SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
GREEN & ANOR v ELLUL & ORS (No 2)
[2018] SASCFC 105
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Stanley and The Honourable Justice Lovell)
15 October 2018
SUCCESSION - FAMILY PROVISION - APPEALS
SUCCESSION - FAMILY PROVISION - PROCEDURE - ORDERS AND OTHER PROCEDURAL MATTERS - COSTS
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE
Application for the costs of an appeal to the Full Court and the hearing and determination of a preliminary point before a master of this Court.
The appeal arose from a claim made for the benefit of the Inheritance (Family Provision) Act 1972 (SA) (the Act). The parties asked the master to determine whether the summons seeking relief pursuant to the Act, in the absence of express words seeking an extension of time, constituted an application for an extension of time within which to bring the application for the benefit of the Act. The master found that the summons did constitute an application for an extension of time.
The Full Court allowed the appeal from the decision of the master. The Full Court held that the summons did not constitute an application for an extension of time for making an application for the benefit of the Act.
The appellant executors now seek an order that the respondents pay the costs of the appeal to the Full Court and the costs of the hearing of the preliminary argument before the master.
Held (by the Court):
1. The costs discretion should not be exercised so as to discourage the bringing of meritorious claims.
2. In the absence of a determination that the respondents’ claims are unmeritorious, the principled exercise of the Court’s unfettered discretion as to costs should be exercised against making an award that the respondents pay the appellants’ costs of the appeal and the hearing before the master.
3. The exercise of the discretion as to costs not to order the unsuccessful plaintiff pay the successful defendant’s costs is not precluded because the applicants for the benefit of the Act failed at a jurisdictional threshold.
4. The application for an order that the respondents pay the appellants their costs of and incidental to the appeal and the hearing before the master is dismissed.
5. The appellants are entitled to payment of their costs of the appeal and the hearing before the master from the estate on a solicitor/client basis.
Inheritance (Family Provision) Act 1972 (SA) s 8, s 9; Administration and Probate Act 1958 (Vic), referred to.
Doedens & Ors v Owen (No 2) [2018] SASC 23; Pizimolas v Pizimolas & Zannis (No 2) [2010] SASC 209; Bowyer v Wood (2007) 99 SASR 190, discussed.
GREEN & ANOR v ELLUL & ORS (No 2)
[2018] SASCFC 105Full Court: Kourakis CJ, Stanley and Lovell JJ
THE COURT:
Introduction
This is an application for the costs of an appeal to the Full Court and the hearing and…
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- Green v Ellul (No 2) [2018] SASCFC 105
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- [2018] SASCFC 105
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CaseChat Overview and Summary
The central legal issue before the court was the appropriate exercise of the court's discretion regarding costs in family provision claims, particularly concerning unsuccessful applicants and the extent to which costs should be borne by the estate. The court was required to consider whether the general rule that costs follow the event should apply, or if the specific nature of family provision legislation and public policy considerations warranted a departure.
The court reasoned that the ordinary rule as to costs is more easily displaced in family provision claims due to conflicting public interest considerations. While unmeritorious litigation that dissipates an estate should not be encouraged, the purpose of family provision legislation is to ensure adequate provision for dependents. Discouraging meritorious claimants through the ordinary costs rule would undermine this objective. The court noted that in cases where there is a moral claim or obligation, or where the litigation arises through the fault of the testator or those interested in the residue, costs may be paid out of the estate, even for unsuccessful applicants. The reasonableness of the application and the financial position of the applicant are also relevant factors.
