Bramwell v Bramwell (No 2)

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BRAMWELL v BRAMWELL & ORS (No 2)
[2022] SASC 76
Judgment of the Honourable Auxiliary Justice Bochner
SUCCESSION - FAMILY PROVISION - REQUIREMENT FOR ADEQUATE AND PROPER MAINTENANCE - DUTY OF TESTATOR - DUTY TO SPOUSE OR PARTNER
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - GENERAL PRINCIPLES AND EXERCISE OF DISCRETION
Inheritance (Family Provision) Act 1972 (SA); Income Tax Assessment Act 1997 (Cth); Administration and Probate Act 1919 (SA); Evidence Act 1929 (SA); Supreme Court Act 1935 (SA), referred to.
Whitington v Whitington (No 2) [2009] SASC 178; Parker v Australian Executor Trustees Ltd (No 2) [2016] SASC 115; Pizimolas v Pizimolas (No 2) [2010] SASC 209; Doedens v Owen (No 2) [2018] SASC 23; Bibbo v Nikou & Delatex Pty Ltd (No 2) [2011] SADC 140; Cutts v Head [1984] Ch 290; Unilever Plc v Procter & Gamble Company [2000] 1 WLR 2436, considered.

BRAMWELL v BRAMWELL & ORS (No 2)
[2022] SASC 76
CIVIL

On 11 February 2022 I delivered judgment in respect of the applicant’s claim for further provision, pursuant to the Inheritance (Family Provision) Act 1972 (“the Act”), from the estate of her late husband. At the time of his death, the applicant and the deceased owned their home in equal shares as tenants in common; the deceased’s estate, including his share in their home amounted to approximately $1,405,000. He also had significant superannuation. The deceased dealt with his superannuation by way of binding death benefit nomination. He divided his benefit in half and directed that half go to the applicant by way of a pension to be paid at the minimum pension rate. The balance was paid into his estate. By his will, the deceased left the applicant a legacy of $60,000, the right to reside in his share of their home on the basis that she meet all of the outgoings, and the use of his household furniture and effects. The balance of his estate he left to his daughter, the respondent.
After hearing the evidence in this matter, I found that the applicant had been left without adequate provision for her proper maintenance, education or advancement in life. I ordered that she receive the deceased’s interest in their home so as to give her complete security as to her residence. I also ordered that she receive a legacy of $200,000 in lieu of the legacy provided for her in the will but in addition to interim payments already made to her. In addition, the applicant would remain entitled to the pension provided to her by way of the binding death benefit nomination.
I have now heard from the parties on the form of the orders and on the question of costs. These reasons deal with those issues.
The form of the orders
Save for the question of costs, there are three issues in relation to the form that the final orders are to take that require determination. They are:
·From which part of the estate the applicant’s legacy is to be paid;
·The interest rate applicable to the legacy; and
·Whether the orders should require the legacy to be paid within a specific period of time.
From which part of the estate should the applicant’s legacy be paid?
The respondent seeks an order that the legacy be paid out of the superannuation benefit received by the estate from the DG Bramwell & Co Superannuation Fund (“the Super Fund”). She seeks this order on the basis that, any money from the Super Fund that goes into the estate and is then distributed to her are subject to taxation; on the other hand, if those funds are distributed to the applicant, then neither she nor the estate would pay any tax on them as the applicant is a death benefits dependant of the deceased within the meaning of s 302.195 of the Income Tax Assessment Act 1997 (Cth). Mr Ower QC submitted, on behalf of the respondent that earmarking this portion of the estate to be the source of the legacy would have no effect on the application but would have a significant effect on the respondent in whose hands those funds would otherwise be taxed.
Mr Cox QC on behalf of the applicant objected to the form of the order sought by the respondent in this regard as he considered that it amounts to an attempt to alter the binding death benefit nomination, which would be beyond the power of this Court. This was the only basis on which Mr Cox objected to the order sought by the respondent. He accepted that it made no difference to the outcome for his client whether her legacy was paid from one part of the estate or another. Mr Ower accepted that I had no power to alter the terms or effect of the binding death benefit nomination and did not ask me to do so.
