Estate of Theresa Katalinic; Vea & Katalinic v Katalinic

[2020] NSWSC 805

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Estate of Theresa Katalinic; Vea & Katalinic v Katalinic [2020] NSWSC 805

Hearing dates:

15 and 16 June 2020

Date of orders:

16 June 2020

Decision date:

26 June 2020

Jurisdiction:

Equity

Before:

Hallen J

Decision:

The Court:

1. Orders subject to compliance with the Probate rules of Court that Probate of the Will dated 9 July 2018 of Theresa Katalinic, also known as Teresa Katalinic, be granted to Jenny Elizabeth Vea and Michael Robert Katalinic, the Plaintiffs.

2. Orders that the matter be remitted to the Senior Deputy Registrar in Probate to complete the grant.

3. Orders that the Defendant pay the costs of the Plaintiffs for the preparation of affidavits not read in relation to the grant of Probate and the appearances not otherwise necessary.

4. Orders that the Defendant pay the specified gross sum of $6,000 instead of assessed costs.

5. Makes no order as to the Plaintiffs’ costs of the notice of motion filed 14 May 2020 as against the Defendant.

6. Makes no order as to the Defendant’s costs of the proceedings.

7. Orders that the Plaintiffs’ costs, calculated on the indemnity basis, not recovered from the Defendant in accordance with the order in Paragraph 4 above, be paid, or retained, as the case may be, out of the estate of the deceased.

Catchwords:

SUCCESSION – Wills, probate and administration – Caveat against grant – Proceedings commenced propounding Will in solemn form – No Defence and Cross-Claim filed by caveator – Notice of motion then filed that caveat cease to be in force and seeking summary judgment – Parties agree that there should be a grant of Probate of Will being propounded by Plaintiffs

COSTS – Whether Court should make a specified gross sum costs order

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Succession Act 2006 (NSW), ss 103, 109

Supreme Court Rules 1970 (NSW), Pt 78, rr 66, 69, 71, 72

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

Application of JV Davey; Estate DV Wilson (Supreme Court (NSW), Hodgson J, 16 February 1996, unrep)

Azzopardi v Smart (The Estate of Alice Ann Smart) (1992) 27 NSWLR 232

Barry v Butlin [1838] II Moore PC 480; 12 ER 1089

Beatson v Perry (1906) 6 SR (NSW) 167

Bullabidgee Pty Ltd v McCleary (No 2) [2011] NSWCA 343

Clocchiatti v Chadwick [2012] NSWSC 1308

Coshott v Parker (No 3) [2015] NSWSC 1195

Cushway v Harris [2012] EWHC 2273 (Ch)

D’Apice v Farrell (Supreme Court (NSW), Powell J,15 May 1992, unrep)

Hamod v New South Wales [2011] NSWCA 375

Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213

Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd (2010) 182 FCR 84; [2010] FCAFC 5

In re Byrne [1937] VLR 33

In re Emery, Deceased; Emery v Emery [1923] P 184

In The Estate of William Plant (Deceased) [1926] P 139

In the Will of Elizabeth O’Driscoll (1929) 29 SR (NSW) 559; 46 WN (NSW) 176

Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) (2011) 197 FCR 113; [2011] FCAFC 136

McGrath v Cherry, Re; Estate of Latimer (2012) 8 ASTLR 243; [2012] NSWSC 569

Mitchell & Mitchell v Gard & Kingwell (1863) 3 Sw & Tr 275; 164 ER 1280

Moran v Place [1896] P 214

Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84

Nobarani v Mariconte (2018) 265 CLR 236; [2018] HCA 36

Peterson v Spartalis (The Estate of Luke Evangelo Spartalis) (Supreme Court (NSW), Hodgson J, 7 April 1995, unrep)

Re Dowling; sub nom NSW Trustee & Guardian v Crossley [2013] NSWSC 1040

Re Estates Brooker-Pain and Soulos [2019] NSWSC 671

Russo v Russo (No 4) [2016] NSWSC 1133

Stoddart (NSW) Pty Ltd v Kellyville Building Pty Ltd [2019] NSWSC 1480

Weinstock v Beck in the Estate of Weinstock (2007) 1 ASTLR 156; [2007] NSWSC 193

Texts Cited:

Alexander Learmonth et al (eds), Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (21st ed, 2018, Thomson Reuters)

Thomas Henry Maxwell, Miller’s Probate Practice (1900, J. Falconer)

Category:

Costs

Parties:

Jenny Elizabeth Vea (First Plaintiff)
Michael Robert Katalinic (Second Plaintiff)

Aldo Katalinic (Defendant)

Representation:

Counsel:
M Evans (Defendant)

Solicitors:
L Rundle & Co (Plaintiffs)
O’Brien Lawyers (Defendant)

File Number(s):

2019/301536

Publication restriction:

Nil

Judgment

Introduction

1. HIS HONOUR: These reasons relate to the estate of Theresa Katalinic, also known as Teresa Katalinic (the deceased), who died on 16 August 2019, aged 62, leaving a duly executed Will made on 9 July 2018. The sole issue for determination, now, is how the burden of costs incurred in relation to proceedings concerning the Will of the deceased, in the circumstances to which I shall refer, should be borne. On 15 June 2020, the matter was listed in the Monday Succession List.

2. The instituted executors named in the deceased’s Will are Jenny Elizabeth Vea and Michael Robert Katalinic, the niece and nephew, respectively, of the deceased, who are the Plaintiffs in the proceedings. They, with their brother, Andrew Charles Katalinic, are the only beneficiaries, entitled equally, to share the whole of the estate of the deceased under the terms of the deceased’s Will. All are children of the deceased’s brother, John, who predeceased the deceased.

3. The Defendant, Aldo Katalinic, is the deceased’s brother. It was accepted that as the deceased did not leave a spouse, any issue, or any parents, surviving her, he would be one of the persons entitled, under the operation of the rules of intestacy, had she not left a valid Will, to the whole of the intestate estate, being the estate as remains after payment of all such funeral and administration expenses, debts and other liabilities as are properly payable out of the estate: ss 129 and 103, respectively, of the Succession Act 2006 (NSW). The other persons entitled would be Silvio, Mario and Sergio, Katalinic, each of whom is a brother of the deceased. (They have played no part in the proceedings although there was evidence that each had been served with a notice to affected persons.)

4. In the submissions served on behalf of the Defendant (to which reference will be made), it is acknowledged that the Defendant “has given instructions on the matters that gave rise to his concern about the will left by the deceased and the events that happened around the time of her death”. However, as will be read, no evidence was filed by, or on behalf of, the Defendant to explain either the basis of his concern or his conduct. Indeed, there was no evidence that he had taken any steps to make any inquiries about the circumstances of the Will until after the Caveat was lodged. (There was a suggestion, in submissions for the Defendant, by Mr M B Evans of counsel, that “[h]e may have made some enquiries within the family”, but there was no evidence thereof: Tcpt, 15 June 2020, p 2(28–41).)

5. I suggested to the legal representatives of the parties that the Court should determine the issue of costs on the papers. Sensibly, and pragmatically, in view of the recent events involving the COVID-19 pandemic, they agreed. However, in the events that happened, and because, having considered the matter I wished to raise a number of points, I heard submissions orally, by audio-link, from each of them, on both 15 and 16 June 2020.

