Milosevska v Milosevski

1. [1]

   HIS HONOUR: Before the Court, for hearing on 4 June 2019, was a notice of motion, filed on 6 May 2019 (wrongly shown as having been filed on 3 May 2019), in which the Defendant, Trajanka Milosevska, the widow of Gorija Milosevski (“the deceased”), seeks “security for the [D]efendant’s costs in these proceedings … in such manner as the Court thinks fit” (presumably pursuant to the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 42.21 or, perhaps, the court’s inherent power to order security for costs); an order that the proceedings be stayed until the Plaintiff gives such security; and that if the Plaintiff fails to comply with such order, that the Summons be dismissed. (The notice of motion contained a typographical error in relation to the order for the stay in that it refers to the “Defendant” giving security. However, at the hearing, the typographical error was amended, by hand, on the notice of motion without objection: s 64 of the Civil Procedure Act 2005 (NSW).)

2. [2]

   The Plaintiff, Pece Milosevski, who is the son of the deceased, commenced the substantive proceedings by Summons filed on 7 December 2018. He seeks a family provision order out of the estate and/or notional estate of the deceased pursuant to Chapter 3 of the Succession Act 2006 (NSW) ("the Act"); an order extending the time for the making of the application; an order under s 91 of the Act, that administration in respect of the estate of the deceased be granted, for the purposes of permitting the application to be dealt with, as administration of the deceased’s estate has not been granted; an order that the costs of the proceedings be paid from the estate of the deceased, including notional estate; and such further or other order as the court sees fit. Accordingly, the application for security for costs brought by the Defendant is in the context of family provision proceedings.

3. [3]

   There is no dispute that the Plaintiff is, and was at the date of commencing the proceedings, “ordinarily resident outside Australia”, residing in Bitola, in the Republic of Macedonia, and that he has no assets in New South Wales. There is also no dispute that he has very few assets outside the jurisdiction.

4. [4]

   By setting out what I shall describe hereunder as the facts, I do not, in any way, purport to determine any factual issues. My purpose is to give an overview in determining the question of whether security for costs ought to be ordered.

The Plaintiff’s claim

1. [5]

   It is to be noted, at the outset, in relation to the affidavits relied upon, that there is a question whether each of the affidavits of the Plaintiff comply with s 27A Oaths Act 1900 (NSW), which provides:

2. [6]

   UCPR r 35.7 provides:

3. [7]

   Because of what is written in the affidavit of the Plaintiff explaining delay to which I shall refer, I note that none of his affidavits reveal whether it was read to him in the presence of the person before whom the affidavit was made, or that it appeared to that person that the deponent, (the Plaintiff) understood the affidavit.

4. [8]

   No objection to the Plaintiff’s affidavits was taken on this basis. However, the rule provides that the affidavit “may not be used”.

5. [9]

   The purpose of the rule was identified by Barrett AJA in In the matters of Shaolin Temple Foundation (Australia) Ltd [2016] NSWSC 1232, at [93]-[95]:

6. [10]

   More recently, the rule was referred to in GWM Goldmining Pty Ltd v Frerk [2018] NSWCA 162, in which Emmett AJA (with whom Payne JA and Simpson AJA agreed) wrote, at [24] and [26]-[27]:

7. [11]

   I considered whether the Plaintiff could rely upon s 64 of the Evidence Act 1994 (NSW) because the Court was informed by his counsel that the Plaintiff was present and available to give evidence about the asserted facts in the affidavits.

8. [12]

   When this matter was raised, counsel for the Defendant accepted that no notice of an objection to the Plaintiff’s affidavits on this ground had been given to the Plaintiff’s legal representatives. He stated that he did not wish to take objection to the Plaintiff’s affidavits being read on this interlocutory application.

9. [13]

   In order to deal with the matter, in accordance with s 56 of the Civil Procedure Act, and without objection from the Defendant, the affidavits were read on the notice of motion.

Background Facts

1. [14]

   The Plaintiff is 52 years of age and lives in Macedonia. He is married with 2 children aged 21 and 20.

2. [15]

   The Plaintiff deposes that the deceased divorced his mother when he was 2 years of age in about 1969. He gives evidence that the deceased paid no child support despite orders having been made in 1967, 1969, 1973, 1977, 1981, 1984 and 1986. (There is no evidence that the orders were served on the deceased, particularly the orders made after he moved to Australia, or that the deceased was otherwise made aware of them.)

