Manly v The Public Trustee of Queensland (No. 2)
[2008] QSC 47
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Appeal Determined (QCA)
- Manly v The Public Trustee of Queensland (No. 2)[2008] QSC 47
- Add to List
Manly v The Public Trustee of Queensland (No. 2)[2008] QSC 47
Manly v The Public Trustee of Queensland (No. 2)[2008] QSC 47
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 14 March 2008 |
DELIVERED AT: | Brisbane |
HEARING DATE: | Heard on the papers |
JUDGE: | McMeekin J |
ORDERS: | 1 That the respondent Public Trustee have its costs assessed on the indemnity basis and paid out of the estate; 2. That the beneficiaries have their costs incurred subsequent to 7 November 2007 assessed on the standard basis and those costs be paid out of the estate. 3. That otherwise there be no order as to costs. |
CATCHWORDS: | SUCCESSION – FAMILY PROVISION AND MAINTENANCE – PRINCIPLES UPON RELIEF GRANTED – APPLICATION OF SURVIVING PARTNER – rejection of application – costs – rejection of Calderbank offer - whether applicant’s unmeritorious conduct should result in bearing the burden of costs Succession Act 1981 (Qld) ss 40-44. UCPR r 361 Kozak v Matthews & Anor [2007] QSC 204 applied Singer v Berghouse (1993) 67 ALJR 708 cited Bowyer v Woods [2007] SASC 327 cited Sherbourne Estate (No. 2): Vanvalen & Anor v Neaves & Anor; Gilroy v Neaves & Anor (2005) 65 NSWLR 268 considered |
COUNSEL: | R Peterson for the applicant RT Whiteford for the beneficiaries A Collins for the respondent |
SOLICITORS: | Collas Moro Ross for the applicant McCowans for the beneficiaries Public Trustee for the respondent |
[1] McMEEKIN J: The applicant sought orders under Part 4 of the Succession Act 1981 for further provision for herself from the estate of her husband, Walter James Manly late of 28 Allinga Street, Coombabah in the State of Queensland, who died on 3 June 2005. On 18 December 2007 I made an order dismissing her application. The question of costs was adjourned for later consideration.
[2] I have now received written submissions from all parties and have been asked to determine the issue on the papers.
[3] On behalf of the beneficiaries an affidavit sworn on 5 February 2008 by Mr Kent William Dalziel, solicitor and member of the firm acting for the beneficiaries, was read. The affidavit shows that on 7 November 2007, about a month before the trial, Mr Dalziel served on the applicant’s solicitors a notice purportedly under Part 5 of Chapter 9 of the Uniform Civil Procedure Rules 1999 in which the beneficiaries offered to settle the applicant’s claim on the basis that payment be made to the applicant in the sum of $270,000 and the balance of the estate shared equally between the beneficiaries, with the applicant and the beneficiaries each bearing their own costs.
[4] I observe that under the terms of the deceased’s Will, the applicant was to receive 25 per cent of the residuary estate which would equate to about $115,000 after deduction of the Public Trustee’s costs of the proceeding but before any other costs of the proceedings were brought into account. Following my decision, that provision stands. The offer made by the beneficiaries was therefore considerably better for the applicant than my eventual decision.
[5] Mr Dalziel’s affidavit also shows that in response to that offer the applicant served on the beneficiaries a notice also purporting to be made in accordance with Chapter 9 Part 5 of the Uniform Civil Procedure Rules whereby she offered to settle on the basis that the Will be amended to give to the applicant the deceased’s house property absolutely and that the estate pay the costs of the applicant and the respondent on an indemnity basis. That, effectively was a claim, for all practical purposes, to the whole of the estate after costs.
[6] There is debate as to whether the provisions of Part 5 of Chapter 9 of the Uniform Civil Procedure Rules can apply to a case of this type i.e. where the application has been dismissed. The relevant rule, r 361, takes as its premise partial success by a claimant. My attention has been drawn to a decision of Helman J in Kozak v Matthews & Anor [2007] QSC 204 wherein he held that such offers should be treated as “Calderbank” offers: see Calderbank v Calderbank [1976] Fam. 93. I accept that view as correct. Effectively there is no prima facie rule as to the effect of such an offer as there would be with an offer under the UCPR. The offer, of course, remains a relevant consideration.
[7] Mr Peterson, who appeared on behalf of the applicant, submitted that the applicant ought to be reimbursed her costs from the estate. He supported that submission by reference to the following matters:
(a)The applicant is “hardly well off” (a quote from my own judgment at [102]) and hence it was not unreasonable for her to reject the offer to settle made as it was only one month prior to the trial date;
(b)If provision for costs are made out of the estate for both the respondent (i.e. The Public Trustee) and the beneficiaries (who are separately represented to The Public Trustee) then, by reasons of that double set of costs the estate will be substantially diminished which in turn will affect the applicant as she is entitled under the Will to 25 per cent of the residuary.
(c)Contrary to my finding in the case, the applicant does not have a capacity to gain employment to supplement her pension;
(d)The beneficiaries have “a roof over their heads” as well as being entitled to receive a benefit of something in excess of $100,000 “from their Uncle’s estate” – I assume a submission made in error as the beneficiaries were the sons of the deceased albeit that a substantial part of the estate did in fact come from the deceased’s brother, their Uncle.
