Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Barbieri v Pirovic [2022] NSWCA 76 Hearing dates: 25 May 2022 Date of orders: 25 May 2022 Decision date: 25 May 2022 Before: Gleeson JA; Mitchelmore JA Decision: (1) Refuse the application for extension of time to file the summons seeking leave to appeal. (2) Summons seeking leave to appeal filed 25 February 2022 be dismissed. (3) Applicant to pay the respondents' costs in this Court. Catchwords: LEAVE TO APPEAL – whether extension of time should be granted – where significant delay of 10 months – where applicant had legal advice – where applicant's earlier notice of appeal challenging principal judgment and costs orders dismissed as incompetent – where applicant now sought extension of time to challenge only costs orders – whether fairly arguable case for leave to appeal Legislation Cited: Civil Procedure Act 2005 (NSW), s 56(1) Supreme Court Act 1970 (NSW), s 101(2)(c) Succession Act 2006 (NSW) Uniform Civil Procedure Rules 2005 (NSW), rr 42.25(1), 42.25(2), 51.2 Cases Cited: Arena Management Pty Ltd (Receivers and Managers apptd) v Campbell Street Theatre Pty Ltd (2011) 80 NSWLR 652; [2011] NSWCA 128 Blackmore v Browne; Kara Kar Holdings Pty Ltd v Blackmore [2011] NSWCA 114 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458 Muriniti v Mercia Financial Solutions Pty Ltd [2021] NSWCA 180 Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 Category: Principal judgment Parties: Anita Victoria Barbieri (Applicant) Antun Pirovic (First respondent) Zorina Pirovic (Second respondent) Representation: Counsel: Mr J Tomaras (Sol) (Applicant) Mr M Auld (Respondents) Solicitors: William Roberts Lawyers (Applicant) Delaney Lawyers (Respondents) File Number(s): 2022/56060 Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2021] NSWSC 335 Date of Decision: 31 March 2021 Material date: 23 April 2021 Before: Sackar J File Number(s): 2019/199597 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. THE COURT: The applicant, Anita Barbieri, seeks leave to appeal from a decision of Sackar J on 31 March 2021 that (1) the applicant pay Antun and Zorina Pirivic's costs of the proceedings below on an ordinary basis, (2) the applicant pay such costs without indemnity from the estate of the late Frank Bakaric, and (3) the applicant pay her own costs of the proceedings below personally and without indemnity from, or recourse to, the estate of the late Frank Bakaric: Pirovic v Barbieri [2021] NSWSC 335 (the costs judgment). The premise of the leave application is that leave is required because the proposed appeal is as to "costs only which are in the discretion of the Court": Supreme Court Act 1970 (NSW), s 101(2)(c). (This premise is considered below at [39]ff.) The applicant also seeks an extension of time for leave to appeal, as the leave application is 10 months out of time. Background 1. Frank Bakaric died on 14 December 2015. The applicant is the second wife and executrix of the deceased's estate. The second respondent, Zorina Pirovic, is the deceased's daughter. The first respondent, Antun Pirovic, is Zorina's husband. 2. The proceedings below were commenced by the Pirovics on 27 June 2019 against the applicant seeking a discharge of a mortgage, together with a declaration as to the amount secured by a mortgage (the mortgage proceedings). The mortgage was granted by Zorina Pirovic in favour of Universal Associates Australia Pty Ltd (Universal) on 1 February 1983 over her 75 per cent interest in a property at Old South Head Road securing an amount of $161,500. Antun Pirovic held a 25 per cent interest in the mortgaged property. Frank Bakaric was a director and principal shareholder of Universal. On 23 December 2002, Universal transferred the mortgage to Frank Bakaric for $1.00. The applicant brought a cross-claim as executrix of the deceased's estate asserting that the amount secured by the mortgage was $1,918,382.69. 3. Although the full terms of the deceased's will were not before the Court, it is common ground that the applicant was a residuary beneficiary of the deceased's estate. The applicant had also brought separate proceedings against the estate in July 2019 making a family provision claim under the Succession Act 2006 (NSW) (the FPA proceedings). 4. On 10 July 2019, Pembroke J ordered that the sum of $1,918,382.69 be placed into a controlled monies account upon completion of the sale of the mortgaged property. That occurred. 5. Although the hearing of the mortgage proceedings was expedited and fixed for trial in October 2019, and again in June 2020, the hearing did not proceed until October 2020. On 21 October 2020, Sackar J ordered that the FPA proceedings be heard subsequent to the mortgage proceedings. 6. Prior to the hearing, orders were made by consent on 23 June 2020, which included that the sum of $161,500 be paid out of the controlled monies account to the deceased's estate in satisfaction of the principal amount under the mortgage. Thus, the essential issue at trial was whether the amount secured by the mortgage was $185,262 of which $161,500 had already been paid to the deceased's estate (being the Pirovics' alternative position) or $1,918,382.69 as contended for by the applicant. 