Earl v Walkom (No 2) - [2025] SASC 91

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
In the Estate of WALKOM (DECEASED)
EARL v WALKOM (No 2)
[2025] SASC 91
Judgment of the Honourable Justice Stanley
SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - CONSTRUCTION GENERALLY - PRINCIPLES OR RULES OF CONSTRUCTION - WHERE UNCERTAINTY
SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - CONSTRUCTION GENERALLY - PRINCIPLES OR RULES OF CONSTRUCTION - READING WILL AS A WHOLE
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - COSTS OUT OF FUND OR PROPERTY - LITIGATION NOT CAUSED BY TESTATOR
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 costs arising from an application for advice and direction as to the proper constructions of the will (the will) of Marie Clare Walkom (the deceased). The applicant, Peter Anthony Earl (the executor) is the appointed executor of the deceased’s estate.
The executor instituted proceedings pursuant to s 69 of the Administration and Probate Act 1919 (SA) on 28 November 2023 seeking advice in relation to the construction of the will. The need for advice and direction arose from the manner in which the will had been drafted, in particular clause 6.4. The executor was uncertain as to how the estate should be distributed given the terms of clause 6.4. He required the Court’s advice as to the proper construction of the will. This required the Court to have the competing construction arguments put by the affected parties.
The fifth respondent, Janine Helen Walkom (Janine), the widow of Ian William Walkom (Ian), a child of the deceased and a beneficiary of the deceased’s will, contended that the estate ought to be distributed pursuant to clause 6.4(a). The first to fourth respondents, being the grandchildren of the deceased, contended that clause 6.4(c) was the decisive provision. While ultimately the Court advised that the will should be construed in accordance with the construction propounded by the grandchildren rather than the construction propounded by Janine; the Court recognised that the question of construction would have been difficult to determine without the roles played by counsel for Janine and the grandchildren.
Having obtained the necessary advice and direction from the Court the parties could not agree the question of costs. At issue was whether the Court should follow the usual order that costs follow the event, or whether good reason existed to depart from the usual order and instead apply the probate costs rule.
The grandchildren contended that costs should follow the event as this is adversarial litigation, and Janine was pursuing her own financial interest. The grandchildren’s position was challenged by Janine and the court found that in actuality each party sought to persuade the Court to adopt a construction most favourable to their financial interest. The attempt to persuade the Court in itself was not what necessitated the proceedings, but rather it was the poor drafting of the will that…

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 Earl v Walkom (No 2)

Details

AGLC: Earl v Walkom (No 2) [2025] SASC 91
Case: [2025] SASC 91
Decision Date: 6 June 2025

CaseChat Overview and Summary

In this case, the applicant, Peter Anthony Earl, seeks an order for costs arising from an application for advice and direction regarding the proper construction of Marie Clare Walkom's will. The deceased's estate is being contested between the grandchildren and Janine Helen Walkom, the widow of Ian William Walkom, a child of the deceased and a beneficiary of the will. The executor sought advice on the construction of clause 6.4 of the will, which has different implications for the distribution of the estate depending on its interpretation. The grandchildren argued for one construction, while Janine argued for another, leading to the need for a court determination.

The legal issues in this case primarily revolve around the construction of clause 6.4 of the will and the appropriate allocation of costs. The primary issue is determining the correct interpretation of clause 6.4, which has significant financial implications for the beneficiaries. The secondary issue is the appropriate allocation of costs in light of the testator's poor drafting of the will and the subsequent litigation. The court must consider the usual principle that costs follow the event but also the broader context of the litigation and the public interest in resolving disputes over estates.

The court concluded that clause 6.4 of the will should be construed in accordance with the grandchildren's interpretation, as this interpretation was consistent with the advice provided by counsel. The court emphasised the importance of the probate costs rule, which generally applies when there are reasonable grounds to require the person contending for a particular construction of an ambiguous provision in a will to make out their case before a judge in a contested hearing. Given the significant value of the estate and the necessity for the court's intervention to resolve the uncertainty, the court found it appropriate to apply the probate costs rule and order that the costs be paid out of the deceased’s estate on an indemnity basis.

The court ordered that the costs of the executor and the respondents be paid out of the deceased’s estate on an indemnity basis. This decision recognises the complexity of the will and the need for court intervention to resolve the ambiguity, while also acknowledging the role of the parties in presenting their respective cases.

