In the Estate of Evelyn Somatillaka Swaris: Delanjan Arnold Swaris v Sandra Charmalie Swaris Seneviratna
[2013] ACTSC 231
•20 November 2013
IN THE ESTATE OF EVELYN SOMATILLAKA SWARIS: DELANJAN ARNOLD SWARIS v SANDRA CHARMALIE SWARIS SENEVIRATNA
[2013] ACTSC 231 (20 November 2013)
PROBATE AND ADMINISTRATION – partial intestacy – where deceased had no will covering her Australian assets – where executor applied to the court for advice – where questions for advice settled prior to hearing
COSTS – respondent’s application for costs – capacity of an estate’s executor to also appear in their capacity as a beneficiary without leave – no capacity
Administration and Probate Act 1929 (ACT), ss 44, 49BA, 49D
Trustee Act 1925 (ACT), s 63
Applicants A1 and A2 v G E Brouwer (in his capacity as Director of the Office of Police Integrity (No 3) (2008) 27 VAR 247
Australian Incentive Plan Pty Ltd (in its capacity as trustee of the Australian Incentive Trust) v Babcock & Brown International Pty Ltd [2011] VSC 43
Bowmil Nominees Pty Ltd [2004] NSWSC 161
Calderbank v Calderbank [1976] Fam 93
Elders Trustee & Executor Co Ltd v Eastoe [1963] WAR 36
Electro Optic Systems Pty Ltd v The State of New South Wales [2013] ACTSC 155
Ezekiel-Hart v The Law Society of the Australian Capital Territory [2012] ACTSC 135
Gurney v Grimmer (1932) 38 Comm Cas 12
Hardie & Lane Ltd v Chiltern [1928] 1 KB 663
Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653
In re Buckton;Buckton v Buckton [1907] 2 Ch 406
Inre Cunningham; Sproule v Quested (1914) 31 WN (NSW) 44
Macedonian Orthodox Community Church St Petka lnc v His EminencePetar, the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66
Noy v Tapgnuk (1997) 138 FLR 205
Perpetual Trustee Co Ltd v Wilson (Unreported, NSW Supreme Court, Young J, 20 October 1995).
Sheehy v Mitchell Crane Hire Pty Ltd (1991) 104 FLR 96
Whitworth v Darbishire (1893) 9 TLR 211
No. P 683 of 2009
Judge: Refshauge J
Supreme Court of the ACT
Date: 20 November 2013
IN THE SUPREME COURT OF THE )
) No. P 683 of 2009
AUSTRALIAN CAPITAL TERRITORY )
)
PROBATE JURISDICTION )
IN THE ESTATE OF EVELYN SOMATILLAKA SWARIS
DELANJAN ARNOLD SWARIS
Applicant
SANDRA CHARMALIE SWARIS SENEVIRATNA
Respondent
ORDER
Judge: Refshauge J
Date: 20 November 2013
Place: Canberra
THE COURT ORDERS THAT:
The costs of the Respondent be paid from the Estate of Evelyn Somatillaka Swaris on a solicitor client basis.
Dr Douglas Edwin Swaris and his wife, Mrs Evelyn Somatillaka Swaris, originally lived in Sri Lanka where Dr Swaris conducted a medical practice, apparently out of a property at Nuwara Eliya. Attached to the practice, Dr Swaris built a maternity wing.
In 1973, Dr and Mrs Swaris moved to New Zealand with their three children, Delanjan Arnold Swaris (the applicant), Sandra Charmalie Swaris Seneviratna (the respondent) and Rohan Senaka Swaris (the other son). They lived in Auckland, but at some stage the three children moved to Australia where they all now live.
Dr Swaris died on 5 December 2006, leaving a will which left his estate, after payment of relevant debts and expenses, in equal shares, to such of his three children as survive him.
Mrs Swaris died on 29 February 2008 in Auckland. Mrs Swaris made a will dated 28 February 2006, but it was limited to her estate in New Zealand only. It left her estate, after payment of debts and expenses, to her husband and, if he did not survive her (as he did not), to her children per stirpes, as to which see Perpetual Trustee Co Ltd v Wilson (Unreported, NSW Supreme Court, Young J, 20 October 1995).
