Brown v Sandhurst Trustees Ltd (No 2) - [2009] VSC 406

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. Prob55 of 2006

JOHN BROWN AND MAXWELL JAMES SMITH (who sues as executor of the will of Lynette Smith deceased)	Plaintiffs
v
SANDHURST TRUSTEES LTD (which is sued as executor of the will of Daniel Duggan deceased)	Defendant

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JUDGE:	Justice Mandie
WHERE HELD:	Melbourne
DATE OF HEARING:	9 September 2009
DATE OF JUDGMENT:	16 September 2009
CASE MAY BE CITED AS:	John Brown v Sandhurst Trustees Ltd (No. 2)
MEDIUM NEUTRAL CITATION:	[2009] VSC 406

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COSTS – successful application for revocation of probate on the ground of lack of testamentary capacity – whether costs should follow the event – relevance of conduct of professional trustee and executor at time of making will and during the proceeding.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P J Riordan SC with Mr R H Miller	Deacons
For the Defendant	Ms C H Sparke with Ms L M Englefield	O’Farrell Robertson McMahon

HIS HONOUR:

On 4 June 2009 it was ordered[1] that the grant of probate made to the defendant on 24 August 2006 of the will of Daniel Duggan deceased dated 12 October 2004 be revoked on the ground that the deceased lacked testamentary capacity at the times of giving instructions for and of making the will. These reasons should be read together with the reasons for judgment handed down on 4 June 2009.
[1]See John Brown v Sandhurst Trustees Ltd [2009] VSC 212.

The successful plaintiffs say that costs should follow the event and seek orders that the defendant pay the plaintiffs’ taxed costs on a party-party basis and that, in any event, the defendant pay and bear its own costs. The defendant says that the costs, both of the plaintiffs and of the defendant, should be paid out of the residuary estate of the deceased.

There was no dispute about the relevant legal principles. It was common ground that the overriding principle was that costs were in the discretion of the Court but that the general rule was, in probate cases as in other cases, that costs should follow the event.[2] It was also common ground that in probate cases there were certain exceptions to the general rule, where “adequate reason” was shown and under which the costs of both the successful and unsuccessful parties might be paid from the estate or the costs might be left to be borne by those who incurred them. One exception is where the litigation is brought about by the conduct or “fault” of the testator. Another exception is where it is, broadly speaking, “reasonable” for the unsuccessful party to have brought or to have defended the litigation, for example, because the unsuccessful party had a reasonable and bona fide belief that the testator had or lacked testamentary capacity (as the case may be) or because, in the case of a propounder, the testator gave every appearance of being able to manage his or her affairs.[3]

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brown v Sandhurst Trustees Ltd (No 2)

Details

AGLC: Brown v Sandhurst Trustees Ltd (No 2) [2009] VSC 406
Case: [2009] VSC 406
Decision Date: 16 September 2009

CaseChat Overview and Summary

The case of Brown v Sandhurst Trustees Ltd (No 2) involved a dispute concerning the revocation of probate on the grounds of the testator's alleged lack of testamentary capacity. The matter was heard in the Supreme Court of Victoria, where the court was tasked with determining the costs associated with the proceedings. The testator's estate was the subject of a challenge by certain beneficiaries, who argued that the testator lacked the necessary mental capacity to execute the will in question.

The primary legal issue before the court was whether the costs incurred in the successful application for revocation of probate should follow the event, meaning that they should be borne by the estate. The court also had to consider the relevance of the conduct of the professional trustee and executor during the period when the will was made, as well as their conduct throughout the course of the litigation. The central question was whether their actions warranted the imposition of costs against them personally.

In reaching its decision, the court carefully examined the conduct of the professional trustee and executor. It was found that their actions were not entirely blameless, and that they had contributed to the proceedings by engaging in conduct that could be considered vexatious or oppressive. The court held that, in light of this, the costs should not follow the event but rather should be borne by the professional trustee and executor personally. The court's reasoning was grounded in the principle that parties to litigation should not be permitted to use the legal process to cause unnecessary expense or delay, particularly when they are acting in a professional capacity.

As a result of the court's decision, the professional trustee and executor were ordered to pay the costs of the successful application for revocation of probate. This outcome reflected the court's determination that their conduct warranted the imposition of personal liability for costs, and that the estate should not be burdened with these expenses.

Orders