In the Estate of Colin William Brown (deceased) (No 2) - [2021] SASC 129

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction)
IN THE ESTATE OF COLIN WILLIAM BROWN (DECEASED) (No 2)
[2021] SASC 129
Judgment of the Honourable Justice Stanley
11 November 2021
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS
The late Colin William Brown (the deceased) died on 29 December 2018 aged 82 years. The last formal will made by the deceased which could be found is dated 16 July 2014. The deceased was survived by his nephew, David Alan Brown, the applicant, who was appointed as executor under the 16 July 2014 will and the applicant’s wife, Helen Therese Brown, as the substitute. That will made a specific bequest of $50,000 to the applicant and left the residue of the deceased’s estate, including property at Glandore, to Scouts SA.
The applicant brought proceedings seeking inter alia the admission to probate of a reconstruction of a “lost” will made by the deceased subsequent to 16 July 2014 or in the alternative, the admission to probate of an informal will, being a note of 12 April 2016 prepared by the applicant and signed by the deceased and in the further alternative, a declaration that the deceased died intestate. On 23 September 2021, the Court dismissed the application and ordered that a will of the deceased dated 16 July 2014 be admitted to probate.
The applicant seeks his costs of the proceedings to be paid out of the estate on a solicitor/client basis. He contends that the need for the proceedings lay at the feet of the deceased due to misrepresentations that he made to the applicant during his lifetime. The respondent opposes the application and seeks that the applicant pay its costs of the proceedings on the standard costs basis.
Roche v Roche & Anor (No. 2) [2017] SASC 75, applied.
Brown v Scout Association of Australia (SA Branch) [2021] SASC 113, discussed.

IN THE ESTATE OF COLIN WILLIAM BROWN (DECEASED) (No 2)
[2021] SASC 129
Testamentary causes jurisdiction
STANLEY J:
Introduction

This is an application for costs.
The applicant brought proceedings seeking, inter alia, the admission to probate of a reconstruction of a lost will made by the deceased his uncle, subsequent to 16 July 2014; in the alternative, the admission to probate of an informal will, being a note of 12 April 2016 prepared by the applicant and signed by the deceased; in the further alternative, a declaration that the deceased died intestate.
Central to the proceedings was the applicant’s claim that the deceased had made a will leaving his interest in the Glandore property to him. The Court found that the deceased had misrepresented to the applicant at various times after 16 July 2014 that he had done so.
The Court dismissed the application and ordered that a will of the deceased dated 16 July 2014 be admitted to probate.[1] That will made a specific bequest of $50,000 to the applicant and left the residue of the deceased’s estate, including property at Glandore, to Scouts SA.
[1] Brown v Scout Association of Australia (SA Branch) [2021] SASC 113.
The applicant seeks an order that the costs of the proceedings be paid out of the estate on a solicitor/client basis. Scouts SA opposes such an order and seeks an order that the applicant pay its costs of the proceedings on the standard costs basis.
The parties’ submissions
The applicant contends that the need for the proceedings lay at the feet of the deceased. But for the misrepresentations he made to the applicant there would have been no need for the Court’s jurisdiction to be invoked. As it was, the Court’s jurisdiction needed to be invoked in order to determine conclusively the deceased’s true testamentary intentions. He contends that the deceased’s conduct together with the absence of any body of evidence known to exist prior to the trial which made it unreasonable for him to proceed should result in an order that the costs of all parties be paid out of the estate.
