Elton v Public Trustee
[2014] SASC 169
•6 November 2014
Supreme Court of South Australia
(Civil)
ELTON v PUBLIC TRUSTEE
[2014] SASC 169
Judgment of The Honourable Justice Stanley (ex tempore)
6 November 2014
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS - WHERE LITIGATION CAUSED BY TESTATOR, EXECUTOR OR INTERESTED PERSONS
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - OTHER CASES
The plaintiff in this matter brought proceedings seeking orders revoking a grant of probate of a will of the deceased, Donald Kerry Walker, made on 22 February 1991 and admitting to probate a reconstruction of a document called an "irrevocable order" as the last will and testament of the deceased. On 14 October 2014 the plaintiff's claim was dismissed.
Both the plaintiff and the defendant apply for an order that their costs be paid out of the estate. They seek those orders on an indemnity basis. The Public Trustee opposes the plaintiff's application for costs. The Public Trustee seeks an order that the plaintiff pays its costs on a party/party basis. In the alternative it contends that there should be no order in relation to the plaintiff's costs.
Whether the plaintiff is entitled to his costs paid out of the estate.
Held:
1. The defendant is entitled to an order for payment of its costs out of the estate as the successful party to the litigation. The estate should pay the defendant's costs on an indemnity basis (at [3]).
2. The plaintiff's action was caused by the conduct of the testator in creating uncertainty and confusion as to his testamentary intentions so as to instil in the plaintiff a bona fide belief that he had been left an interest in the testator's property (at [7]).
3. The conclusion that the deceased had by his own conduct caused the litigation invokes a recognised exception entitling an unsuccessful plaintiff to an order that his costs be paid out of the estate (at [8]).
4. An order should be made for the payment of the plaintiff's costs from the deceased's estate on an indemnity basis (at [10]).
Ponder v Burmeister [1909] SALR 62; Fielder v Burgess [2014] SASC 98; Re Cutliffe’s Estate [1959] P 6, considered.
WORDS AND PHRASES CONSIDERED/DEFINED
"costs paid out of the estate"
ELTON v PUBLIC TRUSTEE
[2014] SASC 169
STANLEY J: The plaintiff in this matter brought proceedings seeking orders revoking a grant of probate of a will of the deceased, Donald Kerry Walker, made on 22 February 1991 and admitting to probate a reconstruction of a document called an "irrevocable order" as the last will and testament of the deceased. On 14 October 2014, I dismissed the plaintiff's claim.
Both the plaintiff and the defendant, the Public Trustee, apply for an order that their costs be paid out of the estate. They seek those orders on an indemnity basis. The Public Trustee opposes the plaintiff's application for costs. The Public Trustee seeks an order that the plaintiff pays its costs on a party/party basis. In the alternative it contends that there should be no order in relation to the plaintiff's costs.
In my view, the defendant is entitled to an order for payment of its costs out of the estate as the successful party to the litigation. The estate should pay the defendant's costs on an indemnity basis. There is no opposition to this order from the plaintiff.
I am not persuaded that the plaintiff should pay the defendant's costs of the action. While the general rule in probate litigation is that costs follow the event, the rule is subject to well recognised exceptions. As Way CJ observed in Ponder v Burmeister[1]over a century ago, costs should be awarded from the estate where the testator's conduct has been the cause of the litigation. Further, there should be no order as to costs where the parties who failed in the litigation were reasonably led into the litigation by a bona fide belief in their case. They must have acted in good faith and must have had reasonable ground for disputing the will. In determining the question of costs the court must view the facts from the position in which they were presented to the parties who failed in the litigation.
[1] [1909] SALR 62.
This approach to the award of costs in probate actions derives from the public interest in ensuring that the testamentary wishes of a testator are carried out and doubtful wills do not pass easily to proof. Nonetheless, in recognising these exceptions to the general rule courts have been alive to the importance of observing the general rule in ensuring that parties are not tempted into ill advised litigation by the prospect that their costs will be met out of the testator's estate.
While the considerations identified by the Chief Justice in Fielder v Burgess[2] are pertinent I consider the authoritative position remains that set out in Ponder v Burmeister and consistently followed since.
[2] [2014] SASC 98 at [58] - [65].
In this case I am satisfied that the plaintiff's action was caused by the conduct of the testator in creating uncertainty and confusion as to his testamentary intentions so as to instil in the plaintiff a bona fide belief that he had been left an interest in the testator's property at 44 Victoria Street, Prospect. That conduct was not confined to the testator's dealings with the plaintiff but extended to his dealings with the plaintiff's father, Mr Bacic, and his fiancée, Ms Dabrowski. Those dealings included the preparation of a document or documents which evidenced a wish that the plaintiff should benefit in some way from the estate. My conclusion that the plaintiff had failed to discharge the onus he bore of proving the existence of a reconstructed will that evidenced the deceased's testamentary intention and revoked the previous will which was admitted to probate, does not detract from these findings.
The conclusion that the deceased had by his own conduct caused the litigation invokes a recognised exception entitling an unsuccessful plaintiff to an order that his costs be paid out of the estate. I do not consider that the judgment in Re Cutliffe’s Estate[3] lays down a general principle. If it does, I would not follow it as it detracts from the full amplitude of the recognised exception.
[3] [1959] P 6.
While the refusal of a settlement offer is a matter to be considered in determining an appropriate order for costs in an estate matter, so as to ensure that claimants adopt a responsible attitude to the litigation so as not to unreasonably deplete the estate, in this case I am satisfied that the plaintiff's refusal to accept offers of $75,000 and $100,000 (inclusive of costs) is not a proper basis to deprive him of an entitlement to have his costs met out of the deceased's estate. The settlement offers failed to take into account the plaintiff's costs. In addition, those offers proposed the payment from the estate of a monetary sum to the plaintiff where the plaintiff's action sought the admission to probate of a reconstructed will that would have left the property to him solely. Most importantly, I am satisfied that the plaintiff at all times acted in good faith and had reasonable grounds for propounding the reconstructed will notwithstanding my conclusion that he failed to discharge the onus he bore of proving the will.
In the circumstances, I am satisfied that an order should be made for the payment of the plaintiff's costs from the deceased's estate on an indemnity basis. Accordingly, I refuse the defendant's application for an order that the plaintiff pay its costs of the action.
Conclusion
The order of the court is that the costs of both parties be paid out of the estate of the late Donald Kerry Walker on an indemnity basis. The costs are to be adjudicated or agreed.
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