Carroll & O'Dea Facebook Makes Changes to your Cost Affidavit in Family Provision Claims - Carroll & O'Dea Lawyers

When it matters,
you need trusted individual advice.

Contact Us

Back to "Wills & Estates Newsletter - May 2019"

Publications

Makes Changes to your Cost Affidavit in Family Provision Claims

Introduction

Practitioners who appear regularly in the family provision list are well versed in the practical pointers provided by Practice Note SC EQ 7.  It is designed to provide a compass to guide the Court, the litigants, and the legal advisers, as to the general course that will usually be followed.[1]

Paragraph 6 of the Practice Note prescribes the documents to be filed by a plaintiff before the first directions hearing.  One of those documents is an affidavit setting out an estimate of the plaintiff’s costs and disbursements, calculated on an ordinary basis, up to and including, the completion of mediation (Costs Affidavit).

Most practitioners will have well used precedent documents to fulfil the requirement for costs disclosure.

However, we will need to think more carefully about our Costs Affidavits after the judgment of Hallen J in Oxley v Oxley [2018] NSWSC 91 (Oxley).

Conditional Costs Agreement

Section 181 of the Legal Profession Uniform Law (NSW) describes a conditional costs agreement, whereby a lawyer agrees to provide 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.

If you offer this service to a client in a family provision claim, you must disclose the costs arrangement to the court.

Oxley

In Oxley, a claim was made for family provision order under Part 3.2 of the Succession Act 2006 (NSW) by two adult children of the deceased.  On day two of the hearing, the Court became engaged in a discussion about whether the plaintiffs had entered a conditional costs agreement with their solicitors, and in turn whether a legal representative of a party has an obligation to include the fact of the conditional costs agreement and its terms in any affidavit of costs.[2]

The short answer, yes.

The requirements for costs disclosure by all parties, as described throughout the Practice Note SC EQ 7, make it very clear that the Court is concerned with managing the costs and disbursements of the parties in the proceedings.  It does so not just to ensure costs are reasonable and proportionate, but also because the Court will need to have all information necessary in order to properly calculate the net distributable estate and the impact of any costs orders on the outcome for plaintiff’s and beneficiaries.

In Oxley, the costs estimate for each party was such that the entire estate would be exhausted to pay the legal representatives of the parties.

His Honour discussed the requirements of paragraph 17.1 of Practice Note SC EQ 7 which provides that the plaintiff’s final costs affidavit should disclose costs and disbursements calculated on both the indemnity basis, and the ordinary basis and the amount, if any, already paid on account as well as any uplift factor, stating “If there is any uplift factor included in the calculation of the plaintiff’s costs, or any agreement that provides for such an uplift factor, the quantum thereof and the terms of any such fee agreement should be identified in the costs affidavit”.

His Honour went on to say at [88]:

“It follows that if there is any conditional costs agreement, the nature of that agreement, and its effect on the payment of the costs of the party, including any term relating to an uplift fee, should be disclosed in each affidavit of costs that is relied upon by either party”.

The solicitor for the plaintiffs expressed a sincere apology to the Court for the omissions from the affidavit of costs and subsequently filed an affidavit disclosing that the plaintiffs had entered into a conditional costs agreement (with no costs and disbursements payable if they were unsuccessful) and their costs agreement did not include an uplift factor.  A copy of the conditional costs agreement was not annexed to the affidavit.

His Honour went on to dismiss the Amended Summons, finding that the provision made for the plaintiffs was not inadequate.  When dealing with costs, His Honour said at 441 (b) the Court:

“Makes no order as to the costs of either of the Plaintiffs, noting that there is a conditional costs agreement made with his, and her, solicitors, so that neither will have any obligation to pay any costs and disbursements of the proceedings”.

Lessons to be learned

  1. Disclose the costs arrangement you have with your client in each Costs Affidavit you provide to the Court.
  2. Consider obtaining an authority from your client to disclose your conditional costs agreement as an annexure to your Costs Affidavit (keeping in mind any concerns about privileged communication).[3]
  3. Consider a costs capping arrangement with your client if you wish to avoid the risk of receiving no order as to costs.

Rebecca Tidswell, Special Counsel 


[1] Oxley v Oxley [2018] NSW SC at [78].

[2] Ibid.  See [46] to [90].

[3] Ibid.  See [69].

Need help? Contact us now.

We're here to help. For general enquiries email or call 1800 059 278.
For Business lawyers call +61 (02) 9291 7100.

Contact Us