defendant : Ms C L Sadleir
Second Defendant : Mr L A Tsaknis
Third Defendant : Mr L A Tsaknis
Fourth Defendant : Mr L A Tsaknis
Fifth Defendant : Mr L A Tsaknis
Sixth Defendant : Mr L A Tsaknis
Seventh Defendant : Mr L A Tsaknis
Eighth Defendant : Mr D V Blades
Ninth Defendant : Mr D V Blades
Solicitors:
Plaintiff : Jackson McDonald
First Defendant : Public Trustee
Second Defendant : Bowen Buchbinder Vilensky Solicitors
Third Defendant : Bowen Buchbinder Vilensky Solicitors
Fourth Defendant : Bowen Buchbinder Vilensky Solicitors
Fifth Defendant : Bowen Buchbinder Vilensky Solicitors
Sixth Defendant : Bowen Buchbinder Vilensky Solicitors
Seventh Defendant : Bowen Buchbinder Vilensky Solicitors
Eighth Defendant : Legal Care Australia
Ninth Defendant : Legal Care Australia
Case(s) referred to in judgment(s):
Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels) [No 2] [2014] WASC 272
Ford Motor Company v Lo Presti [2009] WASCA 115
1 MASTER SANDERSON: These reasons deal with the costs arising from this matter. In the main proceedings I determined the plaintiff's claim should fail and a claim made by the second to fourth, sixth and seventh defendants should also fail. (The fifth defendant did make a claim but it was abandoned at trial.) All parties agreed the costs of the executor should be paid from the estate and they also agreed the costs of the eighth and ninth defendants be paid by the estate. The difference is between the plaintiff's view of what orders ought be made as to the costs and the views of the second to seventh defendants.
2 The different positions of the parties can be explained by setting out the minutes of orders proposed by each. The plaintiff's draft minute was as follows:
1. The second to seventh defendants pay the plaintiff's costs of the first interim order applications.
2. The balance of the plaintiff's taxed costs be paid from the estate.
3. The second to seventh defendants' taxed costs, capped at $100,000, be paid from the estate.
4. The eighth and ninth defendants' taxed costs be paid from the estate
5. The first defendant's costs be paid from the estate as a testamentary expense.
3 The second to seventh defendants' draft minute was in the following terms:
1. The order made on 28 November 2014 that the first defendant pay the plaintiff a sum of $80,000 by way of interim provision from the estate of the deceased and the order made on 6 November 2015 that the first defendant pay the plaintiff the sum of $100,000 by way of interim provision from the estate of the deceased be affirmed.
2. The amounts of $80,000 and $100,000 in order 1 be taken into account and included in the amount otherwise payable to the plaintiff from the estate of the deceased effected by the law relating to intestacy.
3. There be no order as to the plaintiff's costs of the action.
4. Subject to order 7 below, the second to seventh defendants' costs of the action be paid by the plaintiff from the portion of the estate of the deceased otherwise payable to the plaintiff by the law relating to intestacy and from 17 November 2014 be paid by the plaintiff to the second to seventh defendants on a full indemnity basis, namely all costs incurred by the second to seventh defendants, except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that, subject to the above exceptions, the second to seventh defendants be completely indemnified as to costs from that date.
5. The second to seventh defendants' costs of the action include the costs of their interpreter, Mr Tam Minh Nguyen.
6. The first defendant and the eighth and ninth defendants' costs of the action be paid from the estate of the deceased.
7. The costs of the second to eighth defendants reserved on 19 March 2015 be paid from the estate of the deceased.
8. The taxing officer is directed to treat the first to ninth defendants as the successful parties in this action.
4 Both minutes recognise there were interim applications in this matter. Under s 7A(2) of the Family Provision Act 1972 (WA) when an interim order is made it must be confirmed, revoked or altered when the application under s 6(1) is determined. That is picked up in order 1 of the second to seventh defendants' minute and I would make an order in those terms. For the sake of clarity it is also appropriate to make an order in terms of [2] of the second to seventh defendants' minute.
5 In support of their application for costs the second to seventh defendants relied upon an affidavit of Leslie Buchbinder sworn 17 August 2016. The main purpose of that affidavit was to annex a letter dated 17 November 2014 which contained a Calderbank offer. Also annexed to that affidavit was a letter from the plaintiff's solicitors to the solicitors for the second to seventh defendants dealing with costs. It is headed 'Without Prejudice Save as to Costs'. Counsel for the plaintiff objected to that letter being admitted into evidence. After hearing argument I decided the letter was privileged and should not be admitted into evidence and all references to it in Mr Buchbinder's affidavit should be struck out. I indicated I would provide written reasons for my decision. What follows are those reasons.
6 It was common ground between the parties the second to seventh defendants had made a Calderbank offer which was rejected by the plaintiff. There was no need to tender the letter from the plaintiff's solicitor to confirm that rejection. Furthermore the plaintiff did not rely upon the letter to advance its case with respect to costs. What the second to seventh defendants were doing as I understand it, was tendering the letter to show the plaintiff took an unreasonable position with respect to the litigation thus reinforcing the second to seventh defendants' claim for indemnity costs.
7 In my view that is not permissible. A letter which is headed 'Without Prejudice Save as to Costs' can of course be used by a party who is seeking costs. The privilege is theirs to waive. But when such a letter comes into existence it must otherwise remain privileged unless that privilege is waived by the party writing the letter.
