Supreme Court New South Wales Medium Neutral Citation: Galea v Camilleri; The Estate of Patricia Camilleri (No 2) [2023] NSWSC 385 Hearing dates: 4 April 2023 Date of orders: 18 April 2023 Decision date: 18 April 2023 Jurisdiction: Equity Before: Meek J Decision: Judgment given for specific sums. No order as to costs of the administration proceedings. Executor to pay costs of commission proceedings. Stay refused. Catchwords: ORDERS — Discussion regarding orders to give effect to findings in respect of administration proceedings resulting in some successful claims — Absence of evidence — Discussion of Armory v Delamirie principle whether in an estate claim the Court is justified in proceeding on the basis of attributing to shares the highest value that is reasonably open on the evidence INTEREST — Claim for pre-judgment interest on a judgment for interest — Applicable principles COSTS — Meaning of event — Discussion of apportionment orders — Consideration of principle that the Court does not usually apportion costs between issues, but acts on the outcome of the proceedings as a whole, without attempting to differentiate issues on which the party may not have succeeded — Natural divide between 13 issues on which the plaintiff succeeded on 4 related issues and the defendant on the balance making some differentiation of costs appropriate — The costs discretion regarding that differentiation may be exercised by various approaches, specifically either an apportionment of issues approach or a pragmatic approach — Pragmatic approach favoured COSTS — Claims for indemnity costs — Consideration of whether Court ought to award indemnity costs reflecting its disapproval of executor's conduct and whether executor's conduct unnecessarily protracted the litigation SUCCESSION — Executors and administrators — Costs of passing accounts — Applicable principles STAY — Application for a stay of judgment to enable executor to give consideration to whether to file a notice of appeal or a notice of intention to appeal — Consideration of applicable principles Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 Armory v Delamirie (1722) 1 Strange 505; 93 ER 664 Bushwall Properties Ltd v Vortex Properties Ltd [1975] 1 WLR 1649 Bushwall Properties Ltd v Vortex Properties Ltd [1976] 1 WLR 591 Chadwick v Bondi Beach Food Pty Ltd (No 2) [2023] NSWSC 246 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354 Ford v Princehorn; Estate of Ford [2012] NSWSC 1165 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd [1988] FCA 364; (1998) 81 ALR 397 Frith v Sipple (Court of Appeal (NSW), Moffitt P, Hutley and Mahoney JJA, 11 September 1978, unrep) Galea v Camilleri; The Estate of Patricia Camilleri [2023] NSWSC 206 Hamod v New South Wales [2002] FCA 424; (2002) 188 ALR 659 Horn v GA & RG Horn Pty Ltd (No 2) [2022] NSWSC 1747 In the matter of Optimisation Australia Pty Ltd (Costs) [2018] NSWSC 280 Islam v Australian Real Estate Relation Pty Ltd [2023] NSWCA 47 Jones v Dunkel (1959) 101 CLR 298 Kalifair Pty Ltd v Digi-Tech (Aust) Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 Maestrale v Aspite [2014] NSWCA 182; (2014) 13 ASTLR 262 MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; [1991] HCA 3 Network Ten Pty Ltd v Rowe [2006] NSWCA 4; (2006) 149 IR 273 New South Wales Bar Association v Stevens [2003] NSWCA 95; (2003) 52 ATR 602 Paringa Mining & Exploration Co plc v North Flinders Mines Ltd (1988) 165 CLR 452; [1988] HCA 53 Port Macquarie-Hastings Council v Diveva Pty Ltd (T/as Mid Coast Road Services) [2017] NSWCA 4 Re Estate Ford; Application for Executor's Commission [2016] NSWSC 6 Richardson v Richardson [2021] NSWSC 353 Sabah Yazgi v Permanent Custodians (No 2) [2007] NSWCA 306 Screenco Pty Ltd v RL Dew Pty Ltd (2003) 58 NSWLR 720; [2003] NSWCA 319 Sydney Attractions Group Pty Ltd v Schulman (No 4) [2013] NSWSC 1728 Tchadovitch v Tchadovitch (2010) 79 NSWLR 491; [2010] NSWCA 316 The Estate of Maureen Laila Huber, of Cobram Vic; The Estate of Dolf Paul Huber [2020] NSWSC 1539 Thomas v SMP (International) (No 6) [2010] NSWSC 1311 Wentworth v Rogers [1999] NSWCA 403 Texts Cited: Handler, Leslie G and Richard Neal, Mason and Handler Succession Law and Practice New South Wales (LexisNexis) Janes, Stephen, David Liebhold and Paul Studdert, Wills, Probate and Administration Law in New South Wales (2nd ed, 2020, Thomson Reuters) Practice Note SC Gen 16 Ritchie's Uniform Civil Procedure NSW (LexisNexis Butterworths) Category: Costs Parties: Carol Galea (First Plaintiff) Reno Camilleri (Second Plaintiff) Peter Camilleri (Third Plaintiff) John Camilleri (Defendant) Representation: Counsel: A Crossland and A Rao (Plaintiffs) L Ellison SC (Defendant) Solicitors: Elderlaw (Plaintiffs) Turner Freeman (Defendant) File Number(s): 2014/332336 and 2019/274722 JUDGMENT 1. HIS HONOUR: On 15 March 2023, I delivered reasons for judgment in relation to proceedings arising out of the estate of the late Patricia Camilleri (the deceased) which judgment is Galea v Camilleri; The Estate of Patricia Camilleri [2023] NSWSC 206 (principal judgment). 2. These reasons assume a familiarity with the principal judgment and will adopt its abbreviations. 3. Broadly speaking, the claims in the principal judgment involved allegations by some of the beneficiaries of the deceased's estate against the executor of the estate (John), alleging wrongdoing in the administration of the estate, and a claim by John for commission. 4. I made findings that the plaintiffs' case of default by John was made out in a number of material respects but not all respects and I rejected John's claim for commission. 5. I directed the parties to bring in short minutes of order to give effect to the reasons for judgment and also to address the question of costs. 6. The parties have been able to agree on a few matters but there are material matters on which they have not been able to agree. Consequently, the matter was listed on 4 April 2023 for counsel for the parties to specifically address a number of issues in respect of which they had provided competing draft orders and written submissions. 7. The contested issues were as follows: 1. what if any amounts should be the subject of a judgment in favour of the plaintiffs consequent upon my findings in the principal judgment; 2. the appropriate orders for costs of the proceedings; and 3. whether there should be a stay on the orders made upon John filing a notice of intention to appeal and/or notice of appeal. 