Di Cecco v Contini (No 2)
[2004] VSC 243
•25 June 2004
8
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. Prob 29 of 2002
| GIULIANA DI CECCO | Plaintiff |
| V | |
| FULVIO CONTINI and MARIO CONTINI | Defendants |
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JUDGE: | Whelan J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 June 2004 | |
DATE OF JUDGMENT: | 25 June 2004 | |
CASE MAY BE CITED AS: | Di Cecco v Contini (No 2) | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 243 | |
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PRACTICE AND PROCEDURE - costs - probate matters - general rule - costs follow the event - two exceptions in probate matters - first where testator caused the litigation - second where circumstances led reasonably to an investigation of the will - second exception established in part - defendants ordered to pay plaintiff’s costs to specified date - otherwise no order as to costs.
Shorten v Shorten (No 2) [2003] NSWCA 60; Perpetual Trustee Co Ltd v Baker [1999] NSWCA 244.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R McGarvie | Perillo Adami & Frank |
| For the Defendants | Mr S Newton | Scomparin & Bernardi |
HIS HONOUR:
In this matter I found for the plaintiff on 11 June 2004 and ordered that the will of Mr Armando Contini made 30 March 2001 be granted probate. I indicated that I would hear the parties on the question of costs and suggested that my reasons be considered by the parties before addressing this question.
I heard argument from counsel on the question of costs on 23 June 2004. The principles applicable to the determination of costs in probate matters such as this were not controversial, although their application to this case was.
As is well established, the general rule is that costs follow the event. Two exceptions apply to this general rule in probate matters. First, where the testator or those interested in the residue have been the cause of the litigation, the costs of an unsuccessful party may be paid out of the estate. Secondly, where the circumstances led reasonably to an investigation of the will, the parties may be ordered to bear their own costs.[1]
[1]Shorten v Shorten (No 2) [2003] NSWCA 60; Perpetual Trustee Co Ltd v Baker [1999] NSWCA 244.
Originally the grounds relied upon by the defendants in this matter were twofold: lack of testamentary capacity, and undue influence by Giuliana Di Cecco. The undue influence ground was abandoned on the first day of the trial. The trial then solely concerned whether Mr Armando Contini had testamentary capacity.
Mr Newton of counsel for the defendants successfully submitted that there was a threshold doubt as to Mr Contini’s testamentary capacity. As stated in my judgment of 11 June 2004, this doubt was created by Mr Contini’s age, the number of wills he made over 3½ years, the increasingly disproportionate dispositions in these wills, and his consultations with the doctors. However, when investigated, the evidence revealed a very strong case in favour of Mr Contini having had testamentary capacity when his later wills were made, and, in particular, when his final will on 30 March 2001 was made. In particular, the medical evidence was strong and unanimous.
On the question of costs, Mr McGarvie of counsel for the plaintiff submitted that costs should follow the event. He also submitted that the undue influence allegation was relevant, as an allegation of undue influence ought not to be put forward unless there are reasonable grounds upon which to make the allegation. In this regard he relied upon Re Cutcliffe’s Estate[2] and Spiers v English.[3]
[2][1959] P 6.
[3][1907] P 122.
Mr McGarvie submitted that counsel for the defendants, and the defendants in their evidence, had continued to suggest throughout the trial that Giuliana Di Cecco had engaged in conduct calculated to influence her father to alter his intentions. Mr McGarvie said that this conduct ought to be taken into account on the question of costs.
In relation to the potential application of the exceptions in probate matters in this case, Mr McGarvie submitted that the litigation was not caused by the testator, nor by Giuliana Di Cecco. Mr McGarvie relied upon my finding that it was difficult to imagine what more Mr Contini could have done to prevent his wills being disputed.
In relation to the second exception, Mr McGarvie submitted that it is relevant to examine the knowledge of the opposing party, not only at the time of issuing proceedings but subsequently. Mr McGarvie submitted that because the plaintiff’s affidavits, which established a strong case in favour of testamentary capacity, were filed and served 12 months prior to commencement of the trial, the outcome of an investigation into capacity ought to have been clear to the defendants long before the matter came on for trial.
Mr McGarvie also relied upon a Calderbank offer by letter dated 4 March 2003 which had not been accepted. The offer was (in effect) that probate should be granted of the last will and that there should be no order as to costs. Mr McGarvie referred to MT Associates v Aqua-Max[4] and submitted that there should be an order that the plaintiff’s costs be paid by the defendants on a party/party basis up to the date of expiry of that offer, which was 18 March 2003, and thereafter on an indemnity basis.
