Whitington v Whitington (No 2) - [2009] SASC 178

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
WHITINGTON v WHITINGTON & ANOR (NO 2)
[2009] SASC 178
Judgment of The Honourable Justice White
26 June 2009
PROCEDURE - COSTS
Following a trial which decided a series of claims regarding a deceased estate, the parties to the action applied for various orders as to costs.
Whether r 76 of the Supreme Court Rules 1987, which governs the costs of a Court conducted mediation, should extend to the costs incurred by the parties in the period between two attempts at mediation - only those costs which related to one or other of the mediations will form part of the a costs order made in respect of the mediations.
Whether the first defendant should pay the plaintiff's costs of and incidental to an appeal he lodged against an order of a Master of this Court when the orders made at trial reflected the order of the Master - first defendant to pay the plaintiff's costs of and incidental to the appeal.
Whether each party should recover their costs from the estate from the plaintiff's successful claim under the Inheritance (Family Provision) Act 1972 (SA) (IFP Act) - whether the plaintiff should pay the defendants' costs of her successful IFP Act claim - whether, having regard to the size of the estate, less than full costs should be awarded - no basis found upon which plaintiff should pay costs of defendants - all parties to recover from the estate their costs of and incidental to the plaintiff's IFP Act claim - due to the size of the estate, these costs to be party/party costs only.
Whether the estate should pay the costs of the defendants' unusccessful IFP Act claims - as defendants' IFP Act claims abandoned, estate should not pay these costs - no order made as to costs of defendants' IFP Act claims.
Whether defendants should pay to the estate the costs it incurred in defending allegations and claims made by the defendants against the estate - whether defendants raised issues unnecessarily - whether conduct of defendants in pursuing claims until the eve of trial caused the estate to incur unnecessary costs - conduct of defendants caused the estate to incur additional costs - defendants to pay estate for costs incurred in defending the allegations and claims they raised.
Inheritance (Family Provision) Act 1972 (SA) s 9; Administration and Probate Act 1919 (SA) s 51; Supreme Court Act 1935 (SA) s 65; Supreme Court Rules 1987 r 52, r 76; Trustee Act 1936 (SA) s 35, referred to.
Whitington v Whitington & Anor [2009] SASC 142; Parente v Parente & Porter (1982) 29 SASR 310; Re McCaffrey (1982) 29 SASR 582; Bowyer v Wood (2007) 99 SASR 190, applied.

WHITINGTON v WHITINGTON & ANOR (NO 2)
[2009] SASC 178
Civil

WHITE J: On 21 May 2009, I delivered judgment on the plaintiff’s application under the Inheritance (Family Provision) Act 1972 (SA) (IFP Act).[1] I found that the late Philip Henry…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Whitington v Whitington (No 2)

Details

AGLC: Whitington v Whitington (No 2) [2009] SASC 178
Case: [2009] SASC 178
Decision Date: 26 June 2009

CaseChat Overview and Summary

Whitington v Whitington (No 2) involved a dispute over the costs incurred in the litigation between the plaintiff, acting as the executor of Philip's estate, and the defendants, Timothy and the Commonwealth Bank, over the administration of the estate and certain claims under the Invalid and Intestacy Provisions Act 1984 (SA) (IFP Act). The court had to determine how the significant costs, which exceeded the value of the estate, should be allocated among the parties. The plaintiff had incurred costs of approximately $125,000, while the defendants had incurred costs of approximately $100,000. The total costs far exceeded the agreed net value of Philip’s estate at the time of his death.

The central legal issues before the court were the allocation of costs incurred by the parties and the appropriateness of the costs in relation to the value of the estate. The court needed to consider the costs associated with the appeal by Timothy against the orders made by the Master and the directions made by the trial judge. Additionally, the court had to determine the costs related to the plaintiff’s defence against the claims made by the defendants and the plaintiff’s own claims under the IFP Act. The court also needed to decide on the costs of mediations held during the proceedings.

The court ruled that Timothy should pay the plaintiff's costs in relation to the appeal and the directions made on 12 April 2006, as Timothy effectively abandoned the claims he raised in his grounds of appeal by not pursuing them at trial. The court also decided that the costs of the mediations should be borne by the parties themselves. Furthermore, the court ordered that the costs of the plaintiff’s IFP Act claims be taxed or agreed on a party/party basis and paid by the estate. The court made no order regarding the costs of the defendants’ own IFP Act claims. Finally, the court ordered that the plaintiff's costs as executor of the estate and incidental to obtaining probate and administering the estate be taxed or agreed as between solicitor and client and paid out of the estate.