1. The following reasons address the above-mentioned issues. 2. Further, Mr Ellison SC drew the Court's attention to some suggested minor corrections in the wording of the reasons for judgment in the principal judgment. His suggestions were not disputed and, with the exception of one matter, as discussed and recorded in the transcript, those amendments have been made, as have other minor corrections. Plaintiffs' proposed judgment amounts 1. In addressing the plaintiffs' claims regarding alleged wilful default by John in the administration of the estate I categorised the claims into 15 Issues and summarised my findings in respect of those Issues at [1008] in the principal judgment. 2. In respect of 3 of those Issues, the plaintiffs proposed that there be judgment in favour of the plaintiffs in specific amounts. The proposed judgment amounts related to the following, namely judgments reflecting amounts referable to: 1. John's failure to invest the deposit on Property 430 (Issue 7); 2. Interest on the unpaid purchase price of $2.7 million for Property 430 (Issue 9); 3. pre-judgment interest on the above-mentioned interest on the unpaid purchase price (Issue 9); and 4. the loss referable to John's delay in selling the Telstra shares (Issue 11). Failure to invest the deposit 1. There was no dispute per se that to give effect to the reasons for judgment there should be calculation of an amount referable to failing to invest the deposit for Property 430 of $300,000. 2. The first apparent difference between the parties in relation to that calculation related to the period over which the calculation should be made. 3. Both parties accepted that the calculation should start as at 21 June 2018 being the date that the contract was entered into. 4. The end date for the calculation was disputed. The plaintiffs contended that the calculation should go through to 23 August 2019 being the date that the contract was ultimately completed, a period of 429 days. However, John contended that the calculation should go through to 13 February 2019 (a period of 240 days), said to effectively coincide with the opening of the controlled monies account. 5. In the principal judgment, I found that on 17 February 2019, Turner Freeman received into its controlled monies account a sum of $2,503,821.92 and that the funds in the controlled monies account then continued to earn interest up to and including the day prior to the settlement of the purchase: principal judgment at [318]-[319]. 6. Mr Crossland indicated that his calculation for the longer period of time had already taken into account a sum of $73,553.71 which at settlement the purchasers had paid the estate referable to interest on the unpaid balance of purchase price (CB 1335), which I address below. The figure of $73,553.71 was made up of two amounts being interest accrued on the sum of $2.5 million ($20,813.98) and interest payable on the unpaid balance of purchase price of $500,000 at 10% in accordance with the contract rate from date of exchange to settlement ($52,739.73). 7. Mr Ellison SC appeared to accept that explanation: T 5. 8. The second issue regarding the calculation is that Mr Crossland's proposed short minutes of order referred to an application of monthly compounding interest. 9. The plaintiffs assumed a rate of interest of 1.5% per annum, which was referable to the prevailing rate of interest on the amount of $2.5 million which Turner Freeman held in a controlled monies account on behalf of Martin: CB 1628. 10. Mr Crossland indicated that in fact the calculation had been performed as a simple interest calculation: T 5.32-34. In light of that, Mr Ellison SC accepted the calculation of Mr Crossland. The total interest calculation was approximately $5,332.58, half of which would be paid to the vendors under clause 2 of the contract. Thus, as a matter of calculation, it was agreed that the figure would be $2,666. Interest on unpaid balance 1. The unpaid balance of the purchase price for Property 430 was $2.7 million. 2. In the principal judgment, I found that there was no adequate explanation by John as to the delay in completing the purchase of Property 430 nor any adequate reason for not issuing a notice to complete shortly after the specified date of completion of 2 August 2018: principal judgment at [792]. 3. There is an interesting question as to whether the calculation should be based upon the date for completion (being the 42nd day after the date of the contract (CB 1019)) or whether the timing is referable to the service of a notice to complete: clause 15, CB 1054. 4. Mr Ellison SC appeared to accept that the calculation should be performed by reference to the 42nd day after the date of the contract (CB 1019): T 2-3. On that basis, the suggested calculation of Mr Crossland was accepted by Mr Ellison SC: T 3. 5. Mr Crossland proposed a calculation in which interest was payable by the purchaser at the rate of 10% per annum pursuant to clause 35.1 of the contract (CB 1021) for 385 days between 2 August 2018 (being the 42nd day after the contract date of 21 June 2018 (CB 1019)) and 23 August 2019 (being the actual date of completion) being $284,794.65. 6. Mr Crossland's suggested calculation then deducted the amount (as I have noted above) of $73,553.71 paid by the purchasers on settlement which results in a sum of $211,240 which is agreed by Mr Ellison SC: T 3. Pre-judgment interest 1. Mr Crossland sought on behalf of the plaintiffs pre-judgment interest on the sum of $211,240 from the date of completion of the contract to the listing date on which counsel made submissions regarding their competing orders being 4 April 2023. 2. The provisions of s 100 (1) and (2) CPA clearly indicate that the Court has a discretion to award interest. 3. There is no specifically prescribed rate for the award of interest up to judgment: Maestrale v Aspite [2014] NSWCA 182; (2014) 13 ASTLR 262 at [135] per Beazley P (as her Excellency then was), with whom Macfarlan and Barrett JJA agreed. 4. Nonetheless, Practice Note SC Gen 16 (Practice Note) deals with the pre-judgment interest rate and relevantly indicates (at [5]) that practitioners and litigants should expect that where, pursuant to s 100 (1) and (2) CPA, interest in respect of the pre-judgment period is to be included in a judgment, the Court will have regard to the following rates, being rates agreed upon by the Discounted Interest Rate Harmonisation Committee established following a referral by the Council of Chief Justices: 1. in respect of the period from 1 January to 30 June in any year – the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced; and 2. in respect of the period from 1 July to 31 December in any year – the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced. 1. Mr Crossland confirmed that the interest calculation of $35,468 had been calculated in accordance with those rates. 