Supreme Court New South Wales Medium Neutral Citation: Wilson v Wright; Wilson v Wright (No 2) [2024] NSWSC 616 Hearing dates: On the papers Date of orders: 23 May 2024 Decision date: 23 May 2024 Jurisdiction: Equity Before: Hmelnitsky J Decision: (1) The defendant's costs to be paid out of the Estate on the indemnity basis. (2) The defendant to pay $66,000 to the plaintiffs on account of their costs, such funds to be paid from the Estate. Catchwords: COSTS — Party/Party — Payable out of a fund — Deceased estate — whether costs-capping order should be made — whether gross sum costs order should be made Legislation Cited: Civil Procedure Act s 98 Uniform Civil Procedure Rules 2005 (NSW) r 42.4 Cases Cited: Baychek v Baychek [2010] NSWSC 987 Beau Timothy John Hartnett trading as Hartnett Lawyers v Anthony Robert Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell (No 2) [2023] NSWCA 311 Haertsch v Whiteway (No 2) [2020] NSWCA 287 Hamod v New South Wales [2011] NSWCA 375 Salmon v Osmond [2015] NSWCA 42 Wilson v Wright; Wilson v Wright [2024] NSWSC 519 Category: Costs Parties: In proceeding 2023/253014: Kyle Thomas Wilson (Plaintiff) Debra Agnes Wright (Defendant) In proceeding 2023/253014: Kimberley Renee Wilson (Plaintiff) Debra Agnes Wright (Defendant) Representation: Counsel: D Flaherty (Plaintiffs) R Tregenza (Defendant) Solicitors: Hinde Ginges Boyd Lawyers (Plaintiffs) Bell Lawyers (Defendant) File Number(s): 2023/253014 and 2023/253020 JUDGMENT 1. I delivered the principal judgment in this matter on 7 May 2024: Wilson v Wright; Wilson v Wright [2024] NSWSC 519. These reasons should be read with that judgment. 2. In essence, I held that adequate provision had not been made for Kimberley and Kyle from the estate of the late Adam Patrick Fornari, their former step-father. It was not in dispute that Kimberley and Kyle had become estranged from the deceased following allegations of sexual abuse made by Kimberley against him of which he was found not guilty at trial. In light of that, I held that I could not attribute any blame for the estrangement to any party. I further held that the evidence before me was unsatisfactory as to the value of the Estate and the needs of the plaintiffs. 3. I ordered provision for Kimberley in the sum of $50,000 and for Kyle in the sum of $40,000. This was less than their initial submission that provision should be made in an amount reflecting two-thirds of the value of the estate (which was, eventually, agreed to have a net value of around $1,034,981) and also less than their closing submission that they should each receive around $200,000. The defendant's submission had primarily been that they should receive nothing, but alternatively that Kyle should receive $25,000 and Kimberley should receive $50,000. 4. I reserved the question of costs. I also noted that, at the hearing, I was informed from the bar table that the defendant's costs up to the end of the hearing were $75,000 on the indemnity basis. The plaintiffs' costs (being one set of costs as they were jointly represented) were said to be $88,000 on the ordinary basis. 5. The plaintiffs and the defendant agreed that the defendant's costs should be paid out of the Estate on the indemnity basis (which, of course, has the direct effect of reducing the legacy she will receive). That is the order I shall make in respect of the defendant's costs. However, the parties' submissions differed in terms of their proposed costs orders for the plaintiffs. Mr Flaherty, for the plaintiffs, argued that the plaintiffs' costs should be paid out of the estate on the ordinary basis. Mr Tregenza, for the defendant, agreed that the plaintiffs' costs should be paid on the ordinary basis but argued that the liability of the estate for those costs should be limited to two-thirds of the provision ordered; that is, $60,000. 6. It is regrettable that these proceedings were unable to be resolved without a hearing. Mediation occurred, but did not resolve the proceedings, at least insofar as the proceedings concerned Kimberley and Kyle. No offers of compromise were made. The hearing itself occupied two days of Court time. 7. Significantly, the total amount of provision obtained is very nearly equal to the plaintiffs' costs incurred on the ordinary basis, and presumably less than the actual costs incurred by the plaintiffs. 8. The relevant principles to be applied in determining costs orders in a case such as this were explained by Beazley P in Salmon v Osmond [2015] NSWCA 42 at [170]-[174], relevantly being that the "overall justice of the case" is the key consideration, although that is not too far removed from the usual rule that costs follow the event. See also Haertsch v Whiteway (No 2) [2020] NSWCA 287 at [4]-[8]. 9. I also note s 98 of the Civil Procedure Act 2005 (NSW): "(1) Subject to rules of court and to this or any other Act-- (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. … (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to-- (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount." 1. I also note r 42.4 of the Uniform Civil Procedure Rules 2005 (NSW), which relevantly provides: "(1) The court may by order, of its own motion or on the application of a party, specify the maximum costs that may be recovered by one party from another." 