She also had property in the Australian Capital Territory, including a unit in Palmerston, and, accordingly, that property must be dealt under the laws as to intestacy.
On 16 December 2009, the applicant was granted Letters of Administration of Mrs Swaris’ estate by this Court.
I was informed that the New Zealand estate has now been administered. There are, however, a number of complexities about the balance of her estate.
Issues also arose between the beneficiaries of the estate of Mrs Swaris. There were suggestions that these matters could be addressed in mediation but that was rejected. There were proposals for the resolution of the issues put in open letters but not agreed.
On 22 August 2012, the applicant as administrator applied to this Court, under s 63 of the Trustee Act 1925 (ACT), for advice regarding the administration of the estate of Mrs Swaris.
On 26 October 2012, Master Harper ordered that the respondent be joined as a respondent to the proceedings and made a timetable for the further conduct of the proceedings.
The proceedings were ultimately listed to be heard by me on 12 August 2013. When the proceedings were called on, I was told that, apart from one issue, the parties had resolved the issues in the proceedings by discussion. I congratulate the parties on being able to do so.
The one issue, however, related to the costs of the respondent of these proceedings to be paid out of the estate. The applicant’s costs were, as would be expected, to be paid out of the estate. The respondent sought her costs on this basis; the applicant neither consented nor opposed such an order.
I was informed, however, that the other son, also, of course, a beneficiary but not a party to these proceedings, opposed such an order and that the applicant, insofar as he was a beneficiary, also opposed the making of the order. There is a difficulty in these submissions which I will address further below.
It is this issue that I must decide. Before I do so, it is appropriate to put the proceedings in some context.
As I have noted (at [7]), there were some complexities in the estate. The first relates to some jewellery. Sometime in late 2006, the respondent was in New Zealand and, she says, was given the jewellery by her mother. There was a dispute about the circumstances under which the respondent received the jewellery and the applicant sought to have it brought into the estate by raising the following question for judicial advice:
Whether the jewellery received by [the respondent] should be treated as a ‘hotchpot’ pursuant to s 49BA of the Act?
Although “the Act” was defined in the Application in Proceedings as the Trustee Act, the provision for hotchpot, is, in fact, s 49BA but of the Administration and Probate Act 1929 (ACT). I assume that this was what was intended.
Another complexity was in relation to the real property owned by Mrs Swaris in the ACT, a unit in Palmerston. It was initially purchased by both Dr and Mrs Swaris as joint tenants. Of course, on the death of Dr Swaris on 5 December 2006 it became, by virtue of the right of survivorship, wholly owned by Mrs Swaris.
The property was rented and rental income was received by the respondent. She said that she used the rental income for, inter alia, the following purposes:
(a) a source of funds for Dr and Mrs Swaris when they visited from New Zealand;
(b) cost of storage for their furniture and personal effects;
(c) airfares and accommodation and spending money for Dr and Mrs Swaris when they visited Australia in 2005;
(d) accommodation for the applicant in New Zealand and for Dr and Mrs Swaris while their New Zealand property was being cleaned;
(e) various bills, including from the nursing home, the relevant medical association and American Express, for Dr and Mrs Swaris while they were in a nursing home.
The respondent also said that she relied on the rental money as a “buffer” to cover expenses that she incurred as attorney for her parents, including for the cost of numerous trips to Auckland, funeral expenses, memorial plaques and the like.
After the death of Mrs Swaris, the respondent continued to receive the rental income until the property was sold in September 2010. This subsequently received income which was, it would appear, property of the estate.
A further complexity was the question of what assets there might be in Sri Lanka, for inquiries have been made which disclose that there may be assets of both Dr and Mrs Swaris in Sri Lanka. The main property on which the medical practice, with the maternity wing, was conducted, may have been, it is believed, owned by Dr Swaris; the secondary title may have been in the name of Mrs Swaris. It appears that this property remains there and both are said to be worth approximately $433,000. Two other properties were sold and the sale proceeds are said to total approximately $79,000. It is believed that these monies may have been deposited in an account with the Bank of Ceylon. It is not clear in whose names they have been deposited.
