Kempson v Haydon (Costs) - [2022] VSC 366

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2020 04795

IN THE MATTER of the estate of JILL NGARITA HALL, deceased

- and –

IN THE MATTER of an application for judicial advice under Order 54.02 of the Supreme Court (General Civil Procedure) Rules 2015

APPLICATION BY PETER RUSTON KEMPSON (IN HIS CAPACITY AS ADMINISTRATOR AND TRUSTEE OF THE ESTATE OF THE LATE JILL NGARITA HALL, DECEASED)	Plaintiff
v
STEPHANIE LYN HAYDON	First Defendant
and
ANDREW GEORGE HALL	Second Defendant

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JUDGE:	FORBES J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	27 June 2022
CASE MAY BE CITED AS:	Kempson v Haydon & Anor (Costs)
MEDIUM NEUTRAL CITATION:	[2022] VSC 366

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PRACTICE AND PROCEDURE – Costs – Costs following judgment – Judicial advice sought on construction of Will –Whether the question of construction and related litigation expenses are ‘testamentary expenses’ – Whether second defendant should pay the plaintiff and first defendant’s costs – Judicial advice sought because adversarial stance taken by beneficiaries – Plaintiff’s costs to be paid from the estate – Second defendant is to pay the first defendant’s costs.

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HER HONOUR:

I gave judgment in this matter on 4 February 2022.[1] The judgment answered a request by the plaintiff executor for judicial advice on whether a gift of land to the second defendant by Jill Ngarita Hall (the deceased) in her will was valid. I determined that the gift failed as the deceased did not own the land in question. This ruling deals with the question of costs. The parties subsequently made written submissions in respect of the appropriate orders as to the costs and are agreed that the question of costs would then be determined on the papers.
[1]Kempson v Haydon & Anor [2022] VSC 30.

The proceeding requested direction in respect of eight questions. My judgment dealt only with the first two questions concerning the gift of land. The remaining six questions have been answered by Associate Justice Irving and orders have been made, including as to costs in respect of those parts of the proceeding. I am concerned only with the costs of the hearing and determination of the questions before me.

The position of the parties on costs

The plaintiff seeks an order that his costs and expenses of and incidental to the first two questions of construction of the will be paid from the assets of the estate on an indemnity basis. He makes no submission as to the appropriate costs orders in relation to the defendants.

The two defendants seek competing proposed costs orders in respect of their costs and those of the plaintiff. The first defendant seeks her costs from the second defendant and submits that neither her costs nor those of the second defendant, nor the plaintiff, should be paid out of the estate. She submits that the application was in practical effect a contested inter-partes application between…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] VSC 366
Decision Date: 27 June 2022

CaseChat Overview and Summary

The case of Kempson v Haydon involved a dispute over testamentary expenses, specifically whether certain litigation costs incurred by the plaintiff should be considered as part of the testamentary expenses within the estate. The matter was before the Supreme Court of New South Wales. The plaintiff, Kempson, sought judicial advice regarding the construction of a Will and incurred costs in relation to this advice and subsequent litigation. The second defendant, Haydon, was asked to contribute to these costs, but contested the claim.

The primary legal issue before the court was whether the costs associated with obtaining judicial advice on the construction of the Will and the related litigation were properly classified as testamentary expenses. The court had to determine if these costs could be recovered from the estate or if they should be borne by the second defendant, who had contested the plaintiff's claims. The court also needed to consider whether the second defendant was liable to pay the costs incurred by the first defendant in the litigation.

The court ruled that the costs of obtaining judicial advice on the construction of the Will and the related litigation expenses should indeed be classified as testamentary expenses. These costs were to be paid from the estate. However, the court found that the second defendant was not liable to pay the plaintiff's costs. Instead, the second defendant was ordered to pay the costs incurred by the first defendant in the litigation. The court's decision was based on the adversarial stance taken by the beneficiaries, which necessitated the judicial intervention and subsequent litigation. The court emphasised the importance of considering the adversarial nature of the dispute in determining the allocation of costs.

The final orders of the court were that the plaintiff's costs, classified as testamentary expenses, were to be paid from the estate. The second defendant, Haydon, was to pay the costs incurred by the first defendant, Kempson, in the litigation. This decision clarified the allocation of costs in a complex testamentary dispute involving judicial advice and adversarial litigation.

Orders