Given that I have no power to change the terms or effect of the binding death benefit nomination, I consider that it is not unreasonable to require the applicant’s legacy to be paid from that part of the estate comprised of the superannuation benefit. There is no doubt that the applicant suffers no disadvantage thereby, and the respondent obtains a benefit. I will, however, word the order somewhat differently from that proposed by the respondent so as to ensure that there can be no doubt there is no attempt to subvert or otherwise alter the operation of the binding death benefit nomination itself. Rather, pursuant to the terms of s 10 of the Act, the order will operate as a codicil to the will, to alter the deceased’s disposition of the superannuation moneys once they are paid into the estate. I will make the following order:
The legacy referred to in paragraph 2.1 above shall be paid from that portion of the estate of the deceased comprised of the superannuation death benefit.
What is the appropriate interest rate?
The applicant sought an interest rate of 6% on the unpaid balance of the legacy on the basis that that is the interest rate for post judgment interest set out in rule 185.1 of the Uniform Civil Rules 2020 (the UCR). The respondent, on the other hand, contended for the interest rate provided for in s 120A of the Administration and Probate Act 1919, which provides:
120A—Interest upon pecuniary legacies
(1)Subject to any testamentary direction or provision to the contrary, where a will provides for the payment of a pecuniary legacy of a specified amount and the legacy is not paid in full on or before the relevant date, then, as from the relevant date and until the date of payment, interest accrues on the legacy, or so much of the legacy as remains unpaid, at the rate from time to time fixed by regulation for the purposes of this section.
(2)A right to interest under this section does not exist independently of a right to payment of the legacy itself, and where a legacy abates, the extent of the abatement shall be taken into account in calculating interest for the purposes of this section.
(3)This section applies to legacies whether they become or became payable before or after the commencement of the Administration and Probate Act Amendment Act 1981 , but it does not affect interest that may have accrued upon a legacy before the commencement of that amending Act.
(4)     In this section—
"the relevant date" means—
(a)     a date fixed by the will as the date on or before which the legacy is to be paid or, if no such date is fixed by the will, the date of the first anniversary of the testator's death; or
(b)     the date of commencement of the Administration and Probate Act Amendment Act 1981 ,
whichever is the later.
Regulation 3 of the Administration and Probate Regulations 2009 currently provides:
3—Interest on pecuniary legacies (section 120A)
(1)For the purposes of section 120A(1) of the Administration and Probate Act 1919 , the rate of interest per annum fixed in any financial year is—
(a)     for the 6 month period commencing on 1 July—the average mid 180 day bank bill swap reference rate published by AFMA as at the first business day of the period; and
(b)     for the 6 month period commencing on 1 January—the average mid 180 day bank bill swap reference rate published by AFMA as at the first business day of the period.
(2)     In this regulation—
"AFMA" means the Australian Financial Markets Association Limited;
"business day" means every day except Saturday, Sunday or a public holiday.
Mr Ower contends that as orders made pursuant to the Act operate as a codicil to the will, it is appropriate that the interest rate on a pecuniary legacy should be that set out in the Administration and Probate Regulations. He accepts that the interest rate allowed by the Regulations will be substantially lower than that sought by the applicant.
I consider that the appropriate interest rate to apply to the legacy is that prescribed by the Administration and Probate Regulations. Any orders made under the Act take effect as a codicil to the will of the deceased. Mr Cox has not given any reason why orders made under the Act should attract a higher rate of interest than any other legacy left in a codicil made by a deceased. The interest rate applicable to the unpaid legacy will be the ordinary rate for unpaid legacies pursuant to the terms of s 120A of the Administration and Probate Act.
Should the orders specify the time within which the legacy is to be paid and the deceased’s interest in the house is to be transferred to the applicant?