3. [16]

   He also says that he sought out the deceased, in Australia, by asking his aunties to have the deceased contact him. When he obtained an address, the Plaintiff says he wrote letters to the deceased.

4. [17]

   On one occasion, he says (but the Defendant denies), that the deceased visited Bitola, Macedonia, but did not contact the Plaintiff.

5. [18]

   Accepting the evidence of the Plaintiff at its highest, it is, at least, arguable that the Plaintiff’s case is one of “bare paternity” only. That, of course, does not mean that “the bare fact of paternity” is not “of very great importance in morality”: Gorton v Parks (1989) 17 NSWLR 1 at 9-10.

6. [19]

   The Plaintiff asserts that he did not know of the deceased’s death until about 10 June 2018. Towards the end of July 2018, he instructed his current solicitors, Bozinovska & Co., and in particular, Ms Gordana Bozinovska of that firm. He never came to Australia to give instructions. The firm, and Ms Bozinovska, continue to act for the Plaintiff.

7. [20]

   There is evidence that his solicitors wrote a letter, dated 13 August 2018, to the Defendant (addressed to her home in Tempe, the relevance of which is discussed later in these reasons) requesting a copy of the deceased’s Will, Inventory of Property, and Probate. The letter also stated that instructions had been received to make a claim for a family provision order.

8. [21]

   The Plaintiff states that no response to this letter was received.

9. [22]

   Proceedings were, ultimately, commenced on behalf of the Plaintiff on 7 December 2018. There is no explanation why there was a delay between August, after the Plaintiff instructed his solicitors, and December 2018, when the proceedings were commenced, other than the assertion that the Plaintiff says he could only contact his solicitor electronically, or by telephone, and that “[t]his has caused some difficulties for me obtaining advice and giving instructions”.

10. [23]

    The Plaintiff does not identify the precise difficulties referred to, although he does say that “[o]nce I engaged my solicitor it took a number of months to complete and translate the required documents”.

11. [24]

    In his affidavits, the Plaintiff does not disclose owning any real property, or other assets. He says that he has a net monthly income of $480 (about $5,760 per annum). His wife has a monthly income of $250 (about $3,000 per annum). The weekly expenses of the Plaintiff and his family equate to $387 (about $20,124 per annum). He does not disclose how the shortfall of income over expenditure is met.

12. [25]

    Indeed, in his affidavit of 9 May 2019, at [9], he states:

13. [26]

    Thus, on the Plaintiff's own evidence, he is devoid of assets and earns very little from his employment and therefore, he has “needs”. No submissions, in writing, however, were made by the Plaintiff on the issue of the designation of property as notional estate of the deceased.

14. [27]

    On the issue of enforcement in Macedonia, of any costs order against the Plaintiff, in written submissions only, the Plaintiff’s counsel referred to the International Private Law Act 2007, published in the official gazette of the Republic of Macedonia, No. 87 of 12 July 2007, Article 100, which states:

15. [28]

    It should be noted that the proof of foreign law is a question of fact. However, the application of the foreign law to the facts of the particular case is a question of law: Brereton J (as his Honour then was), “Proof of Foreign Law – Problems and Initiatives” [2011] NSWJ Schol 13 (referred to by Pembroke J in Crupe Pte Limited v Stuart Kinnear Robertson [2018] NSWSC 2056).

16. [29]

    There was no evidence concerning the International Private Law Act or its meaning. I do not propose to rely upon the written submissions of the Plaintiff on this topic. (In any event, counsel accepted that it would not matter as the Plaintiff would not be able to satisfy an order even if it were able to be enforced in Macedonia.)

17. [30]

    On 29 May 2019, that is about 6 months after the commencement of the proceedings, and three working days before the hearing of the notice of motion, the Plaintiff’s solicitor, Ms G D Bozinovska, swore an affidavit to which she annexed correspondence that she had sent to the Defendant’s solicitors on 13 May 2019 and on 15 May 2019. She received a response from the Defendant’s solicitors on 21 May 2019. The purpose of this evidence was to suggest that the amount in the jointly held bank account had been wrongly expended by the Defendant.