7. On 21 December 2021, the primary judge delivered judgment and held that the mortgage secured an amount of $185,262 and that the applicant's cross-claim should be dismissed: Pirovic v Barbieri [2020] NSWSC 1892 (the principal judgment). 8. The applicant filed a notice of intention to appeal on 18 January 2021. Orders with respect to the principal judgment were made on 5 February 2021. On 26 March 2021, senior counsel then appearing for the applicant before Sackar J informed the Court that the applicant, having received legal advice, did not propose to appeal the principal judgment. The parties then made submissions on the issue of costs and Sackar J delivered the costs judgment on 31 March 2021. 9. The applicant discontinued the FPA proceedings by leave granted by Hallen J on 26 May 2021. Costs judgment 1. The costs judgment addressed three issues: (a) whether there should be some apportionment of costs between the Pirovics as plaintiffs and the applicant as defendant/cross-claimant; (b) whether the applicant should be indemnified out of the deceased's estate; and (c) whether the applicant should pay costs on an indemnity basis. 2. As to (a), the primary judge concluded that there should be no apportionment because although the plaintiffs had failed on some issues, the great preponderance of the time and effort was clearly spent on whether there had ever been a demand for repayment of the mortgage and all other matters played little, if any, tangible part in the trial: at J [13]. Moreover, the defendant was wholly unsuccessful on that substantial issue and the judge considered that any apportionment would be an entirely artificial exercise and not a true reflection of the central factual issue contested at trial: at J [14]. 3. As to (b), after referring to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.25(1), and the exception in r 42.25(2), the primary judge concluded that the defendant should not be indemnified out of the estate, finding that, in an attempt to bolster her case, the applicant had contended that her monies were used in loaning monies to the Pirovics and that she was advancing her own interests in the proceedings. It is appropriate to set out the judge's reasons at J [20] in full: This was not a case about the terms of the will which were left unclear and it was not a problem in my view caused by the testator. I found he never made the various promises attributed to him by the Defendant and that assertion was, for example, contrary to his own hand written statement made at about the same time as his will in 2011. In the contemporaneous written materials there was no support for the Defendant's case as I saw it. The case concerned a mortgage and its terms. True the question was whether the amount owed was an estate asset but that litigation was collateral to the will as such. It should be observed that in order to bolster her case the Defendant asserted that some of her funds were used to lend to the Plaintiffs. I consider it is fair to submit as the Plaintiffs do that the Defendant was advancing her own interests in the litigation in substance. For these reasons I am of the view the Defendant should not be indemnified out of the estate. 1. As to (c), although the primary judge had rejected the applicant's evidence, he was not prepared to find that the applicant came to court intent on perjuring herself. Further, although there was a paucity of contemporaneous documents to support the applicant's position and there was a significant amount of apparent exaggeration on her part, which the judge characterised as "not a happy mix", on balance he was not prepared to find that the applicant acted so unreasonably as to justify a special costs order: at J [23]-[24]. Extension of time 1. When the judge delivered his reasons for the costs judgment on 31 March 2020, he did not actually make orders. He left it to the parties to formulate orders consistent with his reasons. As a consequence of the applicant's delay in responding to the terms of the orders proposed by the plaintiffs, this did not occur until 23 April 2021. Hence, the "material date" within the meaning of UCPR, r 51.2, from which time limits concerned with appeals and applications for leave to appeal are measured, is the making of the orders on 23 April 2021: Blackmore v Browne; Kara Kar Holdings Pty Ltd v Blackmore [2011] NSWCA 114 at [9] (Campbell JA). 2. On 27 October 2021, the applicant filed a notice of appeal against the principal judgment and costs judgment; the applicant was then self-represented and the notice of appeal was well out of time. On 13 December 2021, Brereton JA made orders that the applicant file a notice of motion, together with a supporting affidavit, seeking an extension of time to file the notice of appeal by 14 January 2022 and, if not filed by that date, the appeal be dismissed. The applicant did not comply with the filing order. On 18 January 2022, the Registrar of this Court ordered that the appeal be dismissed as incompetent. 