Craker v Craker (No 3)

Case [2019] SASC 13

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

CRAKER v CRAKER & ORS (No 3)

[2019] SASC 13

Judgment of The Honourable Justice Stanley

15 February 2019

SUCCESSION - MAKING OF A WILL - TESTAMENTARY INSTRUMENTS  - MISTAKES AND OMISSIONS

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - OTHER CASES - FAILURE IN PORTION OF A CASE

This is an application for the costs of an action for rectification of a will pursuant to s 25AA of the Wills Act 1936 (SA) (the Act).

The plaintiff is the widow of the deceased and the mother of the fourth defendant.  The first, second and third defendants are the children of the deceased by a previous marriage. The plaintiff made an application for rectification.  The solicitors who drafted the will were joined to the proceedings as an interested party. They were the sole contradictors in the trial of the rectification proceedings.   Ultimately, the plaintiff succeeded in her application for rectification of clauses 10 and 11 of the will but failed in relation to application for rectification of clause 12.

The plaintiff now seeks orders that the interested party pay the costs of the first to third defendants on a party/party basis, the costs of the fourth defendant on an indemnity basis, and 75 per cent of the plaintiff’s costs on a solicitor/client basis.

Held:

1.  The need for rectification in respect of clauses 10 and 11 of the will arose from the fault of the solicitor who drafted the will. In those circumstances it is appropriate that the interested party should pay the costs of the parties to the action.

2.  It would be unfair to visit the costs of the whole action upon the interested party as the plaintiff failed in relation to her application for rectification of clause 12. That can most appropriately be addressed by wielding a broad axe in relation to the interested party’s liability for the costs of the action.

3.  The interested party is to pay 50 per cent of the plaintiff’s costs of the action on a party/party basis.

4.  The interested party is to pay the first, second and third defendants’ costs of the action on a party/party basis.

5.       The interested party is to pay the fourth defendant’s costs of the action on an indemnity basis. 

Wills Act 1936 (SA) s 25AA, referred to.
Craker v Craker & Ors (No. 1) [2018] SASC 10; Re Molnar (No. 2) [2016] SASC 159; Morley v Rawlings [2015] 1 AC 129; City of Burnside v Attorney-General of South Australia (1994) 63 SASR 65; Coates v Wattson Estate of Sullivan [2013] NSWSC 604; Public Trustee v Permanent Trustee Company Ltd [2003] NSWSC 556; Wesley v Wesley [1998] SASC 6560, discussed.
Kerr v Kerr (No. 2) [2016] SASC 24; Badenach v Calvert (2016) 257 CLR 440, considered.

CRAKER v CRAKER & ORS (No 3)
[2019] SASC 13

STANLEY J:

Introduction

  1. This is an application for the costs of an…

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AGLC
Craker v Craker (No 3) [2019] SASC 13
Case
[2019] SASC 13
Decision Date

CaseChat Overview and Summary

The case of Craker v Craker (No 3) dealt with issues of costs in a dispute between the plaintiff and multiple defendants, with the primary focus on the costs incurred by the interested party in relation to rectification of clauses in a will. The court was required to determine whether the estate or the plaintiff should bear the costs incurred by the interested party in opposing the application for rectification of clauses 10 and 11, and whether the interested party should be entitled to recover its costs from the plaintiff or the estate. The court also had to decide whether to certify the costs as fit for senior counsel.

The court held that the solicitor drafting the will had a duty to act on the testator’s instructions and to apply the requisite level of care and skill in doing so. It was the duty of the solicitor to identify the relevant Certificate of Title references and ensure that the terms of the will reflected those instructions. The court rejected the submissions of the interested party that it should be entitled to its costs from either the plaintiff or the estate. The court held that the interested party’s costs should be borne by the estate as it was the estate that failed in the rectification application, and the interested party was required to participate in the rectification proceedings on a matter upon which the plaintiff ultimately failed.

The court ordered that the interested party was to pay 50 per cent of the plaintiff’s costs of the action on a party/party basis. It also ordered that the interested party was to pay the first, second and third defendants’ costs of the action on a party/party basis. However, the court ordered that the interested party was to pay the fourth defendant’s costs of the action on an indemnity basis. The court certified that the costs were fit for senior counsel.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Except for the fourth defendant’s costs, costs of the other parties, namely, the plaintiff and the first, second and third defendants, are to be assessed on a party/party basis. I would certify costs fit for senior counsel.Conclusion I would order the interested party to pay 50 per cent of the plaintiff’s costs of the action on a party/party basis. I would order the interested party to pay the first, second and third defendants’ costs of the action on a party/party basis. I would order the interested party to pay the fourth defendant’s costs of the action on an indemnity basis. I would certify costs fit for senior counsel.

Ratio Decidendi

Legal Principle Established

The interested party submit there are five reasons the estate should pay its costs and the plaintiff’s costs. First, the interested party had to intervene in relation to the life insurance and superannuation issue. Accordingly, the rectification proceedings should be regarded as an expense in the administration of the estate. Second, the plaintiff could have resolved the issue of rectification of clauses 10 and 11 without the need to proceed to trial. Accordingly, there was little justification in the plaintiff incurring significant additional costs in pressing for rectification. Where the interested party was required to participate in the rectification proceedings on a matter upon which the plaintiff failed, it is both reasonable and fair that the interested party’s costs be met by the estate. Third, authorities such as Coates v Wattson; Estate of Sullivan,[13] Public Trustee v Permanent Trustee Company Ltd[14] and Wesley v Wesley[15] support the proposition that the costs of rectification of an administrative or transposition error of the kind that occurred in this case are a matter for the estate. Fourth, given the Court’s finding in relation to the application for rectification of clause 12, the original claim for rectification against the defendants was bound to fail in that respect. Accordingly, no consequential costs orders would have been visited upon the interested party. The settlement militated against the need for a trial on rectification but the plaintiff insisted upon pursuing the application, inter alia, in relation to the life insurance and superannuation policies upon which she ultimately failed. This failure justifies the course adopted by the interested party in incurring costs in opposing the application for rectification. On that issue the interested party submits that it is entitled to its costs from either the plaintiff or the estate. Fifth, even if the Court were to conclude that the plaintiff is entitled to some of her costs payable by the interested party, as opposed to the estate, in relation to rectification of clauses 10 and 11, the identification of what part of her costs she should be entitled to recover is so difficult as to dissuade the Court from exercising its costs discretion to permit that course. That would require the Court to offset the costs to which the interested party is entitled in relation to the rectification application in respect of clause 12. The interested party contends that this underlines why the fairest and most just course is to order the estate to pay the costs of the interested party and the plaintiff.[13] [2013] NSWSC 604. [14] [2003] NSWSC 556. [15] [1998] SASC 6560. Consideration I reject the submissions of the interested party. In this matter, the solicitor was under a duty to act on the testator’s instructions and to apply the requisite level of care and skill in doing so.[16] It was the duty of the solicitor drafting the will to identify the relevant Certificate of Title references and in light of those references to ensure that the terms of the will reflected those instructions. I accept that the testator relied upon the solicitor to ensure that his instructions were accurately reflected in the terms of the will she drafted. While the testator was confused by the terms by which the Wombat’s Rest properties were referred to in the drafts of his will, responsibility for ascertaining precisely the terms of his instructions in relation to those properties rested with the solicitor who drafted the will. The only confusion in this matter was on the part of the solicitor. While I accept that the testator failed to identify the mistake that had been made, I do not consider that there is any attribution of “fault” on his part. The fault lay with the solicitor.[16] Badenach v Calvert [2016] HCA 18, (2016) 257 CLR 440 at [18].