(e)If the applicant’s costs were paid from the estate then she would obtain her full quarter share of the remaining estate as provided for in the Will.
[8] I would observe immediately in relation to (c) above that it is unhelpful, to say the least, to urge on me a consideration that relies on my reversing findings of fact made in the course of the trial.
[9] In relation to (e) there is good reason why the applicant should not expect to receive her full quarter share – her insistence that there be a trial and on issues on which she comprehensively lost. There is every reason to insist that parties endeavour to resolve claims, especially in modest estates as is this one.
[10] The Public Trustee and the beneficiaries each urge that their respective costs be paid by the applicant. Numerous matters are urged on me, the most cogent of which are these:
(a)The significant offer to settle made by the beneficiaries, which was far more advantageous to the applicant than my eventual decision;
(b)The nature of the applicant’s response which effectively was to claim the whole of the estate which compelled the matter to go to trial;
(c)That in the circumstances the applicant’s approach to the offer was unreasonable and the proximity of the offer to trial irrelevant;
(d)The estate is a modest one such that the impact of the payment of the applicant’s costs out of the estate would have a significant effect on the benefit that the beneficiaries receive from the estate;
(e)The practice direction that applies to applications of this type (No. 8 of 2001) including as it does a mandatory provision for “a dispute resolution plan designed to exhaust the prospects of consensual resolution of the application” exemplifies the modern approach to litigation namely to reduce costs and delay by encouraging early consensual resolution which approach will be encouraged and reinforced by making orders for costs in these circumstances;
(f)That the applicant set out to mislead the court and was less than candid about other issues – the court should be seen to be discouraging the prosecution of claims with the lack of candour;
(g)Although there was separate representation of the Public Trustee and the beneficiaries there was not a doubling up of costs as the Public Trustee took no active role in the proceedings save for informing the court as to the assets and liabilities of the estate, leaving it to the beneficiaries to conduct their defence of the application. That was the Public Trustee’s duty had the beneficiaries not stepped in.
[11] I observe that the Public Trustee took no part in the trial – the function of the executor was discharged by the beneficiaries - and that no evidence was led to indicate that there was any doubling up of costs or, if there was, the extent of it.
[12] I have been referred to a number of decisions in which courts have considered the principles that apply in cases of this type. In Singer v Berghouse (1993) 67 ALJR 708 at 709 Gaudron J had this to say about family provision applications in relation to an application before the appeal for security for costs:
“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.”
[13] More recently Debelle J sitting in the South Australian Full Court summarised the relevant principles in Bowyer v Woods [2007] SASC 327 as follows:
“In my opinion, the legislature 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 practice not to award costs against the plaintiff who failed, can no longer be accepted as a general proposition. …
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 issue 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.”
[14] The applicant’s claim for costs seems to me to be entirely without merit. Further, in my view, the beneficiaries and the respondent have a strong case for their costs to be met by the applicant. Her failure in the application, the modest size of the estate, her rejection of an offer, which on my findings was plainly reasonable, and her lack of candour in conducting the application, all provide powerful reasons why I should consider that the overall justice of the case should result in her bearing the burden of the costs.
[15] However I have come to the view that I should not order the applicant to pay the beneficiaries’ costs. The principal reasons for that are:
(a) That such an order would effectively take away the entire benefit the applicant might otherwise have received from the estate, in circumstances where she is not well off;
(b) The offer that the applicant rejected came at a stage when, I assume, a substantial amount of the costs had already been incurred;
(c) I am mindful of the difficulties in assessing and quantifying cases of this type by the parties and their legal advisers as commented on by Palmer J in Sherbourne Estate (No. 2): Vanvalen & Anor v Neaves & Anor; Gilroy v Neaves & Anor (2005) 65 NSWLR 268 at p 278;
(d) As I mentioned in my judgment I am concerned that an estate that essentially consisted of an ordinary residential dwelling and a sum of cash should incur costs totalling some $180,000 – about 40 per cent of the entire estate – to have the matter prepared and litigated. I do not think it just to expose the applicant to the whole of such a burden.
[16] But for the unmeritorious conduct of the applicant in her prosecution of her case there may have been reason to consider more favourably an order that the Applicant and the beneficiaries each pay their own costs, thereby preserving the applicants’ share of the residuary estate to the extent that was reasonably possible. However the principal matter debated at the trial centred on her relationship with the deceased in respect of which I found that she “set out to mislead the court”. The applicant undoubtedly caused significant costs to be needlessly incurred by the beneficiaries. It seems to me unjust that the beneficiaries bear the entirety of those costs.
[17] Balancing out these various considerations as best I can, and applying the principles referred to above, the orders that I make in relation to costs are as follows:
(a)That the respondent Public Trustee have its costs assessed on the indemnity basis and paid out of the estate;
(b)That the beneficiaries have their costs incurred subsequent to 7 November 2007 assessed on the standard basis and those costs be paid out of the estate.
(c)That otherwise there be no order as to costs.