3. On 15 February 2022, Sackar J made a lump sum costs order in favour of the respondents in an amount of $393,091.81, following a judgment delivered on 11 November 2021: Pirovic v Barbieri [2021] NSWSC 1460. His Honour had delayed entering orders pending the outcome of the appeal proceedings. 4. The applicant filed the present summons seeking leave to appeal on 25 February 2022. The proposed appeal only seeks to challenge the costs orders made on 23 April 2021. 5. The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties, bearing in mind that upon the expiry of the time for appealing (or, in this case, seeking leave to appeal), the respondent has "a vested right to retain the judgment": Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458 (at 459) per McHugh J. The factors of general relevance to the exercise of the discretion to extend time are the length of the delay, the reason for the delay, whether the applicant has a fairly arguable case and the extent of any prejudice suffered by the respondent: Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 (at [55]) per Basten JA. 6. Here, the delay of ten months is significant. Reasons for the delay 1. The applicant advanced two reasons to explain the delay. One was that she had instructed Tzovaras Legal on about 12 July 2021 to pursue an appeal, however, Mr Ted Tzovaras suffered a stroke on 21 August 2021 and that firm ceased to act for the applicant on 11 September 2021. The other was that the applicant was unable to comply with the orders made by Brereton JA on 13 December 2021 with respect to seeking an extension of time for the notice of appeal filed on 27 October 2021 (see [16] above) because she was physically and mentally unwell around Christmas 2021 and not in a position to deal with the matter. 2. There are difficulties with the applicant's explanation for the delay. One is that explanation was less than fulsome. The applicant failed to disclose in her affidavit sworn 22 February 2022 that her then senior counsel had informed Sackar J on 26 March 2021, that the applicant, having received legal advice, did not propose to appeal the principal judgment. 3. Nor did the applicant explain her failure to inform the Pirovics or the Court below that by at least mid-July 2021 she had changed her mind and intended to appeal, which she did by filing a notice of appeal out of time on 27 October 2021. That failure occurred in circumstances where the proceedings below were mentioned before Sackar J on 11 occasions between 23 April and 22 October 2021 and cost were being incurred by the Pirovics in pursuing the lump sum costs application. 4. As counsel for the Pirovics correctly submitted, the applicant's affidavit also does not meaningfully explain why, given she had the benefit of legal advice from three different firms of solicitors, and had filed a notice of appeal apparently while self-represented, the applicant's solicitor did not bring to the Court's attention, on 13 December 2021, her asserted physical or mental incapacity to comply with court orders when Brereton JA fixed the time for filing a notice of motion for an extension of time to appeal together with a supporting affidavit. 5. The obligation to ensure the just, quick and cheap resolution of the real issues (Civil Procedure Act 2005 (NSW), s 56(1)) is imposed on all parties to civil proceedings, whether or not they are represented. Time periods are fixed for steps to be taken in legal proceedings to ensure the efficient disposition of proceedings, that they do not become stale and to provide finality of legal disputes. Here, the applicant delayed filing an appeal for over 7 months, and then failed to prosecute her appeal, leading to its dismissal. The applicant now seeks to advance the same grounds of appeal against the costs judgment as were included in the notice of appeal which was dismissed as incompetent because it was out of time. 6. The applicant's explanation for the delay is unsatisfactory. Whether there is a fairly arguable case 1. The proposed appeal does not raise any issue of principle or question of general importance. The application for an extension of time directs attention to whether the applicant has a fairly arguable case for leave to appeal on the basis that she has suffered an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. It is well-established that it is not sufficient merely to show that the trial judge was arguably wrong: Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]. 2. The applicant relies upon three interrelated arguments. First, the applicant contends that the primary judge failed to consider UCPR, r 42.25(1). 3. Second, the applicant contends that the primary judge erred in the exercise of the costs discretion in not apportioning costs or making each party pay their own costs. 4. Third, the applicant contends that in finding that the applicant should pay the costs personally, but not on an indemnity basis, the primary judge made an error in reasoning which the applicant attributes to the adverse credit findings made against the applicant. 