In the Matter of Marion Shirley Manley - [2013] SASC 134

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Application)
In the Matter of MARION SHIRLEY MANLEY
[2013] SASC 134
Reasons for Decision of The Honourable Justice Stanley
14 August 2013
SUCCESSION - MAKING OF A WILL - TESTAMENTARY CAPACITY - GENERALLY
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS - WHERE LITIGATION NOT CAUSED BY TESTATOR - REASONABLENESS
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS - GENERAL PRINCIPLES
In this matter, an application was heard pursuant to s 7 of the Wills Act 1936 (SA), for an order authorising the making of a will. For reasons delivered by Justice Stanley on 27 June 2013, the plaintiffs were granted permission to proceed with the application but the application was refused and the proceedings dismissed.
An issue arose as to the costs of the proceedings.
The plaintiffs did not seek an order for costs but opposed the application for costs by the Health Services Charitable Gifts Board (the Board). The plaintiffs submitted that the Court should refrain from making an award of costs in favour of the Board, notwithstanding that the Board was able to demonstrate a proper interest in the proceedings entitling it to be heard. The plaintiffs submitted that a right to be heard did not necessarily entitle the Board to an order of costs in its favour where the application was unsuccessful.
The proposed testator supported this submission.
The Board submitted that costs should follow the event.
Held:
1. The plaintiffs are permitted to make this application.
2. The application is refused and the proceedings are dismissed.
3. The plaintiffs pay the costs of the Board on a party/party basis.
4. The costs of and incidental to this application of the proposed testator and her litigation guardian be paid on an indemnity basis from the estate of the proposed testator.
The application was brought by the plaintiffs to advance their own interests. The proposed will would have adversely affected the interests of the Board. The Board had a proper interest in the proceedings. The plaintiffs’ application having failed, they should meet the Board’s costs on a party/party basis. [11].
Wills Act 1936 (SA) s 7, referred to.
Hoffmann v Waters (2007) 98 SASR 500, applied.
Hill v Hill (No. 2) [2001] VSC 135, considered.

In the Matter of MARION SHIRLEY MANLEY
[2013] SASC 134
Testamentary Causes Jurisdiction

STANLEY J: In this matter, I heard an application pursuant to s 7 of the Wills Act 1936 (SA) (the Act), for an order authorising the making of a will. For reasons delivered by me on 27 June 2013 I gave the plaintiffs permission to proceed with the application but refused the application and dismissed the proceedings. An issue arose as to the costs of the proceedings. On 14 August 2013 I made orders disposing of the proceedings, and dealing with costs. Those orders were:
1.The plaintiffs are permitted to make this application;
2.The application is refused and the proceedings are dismissed;
3.The plaintiffs pay the costs of the Health Services Charitable Gifts Board on a party/party basis; and
4.The costs of and incidental to this application of the proposed testator and her litigation guardian be paid on an indemnity basis from the estate of the proposed testator.
At that time, I indicated I would publish reasons for the costs orders I made. These are my reasons.
The plaintiffs did not seek an order for costs but opposed the application for costs by the Health Services Charitable Gifts Board (the Board). It was agreed that the proposed testator and her litigation guardian should be paid costs from the estate on an indemnity basis.
I dismissed the application by the plaintiffs for an order authorising the making of a new will for the proposed testator, their grandmother, as I could not be satisfied that, had she had testamentary capacity, the proposed will accurately reflected her likely intentions. I came to this conclusion on the basis that she had lacked testamentary capacity since February 2005 and the last expression of her testamentary intention was to be found in the will she made on 4 November 2004. That will left the residue of her estate to the Board, after the grant of a legacy of $5,000 to her daughter, the plaintiffs’ mother.[1] The proposed will left the residue of her estate to be divided equally between the plaintiffs after providing a legacy of $5,000 to the Board.
[1] The plaintiffs’ mother subsequently died in 2006.
Mr Edmonds-Wilson, counsel for the plaintiffs, submitted that in the exercise of the Court’s discretion, it should refrain from making an award of costs in favour of the Board, notwithstanding that the Board was able to demonstrate a proper interest in the proceedings entitling it to be heard.[2] He submitted that a right to be heard did not necessarily entitle the Board to an order of costs in its favour where the application was unsuccessful. He submitted that if the contrary was so, an unsuccessful applicant would be exposed to a costs order in circumstances which were not in the public interest as it could act as a disincentive to potential applicants from bringing proper applications. In this case, as the Court saw fit to give permission to bring the proceedings, it could not be said that the proceedings were unmeritorious. Accordingly, the plaintiffs should not be punished by an award of costs against them.
[2] Wills Act 1936 (SA), s 7(7)(h).
Mr Quinn, counsel for the proposed testator and the guardian ad litem, supported this submission.
Mr Wait, counsel for the Board, submitted that the relevant principle is that costs should follow the event. The Board, as a beneficiary under the existing will, was in no different position from any party to civil litigation. Had the application been successful, the Board’s interests would have been adversely affected. On that basis alone, it was entitled to an award of costs in its favour. Those costs should be paid by the unsuccessful plaintiffs rather than the estate. In any event, the Board performed the role of a contradictor, a role no one else performed in the litigation. This was not an application brought by the plaintiffs in the testator’s interest, but rather in their own interests. The application having failed, they should be liable for costs.
The Court’s power in relation to costs is found in s 7(8) of the Act, which provides:
In determining an application under this section, the Court may make such incidental orders relating to costs or other matters as it thinks fit.
In Hoffmann v Waters[3] Debelle J considered the principles applicable to the award of costs in the exercise of the jurisdiction conferred by s 7. He noted that s 7(8) invested the Court with a wide discretion as to costs. He considered that the ordinary rule is that the costs should follow the event. He considered different approaches might be taken to awarding costs depending on whether the application is brought against a background where there is an existing will, and the contenting parties are either seeking a benefit from the estate or are seeking to protect an existing benefit from the estate, or where no will exists, and the will is proposed on behalf of a person who has never had testamentary capacity. In the former case, an order for costs that follow the event may be made. In the latter case, it might be more appropriate to pay the costs of all parties properly before the Court out of the estate. The latter approach reflects the public interest in ensuring that every person has a will so as to provide for the orderly disposition of assets upon death. Accordingly, costs orders should not be made which would dissuade all relevant interests from appearing on the application for fear that they might be exposed to a liability for costs. On the other hand, where parties merely are seeking to advance individual interests, different considerations apply and an order that costs follow the event is more appropriate. Nonetheless, orders as to costs will depend upon the individual facts and circumstances of each case.
[3] [2007] SASC 273 at [21] – [26], (2007) 98 SASR 500 at 508 – 509.
A similar approach has been taken in the Victorian jurisdiction which is founded on a statute in substantially the same terms.[4]
[4] See Hill v Hill (No. 2) [2001] VSC 135 at [9]; Boulton v Sanders & Ors [2004] VSCA 112 at [134] – [153].
In this matter, I agree with the submissions of the Board. The application was brought by the plaintiffs to advance their own interests. The proposed will would have adversely affected the interests of the Board. The Board was the only contradictor before the Court. As the plaintiffs acknowledge, the Board had a proper interest in the proceedings. The plaintiffs’ application having failed, they should meet the Board’s costs. They should do so on a party/party basis.