Orders

Orders of the court

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Background

Background to the litigation

The costs issues in this action are significant. On the first day of trial I was informed that the total costs incurred by the plaintiff in relation to this litigation were of the order of $125,000, and that the total costs incurred by the defendants were of the order of $100,000. Costs of this order are quite disproportionate to the size of Philip’s estate. The total costs of the parties exceeds the agreed net value of Philip’s estate at the time of his death on 23 April 2001 ($202,547). Even allowing for the increase in the net value of the estate which is attributable to the increase since Philip’s death in the value of the Glenelg property, the costs incurred by the parties are disproportionate to the amounts at stake in the litigation.Background In order to provide some context to the issues concerning costs, it is necessary to outline the background to the proceedings. Philip died on 23 April 2001. The plaintiff was granted probate of his will on 13 February 2004. Philip intended to provide for the plaintiff by giving her a life interest (terminable in the event of her remarriage) in his half interest in the Glenelg property with the intention that the plaintiff could continue to reside in it. On the death or remarriage of the plaintiff, the interest in this property was to pass to Timothy. As I found in my reasons of 21 May 2009, there were two difficulties with that bequest. First, the estate’s liabilities well exceeded its liquid assets, with the consequence that the plaintiff could discharge those liabilities only by selling the estate’s interest in the Glenelg property. Secondly, the fact that Philip owned only one half of the Glenelg property meant that he could not pass to the plaintiff a right to exclusive possession or occupation of it. In 2004, the plaintiff proposed selling the estate’s interest in the Glenelg property with a view to discharging the estate’s liabilities and with a view to acquiring more suitable accommodation. In relation to the sale of the property in order to discharge debts, the plaintiff was proposing to exercise the powers vested in her as executor by s 51(1) of the Administration and Probate Act 1919 (SA) (APA). The defendants were opposed to a sale of the property as it had been held in the Whitington family for over 100 years. Timothy lodged a caveat on the estate’s title to the Glenelg property, forbidding the registration of any dealing with the estate’s interest unless such dealing was made subject to the interest he had in the property arising under Philip’s will. The plaintiff commenced these proceedings on 12 September 2005, seeking an order for the removal of Timothy’s caveat. Prior to the commencement of these proceedings, the Commonwealth Bank had commenced proceedings against the estate to enforce the payment to it of a liability incurred by Philip during his lifetime. The plaintiff’s application for the removal of the caveat was successful. On 8 February 2006, a Master of this Court made orders directing the Registrar General to remove the caveat and, to the extent that it was necessary to do so, conferred power on the plaintiff under s 51 of the APA to sell the estate’s interest in the Glenelg property, subject to a condition that, after paying the costs of sale and discharging the estate’s liability to the Commonwealth Bank, the net proceeds of sale be paid into the Suitors’ Fund to abide the further order of this Court. Subsequently, the Master ordered that the costs incurred by both the plaintiff and Timothy relating to the plaintiff’s application should be paid from the estate as an expense of the administration.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

I consider that there should be no order as to the costs of the defendants’ own IFP Act claims.Conclusion In summary, for the reasons given above, the orders as to costs are these:1.The first defendant is to pay to the estate the costs of and incidental to his appeal against the orders made by the Master on 8 February 2006 and 16 February 2006 and of and incidental to the directions made by Sulan J on 12 April 2006;2.The first defendant is to pay to the estate the costs incurred by the plaintiff to 25 May 2008 in defending the allegations and claims made in the Statement of Claim filed on 8 May 2006;3.The first and second defendants are to pay to the estate the costs incurred by the plaintiff in defending the allegations and claims made in the Amended Statement of Claim filed on 26 May 2008, other than the costs of defending their respective claims under the IFP Act;4.The costs of all parties of and incidental to the plaintiff’s claim for provision under the IFP Act made in the Counterclaim filed on 30 May 2008 are to be taxed or agreed on a party/party basis and paid by the estate;5.The parties are to bear their own costs of the mediations held on 31 October 2006, 15 November 2007 and 18 December 2007;6.The plaintiff’s costs as executor of the estate of and incidental to obtaining Probate and administering the estate are to be taxed or agreed as between solicitor and client and paid out of the estate;7.I make no order with respect to the costs of the defendants’ own IFP Act claims;8.I will hear from the defendants as to whether any order for contribution as between themselves is appropriate;9.Order No 2 made by Sulan J on 18 December 2007 is amended so as to permit the documents sealed up under that order to be opened by an order of a Judge or Master. I will hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

The parties were agreed that each should bear their own costs in respect of the mediations of 31 October 2006, 15 November 2007 and 18 December 2007. The defendants contended, in addition, that the parties should bear their own costs in respect of all attendances before Sulan J in the period from 14 September 2006 to 18 December 2007 inclusive and in respect of all documents filed in the Court in the period from 30 October 2006 to 15 November 2007 inclusive. I see no reason to make the additional order proposed by the defendants. It will be a matter for the Master carrying out the costs adjudication to determine whether the attendances and documents referred to formed part of the mediations conducted before Sulan J. If they did, then they will be subject to the order for costs of the mediation which I will make (which will accord with r 76.03(f)). If they do not, the costs of and incidental to those attendances and documents will be recoverable only if they are the subject of some other costs order.Administration of the Estate It was common ground that the plaintiff is entitled, pursuant to s 35(2) of the Trustee Act 1936 (SA), to recover from the estate the costs incurred by her in administering the estate. The Appeal from the Orders of Judge Withers By the order made by Sulan J on 12 April 2006, the costs of the appeal and of the orders and directions made by him on that day were reserved to the trial Judge. The plaintiff submitted that Timothy should pay her costs of and incidental to that appeal. Timothy opposed that order. In my opinion, it is appropriate that Timothy pay the plaintiff’s costs in relation to the appeal and in relation to the directions made on 12 April 2006. The costs should be paid to the plaintiff in her capacity as executor. It is inappropriate to attempt a differentiation between the costs incurred by the plaintiff in relation to the appeal in her capacity as executor, creditor and beneficiary of the estate. There are two reasons why I consider it appropriate for Timothy to pay those costs. First, Timothy’s grounds of appeal raised several of the matters which were subsequently pleaded by him in the Statement of Claim filed on 8 May 2006. Timothy effectively abandoned those claims by not pursuing them at trial. Secondly, the effect of the orders made on 21 May 2009 after the trial is substantially similar to the orders made by the Master on 8 February 2008, namely, removal of the caveat, sale of the Glenelg property and payment into Court of the net proceeds to abide a further order of the Court. Even if, as Timothy submitted, the appeal was “subsumed” by the subsequent mediation conducted before Sulan J, it did involve the incurring of costs by the estate. Sulan J obviously intended that the final determination of the issues between the parties should be a relevant matter in the determination of the costs of the appeal. In that respect, Timothy has failed and in my opinion, he should pay the costs of the appeal and of the directions made on 12 April 2006. The Plaintiff’s IFP Act Claim