Malachowski Jnr v Ciura; Malachowski v Ciura [2017] NSWSC 381

Supreme Court New South Wales

Medium Neutral Citation: Malachowski Jnr v Ciura; Malachowski v Ciura [2017] NSWSC 381 Hearing dates: 31 March 2017 Date of orders: 31 March 2017 Decision date: 31 March 2017 Jurisdiction: Equity - Family Provision List Before: Kunc J Decision: Motion dismissed with no order as to costs Catchwords: JUDGMENTS AND ORDERS – Terms of orders to give effect to settlement – No issue of principle Legislation Cited: Succession Act 2006 NSW Category: Procedural and other rulings Parties: 2016/291751

Tadeusz Malachowski Jnr (Plaintiff) Stanislaw Ciura (Defendant)

2016/325463

Tadeusz Malachowski (Plaintiff) Stanislaw Ciura (Defendant) Representation: Counsel:

L Mathias (Plaintiff – both proceedings) T Catanzariti (Defendant – both proceedings)

Solicitors:

Ken Cush and Associates (Plaintiff – both proceedings) Elringtons Lawyers (Defendant – both proceedings) File Number(s): 2016/291751; 2016/325463 Publication restriction: No

EX TEMPORE Judgment 1. HIS HONOUR: By summons filed on 29 September 2016 the plaintiff, Tadeusz Malachowski Jnr, commenced family provision proceedings against the defendant, Stanislaw Ciura, for provision out of the estate of the late Tadeusz Malachowski (the "family provision proceedings"). 2. At or about the same time Mr Malachowski Jnr also commenced proceedings (the "probate proceedings") seeking to have the probate issued to Mr Ciura revoked and for an order granting probate to himself (Mr Malachowski Jnr). 3. On 2 February 2017 both proceedings were the subject of a mediation conducted by Mr Paul Studdert. Ms Johnson, solicitor, attended the mediation on behalf of Mr Malachowski Jnr, instructing Mr Peter Tierney of Counsel. Mr Malachowski Jnr was also in attendance. 4. The solicitor for the defendant, Mr Cotchett, attended with Ms Catanzariti of Counsel on behalf of the defendant and the other beneficiary in the estate, both of whom were also in attendance at the mediation. 5. On the afternoon of the mediation, the defendant was invited to submit his final offer of settlement in the proceedings. In response, an offer was made on behalf of the defendant to compromise the proceedings by agreeing to the payment of a legacy to Mr Malachowski Jnr in the sum of $210,000 inclusive of costs. The offer was silent in relation to any condition about its payment and no timeframe for payment was proposed. 6. A request was made on behalf of Mr Malachowski Jnr that the offer remain open for acceptance until the end of the following week, being Friday 10 February 2017. 7. On Friday, 10 February 2017 Mr Peter Tierney of Counsel sent an email to Ms Catanzariti which included: "I am therefore instructed to accept your client's offer to settle the proceedings for the payment of a legacy to our client in the sum of $210,000, inclusive of costs. I would be grateful if you would have Mr Cotchett forward draft orders, with the notice of motion required by Practice Note Eq 7, to Ms Johnson for approval and execution. I note that this matter is listed next Friday in the family provision list. If you would like me to mention the matter by consent of both parties, I am happy to do so." 1. On the following Friday the matter was dealt with by Hallen J in the ordinary course of the Family Provision List. His Honour made the following orders: 1. Note the matter has resolved between the parties. 2. Direct that any original affidavits required to be read, together with the original signed consent orders reflecting the resolution of the proceedings, be delivered to the chambers of the family provision list judge by 4 pm on 1 March 17. 3. Stand the matter over for further directions before the family provision list judge on Friday 10 March 2017. 1. On 16 February 2017 the defendant's solicitors sent to Mr Sam Tierney, the solicitor for Mr Malachowski Jnr, draft consent orders in both the probate proceedings and the family provision proceedings. The draft orders in the probate proceedings have proved to be uncontroversial. They are: 1. Order that the plaintiff's application be dismissed. 2. No order as to the parties' costs, with the intent that each party pay their own costs. 1. It was the proposed consent orders in relation to the settlement of the family provision proceedings that have given rise to the present problem. The proposed orders included: "1. Orders that the Plaintiff receive a legacy of Two hundred and ten thousand dollars ($210,000.00) out of the estate of the late Tadeusz Malachowski ("Deceased") pursuant to Chapter 3 Succession Act 2006 (NSW), payable within 14 days of the sale of the Deceased's property at 46 Alice Street, Queanbeyan, NSW ("Deceased's Property"). 