6. Then, because I considered the matter should not be unnecessarily delayed, the legal representatives of the parties were immediately informed of the orders and were told that the Court would subsequently publish reasons. These are the reasons.

Procedural Events

7. On 26 September 2019, the Defendant, by his then solicitors, Grahame W Howe & Co, lodged in the Probate Registry, a caveat requiring that “[n]o grant of probate or reseal be made without prior notice” to him. It stated that the Defendant’s interest was as “the brother of the deceased and a beneficiary pursuant to [the] Succession Act if the deceased died intestate”.

8. (I note that the original caveat retained on the Court file has a date stamp of 25 September 2019, amended by hand to 26 September 2019 reflecting the filing, on that date, on Justice Link. The parties referred to the date of the Caveat as being filed on the 25 September 2019. Although nothing turns on whether the Caveat was lodged on one date, or the other, I have noted it, for completeness.)

9. By letter dated 8 October 2019 addressed to Bricknell Legal, the (then) solicitors for the Plaintiffs, the Defendant’s (then) solicitors enclosed a copy of the Caveat noting, relevantly, in the letter, that the deceased’s Will was not a valid Will as the deceased had lacked testamentary capacity and had been the subject of (testamentary) undue influence. The Defendant’s solicitors requested a copy of the Plaintiffs’ solicitor’s Will file, including any contemporaneous notes relating to instructions, capacity and execution of the deceased’s Will. The letter also suggested that the deceased may have executed a later Will.

10. The Plaintiffs’ solicitors responded to the Defendant’s solicitors’ letter, by letter dated 21 October 2019, noting that the Defendant had provided no basis for the assertion of a lack of testamentary capacity, save for a belief that the Defendant held. In the letter, the solicitors confirmed that the Plaintiffs denied exerting any undue influence. They also denied knowledge of any later Will made by the deceased. The Plaintiffs’ solicitors requested that the Caveat, lodged on behalf of the Defendant, be withdrawn within 14 days, failing which an application would be made to the Court for a grant of Probate in solemn form. That a costs order would also be sought was threatened.

11. On 24 October 2019, the Defendant’s solicitors, again, wrote to the Plaintiffs’ solicitors, asserting that “the nature of the deceased’s mental capacity and the facts surrounding the execution of the Will … give rise to the commonly referred principle known as ‘suspicious circumstances’”. No medical, or other, evidence, to support a lack of testamentary capacity, or the nature of the “suspicious circumstances” giving rise to a lack of knowledge and approval, was included in the letter. The following request was also made:

“Again, to properly advise our client, we seek again for you to provide us a copy of your file relating to the creation and execution of the Will including any handwritten notes. Could you also confirm who engaged yourself to act for the deceased in relation to the matter?

Your failure to provide these documents at this stage will be relevant to the issue of costs especially as you will be required to produce them should litigation be commenced.”

12. The Plaintiffs retained their current solicitors, L Rundle & Co, in December 2019. By letter dated 20 December 2019, that firm informed the Defendant’s solicitors that it had received instructions to act for the Plaintiffs because
    Mr Danny Bricknell (a solicitor with Bricknell Legal) would, in the event of contested probate proceedings, become a material witness.

13. In the letter, the Plaintiffs’ solicitors also wrote that:

“ … there does not appear to be any factual basis to the allegation the deceased lacked testamentary capacity. Insofar as it is asserted that there are suspicious circumstances attached to the giving of instructions or the execution of the will by the Deceased, we foreshadow that particulars in any pleadings in contested proceedings and affidavit evidence to prove those facts will demonstrate:

1. The Deceased met with her solicitor on at least three occasions;

2. The Deceased was seen by the solicitor alone on the occasion she provided oral instructions for her will;

3. The solicitor saw the Deceased alone when he verified her instructions;

4. The Deceased communicated with work colleagues in relation to her intention to make a will and expressed the intention to make dispositions in her will for her nieces and nephews.

There is no basis to the allegation the Deceased was coerced in the making of the will.”

14. In the letter, the Plaintiffs’ solicitors, once again, invited the Defendant to withdraw the Caveat, and stated that, failing which, the Plaintiffs would file a Statement of Claim, seeking Probate of the Will in solemn form, and would join the Defendant as a party to the proceedings. Again, that an order would be sought for the Defendant to pay the Plaintiffs’ costs was threatened.

15. In an email dated 23 December 2019, from the Defendant’s then solicitor, addressed to the Plaintiffs’ solicitors, Mr Howe confirmed that he would be “meeting with our client early in the new Year to discuss the matters raised…”. He requested, once again, “a copy of Mr Bricknell’s file and/or the file notes in relation to the will”.

16. The Plaintiffs’ solicitors responded on 13 January 2020. Enclosed with their letter to the Defendant’s solicitors, was a copy of the solicitor’s file notes and client instruction sheet relating to the deceased’s Will, a copy of the Powers of Attorney and Appointment of the Enduring Guardianship (which had been executed by the deceased).

17. The letter also confirmed that:

“ … no file note was generated in relation to the attendance on 18 June 2018, at which time the testator was handed a printed firm brochure regarding Powers of Attorney and appointment of Enduring Guardianship and a blank copy of the Bricknell Legal Will & Estate Planning Information Sheet.”

18. There is no evidence that the Defendant, by his solicitors, responded to the correspondence from the Plaintiffs’ solicitors.

19. On 11 February 2020, notice of the Plaintiffs’ application for Probate was published online via the New South Wales Online Registry.

20. By Statement of Claim filed 14 February 2020, the Plaintiffs sought a grant of Probate in solemn form, of the deceased’s Will; an order that, “subject to compliance with the probate rules; an order that the matter be remitted to the Registry to complete the grant”; an order for costs; and “such further or other orders as the Court deems fit”. The Statement of Claim bore the return date 13 March 2020.

21. On 12 March 2020, the Defendant’s solicitors wrote to the Plaintiffs’ solicitors informing them that their instructions had been withdrawn and that a copy of the Statement of Claim and the Plaintiffs’ Probate Disclosure Statement had been forwarded to the Defendant.

22. The proceedings came before Lindsay J on 13 March 2020. There was no appearance by, or on behalf of, the Defendant. (This may be partly explicable because an affidavit of service of Mr M Slater made on 23 March 2020, reveals that a copy of a letter dated 16 March 2020 from L Rundle & Co to the Defendant, the Statement of Claim filed on 14 February 2020, a Probate Disclosure Statement filed 20 February 2020 and a copy of the orders made by Lindsay J, were not served until 18 March 2020. However, it is not known whether the Defendant’s former solicitors had advised him of the return date of the Statement of Claim prior to their retainer being terminated.)

23. Lindsay J marked a copy of the letter dated 12 March 2020, from Grahame W Howe & Co to the Plaintiffs’ solicitors as Ex P1, and noted its contents. His Honour then made directions for the filing and service of the Defence to the Statement of Claim, as well as the Defendant’s Disclosure Statement by 3 April 2020. Other directions, which would, no doubt, have required an amount of work to be performed by the Plaintiffs’ solicitors, were also made and the matter was adjourned until 20 April 2020.

24. On 20 March 2020, Mr D Keserovic, a solicitor, swore an affidavit of attesting witness in relation to the deceased’s Will.