2. Mr Ellison SC accepted the calculation. 3. The only issue raised by Mr Ellison SC was whether the Court as a matter of discretion ought to make an award of pre-judgment interest. 4. The purpose of the discretion is to permit a successful party to be properly compensated for a real and practical loss or detriment for which it has suffered, in order to ensure that it is restored fully to the position in which it would have been in but for the defendant's wrongdoing: see e.g. Screenco Pty Ltd v RL Dew Pty Ltd (2003) 58 NSWLR 720; [2003] NSWCA 319 at [90] per Tobias JA, at [12] per Handley JA citing MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; [1991] HCA 3 at 663 and at [56] per Sheller JA. 5. Mr Ellison SC did not suggest that the provisions of s 100(3) precluded the awarding of interest. 6. The provisions of s 100(3) in so far as they preclude in certain cases the giving of interest upon interest do not apply where the judgment amount is really an award of damages even if those damages have been calculated by reference to interest that party ought to have been paid: e.g. Bushwall Properties Ltd v Vortex Properties Ltd [1975] 1 WLR 1649 at 1660 per Oliver J (on appeal, the contract grounding the award of damages and interest was held to be unenforceable and Oliver J's decision was overturned: Bushwall Properties Ltd v Vortex Properties Ltd [1976] 1 WLR 591 – because the issue of the measure of damages did not therefore arise, their Lordships did not express a view on it: see at 604 per Sir John Pennycuick (Orr and Buckley LJJ agreeing)). Nor does it preclude an award of interest upon interest awarded as equitable compensation: e.g. Thomas v SMP (International) (No 6) [2010] NSWSC 1311 at [20]-[24] per Pembroke J. 7. Mr Ellison SC did not suggest any particular discretionary matter that ought to preclude the awarding of interest. 8. I am satisfied that in the circumstances of this case it is appropriate to make the award of interest in the sum of $35,468. Delay in sale of Telstra shares 1. The plaintiffs sought judgment for loss on the two parcels of Telstra shares being $9,926 on the parcel of 3760 shares and $14,119 on the parcel of 4,614 shares together with pre-judgment interest on those sums in the amount of $1,227 and $1,494 respectively. I determined in the principal judgment that the 3,760 Telstra shares forming part of the deceased's estate as disclosed in the inventory of property were in fact sold and the net proceeds accounted for to the estate and, further, that although the parcel of 4,614 Telstra shares which had been part of Reno Senior's estate were not disclosed as an asset of the deceased's estate, those shares had nonetheless been sold and accounted for: principal judgment at [817], [821]. I further found that the failure of John to sell the Telstra shares promptly resulting in a lesser price for the value of those shares amounted to a default: principal judgment at [822]. 2. However, I noted that I had not been provided with particular evidence as to when after the deceased's death or after probate was obtained the shares ought to have been sold nor was I provided with evidence as to the value of the shares at that time and in the absence of such evidence I could not fix any specified amount of loss: principal judgment at [824]. 3. The figures used by Mr Crossland in relation to his calculation of loss on the sale of the Telstra shares were premised on both parcels of shares being sold at a price of $6.09 being the value per share recorded in the inventory of property (in respect of the 3,760 share parcel) less in each case their ultimate sale price. 4. The figure of $6.09 is a figure effectively as at the date of death which was reflected in the inventory of property. 5. Mr Crossland submitted that it was John's onus to provide evidence to me regarding the appropriate price of the Telstra shares and that, in the absence of him providing or adducing that evidence, the Court ought to proceed on the basis that the appropriate sale price would not have been lower than $6.09: T 6. 6. There are some instances in estate law where, in the absence of executors providing information regarding issues before the Court, the judge may be justified in proceeding on the basis of attributing to shares the highest value that is reasonably open on the evidence, such as in a family provision claim: Tchadovitch v Tchadovitch (2010) 79 NSWLR 491; [2010] NSWCA 316 at [14] per Campbell JA (Allsop P and Young JA agreeing) citing Armory v Delamirie (1722) 1 Strange 505; 93 ER 664; Jones v Dunkel (1959) 101 CLR 298. 7. However, it seems to me that it would not be right to infer that the price of the shares would have remained constant at the price as at the date of death. The sale would not have happened as at the date of death. An orderly sale consistent with appropriate carrying out of executorial duty would have seen the sale happen at some time likely shortly after probate was obtained: T 6-7. Share prices are notoriously variable and it seems to me that no proper inference could be drawn that calculation should be performed on the price of the shares based on the price as of the date of death. 8. For those reasons, I decline to enter judgment in favour of the plaintiffs for any specific sum based on John's delay in selling the Telstra shares. Summary of judgment amounts 1. In light of the above, there will be judgment for the plaintiffs against John in the sum of $249,374 as at 4 April 2023, being the total of the following amounts: 1. $2,666 (John's failure to invest the deposit on Property 430 – Issue 7); 2. $211,240 (interest on the unpaid purchase price of $2.7 million for Property 430 – Issue 9); and 3. $35,468 (pre-judgment interest on the above-mentioned interest on the unpaid purchase price – Issue 9). Costs 1. The parties approached the question regarding costs of the proceedings differently. 