It is not clear whether any of these assets are assets of Mrs Swaris or whether they are all assets of Dr Swaris. In the latter case, they must initially be administered by the executors of the estate of Dr Swaris, who include the respondent, not by the administrator of Mrs Swaris’ estate.
Dr Swaris appointed the applicant and the respondent jointly as executors of his will.
It appears that application has been made in the District Court of Nuwara Eliya in the Republic of Sri Lanka for issue of Letters of Administration for the estate of Mrs Swaris but the Court has ordered that before the matter can proceed a sum of 540,000 rupees (which appears to be about $40,000) must be lodged as a deposit with the Court. This is, I was informed, a court requirement, that 10% of the value of the estate or thereabouts must be deposited with that Court in order to obtain an appropriate probate order.
Some of these issues seem to me to be beyond the jurisdiction of this Court. For example, although I do not have to decide, it seems to me that it is unlikely that the jewellery could be brought into hotchpot in the intestate estate in this Territory.
There is no doubt that s 49BA of the Administration and Probate Act applies to a partial intestacy; the definition of “intestate estate” in s 44 of that Act makes that clear.
Further, s 49D of that Act goes further and, under s 49D(5), the child of an intestate who acquires an interest under the will of the intestate is required to bring the interest to which the child is entitled under the will into account as at the date of death of the intestate in calculating the interest that the child is entitled to take under the estate of the intestate.
There are, however, formidable problems with applying this to the jewellery. I am informed that there is no law of hotchpot in New Zealand. Secondly, the estate of Mrs Swaris in New Zealand has now been wound up. These are complex issues which, fortunately, I do not have to resolve in this application.
The parties have agreed on all of the issues except costs, at least as to a way forward and, in the order that I was asked to make, the Court notes the agreement of the parties.
As to the issue I have to decide, namely the costs of the proceedings, it is necessary to give a little more background.
Regrettably, the respondent seems to have fallen out with the applicant and the other son. Unfortunately, that is not uncommon in the distribution of estates, even where only the children of a testator or testatrix are concerned.
I was provided with substantial affidavit material and a significant amount of correspondence outlining the issues, the attitudes of the parties and giving a deal of information as to the facts about some of the issues. Fortunately, I do not have to deal with that in any detail.
My attention was particularly drawn, however, to a number of issues.
About a year after the death of Mrs Swaris, the applicant wrote to the respondent concerned that there had been no progress in resolving the issue of the disposal of the Palmerston property, the ownership of the rental income from it and the assets in Sri Lanka.
On 10 December 2009 the applicant’s lawyers wrote to the respondent’s lawyers advising that the applicant was in a position to make application for Letters of Administration and proposed to do so on 11 December 2009. The respondent’s lawyers indicated that the respondent was collecting documents previously sought by the applicant and asked for a deferral of the application until that had been provided and considered, a request that was agreed.
That material was later provided by the respondent to her lawyer, who was in the process of reviewing it when the proposal for the applicant to make an application for Letters of Administration was further pressed. The respondent’s lawyer asked for further time to permit completion of the review of the documents but, if not, that the application be made for the applicant and respondent to be appointed jointly as administrators. I note that the applicant and respondent were jointly executors of the estate of Dr Swaris, though they did seem by this time to have become somewhat at odds with each other.
In any event, that request was rejected for the stated reason that it would “further delay the matter and also put the estate to significant extra costs”. The applicant’s lawyer also stated that the other son had expressed a preference for the applicant alone to be appointed administrator. The applicant then did apply and, as I have noted earlier (at [6]), the applicant was appointed administrator of Mrs Swaris’ estate on 16 December 2009.
There was then a deal of correspondence in which information and proposals were supplied and made. I do not need to rehearse that correspondence.
The unit in Palmerston appears to have been sold on or about 6 September 2010. Issues arose about whether to distribute or partially distribute the estate and what to do about the Sri Lanka assets. There were suggestions of a “round table conference” made by the applicant and agreed to by the respondent. I could not tell from the correspondence I had what happened to this proposal.
On 29 September 2011, however, the applicant’s lawyer wrote to the respondent’s lawyers advising:
Given the breakdown of the relationships between all the beneficiaries in this matter our client will be applying for guidance from the ACT Supreme Court under section 63 of the Trustee Act 1925 (ACT) to afford him some protection from claims relating to his actions as Administrator.
The respondent’s lawyers suggested that such an application was premature and suggested that the proposed interim distribution could be made consensually and without the expense of such an application.
On 19 October 2011, the applicant’s lawyers put a proposal for the interim distribution of the estate. They requested a response by 5:00 pm the next day, which might be thought a rather peremptory request. There does not seem to have been a response to the request. I do not need to set out the terms of the proposal which had some similarities with the agreement that I was asked to note in the consent orders I was asked to make.
On 24 October 2011, however, the respondent’s lawyer proposed a formal mediation. There was no response to that proposal, however, on 28 November 2011 the applicant’s lawyer wrote advising with respect to that proposal that they had “sought ... instructions again today”.
On 15 December 2011, the applicant’s lawyers advised of certain pre-conditions under which the applicant would be willing to participate in such a mediation. Those pre-conditions were agreed to by the respondent, though it appears with a slight modification.
On 1 February 2012, the applicant’s lawyers responded:
In light of the concerns raised by your client regarding the treatment of estate assets, the complexity of the issues in dispute and our client’s own concerns that he effectively and conscientiously discharge his obligations as the administrator of the estate, he has decided to seek the guidance and direction of the Supreme Court pursuant to s 63 of the Trustee Act 1925 (ACT) regarding the scope of the estate and the next steps to be taken in relation to the estate assets.
That application was not filed, however, and on 16 July 2012, there was further correspondence in which the applicant’s lawyers advised “[t]he exact timing of that application is still being determined” and set out the guidance to be sought from the Court.
The respondent’s lawyers responded that the respondent now agreed that the application should be made and suggested further issues may need to be resolved by it.
The application was then made as noted above (at [9]).
There was further correspondence, including an offer of settlement and a further offer of mediation by the respondent, which the respondent rejected.
In later correspondence, it is also relevant that the applicant invited the respondent to file her evidence and consented to her being made a party to the proceedings. He further indicated in later correspondence that he neither opposed nor consented to the respondent’s legal fees being paid from the funds in the estate.
The proceedings were then listed for hearing on 12 August 2013. In preparation for that hearing, the applicant prepared and filed a most useful document dated 7 May 2013 titled “Summary of the Applicant’s Position”, with the orders sought and a list of matters for determination. There were nine issues, though some were in the alternative.
As explained earlier (at [11]), when the proceedings commenced, it was announced that agreement had been reached on all issues other than as to costs.
As to the agreement, it is clear from my reading of the affidavits filed and the inter-partes correspondence that, when comparing those matters in dispute and the attitude to them by the parties with the agreement actually reached and which I was asked to note, the result was a genuine compromise; that is, in the words of Lawrence LJ in Gurney v Grimmer (1932) 38 Comm Cas 12 at 18 that “a mutual concession has been made by both parties and that each party has got something less than [he or she] claimed”.
The compromise was, of course, concluded in terms that are appropriate for adversarial proceedings, but it is clear that proceedings under s 63 of the Trustee Act are not limited to non-adversarial proceedings as decided by the High Court in Macedonian Orthodox Community Church St Petka lnc v His EminencePetar, the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 at 89; [56].
In arriving at the result, I note the applicant, through his counsel, conceded that the respondent had, in the course of providing the evidence she was invited to give, made available useful information which had helped in the resolution of the issues faced by the parties and, had the application had to proceed, her affidavit would have assisted the Court in gaining a full understanding of the relevant issues. He did, however, express a caveat that this was not “to say that all of the costs she incurred are necessarily appropriately paid out of the estate”.
It is against this background that I must determine this application.
SUBMISSIONS
Mr B Meagher SC, who appeared for the respondent, sought an order that the costs of the respondent be paid out of the estate on a solicitor-client basis. He submitted that there were really two bases on which such an order should be made in this case.
