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].
[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
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
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
KIEFEL CJ, GAGELER, NETTLE, GORDON AND EDELMAN JJ
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Ratio Decidendi
Legal Principle Established
Established by:
KIEFEL CJ, GAGELER, NETTLE, GORDON AND EDELMAN JJ