2. The principal judgment involved the concurrent hearing of what I have described as the administration proceedings filed by the plaintiffs against John in 2019 and the commission proceedings being John's application by notice of motion seeking an order for the passing of accounts for the administration of the deceased's estate from 21 October 2014 to 31 March 2022 and allowing of commission which motion was filed in the 2014 probate proceedings: principal judgment at [16]. 3. The plaintiffs sought an order with respect to the administration proceedings that John pay the plaintiffs' cost of the proceedings on an indemnity basis with such payment not to be the subject of an indemnity or reimbursement from the estate by John and, further, that there be no order as to John's costs to the intent that he receive no reimbursement from the estate for those costs. 4. In relation to the commission proceedings, the plaintiffs sought orders to similar effect. 5. Mr Ellison SC, on behalf of John, sought in relation to the administration proceedings orders that: 1. 50% of the plaintiffs' costs be paid out of the estate of the deceased, otherwise there be no order as to the costs of the plaintiffs; and 2. 50% of John's costs be paid out of the estate of the deceased, otherwise there be no order as to the costs of John. 1. In relation to the commission proceedings, Mr Ellison SC sought orders that: 1. the costs of the plaintiffs (Carol, Reno and Peter) be paid out of the estate of the deceased; 2. there be no order as to John's costs of the commission claim to the intent that he pay his own costs of the proceedings without recourse to the estate of the deceased; and 3. John's costs in preparing the estate accounts be paid out of the estate of the deceased on the indemnity basis. Submissions 1. Mr Crossland and Ms Rao made detailed submissions in relation to the question of costs. Their principal submission was that the plaintiffs had succeeded in an order for damages against John and that John had failed in his claim for commission and that, accordingly, costs in each proceedings should follow the event: r 42.1 UCPR. 2. Mr Crossland rejected the apportionment-type or percentage-type orders proposed by Mr Ellison SC. Whilst he accepted that the Court had declined to award damages in relation to a number of Issues, he submitted that those are not matters which should disturb the making of the usual order. 3. Mr Crossland submitted that apportionment-type orders are only appropriate where a matter on which a party has been unsuccessful is severable and occupied a significant part of the trial citing In the matter of Optimisation Australia Pty Ltd (Costs) [2018] NSWSC 280 (Re Optimisation) at [13] per Brereton J (as his Honour then was); Sabah Yazgi v Permanent Custodians (No 2) [2007] NSWCA 306 at [24] per Beazley, Ipp and Tobias JJA. 4. In particular, Mr Crossland submitted regarding the Issues in respect of which I found that no amount of damages ought to be awarded: 1. in the case of the failure to rent the Arndell Park property (Issue 3) it was not a severable issue, and; 2. in relation to the other Issues (Use of estate funds to pay Mr Batten – Issue 13; and other "minor" issues (IAG shares – Issue 2)), my findings should not disturb the making of the usual order because the time spent on those Issues was negligible. 1. Mr Crossland submitted that John was defending the administration proceedings in substance personally in respect of allegations regarding alleged breaches of his obligations as executor and making his claim for commission again in a personal capacity and, in those circumstances, John should be liable personally for any costs orders rather than having any indemnity out of the estate. 2. Further, Mr Crossland submitted that an indemnity costs order was appropriate as reflecting the Court's disapproval of John's conduct in concealing his interest in Property 430 and conducting the proceedings in a manner to conceal his interest and by giving false evidence in cross-examination: citing, inter alia, Hamod v New South Wales [2002] FCA 424; (2002) 188 ALR 659. He submitted that John's pattern of concealment occurred prior to the litigation and persisted during the litigation resulting in increased tasks and steps being incurred by the plaintiffs. He also cited John's failure to respond to requests for copies of valuations and details of rental properties as supporting such an award of indemnity costs. Mr Crossland in the written submissions made reference to the decision of Ward CJ in Eq (as her Honour then was) in Richardson v Richardson [2021] NSWSC 353 (Richardson) at [186]-[189] as supporting the proposition that indemnity costs may be ordered by reason of a pattern of wilful disregard by an executor of his duties prior to and in the course of the litigation. General principles 1. Costs are in the discretion of the Court, subject to the CPA, rules of Court and any other Act: s 98(1)(a) CPA. 2. The Court has full power to determine by whom, to whom and to what extent costs are to be paid: s 98(1)(b) CPA. 3. The Court may order that costs are to be awarded on the ordinary basis or on an indemnity basis: s 98(1)(c) CPA. 4. The general position is that if the Court makes any order as to costs, the Court is to order that costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: r 42.1 UCPR. 5. If the Court makes an order for dismissal of the proceedings, then generally speaking, unless the Court orders otherwise, the moving party (the plaintiff/cross-claimant) must pay the opponent's costs of the proceedings to the extent to which they have been dismissed: r 42.20(1) UCPR. 6. Generally, costs payable to a party under an order of the Court are to be assessed on the ordinary basis: r 42.2 UCPR. 7. The proper exercise of the discretion for costs will clearly have regard to the reason for dismissal of the proceedings in any given case: Ritchie's Uniform Civil Procedure NSW (LexisNexis Butterworths) at [42.20.10]. What is an event? 