- Unreported Judgment
SUPREME COURT OF QUEENSLAND
23 January 2012
On the Papers
That the applicant pay the respondent’s costs of and incidental to this proceeding:
(i) on the standard basis up and until 16 June 2010; and
(ii) on the indemnity basis thereafter.
PROCEDURE – COSTS – FAMILY MAINTENANCE AND PROVISION APPLICATION – where application unsuccessful - on which basis costs should be awarded
Succession Act 1981 (Qld)
Uniform Civil Procedure Rules 1999 (Qld)
Barton v Daley  QSC 322
Bowyer v Woods  SASC 327
Coombes v Ward (No 2)  VSC 84
Dawson v Joyner  QSC 385
Dobb v Hackett (1993) 10 WAR 532
Jvancich v Kennedy (No 2)  NSWCA 397
Kozak v Matthews  QSC 204
McCusker v Rutter  NSWCA 318
Mitchell v Gard (1863) 164 ER 1280
Nicholls v Hall  NSWCA 356
Re Sitch  VSC 383
Reddie v Cornock  NSWSC 187
Ritter v Godfrey  2 KB 47
Sherborne Estate (No 2): Vanvalen v Neaves (2005) 65 NSWLR 268
Singer v Berghouse (1993) 67 ALJR 708
Underwood v Underwood  QSC 107
G Crow SC & A Arnold for the applicant
L Nevison for the respondent
Johnson Law for the applicant
Rees R & Sydney Jones for the respondent
 McMeekin J: On 12 December 2011 I provided the parties with my reasons for dismissing Mr Garry Dawson’s application for family provision under Part IV of the Succession Act 1981 (Qld). I directed that the parties provide such submissions as they might be advised on any orders for costs that should be made.
 The applicant submits, notwithstanding his unsuccessful application, that his costs should be paid out of the deceased’s estate on the standard basis. The respondent contends that the costs in these proceedings should follow the event and be paid on the indemnity basis after an offer was made by the respondent.
 Costs may not always follow the event in family provision applications. All depends on the facts. This has long been recognised. As Gaudron J said in Singer v Berghouse:
“In most cases, costs follow the event in the sense that, saving special or extraordinary circumstances, costs are awarded in favour of the successful party against the unsuccessful one. ... even so, decisions [in family provision matters] involve a discretionary judgment of a very broad kind made by reference to the circumstances of the particular case and not by reference to a rule or rules which direct the decision one way or the other.
Family provision cases stand apart from cases in which costs follow the event ... costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate.” (emphasis added)
 I observe that in footnote 4 to her Honour's judgment she noted that it was said by Ross Martyn (Family Provision: Law and Practice, 1985) at p78 that in the United Kingdom an unsuccessful applicant "will be very lucky indeed if he gets his costs out of the estate".
 There has been some discussion in the cases in more recent times that touch on the ongoing applicability of Gaudron J’s remarks. In Jvancich v Kennedy (No 2)  NSWCA 397 at , Giles JA observed (with Handley JA and McColl JA agreeing) that the “overall justice of the case” is “not remote from costs following the event”. In Re Sitch  VSC 383 at  Gillard J said:
“In my opinion the legislature (in Victoria) has made it clear that in appropriate cases a costs order can be made against an applicant, and some of the old cases must now be approached with care. The old rule which, as I say, was a common practise not to award costs against the plaintiff who failed, can no longer be accepted as a general proposition.”
 Whether New South Wales continues to follow the approach explained by Gaudron J was queried but not resolved in Nicholls v Hall  NSWCA 356 where Mason P, Hodgson and McColl JJA said at :
“… we note that in times past, adverse costs orders have occasionally been withheld against plaintiffs who have (without misconduct in the proceedings) brought tenable yet ultimately unsuccessful claims under the Family Provision Act (see Mason & Handler, Succession Law and Practice NSW at ). This practice may have been seen as having some justification from a perceived desirability of minimising post-litigation conflict in family disputes, the availability in some cases of a significant fund the use of which could alleviate hardship on a losing party, and the circumstance that in some cases the decision was a marginal discretionary decision on which reasonable minds could differ. The Court was informed that this is no longer the practice of the Equity Division and that what may be termed general costs principles apply to these types of cases. Without endorsing or disendorsing the apparent change of practice, we would simply note that the point does not arise for consideration in this appeal.”
 However the continuing authority of Gaudron J’s observations seems to have been accepted more recently. In McCusker v Rutter  NSWCA 318 Young JA considered the principles that apply in family provision applications where the plaintiff was wholly unsuccessful (with Campbell and Handley AJA agreeing with the exposition of principles but disagreeing as to the orders):
“ The general rule is that “there is no power in the court to make a successful defendant pay the costs of an unsuccessful plaintiff. The reason is obvious: it is the plaintiff who brings the defendant into court.” London Welsh Estates Ltd v Phillip (1931) 144 LT 643 applied by the High Court in Hally v Dennis  HCA 41 ; 95 CLR 661 and by this court in Deen v Different Drummer Pty Ltd, 30 March 1978 (BC7800157). Here the order was not that the unsuccessful plaintiff get her costs from the successful defendant, but rather that no order for costs be made. Such cases are not as black and white as the ones I have just referred to, but even so, the authorities show that it is relatively rare that a court should make such an order.