The first was that the respondent had made substantial information available in the proceedings, as invited to do, and which had led to facts being known, of which the appellant had no knowledge, and which would have been of substantial assistance to the Court, had it had to give the sought advice. The provision of the information had also contributed to the agreement ultimately reached by the parties.
The second basis was that, insofar as the proceedings were of an adversarial nature, that had been because they were really commenced as such, the appellant seeking particular advice that was, in actuality, directed at resolving disputes between the appellant and the respondent, such as the status of the rent for the Palmerston property prior to the death of Mr Swaris and in respect of which the respondent was really defending her position which was, in that case at least, vindicated, as it was in others.
Similarly, the advice sought in relation to the jewellery was not advice that the Court had jurisdiction to give in the circumstances, but the respondent had taken the opportunity of the proceedings to make an offer which was agreed and so resolved that issue.
The applicant, as noted, neither consented to nor opposed the order sought by the respondent as to costs.
As I have also noted, he seemed also to want to take on a separate role, as a beneficiary, and oppose the application in that capacity. He also announced that the other beneficiary, the other son, although not a party, also opposed the application.
He submitted in this context that the settlement offer made in his lawyer’s letter of 19 October 2011 (see [42] above) amounted to some kind of “Calderbank” letter (see Calderbank v Calderbank [1976] Fam 93) which had put a proposal not accepted but then agreed to at the hearing.
Mr G Blank, who appeared for the applicant, also explained that mediation had not been accepted because the other beneficiary, the other son, was opposed “to some of the views [of the respondent]”, that the applicant was concerned about additional costs and that the parties seemed to have views that were too far apart.
CONSIDERATION
(a) Attitude of the beneficiaries – the other son
I have noted above (at [13]) that the other son, not a party to these proceedings, has expressed a view on the question as to costs.
Further, as I also noted (at [13]), the applicant has purported to express a view qua beneficiary as to the question of costs.
I must decide whether to take these views into consideration.
There is no doubt that, in certain circumstances, where there are matters such as dealing with a trust deed, the attitude of the beneficiaries, whether parties to the proceedings or not, is relevant to the court’s consideration. See, for example, Bowmil Nominees Pty Ltd [2004] NSWSC 161 at [18]. Indeed, where the relevant status of the beneficiaries is in issue, all should be made parties: Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653 at 656 (Hughes).
This is, however, not such a consideration here, for the issue to be resolved, costs, is entirely an incident of the litigation and, though it will affect all beneficiaries, is a part of the litigation itself.
In such litigation, there still are parties, and persons are only parties by virtue of relevant actions, such as commencing proceedings, being served and filing a notice of intention to respond or by a court order. The other son has not sought to be made a party. I do not know whether he has been served, though the Application in Proceedings was directed to him. He did not file a Notice of Intention to Respond .
Indeed, s 63(4) of the Trustee Act makes it clear that it was not necessary for the other son to be served with the application. It does not seem to me that the application for advice fell into any of the categories set out in s 63(5) of the Act.
Section 63(8) of the Trustee Act makes a clear distinction between a person served and a party.
In my view, the other son is not a party. He has not participated in the proceedings nor in the submissions. He has not heard the arguments of counsel. He may not even know the outcome of the proceedings; that is not, in the circumstances, a matter with which I have to be concerned. I do not consider that I should hear from him as to the costs of the proceedings.
(b) Attitude of the beneficiaries – the applicant
The applicant has, of course, been a party to the proceedings. He appears, however, as the administrator of the estate; it is only in this capacity that he can make the application under s 63(1) of the Trustee Act.
There is no doubt that a party can appear in proceedings in two capacities or have two different interests. See, for example, Hardie & Lane Ltd v Chiltern [1928] 1 KB 663 at 669. It would seem that the two capacities must be specified. Sometimes, such a joinder will not be allowed, as in Whitworth v Darbishire (1893) 9 TLR 211.
Here, there is no indication in the proceedings that the applicant is participating in these proceedings in other than his capacity as administrator of the estate of Mrs Swaris. So far as he is a beneficiary, he is not a party and the approach I have adopted above applies.
In any event, I do not consider that it is permissible for him to make competing submissions.