1. In Horn v GA & RG Horn Pty Ltd (No 2) [2022] NSWSC 1747, I addressed the question of what is an event for the purposes of exercise of the Court's discretion in relation to costs. I stated at [71]-[75]: 71. Depending on the nature of the litigation the "event" may be characterised in more than one way: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 (Doppstadt) at [15] per Ward, Emmett, and Gleeson JJA. 72. Generally, the "event" refers to the event of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt at [15] citing Windsurfing International Link v Petit [1987] AIPC 90–441 at 37,861-37,862 per Waddell J. 73. An "event" may refer to the determination of the proceedings as a whole or of particular causes of action, although not necessarily so. It may include certain disputed questions of fact or law. 74. An event will not necessarily be limited to "issues" in the technical pleading sense, but any disputed question of fact or law: Hughes v Western Australian Cricket Association (Inc) & Ors (1986) ATPR 40–748 at 48,136 per Toohey J citing Cretazzo v Lombardi (1975) 13 SASR 4 at 12 per Hogarth J; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22 per Young J (as his Honour then was); Australian Receivables Ltd v Tekitu Pty Ltd (subject to deed of company arrangement) (deed administrators appointed) & Ors [2011] NSWSC 1425 at [25] per Ward J (as her Honour then was). 75. How the Court approaches the question will essentially be guided by the circumstances of each given case rather than abstract analysis of how the notion of an event should be viewed. Apportionment of costs 1. In Re Optimisation, Brereton J (as his Honour then was) stated at [13] as follows (omitting footnotes): Where litigation involves multiple issues, the ultimately successful party may have failed on one or a number of those issues. Given that "the event" is not necessarily limited to the final overall outcome, but includes individual issues in the proceedings, the question often arises whether there should be a departure from the general rule where the ultimately unsuccessful party has succeeded (and, as a corollary, the successful party has failed) on one or more substantial issues. The court does not usually apportion costs between issues, but acts on the outcome of the proceedings as a whole, without attempting to differentiate issues on which the party may not have succeeded. However, a successful plaintiff who has failed on certain issues may be deprived of costs on those issues, or even ordered to pay the defendant's costs of them. But this course, while open, is one on which the court embarks with hesitation; the authorities reflect consistent themes that (1) justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case; but (2) it may be appropriate to apportion costs where a clearly definable and severable issue, on which the otherwise successful party failed, has occupied a significant part of the trial. The severability of one issue on which the successful party failed is not, without more, sufficient to warrant departure from the general rule. However, the court may depart from the general rule if the ultimately unsuccessful party succeeds on significant issues, particularly if those issues are clearly dominant or separable. Indemnity costs principles 1. Costs are essentially compensatory and not punitive in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings: Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 at 543 per Mason CJ. 2. Indemnity costs may be awarded where an unsuccessful party has unnecessarily protracted a trial particularly by deliberately false defences and allegations of fact: see e.g. Degmam Pty Ltd (in liq) v Wright (No 2) [1983] 2 NSWLR 354 (Degmam (No 2)) at 358D-360A per Holland J; Wentworth v Rogers [1999] NSWCA 403 at [85] per Handley and Stein JJA and Sheppard AJA. 3. Costs have been awarded on an indemnity basis pursuant to an exercise of discretion in circumstances where an unsuccessful party has engaged in unreasonable conduct of litigation: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd [1988] FCA 364; (1998) 81 ALR 397 (Fountain Selected Meats) at 400 per Woodward J; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 (Colgate-Palmolive) at 233 per Sheppard J. Determination 1. Mr Crossland, following discussion with me during the further hearing on 4 April 2023, refined his submission based on the judgment of Ward CJ in Eq (as her Honour then was) in Richardson. It is not apparent to me that her Honour's award of indemnity costs was based principally on the default by the executor. 2. He submitted that a refined and perhaps more correct way of understanding the reasoning was that the executor had engaged in conduct in the course of litigation which gave rise to the additional costs and the extension of the litigation or the adding to the complexity of the litigation and which was also a breach of the executor's obligations and so in some way strengthened the claim for indemnity costs: T 8-9. 3. It is true that I made the observation in the principal judgment that John had not disclosed his interest in Property 430 in his pre-trial affidavits: principal judgment at [635]-[638]. 4. However, no particular evidence was adduced on the hearing regarding the orders to be made concerning the extent of the claimed pre-hearing conduct of John said to have constituted breaches of duty or the increase in tasks or steps said to have been taken by the plaintiffs to conduct the hearing. 5. Whilst it is true that I made findings that I rejected John's evidence on certain matters, the examples given by Mr Crossland mostly (not exclusively) related to my findings in respect of Issue 6 which was whether John was an ultimate purchaser of Property 430. 6. My overall impression of the conduct of the hearing was that it was not unnecessarily prolonged by John (and certainly not by his legal representatives) in a manner in which such conduct is described in the above-mentioned authorities, in particular, Degmam (No 2), Fountain Selected Meats and Colgate-Palmolive. 7. I am not persuaded that there ought to be an order for costs on the indemnity basis arising from John's conduct of the proceedings. 8. Mr Ellison SC's submissions in relation to the costs in respect of the administration claim were as follows: 1. the plaintiffs were unsuccessful in Issues 1, 3, 4, 5, 8, 10, 13 and 14. They failed in Issue 12, but the Court was "concerned" with regard to the evidence. In Issues 2, 11 and 15 there was a finding of unacceptable delay; 2. the plaintiffs succeeded in Issues 6, 7 and 9. It is Issues 7 and 9 which have resulted in the claim by the plaintiffs for damages and interest which grounds the judgment; and 3. the plaintiffs and the defendant have each been partially successful and partially unsuccessful. Costs should be apportioned accordingly. 1. Whilst the administration proceedings and the commission proceedings (as I have defined them) were ordered to be heard together with evidence in one being evidence in the other (subject to any just objection and relevance), it seems to me appropriate as the parties have each submitted to deal with the costs of those proceedings separately. Administration proceedings 1. In relation to the administration proceedings, I categorised the issues in those proceedings into 15 Issues, being distilled from a much larger set of issues. 