Mr Ower submits that there is no necessity to specify the time within which the estate is to be distributed in accordance with the orders. While the applicant and respondent have obviously been in dispute about the applicant’s entitlement pursuant to the Act, they have otherwise worked cooperatively and reasonably as executors, and there has been no suggestion that this will not continue. In addition, he makes the submission that, if I were minded to specify the time within which the orders are to be complied with, the time should run from the date on which a certified copy of the order is made on the probate of the deceased’s will, rather than from the date of the orders.
Mr Cox presses for the inclusion of the time for compliance with the orders, although he accepts Mr Ower’s contention that the appropriate date from which that time should run is the date on which a certified copy of the orders is made on the probate. He submitted that, if the interest rate was low, then, to protect the applicant’s interests, an order should be made to ensure that her legacy is paid to her as soon as possible.
In my judgment I made mention on a number of occasions of the cooperative and respectful way in which the parties had conducted the action. No evidence has been put to me to suggest that this approach will not continue. Further, it is as much in the respondent’s interests as the applicant’s to have the estate distributed without unnecessary delay. In this regard, I note that the applications for interim distributions have been made by the respondent.[1] In the circumstances, I decline to make an order setting the time frame within which the estate is to be distributed, as I do not consider it to be necessary.
[1] See FDNs 25 and 57.
Costs
Mr Cox submits that the applicant should have her costs from the estate on a solicitor/client basis. Mr Ower submits that she should have her costs on the standard costs basis.
Mr Cox submits that the solicitor/client basis is appropriate for two reasons. First, that is the usual basis on which costs are ordered in favour of successful applicants under the Act, absent any factors which might render such an order inappropriate. Second, the respondent unreasonably refused to accept a Calderbank offer made to her.
The usual basis for cost awards in this jurisdiction
Mr Cox relies on three authorities to support this contention. The first of those authorities is Whitington v Whitington (No 2)[2] (“Whitington”). In that case, White J said:
By s 9(8) of the IFP Act, the Court may make such order as to the costs of the proceedings as it considers just. It is common for the costs of a successful applicant under the IFP Act to be awarded on a solicitor/client basis. However, the Court’s usual discretion must be exercised and, amongst other things, account may be taken of the size of the estate, the successful applicant’s conduct in the litigation, and the effect of an order on a solicitor/client basis on any residuary beneficiary.[3]
(citations omitted)
[2] [2009] SASC 178.
[3] Ibid, [30].
The second case relied on by Mr Cox is Parker v Australian Executor Trustees Ltd (No 2)[4] (“Parker”). In Parker, after discussing the decision of Kourakis J (as he then was) in Pizimolas v Pizimolas (No 2)[5] (“Pizimolas”) Lovell J said:
Both Kourakis J and White J acknowledge the existence of a “standard order” and the fact that it has been the practice in South Australia for that to be followed. However it appears that White J, whilst acknowledging that the “usual discretion” on costs was to be exercised, was prepared to accept as a factor affecting the exercise of the discretion the practice of awarding solicitor/client costs to successful applicants.
With respect I agree that the approach of White J is preferable unless the Full Court determines otherwise. The practice of making a “standard order” is a factor to be taken into account when a court is exercising its discretion on costs.
In my opinion the parties to this type of litigation should not assume that a court will automatically award costs on a solicitor/client basis. A court may exercise the discretion on costs taking into account the practice of the “standard order” but also looking at the other factors mentioned by White J such as the size of the estate, the parties conduct in the litigation, what offers of settlement have been made by any party and the effect that the costs order may have on any beneficiary. Obviously other factors pertinent to the case may have relevance to the exercise of the discretion.[6]
[4] [2016] SASC 115.
[5] [2010] SASC 209.
[6] Supra, [12]-[14].
The third case relied on by Mr Cox is that of Doedens v Owen (No 2),[7] where Nicholson J, while not referring to either Whitington or Parker, made an order in favour of the successful plaintiffs on the solicitor/client basis, over the objection of the defendant.
[7] [2018] SASC 23.
