Burge v Burge (No. 2)

[2015] NSWSC 141

Supreme Court

New South Wales

Medium Neutral Citation:	Burge v Burge (No. 2) [2015] NSWSC 141
Hearing dates:	On the papers
Date of orders:	03 March 2015
Decision date:	03 March 2015
Jurisdiction:	Equity Division
Before:	Darke J
Decision:	Order that plaintiff’s costs on an indemnity basis and the defendant’s costs on the ordinary basis be paid out of the estate.
Catchwords:	COSTS – departing from general rule that costs follow the event – probate litigation – litigation brought about by state of papers left by deceased – whether unreasonable for unsuccessful party to not accept Calderbank offer
Legislation Cited:	Succession Act 2006 (NSW) s 8
Cases Cited:	Burge v Burge [2014] NSWSC 1772 Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786 Lippe v Hedderwick [1922] HCA 44; (1922) 31 CLR 148 Shorten v Shorten (No 2) [2003] NSWCA 60 Vaughan v Hoskovich [2010] NSWSC 706
Category:	Costs
Parties:	Anne Bell Burge (plaintiff) Conrad Michael Burge (defendant)
Representation:	Counsel: V F Kerr (plaintiff) P Blackburn-Hart SC (defendant) Solicitors: Lane and Lane (plaintiff) Lane and O’Rourke (defendant)
File Number(s):	2013/137871
Publication restriction:	Nil

Judgment

Introduction

1. The question of costs remains to be determined in this matter. By a judgment delivered on 11 December 2014 (“the main judgment”), it was held that the Court was not satisfied that a certain informal testamentary document was intended to form the will of the late Rupert Burge (see Burge v Burge [2014] NSWSC 1772). Accordingly, the Amended Cross Claim brought by the defendant was ordered to be dismissed, and probate of a will dated 15 March 1983 was granted to the plaintiff.

2. In the course of the main judgment, I expressed the view that the litigation had essentially been brought about by the state of the papers left by Rupert Burge and that, in those circumstances, it was prima facie appropriate to order that the costs of all parties be borne out of the estate on an indemnity basis (see the main judgment at [67]).

3. The plaintiff has taken issue with that approach, and submits that the appropriate order for costs is that the defendant pays the plaintiff’s costs up to 9 July 2014 on the ordinary basis, and after 9 July 2014 on an indemnity basis. There is no dispute that the plaintiff’s costs should be paid out of the estate on an indemnity basis.

4. Directions were made for the filing of written submissions. The plaintiff filed written submissions of Counsel dated 5 February 2015, and the defendant filed written submissions of Senior Counsel dated 25 February 2015.

5. Neither party suggested that any further oral hearing was required, so the matter has been dealt with on the papers. The written submissions have been considered, and have been placed on the Court file.

Submissions

6. In brief summary, the plaintiff submitted that the case was not truly one brought about by the conduct of the testator and thus did not fall within the first of the recognised exceptions referred to in Shorten v Shorten (No 2) [2003] NSWCA 60 at [15]. It was put that the only failing of the testator was in not destroying the informal will “in which he had recorded a contemplation concerning his testamentary desires”. Moreover, the plaintiff contended that in all the circumstances, the defendant took the risk that he would not be able to discharge the onus under s 8 of the Succession Act 2006 (NSW) in relation to the informal will.

7. The plaintiff further submitted that the defendant had unreasonably failed to accept a Calderbank offer made on 19 June 2014 which, had it been accepted, would have resulted in the defendant receiving about $200,000 out of an estate with a net value of about $1,000,000. The response to the offer, made by the defendant on 9 July 2014, was to the effect that he required the matter to be determined by the Court.

8. Finally, it was submitted that it would not be a just outcome if the plaintiff (who is the sole beneficiary entitled under the 1983 will admitted to probate) had to bear the costs of the litigation given that she had made a generous offer to resolve the matter.

9. The defendant submitted that this was indeed a case where the litigation was caused by the testator, who almost never discussed his testamentary intentions with his family, and left behind a variety of papers which concerned those intentions. The defendant also emphasised that the probate jurisdiction of the Court is less concerned with the claims of adversarial parties than with the public interest in the due administration of property in accordance with the testamentary intentions of deceased persons. In that regard, reference was made to the recent decision of Lindsay J in Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786, especially at [108] and [114]-[115]. The defendant further submitted that it was not unreasonable for the defendant to propound the informal will, and it was not unreasonable for the defendant to require the issue to be determined by the Court. It was pointed out, for example, that the informal will was clearly testamentary in character, and was signed and dated by the testator.

Determination

10. I remain of the view that this is a case where the litigation has essentially been brought about by the state of the papers left by Rupert Burge. He retained in his possession (albeit not with the other documents in the envelope marked “WILLS”) an informal will the form and content of which provided considerable support for the view that he intended it to form his will (see the main judgment at [52] and [54]). The plaintiff herself recognised that the informal will raised some doubt as to whether a grant should be made in respect of the 1983 will (see the main judgment at [67]).

11. The informal will was the basis of the defendant’s opposition to the plaintiff’s claim for probate in respect of the 1983 will. The case seems to me to fall within the first of the exceptions identified in Shorten v Shorten (No 2) (supra) at [15] (see also Lippe v Hedderwick [1922] HCA 44; (1922) 31 CLR 148 at 154-155; Vaughan v Hoskovich [2010] NSWSC 706 at [69]).

12. I do not think that it was in any way unreasonable of the defendant to propound the informal will. I considered the case to be a borderline one (see the main judgment at [64]), and propounding the informal will was consistent with the public interest sought to be advanced in the probate jurisdiction of the Court.

13. Moreover, in these circumstances, I do not think that it was unreasonable of the defendant to not accept the Calderbank offer. The offer was a commendable attempt to resolve the matter, and in ordinary adversarial litigation the failure by an unsuccessful party to accept such an offer is generally a significant factor to be considered on the question of costs. I readily accept that there is an adversarial flavour to this case as the plaintiff is the sole beneficiary entitled under the 1983 will and the defendant would be the sole beneficiary entitled under the informal will. Nevertheless, I do not think that these circumstances displace the public interest as the primary concern of the probate jurisdiction. Whilst I regard the failure to accept the Calderbank offer as a relevant factor in this case, in my view it was not unreasonable of the defendant to decline the offer and have the question of the testator’s true testamentary intentions determined by the Court.

14. In all the circumstances, I consider that in this case it is appropriate that there be a departure from the usual position that costs follow the event. I consider that Rupert Burge’s estate should bear the costs of the litigation which was brought about by his conduct. I appreciate that, as a practical matter, the consequential depletion of the estate is borne by the plaintiff. However, that burden is suffered by her as the beneficiary under the 1983 will, not as the plaintiff in the proceedings.

15. However, upon reflection, I think it appropriate that the defendant’s costs be paid on the ordinary basis rather than on an indemnity basis. In cases of this kind, an ordinary costs order would generally strike a fair balance between neither deterring, nor overly encouraging, the bringing of challenges to probate applications. I do not think that in the circumstances of the present case a special costs order in favour of the defendant would be warranted.

16. The Court orders:

1. that the plaintiff’s costs of the proceedings be paid on an indemnity basis out of the estate of the late Rupert Burge; and

2. that the defendant’s costs of the proceedings be paid on the ordinary basis out of the estate of the late Rupert Burge.

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Decision last updated: 03 March 2015