Chronis v Karan (No 2) - [2021] SASC 101

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Judicial Review)
CHRONIS v KARAN & ORS (No 2)
[2021] SASC 101
Judgment of the Honourable Justice Parker
SUCCESSION - MAKING OF A WILL - TESTAMENTARY CAPACITY
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS
This is an application for costs. The applicant succeeded in his application which sought orders from the Court pronouncing the force and validity of the will made by the deceased, Efstathia Birbas (known as Stathoula), and that the will be admitted to probate in solemn form.
The applicant submits that the respondents should pay his costs up to 30 April 2020 on a standard costs basis and thereafter on a solicitor/client basis because of the respondents unreasonably failed to accept an offer to settle the matter in April 2020. The respondents submit that the parties’ costs should be paid out of the estate on a standard costs basis as the circumstances of the case were such that the Court’s supervisory jurisdiction over the administration of deceased estates was properly exercised.
Held, per Parker J:
1.The circumstances of suspicion that arose justified the respondents requiring the applicant to discharge at trial the burden of persuading the Court that it was affirmatively satisfied as to the force and validity of the will.
2.Given the state of the evidence at the time, the respondents did not act unreasonably in refusing the settlement offer in March 2020.

3. The parties’ costs are to be paid out of the deceased’s estate on a standard costs basis.
Mitchell & Anor v Gard & Anor (1863) 3 Sw & Tr 275, applied.
Fielder v Burgess [2014] SASC 98; Hall v Carney & Ors (No 2) [2012] SASCFC 105; Middlebrook v Middlebrook (1962) 36 ALJR 216; Ponder v Burmeister [1909] SALR 62; Roche v Roche & Anor (No 2) [2017] SASC 75; Spiers v English [1907] P 122, discussed.
Hall v Carney & Ors [2012] SASCFC 76, considered.

CHRONIS v KARAN & ORS (No 2)
[2021] SASC 101
Civil

PARKER J: This is an application for costs following an order of the Court pronouncing the force and validity of the will made by Efstathia (known as Stathoula) Birbas and the making of an order that her will be admitted to probate in solemn form.
The applicant contends that the respondents should pay his costs up to 30 April 2020 on a standard costs basis and thereafter on a solicitor/client basis. The basis for that contention is that the applicant submits that the respondents unreasonably failed to accept an offer to settle the matter in April 2020.
The respondents seek an order that the parties’ costs be paid out of the estate on a standard costs basis. Alternatively, the respondents submit that if that submission is rejected, no order for costs should be made or an order made that the parties bear their own costs.
The Court ultimately rejected the contentions by the respondent that Mrs Birbas lacked testamentary capacity at the…

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 Chronis v Karan (No 2)

Details

AGLC: Chronis v Karan (No 2) [2021] SASC 101
Case: [2021] SASC 101
Decision Date: 20 August 2021

CaseChat Overview and Summary

Chronis v Karan (No 2) involves a dispute over the validity of a will and the associated costs of probate proceedings. The case pertains to the estate of Mrs Birbas, with the primary issue being the testamentary capacity of Mrs Birbas at the time she executed her will. The respondents, who were contradictors to the application for probate, argued that there were reasonable grounds to question the validity of the will due to concerns about Mrs Birbas's capacity. The primary legal issues were whether the respondents had reasonable grounds to question the will's validity and whether they acted reasonably in refusing a settlement offer. The court also needed to determine the appropriate allocation of costs in the context of the probate proceedings.

The court examined the principles governing costs in probate matters, drawing on precedents such as Roche v Roche and Mitchell v Gard. The key principle is that while costs generally follow the event, there are exceptions in probate cases. Specifically, if a party has reasonable grounds to question the execution of a will or the capacity of the testator, they may be relieved from costs. The court considered the respondents' actions in light of these principles and the specific circumstances of the case. The court found that the circumstances justified the respondents' actions and that they did not act unreasonably in refusing the settlement offer. Therefore, the court ordered that the parties' costs were to be paid out of the deceased’s estate.