25. On 9 April 2020, the Plaintiffs swore an affidavit of executors in what might be described as the usual form. In it, they identified the Will, the deceased’s signature thereon, the identity of the attesting witnesses, annexed a copy of the deceased’s Death Certificate, confirmed that the deceased left assets in New South Wales, and that she did not marry after making the Will, identified the beneficiaries entitled under the terms of the Will, annexed a schedule of assets and liabilities and stated “[w]e are not aware of any circumstances which raise doubt as to our entitlement to a grant of probate of the will of the deceased”.

26. On 17 April 2020, Jueun Na, a solicitor in the employ of the Plaintiffs’ solicitors, swore an affidavit deposing to personal service, on 1 April 2020, of notice of the proceedings on “persons who are adversely affected under the Will dated 9 July 2018” of the deceased, being the Defendant, Mario Katalinic, Sergio Katalinic, and Silvio Katalinic. (It was noted that Silvio Katalinic is a person under a legal incapacity and that a copy of the documents had been sent to the Plaintiffs, who are the financial managers of Silvio Katalinic pursuant to a financial management order dated 29 April 2014.)

27. On 20 April 2020, the matter was listed again, this time, before me. There was no appearance, by, or on behalf of, the Defendant. I made a number of directions, which related to the circumstances surrounding the taking of instructions from the deceased and the preparation, and subsequent execution, of the Will. Relevantly, I also noted that “the Plaintiffs are considering whether to file and serve a notice of motion seeking an order that the caveat lodged by the Defendant cease to be in force”. The proceedings were adjourned until 25 May 2020.

28. Under cover of a letter dated 22 April 2020, addressed to the Defendant, the Plaintiffs’ solicitors provided a copy of “an unfiled Notice of Motion”, explained its terms and stated that:

“The purpose of this correspondence is to give you a final opportunity to voluntarily withdraw the Caveat against Grant without the Plaintiffs incurring significant additional costs including a filing fee and the legal costs of preparation of at least two further affidavits. As you will see in the draft Notice of Motion the Plaintiffs will be seeking that you pay the costs of the application to the Court for the Grant of Probate and arising from the Motion. The Plaintiffs will not seek a Costs Order against you if you immediately withdraw the Caveat.”

29. By notice of motion filed on 14 May 2020, the Plaintiffs sought an order that “the Caveat of [the Defendant] dated 25 September 2019 cease to be in force”, an order that there be summary judgment for the Plaintiffs “as sought in the Statement of Claim”, and an order that “the Defendant … pay the Plaintiffs’ costs of the Motion and the proceedings”. The notice of motion was listed in the Succession List on 25 May 2020.

30. An affidavit of service, sworn 21 May 2020, of Mr M Folkes, reveals that the notice of motion and other documents were served on the Defendant on 19 May 2020. There was also a letter from the Plaintiffs’ solicitors, accompanying the notice of motion, which confirmed the adjourned date of 25 May 2020 and provided a copy of the protocol for appearing before the Court by telephone.

31. On 20 May 2020, the Plaintiffs filed an affidavit sworn on that date by Michael Robert Katalinic, the second Plaintiff, in which, amongst other things, he set out a summary of the events that had occurred in relation to the matter; annexed a copy of the correspondence to some of which reference has been made; stated that he believed that the Statement of Claim had been personally served on the Defendant on 18 March 2020; and annexed a copy of correspondence from the Plaintiffs’ solicitors, being letters dated 9 April 2020, 17 April 2020, 20 April 2020, two letters dated 22 April 2020, and a letter dated 18 May 2020.

32. There is no evidence of any response, from the Defendant, or on his behalf, to any of the correspondence. Indeed, it appears that after about December 2019, until about mid-May 2020, he had hardly participated in the litigation. He certainly did not co-operate, in any way, with the Plaintiffs, by acting in the manner that was required of him, in circumstances where it was the filing of the Caveat that led to the dispute.

33. The second Plaintiff also identified documents in support of the application, being an affidavit of one attesting witness, an affidavit of service, the affidavit of executors, an affidavit confirming service of the Notice of Proceedings, an affidavit of Danny Bricknell (the solicitor who took instructions for, and who prepared, the deceased’s Will) and he confirmed that the original Will had been lodged at the Registry.

29. An affidavit of Mr Bricknell had been sworn on 20 May 2020. In this affidavit, he set out a chronological statement of the events that had occurred that led to the deceased executing her Will, an Appointment of Enduring Guardian, and an Enduring Power of Attorney, each on 9 July 2018. He then stated, in direct speech, the conversation that he had with the deceased on 25 June 2018, during which he took instructions in relation to each of the documents. He annexed a copy of the relevant documents, including a contemporaneous file note, dated 25 June 2018 (which he had dictated immediately after the meeting). He confirmed that whilst the first Plaintiff, Ms Vea, had come with the deceased, she had waited outside his office whilst he took instructions directly from the deceased.

30. He then stated, in direct speech, the conversation that he had with the deceased on 9 July 2018, and the events surrounding the execution by the deceased of the Will. He confirmed that, on this occasion also, whilst Ms Vea, the first Plaintiff, had accompanied the deceased, she had waited outside Mr Bricknell’s office until after the deceased had executed the Will. She had then been asked to join them “to accept her appointment as Attorney and Guardian for the deceased”.

31. Finally, Mr Bricknell confirmed that:

“I was at all times satisfied during my attendances with the deceased that she had testamentary capacity to make a will. I am aware of the legal test for testamentary capacity and the principles set out in the judgment of Banks v Goodfellow (1870) LR 5 QB 549.

… I formed the view that notwithstanding the deceased’s limitations in reading and writing she provided me with clear and unequivocal instructions. I did not observe any behaviour or conversations which suggested to me she did not know and approve of the contents of her will.”

37. In the File Note dated 25 June 2018 (a copy of which was annexure B to
    Mr Bricknell’s affidavit), the deceased was noted as having informed Mr Bricknell that “she didn’t read very well”.

38. On 20 May 2020, the Defendant filed a Notice of Change of Solicitor, which disclosed that O’Brien Lawyers had been retained to act for him in place of Grahame W Howe & Co.

39. On 25 May 2020, Mr B Dornan, solicitor, appeared for the Plaintiffs and
    Mr M B Evans of counsel appeared for the Defendant. I pointed out that the Caveat had lapsed on about 25 March 2020, that no other caveat had been filed by, or on behalf, of the Defendant, and that the Court had not extended the operation of the Caveat. (As will be read, a caveat takes effect when it is filed, and, unless the Court otherwise orders, it lapses after 6 months: Supreme Court Rules 1970 (NSW), r 78.69(1).)

40. I then made the following notations and directions:

“1. Notes that counsel for the Defendant has indicated that the Defendant has a claim asserting that property in the name of the deceased is held on trust for him and others.

2. Notes that counsel for the Defendant agrees that in principle such that a claim does not prevent the grant of probate of the Will dated 9 July 2018.

3. Directs the Defendant by his solicitors to inform the Plaintiff by his solicitors whether the matter should now be referred to the Senior Deputy Registrar in Probate for the purposes of making a grant of probate subject to compliance with the Rules of Court by 4:00 p.m. on 28 May 2020.

4. Directs that orders dealing with the matters set out above be delivered to the Chambers of the Succession List Judge by 4:00 p.m. on 29 May 2020.