Mr Cox submits that consideration of the factors referred to by White J does not lead to a conclusion that an order for solicitor/client costs would be inappropriate. He submits that the estate in this matter is a large one, and as the residuary beneficiary, the respondent will still receive the bulk of the estate. Thus, the more generous costs basis would have little material effect on her entitlement, whereas the less generous one would have a significant effect on the benefit received by the applicant from the orders for further provision. Further, there was nothing in the applicant’s conduct which would result in a disentitlement to the more generous costs order.
Finally, Mr Cox seeks to rely on the offers made by the parties. He concedes that the offers were made in the context of mediation but were clearly marked as being without prejudice save as to costs. I will return to the content of the offers in due course.
Mr Ower accepts that Parker is the leading authority on the question of costs of a successful applicant in claims under the Act. He submits that Parker stands for the principle that there is no invariable practice that a successful claimant will receive an award of solicitor/client costs, but the fact that such an award was often granted was a factor to be taken into consideration. He argues that Doedens is of little relevance in this matter, as it relied on the offers made between the parties rather than on any question of principle.
In addressing the factors identified as relevant by White J, Mr Ower submits that the estate should not be regarded as excessively large. Once the value of the deceased’s share in the house and the legacy to the applicant have been deducted, the balance remaining to the respondent is approximately $1,000,000, part of which will incur a tax liability. As a result, an award of solicitor/client costs would have a significant impact on the benefit to be received by the respondent from the estate.
Mr Ower submits that the conduct of each of the parties during the litigation is a neutral factor.
In respect of the offers made by the parties, Mr Ower submits that I am unable to take into consideration the offers made in the course of the mediation, as they are inadmissible as a result of s 67C of the Evidence Act 1929. He says that, while offers marked “without prejudice save as to costs” are an exception to s 67C, this does not apply to offers made in the course of mediation. In this regard, he relies on two cases, Pizimolas and Bibbo v Nikou & Delatex Pty Ltd (No 2)[8] (“Bibbo”). Section 67C provides:
[8] [2011] SADC 140.
67C—Exclusion of evidence of settlement negotiations
(1)Subject to this section, evidence of a communication made in connection with an attempt to negotiate the settlement of a civil dispute, or of a document prepared in connection with such an attempt, is not admissible in any civil or criminal proceedings.
(2)     Such evidence is, however, admissible if—
(a)     the parties to the dispute consent; or
(b)     the substance of the evidence has been disclosed with the express or implied consent of the parties to the dispute; or
(c)     the substance of the evidence has been partly disclosed with the express or implied consent of the parties to the dispute, and full disclosure of the evidence is reasonably necessary to—
(i)enable a proper understanding of the other evidence that has already been adduced; or
(ii)     avoid unfairness to any of the parties to the dispute; or
(d)     the communication or document included a statement to the effect that it was not to be treated as confidential; or
(e)     the proceeding in which the evidence is to be adduced is a proceeding to enforce an agreement for the settlement of the dispute or a proceeding in which the making of such an agreement is in issue; or
(f)     the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute; or
(g)     the making of the communication, or the preparation of the document, affects the rights of a party to the dispute; or
(h)     the communication was made, or the document was prepared, in furtherance of—
(i)    the commission of a fraud or an offence; or
(ii)     the doing of an act that renders a person liable to a civil penalty; or
(iii)    the abuse of a statutory power.
(3)Subsection (1) does not apply to parts of a document that do not concern attempts to negotiate a settlement of a dispute, if it would not be misleading to adduce evidence of only those parts of the document.
In Pizimolas, Kourakis J (as he then was) said:
The defendants also rely on what they contend was the plaintiff’s unreasonable failure to settle. They tendered a letter dated 31 December 2009 in which the plaintiff, by his solicitor, made an open offer to settle for about 55 per cent of the value of the estate. In the letter, the plaintiff informed the defendants of his intention to tender the letter in the event that he bettered that offer. Now, however, the plaintiff objects to the tender of the letter. I received the letter de bene esse to determine the objection to its admissibility.