 The leading case is the decision of the English Court of Appeal in Ritter v Godfrey  2 KB 47. At 60, Atkin LJ said:
‘In the case of a wholly successful defendant, in my opinion the judge must give the defendant his costs unless there is evidence that the defendant (1) brought about the litigation, or (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3) has done some wrongful act in the course of the transaction of which the plaintiff complains.’
 As to the third principle, his Lordship went on to say at p 61:
‘Such conduct must, however, be in the course of the transaction complained of.’
Earlier in his Lordship’s judgment he referred to Edmund v Martell (1907) 24 TLR 25 at 26, where Buckley LJ said:
‘The judge had no power to deprive the successful litigant of costs because in some matters not material he might think that that party should have behaved, say, with more courtesy or consideration.’
 Ritter v Godfrey has been followed on many occasions in this court, see eg Mitropoulos v Greek Orthodox Church (1993) 10 ACSR 134 per M McLelland J and Total & Universal Pty Ltd v Kingsway Property Investments (No 2) Pty Ltd  NSWSC 581 per Campbell JA. See also in the Federal Court Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 at 220–221 per Fisher J.
 A series of decisions at first instance show that there is some more flexibility where there has been an unsuccessful claim made under the Family Provision Act. In Singer v Berghouse  HCA 35; 114 ALR 521, 522 Gaudron J said:
‘Family Provision cases stand apart from cases in which costs follow the event. Leaving aside cases under the Act which, in s 33, makes special provision in that regard, costs in Family Provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate.’
 Examples of situations where courts have thought no order should be made against an unsuccessful plaintiff are afforded by Sherborne Estate (No 2) : Vanvalen v Neaves (2005) 65 NSWLR 268 per Palmer J and Moussa v Moussa  NSWSC 509 per Barrett J. Whilst it is clearer in a case where if an order for costs is made against an unsuccessful plaintiff he or she will instantly become impecunious and so may be able to make a fresh application under the Act so that it is counter-productive to make an order as to costs against such a plaintiff, what Gaudron J said in Singer shows that it is not only in such cases that it may be inappropriate to make an order for costs against an unsuccessful plaintiff under the Act.”
 How close one gets to the borderline, the nature of the relationship between the testator and the applicant, the basis on which the claim is brought, and the potentially crippling effect of any costs orders particularly where the orders will have minimal effect on the estate have been held to be relevant factors: Sherborne Estate (supra) per Palmer J; Coombes v Ward (No 2)  VSC 84; Reddie v Cornock  NSWSC 187.
 Where, as here, there has been an offer of compromise by the successful respondent, there are additional considerations relevant to the “overall justice of the case.” In Dobb v Hacket (1993) 10 WAR 532 Murray J said (at 540):
“The courts should preserve in the minds of litigants, the conscious consideration that their behaviour may place the matter at risk as to costs if they refuse reasonable offers of settlement. The court should be careful not to foster the proposition that obstinacy and unreasonableness will not be punished by orders as to costs.”
 In Bowyer v Woods  SASC 327 Debelle J (Nyland and Anderson JJ agreeing) undertook an examination of cases which led the Full Court of South Australia to conclude (at ):
“There is therefore, a substantial body of consistent opinion as to the rules which ordinarily operate in relation to an unsuccessful application. The principles are that, generally speaking, there will be no order as to costs of an unsuccessful application. The court may in its discretion make an order in favour of an unsuccessful applicant who makes a reasonable application founded on a moral claim or obligation. While it is unnecessary to decide the issues in this case, the cases also suggest that the court may in its discretion order an unsuccessful applicant to pay costs where the claim was frivolous or vexatious or made with no reasonable prospects of success or where the applicant has been guilty of some improper conduct in the course of the proceedings.”
 After reviewing these decisions Jones J concluded in Underwood v Underwood  QSC 107:
“Whilst there is no Queensland statutory equivalent to the Victorian provision referred to by Gillard J, the principles upon which the court’s discretion is now exercised has been similarly refined in the manner expressed by the Full Court of South Australia. The rejection of a reasonable offer of settlement is now more commonly seen as a basis for either denying a successful applicant some part of his or her costs or indeed, ordering payment to the estate of part of its costs.”
 In that latter case Jones J was influenced by an applicant’s “lack of appreciation of the extent of her true entitlement” and “reckless indifference to the rights of others” in requiring that the applicant pay costs, she having rejected an offer of compromise more favourable than his eventual decision.