5. Stands the matter over for further directions before the Succession List Judge on Monday, 15 June 2020.”

41. On 29 May 2020, Mr Dornan sent to my Chambers an email to which was attached a copy of a Consent Order dated 29 May 2020, signed by the legal representative of each of the parties. The Consent Order was in the following terms:

“1. Order that Probate of the Will dated 9 July 2018 of the late Theresa Katalinic also known as Teresa Katalinic be granted to Jenny Elizabeth Vea and Michael Robert Katalinic.

2. Order that subject to compliance with the Court Rules the matter be referred to the Senior Deputy Registrar in Probate for the making of the Grant.

3. The Court notes the plaintiff and defendant are unable to agree to the appropriate cost orders and seek that the question of the costs of the parties be determined by the Court.

4. Order that all questions of costs relating to these proceedings be referred to the Senior Deputy Registrar in Probate for determination.”

42. By email dated 2 June 2020, at my request, my Associate sent an email in the following terms to the legal representative of each of the parties:

“Dear All,

His Honour has considered the email dated 29 May 2020 from Mr Dornan.

His Honour does not propose to refer the costs application to the Senior Deputy Registrar in Probate for hearing and unless objection is taken to this course by one, or both, of the parties, his Honour will determine the costs application on the papers and with the benefit of written submissions by each of the parties.

His Honour has made the following order:

1. Orders that each party provide by 4:00 p.m. on 9 June 2020, an outline of written submissions on costs, in hard and soft copy, which submission are to include an index of documents intended to be read on the application.

His Honour does not propose to vacate the directions hearing on 15 June 2020 and, if possible, will deal with the matter on that date.”

43. In accordance with the directions made in Chambers, the Plaintiffs’ solicitors sent a written Outline of Submissions on 9 June 2020. The Defendant’s counsel sent a written Outline of Submissions on 10 June 2020.

44. In his submissions, Mr Dornan noted:

“25.   The plaintiffs assessed their costs on the indemnity basis to be $19,751.38 (inclusive [of] gst) at 27 May 2020 and a further $4,290 (inclusive of gst) since that date to the filing of these submissions.

26.   If the matter had proceeded on an uncontested basis the cost would have been $6,460.29 inclusive of GST made up of scale costs of $4,830.29, a Court filing fee of $1,583.00 and a notice of application of $47.00.”

45. In summary, he submitted:

“27.   The plaintiffs’ primary submission is that:

(i)   the defendant should pay the difference between the plaintiffs’ costs of the proceedings as agreed or assessed on the indemnity basis and the costs that would have been incurred had the application been for a grant of probate in common form;

(ii)   to the extent the plaintiffs are unable to recover costs from the defendant their costs should be paid from the estate of the deceased on the indemnity basis;

(iii)   there be no order as to the defendant’s costs.

28.   In the alternative, the plaintiffs submit that:

(i)   the defendant should pay the plaintiffs’ costs of the proceedings on the ordinary basis;

(ii)   to the extent the plaintiffs are unable to recover costs from the defendant their costs should be paid from the estate of the deceased on the indemnity basis;

(iii)   there be no order as to the defendant’s costs.”

46. In summary, Mr Evans submitted:

“The defendant was named in the Statement of Claim as defendant in the proceedings but, apart from lodging a caveat requiring to be notified of any grant, the defendant has not filed any document or taken any step to oppose the grant.

The defendant, through his solicitor, made some enquiries about the circumstances in which the will was made. In the circumstances, it is submitted that those enquiries were reasonable and justified and not that different from the general enquiries many relatives make after the death of a member of the family.

There is no justifiable basis upon which the defendant should now be ordered to pay the plaintiff’s costs of the proceedings or of the Notice of Motion. Those costs should be paid out of the estate.”

47. As stated earlier, although I had indicated that the costs issue would be determined on the papers, when I came to consider the evidence and the submissions, it seemed that there were a number of aspects of the proceedings that had not been the subject of the submissions. On 15 June 2020, and then on 16 June 2020, I dealt with those issues orally, by audio-link, with Mr Dornan and Mr Evans.

48. I recorded the documents that I had read in relation to the costs issue. Mr Evans did not seek to cross-examine any of the deponents of the affidavits that were read. (There were no affidavits relied upon by the Defendant.)

49. Following this, I raised with the legal representatives a number of matters, to which I have referred below, and requested each legal representative to respond. Very little was said disputing the matters that the Court raised.

50. Thereafter, I stated that I was considering making an order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW), that the Plaintiffs, as the party to whom some costs are to be paid, are entitled to a specified gross sum instead of assessed costs. I suggested that as the amounts involved were not substantial, the parties’ legal representatives might wish to try to reach agreement on the quantum of those costs.

51. Due to Mr Dornan otherwise being required in another court, the discussion could not take place immediately, and I adjourned the matter until 2:00 p.m. on 16 June 2020. I was then informed that Mr Dornan had made an offer for a gross sum, but not only had the gross sum proposed been rejected, the Defendant’s solicitor did not accept that the case was one for such an order to be made.

52. Mr Evans confirmed that he had those instructions and submitted that as the matter was not complex and the costs were not large, it was more appropriate for costs to be assessed in the usual way. As will be read, I disagreed. It will be necessary to return to this topic later in these reasons.

Procedural Framework

53. Rule 78.66 of the Supreme Court Rules, relevantly provides that a person who claims to have an interest in an estate may file a caveat in respect of any grant of probate or administration, being made in respect of the estate. The caveat must state fully the nature of the interest claimed by the caveator and an address for service. This type of caveat is described as a general caveat.

54. The appropriate form of caveat to raise a ground of invalidity of a will, other than because of a want of proper execution, is the general caveat (of the type lodged in the present proceedings): Azzopardi v Smart (The Estate of Alice Ann Smart) (1992) 27 NSWLR 232 at 238 (Powell J), applying Beatson v Perry (1906) 6 SR (NSW) 167.

55. A party who wishes to lodge a caveat may do so any time after the death of the deceased and at any time prior to the grant of probate or administration being made. If the caveator is aware that any other person is making, or is intending to make, an application for the grant of probate or administration, in respect of the same estate, the caveator must, within 7 days after filing the caveat, serve a copy of the caveat on that other person.

56. Under r 78.69(1), a caveat takes effect when it is filed and, unless the Court otherwise orders, lapses after six months. However, under r 78.69(2), the Court may extend the duration of a caveat. Where a caveat has been lodged, but lapses through the effluxion of time, or an order is made that it ceases to be in force, the position is as if no caveat had been lodged, and the Court may grant Probate without requiring further notice to be given to the caveator: see, In re Byrne [1937] VLR 33 at 33 (Martin J).

57. Rule 78.71, relevantly, provides that, if a person has applied for the grant of probate and a caveat is in force in respect of any grant of probate being made in respect of the estate concerned, the person may apply for an order that the caveat cease to be in force in relation to the application. If the person has commenced proceedings for the grant of probate, the application must be made by notice of motion in those proceedings: r 78.71(2)(b). Under
    r 78.71(3), the caveator must be joined as a defendant in the proceedings.

58. Rule 78.71(4) provides that, if the Court considers that the evidence fails to show that the caveator has an interest in the estate concerned, or a reasonable prospect of establishing such an interest, such that there is a doubt as to whether a grant of probate should be made, the Court may order that the caveat cease to be in force in respect of the application.