2. On the Issues relating to accounting for the IAG shares and Telstra shares (Issues 2 and 11), I found that there was an explanation as to what had happened which demonstrated that the proceeds of sale had been accounted for but that there was some degree of delay in John selling the shares. In a sense, both parties had a bit of success and a bit of failure on each of those Issues. 3. That leaves 13 Issues which were the subject of an outcome one way or the other within the administration proceedings. 4. I am mindful, having given due consideration to Mr Crossland's submissions, that the Court does not usually apportion costs between issues but acts on the outcome of the proceedings as a whole, without attempting to differentiate issues on which the parties may not have succeeded. 5. However, I consider that within those 13 Issues there was natural divide in which the plaintiffs succeeded on 4 related Issues and the defendant succeeded on the balance. 6. 4 of those 13 Issues as a matter of substance all related to the Issues concerning Property 430. Issues 6, 7 and 9 directly related to whether John was the ultimate purchaser of Property 430 and his failures in investing the deposit and completing the sale. The delay that I found in relation to Issue 15 in John applying for stamp duty exemption was essentially delay by reason of the fact that John had become a purchaser or an interested party in Property 430. 7. The plaintiffs' success in the proceedings and indeed the findings that I have made resulting in amounts for judgment in favour of the plaintiffs all related to the Issues concerning Property 430 and, specifically, Issues 7 and 9. 8. On the balance of the 13 Issues, John was effectively successful in 9 of those 13 Issues. They were Issues in which the plaintiffs had raised allegations against John but on which I did not find for the plaintiffs. 9. It seems to me that the proper course in relation to costs is to take a substantive approach to the sets of Issues that I have described namely (leaving aside Issues 2 and 11 on which both parties had mixed success) there were 4 Issues relating to Property 430 on which the plaintiffs were successful and 9 separate Issues which John successfully defended. 10. I do not consider that a minimal amount of time was spent in the proceedings on the 9 (non-Property 430) Issues. There was a significant amount of material in relation to the plaintiffs' claims regarding failure to rent Arndell Park (Issue 3). It was the one Issue in the proceedings on which expert evidence was led. There were further significant amounts of time spent in the proceedings in relation to the claims involving Mr Batten and the allegations that John had used money or funds from the estate to advance his personal interests arising out of the engagement of Mr Batten (Issues 13 and 14). 11. Having made that observation regarding a natural divide of the Issues allowing a differentiation of costs, the costs discretion (as described in s 98 CPA) may be exercised by various approaches specifically either an apportionment approach or a pragmatic approach. 12. Thus, one way in which the question of costs can be dealt with is for me to order costs based on a type of apportionment namely that John pay the plaintiffs' costs on the 4 Issues connected to Property 430 that I have identified (Issues 6, 7, 9 and 15) on the ordinary basis but without recourse to the estate and that the plaintiffs pay John's costs on the 9 separate Issues that he successfully defended (Issues 1, 3, 4, 5, 8, 10, 12, 13 and 14). 13. Another way of approaching the costs is to consider addressing the matter pragmatically. Such an approach is available, I consider, because each of the plaintiffs and John have had success in relation to the Issues that I have described above and, without attempting to be precise, it is fair to say that a substantial amount of hearing time was taken up on the one hand by the block of 4 Issues on which the plaintiffs have been successful and on the other hand the grouping of 9 Issues on which John has been successful. 14. On the pragmatic scenario, an available outcome is to simply order that the parties bear their own costs of the administration proceedings. Both counsel in slightly differing ways gave a degree of qualified support for a pragmatic approach. 15. Mr Ellison SC observed that the history of litigation within the family and steps to facilitate a prompt finalisation of the estate would be relevant factors to take into account in a pragmatic solution that each party bear their own costs of the administration proceedings. 16. Mr Crossland for his part accepted that if costs were awarded on an Issue basis it would be a mammoth task for a costs assessor to separate the costs associated with the respective Issues: T 14. 17. Even if I were to award costs on an apportionment-of-issues-basis as I have described them namely that John pay the plaintiffs' costs on the Property 430 Issues (6, 7, 9, and 15) and the plaintiffs were to pay John's costs on the other 9 Issues, I would in any event be minded to make an order setting off the respective costs. 18. Mr Crossland submitted that there were some Issues which the plaintiffs pressed (being Issues 4, 5 and 8) which he says were about delay and even though the plaintiffs were unsuccessful in making out their contentions on those Issues, they were Issues which went principally to the question of the commission and that supports his contended orders and should impact my determination on costs: T 15-16. 19. I am not inclined to accede to that submission. My findings in relation to John's claim of commission were to a large extent influenced by my findings on the Issues in relation to Property 430 and the other matters referred to by me in the principal judgment at [1083]-[1095]. The findings that I made on Issues 4, 5 and 8 did not, in my assessment, loom large in relation to my discretion to deny commission. 