The letter refers to offers made in an earlier mediation conference including an offer made by the defendants to settle on the basis that the parties withdraw their respective claims and carry their own costs. The defendants have bettered that offer and now wish to tender the plaintiff’s letter to show that they made the offer. The plaintiff objects on the ground that, even though the offer was set out in his letter of 31 December 2009, it evidences communications made in a settlement conference and is therefore rendered inadmissible by s 67C of the Evidence Act 1929, which provides:
…
It should be noted that s 67C of the Evidence Act 1929 prohibits the admission of evidence in “proceedings”. It is not limited to the trial of the substantive controversy. An application for costs is a proceeding or, at the very least, a step in a proceeding.
In my view, none of the exceptions in s 67C(2) apply. Whatever the plaintiff may have intended when the letter was sent, he does not now consent to admission of the letter for the purposes of s 67C(2)(a). Generally, the consent of the parties to the tender of confidential information pursuant to s 67C(2)(a) must be contemporaneous. Nor has the substance of the evidence been disclosed to the Court, or indeed any third party, so as to fall within s 67C(2)(b). Section 67C(2)(d) of the Evidence Act 1929 is inapplicable because the “communication” to which it refers is the communication made in the course of the settlement conference. Section 67C(2)(d) does not operate on the statement made in the plaintiff’s subsequent letter that he did not intend to treat the contents of his letter confidential. Moreover, the defendants have at no time stated that they would not treat the offer made by them in the mediation as confidential. The other exceptions even more obviously do not apply. I refuse to receive the letter.[9]
(citations omitted)
[9] Supra, [10]-[13].

In Bibbo, for the purpose of dealing with the question of costs, one of the parties sought to refer to matters raised in the course of mediation. Beazley DCJ referred to Pizimolas and said:
[14] Save for the letter dated 28 March 2007, I am of the opinion that the correspondence and all of the matters referred to in the affidavit did arise out of that mediation. None of it falls within the exclusions in s 67(2) of the Evidence Act. Accordingly none of that material is admissible pursuant to s 67C (1) of the Act.
[15] The letter of 28 March 2007, prima facie, is inadmissible pursuant to s 67C(1) of the Act, detailing as it does, with negotiations between the parties on a without prejudice basis to resolve the proceedings. However in Cutts v Head, for reasons affirmed by the courts in Pizimolas (No2) and in Rayner v Pethick, supra, Oliver LJ said, ‘Where a letter has been made without prejudice, but there is an expressed reservation as to costs, then in those circumstances a letter would be admissible on the question of costs.’
(citations omitted)
I consider that the correspondence on which the applicant seeks to rely is admissible as it falls within one of the exceptions to s 67C, as each letter included a statement to the effect that it was not to be treated as confidential (s 67C(2)(d)). This is despite the fact that there is no doubt that the correspondence on which the applicant seeks to rely occurred in the course of mediation.
Five letters in total passed between the parties between February 2020 and May 2020; the first, dated 7 February 2020, from the respondent to the applicant says:
As discussed at the meeting on 22 January 2020, we propose to respond to the last offer made at the mediation by way of letter. Accordingly, the contents of this letter are subject to the confidentiality provisions of the Mediation Agreement and otherwise privileged. It is sent on a without prejudice save as to costs basis.[10]
[10] FDN 53, RLJ-1.
The letter in reply, dated 15 April 2020, from the applicant to the respondent, confirmed that it also was “subject to the confidentiality provisions of the Mediation Agreement and is submitted on a without prejudice save as to costs basis.”
The third letter, dated 24 April 2020, from the respondent, does not refer to the mediation or the mediation agreement, but is endorsed “Without Prejudice Save as to Costs”. The fourth letter, dated 1 May 2020, from the applicant, refers to the execution of a deed of family arrangement and says:
Until this is executed, we consider the mediation to remain open.
It is also endorsed, “Without prejudice except as to costs”.
The final letter is from the respondent and is dated 6 May 2020 and carries no endorsement as to costs. It says:
Our client is not prepared to agree to settlement on the terms set out in draft Deed.
We are instructed that our client now withdraws her last offer.
We are not instructed to put forward any further offer.
Instead, we are instructed to bring the mediation to a close.[11]
[11] Each of these letters is found within FDN 53, RLJ-1.
I consider that the first letter sets out the framework in which all of the correspondence was sent; that is, that the contents of the negotiations between the parties would remain confidential, except in the event that they became relevant to the question of costs. It is clear from the correspondence that each party intended, at the time that the letters were written, to rely on the offers made in the event that it was to their benefit to do so on the question of costs. Clearly, they accepted that the contents of the offers were not admissible on the question of any entitlement to the applicant of further provision, or the amount of such provision.
Beazley DCJ referred to the decision of Cutts v Head.[12] In that case, in considering whether any policy reason existed for allowing a “carve out” of the without prejudice position in respect of costs, Fox LJ said:
Now, an offer of compromise in the Calderbank form is not, so far as the substantive issues in the action are concerned, an inhibition upon compromise. Down to judgment, the proposal for compromise cannot be referred to. The matter only arises upon the question of costs after the issues have been decided. As to that, I am not convinced that the reservation as to costs would inhibit a reasonable compromise. If a party is exposed to a risk as to costs if a reasonable offer is refused, he is more rather than less likely to accept the terms and put an end to the litigation. On the other hand, if he can refuse reasonable offers with no additional risk as to costs, it is more rather than less likely to encourage mere stubborn resistance.[13]
[12] [1984] Ch 290.
[13] Ibid, 315.
The Court held that an offer made on a without prejudice basis could still be considered on the question of costs if that intention was clearly articulated and understood between the parties at the time that the offers were exchanged.
The Court of Appeal reinforced this decision in Unilever Plc v Procter & Gamble Company.[14] In discussing the position at common law, Lord Justice Robert Walker said:
Nevertheless, there are numerous occasions on which, despite the existence of without prejudice negotiations, the without prejudice rule does not prevent the admission into evidence of what one or both of the parties said or wrote. The following are among the most important instances:
…
(7) The exception (or apparent exception) for an offer expressly made “without prejudice except as to costs” was clearly recognised by this court in Cutts v. Head [1984] Ch. 290 and by the House of Lords in Rush & Tomkins, as based on an express or implied agreement between the parties. It stands apart from the principle of public policy (a point emphasised by the importance which the new Civil Procedure Rules, Part 44.3(4), attach to the conduct of the parties in deciding questions of costs). There seems to be no reason in principle why parties to without prejudice negotiations should not expressly or impliedly agree to vary the application of the public policy rule in other respects, either by extending or by limiting its reach. In Cutts v. Head Fox L.J. said (at page 316) “what meaning is given to the words ‘without prejudice’ is a matter of interpretation which is capable of variation according to use in the profession. It seems to me that, no issue of public policy being involved, it would be wrong to say that the words were given a meaning in 1889 which is immutable ever after”.[15]
[14] [2000] 1 WLR 2436.
[15] Ibid, 2445.
There is no doubt that the common law position has been modified by the Evidence Act in each state and federally, and also by the legislation and Rules governing the Court in which the action is commenced. The provisions of the Supreme Court Act 1935 and the Uniform Civil Rules 2020 or their predecessor do not apply here as the mediation occurred between the parties prior to the commencement of this action.
While I am not bound by these English cases, I consider that their reasoning is persuasive and allows me to conclude that the offers which passed between applicant and respondent in this matter were intended by the parties to be without prejudice so long as the outcome remained contested between them, but that both parties sought to deploy them in the event that they were relevant to the question of costs. This is clear from the fact that each letter contains the endorsement of the words “without prejudice save as to costs” or their equivalent. The intention of both parties was the same: that their negotiations were subject to mediation privilege except to the extent that they became relevant to the question of costs.
Pizimolas can be distinguished from this case, because of the peculiar nature of its facts. In that case, the successful party, the defendants, sought to rely on an open letter of offer from the plaintiff, in which the plaintiff referred to offers made by the defendants in an earlier mediation. The defendants sought to tender the plaintiff’s letter, as evidence of their own offers made during the mediation. At no time was there any statement by the defendants that they did not intend to treat their own offers as confidential. Thus, there was clearly no meeting of the minds as to the extent of the confidentiality of the offers made.