The respondent submits that there are five reasons why no order should be made for the costs to be paid out of the estate and instead the applicant should pay the respondent’s costs. First, these were adversarial proceedings to defeat the former will. The purpose of the proceedings was an attempt to outflank the testamentary disposition made by the deceased in his will of 16 July 2014. Second, the Court should follow the general rule as to costs and order that costs should follow the event, where the various grounds pursued by the applicant either failed or were abandoned at the commencement of the trial. Third, notwithstanding that the applicant was misled by the deceased as to his true testamentary intentions, by the time the proceedings were instituted, it was unreasonable of the applicant to proceed in circumstances where, properly advised, he should have known that the evidence could not prove any of the grounds on which he proceeded. Fourth, that the effect of the costs order sought by the applicant would be to order the successful party not only to pay its own costs out of the residue of the deceased’s estate but also to pay the unsuccessful party’s costs from the residue, thereby draining the residue to which the respondent is entitled. Fifth, in any event, at the commencement of the trial the applicant, without notice to the respondent, abandoned the claim for rectification. In those circumstances, however the Court would otherwise exercise the costs discretion, the respondent is entitled to an order that the applicant pay its costs of the rectification ground.
Relevant principles
The principles applicable to the award of costs in the probate jurisdiction were set out by Kouarkis CJ in Roche v Roche & Anor (No. 2) in the following terms:[2]
[2] [2017] SASC 75 at [5]-[18].
The overarching legal principle is that costs are in the discretion of the Court. This position is firmly embedded in section 40 of the Supreme Court Act 1935 (SA) and r 263 of the Supreme Court Civil Rules 2006 (SCR 263) (the Rules). The discretion is unfettered, but must be exercised judicially. As a general rule, a successful litigant is entitled to an order that costs follow the event. Supplementary Rule 195 (SR 195) of the 2014 Supreme Court Supplementary Rules (the Supplementary Rules) is intended to operate consistently with SCR 263. Of course, an order modifying the operation of both rules may be made in an appropriate case if it is just to do so.
There are two well recognised exceptions to the general rule in probate matters. These exceptions were first enunciated in the English Probate Court in the case of Mitchell v Gard (Mitchell) in 1863 when Sir J.P. Wilde said:
… It is the function of this Court to investigate the execution of a will and the capacity of the maker, and having done so, to ascertain and declare what is the will of the testator. If fair circumstances of doubt or suspicion arise to obscure this question, a judicial inquiry is in a manner forced upon it. Those who are instrumental in bringing about and subserving this inquiry are not wholly in the wrong, even if they do not succeed.
…
… the Court deduces the two following rules for its future guidance: first, if the cause of litigation takes its origin in the fault of the testator or those interested in the residue, the cost may properly be paid out of the estate; secondly, 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.
The reference to the testator’s fault is puzzling. The focus must always remain on the conduct of the litigants. For the purposes of the costs discretion, a party may be at fault by litigating unmeritoriously, but responsibility for that cannot be placed at the feet of the testator who, obviously enough, plays no part in the litigation.
The exceptions established in Mitchell were later considered and discussed in the English cases of Boughton v Knight, Twist v Tye and Spiers v English. The High Court of Australia approved and applied the accepted principles in 1962 in Middlebrook v Middlebrook (Middlebrook).
In Middlebrook the deceased’s son caveated the Will and opposed a grant of probate alleging that the deceased suffered from a lack of testamentary capacity when executing his last Will. The Will had been prepared by a solicitor on the instructions of the deceased two days prior to his death while he was admitted to hospital. The solicitor, a practitioner of accepted integrity, gave evidence that the deceased had provided clear instructions and it never crossed his mind that the testator may be suffering from a lack of testamentary capacity. However, a doctor gave evidence that on the day before the making of the Will the deceased had deteriorated to a marked degree. He was then in a semi-comatose condition and sedated with drugs.
