Nicholls v Hall and Ors (No 2) [2008] NSWCA 20 (6 March 2008)

Last Updated: 6 March 2008

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Nicholls v Hall and Ors (No 2) [2008] NSWCA 20


FILE NUMBER(S):
40832/06

HEARING DATE(S):
written submissions

JUDGMENT DATE:
6 March 2008

PARTIES:
David Norman NICHOLLS (appellant)
Deborah Anne HALL (first respondent)
Gregory Robert HALL (second respondent)
Donna Louise ROBINSON (third respondent)
Gregory James ROBINSON (fourth respondent)
Deanne Elizabeth DAY (fifth respondent)
Colin William DAY (sixth respondent)

JUDGMENT OF:
Mason P Hodgson JA McColl JA

LOWER COURT JURISDICTION:
Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):
SC 2998/05

LOWER COURT JUDICIAL OFFICER:
Young CJ in Eq

LOWER COURT DATE OF DECISION:
12 December 2006

LOWER COURT MEDIUM NEUTRAL CITATION:
[2006] NSWSC 1377

COUNSEL:
L ELLISON SC (Appellant)
J R WILSON SC/ D LIEBHOLD (Respondents)


SOLICITORS:
Turnbull Hill Lawyers (Appellant)
Kells the Lawyers (Respondents)

CATCHWORDS:
COSTS – Family provision – Appeal – Appeal court awards appellant one-seventh share of estate – Offer of compromise at first instance but not on appeal – No effect on costs of appeal – Offer of sum greater than amount resulting from appeal decision, but less than amount appellant would have received if costs not incurred – Costs orders in favour of appellant confirmed.

LEGISLATION CITED:
Uniform Civil Procedure Rules 2005, Pt 42 r 15

CATEGORY:
Consequential orders

CASES CITED:
Fotheringham v Fotheringham No. 2 (1999) 46 NSWLR 154
Moore v Woodforth (No. 2) [2003] NSWCA 46

TEXTS CITED:


DECISION:
Case not made out to alter the costs orders previously made.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40832/06

SC 2998/05

MASON P

HODGSON JA

McCOLL JA

6 MARCH 2008

David Norman NICHOLLS v Deborah Anne HALL and Ors (No 2)

Judgment

1 THE COURT: On 13 December 2007, the Court gave its judgment in this appeal ([2007] NSWCA 356), and made the following orders:

(1) Appeal allowed.

(2) Orders below set aside, and in lieu thereof order that the estate of the deceased be divided between the daughters of the deceased and the appellant in the proportions of two-sevenths to each daughter and one-seventh to the appellant.

(3) Order that the costs of the respondents below and on appeal be paid out of the estate of the deceased on an indemnity basis.

(4) Order that the costs of the appellant of the proceedings below be paid out of the estate of the deceased.

(5) Order that the respondents pay the appellant’s costs of the appeal, and have a certificate under the Suitors’ Fund Act if otherwise entitled, and that they be reimbursed for these costs from the estate of the deceased.

2 On application made on that occasion by the respondents, the Court gave liberty to the respondents to apply for different costs orders.

3 The respondents have now done so, relying on an offer of compromise dated 4 August 2006, by which the respondents offered to compromise the appellant’s claim by paying him $160,000 plus his costs. They contend that the appellant obtained an order less favourable to him, because after deducting from the net estate of $1.3 million the first instance costs of $163,515.93 and the appeal costs of $134,539.94 (less $10,000 from the Suitor’s Fund), the appellant‘s one-seventh share of the estate amounts to $144,577. The respondents contend that accordingly they are entitled to an order that the appellant pay their costs of the trial and of the appeal, from 5 August 2006: see Uniform Civil Procedure Rules 2005, Pt 42 r 15.

4 We note that the appellant responded to the respondents’ offer of compromise by an offer dated 14 September 2006 to compromise his claim by accepting $225,000 plus his costs. There is no evidence of any other offers made prior to the hearing of the appeal; and in particular, there is no suggestion that the respondents made any offer to the appellant after the respondents had succeeded at first instance.

5 In the main judgment, this Court agreed with the primary judge’s comments on the level of costs in these proceedings. The cost of the appeal seems perhaps even more extravagant, in a fairly simple case involving less than one day’s hearing. If assessment of costs is required, the costs might be substantially reduced. However, our decision of this application does not depend on this possibility.

6 In the Court’s assessment, provision for the appellant was to be one-half that for each daughter; and (should it be necessary to make this explicit for the purposes of this judgment) it was and is the Court’s view that this was an appropriate apportionment whether the estate was $1.3 million or (by reason of costs) only $1 million.

7 Since no offer was made by the respondents after the judgment at first instance, the appellant had to bring the appeal, and the costs of the appeal had to be incurred, if the appellant was to avoid the effect of the first instance judgment. In our opinion, the offer of compromise does not justify any departure from the ordinary rule as to the costs of the appeal, and they should be borne by the unsuccessful respondents: see Fotheringham v Fotheringham No. 2 (1999) 46 NSWLR 154, Moore v Woodforth (No. 2) [2003] NSWCA 46.

8 In our opinion also, there is merit in the submission for the appellant that it would be unfair for the appellant to be disadvantaged because the costs of the appeal ordered to be borne by the respondents reduced the appellant’s recovery, because he has to contribute one-seventh to these costs. If one leaves out of account the effect of the costs of appeal on the net estate to be distributed, the appellant’s one-seventh share would be $162,369, a figure in excess of that offered by the respondents in their offer of compromise.

9 In our opinion, that consideration alone could be sufficient to justify the Court ordering otherwise, in terms of UCPR Pt 42 r 15.

10 In addition, we note that the first instance hearing took place on 23 and 24 October 2006, and the respondents’ offer was made on 4 August 2006; so at that time, a substantial part of the first instance costs would not yet have been incurred, and the value of the apportionment ordered by this Court would have been substantially higher than $162,369. Had no litigation been necessary, the value of the appellant’s one-seventh share would have been about $186,000.

11 A further consideration is that, after the respondents’ offer, the appellant made an offer which, while it was above any of the above figures, could not be considered an unreasonable offer. In circumstances where both sides had made offers which were not unreasonable, and were only $65,000 apart, one would have expected negotiations to continue and to be successful; and in the ordinary course of negotiation, the next offer would have come from the respondents. So far as the evidence goes, no such offer was made; so to that extent, the respondents might be considered as bearing the greater responsibility for the failure of negotiations.

12 If costs are assessed as presently claimed, and if no adjustment is made to the orders made on 13 December 2007, the appellant’s one-seventh contribution to the costs amounts to about $41,000, of which $17,791 would be due to the necessity for an appeal, in which he was entirely successful.

13 Having regard to all these considerations, in our opinion a case is not made out to alter the costs orders previously made.

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LAST UPDATED:
6 March 2008