Morgan v Black (No 2)

On 7 September 2023, I dismissed the Plaintiff’s claim for a family provision order out of the estate or notional estate of her father, the late Raymond Leslie Morgan (the deceased): Morgan v Black [2023] NSWSC 1073 (“the principal judgment”). In the reasons for Judgment handed down on that day, I determined that the Plaintiff had not shown sufficient cause for an extension of time to bring her application, and that an extension should be refused; and further, and in any event, the Plaintiff had not established that there are special circumstances which justify the making of a notional estate order, and that the orders sought should not be made.

There is no estate or notional estate of the deceased from which any order for costs can be made. In those circumstances, I directed the parties to provide short submissions in respect of any proposed costs orders.

The Defendant has sought an award of costs on the ordinary basis, and has provided a written set of submissions in support of that application.

The Plaintiff indicated that she made no submissions in response to the Defendant’s application for costs.

The general power to award costs in s 98(1) of the Civil Procedure Act 2005 (NSW) provides that costs are in the discretion of the Court.

The exercise of that general discretion is subject to r 42.1 of the Uniform Civil Procedure Rules 2005, which provides as follows:

In addition, r 42.20(1) provides that if the Court makes an order for the dismissal of the proceedings, then unless the Court otherwise orders, the plaintiff must pay the defendant’s costs of the proceedings.

Section 99(1) of the Succession Act 2006 (NSW) confers an additional power in relation to costs, in the following terms:

This provision cannot have any application to the current matter because, as explained in the principal judgment, there are no assets in the deceased’s estate out of which costs could be paid; and by reason of the Plaintiff’s application for a notional estate order having been rejected, there is no notional estate of the deceased out of which those costs could be paid.

It is well established that family provision applications “raise different issues with respect to costs” to those raised by other proceedings: Salmon v Osmond [2015] NSWCA 42 at [172] per Beazley P (McColl and Gleeson JJA agreeing). Reference has frequently been made to the observations of Gaudron J in Singer v Berghouse [1993] HCA 35; 67 ALJR 708 at 709:

However, as Giles JA observed in Jvancich v Kennedy (No 2) [2004] NSWCA 397 at [11] (Handley and McColl JJA agreeing), the “overall justice of the case” is “not remote from costs following the event”.

Where an application for a family provision order is dismissed, the prima facie principle with respect to costs is as stated in rr 42.1 and 42.20(1) of the Uniform Civil Procedure Rules, that is, that there should be an order that the unsuccessful plaintiff pay the defendant’s costs: Chapple v Wilcox [2014] NSWCA 392 at [139] per Barrett JA.

But while the default rule in r 42.1 applies to family provision proceedings, its application remains subject to the Court exercising greater than usual “liberality and discrimination” in deciding whether to depart from it: Haertsch v Whiteway (No 2) [2020] NSWCA 287 at [6] per curiam (Macfarlan, Meagher and Leeming JJA). For example, it is not uncommon, “though atypical”, for an unsuccessful applicant not to be ordered to pay the defendant’s costs where the applicant is or would become impecunious and the claim for provision was reasonable or borderline: ibid. at [7].

As regards the relevance of impecuniosity, the Court of Appeal made the following comments in Haertsch v Whiteway (No 2) at [9]:

Further, the Court noted (at [11]), that while a more liberal approach to costs has been adopted where “borderline” questions of judgment have been involved, those observations are “typically directed to the evaluative and discretionary judgments as to what would constitute adequate provision for the applicant’s proper maintenance, education or advancement”. The Court noted, in that case, that the plaintiff’s application did not fail for that reason. Instead, it failed because, as was the case here, the Court held that an extension for time should not be granted, and the notional estate order sought was not able to be made.

As set out in the principal judgment (at [115]), the Plaintiff has no net assets. However, impecuniosity is not, of itself, a reason to deny the successful party a costs order.

While the position may be different where the making of an adverse costs order might, by altering the Plaintiff’s financial circumstances, affect the basis on which the application for a family provision order was rejected, and thereby cause a further application, that is not the case here. The application was rejected because sufficient cause was not shown for extending the date for bringing the application to the date on which the Summons was filed, and further and in any case, because I was not satisfied that there were special circumstances which justified the making of a notional estate order.

The Defendant has been wholly successful, and in defending these proceedings, has incurred significant costs, which have substantially depleted the limited assets available for her to meet her living expenses: see principal judgment at [22], [24].

Finally, with notice of the costs order sought by the Defendant, and the basis on which it is sought, the Plaintiff has chosen not to make any submissions in response.

In those circumstances, and having regard to the principles outlined above, I have formed the view that, in the exercise of the discretion under s 98 of the Civil Procedure Act 2005, I should make the order sought by the Defendant, and award costs of the proceeding on the ordinary basis.

Accordingly, I make the following order: