Estate of Stanley William Church

[2012] NSWSC 1563

Supreme Court

New South Wales

Medium Neutral Citation:

Estate of Stanley William Church [2012] NSWSC 1563

Hearing dates:

Monday, 10 December 2012

Decision date:

11 December 2012

Jurisdiction:

Equity Division - Probate List

Before:

White J

Decision:

1. Order that the plaintiff's costs on the ordinary basis be paid out of the deceased's estate.

2. The exhibits and court book are to be dealt with in accordance with the practice note.

Catchwords:

COSTS - WILLS, PROBATE AND ADMINISTRATION - plaintiff unsuccessfully applied for revocation of grant of probate to defendant - exceptions in probate litigation to ordinary rule that costs follow the event - defendant's conduct caused plaintiff to commence and continue proceedings - plaintiff's costs to be paid out of deceased's estate

Cases Cited:

Gray v Hart (No. 2) [2012] NSWSC 1562
Perpetual Trustee Company Limited v Baker [1999] NSWCA 244
Mitchell v Gard (1863) 3 Sw & Tr 275; 164 ER 1280
Shorten v Shorten (No. 2) [2003] NSWCA 60

Category:

Costs

Parties:

Robert Church (Plaintiff)
Marjorie Mason (Defendant)

Representation:

Counsel:
M S Willmott SC with S Chapple (Plaintiff)
L Ellison SC with G J Smith (Defendant)
Solicitors:
Eric Butler Will Dispute Lawyers (Plaintiff)
GP Legal (Defendant)

File Number(s):

2010/46691

Judgment

1. HIS HONOUR: The plaintiff was unsuccessful in his application to revoke the grant of probate to the defendant (Estate of Stanley William Church [2012] NSWSC 1489). He nonetheless seeks an order for his costs out of the estate. The defendant submits that there should be no order as to the defendant's costs. I considered the relevant principles in a judgment delivered immediately before this judgment (Gray v Hart (No. 2) [2012] NSWSC 1562). I will not repeat them.

1. Unless the deceased was the cause of the litigation, prima facie the plaintiff should bear his own costs. I say prima facie because the defendant's conduct of the litigation is also relevant to the costs order to be made. The plaintiff submitted that the deceased's state of health reasonably called for an inquiry as to his testamentary capacity. I accept that submission, but it does not follow that the plaintiff should therefore have his costs from the estate.

1. The plaintiff also submitted that the law does not require the deceased to be morally culpable. The plaintiff submitted that the touchstone is whether it was the deceased's conduct that led to his will being surrounded with confusion or uncertainty in law or fact that determines whether costs should be paid to him out of the estate.

1. I do not accept that submission. Although the authorities cited included Perpetual Trustee Company Limited v Baker [1999] NSWCA 244 at [14], the principle as so stated does not have regard to what was said in the seminal case of Mitchell v Gard (1863) 3 Sw & Tr 275; 164 ER 1280. Shorten v Shorten (No. 2) [2003] NSWCA 60 has re-established orthodoxy.

1. The plaintiff also submitted that the deceased was the cause of the litigation because Mr Gelonesi, the solicitor retained for the deceased by the defendant, failed properly to carry out his task. Had Mr Gelonesi asked open questions, had he ascertained the existence of the plaintiff and had he asked the deceased his reasons for wishing to leave his estate to the defendant, there is every reason to think that this litigation would have been avoided.

1. The first exception to the rule that costs follow the event arises if either the deceased or the person interested in the residuary estate was the cause of the litigation. I was not referred to any authority where costs have been ordered to be paid from the estate because the solicitor who took instructions was the cause of the litigation. A principal is responsible for the acts and omissions of his or her agent in the course of the agent's authority. Hence it was submitted that as it was the omission of the solicitor that was the cause of the litigation, the deceased, or if not the deceased, the defendant, being the residuary beneficiary who had engaged the solicitor's services for the deceased, should be seen as the cause of the litigation.

1. Whilst there is some logic in that submission, I do not think it sufficiently addresses the reasons for the adoption of the two exceptions to the rule in probate litigation that costs would otherwise follow the event. The first exception, namely that the testator or person interested in residue was the cause of the litigation, is directed to answering the question whose fault was it that the litigation has come about? In my view that inquiry directs attention to whether the deceased or the residuary beneficiary was personally at fault. The testator was not at any fault. He did not arrange for Mr Gelonesi's retainer. The defendant did, but it was not submitted that she was personally at fault for not retaining a solicitor with more experience or expertise.

1. I do not think it could be said that the testator brought about the litigation, notwithstanding that I accept that it is improbable that the litigation would have taken place had the solicitor acted as he should have. It follows that prima facie the appropriate order is that the plaintiff should bear his own costs. But that position is to be moderated by reason of the defendant's conduct of the litigation.

1. The first consideration is that the defendant, through her solicitor, asserted a reason for the deceased's having made his will, which reason I have rejected. The plaintiff was entitled to believe that the reason advanced by the defendant's solicitor was without substance. This would have had the tendency to encourage him to institute and pursue the litigation.

1. Secondly, a document critical to my decision, both on the issue of testamentary capacity and the issue of knowledge and approval, was not produced by the defendant until shortly before the hearing. The defendant's solicitor had been subpoenaed to produce the file maintained in relation to the execution of the will. The document was not produced because, as I was told, it was not in that file. This is not a satisfactory position. The document was clearly highly relevant and should have been produced at a very early stage of the litigation. Nor did the defendant refer to that document in her first affidavit. If her first affidavit was to have told the whole truth about the circumstances relating to the execution of the will, that evidence should have been adduced.

1. I conclude that the plaintiff was encouraged to commence and to continue the proceedings because the defendant's solicitor asserted as a reason for the deceased's will what I have found to be an incorrect reason, and was encouraged to continue the proceedings by the defendant's not producing until the last moment a critical piece of evidence. These matters warrant departure from what would otherwise be the appropriate order.

1. I order that the plaintiff's costs on the ordinary basis be paid out of the deceased's estate.

1. The exhibits and court book are to be dealt with in accordance with the practice note.

Decision last updated: 17 December 2012