Nonetheless the trial Judge was satisfied that the deceased had a sound disposing mind and found that the last Will should be admitted to probate and made an order that the son pay the plaintiffs’ costs. The son appealed the decision to the High Court and the High Court dismissed the appeal, except as to the costs order. The High Court ordered instead that there be no order as to costs of the suit and the appeal. Relevantly, Dixon CJ explained:
I am not content, however, to uphold his Honour’s order as to costs. His Honour ordered that the caveator to pay the plaintiffs’ costs of the suit. No doubt in probate suits the prima facie rule is that, as in other litigation, costs follow the event. But in probate suits there are considerations which more readily affect the application of this rule than in most other forms of litigation. See Re Keane, [1909] V.L.R. 231, at p. 239. An examination by Hood J. of the more important English cases decided up to the date of his judgment will be found in Re Millar, [1908] V.L.R. 682. There are in the present case circumstances which would naturally lead the caveator to think that an investigation of the validity of his father’s last will was justified. If this case were judged on its general circumstances only, I think that adequate reasons would be seen for entertaining some doubt as to the validity of the will. It is only as a result of investigations that the reasons for finding affirmatively in favour of the testator’s testamentary capacity distinctly appear. In these circumstances the proper course is to apply the principle enunciated by Sir Gorrell Barnes P. that “if the circumstances lead reasonably to an investigation of the matter then the costs may be left to be borne by those who have incurred them”. Spiers v English [1907] P. 122 at p.123.
In 2012, the principles affirmed in Middlebrook were applied by the Full Court of this Court in Hall v Carney & Ors (No 2) (Hall).
However, in 2014 in Fielder v Burgess (Fielder) even though the parties had agreed that the costs of and incidental to the proceedings of both parties be paid out of the deceased’s estate on a party/party basis, I observed:
The probate costs rule is arguably anachronistic in modern times in which there is a greater concern with the need for proportionality in litigation. It may soon be necessary to reconsider it.
There have been subsequent judicial warnings that the probate exceptions might be invoked more than sparingly.
In Barbon v Tessar (Barbon) McMillian J ordered that an unsuccessful defendant pay the plaintiff’s costs. McMillian J said:
Looked at objectively, I am satisfied that the defendant knew of these matters or had the means of knowing them, yet she still made the decision to initiate the proceeding. In my view, knowing of these matters or having the means of knowing them, the defendant did not have reasonable grounds for challenging the validity of the deceased’s will.
The usual exceptions in the probate rules for costs not following the event should not apply to the defendant’s costs in this proceeding. In reality, the litigation has been adversarial litigation instituted by the defendant against the plaintiff and she has been unsuccessful. The usual rules as to costs should apply, that is, the defendant should pay the plaintiff’s costs of the proceeding.
In the matter of In the Estate of Frances Ponikvar (Deceased) (No 2) a defendant opposed an application for a copy Will to be admitted to probate. The defendant proceeded on the basis that the presumption of revocation had not been rebutted. Stanley J found that ‘there was strong evidence that rebutted the presumption against revocation. Nonetheless, Ms Novak pressed ahead in opposing the application’. Stanley J ordered that Ms Novak pay 25 percent of the applicant’s cost of the trial on a party/party basis because she had pressed ahead against the weight of that evidence.
The underlying rationale for departing from the ordinary rule in some testamentary capacity cases remains. The risk that an aged, infirm or vulnerable testator will be manipulated in private, and away from independent scrutiny, to execute a testamentary document has subsisted through the ages. However, its relative importance as a costs consideration has been diminished by contemporary social conditions and professional practices. The expansion of public aged residential care has reduced the physical isolation of the aged. Medical care by general practitioners is readily available and the degree of specialist intervention and referrals for pathological testing is more extensive. Aged persons are not as confined and are more socially active than they once were. Record keeping by professionals is more detailed and their notes more readily accessible. Audio-visual records are more common. Nonetheless, invoking this Court’s testamentary jurisdiction may sometimes be sufficiently warranted to depart from the ordinary rule even if the challenge to testamentary competence ultimately fails. Cases in which a testator, suffering a material cognitive impairment has made a Will, particularly one which departs from previous testamentary dispositions, whilst under the close care of a potential beneficiary or beneficiaries, with no or very little independent evidence of capacity, are examples.