2. Orders that the Deceased's Property be listed with an agent for sale of the Estate Property no later than 4 weeks from the date of these Orders. 3. Order that if the Deceased's Property has not exchanged contracts for sale within three (3) months of the listing of the property for sale, the Defendant will list the property for sale by public auction, to take place within five (5) months from the date of these Orders." 1. To cut a long story short, Mr Malachowski Jnr's solicitors took issue with that proposed form of consent orders. They viewed those orders as being inconsistent with the settlement that had been reached and were concerned that the draft orders in some way made payment of the agreed legacy conditional upon the matters set out in the proposed orders. 2. Ms Catanzariti, who appeared again for the defendant on the present motion, explained to the Court that, as far as her client was concerned, that machinery had been suggested for the protection and benefit of Mr Malachowski Jnr. 3. Further correspondence ensued between the parties, not all of which has been placed before the Court. 4. Matters came to a head with the filing of a notice of motion dated 20 March 2017 on behalf of Mr Malachowski Jnr which seeks this relief: "1 A declaration that these proceedings and the proceedings 2015/159293 were compromised by the parties by agreement reached on 10 February 2017 ("the settlement"). 2 A declaration as to the terms of the settlement. 3 An order that the defendant pay the costs of the plaintiff: a. of and incidental to this application; and b. all work undertaken on behalf of the plaintiff to finalise the proceedings from 10 February 2017 to the date of these orders." 1. It is that motion with which the Court is concerned today. I note that the reference in prayer 1 of the motion to proceedings 2015/159293 is incorrect. That file number is for the original proceedings in which probate was granted. The probate proceedings challenging that grant of probate (and which were settled on 10 February 2017) are 2016/325463. 2. Before giving reasons for the conclusions which the Court has reached, there is one additional fact which I should record. I have been informed by Ms Catanzariti from the Bar table that, given the dispute that has been disturbing the parties for the last few weeks over this matter, her client has taken out a loan to ensure that the $210,000 legacy will be paid within the next seven days. I have no reason to doubt that will be done. 3. The recording of that fact demonstrates that, in practical terms, there was nothing left in dispute. As was put to me by Ms Mathias, who appeared for Mr Malachowski Jnr, what the parties were really now arguing about was an application made by her client for his costs of the notice of motion and the costs incurred in seeking to "enforce the settlement" as he perceived it. 4. In my view, the legal effect of what occurred at the mediation and the subsequent acceptance of the offer is straightforward. An offer was made that the plaintiff be paid a legacy (and it is important to note that the words "a legacy" were used) of $210,000 inclusive of costs. That offer was accepted in precisely the same terms by Mr Peter Tierney's email set out in paragraph [7] above. 5. There is no doubt in my mind that, as a matter of contract, there was at least an express term of the settlement that Mr Malachowski Jnr would be paid "a legacy" from the estate of $210,000 inclusive of his costs. 6. The parties did not reach any express agreement about when or from what source that legacy was to be paid. It would have been open to them to negotiate about it, had they chosen to do so. They did not. 7. In the course of argument, some attention was directed to whether or not the Court would imply that the legacy was payable within a reasonable period. In the circumstances of this case I do not think that is the correct analysis. The parties had agreed to the payment of a legacy out of the estate. In those circumstances, to the extent that any term would be implied, in my view it would be that the legacy was payable "in the ordinary course of administration". That implication arises because of the description of it as "a legacy". 8. In the events which have happened, and given that the amount is to be paid within the next seven days, the conclusion I have reached in the preceding paragraphs is only of academic interest. The important thing is to determine what orders should be made to give effect to the settlement that the parties have reached. 