The court ordered that the appellants were entitled to payment of their costs of the appeal and the hearing before the master from the estate, on a solicitor-client basis. The application for an order that the respondents pay the appellants' costs was dismissed.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
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Ratio Decidendi
Legal Principle Established
In Pizimolas v Pizimolas & Zannis (No 2),[6] Kourakis J (as he then was) discussed the approach to costs in family provision claims in the following terms:[7][6] [2010] SASC 209.[7] [2010] SASC 209 at [6]-[7].The ordinary rule as to costs is more easily displaced in family provision claims. In my view that approach reflects conflicting public interest considerations. On the one hand unmeritorious litigation which dissipates the estate should not be encouraged. On the other hand the purpose of family provision legislation is to charge the estates of testators who have made inadequate provision with such an amount as is necessary for the support of their dependents; that public policy objectives may not be achieved in practice if meritorious claimants are discouraged from making a claim by the ordinary rule as to costs. In Bowyer v Woods, Debelle J considered the exercise of the costs discretion in family provision claims, saying:[66] The reported decisions contain little discussion of the principles to be applied. In most instances the report simply notes the order as to costs. There is a substantial number of decisions in which no costs order was made in the case of an unsuccessful application: re Maslin [1908] VLR 641; re Chapman [1918] St R Qd 226; re Roberts [1919] VLR 125; re Kennedy [1920] VLR 513; re Richardson [1920] SALR 24; re McCreedy [1938] St R Qd 293; re Milanovic [1973] Qd R 205; Dobell v Van Damme [1982] VR 425. In Fox v Burvill (1955) 92 CLR 334 at 341, the High Court ordered that, in the particular circumstances of that case, the costs of the unsuccessful applicant who was also the appellant (she was the divorced widow of the testator) be paid out of the estate. In Krause v Sinclair at 78, Tadgell J ordered that an unsuccessful applicant should not have the benefit of an order for costs but at the same time she would not be ordered to pay costs. The executor’s costs were paid out of the estate. In Singer v Berghouse at 214, the majority noted that there is nothing in the Act which precludes an order for costs against an unsuccessful applicant. While that is unquestionably correct, their Honours were not discussing the ordinary rule nor did they question that in some circumstances an unsuccessful applicant might recover costs out of the estate. In exercising its discretion not to order costs against an unsuccessful applicant, the court will also consider the effect of an order for costs upon the applicant’s financial position: re De Feu (deceased) [1964] VR 420 at 428.[67] In some instances the question whether an unsuccessful applicant will be liable for costs will depend on the reasonableness of the application. In re Testator’s Family Maintenance Acts (1916) 12 Tas LR 11 at 13 Ewing J held that in view of the fact that the applicant was ‘within his rights in coming to the Court there should not be an order for costs’ except as to the costs of two parties which were paid out of the estate. The decision was affirmed on appeal. In the case of a reasonable application based on a moral claim or obligation, the unsuccessful applicant may even obtain an order for costs in his favour out of the estate. Re Bodman [1972] Qd R 281 is an instance. In that case, a number of applicants succeeded but one failed. Hoare J ordered that both the successful applicants and the unsuccessful applicant be paid their costs out of the residuary estate of the deceased. He said:As to costs I order that the costs of each applicant, including reserved costs, be taxed as between solicitor and client and be paid out of the residuary estate of the testator. So far as concerns the applicant George Albert Bodman, although his application failed, in the particular circumstances of this case especially having regard to the strong moral obligation of the deceased towards him, I order that his costs, including reserved costs, be taxed as between solicitor and client and paid out of the residuary estate of the deceased. In re Klease (1972) QWN 44 Hoare J ordered that unsuccessful applicants should have paid their costs out of the estate because ‘there was this moral obligation in their favour and the applicants could not be said to be unreasonable’.In my view, the principles which govern the award of costs where the validity of a will is contested have some application to family provision claims by way of analogy. Those principles were summarised by Angas Parsons J in Public Trustee v Hall:The rules relating to costs have been classified as follows: - 1. If the litigation results through the fault of the testator or those interested in the residue the costs may properly be paid out of the estate. 2. If there be sufficient and reasonable ground looking to the knowledge and means of knowledge of the opposing party to question either the execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party may properly be relieved from the costs of his successful opponent. 3. Unless the circumstances of the case bring it within one of the foregoing exceptions, the general rule that costs follow the event ought to prevail.[Footnotes omitted.]Consideration