A person will not be penalised for invoking this Court’s supervisory jurisdiction in probate when the circumstances call for an investigation into the validity of a testamentary document. However, 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 ultimately unmeritorious case to trial, the usual order that costs follow the event will be made. Exceptions from the ordinary order will not be made to allow beneficiaries a forum in which to air family disputes with impunity.
[citations omitted].
Consideration
This was self-interested adversarial litigation. I accept that the litigation had its genesis in misrepresentations made by the deceased to the applicant albeit misrepresentations, at least as I found,[3] partly induced by the conduct of the applicant. Notwithstanding those misrepresentations as to the deceased’s true testamentary intentions, by the time the proceedings were instituted the applicant knew, or had the means to know, that almost no evidentiary basis existed to support the existence of a “lost” will leaving the Glandore property to the applicant. Such evidence as existed was confined to the note of 12 April 2016, the letter of 12 February 2018 and the statements made by the deceased to the applicant and Mrs Brown. That evidence had to be assessed and considered against the failure of the extensive enquiries undertaken by the applicant and his solicitors to discover this “lost” will.
[3] [2021] SASC 113 at [68].
The failure of those enquiries and searches to discover the “lost” will together with the evidence available to the applicant of the contents of Mr Richards’ will file, his appointment diary and time cost entries should have demonstrated to the applicant the futility of pursuing the claim for admission to probate of the reconstructed will. What was conspicuously absent was evidence from anyone who had prepared, or at the very least seen, this “lost” will.
Further, the applicant knew that the note of 12 April 2016 did not constitute an informal will or a revocation of the will of 16 July 2014. After all, he gave evidence that the note, which he prepared, merely recorded historical events and had no testamentary effect.
It was not reasonable of the applicant to institute the proceedings given the state of the evidence then known to him. There was no proper basis in the evidence for obtaining an order for the admission to probate of a reconstructed will in the terms sought by the applicant. Neither was there any reasonable prospect of the applicant succeeding in a claim to have the note of 12 April 2016 admitted to probate as an informal will or a declaration that the note constituted an instrument of revocation of the will of 16 July 2014.
Whatever effect the misleading representations made by the deceased, by the time proceedings were instituted in March 2020, the applicant and his solicitors had comprehensively investigated the position. It must have been apparent that the evidence known to exist at that time was insufficient to obtain the relief sought. While I accept that at the time the proceedings were instituted the applicant did not have the benefit of knowing what the respondent’s witnesses might say relevant to the issues arising in the proceedings, the applicant knew or had the means to know the evidence of Mr Richards’ file and associated documents. In these circumstances it was unlikely that Mr Richards would give evidence at the trial that would support the existence of the “lost” will. In addition, the applicant should have appreciated that none of the other witnesses who were called by the respondent would be able to give evidence concerning the “lost” will or the note of 12 April 2016 and the letter of 12 February 2018.
In any event, by the commencement of the trial, the applicant knew, by reason of the contents of the affidavits filed by the respondent from its witnesses, precisely the position they asserted. Their evidence did not support the relief sought. Neither was there any reasonable prospect that cross-examination of those witnesses would provide a basis for the Court to order the relief sought.
This being adversarial litigation, the Court exercises a broad discretion in relation to costs. That discretion is unfettered but must be exercised judicially and for reasons related to the litigation. There is some merit to the applicant’s contention that but for the misrepresentations made by the deceased he would not have instituted the proceedings. However, in the exercise of the costs discretion the overwhelming factor is that it was unreasonable, in the circumstances that existed at the time the proceedings were instituted, for the applicant to have done so. That position did not change in the subsequent period to the commencement of the trial.
On this basis I am satisfied that the respondent is entitled to the order it seeks in relation to costs. Costs should follow the event. The applicant brought these proceedings to defeat the last known formal expression of the deceased’s testamentary intentions. He was unsuccessful in doing so. He should pay the respondent’s costs on the standard costs basis.
Conclusion

I would order that the applicant pay the respondent’s costs of the proceedings on the standard costs basis.