New South Wales Supreme Court CITATION : Price v Ikin [2004] NSWSC 706 HEARING DATE(S) : 28/7/2004 JUDGMENT DATE : 27 August 2004 JURISDICTION: Equity Division JUDGMENT OF : Master Macready at 1 DECISION : Proceedings dismissed with no order as to costs. CATCHWORDS : Procedure - costs. Application under Family Provision Act 1982. Plaintiff dies before hearing. Consideration of whether in this case the Court can make an order for costs. Held no power to make an order for costs. McEvoy v Public Trustee (1989) 16 NSWLR 92 Stead v Foster (Unreported, NSWSC, 4 September 1998) Kalejs v Minister For Justice & Customs (2001) 111 FCR 442 Phung v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 821 CASES CITED : Ali v Hartley Poynton (No 2) [2002] VSC 245 In the Marriage of Sims (1980) 50 FLR 286 Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 at 201 Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622 One Tel Ltd v Deputy Commissioner of Taxation (2000) FCA 270 PARTIES : Robert John Price v David William Ikin FILE NUMBER(S) : SC 4287 of 2002 COUNSEL : M. Willmott SC for plaintiff B. Sharpe for defendant SOLICITORS : Lees & Givney for plaintiff Winston Readford for defendant - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Master Macready Friday 27 August 2004 4287 of 2002 ROBERT JOHN PRICE v DAVID WILLIAM IKIN AND ORS JUDGMENT 1 MASTER: This is the hearing of an application for costs on behalf of the plaintiff. The substantive matter concerns an application under the Family Provision Act 1982 (NSW) in respect of the estate of the late Deidre Robin Price who died on 14 November 2001. The plaintiff who had gone through a marriage ceremony with the deceased in 1991 survived the deceased. Walter Joseph Goosakoff, the second defendant, who was in fact the husband of the deceased, she having married him on 8 November 1972, also survived the deceased. 2 The application is made because the plaintiff in the proceedings died on 9 May 2004. The plaintiff, by his legal representatives in these proceedings, accepts that because of the decision in McEvoy v Public Trustee (1989) 16 NSWLR 92 the late plaintiff's cause of action does not survive his death and the proceedings abate. Assets in the estate 3 It appears that the plaintiff's estate is insolvent with the only assets being savings with the Horizon Credit Union in the sum of $11.00 and a van that was repossessed by the hire purchase company following his death. For ten years the plaintiff and the deceased resided in the property 352 Pittwater Road, North Ryde, New South Wales. It turns out that that property had been registered in the name of the deceased and her husband Walter Goosakoff as joint tenants and that it passed to him by survivorship upon her death. 4 The property is valued at $530,000.00. It is apparent that there are a number of debts in the estate of the deceased totalling some $25,619.00. 5 The deceased made her last will on 16 August 2001. Under that will she gave the whole of her estate to her husband Walter Joseph Goosakoff. 6 I have read the substantive evidence in the hearing and it is apparent that the deceased deceived the plaintiff as to the fact of her earlier marriage and the existence of her husband. She also represented that the house in which she and the plaintiff resided was in fact owned by her. It seems apparent that the deceased's husband who is now aged 73 years suffered strokes in 1984 and 1985. It appears that in 1989 the plaintiff and the deceased commenced living together at the home of the deceased and her husband. Apparently he was not living there at the time. The deceased told the plaintiff she had previously lived with Wally but that he was in a nursing home because of a stroke. That she said was "past history". 7 After the death of the deceased the plaintiff continued living in the property and remained there. Wally, the husband, was living in a Christadelphian Homes Limited village and the house in which he was living was to be demolished. No accommodation would then be available to him. In these circumstances, David Ikin, the stepson of the husband sought alternative accommodation for himself and Wally so that he could look after Wally. The medical evidence seems to suggest that Wally the husband could be looked after in his own home provided he had a carer. He can not speak but he can understand others when they speak to him. 8 In these circumstances David Ikin found a property at North Ryde, which was leased, from 10 May 2004. David Ikin and Wally moved into the property on 17 May 2004. Some three weeks later they found out that the plaintiff had died on 9 May 2004. They then re-entered the deceased's property and spent $1,737.35 to clean it. They now live there. Unfortunately David Ikin has a liability, which might increase to a sum of $8,331.00 if the accommodation that he leased cannot be relet to a new tenant. The defendants submit that the appropriate costs' order should be that each party pay their own costs. The defendants' outstanding costs are some $37,952.00. 9 The plaintiff's legal representatives seek an order for costs which up to the date of his death amounted to $34,363.60 and are estimated up to and including the hearing before me at a total sum of $41,818.30. 10 There are number of procedural problems in respect the application. The plaintiff made a will dated 17 March 2004 under which he appointed his Brother Baden Thomas Price as executor and trustee. He gave a number of pecuniary legacies and left the residue of his estate equally between his brother Baden and his sister Cecelie Mary Turner. There has been no application for Probate of that will. 11 I have already referred to the history, the deceased's will, the assets in the estate and the existence of a notional estate being the property valued at $530,000.00 which is now owned by Wally. 12 At the time the plaintiff swore his affidavit in February 2003 he was 55 years of age and was working in his lawn mowing business, which gave him an income of about $500.00 per week. This covered his business expenses but not all his other personal expenses. He had assets being a van, lawn mowing equipment and furnishings totalling $20,000.00. It is apparent that he had been going into debt since the death of the deceased as his liabilities amounted to $31,500.00, which included an estimate then for legal costs of $10,000.00. He had no superannuation entitlements and would have to keep working until he received the pension. 13 He had a number of health problems including angina. He suffered from back pain, skin cancer and was a diabetic. He was a single man with no dependants. He gave evidence of number of particular matters in relation to how he had been left without adequate and proper provision for his maintenance, education and advancement in life. Clearly he needed some funds to provide accommodation, replace equipment and pay out his debts. He had a relationship with the deceased for some 10 years and had not contributed anything to the build-up of the estate other than possibly repairs and maintenance. 14 The husband Wally is now 73 years of age. He has assets of several hundred dollars and liabilities approaching $4,000.00. He lives on the pension from which he receives of $470.00 per fortnight. As I earlier recounted, he also has the house where he now lives and is looked after by David Ikin. It appears from the evidence that the house in question may have been acquired by the deceased prior to her meeting Wally. In any event the deceased and Wally were married in 1973 and lived together until the disabilities which Wally suffered as a result of the strokes overcame him in 1987 and he went into a nursing home. 15 As is apparent from McEvoy's case, the plaintiff's cause of action does not survive his death. That is a matter of substance. In addition, so far as procedural matters are concerned, the proceedings themselves have abated. In the circumstances of this case Part 8 rule 10 of the Supreme Court Rules 1970 (NSW) (SCR) does not apply to prevent the proceedings from abating. Part 8 rule 16 of the SCR is in the following terms: "16 Deceased person (1) Where in any proceedings it appears to the Court that a deceased person was interested, or that the estate of a deceased person is interested, in any matter in question in the proceedings and that he has no personal representative, the Court may, on the application of any party: (a) order that the proceedings continue in the absence of a person representing the estate of the deceased person, or (b) by order (with the consent of the person appointed) appoint a person to represent that estate for the purposes of the proceedings. (2) An order under subrule (1), and any judgment or order subsequently entered or made in the proceedings, shall bind the estate of the deceased person to the same extent as the estate would have been bound had a personal representative of the deceased person been a party to the proceedings. (3) Before making an order under this rule, the Court may require notice of the application for the order to be given to such (if any) of the persons having an interest in the estate as it thinks fit." 16 It would seem that the plaintiff, a deceased person, was interested in the matter in question in the proceedings. There is as yet no legal personal representative and accordingly the terms of the rule applies. There is however the need to have the consent of the person to be appointed and normally it should be provided in writing. Subject to appropriate consent being proved in this way and subject to there being evidence of the consent of the other residuary beneficiary and that the will is the last will of the deceased the procedural pathway is available to make an order for the appointment of Baden Thomas Price to represent the estate of the plaintiff for the purposes of the proceedings if it is appropriate to make an order for costs. 17 I turn to the question of whether the Court can make an order for costs in light of the death of the plaintiff and consequent abatement of proceedings. In this respect, the 11 December 2001 judgment of Kenny J in the matter of Kalejs v Minister For Justice & Customs (2001) 111 FCR 442; [2001] FCA 1769 is particularly instructive. In that case, a question arose as to whether the Court had the power to award costs where the proceedings had abated as a result of the death of the applicant. Mr Kalejs had brought proceedings seeking Judicial Review under s 39B of the Judiciary Act 1903 (Cth) in respect of a decision by the Minister to give notice under s 16(1) of the Extradition Act 1988 (Cth) and a Magistrate's order under s 19 of the Act that he was eligible for surrender to Latvia. At paras 15 to22 Kenny J analysed the authorities on the question of whether the particular causes of action were transmissible from the deceased to his or her legal personal representative and as a matter of construction of the statute concluded that they did not survive. 