59. Under r 78.71(6), if the Court does not order that the caveat cease to be in force in respect of the application, the Court may give such directions as appear best adapted for the just, quick and cheap determination of proceedings.

60. Under r 78.72, if a caveat is in force in respect of a deceased person’s estate, proceedings for the grant of probate must be commenced by statement of claim. Unless the Court otherwise directs, the caveator is to be a party to the proceedings.

61. It should be remembered that “a caveat is not a notice to any opponent in particular. It is a notice to the registrar, or officer of the Court, not to let anything be done by anybody in the matter of the will, or the goods of the deceased, without notice to the person who lodges the caveat. It is impossible to look at the caveat as commencing any litigation – it merely requests the registrar to tell the caveator if anybody stirs in this matter”: Moran v Place [1896] P 214, at 216 (Lindley J); In re Emery, Deceased;Emery v Emery [1923] P 184 at 187–188 (Sir Henry Duke P); Re Estates Brooker-Pain and Soulos [2019] NSWSC 671 at [60(e)] (Lindsay J).

62. Whilst the Rules provide that “a person” may lodge a caveat, probate litigation is conveniently called “interest litigation”. The caveator must be prepared to show that he, or she, has a relevant “interest”. The purpose of requiring a caveator to have a relevant “interest” is to exclude meddlers and to reduce the risk of the estate facing the financial burden of unnecessary, and inappropriate, litigation, perhaps, by someone with limited, or no, funds available to meet any costs order that is made.

63. In Peterson v Spartalis (The Estate of Luke Evangelo Spartalis) (Supreme Court (NSW), Hodgson J, 7 April 1995, unrep) his Honour dealt with the question of the requisite interest, stating:

“the cases suggest that the interest must be ‘relevant’, that is, such that their rights will or may be affected by the grant they wish to challenge ... Those cases make it clear that a person entitled on intestacy will not have an interest in relation to a will of the deceased if there is an unchallenged earlier will of the deceased under which that person takes no interest …

It appears that two views are possible. One is that there is a relevant interest, once a bare possibility of rights being affected is shown; while the other is that there is an onus on caveators to show that there is a reasonable prospect of such affectation ... In my view, the latter view is preferable: otherwise the Court would be precluded from ordering that a caveat cease to have effect once a caveator shows an interest in both wills and a bare possibility of rights being affected by a grant in respect of the later of them rather than the earlier.”

64. Windeyer J in Weinstock v Beck in the Estate of Weinstock (2007) 1 ASTLR 156 at [13]; [2007] NSWSC 193 at [13], wrote:

“There is no doubt that Mrs Beck as caveator has an interest. In most cases, of course, the interest which a caveator asserts is an interest under an earlier will if capacity is attacked or under a later will if the last will is not propounded. There might also be an interest on intestacy in the event that the will propounded is held to be invalid. In such a case the law is quite clear.”

65. In Nobarani v Mariconte (2018) 265 CLR 236 at 251 [49]; [2018] HCA 36 at [49] (Kiefel CJ, Gageler, Nettle, Gordon and Edelman JJ), a unanimous High Court, stated that a person will have a sufficient interest if he or she has a right which will be affected by the grant and that “[i]t is also legally erroneous to conclude that rights of low monetary value cannot amount to a legal interest”.

66. A caveator cannot, indefinitely, hold up the issue of a grant merely on account of suspicion. Faced with a caveat, the person who has sought probate or administration can take one of the several steps stated in the Probate Rules. One such step can be to file a summons (where no application for a grant has been filed) or a notice of motion (where an application for a grant has been filed), seeking an order that the caveat cease to be in force (assuming the caveat has not lapsed through the effluxion of time).

67. In the ordinary course of events, in such circumstances, the applicant will be sent an email in the form of a notice from the Registry in the following terms (although I do not suggest such an email was sent in this case):

“1. A caveat was filed on ###. Your attention is drawn to Division 10 of Part 78 of the Supreme Court Rules and note rules appropriate to the type of caveat filed.

(1) You may wait for the caveat to lapse and as long as the caveator doesn’t file a new caveat or extend the caveat, the grant can be made without Court proceedings (a caveat lapses after 6 months).

(2) The caveator may withdraw the caveat. This may happen as a result of negotiation between the parties.

(3) If you feel that the caveator doesn’t have a legitimate interest you may file a notice of motion to have the caveat cease to be in force pursuant to rule 73 of Part 78 of the Supreme Court Rules.

(4) If the caveat is lodged pursuant to rule 68 you may file a summons (Form 4A or 4B) without naming the caveator as a defendant. You will then be required to prove the will in solemn form in Court. The caveator has a right to cross-examine on due execution.

(5) If the caveat is filed pursuant to rules 66 or 67 and the caveator has a legitimate interest, then you (or the caveator) should commence contentious proceedings by way of Statement of Claim.

2. Further requisitions may flow.”

68. On the return date of such a summons, or notice of motion, the caveator is expected to have available, and ready to be tendered, evidence “to show … in broad terms, that he had an interest to support the caveat and that he had a prima facie case of a ground of invalidity upon which he relied”: Nobarani v Mariconte at [45]. In default of having such evidence available, the Court may order that the caveat cease to be in force with the costs of the application being paid by the caveator: Azzopardi v Smart at 238; D’Apice v Farrell (Supreme Court (NSW), Powell J, 15 May 1992, unrep).

69. More recently, in Clocchiatti v Chadwick [2012] NSWSC 1308, Ward J (as her Honour then was), referred to the decisions of Powell J and added, at [14]:

“I consider that what is required, by the authorities referred to above, by way of evidence at the return of the present application is evidence that is sufficient to raise a doubt as to the execution of the will on the particular ground on which the will is sought to be challenged (here, that being said to be fraud), not evidence from which it might later be said that an inference can be drawn as to an unstated ground of challenge to the will. That leads me to conclude that there should be a declaration that the caveat ceases to take effect.”

70. I respectfully agree. The appropriate test for determining whether a caveat should cease to be in force is whether, on the material before the Court, there is evidence that the caveator has an interest in the estate concerned, or a reasonable prospect of establishing such an interest, and there are circumstances that warrant investigation as would reasonably require the matter to proceed as a fully contested suit before the Court should consider making a grant of probate in respect of the will (a doubt as to whether the grant of probate or administration should be made).

71. It follows from the above, that a caveator should take steps, both before, and after, the lodgement of the caveat, to gather the necessary evidence to demonstrate, in broad terms, that he had an interest to support the caveat and that he had a prima facie case of a ground of invalidity upon which he relied. That requirement is heightened where the caveator questions the conduct, or the good faith, of others, and places on the record an allegation of undue influence or fraud. “These are affirmative charges; and they ought not to be made except upon some apparently very sufficient ground”: Mitchell & Mitchell v Gard & Kingwell (1863) 3 Sw & Tr 275 at 278; 164 ER 1280 at 1281 (Sir James Wilde (the future Lord Penzance)).

70. As stated earlier, if the Court does not order that the caveat cease to be in force, the Court may give such directions as appear best adapted for the just, quick and cheap determination of proceedings. (Merely successfully defending the application that the Caveat cease to be in force does not mean that the caveator will succeed in the Probate proceedings that are commenced or that he, or she, will obtain an order for costs out of the estate at the final hearing.)

71. Alternatively, the person who has made the application for probate or administration can file a statement of claim seeking an order that probate or administration of the Will be granted in solemn form. Once a statement of claim has been filed, the proceedings continue on pleadings as a contested claim for the grant of probate or administration.

The Proceedings

74. The Plaintiffs, in this case, did not, as had been threatened, initially, file a Summons or notice of motion, seeking an order that the Caveat cease to be in force. It is difficult to know why they did not. It may have been because, there was no dispute that the Defendant had an “interest”, as a beneficiary entitled under the operation of the rules of intestacy, to have lodged the Caveat. Similarly, that what may be described as “standard grounds” for disputing the validity of the Will being propounded, these being an absence of testamentary capacity, an absence of knowledge and approval and undue influence, had been asserted (albeit, without any apparent evidence in support).

75. Rather, the Plaintiffs commenced proceedings, by way of the filing, and subsequent service of, a Statement of Claim, in which they named the Defendant, who was the caveator and in which pleading they sought an order for Probate in solemn form of the deceased’s Will. Once this was done, the matter would have proceeded on pleadings and the Caveat become somewhat irrelevant.

76. No doubt, for this reason, and others, even though there was no appearance by, or on behalf of, the Defendant, on the first return date of the Statement of Claim, Lindsay J made the orders and the directions that he did.

77. It was only well after the filing and service of the Statement of Claim that the Plaintiffs filed and served the notice of motion, seeking an order for the Caveat to cease to be in force and an order for summary judgment. By that time, however, the Caveat lodged by the Defendant had expired through the effluxion of time, it had not been extended by order of the Court, and the Statement of Claim had been filed.

78. There is a paradox in the Court hearing a notice of motion for the removal of a caveat that has already lapsed. An obvious question arises whether it is appropriate for the Court to order that a caveat cease to be in force when the caveat has already lapsed. I am doubtful that it is the proper form of the order in those circumstances. Perhaps, the more appropriate form of order is one which has the result that the matter may proceed to a grant on the Summons that has been filed: Application of JV Davey; Estate DV Wilson (Supreme Court (NSW), Hodgson J, 16 February 1996, unrep).

79. There was another aspect of the notice of motion that may have been required to be dealt with, namely the order sought for summary judgment. Even though the evidence revealed that the Statement of Claim had been filed and served, no Defence or Cross-Claim had been filed.

80. There is a question concerning whether the Plaintiffs could have obtained summary, or default, judgment. The Court will only make a grant of Probate in solemn form if it is satisfied, on the balance of probabilities, that the testator was free to make the will, had the requisite testamentary capacity and knew and approved of the contents of the will. In Barry v Butlin [1838] II Moore PC 480 at 482; 12 ER 1089 at 1090, Baron Parke noted that “the onus probandi lies in every case upon the party propounding a Will; and he must satisfy the conscience of the Court that the instrument so propounded is the last Will of a free and capable Testator”. Furthermore, “the court always has a supervisory, and to some extent investigatory, jurisdiction in probate matters”: Cushway v Harris [2012] EWHC 2273 (Ch) at [8] (Henderson J).

81. There is authority, in New South Wales, for the proposition that, in Probate, there is no room for any concept of default judgment. In Re Dowling; sub nom NSW Trustee & Guardian v Crossley [2013] NSWSC 1040, Young AJ wrote at [23]–[25]:

“A suit to obtain probate in solemn form is litigation attendant to which is in the public interest in seeing that the last will of a free and capable testator is recognised and enforced. It is often said that, in a sense, the decision in such a suit operates in rem and binds all the world, see, e.g., Gray v Hart: Estate of Harris (No 2) [2012] NSWSC 1562 at [5] (White J). However, it should be noted that this statement is true only in a broad sense: see Williams, Mortimer and Sunnucks, Executors, Administration & Probate (20th ed, 2013) Sweet & Maxwell, London at [11.05]; Re Langton [1964] P 163 at 175 per Danckwarts LJ.

As to the decree being binding on all the world, see Concha v Concha (1886) 11 App Cas 541 at 551-552 and 571-572 and Beardsley v Beardsley [1899] 1 QB 746. Despite the broad general statement of the rule, a decree in solemn form will not bind a non-party to the suit unless he or she is conusant of the proceedings, that is that he or she had notice of the proceedings and had a right to intervene, Newell v Weeks (1814) 2 Phillim 224; 161 ER; Young v Holloway [1985] P 87.

Orders are only made in such a suit after the judge has received evidence tending to satisfy him or her that such a decision “binding the whole world” should be made. There is no room for any concept of default judgment.”

82. The decision of Young AJ in Re Dowling, was quoted, with approval, by Lindsay J in Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786, at [259]:

“Because an order that probate be granted in solemn form requires the Court to exercise an independent judgement, after constitution of an evidentiary foundation, there is no room for any concept of default judgment such as may attend proceedings on a pleaded common law cause of action (Re Dowling [2013] NSWSC 1040 at [25]). However, by contrast, the analogy of a ‘default judgment’ may not be wholly inapt to describe the “interlocutory” character of a grant in common form: Caldor v Public Trustee [2003] NSWCA 187 at [5].”

83. In support of the notice of motion, a number of the affidavits to which reference has been made above were filed. I have read all of the affidavits and am satisfied that the orders forwarded to the Court on 29 May 2020, should be made and the matter remitted to the Senior Deputy Registrar in Probate to complete the grant upon being satisfied that there has been compliance with the Probate rules of Court.

General Principles relating to Costs

84. In what follows, I make clear that I am not attempting to lay down any strict guidelines, to prescribe a general principle and exceptions, or even to give exhaustive examples on how costs should be determined.

85. Ultimately, the Court has a broad discretion as to costs under the Civil Procedure Act2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). The discretion must be exercised judicially, and according to the circumstances and particulars of each individual case. What I shall identify calls attention to those discretionary considerations that may be taken into account in the exercise of the Court’s power to determine who is to bear the burden of the costs of the proceedings.

86. Of course, one starts in any determination of costs, with s 98(1) of the Civil Procedure Act, which provides that subject to the rules of court and to that, or any other Act, costs are in the discretion of the court, and the court has full power to determine by whom, to whom, and to what extent, costs are to be paid. The court may order that costs are to be awarded on the ordinary basis or on the indemnity basis.

87. UCPR r 42.1 provides that costs should follow the event unless it appears to the court that some other order should be made as to the whole, or any part of the costs.

88. In Howards Storage World Pty Ltd v Haviv Holdings Pty Ltd (2010) 182 FCR 84 at 89 [17]; [2010] FCAFC 5, Gray J (with whom Lindgren J agreed) wrote, at [17]:

“The overriding principle that costs are in the discretion of the Court can also be expressed in terms of the negative proposition that no rule or principle should be applied mechanically in the determination of the question where costs should lie in any particular case. Attention must always be paid to the particular circumstances of the individual case. The aim is to do substantial justice in relation to costs, based on the outcomes of the various issues in the proceeding, as between the entities that are parties to that proceeding."

89. Ultimately, the Civil Procedure Act and the UCPR require the Court to make such order as it thinks just in the particular circumstances of the case: Bullabidgee Pty Ltd v McCleary (No 2) [2011] NSWCA 343 at [10] (Allsop P, Basten and Young JJA).