 With those principles in mind I turn to the arguments in this case.
Factors to Consider
 In exercising my discretion, the applicant submits that I give weight to the following factors:
- the applicant was the deceased’s oldest son;
- the considerable size of the estate;
- there has been no suggestion of improper conduct by the applicant in the proceedings leading up or during the trial;
- the application was proper and reasonably brought;
- the rejection of the claim rested largely on the court’s subjective finding as to whether the Applicant had a “need” to be met from the estate;
- the difficulty in assessing and quantifying family provision cases;
- the Respondent’s offer to the Applicant was not a ‘commercial offer’ which in turn demonstrates that the respondent considered the application to be a reasonable one.
- bringing the matter before the court to be heard was a reasonable course when considering:
- the unusual facts and circumstances
- the common ground between the parties regarding the facts in issue
- the need for a formal hearing and submissions even in the event of a compromise being reached
 It is necessary to refer to factors (d), (e), (g) and (h). Before doing so I note two matters. The submission made at the hearing was that the applicant be awarded between 75% and 100% of the estate – an award of in excess of $2M. Secondly, the offer made by the respondent was that the estate pay to the applicant $175,000 plus costs on an indemnity basis and was made on 2 June 2010 following an unsuccessful mediation.
 My response to the applicant’s submissions is:
(a) To say that the claim “was proper and reasonably brought” is, on my findings, simply wrong. I have some considerable difficulty classifying this case as a borderline one. It was not based on any “moral claim or obligation” as envisaged in Bowyer v Woods  SASC 327. Further, this was not a case involving difficult findings of facts on contested material – the facts were well known to both parties and largely not in dispute. What dispute there was largely centred on the applicant’s claim to have reformed the relationship with his father at a time when the uncontested medical evidence was that his father was in an advanced state of senile dementia and unable to form relationships;
(b) In addition to the lack of “need” there were other important factors - the testator and the applicant were estranged. The applicant had pursued the testator with litigation which the testator considered – and not without some cause – to be unmeritorious. Whatever be the merits at that time, the effect of the testator’s actions then was that the applicant was treated generously when he was young and plainly on the understanding of both that the applicant’s claims on his father were at an end. Finally Ross’ competing claim on the deceased’s bounty was far superior to the applicant’s; 
(c) The offer was a commercial one – it no doubt was reached after considering the likely costs of resisting the claim. It was a timely offer made some 18 months before trial. It showed good judgment. To reject the offer was imprudent;
(d) The facts here are not so unusual. The need to seek a sanction of any compromise where there are only two competing potential beneficiaries who are in agreement hardly compares to the costs involved in a contested hearing with a significant amount of affidavit material;
(e) The applicant had a very unrealistic view of his entitlements.
 Whilst an award of costs against the applicant will not be welcomed by him it is not shown that such an order would prove significantly adverse to his financial position.
 There is nothing in the relationship between the testator and the applicant or the applicant’s conduct towards the testator that would put this case in any special category. If anything, what factors there are go against the applicant.
 I note that none of the factors mentioned by Atkin LJ in Ritter v Godfrey  2 KB 47 apply to the respondent executor here. And far from doing some wrongful act he attempted to save substantial costs by making a timely and well judged offer. Murray J’s observations in Dobb v Hacket (1993) 10 WAR 532 concerning the relevance of such offers are pertinent.
 The general rule is that costs follow the event. I cannot identify any cogent reason why the overall justice of the case would require some different approach. The making of a reasonable and timely offer makes plain that the estate should not be burdened with additional costs. As Sir J. P Wilde (as Lord Penzance then was) said in Mitchell v Gard (1863) 164 ER 1280 at 1281:
“The basis of all rule on this subject should rest upon the degree of blame to be imputed to the respective parties, and the question, who shall bear the costs? will be answered with this other question, whose fault was it that they were incurred?”
 Here it is the applicant’s fault that costs have been incurred.
 I order that the applicant pay the respondent’s costs of and incidental to this proceeding:
(i) on the standard basis up and until 16 June 2010;
(ii) on the indemnity basis thereafter.
 Dawson v Joyner  QSC 385.
 See r681 Uniform Civil Procedure Rules 1999 (Qld).
 (1993) 67 ALJR 708 at 709;  HCA 35.
 Best treated as “Calderbank offers” (see Calderbank v Calderbank  Fam 93) as explained by Helman J in Kozak v Matthews  QSC 204 – and so the offer is relevant but not decisive.
 Dawson v Joyner  QSC 385 at .
 Cf. Barton v Daley  QSC 322 at - per Ann Lyons J citing Mills CJ in Koorneef v Lewkowicz  ACTSC 81.
- Published Case Name:
Dawson v Joyner (No 2)
- Shortened Case Name:
Dawson v Joyner (No 2)
 QSC 24
23 Jan 2012
No Litigation History