1. On costs-capping orders specifically, Ball J noted in Baychek v Baychek [2010] NSWSC 987 at [22]-[23] that: "A second feature of Family Provisions Act matters is that the amount claimed or that the plaintiff can reasonably be expected to recover may be quite small, either because the estate is small or because the claim itself does not justify the award of a more substantial amount. In those cases, it is reasonable to expect that the costs will be proportionate to the amount claimed and the nature of the issues in the case. As Palmer J pointed out in Sherborne Estate (No 2) (2005) 65 NSWLR 268 at [30] (referring to Lord Wolfe's comments in Lownds v Home Office [2002] 1 WLR 2450), "[p]roportionality of costs to the value of the result is central to the just and efficient conduct of civil proceedings". As I have pointed out, that principle is reflected in the CPA s 60. …. A third feature of Family Provisions Act matters is that, as Palmer J pointed out in Sherborne Estate (No 2) (2005) 65 NSWLR 268, they often involve considerable personal animosity. In disputes of that type, parties are often more concerned to vindicate their position than to resolve the dispute as efficiently and as cost effectively as possible. In those cases, it may well be appropriate to cap such a party's costs." 1. His Honour discussed the practicalities of costs-capping orders at [25]: "One point follows from what I have said is that I do not think that an order fixing costs in Family Provisions Act matters should be seen as any more exceptional than an order capping costs. Where the court makes an order capping costs, the effect of the order, if it is to have any effect at all, will be to limit the amount that the costs applicant can recover on assessment to the amount of the cap. To put the point another way, the cap will normally be fixed at an amount that is less than the amount that it might reasonably be expected that the costs applicant will recover on assessment. Were it otherwise, there would be no point in fixing the cap in the first place. If the court makes an order fixing costs at the cap – and the cap is a true cap – the effect of that order is to permit the costs applicant to recover costs without the need for assessment but still to limit the amount that the costs applicant might otherwise expect to recover on assessment. The advantage, then, of fixing costs in this way is that the amount fixed still operates as a cap but it does so in a way that makes assessment unnecessary. In doing so, it gives effect to the overriding purpose identified by the CPA s 56 – that is, to facilitate the just, quick and cheap resolution of the proceedings. In fixing costs as a cap rather than as a substitute for an assessment, it seems to me that the court should take into account the same matters that it takes into account in determining an appropriate cap. That is, what the court must be satisfied of is that the costs are excessive having regard to matters such as the nature of the case, the size of the estate and the amount that the costs applicant has recovered and could reasonably be expected to have recovered at the time proceedings were commenced. If the court is satisfied that the costs are excessive, then it will need to determine what amount to fix. But, as I have said, the nature of that enquiry seems to me to be no different from an enquiry concerning what amount to fix as a cap. I return to this matter below." 1. I respectfully adopt his Honour's analysis. Given that the costs incurred in this case were beyond the amount ultimately obtained by way of an order for provision; the relatively modest size of the estate; and the fact that any costs order will further reduce the legacy of the defendant, whom I found, at [90], had "made considerable personal sacrifices to support her brother" and was "the natural object of the deceased's testamentary intention", I have determined that it is appropriate to order that the plaintiffs only recover a portion of their costs from the Estate. 2. I should add that I accept that the plaintiffs saved expense by only retaining one firm of solicitors and one counsel between them. However, I view this as an essentially neutral factor. There was only minimal distinction between the plaintiffs' claims. Evidence in one proceeding was ordered to be evidence in the other. It was inevitable that they would have been heard together. 3. Because of the information which the plaintiffs have helpfully provided as to their costs, and noting the remarks of Ball J above, it is further appropriate that I order costs to be fixed in a specific sum pursuant to s 98(4)(c) of the Civil Procedure Act. This will save the plaintiffs submitting their costs for assessment in circumstances where their maximum recovery is capped, which is the principal purpose of such an order: Hamod v New South Wales [2011] NSWCA 375 at [816]-[817], cited in Beau Timothy John Hartnett trading as Hartnett Lawyers v Anthony Robert Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell (No 2) [2023] NSWCA 311 at [46]. 4. In the latter case, the Court (comprising Bell CJ and Adamson JA) noted at [48], that in assessing a figure to be ordered to be paid as a specified gross sum, the "Court is entitled to apply a broad-brush approach by reviewing the tax invoices of the solicitors and counsel and determining what is fair between the parties." Such evidence is not available here although I did not understand Mr Tregenza to take issue with the veracity of the figures put forward by Mr Flaherty. 5. In those circumstances, I would have made an order requiring the defendant to pay 75% of the plaintiffs' costs on the ordinary basis, due to the factors set out at [13] above. That leads me to determine that an appropriate order, specifying costs in a gross sum, is to order the defendant pay to the plaintiffs (jointly) $66,000 on account of their costs. 6. The orders of the Court will therefore be: 1. The defendant's costs to be paid out of the Estate on the indemnity basis; and 2. The defendant to pay $66,000 to the plaintiffs on account of their costs, such funds to be paid from the Estate. ********** 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: 23 May 2024