18. [31]

    More importantly, it seems to me, the Plaintiff’s solicitor disclosed that:

19. [32]

    A copy of the costs agreement was not annexed to the affidavit, but I have assumed that the costs agreement referred to is a costs agreement (a conditional costs agreement) that provides that the payment of some, or all, of the legal costs is conditional on the successful outcome of the matter to which those costs relate, pursuant to Part 4.3, s 181 of the Legal Profession Uniform Law Application Act 2014 (NSW).

20. [33]

    Counsel for the Plaintiff confirmed that this was so. In fact, he went further and informed the Court from the Bar table, without objection, that the Plaintiff is required to pay disbursements only in the event that he is unsuccessful.

21. [34]

    There was no evidence given on the way in which the disbursements, which, presumably, include counsel’s fees, would be met by the Plaintiff, or how he had been able to attend New South Wales for the notice of motion for security.

22. [35]

    It is to be noted that the Plaintiff’s solicitor had sworn a costs affidavit on 7 December 2018, which she said was made “in accordance with Practice Note SC Eq 7”. No mention of conducting the proceedings on behalf of the Plaintiff “on a speculative basis” was disclosed in that affidavit.

23. [36]

    I have, now, dealt with the obligation of a solicitor to disclose the existence of a conditional costs agreement in, at least, two other judgments, namely in Anderson v Hill [2017] NSWSC 1149, at [35]-[38], and at [40]-[41] and in Oxley v Oxley [2018] NSWSC 91, at [57]-[90].

24. [37]

    In Oxley v Oxley, at [88], I wrote:

25. [38]

    The information provided by the Plaintiff’s solicitor should have been disclosed in her first costs affidavit. Clearly, it was a matter of relevance to the Defendant and is a matter relevant to the Court.

26. [39]

    The Plaintiff seeks an order that the Defendant’s notice of motion be dismissed with costs (thrown away), to enable the Plaintiff to properly pursue and prosecute his claim at a final hearing in accordance with the dictates of justice.

27. [40]

    It was accepted by the Plaintiff’s counsel, after obtaining instructions from the Plaintiff, that there would be no point in ordering the proceedings to be stayed if an order for security were made, as the Plaintiff would not be able to satisfy any order. In those circumstances, the proceedings should be dismissed: Tcpt, 4 June 2019, p 8(22) – 9(10).

The Defendant’s defence to the Plaintiff’s claim

1. [41]

   The Defendant is 72 years of age. She was born in northern Macedonia. She married the deceased in 1971 and remained married to him until his death in February 2017. It follows that they were married for about 46 years. There were four children of their marriage, all of whom are now adults.

2. [42]

   Counsel for the Defendant stated from the Bar Table, without objection, that the deceased died intestate: Tcpt, 4 June 2019, p 9(34-38). There has been no grant of administration.

3. [43]

   The Defendant gave evidence that the deceased “had no assets or liabilities of significant financial value which would form part of his estate. His personal effects had no commercial value. No grant of administration was required”. He had no superannuation.

4. [44]

   It follows, if the Defendant’s evidence is accepted, that there is no actual estate out of which an order for provision in favour of the Plaintiff may be made.

5. [45]

   The Defendant acknowledged that she and the deceased owned a property at Tempe, a suburb of Sydney, as joint tenants, and that since the death of the deceased, she has become the sole registered proprietor of that property (“the Tempe property”). At the date of death, the value of the property was said to be $970,000.

6. [46]

   She also gave evidence that the Tempe property was purchased jointly by the deceased and her, in 1974; that it was their matrimonial home; and that it remains the home in which she currently lives. She has lived in the Tempe property for about 45 years and says that she wishes to continue to do so. Two of her children currently reside there with her, one of whom, Robert, is now her primary carer.

7. [47]

   She stated that she had worked with the deceased to pay off the Tempe property and that she had worked for about 10 years longer than he did, in order to support the family after he had suffered a back injury and had stopped working. Until her retirement, in 1990, she worked continuously, apart from periods of maternity leave, and had earned an income, which was part of the income of the family.

8. [48]

   The Defendant suffered a stroke in 2012, following which she was unable to care for the deceased as she had done until that time. Thereafter, their daughter, Sonia, became his primary carer.

