JAB v Executors of MST [No 2][2023] QSC 51

SUPREME COURT OF QUEENSLAND

1. [1]
   This matter involved a four day trial where the plaintiff sought relief against the estate of her deceased former de facto partner, MST (“the deceased”) in relation to a property acquired by the deceased (“the property”), claiming that:

   1. (a)
      prior to the deceased completing the purchase, she and the deceased orally agreed to buy the property together on the basis that they would each contribute one half of the purchase price;
   2. (b)
      the plaintiff made financial contributions towards the acquisition and improvement of the property by payments to the deceased (which are particularised in her statement of claim);
   3. (c)
      unbeknownst to the plaintiff, the contract was prepared in the deceased’s name alone as purchaser; and
   4. (d)
      on 12 March 2016, the deceased executed a document, being a transfer in Form 1 and Form 24, transferring his right, title and interest in the property to himself and the plaintiff to be held as joint tenants.
2. [2]
   The plaintiff claimed:

   1. (a)
      a declaration that she is entitled to be registered as the sole proprietor of the property pursuant to the transfer executed by the deceased on 12 March 2016; or
   2. (b)
      in the alternative, a declaration that the defendants as the executors of the estate of the deceased hold any right, title and interest they may have in the property upon trust for the plaintiff and the deceased in equal shares, or, alternatively, in the proportions of their contributions to the property; or
   3. (c)
      in the alternative, equitable compensation in the amount of $205,670. 
3. [3]
   There were three issues to be determined at trial:

   1. (a)
      first, whether the Supreme Court has jurisdiction to determine these proceedings (“the jurisdiction issue”);
   2. (b)
      second, if this Court has jurisdiction, whether the deceased held the property on trust for the plaintiff and himself in equal shares or, alternatively, in the proportions of their contributions to the property (“the trust issue”); and
   3. (c)
      third, whether the deceased executed the transfer documents (“the transfer issue”).
4. [4]
   On 21 October 2022, I published my reasons which set out that the plaintiff was wholly unsuccessful.^[1] I found that:

   1. (a)
      the Supreme Court did not have jurisdiction to determine these proceedings;
   2. (b)
      even if the Court did have jurisdiction, the deceased did not hold the property on trust for the plaintiff and himself; and
   3. (c)
      the deceased did not execute the transfer documents.
5. [5]
   In this case, the defendants seek indemnity costs for:

   1. (a)
      the entirety of the proceedings; or
   2. (b)
      in the alternative, from a date when one of various offers to settle (referred to below) were made.
6. [6]
   The plaintiff submits that, consistent with rr. 681 and 702 of the Uniform Civil Procedure Rules 1999 (“the UCPR”) and the proper exercise of my discretion, costs should follow the event on a standard basis.
7. [7]
   The defendants and the plaintiff were represented at trial.
8. [8]
   I note that I intended to deliver my decision in this matter on 16 December 2022. However, on 15 December 2022, it became apparent that the plaintiff had filed an affidavit in this matter where she purported to represent herself. The representatives of the parties confirmed that they had not received copies of this affidavit, so copies were provided to them.
9. [9]
   On the morning of 16 December 2022, the plaintiff’s legal representative informed the court that the plaintiff wished to appear on her own behalf later that day, which she did.  However, Mr Hackett, the plaintiff’s counsel at trial, remained to assist the court.
10. [10]
    Courts cannot too readily be seen to be awarding indemnity costs.^[2]  In 2040 Logan Road Pty Ltd v Body Corporate for Paddington Mews CTS 39149 (No 2)  (“2040 Logan Road”) Burns J stated:^[3]

11. [11]
    In LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Tagio & Ors, Boddice J stated:^[4]

12. [12]
    In this instance, the defendants rely on three aspects which they submit separately and cumulatively warrant the grant of indemnity costs for all or part of the proceedings, being:

    1. (a)
       that the defendants were sued as executors of the estate of the deceased and, as part of the relief, declarations were sought by the plaintiff that they held an estate asset property comprising real property on trust for the plaintiff as trustees;
    2. (b)
       the fact that the matter was pursued, in part, on the basis that the deceased had executed a transfer which, it was alleged, gave the plaintiff a claim that the property was held for the plaintiff and defendants in equity as joint tenants; and
    3. (c)
       the unreasonable refusal to accept the various offers to settle.
13. [13]
    In my view, the defendants are entitled to indemnity costs on the third basis, i.e., the plaintiff’s unreasonable refusal to accept the various offers to settle.

