Lewis v Lewis (No 2)

THE COURT: On 6 August 2021, this Court gave judgment in Lewis v Lewis [2021] NSWCA 168 and made three orders:

By notice of motion filed on 20 August 2021, Peter seeks a further order as to costs, namely:

David opposes that order, although it is accepted that the application was made within the time specified by UCPR r 36.16. The parties have exchanged written submissions in accordance with a timetable directed by the Registrar, and have not sought for there to be an oral hearing. The second respondent has continued to take an inactive role in the appeal.

In support of the application, Peter points to a comparable order made by the primary judge on 29 October 2020 in Lewis v Lewis (No 2) [2020] NSWSC 1519. His Honour had ordered that David pay 80% of Peter’s costs and then made an order similar to that which is now sought, namely:

In support of those orders, his Honour provided the following reasons:

David opposes the orders sought. David notes that in his written submissions opposing the appeal, Peter had sought different orders concerning costs. In particular, Peter had sought an order that the appeal be dismissed with costs calculated on the indemnity basis, and that those costs “in the first instance to be charged on the appellant’s entitlement under the estate of the deceased” and a further order that “to the extent the costs of the respondents are not satisfied by order 3, the respondents’ costs on the indemnity basis are to be paid out of the estate of the deceased”.

David observes that this Court’s orders are different from and inconsistent with what was sought in Peter’s earlier submissions and contends that r 36.16 of the UCPR is not intended to permit a party to re-agitate a submission on costs which has been rejected by the Court of Appeal.

David further submits that r 36.16 does not permit a party to advance a different costs order in circumstances where the original costs order sought has been rejected.

Finally, David submits, but without any elaboration, that the costs order made by the Court of Appeal is the correct order, such that Peter’s notice of motion should be dismissed with costs.

In his submissions in reply, Peter contends that the Court of Appeal’s judgment did not deal with the submissions as to costs which were sought to mirror those made by the primary judge, and that there is nothing in UCPR r 36.16 preventing what is said to be a very limited re-agitation of the consequential order with regard to costs.

The parties did not address the costs of the appeal or cross-appeal, either in their written submissions supplied in advance of the appeal, or in their addresses on 22 June 2021, save only for the fact that, as David observes, Peter sought an order for indemnity costs and the charging order in his written submissions. The submissions did not articulate a basis for any such order.

This Court’s judgment of 6 August 2021 rejected Peter’s submission that he was entitled to party-party costs on an indemnity basis. That is implicit in the fact that parts of David’s submissions found success (notably, the matter put in issue by Peter whether the 2014 will and 2015 codicils had been read to Pamela: see at [83]-[90]).

Properly, Peter does not seek by this motion to re-agitate his claim for party-party costs on an indemnity basis. To do so would be inconsistent with what has already been decided, and there is no basis to think that one of the limited exceptions which permit that to occur was available here.

Order 3 made on 6 August 2021 only concerned the party-party costs of the active parties, David and Peter. The order sought by Peter concerns where he may look to recover his own solicitor-client costs. It is fairly described as supplementary upon the order already made.

The order sought by Peter’s motion is justified by the same reasoning given by the primary judge in relation to the 80% entitlement to costs there ordered which is reproduced above. David had sought by ground 11 to challenge other aspects of that exercise of discretion, which this Court rejected. He did not however seek to challenge the appropriateness of an order that Peter’s costs be paid out of the estate immediately, with the party-party costs being deducted from David’s entitlement under the will, and with the difference being borne by the residuary beneficiaries.

There is one qualification to the foregoing. The orders sought by Peter’s motion include an order that, if and when the Administrator pays Peter’s solicitor-client costs out of the estate, then in addition to his being subrogated to Peter’s entitlement to costs under order 3, “the payment [shall be] charged against the appellant’s entitlement as a beneficiary of the estate of the late Pamela Lewis”. That goes beyond the terms of the orders made in Lewis v Lewis (No 2) [2020] NSWSC 1519. It also may potentially give rise to a dispute as to its operation, insofar as the reference to “charge” might be understood as creating a proprietary interest. The order made by Parker J provides that when the administrator of the deceased estate pays Peter’s solicitor-client costs, he stands in Peter’s shoes and can enforce Peter’s entitlement to a costs order against David. The intent is that he will be able to satisfy that entitlement by setting off against David's entitlement under the will. It may be that the order sought in Peter’s motion was not intended to achieve any different result, but even so it is preferable that its terms mirror those of the corresponding order made at first instance. Just as David did not challenge the order that Peter be entitled to 80% of his solicitor-client costs from the estate, with the estate being subrogated to Peter’s entitlement, so too Peter did not in his cross-appeal challenge the form of that order.

Accordingly, the appropriate order in those circumstances is one which mirrors the orders made by the primary judge, namely:

The result is that Peter has been substantially successful in obtaining the orders sought on his motion, and the costs of the motion should follow the event. There is no reason for those costs to be treated any differently from Peter’s costs of the appeal.

The Court therefore makes the following orders: