The costs referred to in orders 2(b), 2(d) and 3 of the orders of this Court in this matter made on 15 August 2018 be paid from the estate of the deceased and on a trustee basis.
On appeal from the Supreme Court of New South Wales
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Nobarani v Mariconte [No 2]
Practice and procedure – Costs – Wills, probate, and administration – Where respondent sought and obtained grant of probate in solemn form – Where respondent resisted appeals to set aside grant of probate – Where grant of probate set aside on appeal – Where respondent applied for order that appellant's costs of trial and appeals be paid out of estate of deceased and on trustee basis – Where costs not shown to be other than properly and reasonably incurred by respondent in connection with administration of estate – Whether order sought by respondent should be made.
Words and phrases – "administration of the estate", "costs payable from the estate", "executor", "litigation expenses", "properly and reasonably incurred".
KIEFEL CJ, GAGELER, NETTLE, GORDON AND EDELMAN JJ. Order 4 of the orders made in this matter on 15 August 2018 provided that the respondent have liberty to apply within 14 days for an order that the appellant's costs of (i) the trial, (ii) the appeal to the Court of Appeal of the Supreme Court of New South Wales, and (iii) the appeal to this Court be paid out of the estate of the deceased and on a trustee basis[1]. On 29 August 2018, the respondent, who was the executrix of the estate, brought that application.
The general rule concerning executors, like that concerning trustees, is that costs properly and reasonably incurred by the executor in connection with the administration of the estate are payable from the estate[2]. These costs can include litigation expenses. Some examples of recoverable litigation expenses are: where an executor has a reasonable and bona fide belief in the validity of the will albeit one that is found to be incorrect[3]; where an executor is unsuccessful in reasonably defending an action brought by legatees[4]; or where an executor unsuccessfully, but reasonably, seeks to uphold a grant of probate on appeal[5].
The same approach applies to the circumstances of this litigation, where the respondent reasonably and properly sought and obtained a grant of probate in solemn form, and then reasonably and properly resisted appeals seeking to set aside that grant of probate. Although, after an appeal to this Court, the grant of probate was set aside due to a denial of procedural fairness at trial to the appellant, there was, and is, no suggestion that the respondent acted other than reasonably and properly in seeking the grant and in resisting the appeals.
The appellant objects to the order sought on the bases that (i) the respondent is also the sole beneficiary of the estate according to the handwritten will made by the late Ms Iris McLaren in 2013 ("the 2013 Will"), and (ii) the respondent, in seeking the costs order, did not inform this Court that, sometime between the trial and the appeal to the Court of Appeal, the estate was distributed to her. For this failure of disclosure the appellant also seeks an order that the solicitors for the respondent pay the costs of the respondent's application on an indemnity basis.
The co-existing interest of the respondent as executrix and as the sole beneficiary under the 2013 Will does not detract in this case from the reasonableness or the propriety of the proceedings brought by the respondent as executrix, or her defence of the appeal to the Court of Appeal and the appeal to this Court as executrix[6]. In addition, no order was made to restrain any distribution of the estate by the respondent following the grant of probate after trial but while an appeal was pending. That distribution may have been at the respondent's risk, but it was not improper. Nor, contrary to the appellant's submissions, is the failure of the solicitors for the respondent to advert to this matter in this Court a basis for an award of costs against the solicitors personally.
[6]Geffen v Goodman Estate [1991] 2 SCR 353 at 391.
An order should be made that the costs referred to in orders 2(b), 2(d) and 3 of the orders of this Court in this matter made on 15 August 2018 be paid from the estate of the deceased and on a trustee basis.
Details
AGLC
Nobarani v Mariconte (No 2) [2018] HCA 49
Case
[2018] HCA 49
Decision Date
CaseChat Overview and Summary
In *Nobarani v Mariconte (No 2)*, the High Court of Australia considered an application by the respondent, who had initially obtained a grant of probate in solemn form, for an order that the appellant's costs of the trial and subsequent appeals be paid out of the deceased's estate on a trustee basis. The grant of probate had ultimately been set aside on appeal.
The central legal issue before the High Court was whether the respondent's costs, incurred in defending the appeals and the initial grant of probate, should be paid from the deceased's estate and on a trustee basis, notwithstanding the unsuccessful defence of the grant. The court was required to determine if these costs were "properly and reasonably incurred" in connection with the "administration of the estate".
The High Court reasoned that an executor who seeks and obtains a grant of probate in solemn form, and subsequently defends that grant against appeals, is acting in the course of administering the estate. The court held that the costs incurred by the respondent in resisting the appeals were properly and reasonably incurred in the administration of the estate, even though the grant of probate was ultimately set aside. The principle applied was that an executor is generally entitled to be indemnified out of the estate for costs properly incurred in the administration, including litigation expenses, unless there are specific circumstances warranting a departure from this rule.
The High Court ordered that the costs referred to in specific earlier orders of the Court be paid from the estate of the deceased and on a trustee basis.
Orders
Orders of the court
The costs referred to in orders 2(b), 2(d) and 3 of the orders of this Court in this matter made on 15 August 2018 be paid from the estate of the deceased and on a trustee basis.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
KIEFEL CJ, GAGELER, NETTLE, GORDON AND EDELMAN JJ
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Established by:
KIEFEL CJ, GAGELER, NETTLE, GORDON AND EDELMAN JJ