In this matter, neither party has sought to put the mediation agreement before me. Thus, I can assume that there was no blanket provision in it as to the use of offers exchanged during the mediation process for the purpose of costs. In any event, there is clear agreement between the parties throughout all of the correspondence that the offers were to remain confidential, unless they became relevant to the question of costs. It is clear that these offers fall squarely within the ambit of s 67C(2)(d). In the absence of a protection such as that afforded by s 65 of the Supreme Court Act 1935, mediation does not hold any special status in respect of confidential communications.
As a result, the offers on which the applicant seeks to rely are admissible in respect of costs. They make it clear that the parties made extensive efforts to resolve the matter prior to the commencement of this action; it appears that at one point, resolution appeared close, but the parties were unable to agree on the terms of the deed required to finalise the matter.
In the circumstances, I am of the view that this is an appropriate matter in which the applicant should obtain an award of costs on the solicitor/client basis. Given the inadequacy of the provision made to her, she was forced to bring this action; if the deceased had provided for her in the way that I have ordered (or similarly), she would not have been required to incur the expenses associated with this action. It would be unjust if she were required to expend a significant portion of the further provision which she has been awarded on meeting her lawyers’ fees.
By way of letter dated 10 March 2022,[16] the applicant advised the respondent that her costs and disbursements on a solicitor/client basis from the conclusion of mediation to the conclusion of the trial were $168,470, and that from the conclusion of trial to the date of the letter, they were $19,935. In addition, her solicitor advised that a portion of her costs prior to the commencement of the action would likely be recoverable. These costs are in the sum of $95,173, on a solicitor/client basis. On the basis that not all of the costs claimed would be recoverable, Mr Ower submits that on a solicitor/client basis, the applicant’s costs would likely be in the region of $250,000. He says that a deduction that size from the respondent’s entitlement of approximately $973,000 would have a significant effect on her.
[16] R37.
I accept that costs on a solicitor/client basis will have a significant effect on the respondent’s entitlement. If the applicant were to receive her costs on the standard costs basis, however, I consider that it will have an even more deleterious effect on her. Her total costs are in the region of $283,578. If she were to receive two thirds of this amount (approximately the amount that might be expected on taxation) she would be required to pay an amount of close to $100,000 to her lawyers: more than one third of the entire cash legacy that she now receives. The respondent, on the other hand, once the applicant’s costs have been deducted, will receive a cash amount of approximately $700,000. Even after her own costs are paid, she will receive a sufficient amount of money to allow her to live comfortably. In addition, it must be remembered that she will receive the balance of the applicant’s pension stream after her death.
I reiterate that I do not consider that it would be fair if the applicant were to lose a third of her entitlement because the deceased failed to make adequate provision for her in his will. If he had acted as a just testator, she would not have incurred this expense. Nor do I consider that the offers exchanged between the parties demonstrate an unreasonable refusal to settle on her part.
Each offer was made on the basis that:
·A new trustee would be appointed in respect of the applicant’s right to reside in the house; and
·In the event that the applicant wished to live elsewhere, the applicant would have available for her use to fund a new residence seven eighths of the net proceeds of sale of the deceased’s share of the house.
The cash legacy differed in each offer.
The first offer from the respondent was for a payment to the applicant of $250,000, to be paid from the moneys coming into the estate from the super fund, in addition to the legacy of $60,000 left to her in the will. That is a total of $310,000.
The counter offer from the applicant was for an amount of $310,000, in addition to the legacy left to her in the will. That is a total of $370,000.
The respondent’s counter offer was for a sum of $300,000 to be paid from the moneys coming into the estate from the super fund. The offer is silent on whether this offer is in addition to or in lieu of the legacy of $60,000 in the will.
The applicant’s next communication accepted the respondent’s last offer, subject to the parties agreeing to the terms of the deed of family arrangement. Again, this response is silent on whether this is in addition to or in lieu of the legacy in the will.