The final orders of the court were that the respondents were justified in requiring the applicant to prove the will's validity, and they did not act unreasonably in refusing the settlement offer. The court also ruled that the parties' costs were to be paid out of the deceased’s estate on a standard costs basis. This decision highlights the importance of the principles governing costs in probate proceedings and the need for careful consideration of the circumstances in each case.

Orders

Orders of the court

Held, per Parker J:

1. The circumstances of suspicion that arose justified the respondents requiring the applicant to discharge at trial the burden of persuading the Court that it was affirmatively satisfied as to the force and validity of the will.

2. Given the state of the evidence at the time, the respondents did not act unreasonably in refusing the settlement offer in March 2020.

3. The parties’ costs are to be paid out of the deceased’s estate on a standard costs basis.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The respondent also points to the fact that the notes prepared by Mr Niarchos at the time he took instructions for the will were very brief and his affidavit provided little additional information concerning the testamentary capacity of Mrs Birbas. The telephone conference between the experts also did not occur until shortly before trial on 29 January 2021. In these circumstances, the respondents submit that it was appropriate that they continue to act as contradictor to the application for probate and that the matter be resolved in the Court’s supervisory jurisdiction.ConsiderationRelevant principles The principles to be applied when determining an application for costs in probate proceedings were helpfully analysed by Kourakis CJ in Roche v Roche & Anor (No 2).[2] [2] [2017] SASC 75 at [5]-[18]. Kourakis CJ observed in Roche that the overarching principle is that costs are in the discretion of the Court. That discretion is unfettered but must be exercised judicially. The ordinary rule is that a successful litigant will be entitled to an order for costs. However, there are exceptions to the general rule in probate matters. Those exceptions were identified in Mitchell v Gard where Sir JP Wilde observed:[3]It is the function of this Court to investigate the execution of a will and the capacity of the maker, and having done so, to ascertain and declare what is the will of the testator. If fair circumstances of doubt or suspicion arise to obscure this question, a judicial inquiry is in a manner forced upon it. Those who are instrumental in bringing it about and subserving this inquiry are not wholly in the wrong, even if they do not succeed. … [T]he Court deduces the two following rules for its future guidance: first, if the cause of litigation takes its origin in the fault of the testator or those interested in the residue, the costs may properly be paid out of the estate; secondly if there be sufficient and reasonable ground, looking to the knowledge and means of knowledge of the opposing party, to question either the execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party may properly be relieved from the costs of his successful opponent.[3] Ibid at 277-278. It is unnecessary to consider the precise effect of the reference by Sir JP Wilde to the fault of the testator. In this case the respondents rely on the second exception identified in Mitchell i.e. having regard to their knowledge and the means of knowledge available to them, they had sufficient and reasonable grounds to question the capacity of the testator. The decision of the High Court in Middlebrook v Middlebrook provides a clear example of the application of the second exception identified in Mitchell.[4] In that case the son of the testator contended that he lacked testamentary capacity. The evidence of an experienced solicitor, whose integrity was accepted, was that he had received clear instructions from the testator two days before his death while he was in hospital. He had no reason to believe that the testator lacked capacity. However, the medical evidence was that on the day prior to the making of the will the health of the testator had deteriorated markedly. He was sedated and semi‑comatose. Despite this evidence, the trial judge ordered that the son, who had challenged the will, should pay the costs of the executor. The High Court dismissed the appeal except in relation to the question of costs. The High Court ordered that there be no order as to costs. Dixon CJ explained that decision as follows:[5]There are in the present case circumstances which would naturally lead the caveator to think that an investigation of the validity of his father’s last will was justified. If this case were judged on its general circumstances only, I think that adequate reasons would be seen for entertaining some doubt as to the validity of the will. It is only as a result of investigations that the reasons for finding affirmatively in favour of the testator’s testamentary capacity distinctly appear. In these circumstances the proper course is to apply the principle enunciated by Sir Gorrell Barnes P that “if the circumstances lead reasonably to an investigation of the matter then the costs may be left to be borne by those who have incurred them”. Spiers v English [1907] P 122 at 123.[4] (1962) 36 ALJR 216.[5] Ibid at 217.