Re Vasiliades; Pappas v Vasiliades (No 2) [2022] VSC 16 (25 January 2022)

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

XENIA PAPPAS	Plaintiff

v

SOCRATES VASILIADES	Defendant

JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	25 January 2022
CASE MAY BE CITED AS:	Re Vasiliades; Pappas v Vasiliades (No 2)
MEDIUM NEUTRAL CITATION:	[2022] VSC 16

COSTS — Where plaintiff unsuccessful in application for removal of executor of estate — Costs to follow the event — Whether costs should be assessed on the standard basis or indemnity basis — Where defendant in representative capacity — Costs awarded on indemnity basis from the plaintiff’s share of the estate of the deceased.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Biviano	Costanzo Lawyers Pty Ltd

For the Defendant	Mr A Kinda	SGM Legal

1 The plaintiff sought the removal of the defendant as the executor of the estate of Avgi Demetrios Vasiliades, deceased.
2 On 5 November 2021 the Court delivered reasons for judgment in this proceeding. The Court determined that the matters advanced by the plaintiff in support of her application were either without basis, not supported by her evidence or were not relevant to the removal application. Accordingly, the Court did not remove the defendant as executor and trustee of the estate.
3 Pursuant to ord 2 of orders made 5 November 2021 the Court ordered that subject to any submissions as to costs, the proceeding be dismissed. The parties were unable to resolve the issue of the costs of the proceeding and written submissions were subsequently filed by the parties on 3 December 2021.

4 The plaintiff submits the Court should consider the ‘costs application’ in two separate components being:

5 The plaintiff submits that each of the plaintiff and the defendant should bear their own costs of the proceeding to the extent that their costs relate to the application to pass over the defendant.
6 The plaintiff submits that the passing over application had reasonable prospects of success as the merits of the passing over application were substantially stronger than the merits of the removal application. As the Court did not determine the passing over application, it would be harsh, unjust and unfair to order that the plaintiff pay the defendant’s costs of the passing over application.
7 The plaintiff concedes that she was unsuccessful in the removal application and, in the circumstances, costs ought to follow the event to be assessed on a standard basis. The plaintiff submits there is no proper basis to order costs assessed on an indemnity basis.
8 In the event that the plaintiff is ordered to pay the defendant’s costs of all or part of the proceeding, the plaintiff seeks orders that the costs be paid out of her share of the residue of the estate.

9 The defendant seeks orders that the plaintiff pay the defendant’s costs of the proceeding assessed on an indemnity basis, alternatively, that the plaintiff pay the defendant’s costs of the proceeding on a standard basis until 18 November 2021 and thereafter on an indemnity basis, and the balance of the defendant’s costs be paid out of the estate of the deceased.
10 The defendant submits that the plaintiff’s application to remove him as executor of the estate was unsuccessful on the basis that no reasonable grounds for bringing the claim were identified and no matters of relevance to the administration of the estate were brought to light.
11 On the basis that the plaintiff was wholly unsuccessful in the proceeding, she should bear the costs on at least a standard basis absent any other consideration.
12 Having regard to the plaintiff’s wilful persistence in the proceeding, notwithstanding that no proper ground was established, and that her allegations were unsupported by the evidence, an order that the plaintiff pay the defendant’s costs of the proceeding only on a standard basis would be an unjust imposition on the other beneficiaries.

13 On 18 November 2021 the defendant made a without prejudice offer save as to costs that the plaintiff pay costs fixed in the amount of $34,275.45 within 150 days. The amount reflected the defendant’s costs less GST, fixed fee costs for the application for probate as well as application fees. The plaintiff rejected the offer.
14 The defendant submits that the plaintiff’s rejection of the offer was unreasonable, having regard to the matters set out in the defendant’s submissions, and costs ought be awarded on an indemnity basis at least from the date of rejection.
15 The plaintiff submits that the without prejudice offer was to settle all disputes between the plaintiff and the defendant, the beneficiaries and Falconbridge Pty Ltd on terms contained in an email dated 14 July 2020. The offer dealt with three proceedings, including two VCAT proceedings and this proceeding. She submits that any application for indemnity costs based on the offer should fail as the offer was not capable of acceptance by the plaintiff alone as it required the acceptance and approval of all beneficiaries under the will and estate and Falconbridge Pty Ltd. The plaintiff also submits that being a global offer with many components, the defendant is unable to say that he has done better than the offer.

16 The plaintiff was unsuccessful in her application to remove the defendant as executor of the estate and costs should follow the event.
17 When the plaintiff issued this proceeding she sought orders that the defendant be passed over as the executor of the estate of the deceased and for the reasons set out in the judgment the Court did not determine the passing over application. The consequence was that the plaintiff was granted leave to file an amended originating motion to seek orders, pursuant to s 34 of the Administration and Probate Act 1958 (Vic). The plaintiff’s amended originating motion included additional orders that the defendant be removed as executor and trustee of the estate of the deceased. The plaintiff’s affidavit dated 3 September 2020 continued to refer and rely on her previous affidavits in her passing over application for the removal of the defendant as executor and trustee of the estate of the deceased.
18 The Court held that the matters relied on by the plaintiff in support of her removal application were either without basis or not supported by her evidence. This includes matters first raised in support of the passing over application. In the circumstances, it cannot be concluded that the passing over application had reasonable prospects of success and that the merits of the passing over application were substantially stronger than the merits of the removal of executor application. The plaintiff is unsuccessful in the proceeding in its entirety and costs should follow the event.
19 The plaintiff’s position is that if any costs orders are made against her, they should be assessed and paid on a standard basis. This fails to reflect that the defendant is sued in his capacity as executor of the estate of the deceased. The usual position is that persons engaged in litigation in a representative capacity should not be out of pocket because of the litigation, provided their expenses are properly incurred.^[1] Costs of an executor are commonly quantified on an indemnity basis and are paid out of the estate of the deceased.^[2] As determined in the judgment, the defendant informed the Court as to the grant of probate being made and co-operated with the plaintiff in obtaining orders on 17 August 2020 for leave to be granted to the plaintiff to file an amended originating motion and summons. The defendant also attempted to resolve the positions on costs without the need for submissions being made. In the circumstances, the defendant’s costs are to be assessed on the indemnity basis.

1. The plaintiff pay the defendant’s costs of the proceeding assessed on an indemnity basis.
2. In the first instance, the costs of the proceeding be paid from the plaintiff’s share of the estate of the deceased, alternatively, they be paid by the plaintiff personally.

Supreme Court of Victoria

Re Vasiliades; Pappas v Vasiliades (No 2) [2022] VSC 16 (25 January 2022)