Dahm v Dahm

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
DAHM & ANOR v DAHM
[2025] SASC 70
Judgment of the Honourable Justice Stanley
SUCCESSION - ADMINISTRATION OF ESTATE - DISTRIBUTION – OTHER MATTERS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - GENERAL PRINCIPLES AND EXERCISE OF DISCRETION

This is an application for advice and direction with respect to the administration of the estate of Sushama Dahm. The executors of the estate (the applicants) sought orders pursuant to s 29(2) of the Trustee Act 1936 (SA) (Trustee Act) that the respondent be barred from instituting any proceedings against the executors in relation to Notified Claims filed by him. The respondent had not taken any steps to withdraw or institute proceedings to enforce the Notified Claims. The applicants further sought a declaration that they be at liberty to administer the estate of the deceased without regard to the Notified Claims.
Prior to the hearing, the relief sought by the applicants was agreed by the respondent. The Court must be satisfied that there is a proper factual basis to make the orders as agreed between the parties.
The only issue which remained the subject of argument at the time of hearing was the costs of the application. The applicants sought that the respondent pay costs on an indemnity basis, or in the alternative a solicitor/client basis, or in the further alternative, on a party/party basis. The respondent submitted he should not be liable for the costs of the application because the costs should be treated as having been necessarily incurred for the benefit of the estate. In the alternative the respondent submits that if he is found liable to pay the costs of the application it ought to be on a standard costs basis only.
Held:
1.It is appropriate and just to make the orders sought in terms of paragraphs 2(a) – (c) of the originating application. Accordingly:
a. The Notified Claims referred to in paragraph 10 (the Notified Claims) of the notice under section 29(2) of the Trustee Act served on the respondent dated 3 April 2023, are absolutely barred as against the applicants.
b. The respondent is barred from instituting proceedings against the applicants in relation to the Notified Claims.
c. The applicants are at liberty to administer the estate of the deceased Sushama Dahm without regard to the Notified Claims.
2.The institution of this application by the applicants seeking the orders in paragraph two of the originating application was necessitated by the default of the respondent in complying with the terms of the notice issued under s 29(2) of the Trustee Act. Legal costs have been incurred as a direct result of the respondent’s failure to act. These costs ought not be treated as having been incurred for the benefit of the estate.
3.The costs of the applicants of and incidental to the steps taken by the applicants under section 29 of the Trustee Act are to be paid by the respondent on a solicitor/client basis.

Trustee Act 1936 (SA) ss 29(1), 29(2) s 29(4), 91; Administration and Probate Act 1919 (SA) s 69; Supreme Court Act 1935 (SA) s 40; Succession Act 2023 (SA) s 95, referred to.
Hall v Carney (No. 3) [2021] SASCA 37; Roche v Roche & Anor (No. 2) [2017] SASC 75; Public Trustee v Taylor (No. 2) [2020] SASC 213, applied.
Olsen v James [2020] NSWSC 1015; English v Stewart [2022] NSWSC 268, considered.

DAHM & ANOR v DAHM
[2025] SASC 70
STANLEY J:
Introduction

The applicants are the executors of the estate of Sushama Dahm. The respondent is an adult child of the deceased and one of the four beneficiaries under her will.
The applicants applied to the Court for various orders in relation to the estate including for the approval by the Court pursuant to s 29(4) of the Trustee Act 1936 (SA) (Trustee Act) of a Notice to be given under s 29(1) for a barring order under s 29(2) of the Trustee Act in respect of claims against the estate; for advice and directions pursuant to s 69 of the Administration and Probate Act 1919 (SA) (the APA) and s 91 of the Trustee Act; and the determination of questions arising in relation to the administration of the estate and related relief. While judgment was reserved the APA was repealed by Sch 3, Cl 1 of the Succession Act 2023 (SA). The equivalent section under the Succession Act is s 95. The application was completed under the APA pursuant to Sch 4, Cl 2 of the Succession Act as if the Succession Act had not been enacted.
