Supreme Court New South Wales Medium Neutral Citation: Mezzapica v Mezzapica (No 2) [2018] NSWSC 575 Hearing dates: On the papers (Submissions 27 February 2018; 19 March 2018; 21 March 2018) Date of orders: 03 May 2018 Decision date: 03 May 2018 Jurisdiction: Equity Before: Emmett AJA Decision: See paragraph [12] Catchwords: PROCEDURE – costs – application for costs on indemnity and ordinary basis – no order as to costs – order that parties be indemnified from estate with respect to preparing and responding to itemised schedule PROCEDURE – extent to which attorney under power is required to provide account to attorney's principal Cases Cited: Parker v Higgins & Ors [2012] NSWSC 1516 Category: Costs Parties: Anthony Robert Mezzapica (Plaintiff) Renato Mezzapica (Defendant) Representation: Counsel: A Maroya (Defendant) Solicitors: Hall Partners Pty Ltd (Plaintiff) Photios Vouroudis & Co (Defendant) File Number(s): 2015/371565 Judgment 1. On 20 November 2017, I published my reasons (the principal reasons) for making a declaration that certain funds standing to the credit of an account in the name of Giuseppa Mezzapica were held on trust by Giuseppa Mezzapica for her three grandchildren, and that the payment of the proceeds of those cheques to the credit of that account constituted a breach of trust [1] . I stood the proceedings over for argument on the question of costs. I have now received written submissions from the parties who requested that the outstanding question of costs be decided on the papers. In these reasons, I shall use terms as defined in the principal reasons. 2. Renato contends that Robert should pay his costs on the ordinary basis up to 12 September 2017 and on the indemnity basis thereafter. He contends that Robert should bear those costs personally and should not be indemnified from the estate of Giuseppa. As an alternative, Renato contends that each should bear his own costs, none of which should be reimbursed from the estate of Giuseppa. Robert, on the other hand, contends that his costs should be paid out of the estate on a trustee basis, and that Renato should pay the estate's costs on a trustee basis. 3. In the principal reasons, I characterised these proceedings as involving an unseemly dispute between two brothers concerning the dealings of one of them with the affairs of their late mother. By his amended statement of claim, Robert sought a declaration that Renato's dealings with their mother's cheque account and Trust Account under power of attorney granted by her to him were beyond power, were an abuse of power and constituted misfeasance. In addition, he sought orders that Renato file an affidavit setting out in detail his dealings in relation to Giuseppa's funds and assets and that he repay the total amount of all monies taken from Giuseppa's estate. Finally, Robert sought an order that an account be taken and an inquiry be held of all of the dealings and all of the transactions undertaken by Renato in connection with the two bank accounts in the name of Giuseppa. 4. In his written submissions on the question of costs, Robert now asserts that the dispute should never have proceeded to litigation. He also asserts that the proceedings should never have proceeded to judgment. 5. Probate of Giuseppa's Will was granted to Robert and Renato on 14 April 2015. The inventory of property lodged in connection with the application for probate disclosed that Giuseppa had property with a total value of $3,643,573 consisting principally of two parcels of real property situated in Strathfield. 6. On 27 May 2010, Giuseppa had appointed Robert and Renato as her attorneys, jointly and severally, to do on her behalf anything she may lawfully authorise an attorney to do. On 21 July 2010, Giuseppa completed an authority for Renato to sign cheques drawn on her CBA account. Following Giuseppa's death, disputation developed between Robert and Renato concerning Renato's dealings with Giuseppa's bank accounts. The development of the dispute is outlined briefly in the principal reasons. 7. In the course of case management of the proceedings, Robert filed a schedule of the payments in respect of which he sought an account from Renato (the Schedule). The Schedule contains some 157 items and, in accordance with the Court's directions, Renato provided a response in relation to each of those items. The items were categorised under five headings as indicated in the principal reasons. However, during the course of the hearing, the Court was informed that Robert pursued his claims in respect of only one of the five categories, involving six payments made by cheques drawn on Giuseppa's CBA account payable to Renato. As explained in the principal reasons, I concluded that it is more likely than not that the six impugned cheques were drawn and payments made to Renato with the consent and authority of Giuseppa. 8. On 12 September 2017, an offer was made to Robert on behalf of Renato that the proceedings be resolved without the need for hearing on the basis that Renato would distribute Giuseppa's jewellery to her granddaughter in accordance with the terms of the Will and that the sum of $82,010 would be distributed to Giuseppa's grandchildren from money held in trust. The money consisted of rental income received from one of the Strathfield properties owned by Giuseppa. Renato contends that Robert did not achieve a better result than that proposed by that offer. Accordingly, he seeks costs an indemnity basis from the date of the offer. 9. The extent to which an attorney under power is required to provide an account to the attorney's principal was the subject of some disputation in the proceedings [2] . Renato contended that Robert's claim for an account to the trustee standard was based upon a misstatement of the applicable account keeping standard. 10. It is clear enough that ill will between Robert and Renato appears to have driven the litigation. As Robert says, it is indeed unfortunate that the dispute ended in litigation. It is not insignificant that evidence filed on behalf of Robert relating to Renato's personal circumstances was not relied on in the proceedings. That evidence may have been filed as a result of a misapprehension as to the issues raised by the proceedings. It is also significant that, once Robert had particularised his concerns in the Schedule and Renato had responded to that Schedule, much of the dispute fell away. 11. Nevertheless, the concern that Robert may have had as to Renato's dealings with their mother's property may have been justified. That concern may have been mollified by a degree of co-operation on the part of Renato. Both Robert and Renato were the executors of the Will. Both were under an obligation to administer the whole of Giuseppa's estate. To the extent that Renato had applied her property to his own use without her consent, if that happened, it was incumbent upon both to investigate that matter. Renato, of course, was in a much better position to investigate those matters than Robert. 12. I consider that Robert was entitled to a greater account than Renato had given. On the other hand, Robert ultimately accepted the explanation given by Renato for a considerable majority of the items in the Schedule. In all the circumstances, I consider that it is appropriate to direct that there be no order as to the costs of the proceedings as between Robert as plaintiff and Renato as defendant. However, Robert should be indemnified out of Giuseppa's estate in respect of all costs reasonably incurred by him in preparing the Schedule and considering Renato's response. Renato should be indemnified out of the estate for all costs reasonably incurred by him in preparing his response. ********** Endnotes 1. Mezzapica v Mezzapica [2017] NSWSC 1553. 2. Much of this discussion concerned interpretation of Parker v Higgins [2012] NSWSC 1516. 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: 03 May 2018