The applicant forwarded a draft deed to the respondent. It is clear from the deed that the applicant intended to accept the offer of $300,000 on the basis that it was in addition to the legacy in the will; this is clear from the terms of the deed which purport to effect alterations to various clauses of the will.
It is difficult, if not impossible, to determine whether the judgment received by the applicant is better or worse than the last offer made by either the applicant or respondent. This is for a number of reasons. First, while the cash component of the offer is more than that awarded at trial, at trial the applicant received the entirety of the deceased’s share in the house. At the time of judgment, this was worth approximately $385,000. Thus, it could be said that the net result for the applicant was in the region of $645,000. However, no value has been attributed to the applicant’s life interest in the house, that she would have retained if the claim had settled at mediation. Thus, I am unable to determine the difference in value between the two positions.
Second, it appears that the settlement negotiations broke down over the terms of the deed of family arrangement. While I have a copy of the draft deed prepared by the applicant, neither party has advised which terms of the deed were in dispute. Thus, I am not able to assess how the offers compare to the judgment received. To be clear, my determination that the applicant is entitled to her costs on the solicitor/client basis is not because the outcome as trial was more favourable than her last offer.
I have determined that the applicant is entitled to receive her costs on the solicitor/client basis, in reliance on the principles set out in Parker.
Summary
In summary, I make the following orders:
1.The time for the making of the Applicant’s application for further provision, and for the filing and service upon the First Respondent and the Second Respondent of the Applicant’s Summons filed 3 May 2020, is extended to 12 May 2020, being the date on which the Applicant’s Summons was served upon the First Respondent and the Second Respondent.
2.The following provision be made out of the estate of Donald Gordon Bramwell, late of 27A Hyland terrace, Rosslyn Park SA 5072, Retired Chartered Accountant, who died on 6 December 2018 (the Deceased), for the maintenance, education or advancement in life of the Applicant, namely:
2.1a legacy of $260,000 in lieu of the legacy provided for the Applicant in clause 3(b)(vi)(C) of the will, inclusive of interest to the date of this order; and
2.2the entire estate, title and interest of the Deceased in the real property situated at 27A Hyland Terrace Rosslyn Park, comprised in Certificate of Title Register Book Volume 5434 Folio 927 (the Hyland Terrace property), in lieu of the right of residence provided for the Applicant in clauses (3)(c)(i) and 4 of the will.
3.The legacy referred to in paragraph 2.1 above shall be paid from that portion of the estate of the deceased comprised of the superannuation death benefit.
4.The sum of $180,000 (being the unpaid balance of the legacy referred to in paragraph 2.1 above), will incur interest at the ordinary rate for unpaid legacies in accordance with s 120A of the Administration and Probate Act 1919 to the date of payment. For the avoidance of doubt, the Applicant is to receive the amount stated in this paragraph net of any taxation that may be incurred by her or the Deceased estate on the amount.
5.The costs of the Applicant of this action be paid from the residuary estate of the Deceased, to be taxed on a solicitor/client basis if not agreed.
6.The burden of the costs entitlement referred to in paragraph 5 above be borne by and paid out of the residuary estate of the Deceased; provided that if the net residuary estate is insufficient for the payment of the cost entitlement provided for in this order then the extent of the insufficiency shall be a charge upon the assets the subject of the beneficial interest of the Third Respondent in the estate under the will of the Deceased.
7.Save as aforesaid, the First Respondent and the Second Respondent shall stand possessed of the estate of the Deceased upon and subject to the trusts declared in the will so far as such trusts shall be capable of taking effect.
8.The costs of the First Respondent and the Second Respondent of this action be taxed or agreed as between solicitor and client and paid out of the residuary estate of the Deceased upon the footing of an indemnity.
9.A certified copy of this order be made on the probate of the will of the Deceased and, for that purpose, the First Respondent and the Second Respondent produce the probate to the Registrar of Probates.
10.Certified fit for Senior Counsel.
11.Liberty to apply for further orders and directions.

[2022] SASC 76

27 July 2022