Aspects of the application had been dispensed with by an Associate Justice prior to my hearing of the matter. The remaining orders sought are set out in paragraph 2 of the originating application as follows:
2. Orders pursuant to section 29(2) of the Act that:
a. The Notified Claims referred to in paragraph 10 (“the Notified Claims”) of the notice under section 29(2) of the Act served on Respondent David Debabrata Dahm (“David”) dated 3 April 2023 (“the Notice”), a copy of the Notice being exhibit “SMD&AM4” to the affidavit of the Executors affirmed by the last of the Executors on 8 April 2024 and filed herein, be absolutely barred as against the Executors.
b. David be barred from instituting any proceedings against the Executors in relation to the Notified Claims.
c. The Executors be at liberty to administer the estate of the deceased without regard to the Notified Claims.
d. The costs of the Executors of an [sic] incidental to the steps taken by the Executors under section 29 of the Act in relation to David, and the costs of the Executors of and incidental to these proceedings in relation to the relief sought by the Executors under section 29(2) of the Act be paid by David on an indemnity basis or in the alternative on a solicitor/client basis or in the alternative on a standard costs basis.
Before trial, the relief the applicants sought pursuant to s 29(2) was agreed by the respondent. As a result, though the Court must be satisfied that there is a proper factual basis to make such orders, the only matter in dispute is the costs of the application.
The applicants sought an order that the costs of the application be paid by the respondent on an indemnity basis, or in the alternative a solicitor / client basis or, in the further alternative, on a party / party basis. The respondent opposed any order that he pay the costs of the application and, in the alternative, submitted that if he was to be found liable to pay the costs of the application it should be on a standard costs basis only.
The facts
·At various times after the death of the deceased the applicants received from the respondent claims or notices of claims against them, in their capacity as executors or against the estate. These are defined as the “Notified Claims” in the originating application. The respondent first wrote to the applicants regarding his potential claims against the estate on 23 June 2022. He sent them a detailed letter concerning the potential claim on 1 August 2022.
·On 29 September 2022 the respondent requested from the applicants information regarding the potential claims. On 27 October 2022 the applicants responded to this request. On 29 November 2022 the respondent issued to the applicant a pre-action claim. On 13 December 2022 the respondent filed an application for pre-action discovery by the applicants in respect of the potential claims.
·In around January 2023 the trustee of the family trust provided the respondent with several thousand pages of materials. On 10 February 2023 the applicants provided the respondent with a copy of the testator’s solicitor’s file. The file consisted of 512 pages. On 22 March 2023 the respondent wrote to the applicants and the trustee about pre-action discovery matters and advised of his intention to obtain an opinion from senior counsel.
·The applicants disputed the Notified Claims.
·Accordingly, on 3 April 2023 the applicants served upon the respondent a Notice issued under s 29(2) of the Trustee Act (the Notice).
·The Notice required the respondent either to withdraw the Notified Claims or to institute proceedings to enforce the Notified Claims within six months of the service of the Notice on the respondent.
·That time elapsed and the respondent did not take either of the options set out in the Notice. The respondent neither withdrew the Notified Claims or took proceedings to enforce the Notified Claims within the specified period which expired on 3 October 2023.
·As a result, the applicants instituted proceedings in which they sought the barring orders against the respondent.
·After the applicants issued the barring notice pursuant to s 29(2) the applicants sent a letter to the respondent enclosing all written communications from Anjana Menon, in her capacity as the trustee of the family trust, regarding beneficiary loans and responses.
·On 3 November 2023 the applicants wrote to the respondent about the expiry of the Notice.
·On 6 November 2023 the respondent wrote to the applicants and informed them that he had obtained advice from senior counsel regarding the potential claims and proposed a without prejudice meeting.
·On 13 November 2023 the applicants wrote to the respondent advising that they considered there was no merit in having the proposed without prejudice meeting and that they intended to obtain judicial advice and directions regarding the distribution of the estate in the face of the failure of certain beneficiaries to approve the proposed distributions. Subsequent attempts by the respondent in the period to December 2023 to procure agreement to meet and discuss a settlement did not succeed.
·On 4 July 2024 the respondent filed a response (FDN 13) advising that he did not oppose the barring orders sought and consented to the making of the orders sought in paragraphs 2(a), 2(b) and 2(c) of the originating application. However, he opposed an order for an award of costs or, in the alternative, proposed that costs should only be awarded on a standard costs basis.
·The respondent has still not taken steps to either withdraw the Notified Claims or institute proceedings to enforce the Notified Claims.