8 There is a further reason why such letters ought not be routinely admitted into evidence. Settlement of any action is always to be encouraged. It really does not matter whether settlement is achieved or not. What is important is that the parties confer and keep conferring in an attempt to settle the action. They would be less likely to adopt that course if after trial they were aware of the risk correspondence passing between solicitors may be tendered as part of the costs argument. Unless there is very good reason for doing so, letters which embody settlement negotiations should be kept confidential between the parties. That is certainly the case here.
9 Accordingly, I made orders striking out those parts of the affidavit complained of by the plaintiff.
10 It remains a fact however, that a Calderbank offer was made and rejected. It is common ground the offer was better than what was achieved by the plaintiff at trial. The question then is whether the second to seventh defendants are entitled to indemnity costs as they propose in [4] of their minute. On behalf of the plaintiff it was argued rejection of the Calderbank offer was reasonable, the plaintiff should have her costs and the second to seventh defendants' costs should be capped at $100,000.
11 In Daniels v Hall (as Administrator of the Estate of Arnold Edward Daniels) [No 2] [2014] WASC 272 EM Heenan J undertook an extensive review of the general principles relating to an award of costs in Family Provision Act proceedings: see [10] to [37]. I very much doubt anything further could be said on the question and I would respectfully adopt what his Honour had to say. In particular it is worth quoting the following paragraph:
All these observations and dicta are, undoubtedly, helpful and pertinent but it must never be forgotten that in awarding costs in claims under this litigation the court is exercising a broad and general discretion which must have regard to the circumstances of each particular case and not be limited, controlled or circumscribed by any general rule or practice [37].
12 His Honour then went on to consider Calderbank offers in the context of proceedings of this nature. There is no reason why Calderbank offers cannot be made in Family Provision Act proceedings and it is a reasonably frequent occurrence. There is also no reason why the general principles applicable to Calderbank offers should not apply: see generally Ford Motor Company v Lo Presti [2009] WASCA 115. Of course the existence of a Calderbank offer is one factor, albeit a very important factor in determining how the costs should fall.
13 In this case the plaintiff says it was reasonable for her to reject the offer. She points out that her case was reasonably arguable. She was the long term spouse of the deceased and his only dependent. She dedicated herself to the deceased's welfare throughout his diagnosis with HIV and subsequent catastrophic motor vehicle accident injury. She has virtually nothing by way of assets. All of the second to ninth defendants are adult children of the deceased. Finally, she says on the face of it, the estate was large enough to provide her with additional financial provision while leaving a reasonable sum for each of the deceased's eight children.
14 She says further the timing of the offer was important. It was made in November 2014 before any of the defendants had filed their affidavits. She says she was not in a position to be able to adequately assess the likelihood of the defendants successfully resisting her action. Furthermore, she says if the second to seventh defendants obtain an order for indemnity costs the estate will be reduced to such an extent that she will be significantly prejudiced and have limited funds to sustain her into the future.
15 As part of counsel's written submissions she produced a number of tables which showed the position of the plaintiff depending on what costs orders were made. Without quoting those tables in full it is clear that an award of indemnity costs would have a very significant negative impact on the plaintiff's position.
16 In the end, I am satisfied this is an overwhelming reason for refusing an order for indemnity costs in favour of the second to seventh defendants. Furthermore, I accept the Calderbank offer was made early in the proceedings at a time when the plaintiff who, undoubtedly properly advised believed she had a strong case, did not accept compromise was appropriate.
17 Of course this decision is a compromise or, perhaps more correctly described, the result of a balancing act. The fact is an offer to settle was made by the second to seventh defendants and the offer was better than what was achieved by the plaintiff at trial. It might well be asked what more the second to seventh defendants could have done. The answer is perhaps to have repeated the offer after the defendants' affidavits had been filed. If that had been done an order for indemnity costs would have been very hard to resist. But in the end in the circumstances of this case, I am not satisfied indemnity costs ought be ordered.
18 It also seems to me that the orders proposed by the plaintiff are the appropriate orders. The only one about which I have any hesitation is the cap on fees at $100,000. In the end I have determined that cap is appropriate for two reasons. First, there were a number of issues raised by the second to seventh defendants which were not pursued at trial but which were live until the trial commenced. One was whether or not the plaintiff had any interest in property owned by the eighth defendant. While not much effort was directed at these questions it was nonetheless the case they were raised.
19 Second, there was the fact that the second to seventh defendants actually maintained a claim of their own. That claim failed. To award costs uncapped would it seem to me to be rewarding defendants who had failed on part of their claim.
20 What remains is the question of who should bear the costs of the first interim application. In my view the plaintiff had a very strong case for an interim payment and she was successful in obtaining an order. The order was resisted by the second to seventh defendants. Costs ought follow the event and the second to seventh defendants ought be liable for those costs.
21 In the end I would make an order in terms of [1] and [2] of the second to seventh defendants' draft minute and otherwise make an order in terms of [1] to [5] of the plaintiff's draft minute. I am not quite sure why the second to seventh defendants require a specific order to cover the costs of the interpreter but if such an order is required I would be prepared to make it. It may also be the plaintiff should have a corresponding order.
22 The precise form of orders may require some further consideration and I will hear the parties if a form of order cannot be agreed.
0
3
1