In the Estate Of Amuso (No 2) - [2021] SASC 61

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction)
IN THE ESTATE OF AMUSO (No 2)
[2021] SASC 61
Judgment of the Honourable Justice Stanley
28 May 2021

SUCCESSION - MAKING OF A WILL - EXECUTION - INFORMAL DOCUMENT INTENDED TO BE WILL
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS - GENERAL PRINCIPLES
An application for costs.

In this matter his Honour dismissed an application for the revocation of a grant of letters of administration made to the first respondent, Vincenza Garreffa. The application was brought by a brother of the deceased, Domenico Amuso, who sought to propound a document as the last will and testament of the deceased. His Honour also dismissed an interlocutory application seeking orders permitting the applicant to occupy premises forming part of the deceased’s estate in reliance upon an asserted estoppel by acquiescence.
The first respondent, the administrator of the deceased’s intestate estate, seeks an order for her costs of the proceedings to be paid by the applicant on an indemnity basis. In her capacity as beneficiary, she also seeks an order that the applicant pay her costs on an indemnity basis.
The applicant contends that the first respondent’s costs should be paid by the estate on a party/party basis. He opposes the making of a costs order in favour of the administrator on any other basis. He also opposes any order that Vincenza Garreffa’s costs, as an interested party, be paid by him or the estate.
Held:

In propounding the document the applicant has acted in wilful disregard of the facts. He has sought to pursue his own financial benefit at the expense of the other beneficiaries. He has done so knowing that the document he sought to propound was not the deceased’s last will and testament. The need for a trial was not caused, or contributed to, by the conduct of the testator.
In addition the applicant’s interlocutory application relied upon an estoppel by acquiescence claim in circumstances where no evidence was led by the applicant on most of the principal elements required to establish such a claim.
Having regard to the principles concerning the award of indemnity costs explained in Colgate-Palmolive Co v Cussons Pty Ltd, a proper basis exists justifying the exercise of the Court’s discretion to award indemnity costs.
Orders
1.The interested party’s costs of and incidental to this action be paid by the applicant upon an indemnity basis.
2.The first respondent’s costs of and incidental to this matter be paid by the applicant upon an indemnity basis.
3.The first respondent, as administrator of the estate, is directed that the costs orders made against the applicant be set off against his entitlement in the intestate estate of the deceased.
4.Any shortfall in the indemnity costs of the interested party is to be paid by the estate of the deceased.
5.Any shortfall in the indemnity costs of the first respondent is to be paid by the estate of the deceased upon the footing of an indemnity.

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Fielder v Burgess [2014] SASC 98; Roche v Roche & Anor (No 2) [2017] SASC 75; Public Trustee v Taylor & Ors (No. 2) [2020] SASC 213, applied.