Consideration
Sections 29(1) and (2) of the Trustee Act provide:
(1) Where a representative or trustee has given notices such as would have been given by the court in an administration action for creditors, beneficiaries, and others to send in to the representative or trustee their claims against the estate of the deceased person or against the trust property, the representative or trustee may, at the expiration of the time named in the notices, distribute the estate of the deceased person or the trust property or any part thereof amongst the persons entitled thereto, having regard only to the claims of which he then has notice, and shall not be liable for the estate or property or any part thereof so distributed to any person of whose claim he had no notice at the time of the distribution.
(2) Where a representative or trustee has received a claim or notice of claim against the estate of a deceased person or against a trust property, and he disputes the claim, that representative or trustee may give to the person making the claim, or giving the notice, a notice in writing that the claim is disputed, and requiring the claimant either to withdraw the claim or to institute proceedings to enforce it within six months of the service of the last-mentioned notice; and if the claim is not so withdrawn or prosecuted, the representative or trustee may apply by summons in chambers to any judge of the Supreme Court, on affidavit setting out the facts for an order that, as against such representative or trustee, the claim shall be absolutely barred, and any such judge may make such order as he deems just, and the order shall bind all persons whom it purports to affect.
The purpose of the jurisdiction conferred on the Court by s 29 of the Trustee Act is beneficial. It is intended to supplement the Court’s broad power to supervise and facilitate the proper administration of estates and trusts.[1] While the statutory regime established by s 29 is intended to protect a representative or trustee, it is also designed to provide claimants with a reasonable opportunity to make claims. The procedure also serves an important public interest. It is manifestly in the public interest that estates and trusts be duly administered with any associated time and expense minimised. It is not in the interests of beneficiaries, trustees or the broader community that administrations be delayed while claimants consider their options, or worse, hold off making claims in the hope of extracting a “commercial settlement” driven by the desire or need to finalise an estate.[2]
[1] Hall v Carney (No. 3) [2021] SASCA 37 at [69].
[2] Hall v Carney (No. 3) [2021] SASCA 37 at [70].
The regime established by s 29(2) requires a potential claimant to “put up or shut up”, particularly in respect of allegations which impact on the proper administration of the deceased’s estate. It is the most direct way of bringing the question about a potential claim to a head.[3]
[3] See Olsen v James [2020] NSWSC 1015 at [118]; English v Stewart [2022] NSWSC 268 at [60] which consider the NSW scheme in s 93 of the Probate and Administration Act 1898 (NSW).
The service of the Notice on the respondent placed a burden on him to respond to the Notice in either of the ways permitted by s 29(2) and to do so within the prescribed six-month period.
In Hall v Carney (No. 3)[4] the Court of Appeal made clear that the Court has a discretion to extend the time within which the Notified Claims could be filed notwithstanding the absence of any express conferral of a power to extend the six-month timeframe stipulated by s 29(2). Nevertheless, the six-month timeframe specified in s 29(2) is important. It is not arbitrary. It represents the Parliament’s intention as to the period of time within which many, probably most, claims can and should be commenced.
[4] [2021] SASCA 37.
In this case the applicants were permitted to apply for a barring order once the six-month period had expired, but it remains for the Court to make such order as the Court deems just.[5] I am satisfied that it is appropriate and just to make the orders sought in the terms of paragraphs 2(a) – (c) of the originating application.
[5] Trustee Act 1936 (SA) s 29(2).
Against that analysis it is necessary to consider the applicable principles relating to an award of costs.
The Court’s power to award costs is conferred by s 40 of the Supreme Court Act 1935 (SA) and UCR 194. In Roche v Roche & Anor (No. 2)[6] Kourakis CJ considered the basis upon which the costs discretion should be exercised in probate matters in the following terms:[7]
[6] [2017] SASC 75.
[7] Roche v Roche & Anor (No. 2) [2017] SASC 75 at [15]-[18].
In Barbon v Tessar (Barbon) McMillian J ordered that an unsuccessful defendant pay the plaintiff’s costs. McMillian J said:
Looked at objectively, I am satisfied that the defendant knew of these matters or had the means of knowing them, yet she still made the decision to initiate the proceeding. In my view, knowing of these matters or having the means of knowing them, the defendant did not have reasonable grounds for challenging the validity of the deceased’s will.