20. Overall, my assessment is that the appropriate order in relation to the administration proceedings is to favour the pragmatic approach namely to order that there be no order as to the costs of the administration proceedings to the intent that each of the parties bear their own costs of the administration proceedings (and for more abundant caution in John's case to make it clear that he have no recourse to the estate in respect of his costs). I am reinforced in that view by the qualified comments of counsel that there would at least be some saving to the parties without having to go through the process of having a complex costs assessment only for the costs to be ultimately set off in any event and the fact that both parties had mixed success on Issues 2 and 11. 21. However, I have no particular materials from which I can assess such costs and, accordingly, the order I will make is for such costs to be paid on the usual ordinary basis. Commission proceedings 1. The costs in relation to the commission proceedings are to my mind more straightforward. Preparation of accounts 1. Ordinarily, the costs of an application for the passing of accounts and allowing of commission are regarded as being a necessary incident of the administration of a deceased estate. Nonetheless, particular guides exist regarding such costs which often differ as between geographic jurisdictions: Stephen Janes, David Liebhold and Paul Studdert, Wills, Probate and Administration Law in New South Wales (2nd ed, 2020, Thomson Reuters) at 887 [PAA 86.290]; Leslie G Handler and Richard Neal, Mason and Handler Succession Law and Practice New South Wales (LexisNexis) at [1441.18]. 2. Depending on the circumstances and whether there are allegations of misconduct or default and depending on findings, costs may sometimes simply follow the event (e.g. Ford v Princehorn; Estate of Ford [2012] NSWSC 1165 at [36]-[43] per White J) or be regarded as standing apart from adversarial litigation: e.g. Re Estate Ford; Application for Executor's Commission [2016] NSWSC 6 at [66]-[68] per Lindsay J. 3. In the event that an award of costs is made in the context of an application for commission, the costs of passing accounts is usually in an amount assessed on an ordinary basis in an amount determined by what is just and reasonable in the particular circumstances: The Estate of Maureen Laila Huber, of Cobram Vic; The Estate of Dolf Paul Huber [2020] NSWSC 1539 at [202] per Slattery J. 4. It seems to me that Mr Ellison SC is correct in his submission that John ought to have his costs in relation to the preparation of the accounts. Whilst it is true that John had no entitlement to commission under the terms of the deceased's Will and in order to obtain commission had to prepare accounts, there was clearly from an early stage in the litigious history between the parties agitation on the plaintiffs' part for John to provide a proper account of his administration of the estate. Commission claim 1. Beyond the costs purely referable to John preparing that account (up to 31 March 2022), John has failed in his application for commission and there is, in my assessment, no reason to depart from the usual order that costs follow the event. Accordingly, John should pay the plaintiffs' costs of his unsuccessful claim for commission. Further, John should not be permitted any recourse to the estate in respect of his own costs. There should be no order as to John's costs of the commission claim. Stay 1. Mr Ellison SC sought an order (save for the order of dismissal of the commission proceedings) that the orders in the proceedings be stayed upon John filing a notice of intention to appeal or notice of appeal and, in the event that such a notice is filed, until the determination of making of final orders in respect of any appeal bought by John in either of the proceedings. 2. The stay was opposed by Mr Crossland. 3. Mr Ellison SC provided no written submissions in relation to or in support of the order for the stay. On the hearing of the applications relating to the orders on 4 April 2023, I asked Mr Ellison SC what principles he suggested I ought to act upon in relation to such a proposed stay. 4. Mr Ellison SC submitted that the principle is that a party is entitled to give consideration in the context of either a notice of appeal or a "holding appeal" and if a stay is granted that any appeal be prosecuted expeditiously. He submitted that John as a prospective appellant has assets and that there are remaining estate assets to satisfy any judgment. 5. In relation to the issue of prospects on appeal, Mr Ellison SC indicated that he was not in a position to provide any form of notice of appeal and that was essentially the reason for wanting some time to allow for a possible appeal: T 19. Mr Crossland submitted that normally there would be provision of a notice of appeal to demonstrate a genuine intention to appeal and provide a basis for a stay either ordered by myself as the trial judge or in the Court of Appeal but that no such draft notice had been provided: T 19. Principles 1. There is no automatic right to a stay of execution as prima facie the judgment appealed from is correct and the Court should not deprive a successful party the fruits of victory. However, the exercise of the jurisdiction to make a stay is incidental to the right of appeal and derives from the inherent power of the Court where necessary to prevent injustice in relation to the proceedings in the Court. Thus, the exercise of the jurisdiction will be particularly appropriate where it is necessary to maintain the status quo in order to preserve the subject matter of the proceedings or to avoid an appeal being rendered nugatory: see e.g. Network Ten Pty Ltd v Rowe [2006] NSWCA 4; (2006) 149 IR 273 at [12] per Santow JA citing Paringa Mining & Exploration Co plc v North Flinders Mines Ltd (1988) 165 CLR 452; [1988] HCA 53. 