Kincaid v Lumsden - [2021] SASC 117

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KINCAID v LUMSDEN & ORS
[2021] SASC 117
Decision of Judge Dart a Master of the Supreme Court
SUCCESSION - FAMILY PROVISION
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS
Applicant seeks provision out of estate - claims to be the domestic partner of the deceased - respondents dispute that the applicant was the domestic partner - applicant has other proceedings against the deceased estate - application by respondents seeking security for costs - interests of justice requires that an order for security be made.
Held:
1. Applicant to pay security for costs in the amount of $40,000.
2. The action is stayed until the security is provided.
Inheritance (Family Provision) Act 1972 (SA); Family Relationships Act 1975 (SA), referred to.
Oshlack v Richmond River Council (1998) 193 CLR 72; Reschke v Trevor Reschke Nominees Pty Ltd [2020] SASC 60, considered.

KINCAID v LUMSDEN & ORS
[2021] SASC 117

This is an application seeking security for costs. These proceedings are brought pursuant to the Inheritance (Family Provision) Act 1972. In the particular circumstances of this matter, the interests of justice requires the making of an order for security for costs.
Background
This matter has a complex background. The applicant asserts that she was in a close personal relationship with Mr Glenn Todman, who died in 2016. Over the last few years of his life Mr Todman changed his will several times. At one time the applicant received a significant bequest in his will. In the final will she only received a small conditional bequest.
The applicant opposed the final will of Mr Todman being admitted to probate. That led to the commencement of contested proceedings in this Court in 2017 seeking to have the final will admitted to probate.[1] The applicant was the respondent in those proceedings. She alleged that Mr Todman lacked capacity to make a will at the time the final will was made.
[1] SCCIV-17-723 Lumsden & Ors v Kincaid.
The opposition continued for three years. The matter was listed for a trial before Stanley J in 2020. About two months before the date fixed for trial the applicant withdrew her opposition to the final will being admitted to probate. She suffered costs orders in favour of the executors and also in favour of the third and fourth respondents in those proceedings. The costs orders have not yet been taxed. It is clear, however, that the costs once taxed will be for a significant amount, probably well over $100,000 and perhaps over $200,000.
That earlier action now continues in respect of a counterclaim. In that claim the applicant says that she is entitled to a constructive trust over the house property at Henley Beach in which she resided. Mr Todman was the registered proprietor. The property is an asset of the estate and the claim for a constructive trust is opposed by the executors and beneficiaries. That claim must be dealt with before…

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.

Continue reading Kincaid v Lumsden

Details

AGLC: Kincaid v Lumsden [2021] SASC 117
Case: [2021] SASC 117
Decision Date: 13 October 2021

CaseChat Overview and Summary

The case of Kincaid v Lumsden involved an application for security for costs in the Supreme Court of South Australia. The applicant, who had a close personal relationship with the deceased, Mr Glenn Todman, was pursuing a family provision claim against the executors and beneficiaries of his estate. The applicant had previously opposed the admission of Mr Todman's final will to probate and incurred significant costs in doing so. She was also pursuing a counterclaim for a constructive trust over a property in Henley Beach, which was an asset of the deceased estate. The executors sought to have the applicant vacate the property, and she was ordered to pay rent pendente lite, which she had not paid. The applicant was also in default of repaying a loan of $20,000 to the estate. The executors sought an order for security for costs in the amount of $40,000, arguing that the applicant would not be able to meet a costs order and that the proceedings were unlikely to proceed to trial.

The court had to determine whether the particular circumstances of the case justified making an order for security for costs. The applicant argued that she was a natural person and that it was unusual for a party to seek security for costs in a family provision claim. However, the court found that the applicant would not be able to meet a costs order and that the proceedings were unlikely to proceed to trial. The court also noted that the applicant had not paid the weekly rent due to the deceased estate or the loan to the estate, and that the cumulative value of the existing costs orders and subsequent costs order in respect of the counterclaim could be as high as $500,000. The court found that the interests of justice required the making of an order for security for costs.

The court ordered that the applicant pay security for costs in the amount of $40,000 and that the action be stayed until the security was provided. The court noted that the applicant was living on social security benefits and that her house at Semaphore was mortgaged. The court also noted that the relationship between the applicant and the deceased had ended before his death and that the applicant needed to obtain a declaration under the Family Relationships Act 1975 to the effect that she was the domestic partner of the deceased in order to have standing to bring the proceeding. The court found that the interests of justice required the making of an order for security for costs despite the applicant being a natural person and the claim being a family provision claim.