18 At paragraphs 23 – 33 he considered the authorities on whether in the circumstances the Court is able to make a costs' order. These included cases where the party died between the hearing and judgment and the Court allowed judgment to be entered nunc pro tunc so that a party will not be prejudiced by a delay arising from the act of the Court. At paragraph 34 he concluded: "Where the subject of the proceeding is a non-transmissible right and a claimant dies before the court has made a decision on the merits, or before any award of costs in favour of one party or other has been made, then, so it seems to me, the court is not only precluded from delivering judgment on the merits but also from making an order as to costs. If there is no-one who can properly be substituted for the deceased claimant since the rights that he sought to pursue are non-transmissible, then, there is no-one who is capable of reviving the action in order that an application for costs might be made. Put another way, in this circumstance, a deceased's personal representative has no legal interest in the proceeding and, therefore, no right to apply for a costs order in his favour. Alternatively, it is sometimes said that the courts will not permit an action to be revived for the sole purpose of an application for costs." 19 As noted by Kenny J the approach he advocated accorded with that taken by Levine J in Stead v Foster (Unreported, NSWSC, 4 September 1998) where His Honour, in dealing with a claim in defamation, observed [at 16]: "It would appear from this that actions cannot be revived for the purposes of an application for costs alone. It appears to me a fortiori where the action, as a personal one, cannot be revived at all. As I noted above, there have been no orders for costs in the proceedings and certainly none has been taxed or assessed, so there can be no revival of the action on that footing. As appears from p1427-p1430 in Daniell's Chancery Practice, interesting questions may arise where injunctions, committal orders and orders appointing receivers have been made in proceedings which subsequently abate and cannot be revived. These would seem to be the sort of incidental matters to which Mahoney JA was alluding [in Fines at 387] and which the Court may be required to consider, even after the abatement of an action." 20 After referring to various limited exceptions to the rule that a Court will not make orders in an action that has abated His Honour concluded: "I am satisfied upon the authorities above that in this case the action abated upon the death of the plaintiff. As a defamation action, it is incapable of being revived by the remaining parties or the executrix of the deceased plaintiff. The purported attempt by the plaintiff's solicitor to relist the matter with a view to discontinuance was nugatory given the abatement. In my judgment, the abatement of the proceedings in circumstances where they cannot be revived deprives the Court of jurisdiction to entertain an application for costs as made by the first defendant purportedly in the abated action or by freshly originated process." 21 The approach adopted by Kenny J in Kalejs v Minister For Justice & Customs has subsequently been referred to in two cases, namely the unreported judgments of Phung v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 821 and Ali v Hartley Poynton (No 2) [2002] VSC 245. In the former case, Ryan J applied Kalejs v Minister For Justice & Customs holding that a visa-holder's application be struck out, it having abated on the death of the applicant and that there be no order as to costs. In the latter case however, Smith J questioned the distinction drawn by Kenny J between cases where the cause of action survived at common law to the benefit of the estate and cases where the cause of action did not survive. At paragraph 6, Smith J held: "In the latter case, Kenny, J analysed the earlier decisions and noted that a distinction had been drawn in Foppoli and Sims between cases where the cause of action survived at common law to the benefit of the estate and cases where the cause of action did not. Kenny, J held that the power to enter judgment nunc pro tunc was not available where the cause of action did not survive for the benefit of the estate. I question that distinction but, as I have already noted, in the present case s29 has the effect that the relevant causes of action survived. On the basis of Kenny, J's analysis, the power to enter judgment nunc pro tunc remained available." 22 In footnote 11, Smith J continued: "The decisions in Sims and Kalejs rely on a view of Foppoli that is in my view debatable. In Foppoli, Hale J did not cite Turner's case. Burt J did, but held that the Tribunal did not possess the requisite power. He drew attention to the distinction between cases where the cause of action survived and those where it did not but reserved his opinion on whether it should be drawn. It should be noted also that the principle has been applied in circumstances where the cause of action at common law did not survive, eg, trespass whether to goods or land - see, for example Craven v Hanley, Barnes 255; Winfield, "Death as affecting liability in tort", 29 COL L Rev 239. The case of Craven was decided in 1738. Legislation was not enacted until 1833 (3 & 4 William IV C42) to enable executors or administrators of an estate to maintain proceedings in trespass." 