90. As was noted (albeit in another context) in Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) (2011) 197 FCR 113 at 116–117 [9]; [2011] FCAFC 136 at [9] (Greenwood and Rares JJ):

“The exercise of the discretion takes account of all of the contextual circumstances of the litigation and the conduct of the parties. One aspect of the award of costs is a recognition that a party has been put to expense which, taking account of the merits as ultimately found on the trial of the action, might otherwise have been avoided. That consideration does not infuse the award of costs with any sense of penalty or punishment but simply recognizes the compensatory nature of an award of costs, in context and according to principle. That is why an award of costs, although involving the exercise of a discretion, generally favours the successful party. As to the importance the community attaches to legal costs incurred of and incidental to the resolution of controversies before courts, see Clark v Commissioner of Taxation [2010] FCA 415 at [90]; Uniline Australia Ltd v S Briggs Pty Ltd (No. 2) [2009] FCA 920; (2009) 82 IPR 56 at [38]; and, Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 at [130]-[132].”

91. In Ohn v Walton (1995) 36 NSWLR 77 at 79, Gleeson CJ (as his Honour then was) wrote:

“The usual rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for costs incurred, in the absence of grounds connected with the charge or conduct of the proceedings which make it unjust or unreasonable that there should be such reimbursement.”

92. In Sahab Holdings Pty Ltd v Registrar-General (No 3) [2010] NSWSC 403 at [37], Slattery J recognised that, in an appropriate case, a costs order may be formulated to reflect the degree of success on distinct issues.

93. I also remember that, other than in respect of costs, the dispute between the parties was resolved without a hearing on the merits. The general proposition is that, where there has been no hearing on the merits, it is not appropriate for the Court to conduct what would amount, in effect, to an hypothetical trial in order to determine an application for costs. Recently, in Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681 at 683–684 [8]–[9]; [2018] NSWCA 84, Basten JA wrote, at [8]–[9]:

“Secondly, although it is possible to make an order for costs against one party if it can be shown that it has invited the litigation by its unreasonable behaviour, or has unreasonably pursued the litigation, such an order should only be made where that judgment is manifest by reference to known circumstances, not in dispute between the parties. If the question cannot be answered without reviewing large swathes of evidence and resolving, on a tentative basis, disputed questions of fact, the task should not be embarked upon.

Thirdly, if contrary to the views set out above, it was appropriate to investigate whether the applicants or the respondent had been unreasonable, either in their conduct prior to the proceedings, or in their conduct of the proceedings, the approach adopted was untenable. Thus, regard was had to the motives of the respondent in commencing proceedings, but no account was taken of the motives of the applicants in capitulating. Further, once it is clear that there is a real dispute as to a significant fact in issue in the proceedings, it is inappropriate to determine that matter, other than in making an interlocutory ruling, by accepting one party’s case without permitting the other party an opportunity to challenge the opposing party’s witnesses.”

94. Payne JA (with whom Meagher JA agreed) wrote, at [30]:

“If both parties to a proceeding which has been settled without a hearing on the merits have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.”

95. There is no suggestion that either the Civil Procedure Act or the UCPR do not apply to Probate, or family provision, proceedings. There are, however, some additional matters to which I shall refer that may be relevant in Probate proceedings. However, in probate suits there are considerations that more readily affect the application of the Civil Procedure Act and the UCPR than in most other forms of litigation. These considerations act as guides to the exercise of discretion, but they are not inflexible.

96. Alexander Learmonth et al (eds), Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (21st ed, 2018, Thomson Reuters), in the United Kingdom context, at [33-01] and [33-05] observed:

“Costs in probate actions are at the discretion of the court. It is the general rule in probate actions, as in other actions, that costs follow the event. The notion, sometimes entertained, that the costs of unsuccessful parties will generally be ordered out of the estate in a probate action, is wrong. A large part of this chapter is taken up by a consideration of the exceptions to the rule that costs follow the event.

…

In the exercise of its discretion on the question of costs, the court must take into account all of the circumstances, including:

(a) the conduct of all the parties, including conduct before, as well as during the proceedings and whether it was reasonable for allegations or issues to be raised or pursued, the manner in which allegations or issues were pursued and whether a claim has been exaggerated;

(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(c) any payment into court or admissible offer to settle made by a party which is drawn to the court’s attention and which is not an offer to which costs consequences under CPR Pt 36 apply.

…

Where the litigation has been caused by the conduct of the testator

Where the state of the testator’s testamentary papers, the habits and mode of life or (doubtfully) where the testator’s own statements have brought about the litigation, costs of unsuccessful parties may be ordered out of the estate. The touchstone is whether it was the testator’s own conduct that led to his will ‘being surrounded with confusion or uncertainty in law or fact’ … The modern trend, however, is for there to be careful scrutiny of any case in which this exception is said to apply, and to narrow, rather than extend the circumstances in which it will be held to be engaged.” (citations omitted)

97. As was said over a century ago in Miller’s Probate Practice (Maxwell, 1900, J. Falconer), at 438–439:

“Two questions are to be considered with reference to an application for costs of the unsuccessful party:- (1) Was there reasonable ground for litigation? (2) Was it conducted bona fide? Where both these questions can be answered in the affirmative it is the usual practice of the Court, without having regard to the amount or the ownership of the property, to order the general costs to be paid out of the personal estate.”

98. Two other principles that are of importance in probate litigation should also be referred to. The first is that “parties should not be tempted into a fruitless litigation by the knowledge that their costs will be defrayed by others”, and the other is that “doubtful wills should not pass easily into proof by reason of the cost of opposing them”: Mitchell v Gard at 1281–1282.

99. Because the issue of costs arises, at least in part, following the lodgement of the Caveat by the Defendant, it is necessary for me to refer to In the Will of Elizabeth O’Driscoll (1929) 29 SR (NSW) 559; 46 WN (NSW) 176, in which Harvey CJ in Eq wrote at 561:

“A person who files a caveat before making full enquiries has to make up his mind when he is doing so that he will pay the costs of the caveat if he is not in a position to carry it further when an application is made for an order absolute. That is a position which should be clearly understood by people that they are not lightly to put on a caveat to put parties to expense and delay without substantial grounds, and if they do without having probed the matter fully they must be prepared to pay any costs occasioned by that caveat should they be unable to carry it on beyond the order absolute.”

100. The passage referred to was quoted by White J (as his Honour then was) in McGrath v Cherry, Re; Estate of Latimer (2012) 8 ASTLR 243 at [17]; [2012] NSWSC 569 at [17].

101. The second is that any suggestion that there is a general rule that costs in Probate proceedings are borne out of the estate should be immediately rejected. As long ago as 1926, In The Estate of William Plant (Deceased) [1926] P 139 at 152, Scrutton LJ wrote:

“I should be reluctant to do anything to create the idea that unsuccessful litigants might get their costs out of the estate, without making a very strong case on facts. The lure of ‘costs out of the estate’ is responsible for much unnecessary litigation.”

102. Ultimately, in the light of all of the circumstances of the particular case, I must decide which costs order better achieves justice between the parties.