9. [49]

   It is unlikely that the Plaintiff would have any evidence to contradict the historical facts asserted by the Defendant.

10. [50]

    The Defendant also stated that, at the date of his death, she and the deceased held a joint bank account, which, then, had a credit balance of $60,874. She gave evidence that, after the deceased’s death but before the commencement of the substantive proceedings, she had expended a substantial part of the jointly held funds in burying the deceased and having an appropriate monument placed on his grave.

11. [51]

    The Defendant’s application for security for costs was brought following her complying with her obligations under Practice Note SC Eq 7, and having revealed to the Court, and to the Plaintiff, the circumstances of the estate and notional estate, and also revealing her own circumstances.

12. [52]

    Based upon a recent affidavit served by Ms Bozinovska, there could be some dispute about the value of the property that may be able to be designated as notional estate.

The substantive proceedings

1. [53]

   As a child of the deceased, the Plaintiff’s standing as an eligible person is not in dispute. The time for making the claim is calculated from the date of death of the deceased to the date of filing of the Summons in the Court Registry: s 58(3). The Plaintiff’s Summons was filed about 10 months out of time.

2. [54]

   As the Defendant does not consent to the time for the making of the application being extended, the Plaintiff must show “sufficient cause” for the Court to “otherwise order”.

3. [55]

   The time constraint imposed by s 58(2) on the making of a family provision application is not a mere formality: Verzar v Verzar [2012] NSWSC 1380, at [98]. (The equivalent section in similar UK legislation has been described as "a substantive provision laid down in the Act itself, and is not a mere procedural time limit imposed by rules of court which will be treated with the indulgence appropriate to procedural rules": Re Salmon, Deceased [1981] Ch 167 at 175.)

4. [56]

   No extension of time will be granted unless the applicant would, in the event of the extension being granted, be entitled to an order for provision under the Act. As Meagher JA wrote in Verzar v Verzar (2014) 12 ASTLR 523; [2014] NSWCA 45, at [24], “[t]he sufficient cause or reason to which s 58(2) is directed is that for allowing an application to be made out of time”.

5. [57]

   Because, on the present evidence, it appears that there is no actual estate, any order for provision and for costs could be made only out of notional estate.

6. [58]

   In the circumstances, the real issues in the Plaintiff’s proceedings are likely to be:

7. [59]

   The issues are not entirely distinct, but are related and overlap: the strength of the Plaintiff’s substantive claim for provision is relevant to the discretion to extend time and whether there are “special circumstances”, and considerations relevant to the extension of time can also inform whether there are “special circumstances” in respect of s 90: Stone v Stone [2016] NSWSC 605, per Brereton J (as his Honour then was), at [7].

8. [60]

   A family provision order may be made in relation to property that is not part of the deceased person’s estate, but is designated as "notional estate" of the deceased person by an order under Part 3.3 of the Act: s 63(5). “Notional estate” of a deceased person is defined in s 3 of the Act to mean property designated by a notional estate order as notional estate of the deceased person. “Notional estate order” means an order made by the court under Chapter 3 of the Act, designating property specified in the order as notional estate of a deceased person. A person’s rights are extinguished to the extent that they are affected by a notional estate order: s 84 of the Act.

9. [61]

   Section 74 of the Act provides that "relevant property transaction" means a transaction, or circumstance, affecting property and described in s 75 or s 76. "Property" includes "any valuable benefit": s 3.

10. [62]

    Section 76 of the Act provides a description of some, but not all, of the circumstances that constitute the basis of a relevant property transaction for the purposes of s 75. One of the circumstances, described in s 76(2)(b), which is relevant in the present case, provides:

11. [63]

    Any such circumstance is “subject to full valuable consideration not being given” (s 76(1)).

12. [64]

    Section 78(2) of the Act which provides that the Court must not make an order under s 78(1)(b) for the purposes of an order that the whole or part of an Plaintiff’s costs be paid from the notional estate of the deceased person unless the Court makes or has made a family provision order in favour of the applicant, to demonstrate that if the Plaintiff were unsuccessful in the substantive proceedings, and if there were only notional estate, he would not be able to obtain an order for his costs.

13. [65]

    Section 80(1) provides that the Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies. Sub-section (2), relevantly, provides that the section applies to a relevant property transaction that took effect on, or after, the deceased person's death. Sub-section (3) relevantly provides that property may be designated as notional estate by a notional estate order under this section if it is property that is held by a person by whom the property became held (whether or not as trustee) as the result of a relevant property transaction.

14. [66]

    There does not appear to be any dispute that the non-severance, before the deceased’s death, of the joint tenancy, in the Tempe property, is a matter capable of giving rise to a designation of property as notional estate: Cetojevic v Cetojevic [2006] NSWSC 431. (The precise way in which the joint bank account was held is not clear on the evidence, but it appears to have been accepted, that the deceased’s interest in the jointly held bank account may also be designated as notional estate.)

15. [67]

    The power to make a notional estate order is discretionary. Section 87 of the Act, contained in "Division 3 Restrictions and protections relating to notional estate orders", circumscribes the Court’s power to make a notional estate order. That section provides:

16. [68]

    Furthermore, in this case, s 90 of the Act is relevant, because the Plaintiff did not commence proceedings within the time prescribed by the Act. The section relevantly provides:

17. [69]

    At the hearing, when asked how long the duration of the hearing of the substantive proceedings was estimated to be, the legal representatives agreed that it would be of 2 days duration.

18. [70]

    In the affidavit sworn on 6 May 2019, in support of the notice of motion, by Ms Suzi Gestakovska, the solicitor for the Defendant, at [6], the Defendant’s costs, calculated on an indemnity basis, of the proceedings, were estimated to be $40,000 plus GST.

19. [71]

    Of course, if the Defendant were successful in defending the proceedings, and if an order were made that the Plaintiff was to bear the Defendant’s costs of the proceedings, the usual order would be for those costs to be calculated on the ordinary basis. The Court was informed, from the Bar table, without objection, that the estimate of the Defendant’s costs, calculated on the ordinary basis, would be $36,000. The Court was also informed that there was an Offer of Compromise which might affect how the Defendant’s costs of the proceedings might be calculated.

20. [72]

    Following the completion of the oral submissions, I indicated to the parties that I would adjourn briefly, to formulate the orders that I proposed to make, and then, in due course, publish the reasons for those orders. The parties agreed to the course that the Court indicated.

21. [73]

    These are the reasons for the orders referred to.

The Law – application for security for costs

1. [74]

   UCPR r 42.21(1) relevantly provides:

2. [75]

   I do not intend what follows to be elevated into rules of law, propositions of universal application, or rigid formulae. Nor do I wish to suggest that the jurisdiction of the Court should be unduly confined, or formulated in advance, or that the discretion should be constrained by statements of principle found in dicta in other decisions, or by preconceptions and predispositions. Decisions of the past do not, and cannot, put any fetters on the discretionary power, which is left largely unfettered.

3. [76]

   The general principles in relation to an application fo security for costs, in my view, may be summarised as follows:

Determination

1. [77]

   It can be seen from what has been written above, that, on an application for security for costs, four issues usually arise: (i) whether the ground referred to in the rule relied upon is established; (ii) if the ground is established, whether, as a matter of discretion, an order should be made; and if each of the other two questions is answered affirmatively, (iii) the quantum of any order to be made and the terms on which it might be made; and (iv) should a stay be ordered until any order for security is met?

2. [78]

   Counsel for the Plaintiff conceded that the threshold test in UCPR r 42.21(1)(a) had been satisfied. The Plaintiff is ordinarily resident outside New South Wales. The concession, which was appropriately made, avoids the need to discuss the meaning of “ordinarily resident”: Corby v Channel Seven Sydney Pty Limited [2008] NSWSC 245.

3. [79]

   Having established the jurisdiction to make an order for security, the question, then, is whether security should be refused for some reason. I shall consider the relevant factors referred to previously.

4. [80]

   I do not accept the Plaintiff’s submission that “the [P]laintiff … has reasonable prospects of success because he is an eligible person, there is inadequacy in provision and he has needs”. Those are not the only matters he must establish. He must also establish “sufficient cause” for the making of his application out of time, and, relevantly, the source from which the order, if any, for provision, can be satisfied, namely out of property designated as notional estate. The last matter was not touched upon in the written submissions of the Plaintiff.

5. [81]

   I have also mentioned that the Defendant is the deceased’s widow of a very long marriage. This is not to say that there is a general rule that the competing claim of a widow is always paramount. However, as was written by Ipp JA, with whom Stein AJA agreed, in Bladwell v Davis [2004] NSWCA 170, at [2]:

6. [82]

   I accept that the Plaintiff has brought the proceedings, genuinely, for the purpose of obtaining a family provision order. He is an eligible person and he has financial “needs”. However, bearing in mind the various matters that he must establish in order to obtain a notional estate order to satisfy an order for provision, it is difficult not to conclude, at this preliminary stage of the case, in the circumstances of the competing financial, and moral, claim of the Defendant, that his prospects of success are rather weak. Very fairly, if I may say, counsel for the Plaintiff accepted that this was so.

7. [83]

   I have already dealt with the impecuniosity of the Plaintiff. The fact that the Plaintiff has no assets in Australia, means that any order for costs in the Defendant’s favour would not be enforceable in Australia. However, an order for provision will not be made merely on account of his impecuniosity.

8. [84]

   In relation to that impecuniosity, there is no suggestion that it was caused by the deceased’s conduct, or, for that matter, by the conduct of the Defendant.

9. [85]

   The Defendant’s counsel accepted that:

10. [86]

    Yet, it is to be noted that the Plaintiff did not give evidence of any inability to borrow funds from an institution, or obtain them by way of loan from family or friends. However, in view of the submission that if an order for security for costs were made, there would be no point ordering a stay, and then, that the proceedings should be dismissed, it is likely that the Plaintiff’s proceedings could not continue if an order for security were made.

11. [87]

    Relevant, also, is that the Plaintiff will not have to bear the burden of his own costs in the event that his application is unsuccessful, since his solicitors have entered a conditional fee agreement with him.

12. [88]

    In Bray v F Hoffman‑La Roche Ltd (2003) 130 FCR 317; [2003] FCAFC 153, Finkelstein J (with whom Branson J agreed) wrote, at 375; [252]:

13. [89]

    (In this case, there is said to be no additional fee as there is no uplift factor in the Plaintiff’s costs agreement.)

14. [90]

    Barrett J in Del Bosco v Outtrim [2008] NSWSC 105 also considered evidence that the plaintiff’s solicitors were acting for her on a contingency basis precluded an order for the provision of security from having the effect of stultifying the prosecution of her claim.

15. [91]

    Yet, not to make an order for security would mean that the Plaintiff, effectively, is immune from satisfying a costs order if he were unsuccessful and if an order that he bear the Defendant’s costs were made. Nor would he have to pay his own costs. Even if successful, without security, the Defendant would effectively have to bear her own costs.

16. [92]

    There is some merit in the argument of counsel for the Defendant that in the circumstances, without an order for security, the Plaintiff would be able to proceed, encumbered only by having to satisfy the amount of disbursements payable to his own solicitors. He would not be able to satisfy any order for costs made in favour of the Defendant. As counsel put it, since the Defendant did not have a conditional costs agreement in place with her lawyers, there was an “imbalance which is unfair”.

17. [93]

    This is not a case in which the Plaintiff is effectively in the position of the Defendant.

18. [94]

    I do not accept the Plaintiff’s submission that “the proceedings involve a matter of public importance”. Each case is decided upon its own facts and no precedent is created in relation to family provision matters generally if an order for security is made in this case. As stated above, the decision to order, or not to order security, cannot, and does not, put any fetters on the discretionary power, in any future case.

19. [95]

    Furthermore, on the question of public importance, the Court must also remember the legal consequences of owning property jointly (particularly in this case in which the joint owner is a spouse of a long marriage).

20. [96]

    The Defendant has brought the application for security reasonably promptly. I do not accept the Plaintiff’s submission that the Defendant is guilty of delay in filing her application for security for costs. I accept that it was necessary for her to put on evidence that detailed, amongst other things, the nature and value of the deceased’s estate and potential notional estate, so that the Plaintiff had an opportunity to consider his position.

21. [97]

    In any event, there is no suggestion that any delay in bringing the application has caused, or will cause, the Plaintiff any prejudice. Nor is there any suggestion that the application for security is oppressive, in the sense that it is being used merely to deny an impecunious plaintiff a right to litigate. The Defendant, herself, in the circumstances of this case, has a right to seek some protection from a barren costs order in the event that the Plaintiff is unsuccessful in his claim and a costs order against him is made.

Security where claim for family provision order

1. [98]

   Whilst it is somewhat unusual to make an application for security for costs in family provision cases, it is not unheard of, particularly when the Plaintiff is not “ordinarily resident” in New South Wales. It will be remembered that in the famous case of Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40, an application was made for security: Singer v Berghouse (1993) 114 ALR 521; [1993] HCA 35, per Gaudron J.

2. [99]

   In Singer v Berghouse, there was a finding that the plaintiff was not impecunious. Mrs Singer was financially able to meet any order for costs that may have been made against her. Equally, she was able to comply with any order for security that may have been made. The application was brought because her assets were all in New York and, should she fail to pay, it would be necessary to enforce an order for costs against her by bringing action on the judgment in New York.

3. [100]

   What led to security not being ordered was that the claim was one brought under the Family Provision Act 1982 (NSW), and the view of Gaudron J was that it was by no means certain that, even if unsuccessful, the plaintiff would be ordered to pay the costs. Her Honour took the view that family provision cases stand apart from cases in which costs follow the event.

4. [101]

   Whilst there remains the discretion to not order an unsuccessful plaintiff to pay a successful defendant’s costs, the usual rule as to costs, prescribed by the Civil Procedure Act, applies the same way as it does to any proceedings brought in this Court.

5. [102]

   I have written, more than once, for example in Harkness v Harkness (No 2) [2012] NSWSC 35, at [18], that:

6. [103]

   The passages that I have repeated were adopted, and emphasised, by Pembroke J in Sung v Malaxos (No 2) [2015] NSWSC 290, at [8].

7. [104]

   The Plaintiff did not refer to what was written in Law of Costs (3rd ed, 2013, LexisNexis Butterworths, Australia), at 931-932, by Professor GE Dal Pont, particularly at [28.4]:

8. [105]

   Perhaps, the paragraph was not referred to because of the plethora of cases, since 2013, in which an order for costs against an unsuccessful plaintiff for a family provision order has been made. In Chapple v Wilcox (2014) 87 NSWLR 646; [2014] NSWCA 392, Basten JA, at [27], referred to the relevant principles that apply. His Honour’s exposition and reference to principles, suggest that what was written by Professor Dal Pont in the paragraph above, is no longer the state of the law.

9. [106]

   The Plaintiff relied upon Lo Surdo v Public Trustee [2003] NSWSC 837 in which Gzell J had to deal with an application for summary dismissal and an application, in the alternative, for security for costs in the family provision claim of an adopted child of the deceased, and in circumstances in which almost the whole of the deceased’s estate had been distributed. His Honour dismissed the application for security.

10. [107]

    However, the facts of that case are very different to the case with which the Court is currently dealing. His Honour wrote, in that case, at [22]:

11. [108]

    Apart from the fact that the Plaintiff has no assets in New South Wales, or in Macedonia, there is simply no evidence that Macedonia has legislation entitling an Australian judgment to be registered and enforced in that jurisdiction. Pursuant to the Foreign Judgments Act 1991 (Cth) and Sch 2 to the Foreign Judgments Regulations 1992 (Cth), Macedonia is not a jurisdiction where there is a reciprocal right of enforcement.

12. [109]

    Gzell J, at [26], also wrote that:

13. [110]

    I have dealt with the relevant principles above which do not support, entirely, the proposition that “there must be something more to justify an order”.

14. [111]

    In relation to the prospects of success of the Plaintiff’s claim, as far as it is possible to say on the untested evidence before me, the legal merits appear to favour the Defendant, a widow of a 46 year marriage, in circumstances where the only asset of substantial value is the matrimonial home in which she has lived for almost all of her life in Australia.

15. [112]

    The Plaintiff has not provided the Court with factual evidence to justify the conclusion that there is a real prospect that he will succeed in that claim at trial. Without a notional estate order, there is no way of satisfying an order for provision, even assuming, in his favour, that such an order will be made.