The usual exceptions in the probate rules for costs not following the event should not apply to the defendant’s costs in this proceeding. In reality, the litigation has been adversarial litigation instituted by the defendant against the plaintiff and she has been unsuccessful. The usual rules as to costs should apply, that is, the defendant should pay the plaintiff’s costs of the proceeding.
In the matter of In the Estate of Frances Ponikvar (Deceased) (No 2) a defendant opposed an application for a copy Will to be admitted to probate. The defendant proceeded on the basis that the presumption of revocation had not been rebutted. Stanley J found that ‘there was strong evidence that rebutted the presumption against revocation. Nonetheless, Ms Novak pressed ahead in opposing the application’. Stanley J ordered that Ms Novak pay 25 percent of the applicant’s cost of the trial on a party/party basis because she had pressed ahead against the weight of that evidence.
The underlying rationale for departing from the ordinary rule in some testamentary capacity cases remains. The risk that an aged, infirm or vulnerable testator will be manipulated in private, and away from independent scrutiny, to execute a testamentary document has subsisted through the ages. However, its relative importance as a costs consideration has been diminished by contemporary social conditions and professional practices. The expansion of public aged residential care has reduced the physical isolation of the aged. Medical care by general practitioners is readily available and the degree of specialist intervention and referrals for pathological testing is more extensive. Aged persons are not as confined and are more socially active than they once were. Record keeping by professionals is more detailed and their notes more readily accessible. Audio-visual records are more common. Nonetheless, invoking this Court’s testamentary jurisdiction may sometimes be sufficiently warranted to depart from the ordinary rule even if the challenge to testamentary competence ultimately fails. Cases in which a testator, suffering a material cognitive impairment has made a Will, particularly one which departs from previous testamentary dispositions, whilst under the close care of a potential beneficiary or beneficiaries, with no or very little independent evidence of capacity, are examples.
A person will not be penalised for invoking this Court’s supervisory jurisdiction in probate when the circumstances call for an investigation into the validity of a testamentary document. However, a person who challenges a testamentary disposition will risk an adverse costs order for persisting in an unmeritorious action after the discovery of evidential material which largely dispels any reasonable concerns. If a party ignores the weight of that evidential material and prosecutes an ultimately unmeritorious case to trial, the usual order that costs follow the event will be made. Exceptions from the ordinary order will not be made to allow beneficiaries a forum in which to air family disputes with impunity.
[Citations omitted]
The respondent submits that, taken as a whole, the originating application is for judicial advice and direction and costs should be decided in accordance with the principles enunciated by me in Public Trustee v Taylor (No. 2)[8] where I said:[9]
The authors of Williams, Mortimer and Sunnucks explain the approach to costs in an action instituted for directions sought from a court for the determination of a question of law arising in the administration of an estate. Costs will be determined in accordance with the following classifications set out in Re Buckton:
(1)Where the action is reasonably brought by the representative for the guidance of the court, the costs of all parties will usually be treated as necessarily incurred for the benefit of the estate and an order made for payment out of it.
(2)Where such an action is reasonably commenced by a person other than the representative, a similar costs order will usually be made.
(3)Where the action seeks similar relief but is hostile, the usual approach to costs in hostile litigation apply.
(4)Where the issue is being pursued by a beneficiary and a third party, in circumstances where, had it not been for the third party, the costs would have fallen into category (2), the costs should be shared amongst the parties. Where a beneficiary’s unreasonable conduct led to substantial costs being incurred by a personal representative in applying to the court, it is appropriate for that beneficiary to bear those costs rather than them falling on the estate and therefore the beneficiaries generally.
[citations omitted]
[8] [2020] SASC 213.
[9] [2020] SASC 213 at [11].

The respondent submits that he should not be liable for costs of the originating application given it appears the applicants acted reasonably in bringing the application for the provision by the Court for advice and directions pursuant to s 69 of the APA and s 91 of the Trustee Act. As a result, the costs of all parties should be treated as necessarily incurred for the benefit of the estate. The originating application is not hostile, given the respondent consented to the proposed barring order, and the usual approach to costs in hostile litigation does not apply. The respondent has not engaged in unreasonable conduct and he has not prosecuted any unmeritorious claims against the executors. The originating application, apart from the barring order, relates predominantly to judicial advice and directions for the benefit of the estate.
