Dalton v Ellis; Estate of Bristow (No 2) [2006] NSWSC 61

New South Wales Supreme Court

CITATION : Dalton v Ellis; Estate of Bristow (No 2) [2006] NSWSC 61

HEARING DATE(S) : 13/12/05

JUDGMENT DATE : 16 February 2006

JURISDICTION : Equity Division Probate List

JUDGMENT OF : Young CJ in Eq

DECISION : Order that plaintiffs pay 75% of defendant's costs.

CATCHWORDS : PROCEDURE [557] [573]- Costs- Defendant succeeding- However plaintiffs succeed on some issues- Whether defendant entitled to whole costs of action.

Barns v Barns (2003) 214 CLR 169 CASES CITED : Latoudis v Casey (1990) 170 CLR 534 Young v Knight [2005] NSWSC 754

Maris Stella Yvette Nevville Dalton (P1) PARTIES : Isis Josephine Georgina Alice Aline Bristow Dalton (P2) Suzanne Ellis (D)

FILE NUMBER(S) : SC 118099/03

COUNSEL : G Sirtes and F Sinclair (P) M Gorrick (D)

SOLICITORS : Access Legal (P) F J Smith & Co (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST

YOUNG CJ in EQ

Thursday 16 February 2006

118099/03 – DALTON v ELLIS; ESTATE OF BRISTOW (NO 2) JUDGMENT 1 HIS HONOUR: On 8 December last I gave reasons for judgment in this case; see [2005] NSWSC 1252. 2 As set out in those reasons, the case involved four points:

(a) a determination as to whether the second plaintiff was a daughter of the deceased;

(b) whether the plaintiffs could sue on a deed of 21 December 1973 and obtain half the estate;

(c) whether the second plaintiff was entitled to an order under the Family Provision Act 1982; and

(d) a defensive claim by the defendant who, apart from the claim by the plaintiffs, took the whole estate under the deceased's intestacy. 3 In my reasons for judgment I held that (a) the second plaintiff was the deceased's daughter; (b) the plaintiffs were entitled to sue on the deed. However, the decision of Barns v Barns (2003) 214 CLR 169 operated so that such a claim could not prevail against proper claims under the Family Provision Act 1982. Issue (c) was decided contrary to the plaintiffs; issue (d) in favour of the defendant. The upshot was that the defendant keeps the whole of the estate. 4 The question now is how should the costs be paid and borne. 5 As things have turned out, counsel made their submissions on this matter in writing. 6 Mr Sirtes for the plaintiffs submitted that orders should be made dismissing the statement of claim, extending the time to the date of judgment for the cross-claimant (defendant) to seek relief pursuant to s 16 of the Family Provision Act 1982, and making an order entitling the cross-claimant to the whole of the estate. The plaintiffs submit that their costs ought to be borne by the estate as there are special circumstances that warrant a departure from the ordinary rule. 7 In support of this submission the plaintiffs say that the difficulties were occasioned by the testator, that there were strenuous and basically fruitless challenges to the second plaintiff's status as the deceased's daughter, and thirdly where there are multiple issues it is appropriate to split the costs between the various issues. As to these, the plaintiffs succeeded on the first two issues and would have succeeded in the whole suit but for the defendant's defensive application under the Family Provision Act. 8 Mr Gorrick for the defendant put that it was more appropriate simply to dismiss the proceedings. In that way the defendant's rights to the whole estate would be seen to have flowed from the will, not from the Family Provision Act. With respect, this would not be the right way of going about things. Were it not for the fact that the plaintiffs' rights under the deed to damages against the estate were subsumed by the defendant's rights under the Family Provision Act, the plaintiffs would have obtained damages equal to half the estate. 9 Mr Gorrick says the defendant had no choice but to defend the proceedings and whilst her grounds of defence to the action on the deed were largely unsuccessful, they were neither fanciful nor doomed and she had to fight in every way available to her. As the ultimate result of the case was that the defendant retained the assets of the estate, the case should be treated as one which the defendant simply won. The plaintiffs' case must be said to have been doomed from the start unless the plaintiffs could distinguish the recent decision of the High Court in Barns v Barns (2003) 214 CLR 169. 10 He also drew my attention to some recent decisions at Associate Justice level such as Young v Knight [2005] NSWSC 754 which demonstrate that the Associate Justices as a matter of practice in Family Provision Act matters are loath to make orders for costs in situations where the only asset is the matrimonial home which will have to be sold to pay costs if an order is made. Mr Gorrick pointed out that the tendency is in such cases to make no orders as to costs. 11 However, Mr Gorrick's prime submission is that his client should get her costs. The purpose of the order for costs is to compensate the successful party and the defendant was the successful party. He cites Latoudis v Casey (1990) 170 CLR 534 at 543 and 567. 12 I have found the decision as to the proper order for costs a rather awkward one. There is force in the submissions of both parties. 13 As I have indicated earlier, the case could well be split into four parts, or at least two principal parts, viz (a) the claim on the deed; and (b) the Family Provision Act claims. As to (a), the defendant lost and indeed she pursued her defence to those claims with some vigour. However, as Mr Gorrick points out, anyone who had read Barns v Barns (and all the lawyers had before the case commenced), would have known that success on that issue would not necessarily get the plaintiffs any money out of the estate. Indeed, failure on those issues would also leave the second plaintiff with a Family Provision Act application which could net as much for her as under the deed. I do not consider that it is appropriate to treat the deed case as a separate issue as separate issues have often been considered in cases at common law. 14 I have considered the possibility of making no order as to costs in accordance with cases like Young v Knight (supra). However, I find that Mr Gorrick's argument that the defendant was forced into this litigation because of the claim made under the deed which, had it not been made, would have meant that she did not have to make any application at all as she took the whole estate under intestacy. Accordingly I have not thought that this is an appropriate order to make. 15 This leaves me in the state where I should make an order that the defendant receive costs from the plaintiffs. The question then becomes whether there should be any discount from the full costs. The factors that are put forward as to why there should be a discount are that considerable time was spent at the hearing in an unmeritorious defence of the second plaintiff's claim of paternity including a large number of, what is said to be unnecessary, personal questions against the first plaintiff. 16 Moreover, the case had previously been fixed for hearing but was, on the defendant's application, adjourned by Palmer J because the defendant wanted to further investigate the recently discovered material on that particular issue. 17 Furthermore time was expended on a defence that the deed was a sham which was without foundation except for some suspicion. 18 To my mind these factors do merit reducing the costs that the plaintiffs should pay the defendant. Added to these are their success on an issue which was very strongly litigated before me, even though even on the material which the defendant had in her possession when the case started, she really was in no stronger situation than she was when she did not know whether the plaintiffs' claims were true or not. However, she went out of her way to try and deny them. 19 In my view the proper order for costs is that the plaintiffs should pay 75% of the defendant's costs. 20 Thus the formal orders must be (in abbreviated form):