9. There is no doubt about what orders should be made to give effect to the settlement of the probate proceedings. Insofar as the family provision proceedings are concerned, the parties agree that a number of orders usual for the settlement of proceedings in the Family Provision List should be made. 10. The parties are agreed that an order that there be no order as to the plaintiff's costs is consistent with and gives effect to the agreement between the parties. The parties are also agreed that an order that the defendant's costs be paid out of the estate on the indemnity basis should be made. In accordance with the practice note in relation to family provision proceedings, the parties are also agreed that notations concerning the application and other matters are also required to give effect to the agreement. The orders and notations to which I have referred in this paragraph will be orders 2, 3 and 4 that I will make at the end of these reasons. 11. In my opinion, in order to give effect to the settlement in the express terms that I have identified, the order that should be made is: 1. Orders that the plaintiff receive a legacy of $210,000 (Two Hundred and Ten Thousand Dollars) inclusive of costs out of the estate of the late Tadeusz Malachowski (deceased) pursuant to Chapter 3 Succession Act 2006 NSW. 1. This leaves the question of what is to be done with Mr Malachowski Jnr's motion and the costs which he seeks. The Court will only make declarations if they are useful. There is no point in the Court making the declaration sought in order 1 of the notice of motion (that the proceedings were compromised by an agreement reached on 10 February 2017) because the parties were in furious agreement that there had in fact been a compromise of the proceedings on that date. 2. Nor is it necessary for the Court to make a declaration as to the terms of the settlement. Rather, the court will give effect to the settlement by making the orders which, save as to one matter which I have identified, the parties are in agreement about. 3. Turning to the costs of and incidental to the motion and of the work undertaken "to finalise the proceedings", I am not satisfied that this is a case in which the plaintiff ought to have his costs of those matters. There are four reasons for this conclusion. 4. First, the motion will be dismissed because the Court does not propose to make the declarations that were sought. 5. Second, without setting it out in any detail, correspondence from Mr Malachowski Jnr's solicitors did very little to enlighten the defendant's solicitors as to what the real matters of concern were and in what terms the plaintiff suggested a declaration as to the terms of the settlement should be made. 6. Third, once the motion had been filed, the defendant's solicitors made an offer on behalf of their client to agree to orders in the family provision proceedings which included: "1. A declaration that these proceedings and the proceedings in 2016/159293 were compromised by the parties by agreement reached on 10 February 2017 ("the settlement"). 2. The Plaintiff receive a legacy of Two hundred and ten thousand dollars ($210,000.00) inclusive of costs, to be paid by 7 April 2017, out of the estate of the late Tadeusz Malachowski ("Deceased") pursuant to Chapter 3 of the Succession Act 2006 (NSW). 3. The legacy attract interest in accordance with section 84A of the Probate and Administration Act 1986 calculated from seven (7) days from the date of these orders. 4. The Defendant to pay the costs of the Plaintiff: a. of and incidental to the application dated 20 March 2017; and b. all additional work undertaken on behalf of the Plaintiff to finalise the proceedings from 10 February 2017 to the date of these orders." 1. That offer was not accepted. Had it been accepted, Mr Malachowski Jnr would in fact have been in a better position than he is now in as a result of the findings that I have made concerning the terms of the settlement and the form of the orders to give effect to that settlement. 2. Fourth, Ms Catanzariti has indicated to the Court that if the motion was dismissed, her client would not seek his costs of the motion. 3. For these reasons I am not satisfied that the plaintiff is entitled to any costs of the motion or the steps which were taken after the date of the mediation to endeavour to agree the terms of the orders. The appropriate result in the circumstances of this case is that the notice of motion in the family provision proceedings be dismissed and that there be no order as to costs with the intention that each party should bear their own. 4. In the probate proceedings I also make orders in accordance with the document entitled Consent Order which I initial and date today and place with the papers. 5. In the family provision proceedings I also make orders in accordance with the Consent Order which has been amended by me which I initial and date today and place with the papers. 6. I direct that the exhibits be returned.