103. In this case, as earlier stated, when the matter was dealt with, I raised with the legal representatives that, perhaps, this was a case where the Court should make an order to the effect that the party to whom costs are to be paid is to be entitled to a specified gross sum instead of assessed costs, pursuant to
     s 98(4)(c) of the Civil Procedure Act. I then adjourned the matter until the next day to enable the legal representatives to discuss whether that form of order was appropriate, and if so, whether the quantum of such gross sum costs could be agreed, or if not, whether the Court should determine the amount. Agreement could not be reached and it was left to me to determine the quantum based upon the evidence available.

104. The principal purpose of this type of order is to avoid the expense, delay and aggravation of further protracted litigation arising from the assessment process: Hamod v New South Wales [2011] NSWCA 375 at [816]–[817] (Beazley JA, with whom Giles and Whealy JJA agreed); Harrison v Schipp (2002) 54 NSWLR 738 at 742 [21]; [2002] NSWCA 213 at [21] (Giles JA). This is particularly important in this case as there has already been a delay of over six months in the administration of the estate because of the lodgement of the Caveat and the events that followed. This is accentuated where the Court forms a view, based upon the prior experience, that any further costs assessment is likely to be unduly protracted and add to costs unnecessarily: Harvey v Barton (No. 4) [2015] NSWSC 809 at [44] (Slattery J); Coshott v Parker (No 3) [2015] NSWSC 1195 (Hall J); Russo v Russo (No 4) [2016] NSWSC 1133 at [4] (Slattery J). For a recent summary of principles see: Stoddart (NSW) Pty Ltd v Kellyville Building Pty Ltd [2019] NSWSC 1480 at [23]–[26] (Darke J).

Determination

105. In this case, at least some of the work that has been done by, or on behalf of, the Plaintiffs, pursuant to the directions of the Court, has been relevant to, and has been relied upon, in determining the question whether, now, as the parties are no longer in dispute about the validity of the deceased’s Will, Probate of the Will should be granted and the matter remitted to the Senior Deputy Registrar in Probate to complete the grant.

106. There are a number of elements of the costs that cause me some concern. The first relates to the lodgement of the Caveat by the Defendant. There is no evidence that he made all, or for that matter any, proper enquiries before the Caveat was lodged. Indeed, his enquiries were to the Plaintiffs’ solicitors after the Caveat was lodged. Had the Caveat not been filed, the application for Probate could have proceeded as an uncontested grant.

107. Following the Plaintiffs’ solicitors providing a copy of the documents relating to the preparation and execution of the deceased’s Will, the Defendant ought to have accepted that the Caveat should be withdrawn and that there should no longer be the need for a contested grant. Yet, even if the Defendant had withdrawn the Caveat, the Plaintiffs, still, would have been required to file a Summons and many of the affidavits that were filed and served.

108. But, the Defendant’s effective silence, after 13 January 2020, at least until the matter was listed before me, several months later, despite him having been served with the Statement of Claim on 18 March 2020, and other affidavits, has resulted in the Plaintiffs incurring costs that would not have had to be incurred. At least two appearances before the Court, which may have been avoided, were required. Another effect appears to have been to delay the grant of Probate and the due administration of the deceased’s estate. It is difficult to glean what motivated the Defendant to lodge the Caveat. In these circumstances, I am satisfied that some of the costs occasioned by the unexplained step taken by the Defendant, as caveator, should not be borne by the deceased’s estate.

109. The second concern relates to the filing and service of the Statement of Claim. Once the Statement of Claim was filed, the matter had to proceed on the pleadings. This, of course, did not occur.

110. The notice of motion was not entirely necessary, because, first, at the time it was filed, the Statement of Claim had already been filed and served; secondly, the Caveat had already lapsed through the effluxion of time; and thirdly, because the summary dismissal application did not, then, have reasonable prospects of success because of the principle stated above in Re Dowling.

111. However, from a practical perspective, the filing of the notice of motion appears to have galvanised the Defendant into action. He appointed new solicitors and counsel, who, properly, in my view, accepted that there was no reason to disbelieve the evidence of Mr Bricknell, and, otherwise, no evidence to dispute the validity of the Will. In addition, clearly, the preparation of the evidence has been relied upon to determine whether the Plaintiffs should be granted Probate of the deceased’s Will.

112. In respect of the argument concerning the costs of the proceedings. None of the matters referred to above appears to have played a significant role in the submissions made on behalf of each party’s legal representatives. Had they considered these matters, a less extreme submission on how the burden of costs should be borne might have resulted in the costs of a contested costs argument having been avoided.

113. In my view, the Defendant should pay the costs of the Plaintiffs’ appearances, that he did not attend, as well as the costs incurred in preparing any affidavits, or other documents, not referred to above, which have been read in order to make the orders that I shall make at the conclusion of these reasons.

114. That conclusion does not mean, however, that the Plaintiffs should receive their costs of the notice of motion. Again, while it was prompted by the silence of the Defendant and the failure to appear before the Court on at least two occasions it has led to the resolution, without a contested Probate hearing, of the whole of the proceedings.

115. The general rule concerning executors, like that concerning trustees, is that costs properly and reasonably incurred by them in connection with the administration of the estate are payable from the estate. These costs can include litigation expenses. It is clear that in doing what they did, the Plaintiffs were endeavouring to have the proceedings dealt with quickly and cost effectively, even though, some of those costs were, ultimately, found to have been incurred unnecessarily.

116. The Plaintiffs should obtain any costs not recoverable from the Defendant, from the estate. In this regard, it cannot be forgotten that, even so, they will be bearing two-thirds of the costs as they are two of the three residuary beneficiaries.

117. In all the circumstances, whilst I accept that there is imprecision in the estimate of the Plaintiffs’ legal costs, I am satisfied that this is an appropriate case to make an order that the Plaintiffs’ costs be awarded on a specified gross sum basis. This can be done easily and speedily, and is based, at least in part, on the costs incurred by the Plaintiffs. Doing so will avoid a formal, and perhaps protracted, assessment which would only add to the financial burden of the parties. To do so will bring the entirety of these proceedings, in this jurisdiction, to a conclusion. In view of the amounts involved, I also think that the Court has sufficient information, and confidence, necessary to undertake a rational and reasonable assessment of the Plaintiffs’ costs so that there is justice to both parties.

118. I have dealt separately with the application for costs of the notice of motion. Neither was wholly successful on the arguments advanced.

119. The Court:

1. Orders subject to compliance with the Probate rules of Court, that Probate of the Will dated 9 July 2018 of Theresa Katalinic, also known as Teresa Katalinic, be granted to Jenny Elizabeth Vea and Michael Robert Katalinic, the Plaintiffs.

2. Orders that the matter be remitted to the Senior Deputy Registrar in Probate to complete the grant.

3. Orders that the Defendant pay the costs of the Plaintiffs for the preparation of affidavits not read, in relation to the grant of Probate and the appearances not otherwise necessary.

4. Orders that the Defendant pay the specified gross sum of $6,000 instead of assessed costs.

5. Makes no order as to the Plaintiffs’ costs of the notice of motion filed 14 May 2020 as against the Defendant.

6. Makes no order as to the Defendant’s costs of the proceedings.

7. Orders that the Plaintiffs’ costs, calculated on the indemnity basis, not recovered from the Defendant in accordance with the order in Paragraph 4 above, be paid, or retained, as the case may be, out of the estate of the deceased.

**************

Amendments

30 July 2020 - [4] Final sentence - "Plaintiffs" deleted and replaced with "Defendant"

Decision last updated: 30 July 2020