2. It has been said that an applicant for a stay must show that it has an arguable case and that there are serious questions for the determination of the appellate Court: Kalifair Pty Ltd v Digi-Tech (Aust) Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383 (Kalifair) at [18] per Handley, Sheller and Ipp JJA. The Court has statutory powers to order a stay for example pursuant to ss 67 and 135 CPA. Either the trial judge or the Court of Appeal may order an appropriate stay of proceedings: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 (Alexander v Cambridge Credit) at 692 per Kirby P, Hope and McHugh JJA. It is said that it is usually appropriate, at least in the first instance, for the party to apply to the trial judge for a stay of any judgment or order: Frith v Sipple (Court of Appeal (NSW), Moffitt P, Hutley and Mahoney JJA, 11 September 1978, unrep) at 1 per Moffitt P. 3. The reason underpinning that notion is that the trial judge will know the circumstances of the case and will be well aware of the factors relevant to the exercise of the discretion to grant or refuse a stay. 4. Further, it has been said that it is not uncommon for judges at first instance to provide a stay for a limited period, in order to allow the successful party a reasonable opportunity to assess the prospects of an appeal: Sydney Attractions Group Pty Ltd v Schulman (No 4) [2013] NSWSC 1728 (Sydney Attractions Group) at [6] per Sackar J. 5. The factors which a Court will ordinarily weigh when considering a stay application were referred to by Payne JA in Port Macquarie-Hastings Council v Diveva Pty Ltd (T/as Mid Coast Road Services) [2017] NSWCA 4 at [29] citing Alexander v Cambridge Credit and Kalifair: a. The onus is upon the applicant to demonstrate a proper basis for a stay which will be fair to all parties. b. The court has a discretion involving the weighing of considerations such as balance of convenience and the competing rights of the parties. c. Where there is a risk that if a stay is granted, the assets of the applicant will be disposed of, the court may refuse a stay. d. Where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay. e. The court will not generally speculate upon the appellant's prospect of success, but may make some preliminary assessment about whether the appellant has an arguable case, in order to exclude an appeal lodged without any real prospect of success simply to gain time. f. As a condition of a stay the court may require payment of the whole or part of the judgment sum or the provision of security. 1. The overriding principle when determining an application for a stay is to ask what the interests of justice require: New South Wales Bar Association v Stevens [2003] NSWCA 95; (2003) 52 ATR 602 at [83] per Spigelman CJ (Meagher and Sheller JJA agreeing). Determination 1. The main basis on which a stay is sought is essentially to permit John a reasonable opportunity to assess his prospects of appeal. Whilst I accept that the decision in Sydney Attractions Group suggests that such a reason may be a basis for a stay, I do not accept that in the circumstances of this case that it is a sufficient reason. 2. My decision in the principal judgment was delivered on 15 March 2023. A period of approximately three weeks elapsed prior to the listing to deal with the making of orders, and another two weeks have now passed. 3. The parties were able to make detailed submissions on the question of the orders. 4. It seems to me that John has had at least a sufficient degree of time to make an assessment regarding any appeal. 5. John bears the onus of demonstrating that there is a proper basis for a stay. Whilst the Court will not generally speculate upon any prospects of success that John might have on appeal, it may, in accordance with the above authorities, make some preliminary assessment about whether there is an arguable case. That is made somewhat difficult (though not necessarily impossible) by the fact that I have not been provided with any form of draft notice of appeal (cf Islam v Australian Real Estate Relation Pty Ltd [2023] NSWCA 47 at [6]-[8] per Gleeson JA). 6. There has been a lengthy litigation history between the parties consequent upon John obtaining a grant of probate in the proceedings. The rectification and family provision proceedings date back over 7 years to October 2015. 7. A substantial complaint of the plaintiffs in the proceedings was delay occasioned by John in the administration of the estate. 8. Here, each of the deceased's children have received significant benefits from the estate. It is not clear to me that if John were to pay the judgment amount awarded that he would be unable to do so nor is it clear to me that the plaintiffs will be unable to repay such amount if the judgment was overturned (cf Chadwick v Bondi Beach Food Pty Ltd (No 2) [2023] NSWSC 246 at [10] per Elkaim AJ). This is not a case in which it can be said that payment of any such judgment amounts would render the appeal nugatory. 9. To facilitate the orderly payment of the judgment sum I will allow John 28 days to make arrangements to pay that sum to the estate prior to it becoming enforceable. Otherwise, overall, I am not persuaded that the interests of justice require a stay in terms as sought by Mr Ellison SC. 10. The refusal of a stay by a trial judge does not preclude a further application being made to the Court of Appeal: Alexander v Cambridge Credit at 692. In the above circumstances, I decline to grant a stay on the judgments. Conclusion 1. The orders of the Court are as follows: 1. in proceedings 2019/274722: 1. Judgment for the plaintiffs against the defendant in the sum of $249,374 as at 4 April 2023 (judgment sum). 2. Order that the judgment sum be paid by the defendant to the estate of the late Patricia Camilleri (Estate), such payment being not required to be paid earlier than 28 days from the date of these orders, but thereafter such payment to be enforceable on the application of the plaintiffs. 3. Order that there be no order as to costs of the (administration) proceedings to the intent that: 1. each of the parties bear their own costs of the administration proceedings; and 2. the defendant receive no reimbursement from the Estate for his costs. 1. Order that a stay of the proceedings be refused but without prejudice to any further application for a stay being made to the Court of Appeal. 1. in proceedings 2014/332336: 1. Order that the accounts prepared by the plaintiff for the period from 21 October 2014 to 31 March 2022 being Exhibit D1 be approved and passed. 2. Order that the plaintiff's costs of preparation of the accounts be paid out of the estate on the ordinary basis. 3. Order that the plaintiff's claim for commission be dismissed. 4. Order that the plaintiff pay the costs of Carol Galea, Reno Camilleri and Peter Camilleri of the plaintiff's claim for commission on the ordinary basis, with such payment not to be subject to any indemnity or reimbursement from the Estate. 5. Order that there be no order as to the plaintiff's costs with the intention that he receive no reimbursement from the estate for those costs. 6. Order that a stay of the proceedings be refused but without prejudice to any further application for a stay being made to the Court of Appeal. ********** 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: 19 April 2023