Orders

Orders of the court

Held:

1. Applicant to pay security for costs in the amount of $40,000.

2. The action is stayed until the security is provided.

Background

Background to the litigation

This is an application seeking security for costs. These proceedings are brought pursuant to the Inheritance (Family Provision) Act 1972. In the particular circumstances of this matter, the interests of justice requires the making of an order for security for costs. Background This matter has a complex background. The applicant asserts that she was in a close personal relationship with Mr Glenn Todman, who died in 2016. Over the last few years of his life Mr Todman changed his will several times. At one time the applicant received a significant bequest in his will. In the final will she only received a small conditional bequest. The applicant opposed the final will of Mr Todman being admitted to probate. That led to the commencement of contested proceedings in this Court in 2017 seeking to have the final will admitted to probate.[1] The applicant was the respondent in those proceedings. She alleged that Mr Todman lacked capacity to make a will at the time the final will was made. [1] SCCIV-17-723 Lumsden & Ors v Kincaid. The opposition continued for three years. The matter was listed for a trial before Stanley J in 2020. About two months before the date fixed for trial the applicant withdrew her opposition to the final will being admitted to probate. She suffered costs orders in favour of the executors and also in favour of the third and fourth respondents in those proceedings. The costs orders have not yet been taxed. It is clear, however, that the costs once taxed will be for a significant amount, probably well over $100,000 and perhaps over $200,000. That earlier action now continues in respect of a counterclaim. In that claim the applicant says that she is entitled to a constructive trust over the house property at Henley Beach in which she resided. Mr Todman was the registered proprietor. The property is an asset of the estate and the claim for a constructive trust is opposed by the executors and beneficiaries. That claim must be dealt with before this matter can proceed as it will determine whether or not the house property is an asset of the deceased estate. The applicant continues to reside in the Henley Beach property. The executors sought to have the applicant vacate the property so that it could be leased on a commercial basis. The applicant opposed that. The commercial rent for the property is about $900 per week. I made an order on 19 December 2019 that the applicant pay the sum of $600 per week by way of rent to the administrator pendente lite. The money was to be held in a separate bank account. The reason for holding the money in a separate bank account is that, if the applicant succeeds on the counterclaim, she will be the owner of the property and would have not had an obligation to pay rent. However, if she is unsuccessful, then she has been occupying the property of the deceased estate and should pay rent for that. The applicant paid the rent for a short period, but has not paid the rent for about 18 months. Whatever the relationship was between the applicant and Mr Todman, it had concluded prior to his death. It is clear that, before he died, Mr Todman was seeking to have the applicant leave the Henley Beach property. To facilitate that, he assisted the applicant to purchase her own property at Semaphore. He lent her $20,000 to assist with the deposit. The loan was recorded in a written agreement, the terms of which required the money to be repaid by 30 November 2020. That money has not been repaid by the applicant and is now a debt due to the estate and is accruing interest. Security for costs

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The question that arises in this matter is whether the particular, and relatively unusual, circumstances, mean that it is in the interests of justice to make an order.Consideration The starting point is to acknowledge that the applicant would not be able to meet a costs order made in this action. She is not able to pay the weekly rent due to the deceased estate, has not repaid the loan to the estate, and has a substantial costs order against her already. The evidence discloses that she is living on social security benefits and that her house at Semaphore is mortgaged. This action was commenced by the applicant simply as a backup action. Her primary claim is pursued in the counterclaim in the earlier action. If the applicant succeeds on the counterclaim, this action will not proceed. The house at Henley Beach is valued at more than $1 million. If the counterclaim is successful, it is unlikely that the applicant would be able to establish that she has been left without adequate provision.[7] [7] Inheritance (Family Provision) Act 1972 s 7. I expect that these proceedings are unlikely to proceed to trial in any event. If the applicant is unsuccessful on the counterclaim, she will suffer another significant costs order against her. The cumulative value of the existing costs orders in the 2017 proceedings and subsequent costs order in respect of the counterclaim may be as high as $500,000. She would also owe rent at market value for the period in which she has occupied the Henley Beach property. There is also the loan to be repaid. This proceeding would serve no utility other than to reduce the amount that she would otherwise owe to the deceased estate. At best the relationship between the applicant and the deceased continued for barely three years and ended before he died. The shortness of the relationship may have an affect on the amount of provision awarded to the applicant if her claim is successful. This proceeding has its own difficulty, in any event. The applicant needs to establish that she was the domestic partner of Mr Todman. The respondents, who are the family of Mr Todman, dispute that fact. The applicant will need to obtain a declaration under the Family Relationships Act 1975 to the effect that she was the domestic partner of the deceased. Unless she does so, she has no standing to bring this proceeding. There are two matters which stand against the making of an order for security for costs. The first is that the applicant is a natural person and the second is that this claim is a family provision claim. It is well-accepted that the courts are reluctant to order security for costs against a natural person. The policy reason behind that is that the mere fact that a person is of poor means should not be used to shut them out of pursuing a valid claim. I accept that is the starting point. It is not necessarily the end point, however. The interests of justice are capable of overriding that consideration. The other issue is that it is unusual, in a family provision claim, for a party to seek security for costs. It is not particularly desirable, in family provision claims, to encourage parties to make such applications. Often the claimants are of extremely modest means and the value of estates are not always significant.