Rejection of offers to settle

14. [14]
    The defendants made offers to settle on four occasions:

    1. (a)
       First offer: an offer on 27 July 2020 where the defendants offered to settle on payment to them of $40,000 and the removal of two caveats lodged by the plaintiff in relation to the property;
    2. (b)
       Second offer: an offer on 12 August 2021 where the defendants offered to pay the plaintiff $100,000 if the caveats were removed and the proceedings were discontinued. The parties were to bear their own costs. The offer was left open for fifteen days and rights were reserved to rely on the offer in seeking indemnity costs;
    3. (c)
       Third offer: an offer on 18 October 2021 which reopened the offer made on 12 August 2021 for a further fourteen day period; and
    4. (d)
       Fourth offer: an offer on 8 December 2021 to settle proceedings where the defendants effectively offered to pay the plaintiff $150,000. The offer was left open for fourteen days and the defendants reserved the right to rely on the offer.
15. [15]
    Clearly, the last three offers would have resulted in the payment of a substantial sum by the defendants to the plaintiff which would have left her in a far better position than she found herself in after judgment.
16. [16]
    In relation to whether the plaintiff unreasonably rejected an offer, I have considered all of the circumstances of the case including the following matters raised by Burns J in 2040 Logan Road:^[5]

In considering whether the rejection of a Calderbank offer was unreasonable or imprudent, the court should ordinarily have regard to the stage of the proceeding at which the offer was received; the time allowed to the offeree to consider the offer; the extent of the compromise offered; the offeree’s prospects of success, assessed as at the date of the offer; the clarity with which the terms of the offer were expressed; and whether an application for indemnity costs was foreshadowed in the event that the offeree rejected the offer.

17. [17]
    In contrast to the first offer, each of the subsequent offers, starting with the 12 August 2021 offer, were clear, reasonable and capable of acceptance.
18. [18]
    Those offers each provided for the defendants to pay a sum to the plaintiff.
19. [19]
    The defendants characterise these offers as extremely generous, particularly having regard to the issue relating to the execution of the transfer and the conduct of the case generally by the plaintiff. The defendants submit that there is little doubt that the plaintiff acted unreasonably in rejecting those offers.
20. [20]
    I accept that the offers were made at a point in the litigation where the parties were well aware of the issues in the proceeding. 
21. [21]
    By the time the 12 August 2021 offer was made, the proceedings had been on foot for over two years. A number of documents had been filed, and a contested application in respect of the issue of jurisdiction had been heard by Boddice J on 15 June 2021.
22. [22]
    The defendants submit that the plaintiff must have been well aware at the date of the offers of the case she would mount at trial, and the risks associated with it. I accept that on each occasion, she was in a position to accept the offers.
23. [23]
    The plaintiff accepts that she rejected the defendants’ offers. However, the plaintiff submits that her conduct in rejecting their offers was not unreasonable given what was at stake to her in the proceedings and therefore she should not be visited with an indemnity costs order.
24. [24]
    In her affidavit, she sets out the reasons why she should not bear the defendants’ costs. These reasons mostly consist of raising, again, matters which were determined at the trial.
25. [25]
    The plaintiff set out in her affidavit the reasons why she should not bear the defendants’ costs, for example:

3. 29.
   I had to keep fighting for what I believe is fair due to the deceased’s and my relationship and our agreement regarding the purchase of [the property]. Although my name was not on the title deed I was still half owner of the house.