Orders

Orders of the court

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Background

Background to the litigation

This is an application for costs arising from an application for advice and direction as to the proper construction of the will (the will) of Marie Clare Walkom (the deceased).[1] [1] Earl v Walkom & Ors [2025] SASC 71.Background The applicant, Peter Anthony Earl (the executor) is the appointed executor of the deceased’s estate. The first to fourth respondents are the grandchildren of the deceased. The fifth respondent, Janine Helen Walkom (Janine), is the widow of Ian William Walkom (Ian), a child of the deceased and a beneficiary of the deceased’s will. The executor instituted proceedings pursuant to s 69 of the Administration and Probate Act 1919 (SA) on 28 November 2023 seeking advice in relation to the construction of clause 6.4 of the will. The executor obtained counsel’s advice in relation to its construction. Counsel advised, inter alia, that the proper construction of the will should be made the subject of an application for a binding determination of the Court. On 15 December 2023 Associate Justice Bochner ordered the joinder of the grandchildren, and the service on Janine of the originating application and supporting documents. On 16 February 2024, Janine was joined as the fifth respondent by order of Bochner AsJ. Janine contended that the estate of the deceased ought to be distributed pursuant to clause 6.4(a) of the will. The grandchildren contended that clause 6.4(c) was the decisive provision. The significance of the constructional choice was that if the grandchildren’s construction was preferred, they would receive one sixth of the deceased’s estate between them and Janine would receive one sixth of the estate. If Janine’s construction was preferred, the grandchildren would receive nothing, and Janine would receive one third of the estate. Janine submitted that in accordance with clause 6.4(a), Ian, who passed away eight weeks after the deceased, had ‘survived’ the deceased, and his estate was therefore entitled to one third of the deceased’s estate. The grandchildren submitted that as clause 6.4(c) applied, Janine was only entitled to the one third of the deceased’s estate if Ian had both survived the deceased and had attained a vested interest. While Ian had survived the deceased, his interest had not vested before he died. I heard this matter for argument on 27 June 2024. I delivered judgment on 20 May 2025. I advised that clause 6.4 of the will should be construed in accordance with the construction propounded by the grandchildren rather than the construction propounded by Janine. The executor estimates the value of the deceased’s estate to be $2,051,557.47.[2] [2] Affidavit of Peter Anthony Earl affirmed 17 November 2023 (FDN 2) at [31]-[39], Exhibit PAE-6. The Court’s power to award costs is conferred by s 40 of the Supreme Court Act 1935 (SA) and Chapter 16, Part 4 of the Uniform Civil Rules 2020 (SA). Offers of settlement The grandchildren made three offers to Janine throughout the course of the proceedings.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

In the circumstances the failure to the fifth respondent to accept the offers does not provide a sound basis to make the orders sought by the first to fourth respondents. While the first to fourth respondents were successful and the making of costs orders indemnifying the parties will injure their financial position, that is the inevitable result of applying the probate costs rule in this case. Conclusion In this case I would order that the costs of the executor and the respondents be paid out of the deceased’s estate on an indemnity basis.

Ratio Decidendi

Legal Principle Established

Clause 6.4 of the will is ambiguous and, as a result, the constructional choice was difficult. That difficulty was reflected in the advice the executor obtained from counsel which accorded with the construction propounded by Janine. The need for advice and direction arose from the manner in which the deceased’s solicitor had drafted the deceased’s will. The deceased’s last will was drafted in 2019. The 2019 will reflected the terms of a previous will made in 2014. The 2014 will was drafted by a paralegal employed by the deceased’s solicitor, Mr Fisher, and it was settled by another solicitor in the firm, Ms Catherine O’Donovan. Mr Fisher died in 2018. It is unclear who drafted the 2019 will. It may have been Ms O’Donovan, but she has no recollection of doing so and nothing in the solicitor’s file throws any light on that matter. Importantly, the 2019 will was almost identical to the 2014 will. The 2019 will only updated the executor clause in the 2014 will. The terms of clause 6.4 did not change. Consideration The Court has a broad discretion in making an order as to costs. It may have regard to any factors it considers relevant, but the exercise of the discretion must be for reasons connected to the litigation. However, the usual order is that costs follow the event. In exercising the costs discretion, I consider that in this case there is good reason to depart from the usual order that costs should follow the event. While Janine’s conduct in not accepting reasonable offers, or positing offers of her own, smacks of the pursuit of her own financial interests in this matter, the proceedings were necessitated by the poor drafting of the will. I accept that in Fielder v Burgess the Chief Justice said that it is not obvious why a testator’s fault in the making of a will should result in a loss to the successful beneficiaries in litigation over an estate. However, I am not sure that the same proposition applies where the error is not that of the testator, but his or her solicitor. As the Chief Justice went on to say, the legal policy applicable to probate cases recognises that there is a public element to the resolution of disputes over estates. It is for that reason that the probate costs rule is generally framed as applying when there are reasonable grounds to require the person contending for a particular construction of an ambiguous provision in a will to make out their case before a judge in a contested hearing.[9] [9] Fielder v Burgess [2014] SASC 98 at [61]. In this case the executor was in a genuine state of uncertainty as to how to distribute the third share of the residue which was valued in excess of $2,000,000. The executor required the Court’s intervention in order to resolve that problem. The Court required each party to make submissions as to the proper construction of the will, and in particular clause 6.4, in order to enable the Court to interpret the will. It is difficult to see how the question of construction could have been determined without the roles played by both counsel for Janine and the grandchildren. While each party sought to persuade the Court to adopt a construction most favourable to their financial interest, recognition of that fact does not detract from the proposition that the executor could not resolve the difficulty in which he found himself without the role played by each party. In these circumstances, it is entirely appropriate to apply the probate costs rule.