Bezjak v Wyatt (No 2)

HIS HONOUR: I have, earlier this afternoon, delivered reasons for judgment in the substantive proceedings, the medium neutral citation of which is Bezjak v Wyatt [2018] NSWSC 199. In those proceedings, I ordered that the Plaintiff's Summons be dismissed.

Following the publishing of those reasons, counsel agreed that I could deal with the issue of costs immediately.

On the application for indemnity costs, counsel for the Defendant tendered a copy of a letter dated 10 October 2017, from the Defendant’s solicitors, to the Plaintiff’s solicitors, to which was attached an Offer of Compromise, also dated 10 October 2017. The Defendant offered to pay to the Plaintiff the sum of $40,000 and her costs "as assessed or agreed to the time of this offer". The offer was said to be able to be accepted on or before 10 November 2017.

No evidence was tendered by counsel for the Plaintiff on the costs application.

There was no dispute that all questions of relief have been determined so that to the extent necessary, the offer made could be disclosed to the Court in order to determine questions of costs. It was also clear that the order on the claim was no less favourable than the terms of the offer that was made by the Defendant, but not accepted by the Plaintiff.

There is no suggestion that the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) do not apply to family provision proceedings: Bruce v Greentree (No 2) [2015] NSWSC 1636 at [35].

UCPR rule 20.26 refers to offers of compromise. There is no dispute that the offer of compromise served by the Defendant’s solicitors complies with UCPR rule 20.26. There was also no dispute that the offer of compromise made by the Defendant contained a genuine compromise at the time at which the offer was made.

Section 98(1) of the Civil Procedure Act provides that subject to the rules of Court and to that, or any other, Act, costs are in the discretion of the Court.

Section 99 of the Succession Act 2006 (NSW) provides:

It is clear that s 99 of the Succession Act, provides for an unfettered discretion as to how the costs of the proceedings for a family provision order may be borne. It also provides an unfettered discretion as to the part, or parts, of the estate, or notional estate, that is, or are, to bear the burden of costs. Importantly, the section relates to the payment of costs out of the estate or notional estate or both. It does not appear to relate to how costs may be borne otherwise.

There was no submission in this case that the costs of the Plaintiff should be borne by the estate. It was accepted, in the substantive proceedings, that, if she was unsuccessful, the Plaintiff should bear the burden of her own costs: Bezjak v Wyatt at [10]. The present costs application relates to whether the Plaintiff should bear any of the Defendant’s costs of the proceedings, considering the Offer of Compromise. On that specific topic, s 99 is silent.

UCPR rule 42.1 provides that costs should follow the event, unless it appears to the Court that some other order should be made as to the whole, or any part, of the costs.

UCPR rule 42.20(1) provides that if the Court makes an order for the dismissal of proceedings, then unless the Court otherwise orders, the Plaintiff must pay the Defendant’s costs of the proceedings to the extent to which the proceedings have been dismissed.

Part 42, Division 3 of the UCPR, relates to "proceedings in respect of which an offer of compromise (the offer) is made under rule 20.26 with respect to a plaintiff's claim (the claim)" (UCPR 42.13).

UCPR rule 42.15A relevantly provides:

The effect of these rules, in this case, is that the Plaintiff must bear the Defendant’s costs of the proceedings for the family provision order, unless the Court otherwise orders. The Court can only order otherwise if there is a discretionary decision to depart from what the UCPR provide.

In Chapple v Wilcox [2014] NSWCA 392 at [27], Basten JA stated:

Kunc J in Bates v Cooke (No 2) [2014] NSWSC 1322 (which was cited, with approval, by White J in AB v Curry & Anor (No 2) [2015] NSWSC 1209 at [4], and by the Supreme Court of Victoria in Briggs v Mantz (No 2) [2014] VSC 487 at [33]-[35], and Smith v Whittaker [2016] VSC 287 at [36]) wrote at [33]:

(An appeal from the substantive judgment of Kunc J was dismissed in Bates v Cooke (2015) 14 ASTLR 221; [2015] NSWCA 278. Nothing was written by the Court of Appeal about the costs judgment.)

In Meres v Meres (No 2) [2017] NSWSC 523 at [43]-[44], I wrote:

I have, of course, remembered that a family provision claim raises different issues with respect to costs setting it apart from other forms of litigation. As such, there are potentially different considerations from the usual equity case where such a claim is unsuccessful.

Counsel for the Plaintiff was unable to identify any feature, or features, which provide a rational basis for the Court to displace what the rule specifies is the costs order to which the Defendant is entitled.

I raised with counsel the fact that I had found that the Plaintiff was an eligible person under s 57(1)(e) of the Act and that this might provide such a feature. However, bearing in mind the whole of the reasons for judgment, my overall impression of the Plaintiff’s evidence, and the terms of the Defendant’s Offer of Compromise, I am not satisfied that there is enough, in that fact, to displace the rule. Furthermore, it is to be noted that there was no evidence of any offer made on behalf of the Plaintiff.

Accordingly, I am satisfied that the overall justice of the case requires that the Defendant receive an order against the Plaintiff for his costs in respect of the claim, assessed on the indemnity basis, in accordance with UCPR rule 42.15A. Since the offer was made before the first day of the trial, the costs, calculated on the indemnity basis, should be from the beginning of the day following the day on which the offer was made (i.e. 11 October 2017). Since the proceedings have been dismissed, the Defendant is also entitled to an order against the Plaintiff for the Defendant's costs, to be assessed on the ordinary basis, in respect of the claim up to the time from which the Defendant becomes entitled to his costs calculated on the indemnity basis.

The Court orders that: