Price v Price

1. [1]

   BASTEN JA: I agree with Macfarlan JA.

2. [2]

   MACFARLAN JA: This is an application for leave to appeal from a costs order made by Pembroke J in the Equity Division on 6 February 2020. Whilst this Court would not ordinarily grant leave to appeal against such an order, particularly when the amount involved is substantially less than $100,000, the proper administration of justice requires a grant of leave, as occurred in Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84 (see at [1] per Basten JA). As indicated below, the primary judge in the present case made errors of both principle and fact in exercising his costs discretion.

3. [3]

   The evidence before the primary judge was very limited. The following description of what occurred is based upon the material put before this Court, by way of evidence or concession, upon the basis of which this Court is able to re-exercise the discretion which was not properly exercised at first instance. In large measure the description is derived from the part of the applicant’s written submissions with which the respondents said that they did not cavil.

The proceedings at first instance

1. [4]

   The applicant in this Court, Ms Mary Price, married Mr Andrew Price in 2010. They separated in 2019 and are parties to hard-fought and incomplete proceedings in the Family Court of Australia. The proceedings went into abeyance when, in January this year, Mr Price fell gravely ill, such that he became in need of a guardian.

2. [5]

   On 25 May 2012 Mr Price had executed an Appointment of an Enduring Guardian and an Enduring Power of Attorney, in both cases in favour of Ms Price or, if she be unwilling or unable to act, then his sister Ms Elisabeth Theodore, the present third respondent. The first and second respondents are children of Mr Price as a result of a previous marriage.

3. [6]

   At 3.14pm on Friday 31 January 2020 a letter from Ms Price’s solicitor, Ms Rebekah Dorter, was sent by email to Mr Price’s solicitor, Mr Farshad Amirbeaggi, enclosing copies of the appointments referred to in [5] above and enquiring whether Mr Price had recently executed documents revoking them when, on Ms Price’s view, Mr Price lacked the capacity to do so. The letter did not foreshadow that Ms Price was intending to take any action as Mr Price’s attorney or guardian.

4. [7]

   At 5.45pm on that evening Mr Amirbeaggi stated by email to Ms Dorter that he had instructions to approach the Guardianship Division of the NSW Civil and Administrative Tribunal (“NCAT”) on the following morning (being Saturday) seeking to have the powers conferred on Ms Price revoked. He invited her to volunteer her retirement.

5. [8]

   At 5.51pm on the same evening Ms Dorter responded by email to the effect that a demand for a response before Saturday was unreasonable, that she would obtain instructions and that she would respond by the close of business on Monday 3 February 2020. She asked that no application be made to NCAT in the meantime.

6. [9]

   At 6.10pm on the same evening Mr Amirbeaggi indicated by email that he would not wait before making an application, given Ms Price’s “conduct, and very clear conflict”. The relevant emails, including this one, were not in evidence before this Court, only a description of them being before it.

7. [10]

   At 11.36pm on the same evening, the present respondents commenced proceedings in the Equity Division of the Supreme Court by filing a Summons.

8. [11]

   The Summons sought the following relief:

9. [12]

   At 11.51pm on the same evening, the Summons was served on Ms Price. It was returnable at 9am on Saturday 1 February 2020 before the Duty Judge, Henry J.

10. [13]

    The supporting affidavit was prepared sometime after 6.06am on the Saturday morning. It summarised certain allegations made in the Family Court proceedings and attributed to Ms Price a concession about her transfer of approximately $1,000,000 from joint funds.

11. [14]

    At the hearing before Henry J, Ms Dorter said inter alia:

12. [15]

    After a short adjournment, Ms Dorter said:

13. [16]

    In the course of argument her Honour asked Mr Amirbeaggi whether he was pressing for orders 6, 7, 8 and 9 sought in the Summons. He confirmed that he was but, after argument, her Honour said:

14. [17]

    Her Honour made the following orders at the conclusion of argument on 1 February:

15. [18]

    On Tuesday 4 February 2020 Ms Price offered, on a without admissions basis, to resign as enduring guardian and vacate the office of attorney, with Ms Theodore taking her place. She also offered to consent to an order that each party bear his or her own costs. The substance of the respondents’ reply late that day was that they were prepared to accept the first limb of the offer but not the second concerning costs. By letter sent the next day, Wednesday 5 February 2020, Ms Price reiterated that she would resign immediately as enduring guardian and vacate her office as attorney.

16. [19]

    On 4 February 2020, prior to receiving the respondents’ response of that day, Ms Price swore an affidavit that responded to allegations that the respondents had made concerning her conduct. By affidavits sworn on 5 February, the second and third respondents, and their solicitor, disputed various of Ms Price’s contentions.

17. [20]

    The proceedings came before the then Duty Judge, Pembroke J, on Thursday 6 February 2020. In this Court the parties accepted that the only material before Pembroke J comprised two documents handed up to his Honour in the course of the hearing, one being minutes of proposed consent orders and the other being a copy of s 6L of the Guardianship Act 1987 (NSW). No other documents were tendered. Whether his Honour nevertheless had reference to and relied on the contents of the court file is not known.

18. [21]

    Mr Amirbeaggi told his Honour that he believed that the parties had settled the proceedings by the “renunciation or removal” of Ms Price as Mr Price’s attorney and guardian, and her replacement with Ms Theodore. There was then discussion between his Honour and counsel about the appropriateness of the Court making orders (other than as to costs) in the terms agreed by the parties. His Honour was satisfied that they should be made.

19. [22]

    The argument then turned to discussion as follows about the appropriate costs order, the respondents having sought and Ms Price having resisted an order that Ms Price pay the respondents’ costs of the proceedings:

20. [23]

    His Honour then made the orders as sought in the short minutes, as well as an order that Ms Price pay the respondents’ costs of the proceedings.

The parties’ arguments in this Court

1. [24]

   Ms Price challenged Pembroke J’s order that she pay the respondents’ costs of the proceedings on two bases.

2. [25]

   First, she contended that his Honour did not apply the “correct test” in exercising his costs discretion because he failed to have regard to the proceedings’ character as protective rather than inter partes. She relied on Lindsay J’s statement in CAC v Secretary, Department of Family and Community Services (No 2) [2015] NSWSC 344 at [11] that the “‘the ordinary rule’ in protective proceedings… [is] that the Court may exercise its discretion as to costs, not by reference to a rule that ‘costs follow the event’, but having regard to ‘what, in all the circumstances, seems proper’” and his Honour’s identification at [16] of factors relevant in this regard, including:

3. [26]

   Ms Price’s senior counsel acknowledged however that no submission that this was the “correct test” was made to his Honour (see Macedonian Church v Eminence Petar (2008) 237 CLR 66; [2008] HCA 42 at [120]). Counsel nevertheless submitted that the point was still open to him to take on appeal because the principle involved was obvious.

4. [27]

   Secondly, Ms Price contended that the primary judge erred in acting on the basis that an “event” had occurred for the purposes of r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), which prescribes that, unless the court considers some other order is appropriate, “costs follow the event”. She submitted that there was no relevant “event” as the proceedings were settled. As well, she contended that the primary judge erred in concluding that Ms Price acted unreasonably in not consenting to orders on the first return date of the respondents’ Summons, that is, on Saturday 1 February.

5. [28]

   In response to Ms Price’s first contention, the respondents submitted that Ms Price stated the effect of Lindsay J’s observations in CAC v Secretary too broadly and stressed that Lindsay J expressly noted that “the general rule [in the Supreme Court] remains that costs follow the event, unless the Court otherwise orders” (at [14]).

6. [29]

   In response to Ms Price’s second contention, the respondents submitted that the primary judge had correctly concluded that a relevant “event” had occurred (being the making of orders in favour of the third respondent, albeit by consent). They further submitted that there were a number of matters indicating that Ms Price did not act reasonably in relation to the litigation, including the following:

7. [30]

   The respondents summarised their position as follows:

Determination of the leave application

1. [31]

   It is convenient to refer first to Ms Price’s second ground of challenge to the primary judge’s costs order, namely, that his Honour misapplied r 42.1’s directive that costs are to follow the event unless it appears that some other order is appropriate.

2. [32]

   As to this contention, it must first be concluded that there was no “event” for this purpose. Whether in particular cases the event is taken as a reference to the outcome of proceedings as a whole or the result of determination of particular issues, for there to be an “event” there must have been a contest in which the applicant for costs has succeeded. As McHugh J pointed out in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624; [1997] HCA 6, if there is no hearing on the merits, the rule that costs follow the event is inapplicable. To similar effect, Basten JA said in Nichols at [2] that “where there has been no trial there is no ‘event’” (see also at [30] per Payne JA, Meagher JA agreeing). There was no contest or hearing as to the merits here because the orders (other than as to costs) were made by consent. That is not to say that a litigant who obtains consent orders will not ever be entitled to costs. He or she may well be, depending upon an assessment of the conduct of each party (see Minister v Lai Qin referred to at [43] below). Where there is consent, that litigant will not however have the benefit of the presumption created by r 42.1.

3. [33]

   If, as the parties in this case agreed should be so, one treats the primary judge’s comments made in the course of argument as his reasons for his decision, it is clear that his Honour impermissibly applied the rule embodied in r 42.1. He seems to have referred to it four times (see the emphasised passages in [22] above). The last reference is in the final three sentences of what his Honour said. These appear to constitute his reasons, albeit succinct, for making the costs order. What his Honour said in that last passage was that Ms Price “took too long to recognise” that she should be “renouncing her appointment” and that in those circumstances there was no justification “for departing from the order”, which appears to have been a reference to the principle his Honour quoted earlier to the effect that costs ordinarily follow the event. As, for the reasons I have given, there was no relevant “event” for the purposes of this principle, his Honour was in error in applying it.

4. [34]

   The primary judge also erred in concluding that Ms Price acted unreasonably. His Honour did not have before him evidence of the factual circumstances which would have enabled him to form a view about that topic.

5. [35]

   Taking into account, for the purposes of re-exercising the costs discretion, the further material that is before this Court, I consider that it should be concluded that Ms Price did not act unreasonably and that there should be no order as to the costs of the proceedings. I note in this respect that Ms Price did not contend in this Court that her costs at first instance should be paid by the respondents. She was content that there be no order as to costs.

6. [36]

   The following matters are of particular relevance to the reasonableness of Ms Price’s conduct and to the unreasonableness of that of the respondents.

7. [37]

   First, both the Appointment of an Enduring Guardian and the Enduring Power of Attorney provided for the third respondent to act as guardian and attorney in the event that Ms Price was unwilling or unable to act. There was therefore no need for the respondents to approach the Court (or NCAT) if Ms Price agreed to renounce her position.

8. [38]

   Secondly, the respondents had no evidence that Ms Price intended or threatened to exercise any of her powers as guardian or attorney precipitously, or at all. No such threat was contained in her solicitor’s letter sent at 3.14pm on Friday 31 January (see [6] above). Moreover, at the hearing before Henry J the next morning Ms Dorter readily proffered on Ms Price’s behalf the undertaking referred to in the next paragraph below that she would not so act. Ms Dorter also made the point that her client had not been requested to provide such an undertaking (see [14] above).

9. [39]

   Thirdly, at the same hearing Ms Dorter gave on Ms Price’s behalf an undertaking that until the further hearing fixed for 6 February 2020 “she will not act, and is unwilling to act” under both appointments. That triggered the third respondent’s entitlement under the instruments to act in the interim period. Ms Dorter also expressly indicated to the Court that her client had no objection to the third respondent so acting.

10. [40]

    Fourthly, the respondents’ commencement of proceeding was precipitous, not affording Ms Price any reasonable opportunity to respond substantively to the respondents’ solicitor’s letter sent at 5.45pm on Friday 31 January. In light of Ms Price’s cooperative conduct before Henry J at the hearing the next morning, it can readily be inferred that at least an interim undertaking not to act (and therefore to permit the third respondent to act as guardian and attorney for the period of the undertaking) would have been forthcoming if that opportunity had been given.

11. [41]

    Fifthly, when Ms Price offered on Tuesday 4 February to consent to the relief that the respondents sought concerning the appointments, the respondents failed to accept her entirely reasonable offer to agree that there be no order as to the costs of the proceedings.

12. [42]

    Sixthly, the respondents did not obtain under the consent orders made by Pembroke J a good deal of the relief that they had sought in their Summons in the proceedings. In particular, they did not obtain the appointment of the first or second respondents as guardians or attorneys to act with the third respondent, as had been sought in Orders 2 and 5 of the Summons, and they did not obtain Orders 6 to 9 (see [11] above) being injunctions, orders for return of property and identification of acts done under the appointments.

13. [43]

    To these circumstances, the principles summarised by McHugh J in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624; [1997] HCA 6 need to be applied:

14. [44]

    Their application leads to the conclusion that Ms Price should not be ordered to pay the respondents’ costs of the first instance proceedings. Ms Price did not act, to use McHugh J’s words just quoted, “so unreasonably” that she should pay those costs. In fact, she did not act unreasonably at all.

15. [45]

    It is unnecessary in these circumstances to consider whether Ms Price would have been assisted in having this conclusion arrived at by recourse to the observations of Lindsay J in CAC v Secretary, Department of Family and Community Services (No 2), to which I have referred above (see [25]), but which were not brought to the primary judge’s attention. It is sufficient to say that those observations do not assist the respondents in the present case because, from their point of view, the proceedings were misconceived. Contrary to their contention that they “had no choice but to commence proceedings” (see [30] above), the issues concerning Mr Price’s guardian and power of attorney about which the respondents were concerned could have been resolved without an application to the court (or NCAT) if they had afforded Ms Price the usual pre-action opportunity to consider and indicate her position (see Nichols v NFS at [6]).

16. [46]

    As the successful party on appeal, Ms Price sought, and should obtain, an order for the respondents to pay her costs of the proceedings in this Court. I note that her counsel foreshadowed the possibility of an application for an order that these costs be paid on the indemnity basis. If that possibility is to be pursued, that should occur in the normal fashion by a notice of motion being filed within the time prescribed by the UCPR. Ms Price would of course be at risk of paying the costs of that motion if she were unsuccessful.

17. [47]

    For these reasons, I propose the following orders:

    1. (1)

       Grant leave to appeal.

    2. (2)

       Set aside the costs order, being Order 6, made by Pembroke J on 6 February 2020.

    3. (3)

       Note that no order is made as to the costs of the proceedings at first instance.

    4. (4)

       Order the respondents to pay the applicant’s costs of the proceedings in this Court.

18. [48]

    MEAGHER JA: I agree with Macfarlan JA.