[4][2000] VSC 163.
Mr Newton for the defendants sought an order that the costs of all parties be paid out of the estate. Mr Newton submitted that the conduct of the testator was responsible for the litigation. He relied upon Perpetual Trustee v Baker,[5] particularly at paragraph 14, where their Honours stated that if the “conduct, habits and mode of life of a testator” form a basis for investigating testamentary capacity, the costs of the unsuccessful party should be paid out of the estate.
[5][1999] NSWCA 244.
Mr Newton submitted that there were three principal aspects of Mr Contini’s conduct which had caused this litigation. First, Mr Contini was said to have approached the making of his wills in an “overbearing and imperious” way. It was submitted that this was indicated by his alleged failure to give proper consideration to what Mr Newton characterised as his duty under Part IV of the Administration and Probate Act 1958 (Vic) and to the long history of dutiful conduct by his children, by his refusal to enter into dialogue or mediation with his sons, and by his exclusion of his sons from his life. Secondly, Mr Newton submitted that Mr Contini had made untrue statements to his medical practitioners in order to justify his dispositions. Thirdly, Mr Newton submitted that Mr Contini’s written explanations had contained inaccurate statements regarding his sons.
In relation to the undue influence allegation, Mr Newton submitted that the question of influence which he raised during the trial was separate from that of undue influence, and was merely the normal circumstances of a person close to a testator being able to unconsciously influence the testator in their favour.
In relation to the Calderbank letter, Mr Newton submitted that because the letter only offered that there should be no order as to costs, the court cannot determine whether the defendants have done better or not.
In summary, then, counsel for the plaintiff submitted that the defendants ought to be ordered to pay the plaintiff’s costs of the proceeding, to be taxed on a party/party basis up to and including 18 March 2003 and thereafter on an indemnity basis. Counsel for the defendants submitted that all costs ought to be paid out of the estate.
In my view before his death Mr Contini did everything which he could possibly have done, other than making dispositions satisfactory to his sons, to avoid this dispute, which he clearly foresaw. As I observed in my judgment, he consulted doctors, he obtained valuations, he discussed matters with his solicitor, and he explained himself in notes expressed in his own words, one of which addressed his sons directly. His conduct and the nature of his personality were not the relevant causes of this proceeding, in my view. The relevant cause was the defendants’ dissatisfaction with the dispositions their father had made in their favour. The first exception does not apply.
I have carefully considered the second exception: did circumstances exist that reasonably led the defendants to seek an investigation of Mr Contini’s later wills?
As indicated in my judgment, there were circumstances that warranted an investigation. Mr Contini was of a very advanced age when he made his later wills. These wills increasingly reduced his dispositions to Fulvio and Mario. There were a large number of wills. Mr Contini attended numerous consultations with medical practitioners. However, upon investigation, the case in favour of capacity was strong and compelling, and this was revealed to the defendants when all of the affidavits had been filed and served on behalf of the plaintiff; that is, by the end of May 2003. In my view, Mr McGarvie’s submissions are correct in this regard.
In the circumstances, the appropriate course, it seems to me, is to order that each party bear their own costs incurred up to and including 1 June 2003, and that thereafter the costs of the plaintiff be taxed on a party/party basis and be paid by the defendants. This approach reflects a limited application of the second exception. This is warranted by the existence of the threshold doubt and by the strength of the evidence resolving that doubt.
There is merit in Mr McGarvie’s submission regarding undue influence, but I think the order I have proposed constitutes a sufficient reflection of the failure of the defendants’ case in the circumstances.
As to the Calderbank letter, I accept Mr Newton’s submission in that regard. The letter, in effect, offered the defendants nothing other than avoiding a costs order. As all that was offered was a costs order, or avoiding a costs order, it is difficult to take it into account in deciding costs. In all the circumstances, I do not consider that the Calderbank letter justifies a departure from the course I would otherwise have taken.
Accordingly, the order will be that the plaintiff’s costs incurred after 1 June 2003 are to be taxed on a party/party basis and paid by the defendants. Otherwise there is no order as to costs.
I reserve liberty to the plaintiff to apply, should she consider it to be necessary, for an order that her costs be paid out of the estate. In the particular circumstances of this matter, I doubt whether that will be necessary and no such application has been made or foreshadowed to me.
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