I shall not consider his opposition to the application for costs by the respondent.
(c) Principles as to costs
Although the application made by the applicant was for judicial advice, the courts have indicated that they are prepared to entertain costs applications by other parties to such litigation. The leading decision is that of Kekewich J in In re Buckton;Buckton v Buckton [1907] 2 Ch 406, where his Honour described these classes of case for this purpose. His Honour said (at 414-5):
In a large proportion of the summonses adjourned into Court for argument the applicants are trustees of a will or settlement who ask the Court to construe the instrument of trust for their guidance, and in order to ascertain the interests of the beneficiaries, or else ask to have some question determined which has arisen in the administration of the trusts. In cases of this character I regard the costs of all parties as necessarily incurred for the benefit of the estate, and direct them to be taxed as between solicitor and client and paid out of the estate. It is, of course, possible that trustees may come to the Court without due cause. A question of construction or of administration may be too clear from argument, or it may be the duty of trustees to inform a claimant that they must administer their trust on the footing that this claim is unfounded, and leave him to take whatever course he [or she] thinks fit. But, although I have thought it necessary sometimes to caution timid trustees against making applications which might with propriety be avoided, I act on the principle that trustees are entitled to the fullest possible protection which the Court can give them, and that I must give them credit for not applying to the Court except under advice which, though it may appear to me unsound, must not be readily treated as unwise. I cannot remember any case in which I have refused to deal with the costs of an application by trustees in the manner above mentioned.
There is a second class of cases differing in form, but not in substance, from the first. In these cases it is admitted on all hands, or it is apparent from the proceedings, that although the application is made, not by trustees (who are respondents), but by some of the beneficiaries, yet it is made by reason of some difficulty of construction, or administration, which would have justified an application by the trustees, and it is not made by them only because, for some reason or other, a different course has been deemed more convenient. To cases of this class I extend the operation of the same rule as is observed in cases of the first class. The application is necessary for the administration of the trust, and the costs of all parties necessarily incurred for the benefit of the estate regarded as a whole.
There is yet a third class of cases differing in form and substance from the first, and in substance, though not in form, from the second. In this class the application is made by a beneficiary who makes a claim adverse to other beneficiaries, and really takes advantage of the convenient procedure by originating summons to get a question determined which, but for this procedure, would be the subject of an action commenced by writ, and would strictly fall within the description of litigation. It is often difficult to discriminate between cases of the second and third classes, but when once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs. Whether he [or she] ought to be ordered to pay the costs of the trustees, who are, of course, respondents, or not, is sometimes open to question, but with this possible exception the unsuccessful party bears the costs of all whom he [or she] has brought before the Court.
This decision has been applied in Australia. Croft J followed it in Australian Incentive Plan Pty Ltd (in its capacity as trustee of the Australian Incentive Trust) v Babcock & Brown International Pty Ltd [2011] VSC 43 at [24]-[25] (Babcock & Brown). See, also, Noy v Tapgnuk (1997) 138 FLR 205 at 211; Inre Cunningham; Sproule v Quested (1914) 31 WN (NSW) 44 at 45.
In Babcock & Brown, Croft J held (at [27]) that the position appears to be, in such litigation, that the parties cannot make an agreement about costs; it has to be decided by the Court. Hence, the need for this application and consideration.
The respondent also referred to what Sheller JA said in Hughes (at 671):
It is I think well-established that, where the terms of a trust document in the context of events which have happened reasonably lead to a trustee to seek administrative advice from the Court as to its meaning and how it should be administered, all parties properly joined should have their appropriate costs out of the Fund.
In Elders Trustee & Executor Co Ltd v Eastoe [1963] WAR 36 at 40, Hale J, citing, inter alia, In re Buckton; Buckton v Buckton, said:
An order for costs is essentially a matter of discretion, and it would be both impossible and in any event undesirable for the courts to have attempted to state any absolute rules on the subject, but, in my opinion, the proper approach appears to be to inquire whether the claim made required to be decided for the due administration of the estate, and if so whether the claim was a reasonable one and in the sense that on the information available at any given moment it would appear to competent counsel to be fairly arguable and not merely a speculative chance. If these conditions are fulfilled then the costs of all parties properly and necessarily before the Court should be met out of the estate, and it is irrelevant who actually initiates the proceedings.