23 His Honour's comments in Ali v Hartley Poynton are, of course, obiter as the issue in that case was whether exemplary damages may be recoverable in circumstances where the cause of action survived and s29 of the Supreme Court Act 1958 (Vic) explicitly stated that such damages were not recoverable for the benefit of the estate. As noted above, in the present matter, the plaintiff's representatives do not quibble with the fact that the relevant cause of action does not survive. As I have indicated Powell J found in McEvoy's case that as a matter of construction of the Family Provision Act 1982 the cause of action does not survive. 24 The doubts of Smith J were not shared by Connor J In the Marriage of Sims (1980) 50 FLR 286. I also do not share them and note that the cases of Turner, Foppoli, Sims and Kalejs were cases where the death occurred after the hearing and before judgment. In the present case the death was before any hearing on the merits of the claim. There can thus be no consideration of an exception to the rule expressed in the maxim "actio personalis moritur cum persona" (a personal action dies with the person) which is based upon the Court's delay between hearing and judgment. As Kenny J points out there is no relevant prejudice suffered by anyone because there is now no-one who stands to gain from the proceedings. This is the same as the situation in Stead v Foster and His Honour's decision is also one which I should follow unless I considered it to be clearly wrong. 25 The decision of Kenny J in Kalejs is based on the principle that any rights that the deceased had under the statute are non-transmissible and thus a deceased's personal representative has no legal interest in the proceedings. This is a matter of substance and is not affected by the procedural facilitation offered by Part 8 Rule 16. The plaintiff's right in this case is a statutory right and it dies with him. There is no provision in the Act allowing the recovery of costs in these circumstances. In my view, the executor of the plaintiff has no right to seek a costs' order. 26 Reference was made to the approach of the Court in respect of the costs consequences of proceedings after they have been settled except as to costs. The principles normally applied in such circumstances were summarised by Mr Justice Hill in Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 at 201. To restate His Honour's apt summation: firstly, the Court should be ready to facilitate the conclusion of proceedings by making a costs order; secondly, it will rarely, if ever, be appropriate, for a Court making a determination as to the costs of the proceedings to determine the outcome of a hypothetical trial; thirdly, in determining the question of costs it would be appropriate to determine the reasonableness of the applicant and respondent in commencing and defending the proceedings; fourthly, it might be appropriate for the Court to consider the conduct of a respondent prior to the commencement of the proceedings where such may have precipitated the litigation; fifthly, where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted. 27 Some of these principles restated above were approved by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622. His Honour noted that when the Court does not determine a matter, it is deprived of the factor that usually determines whether or how it will make a costs order, namely, the result. See Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin at 624-625. 28 Recently in One Tel Ltd v Deputy Commissioner of Taxation (2000) FCA 270 Burcher J had reason to comment on the above two cases. His analysis is useful but I will not repeat it here. 29 One of the things to be gleaned out of these cases is the comment of McHugh J when he referred to the decision of Pincus J as being an example of a case where although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. However, as observed by Kenny J in Kalejs these authorities are plainly distinguishable from the present case since they concern the parties voluntary termination of litigation and not the termination of litigation by death. In case some other view is taken on this aspect I would observe that having regard to the facts it certainly is not a case where the plaintiff was almost certain to have succeeded if the matter had been fully tried during the lifetime of the plaintiff. It is a small estate and a Court could well have taken the view that the claim of the husband, given his disabilities and longer life with the deceased, should prevail thus leading to a dismissal of the plaintiff's claim. 30 In any event, I am persuaded that in light of the death of the plaintiff, the consequent abatement of proceedings and the decisions in Kalejs v Minister For Justice & Customs and Stead v Foster, the appropriate costs consequences are that in the circumstances, there be no order as to costs. 31 The orders I make are that the proceedings be dismissed with no order as to costs to the intent that each party shall bear their own costs. ********** Last Modified: 08/27/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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