16. [113]

    I considered exploring the possibility of mediation and limiting the amount of security to the conclusion of a mediation, but I do not think that would be appropriate. An offer, the terms of which were not known until after the notice of motion was determined, has already been made to the Plaintiff by the Defendant, and was rejected or has lapsed.

17. [114]

    Ultimately, the Court must balance the interests of each of the parties and reach a conclusion based upon the interests of justice. It is a matter where the interests of justice will not be perfectly served whatever order the Court makes. As was written by the Supreme Court of New Zealand in Reekie v Attorney-General [2014] 1 NZLR 737; [2014] NZSC 63, at [2]-[3]:

Determination

1. [115]

   Having carefully considered the matter, and after weighing the relevant considerations, the least imperfect solution is to order that the Plaintiff provide security for costs. However, the quantum of the security would not have been determined as the estimate of the Defendant’s costs calculated on the indemnity basis. Rather, the estimate would be based on slightly less than the estimate of costs calculated on the ordinary basis (as disclosed from the Bar table).

2. [116]

   Furthermore, this is a case where the Defendant’s application for security was made reasonably promptly, and the work that has been done, whilst, of course, necessary for the substantive proceedings, is also relevant to the application. In what follows, I have considered this.

3. [117]

   Doing the best I can, I am of the opinion that the total amount of the security should be $30,000. I was prepared for it to be paid in two tranches – $15,000 within 28 days of the date of the making of the orders, and $15,000 within 28 days of the matter being listed for hearing.

4. [118]

   When I returned to Court, I announced that I proposed to make an order for security as set out above, unless the Plaintiff stated to the Court, having heard the form of orders proposed, that his proceedings should be dismissed. Once again, after obtaining instructions, counsel for the Plaintiff said that the Plaintiff did not, in the circumstances, oppose the dismissal of the proceedings: Tcpt, 4 June 2019, p 15(7-27).

5. [119]

   In relation to the costs of the notice of motion, in Jazabas Pty Ltd v Haddad [2006] NSWSC 880, Simpson J (as her Honour then was) made an order that the unsuccessful plaintiff should pay the costs of successful defendants’ security for costs applications and that the costs and that such costs be paid forthwith. Her Honour wrote, at [13]-[15]:

6. [120]

   In Lex Fitness Pty Ltd ATF Lex Family Trust v Australian Fitness Management Pty Ltd [2017] NSWSC 157, Slattery J wrote, with respect to the successful defendant’s application for costs following an order for security for costs (at [70]-[73]):

7. [121]

   In the circumstances, the Plaintiff should pay the Defendant’s costs of the notice of motion.

Dismissal of the proceedings and the costs of the proceedings

1. [122]

   Following the agreement of the Plaintiff that the proceedings should be dismissed, counsel for the Defendant handed to the Court a copy of the Offer of Compromise, which provided:

2. [123]

   UCPR r 20.26 refers to offers of compromise. There was no dispute that the offer of compromise served by the Defendant’s solicitors complied 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.

3. [124]

   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.

4. [125]

   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).

5. [126]

   UCPR rule 42.15A relevantly provides:

6. [127]

   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.

7. [128]

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

8. [129]

   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]:

9. [130]

   (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.)

10. [131]

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

11. [132]

    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.

12. [133]

    Bearing in mind these reasons for judgment, my overall impression of the Plaintiff’s evidence, and also the terms of the Defendant’s Offer of Compromise, I am not satisfied that there is enough to displace the rule relating to costs. Furthermore, it is to be noted that there was no evidence of any offer made on behalf of the Plaintiff.

13. [134]

    Following the commencement of the substantive proceedings, the matter had been listed on a number of occasions for directions. On 8 April 2019, it was noted that the Plaintiff had rejected an offer contained in an offer of compromise served on 27 March 2019. The offer was left open for acceptance until 26 April 2019. It was also noted that in the event that the offer was not accepted, the Defendant would give consideration to filing and serving a notice of motion for security for costs. It is clear the offer was not accepted.

14. [135]

    Accordingly, I am satisfied that the overall justice of the case requires that the Defendant should 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. 27 March 2019). Since the proceedings are to be 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.

15. [136]

    The order for indemnity costs is not to include the costs of the notice of motion in respect of which I shall make the order I announced to the parties before the Plaintiff agreed that the proceedings should be dismissed.

16. [137]

    The Court: