Tomamichel v McCann (Ruling) (No 3)

[2014] VCC 427

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

CIVIL DIVISION

Revised
Not Restricted
Suitable for Publication

DAMAGES AND COMPENSATION LIST
FAMILY PROPERTY DIVISION

Case No. CI-13-03524

IN THE MATTER OF AN APPLICATION UNDER PART IV OF THE ADMINISTRATION AND PROBATE ACT 1958

AND

IN THE MATTER OF THE WILL AND ESTATE OF COLIN EDGAR TOMAMICHEL, DECEASED

BETWEEN

PAUL DOUGLAS TOMAMICHEL

LYNDAL MAREE TOMAMICHEL-ARGAET

and

MAREE ELIZABETH McLAY

Plaintiffs

v

HEATHER JEAN McCANN
(who is sued as the Executrix of the Will of the late COLIN EDGAR TOMAMICHEL)

Defendant

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JUDGE:	HIS HONOUR JUDGE MISSO
WHERE HELD:	Melbourne
DATE OF HEARING:	20 March 2014
DATE OF RULING:	9 April 2014
CASE MAY BE CITED AS:	Tomamichel & Ors v McCann (Ruling) (No 3)
MEDIUM NEUTRAL CITATION:	[2014] VCC 427

RULING
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Subject:   TESTATOR'S FAMILY MAINTENANCE  

Catchwords:              Claim by three plaintiffs – two plaintiffs were successful – Calderbank offer – whether the unsuccessful plaintiff should not recover costs from the estate

Legislation Cited:       Administration and Probate Act 1958, s97(6)-(7)

Cases Cited:Calderbank v Calderbank [1975] 3 All ER 333; Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; M T Associates Pty Ltd v Aqua-Max Pty Ltd & Anor (No 3) [2000] VSC 163; Metricon Homes Pty Ltd v Sawyer [2013] VSC 518; Metalicus Pty Ltd v Metwholesale Pty Ltd (No 2) [2011] VSC 157; In the Matter of Moerth (No 2) [2011] VSC 275; Forsyth v Sinclair(No 2) (2010) 28 VR 635

Ruling:   The estate of the deceased pay 90 per cent of the plaintiffs’ costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Dr J Glover	Beaumont Lawyers
For the Defendant	Mr K Mihaly	Rose Lawyers

HIS HONOUR:

Introduction

1        There remains one matter for me to determine, and that is, whether Maree should obtain an order for costs to be paid by the estate of the deceased.

2        Dr J Glover of Counsel appeared for the plaintiffs, and Mr K Mihaly of Counsel appeared for the defendant.

The Issues

3        Maree’s claim against the estate failed.  She was served with a Calderbank offer which comprised a letter from Rose Lawyers dated 9 January 2014, followed by a letter from Rose Lawyers dated 14 January 2014.  The offer made in the letter dated 14 January 2014 was for the sum of $50,000 plus $10,000 costs.  The offer was rejected.

4        Mr Mihaly submitted that the offer met each of the demands of a Calderbank offer[1] and, therefore, that Maree should not recover costs from the estate.  Mr Mihaly informed me that no application was made by the defendant for Maree to pay the estate’s costs in defending her proceeding.

[1]Calderbank v Calderbank [1975] 3 All ER 333 and Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435

5        Dr Glover submitted that the Calderbank offer was defective because it included Maree’s costs.  I do not consider that to be a defect which renders the Calderbank offer to be ineffective because of what was said by Gillard J in M T Associates Pty Ltd v Aqua-max Pty Ltd & Anor (No 3).[2]In essence, Gillard J considered that an all in offer is an effective way in which to make a Calderbank offer because it does not present any real difficulty in the party upon whom the offer is served making an assessment of the offer in terms of the claim and costs.  Mr Mihaly made the point, which I accept, that whether the offer was $50,000 or $10,000 for costs or $60,000 all in, makes little difference.  What is important is that the offer is clear and enabled Maree to assess the offer.  I cannot see how she would have faced any difficulty making an assessment of that offer.

[2][2000] VSC 163, and also Metricon Homes Pty Ltd v Sawyer [2013] VSC 518

6        Therefore, Maree’s result is worse than the offer made to her, and on the face of it, presents an obstacle to her in obtaining an order for costs to be paid by the estate.

7        Mr Mihaly submitted that, if I accepted his submission that the estate should not pay Maree’s costs, then I should order that the costs be assessed in accordance with a “rule of thumb” apportionment as between the three plaintiffs, that is, Lyndal will obtain one third of the total costs of the plaintiffs, Paul will obtain one third of the total cost of the plaintiffs, and the remaining one third to be attributed to Maree should not be recoverable by the plaintiffs.

8        Mr Mihaly referred me to some authorities for that proposition.[3]  I do not think there is any doubt that judges now recognise that there may well be circumstances where a party should not be exposed to the payment of the whole of the successful party’s costs where the successful party is only partially successful.  Judges determine matters such as that by striking some sort of proportionality relevant to the recovery of costs.  That seems to have been what drove Croft J to make orders for costs of that kind in Metalicus.[4]

[3]Metalicus Pty Ltd v Metwholesale Pty Ltd (No 2) [2011] VSC 157

[4]Supra

9 Mr Mihaly referred me to s97(6) of the Administration and Probate Act 1958, which provides the Court “may” make an order to costs where, in the Court’s opinion, it is “just”. He also referred me to ss(7) which provides that, where the Court is satisfied that an application under Part IV has been made frivolously, vexatiously or with no reasonable prospect of success, the Court “may” make an order for costs against the applicant. He submitted that the legislature had, to use my words, drawn a line in the sand demonstrating that costs should be ordered to be paid by the estate only where it is just, and that part of the measuring of that is whether the proceeding is made frivolously, vexatiously or with no reasonable prospect of success.

10       Mr Mihaly referred me to a judgment of Gardner AsJ In the Matter of Moerth (No  2),[5] in which his Honour observed that, where an applicant has a weak claim, but has been advised that he/she is very likely to recover his/her costs from the estate, then there is nothing to discourage weak and unmeritorious claims being brought.  No doubt the legislature had that in mind when s97(7) was included in Part IV.

[5][2011] VSC 275 and Forsyth v Sinclair(No 2) (2010) 28 VR 635

Disposition

11       I do not intend to repeat my analysis of the law set out in my principal reasons.  It is enough for me to repeat that the category of applicants who may have merit in a claim, but not necessarily a meritorious claim, is not defined.  I refer to the observation that no one is ruled in nor is anyone ruled out.

12       I am firmly of the view that a daughter-in-law is not ruled out.  Whether a daughter-in-law is ruled in will very much depend upon the peculiar facts relevant to her relationship with the deceased assessed against the factors referred to in s91, and, in particular, ss(4)(e)-(p).

13       In giving consideration to Maree’s claim, I did not consider that it was without merit, but I did decide it was not meritorious.  That is inconsistent with the claim being frivolous, vexatious or with no reasonable prospect of success or being a weak or unmeritorious claim.

14       I am not persuaded that a claim under Part IV is analogous to litigation in the commercial world.  It is abundantly clear that the family provisions in Part IV are part of social engineering based upon a moral duty which is quite different from the legal duty by which commercial litigation is governed.  They recognise that even if the claim fails, that failure does not necessarily mean an exposure to an order for costs or a disentitlement from recovery of costs from the estate.

15       If the defendant had not served a Calderbank offer, then I would have considered myself unrestrained in considering Maree’s application for costs.  I would have granted her application.  I think I am obliged to give effect to the Calderbank offer, but not to the extent submitted by Mr Mihaly.  I think his resort to what occurred in Metalicus as authority for the proposition that proportionality should be governed in all litigation by the “rule of thumb” fails to pay regard to a number of factors which I consider are relevant in the exercise of my discretion.

16       The factors which I think are relevant for me to consider are as follows:

·        Maree’s evidence was essential to demonstrate the fabric of the relationship between Maree’s family and the deceased.

·        If she was not a party to the proceeding, then the instructions she gave, the affidavit she swore and her oral evidence would have nonetheless been critically important to the cases put by Lyndal and Paul.

·        Maree was not separately represented.  A proper decision was made by Maree, Lyndal and Paul to be represented by one firm of solicitors and one member of Counsel.

·        Every effort, so far as I can see, was made to run the litigation efficiently and with a view to cost effectiveness so that the real issues were exposed.  Indeed, the parties are to be congratulated for having run this litigation so efficiently.

·        Maree’s claim was not without merit; however, in the end, I considered it to be unmeritorious, but falling well short of being so weak or frivolous or vexatious or with no reasonable prospect of success.

17       In the circumstances, I think some proportionality is called for.  However, I am concerned not to have Lyndal and Paul penalised by reducing the costs which they are entitled to recover when, as far as I can see, it is very difficult to distinguish what costs are attributable to Maree as opposed to Lyndal and Paul.  I consider that it is a relevant consideration that they ran the litigation as if they were one party.

18       I will give effect to the Calderbank offer by making an order that 90 per cent of the costs of the plaintiffs be paid out of the estate.

19       I proposed to Counsel that rather than prolong this matter any further by requiring the parties to attend the Court only for the purpose of the delivery of this short ruling, that I would email the ruling to Counsel, which the parties would accept as an adequate delivery of the ruling binding upon the parties.

20       I will now leave it to Counsel to draft the relevant orders and submit them to me for approval.  I will remind the defendant that I must be provided with the probate parchment at the same time as the orders are submitted for my approval.

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