5. UCPR, r 42.25 provides: 42.25 Costs of trustee or mortgagee (cf SCR Part 52A, rule 42) (1) Subject to subrule (2), a person who is or has been a party to any proceedings in the capacity of trustee or mortgagee is entitled to be paid his or her costs in the proceedings, in so far as they are not paid by any other person, out of the fund held by the trustee or out of the mortgaged property, as the case may be. (2) The court may order that the person's costs not be so paid if— (a) the trustee or mortgagee has acted unreasonably, or (b) in the case of a trustee, the trustee has in substance acted for his or her own benefit rather than for the benefit of the fund. 1. The difficulty with the first argument is that the primary judge clearly had regard to r 42.25(1) and the exception in sub-rule (2), to which his Honour referred at [18] of the costs judgment. 2. Further, and contrary to the premise of the applicant's submissions in relation to the third argument, there is no inconsistency between the primary judge's rejection of the respondents' claim for costs on an indemnity basis, because the judge was not prepared to find that the applicant had acted so unreasonably as to justify a special costs order, and the finding that the exception to the general rule that the trustee be indemnified for his or her costs of the proceeding out of the fund administered by the trustee was engaged. 3. In finding that the exception in r 42.25(2) was engaged, the primary judge relied upon subrule (b), not subrule (a). And contrary to the applicant's submission, the finding for the purposes of subrule (b) that the applicant had, in substance, acted for her own benefit rather than for the benefit of the fund she was administering, was not based on the adverse credit findings against the applicant. The finding was well open to the primary judge in the exercise of his discretion for the reasons given at [20] of the costs judgment, which has been set out at [11] above. 4. We would add that this finding was also supported by the following matters: (a) the applicant was a residuary beneficiary of the deceased's estate, (b) the applicant had given evidence in the proceedings below, which the primary judge recorded at [268] of the principal judgment, that she thought she was entitled to a family provision claim because the funds that (allegedly) went to the Pirovics were mainly from her, and (c) the applicant only discontinued her family provision claim after the dismissal of the estate's cross-claim against the Pirovics in the mortgage proceedings. Plainly, the applicant stood to benefit from any success by the estate on the cross-claim, if her family provision claim subsequently succeeded against the estate. 5. Addressing the applicant's second argument, it is well-established that where there are multiple issues in a case, the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [18] and the authorities there referred to. 6. The primary judge's discretionary decision for declining to apportion costs on some issues was well open to the judge for the reasons given. The approach taken by the judge was consistent with principle and the findings as to the particular circumstances of this case. 7. For the above reasons, the applicant does not have a fairly arguable case that would justify leave to appeal, let alone an extension of time in which to do so. Other matters 1. The Court has addressed the application for leave to appeal, and an extension of time to do so, on the basis advanced by the applicant which assumes that leave is required under s 101(2)(c) of the Supreme Court Act to challenge costs orders (2) and (3), as well as costs order (1). 2. The premise that leave is required with respect to orders (2) and (3) is debateable. It is arguable that the need to make a finding under r 42.25(2), as to the conduct of the applicant which disentitles the applicant to indemnity from the deceased's estate under r 42.25(1), takes the case out of being one as to "costs only that are in the discretion of the Court": see the discussion by Campbell JA (McColl and Macfarlan JJA agreeing) in Arena Management Pty Ltd (Receivers and Managers apptd) v Campbell Street Theatre Pty Ltd (2011) 80 NSWLR 652; [2011] NSWCA 128 at [58]-[70]; Muriniti v Mercia Financial Solutions Pty Ltd [2021] NSWCA 180 at [20]-[25] (Bell CJ, Gleeson JA and Emmett AJA agreeing) in relation to costs orders against a non-party. 3. However, in the absence of argument it is not necessary to decide this question in this case. In any event, if leave to appeal were not required with respect to an appeal against costs orders (2) and (3), the application seeking an extension of time for leave to appeal against those orders would be unnecessary but the applicant would still require an extension of time to appeal those orders as of right. Any such application would encounter the same difficulties as the present application for an extension of time for leave to appeal. Orders 1. The Court makes the following orders: 1. Refuse the application for extension of time to file the summons seeking leave to appeal. 2. Summons seeking leave to appeal filed 25 February 2022 be dismissed. 3. Applicant to pay the respondents' costs in this Court. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 May 2022