Further, the respondent submits that he should not be penalised for challenging the estate through correspondence before December 2023 in circumstances where serious questions arose as to the validity of the wills of the deceased. He submits he had a reasonable basis for agitating his potential claims through correspondence. He said delays were largely caused by the fact that he needed to procure and investigate thousands of pages of materials; he was not provided with electronic copies of over 20 years of bank statements and had to review those documents in hardcopy; he needed to collate the relevant materials; and to obtain an opinion from senior counsel regarding his potential claims; he needed to formulate a strategy; and finally, he attempted to arrange a without prejudice meeting with the applicants in an attempt to resolve the matter, which attempts were rebuffed by them.
In the circumstances, the respondent submits that upon completing these investigations and taking further advice he consented to the proposed barring order. He submits this is evidence of the reasonableness of his conduct.
I do not accept this submission.
The institution of this application by the applicants seeking the orders in paragraph 2 was necessitated by the default of the respondent in complying with the terms of the Notice pursuant to s 29(2) served on him on 3 April 2023. Having been served with the Notice the respondent chose not to take either of the options which s 29(2) requires. The time for doing so expired on 3 October 2023. Nonetheless the applicants took no further action for another six months. Even then the respondent failed to take any steps to comply with the s 29(2) Notice or obtain further time to do so. During that period he did not advise the applicants that he could not make a decision whether to withdraw the Notified Claims or institute proceedings to enforce them.[10]
[10] Third Affidavit of Gaetano Anthony Aiello affirmed 18 October 2024 [FDN 17] at [10] – [12].
In the circumstances of this case the applicants had no practical option but to approach the Court to seek the orders in paragraph 2 of the application. Legal costs have been incurred by them in relation to the originating application. Those costs have been incurred as a direct result of the respondent’s failure to act. There is no justification for his failure to act on the basis that he was endeavouring to arrange settlement discussions. The assertion that the delay is explained by the applicants’ failure to agree to settlement discussions would be to endorse of the very mischief which the procedure enshrined in s 29(2) is intended to prevent. An aspect of that mischief is delay in an attempt to extract a commercial settlement.[11] It is a reasonable inference that this was the underlying purpose in the delay of the respondent in complying with the Notice. While it can be accepted that some delay might have been occasioned by the need to consider voluminous documents, the respondent was at all times legally represented and still has not complied with the requirements of the Notice. I consider that sufficient opportunity existed for him to do so at the very latest by 15 April 2024 when the originating application was commenced.
[11] Hall v Carney (No. 3) [2021] SASCA 37 at [70].
Accordingly, in exercising the costs discretion, I consider that there is no good reason to depart from the principle that costs should follow the event. The respondent’s conduct was motivated by the pursuit of his own interests in relation to his failure to withdraw the Notified Claims or to institute proceedings based on them. The costs incurred as a result should not fall on the applicants.
In the circumstances I consider that it is appropriate to order that the respondent pay the costs of the application on a solicitor / client basis. The legal costs incurred by the applicants are “testamentary expenses” in terms of the meaning of that phrase in the will of the deceased. If the respondent was only to pay costs on the standard costs basis within the meaning of UCR 191.1 the probable practical effect would be that some of the burden of the costs incurred by the applicants in this aspect of the action would fall to be borne by the three other residuary beneficiaries of the estate of the deceased. That would be unjust.
Conclusion
I would make orders in terms of paragraphs 2(a), 2(b), 2(c) and 2(d) of the originating application. Accordingly, I make the following orders:
1.The Notified Claims referred to in paragraph 10 (the Notified Claims) of the notice under section 29(2) of the Trustee Act 1936 (SA) (the Act) served on the respondent dated 3 April 2023 (the Notice), are absolutely barred as against the applicants.
2.The respondent is barred from instituting proceedings against the applicants in relation to the Notified Claims.
3.The applicants are at liberty to administer the estate of the deceased Sushama Dahm without regard to the Notified Claims.
4.The costs of the applicants of and incidental to the steps taken by the applicants under section 29 of the Trustee Act are to be paid by the respondent on a solicitor/client basis.

[2025] SASC 70

19 May 2025