IN THE ESTATE OF AMUSO (No 2)
[2021] SASC 61

STANLEY J:
Introduction

In this matter I dismissed an application for the revocation of a grant of letters of administration made to the first respondent, Vincenza Garreffa (Ms Garreffa). The application was brought by a brother of the deceased, Domenico Amuso, who sought to propound a document as the last will and testament of the deceased. I also dismissed an interlocutory application seeking orders permitting the applicant to occupy premises forming part of the deceased’s estate in reliance upon an asserted estoppel by acquiescence.
The first respondent, the administrator of the deceased’s intestate estate, seeks an order for her costs of the proceedings to be paid by the applicant on an indemnity basis. In her capacity as a beneficiary, she also seeks an order that the applicant pay her costs on an indemnity basis.
The applicant contends that the first respondent’s costs should be paid by the estate on a party/party basis. He opposes the making of a costs order in favour of the administrator on any other basis. He also opposes any order that Ms Garreffa’s costs, as an interested party, be paid by him or the estate.
As a general rule, costs follow the event and costs are awarded on a standard costs basis. However, the Court has an absolute discretion as to whether to make an award of costs, and if so, the basis of any award.[1]
[1] Uniform Civil Rules 2020, 194.3.
Historically in probate matters the costs of parties to proceedings have frequently been ordered to be paid out of the estate.
The probate costs exception has become something of an anachronism.[2] In any event, the exception is generally confined to circumstances where litigation has been caused, or contributed to, by the way in which the testator made his testamentary intentions known.[3]
[2] Fielder v Burgess [2014] SASC 98 at [58].
[3] Fielder v Burgess [2014] SASC 98 at [57].
In Fielder v Burgess[4] Kourakis CJ said[5] that in much probate litigation there is little room for the application of the exception where disputes are between private parties advancing competing claims to the testator’s bounty for their private financial benefit.
[4] [2014] SASC 98.
[5] [2014] SASC 98 at [62].
In Roche v Roche & Anor (No. 2)[6] Kourakis CJ further explained[7] that a person who challenges a testamentary disposition will risk an adverse costs order for persisting in an unmeritorious action after the discovery of evidential material which largely dispels any reasonable concerns. If a party ignores the weight of that evidential material and prosecutes an unmeritorious case to trial, the usual order that costs follow the event will be made.
[6] [2017] SASC 75.
[7] [2017] SASC 75 at [18].
Those principles were recently applied in Public Trustee v Taylor & Ors (No. 2).[8]
[8] [2020] SASC 213 at [11]-[17].
The critical basis for the claims for indemnity costs against the applicant is the Court’s rejection of his application for an order revoking the grant of letters of administration and his propounding a document, of which he was the author, as the last will and testament of the deceased. The Court rejected the applicant’s case.
The applicant should not have issued the application. Initially he asserted that the purported will document was in the writing of the deceased in circumstances where he must have known that he was the author of the document. When the evidence demonstrated incontrovertibly that to be the case, he then adapted his case to accepting the possibility that he was the author of the document but that it had been nonetheless executed by the deceased. The Court did not accept that submission. Had the applicant successfully propounded that document as the deceased’s last will and testament, he would have benefitted substantially from the testamentary disposition contained in that document. In consequence Ms Garreffa and the other beneficiaries would have suffered a corresponding financial detriment.
In propounding the document the applicant has acted in wilful disregard of the facts. He has sought to pursue his own financial benefit at the expense of the other beneficiaries. He has done so knowing that the document he sought to propound was not the deceased’s last will and testament. The need for a trial was not caused, or contributed to, by the conduct of the testator.
In addition the applicant’s interlocutory application relied upon an estoppel by acquiescence claim in circumstances where no evidence was led by the applicant on most of the principal elements required to establish such a claim.
Having regard to the principles concerning the award of indemnity costs explained in Colgate-Palmolive Co v Cussons Pty Ltd,[9] a proper basis exists justifying the exercise of the Court’s discretion to award indemnity costs. The applicant having persisted in an unmeritorious action should pay the costs of the action on an indemnity basis. The award of costs on an indemnity basis is not punitive but is designed to ensure that the beneficiaries of the estate are not prejudiced by these ill-judged applications.
[9] (1993) 46 FCR 225 at 233.
This leaves the question of whether Ms Garreffa is entitled to an award of costs on an indemnity basis both in her capacity as the administrator of the deceased’s estate and as a beneficiary of that estate. In my view she is entitled to an award of costs on an indemnity basis in both capacities.
While the Court must be careful not to permit an estate from being plundered by the incursion of unnecessary costs, in this case while the interests of Ms Garreffa, in her capacity as administrator and in her capacity as beneficiary had much in common, she was confronted by a position adopted by the applicant, set out in the letter from his solicitors dated 25 October 2019, asserting the existence of a conflict of interest on the part of Ms Garreffa. In light of that assertion, I do not consider that there is any justifiable criticism levelled at her for seeking to be separately represented in each capacity.
Finally, I consider it appropriate that that Court should direct the administrator to set off the amount of the costs ordered against the applicant against the entitlement he has in the intestate estate of the deceased, so as to ensure that the estate is not depleted by reason of his self-interested and unmeritorious action.
In the circumstances, I would make the following orders:
1.The interested party’s costs of and incidental to this action be paid by the applicant upon an indemnity basis.
2.The first respondent’s costs of and incidental to this matter be paid by the applicant upon an indemnity basis.
3.The first respondent, as administrator of the estate, is directed that the costs orders made against the applicant be set off against his entitlement in the intestate estate of the deceased.
4.Any shortfall in the indemnity costs of the interested party is to be paid by the estate of the deceased.
5.Any shortfall in the indemnity costs of the first respondent is to be paid by the estate of the deceased upon the footing of an indemnity.