That general rule was referred to by Higgins J in Sheehy v Mitchell Crane Hire Pty Ltd (1991) 104 FLR 96 at 106, where his Honour noted:
In probate and trust matters, unless a party has been vexatious or lacking in good faith, costs are allowed to all parties out of the fund (cf Trustees, Executors & Agency Co Ltd v Ramsay (1920) 27 CLR 279; Currie v Glen (1936) 54 CLR 445 – on appeal by a beneficiary, that party may be refused costs if unsuccessful and will usually be ordered to pay costs).
(d) Application of the principles to this case
The question really is whether this was adversarial litigation of a kind whereby the adversarial rule, that costs follow the event, should apply.
It does seem to me that the litigation fitted rather within the first class described by Kekewich J in In re Buckton; Buckton v Buckton. It was not in adversarial form, for the respondent was merely given notice and was not initially made a party, though she was later joined. That joinder was not opposed and has, in fact, been valuable, not only in leading to a resolution of the issues, but in providing additional information of value to the applicant.
Thus, while that did seem to me to be, somewhat in substance, adversarial litigation, although not in form, it may properly be regarded as a summary procedure for determining speedily and inexpensively questions, the solution for which must sooner or later be determined for the benefit of all concerned: In re Buckton; Buckton v Buckton at 416; Applicants A1 and A2 v G E Brouwer (in his capacity as Director of the Office of Police Integrity (No 3) (2008) 27 VAR 247 at [3].
I accept, too, that the respondent has succeeded in her contentions in a number of areas. The mention of her jewellery in the estate was not a matter in which I would have had jurisdiction (though the respondent was prepared to disclose its value and share that with her brothers). The rental from the Palmerston property received before the death of Mrs Swaris is not to be brought into the estate and there is to be an interim distribution (though the applicant was not necessarily opposed to this).
Thus, insofar as the proceedings had an adversarial flavour or indeed could by analogy be regarded in the third of the classes identified by Kekewich J, the respondent cannot be said to have failed in her contentions.
Mr Meagher also submitted that the respondent had sought to have the issues between the parties mediated. That offer was never accepted. It is not possible nor desirable for me to evaluate in detail the reasons why the applicant declined to do so, other than to say that the final result shows that those reasons did not, in fact, ultimately prevent compromise.
While an unsuccessful mediation does add costs, a good mediator will usually be able, at least, to narrow the issues in dispute, which can result in a cost savings in the ultimate proceedings.
As I held in the Ezekiel-Hart v The Law Society of the Australian Capital Territory [2012] ACTSC 135 at [26]–[39] (Ezekiel-Hart), a failure to engage in mediation without a reasonable cause may be reflected in costs. That approach was followed in Electro Optic Systems Pty Ltd v The State of New South Wales [2013] ACTSC 155 at [5]-[6].
The matters that I identified in Ezekiel-Hart (at [34]) did not appear to justify refusal to mediate.
That the proceedings have settled may be relevant, though one must use hindsight very cautiously. It is, however, a relevant factor in favour of an order being made that the respondent’s costs should be paid from the estate.
CONCLUSION
It seems to me that, in this case, the ordinary approach to estate litigation should apply and the applicant and the respondent should each have their costs paid out of the estate on a solicitor and client basis.
I shall so order.
AN ADMINISTRATIVE MATTER
At the very end of the proceedings, the respondent tendered some public correspondence. Mr Blank needed a little time to check it but ultimately consented to the tender. For some reason, perhaps because that was the last matter then done of that day, I omitted to make the procedure clear. I shall admit the correspondence and mark it Exhibit A.
I certify that the preceding ninety-seven (97) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.
Associate:
Date: 2013
Counsel for the Applicant: Mr G Blank
Solicitor for the Applicant: Trinity Law
Counsel for the Respondent: Mr B Meagher SC
Solicitor for the Respondent: Certus Law
Date of hearing: 12 August 2013
Date of judgment: 20 November 2013
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