3. 30.
   By the deceased signing the Transfer documents, it acknowledged my financial input to the purchase of [the property], allowing me at least 50% of any proceeds from the sale.

3. 31.
   I have always believed because I paid for half of [the property] I’d also be entitled to half of the proceeds from the sale of the property.

26. [26]
    She reiterated these matters in her oral submissions to me where she made submissions on her own behalf. 
27. [27]
    The plaintiff made it clear that she did not accept the offers made by the defendants because she thought she had put 50 per cent into the house, so she should get 50 per cent of whatever the sale price was. She did not see the offers as reasonable.
28. [28]
    In her affidavit, the plaintiff also raises a number of grievances against the deceased.
29. [29]
    The plaintiff’s counsel’s written submissions summarise her position in this way:

Finally, while the plaintiff accepts that she rejected the defendant’s offers, it is submitted that her conduct in doing so was not unreasonable given what was at stake to her in the proceedings and should not be visited with an indemnity costs order.

30. [30]
    As I have already stated, the submissions the plaintiff made, like her affidavit, often raised claims she had made in the trial, and which I had made adverse findings on. She particularly contested my finding that the deceased had not executed the transfer.
31. [31]
    She stated that she did not have the money to pay a costs order.
32. [32]
    The defendants tendered a title search which showed that the plaintiff owned a property with two mortgages. The plaintiff confirmed that she lived in this house and that it is all she has got.
33. [33]
    I have taken into account all of the matters raised by the plaintiff in her affidavit and submissions to me. I also have taken into account her counsel’s submissions whereby he stated:

Your Honour has to determine objectively whether the refusal of the offers was unreasonable. And [the plaintiff’s] case has always been that she had at least an agreement to contribute half the purchase price and a half interest…

… your Honour knows her evidence was also supported by the Justice of the Peace and another handwriting expert, which your Honour hasn’t accepted, I accept. But when you view that conduct objectively, the decision you have to make was, was her conduct unreasonable in the face of the competing evidence and her own evidence. And that’s why I made the submission it wasn’t.

… [The plaintiff] gave evidence of an oral agreement with the deceased to acquire the property in equal shares and contribute half the purchase price. She gave evidence, and your Honour knows it was admitted that she had contributed at least $50,000 towards the purchase price. She contended she contributed up to the full half. But even the defendant’s conceded, she contributed 50,000 towards the purchase.

34. [34]
    I have considered the issues he raises. However, in my view, the plaintiff’s refusal of the offers including and after the offer on 12 August 2021 was unreasonable.
35. [35]
    The offers were made at an advanced stage in the proceedings when her prospects of success should have been clear to her, as the pleadings had been filed.   
36. [36]
    Each of the last three offers were made at advanced stages of the litigation where the parties were well aware of the issues. The proceedings had commenced on 4 June 2019. After the filing of a reply on 19 December 2019, an amended statement of claim was filed on 9 November 2020. The issue of jurisdiction was raised before Boddice J on 15 June 2021 and a second further amended statement of claim filed on 16 June 2021.
37. [37]
    The offer of 12 August 2021 (and the subsequent offers) was made a long time into the litigation whereby the plaintiff was well aware of her position.  
38. [38]
    The offers were generous and in significantly more favourable terms to her than the ultimate judgment, where I found her to be wholly unsuccessful. 
39. [39]
    The plaintiff was given appropriate time to consider the offers, and the defendants clearly reserved the right to rely on the offer made on 12 August 2021 in making an application for indemnity costs.^[6]
40. [40]
    In all of the circumstances, the plaintiff’s rejection of these offers was unreasonable.
41. [41]
    Accordingly, in all of the circumstances, I consider that the plaintiff should pay the defendants’ costs of the proceedings to be assessed on the standard basis until 11 August 2021, and on an indemnity basis thereafter. 

Orders

42. [42]
    I order that the plaintiff pay the defendants’ costs of the proceedings to be assessed on the standard basis until 11 August 2021, and on an indemnity basis thereafter.